Why HSBC Global Investment Funds – Indian...
Transcript of Why HSBC Global Investment Funds – Indian...
Why HSBC Global Investment Funds – Indian Equity?
Important information:• The Fund invests primarily in Indian equities. The Fund is subject to the concentration and emerging market risks of investing in a single emerging market.• The Fund’s investments may involve substantial market, currency, volatility, regulatory and political risks. Investors may suffer substantial loss of their investments in
the Fund.• The investment decision is yours but you should not invest unless the intermediary which sells you the Fund has advised you that the Fund is suitable for you and has
explained why, including how investing in the Fund would be consistent with your investment objectives.• Investors should not invest in the Fund solely based on the information provided in this document and should read the offering document of the Fund for details.
Excellent performance
Proven expertise
The Fund has been led by the same management team with
deep local knowledge since inception. Over the past 13 years,
the Fund has grown to become one of the largest Indian
equity funds globally1
Investors can access one of the most dynamic markets with
ease via a proven and consistent investment management
process
Invest with confidence
The Fund is managed by an experienced, active
fund manager who is well-known for his
high-conviction approach and ability to deliver
outperformance
Investors can ride on his deep market insight
and stock picking ability to uncover value and
capture short and long-term opportunities in the Indian
equity market
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Investment involves risk. Past performance is not indicative of future performance. Please refer to the offering document for further details including the risk factors. The document has not been reviewed by the Securities and Futures Commission.
The document is prepared for general information purposes only. All views expressed cannot be construed as an offer or recommendation by HSBC Global Asset Management (Hong Kong) Limited ("AMHK"). AMHK and HSBC Group shall not be held liable for damages arising out of any person's reliance upon this information. Any person considering an investment should seek independent advice on the suitability or otherwise of the particular investment.
Issued by HSBC Global Asset Management (Hong Kong) Limited
Source: 1. Morningstar Inc. Data as at 31 July 2009. Calendar year performance of the Fund- 2004: 27.8%; 2005: 34.5%; 2006: 45.9%; 2007: 77.9%; 2008: -70.3%. Bid to bid price with dividend reinvested in USD term. 2. Lipper Fund Awards 2008 - Three-Year Award - Equity India and Lipper Fund Awards 2008 - Five-Year Award - Equity India, fund performance as at 31 December 2007.
Fund manager:Sanjiv Duggal
The Fund
S&P/IFCI India Index
63.6%
45.3%
3 month
104.0%
73.2%
6 month
-11.6%
-2.7%
1 year
88.5%
67.4%
Year to date
The HSBC Global Investment Funds – Indian Equity (the “Fund”) has outperformed the benchmark, and it’s the best performing India fund
authorised in Hong Kong year-to-date posting a spectacular 88.5% gain1
The Fund has been awarded the Lipper Fund Awards 2008, Three year award - Equity India and Five year award - Equity India2
Tapping into the promising Indian growththrough a proven strategy
Important information:• The Fund is subject to the concentration and emerging market risks of investing in a single emerging market.• The Fund’s investments may involve substantial market, currency, volatility, regulatory and political risks. Investors may suffer substantial loss of their investments in
the Fund.• The investment decision is yours but you should not invest unless the intermediary which sells you the Fund has advised you that the Fund is suitable for you and has
explained why, including how investing in the Fund would be consistent with your investment objectives.• Investors should not invest in the Fund solely based on the information provided in this document and should read the offering document of the Fund for details.
Currency appreciation potenital
The expected appreciation of the rupee will add to equity returns and strengthen the Indian re-rating story
Reasonable valuations versus history
India has reversed from being one of the worst performing markets last year to one of the best year to date. Despite the strong rally, valuations remain fair
India offers one of the highest GDP growths in the world, supported by a burgeoning domestic market and proactive stimulus
Favourable demographics and easing inflation will also support growth
Equities have recovered significantly, but valuations are still reasonable
Short-term volatility is a risk, therefore an experienced active fund manager with a proven track record is the key for outperformance
MSCI India Trailing PE, 1995-2008
Source: FactSet, MSCI and Morgan Stanley. Data as at 16 June 2009.
Relatively strong and sustainable GDP growth
India is set to remain one of the fastest growing economies in the world over the coming two years. India is following China’s GDP growth curve but with a lag as economic liberalisation began in 1991, 12 years after China’s open-door policy in 1979
Rising income and proactive stimulus measures
India’s growth will also be driven by pent-up domestic demand and favourable demographics. Growth will be supported by proactive government measures (i.e. six interest rate cuts since October 2008 and three stimulus packages) and easing inflation
US EU Japan India
12
10
8
6
4
2
0
-2
-4
-6
-8
Real GDP %y/y
00 01 02 03 04 05 06 07 08 09E 10E
Source: UBS and Halbis. Data as at 17 June 2009. Source: Motilal Oswal. Data as at 16 June 2009.
Property Cost - LHS Affordability -LHSAnnual Income (Rs) - RHS
32
28
24
20
16
12
8
5 Yr Avg10 Yr Avg
54
52
50
48
46
44
42
40
38
Rs/US$
24.9%appreciation
24.4%depreciation
Source: CCSA. Data as at 16 June 2009.
8
6
4
2
0
36
27
18
9
0
%
x
%
15.6
5.9
22.0
11.18.3
6.6 5.3 5.14.3
4.6
5.05.1
5.03.7
4.7
95 96 97 98 99 00 01 02 03 04 05 06 07 08 09E
95 96 97 98 99 00 01 02 03 04 05 06 07 08 01/00 04/01 07/02 10/03 01/05 04/06 07/07 10/08
August 2009
Summary
HSBC Global Investment Funds – Indian Equity
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2009
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All
Investment involves risk. Past performance is not indicative of future performance. Please refer to the offering document for further details including the risk factors. The document has not been reviewed by the Securities and Futures Commission.
The document is prepared for general information purposes only. All views expressed cannot be construed as an offer or recommendation by HSBC Global Asset Management (Hong Kong) Limited ("AMHK"). AMHK and HSBC Group shall not be held liable for damages arising out of any person's reliance upon this information. Any person considering an investment should seek independent advice on the suitability or otherwise of the particular investment.
Issued by HSBC Global Asset Management (Hong Kong) Limited
Potential risksWhile the risk-reward profile of Indian equities remains favourable, investors should also pay attention to underlying risks of the Indian market. For instance, drastic slowdown in the global economy, liquidity outflows from the Indian equity markets, policy and regulatory changes.
Suitable investors The Fund is suitable for investors who have a medium-to long-term
investment horizon and want exposure to: - full range Indian equities - access to investment specialists - benefit from satisfactory and risk-adjusted return potential
As a single country fund, the Fund may be subject to short-term volatility and is suitable for investors who have a higher risk appetite
Investment objectiveThe Fund seeks long-term capital growth mainly through a diversified portfolio of investments in equity and equity equivalent securities of companies listed on a major stock exchange or other regulated market of India, as well as companies which carry out a preponderant part of their business activities in India.
Asset allocation2
www.assetmanagement.hsbc.com/hk
Frequent volatility best managed through active, disciplined management
As a high growth market, Indian equities can be very volatile. Emphasis the importance to look past short-term volatility and keep long-term investment horizon is particularly important for investing in India
Source: CCAS Asia Pacific Markets. Data as at 16 June 2009
Therefore, an experienced, active fund manager with a proven high-conviction and disciplined investment approach is critical to capture growth in the long term:
- The contrarian approach of HSBC Global Investment Funds - Indian Equity (the “Fund”) enables it to capture short-term trends and take advantage of volatility
- The manager's deep market insight helps the Fund to generate additional alpha- The Fund is one of the largest offshore Indian equity funds in Hong Kong1
- The Fund has delivered outstanding long-term performance through top-down sector/theme selection, coupled with fundamental research and stock picking
Year to date, the Fund has outperformed the industry average and ranked first among the funds within the same category1
Fund
Peers’ average
5.0%
3.8%
1H06
39.0%
35.2%
2H06
14.3%
16.5%
1H07
55.7%
43.6%
2H07
-36.3%
-41.1%
1H08
-53.3%
-36.7%
2H08 YTD2009
88.5%
61.7%
Fund details2
Class
Fund size
Fund price (bid/offer)
Launch date
Initial charge
Management fee
Fund manager
Investment advisor
Class AD
US$4,890.94 million
US$142.500 / US$150.395
1 March 1996
Up to 5.25%
1.5% per annum
Sanjiv Duggal
HSBC Global Asset Management (Singapore) Limited
1,000
3,000
5,000
7,000
9,000
11,000
13,000
15,000
17,000
19,000
21,000
Securities market scam
NDA wins elections,Vajpayee becomes PM
Vajpayeebecomes PM 9/11 attacks
BJP loses elections
GDP growth forecasts top 6%
US rate rise fears
Dr Singh appointed PM
Reliancesettlement
F&O unwinding and interest rate rise fears spark correction
Index
Sub-prime crisis, political tussle on Indo-USNuclear deal impacts market
UPA govt has successfully passed confidence votes
Rise in crude price led spark to macro economic environment
Mumbai Terrorist Attack
Economicreformskicked off
Babri Masjid,Bombay blasts
phase of political instability
Fed reduces growth forcast for US
Global markets correct with fear of US recession
Performance in US$ (%)1
Calendar year performance
04
27.8
05
34.5
06
45.9
07
77.9Fund
2009YTD
88.5
08
-70.3
Cumulative performance
3 mth
63.6
1 yr
-11.6
3 yrs
37.0
5 yrs
165.3Fund
Sources: 1. Morningstar, Inc. Data as at 31 July 2009. Bid to bid price with dividend reinvested. Peers = Hong Kong SFC Authorised universe - Indian equity; 2. HSBC Investment Funds (Hong Kong) Limited. Data as at 31 July 2009.
Stimulus package announced by Indian govt
01/91 12/91 12/92 12/93 12/94 12/95 12/96 12/97 12/98 12/99 12/00 12/01 12/02 12/03 12/04 12/05 12/06 12/07 12/08
Technology 12.2%
Industrials 15.0%
Basic materials 17.4%
Oil & gas 9.6%Telecommunications 2.9%
Health care 6.2%
Consumer goods 16.5%
Financials 13.2%
Cash 5.6%Utilities 1.3%
Display until November 2009