About
On December 12, 2001, HSBC AMC was incorporated and HSBC Mutual Fund was established on May 27 2002, with HSBC Securities and Capital Markets (India) Private Limited serving as the sponsor of HSBC AMC.
The fund house has over INR 87,088 Cr of Assets under Management (AUM) (~$10.62 billion @ 82 per USD) as on 31st May 2023.
HSBC Mutual Fund serves more than 1 million customers through its 1000 plus offices spread all over India.HSBC AMC offers more than 103 different types of schemes under three types of options – equity, debt, and product add-on funds. HSBC Mutual Fund has over 30 mutual fund schemes catering to various preferences like liquidity, wealth creation and growth. HSBC Mutual Funds offers over 8 equity mutual funds, HSBC mutual fund offers more than 7 hybrid mutual funds with varying asset allocation and maturity periods. HSBC mutual fund offers more than 15 debt mutual funds that generate stable returns against very low risks.
Established in 1886, HSBC is the world’s 7th largest bank in terms of total assets and revenues. The HSBC empire has more than 100 million active customers all over the world in every continent except the Polar regions. It is the second largest company which is listed on London’s Stock Exchange behind only Royal Dutch Shell.
Key financials for the year 2021-22
| Total income (INR cr) | Total expenses(INR cr) | EBIT(INR cr) | EBIT margin | Net profit(INR cr) | Total income (USD million) | Total expenses(USD million) | Net profit(USD million) |
| 1186.3 | 719.4 | 466.9 | 39% | 466.9 | 158.17 | 95.92 | 62.25 |
Key staff
Kailash Kulkarni is the CEO of HSBC AMC. He has over 25 years of work experience, heading sales functions of businesses across BFSI. Previously, he was the Head of Sales at Kotak Mahindra Asset Management. At MetLife India Insurance, Mr. Kulkarni set up and expanded the agency network. His journey in the BFSI space began with growing the third party distribution network, first for JM Financial and subsequently for ICICI Bank. He has also worked in Eicher Motors in distribution, sales and marketing functions. Currently Kailash Kulkarni is on the board of the Association of Mutual Funds of India (AMFI) and has previously headed the Financial Literacy Committee for AMFI. Kailash Kulkarni is a management graduate from the Institute of Management Development and Research.
Venugopal Manghat is the CIO – Equity at HSBC AMC. He was initially a member and Equity Research Analyst at the Mumbai Stock Exchange in 1993. His primary role was to identify investment opportunities in numerous industries. In 1995, he joined Tata Asset Management Ltd, where he held several positions like Management Trainee, Member of the Senior Management Team, Head of Research, Co-Head of Equities, and Portfolio Manager before moving to L&T Mutual Fund. Mr. Manghat holds a B.Sc degree in Mathematics and an MBA degree in Finance. He has also cleared the certification level of BSE Institute.
Shriram Ramanathan is the CIO – Fixed Income at HSBC AMC. He was a Portfolio Manager at FIL Fund Management. In his previous roles, he was a Senior Investment Manager – Global Emerging Market Debt (Asia) at ING Investment Management Asia Pacific in Hong Kong, and a fixed income fund manager in India. His earlier assignments were with Zurich Asset Management Company in fixed income research and with the Treasury department of ICICI Bank, where he started his career in investments in 2000.Shriram is a Chartered Financial Analyst and holds a Post Graduate Diploma in Business Management from XLRI Jamshedpur along with an engineering degree from the university of mumbai B.E (Electrical), PGDBM-XLRI, CFA.
Investment philosophy
HSBC India evaluates potential investment risk as much as investment return to stay true to your objectives and constraints. HSBC India focuses on valuation, long-term risk-adjusted returns, and fundamental research across all asset classes and strategies. To ensure significant resources to HSBC India teams of investment experts with sophisticated decision-making, analytics, and risk management tools.
The investment approach
- Helping clients grow and protect their assets
- Using expertise in connecting the developed and developing world to provide clients with sustainable investment opportunities across multiple asset classes and capabilities
As we aim to achieve sustainable solutions for our clients, we have fully integrated responsible investment within our investment culture and process. In our investment process, Environmental Social Governance (ESG) analysis is incorporated alongside financial analysis to quantify a company’s potential risks and returns over the longer-term.
Fixed Income – Investment philosophy & process
- Liquidity management focused on risk management
- The investment process seeks to manage credit, liquidity, and interest rate risks efficiently
- Investment process focused on three major stages – Factor process (to identify credit and duration bands), Credit evaluation, Ongoing strategy
- Continuous monitoring and reassessment of risk
- Balanced approach to credit
- Balanced approach in managing risk – lower issuer concentration
Equity – Investment philosophy & process
- Considered, disciplined and conviction based portfolio building process
- Focus on three stage investment process – Stock screening, Analysis and Portfolio construction
- Supported by ESG guidelines
Media
Will L&T Mutual Fund’s acquisition inject fresh life into HSBC India MF Its co-CEO weighs in, Money Control website, January 10 2023.
Link to media-
In November 2022, HSBC mutual fund, one of the handful of foreign asset management companies in India, announced that its takeover of L&T mutual fund was complete, which made bigger news than any of its mutual fund schemes ever did in the past many years, as HSBC India’s mutual fund performance has been ordinary. but newly appointed co-CEO, Kailash Kulkarni has plans to localize this foreign fund house and do business the India way . This move has made the combined entity the 14th biggest AMC in India, with AUM of rs. 85,839 crores at the end of December 2022. HSBC mutual fund has absorbed the entire team of L&T mutual fund and the CEO of the two fund houses –Kailash Kulkarni & Ravi Menon- have been designated as the co-CEO of the combined entity.
Key highlights of the year gone by together with Kailash Kulkarni and Ravi Menon, Co-CEOs of HSBC Mutual Fund with insights on market trends and strategy for the year 2023 , HSBC website , 01 January 2023,
Link to media – https://www.assetmanagement.hsbc.co.in/en/mutual-funds/investor-resources/videos-and-webinars/2022-highlights-with-co-ceo
Russia-Ukraine war, tightening of interest rate, global inflation has impacted all asset classes. The parallel world is where India is operating as equity returns are +4%, compared to NASDAQ ( -13%) , HANGSENG (-13%). Midcap and small cap funds are not performing well. PSU is underperforming and so are IT stocks when compared with the global IT markets. He mentions there is a coupling taking place between India and global markets, but India is outperforming in certain sectors. The GDP growth for Q4FY2023 has been 7.2 %, making India the fastest growing economy in the world. DII were positive but FII were negative to the tune of 1.2 lac crore but this outflow was for the first 7 months but next 5 months were positive, indicating positive sign for India. About the industry, the 40 lac crore mark was touched in November 2022, and this AUM has been positively growing for the tenth straight year. SIP monthly investments have been 13000 crores, crossing the 6 lac crore mark. Corporate performance has been outstanding across sectors. There is huge potential for equity and fixed income markets in 2023.Ultra-short term funds shift to long term fund investing. The behavioural manner of investors is changing to staying invested for a longer term.
“Money View from the Top.” Mr. Kailash Kulkarni, Chief Executive Officer (CEO), L&T Mutual Fund (Interview was recorded before L&T MF became HSBC), 5 paisa YouTube channel, December 15, 2022.
Link to media- https://www.youtube.com/watch?v=f6Vqe7ZzG2A
He talks about the investment objective of small scale investors (entities) that earn in Two-digit CAGR as they invest for long term for securing their family needs. These entities have earned the maximum returns, whether the amount invested is nominal. Volatility is a friend and not an enemy, which is proven by a 25-year statistical trend. There are only 50 trading days where there are explosive returns in the past 25 year long trading days. Long term view on equity is the ideal mix to earn maximum return. Talking about India, it is a bright star among the major economies that are facing turmoil. invest in index funds for sustainable returns. According to him, the psychology of investors is undergoing a transformative change in terms of duration for which money is invested. During the 2008 crisis around 15% of the total volume of depositors had withdrawn money. For SIP, around 50% of the amount is invested for 5+ years. Pre-covid there were 2.1 crore investors and 1.5 cr new investors added in last 2 years. Some people research by themselves before jumping into investing , but a distributor advisor is a better option to opt for managing funds- as he has more knowledge and individuals have no time to track investment. These advisors understand risk appetite better than individuals. For equity markets, people should invest in balanced advantage fund and index fund (Nifty- as low risk) and later diversified fund, sector fund and mid-cap funds after gaining exposure and experience. For the next 3-5 years, he expects markets to be bullish, and there is a shift of investment from real estate and gold to financial instruments and products. Later, he advises not to rely on historical performance analysis and trends for taking decisive decisions and not to set high benchmarks for equity investments, and realise the surplus returns to be a bonus.
HSBC Asset Management to acquire L&T Mutual Fund for Rs 3,200 crore, ET website, December 2021.
HSBC Asset Management (India), a wholly-owned subsidiary of HSBC Holdings, on Friday said it has entered into an agreement with L&T Finance Holdings Limited (LTFH) to fully acquire L&T Investment Management Limited (LTIM) for $425 million or Rs 3,193 crore. This transaction enhances the strength of our business in India and reinforces our status as one of Asia’s leading wealth managers.
HSBC Asset Management to acquire L&T Mutual Fund for Rs 3,200 crore
HSBC Asset Management (India), a wholly-owned subsidiary of HSBC Holdings, on Friday said it has entered into an agreement with L&T Finance Holdings Limited (LTFH) to fully acquire L&T Investment Management Limited (LTIM) for $425 million or Rs 3,193 crore. This transaction enhances the strength of our business in India and reinforces our status as one of Asia’s leading wealth managers.
Read more at:
HSBC Holdings India operations H1 profit up 22%
Shashank Didmishe London-based lender HSBC Holdings Plc on Monday reported an increase of $800 million in its profit after tax to $9.2 billion in the six months ended June 30, which includes a $1.8 billion gain on the recognition of a deferred tax asset from historical losses.
Prepared by – Jigyasu Bhan Singh Aug 2022
Updated by – Akash Damani, June 2023
Authors
Bhavna Mundhra,
Akash Damani
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