HSBC GIF Indian Equity Fund

Transcription

1 HSBC GIF Indian Equity Fund For Investment Professionals only Investment Case Investment Team The Fund Summary

2 The investment case 2

3 Investment case Why invest in the HSBC GIF Indian Equity Strategy? One of the fastest growing major economies even with slowdown this year One of the fastest falling stock markets Sentiment swing over from dream to nightmare scenario back to reality Political uncertainty and policy risk have been factored into equity prices Currency depreciation positive for revenues and operational earnings Valuations are attractive again below 5 and 10 year averages 3

4 The investment team 4

5 A large and experienced Asian Equity Team Management Team Over 40 years Collective Investment Experience Sanjiv Duggal Fund Manager Sanjiv joined HSBC in April 1996 and is responsible for the management of Indian equities. With 14 years of investment experience, Sanjiv has lead managed the flagship HSBC GIF Indian Equity Fund since the fund's inception. Prior to joining HSBC, Sanjiv worked for the Hill Samuel Group where he spent nearly five years, initially in internal audit and latterly as an Emerging Markets fund manager. Sanjiv is a fully qualified Chartered Accountant. Manish Srivastava CFA Fund Manager Manish is a fund manager in the Indian equity team and has been working in the industry since Prior to joining the firm in 2006, Manish worked for ABN Amro and Citigroup as an equity analyst. He holds a Bachelor of Technology in Mining Engineering from the Institute of Technology in Varanasi, is a management graduate from the Indian Institute of Management in Ahmedabad and is a CFA charterholder. Viresh Mehta Fund Manager Viresh is a fund manager in the Indian equity team and has been working in the industry since Prior to joining the firm in 2002, Viresh was the head of dealing and sales trading with UBS Warburg Securities, India. He has also had prior experience in servicing institutional investors at Prabhudas Lilladher Limited and DSP Financial Consultants Limited. He holds a degree in Engineering and an MMS in Finance, both from Bombay University. 5

6 A large and experienced Asian Equity Team Management Team Over 40 years Collective Investment Experience Divya Balakrishnan Investment Analyst Divya is an Investment Analyst in the Indian equity team and assists the fund management team in researching sectors and stocks for their portfolio. She has been with HSBC Singapore since July 2005, and worked in institutional banking sales prior to joining Halbis. She holds a bachelor's degree in Electrical and Biomedical Engineering from the National University of Singapore and is currently a level 2 CFA candidate. Support Team Nancy Lobo Business Manager Nancy Lobo is the Business Manager supporting Halbis Singapore and has been working in the Mutual Fund industry since Prior to re-joining the firm in 2007, Nancy worked at HSBC AMC India supporting Sanjiv and Viresh and with Lotus India AMC as Sr. Manager - Institutional Sales. She holds a degree in Economics (Honours) and MMS in Marketing, both from Bombay University. Shelby Doshi Team Coordinator Shelby is the Team Coordinator supporting Halbis Singapore. She recently joined the India Equity team but has been with HSBC since She is currently pursuing a double degree in Marketing & Human Resources from Murdoch University. 6

7 A large and experienced Asian Equity Team An experienced and dedicated team of research, risk management and portfolio implementation specialists Name Title Role Years of Experience with the Group Years of Industry Experience Regional Portfolio Management Ayaz Ebrahim Chief Executive Chief Investment 4 20 Officer Officer Robert Tucker Investment Fund Manager 8 11 CFA Director Sector Analysts Hugh Lee Senior Investment Analyst Regional Financial 3 13 Patrick Crivelli Investment Analyst Regional Consumer 3 7 Mathew Lee Investment Analyst Regional Property 3 9 Quantitative Analysis & Implementation (QAI) Unit Andrew Lee Head of Quantitative Analysis Quantitative Analysis and 4 14 CFA & Implementation Unit Portfolio Implementation Dealers Florench Hsieh Head of Dealing Dealing Samuel Lai Senior Dealer Dealing 8 20 Product Specialist Francis Chung Director Product Specialist 2 18 Sami Abouzahr Asia Product Specialist 5 5 7

8 The fund: HSBC GIF Indian Equity Fund 8

9 HSBC GIF Indian Equity Fund Fund facts Recommended Investment Horizon: Investment Universe: Benchmark: Stock Weighting: Sector Diversification: 5 years Indian equities with no capitalisation constraints. IFCI India A concentrated portfolio of our preferred stocks (60-100) Broad sector limits 9

10 HSBC GIF Indian Equity Fund Investment Philosophy India has a large, relatively closed economy, but is affected by both global and local business cycles Indian team integrates with Global Emerging Markets and Asian teams with analysts in key local markets to gauge impact of both cycles Regulatory and political reform is often a key driver of value change, given over-regulated and over-protected economy Political/regulatory focus heightened in the Indian investment process versus developed markets Seek to identify beneficiaries of such change India has large pool of highly-skilled English speaking labour with relatively low wages. This could lead to global competitive advantage in labourintensive sectors We seek to identify such opportunities within our investment process 10

11 HSBC GIF Indian Equity Fund Process Highlights Economic and business cycles are the primary determinants of value change Top-down sector/theme selection followed by bottom-up stock selection Blend of growth and/or value at appropriate time in business cycle with valuation checks Dedicated risk management team, bringing together a range of risk management tools into the investment process 11

12 HSBC GIF Indian Equity Fund Investment process Formulate Macro Overview Sector Allocation Screen The Universe : Selected List Stock Selection Determine Stock Positions Portfolio Expectations for the local and global business cycle versus market expectations Macro sensitivities; currency and interest rate outlook Macro effect at the sector level Dynamic time horizon Assess key positive and negative beneficiaries of changes Preferred sector weights Quantitative & qualitative screening Stocks with a catalysts for change In house research: Management quality Competitive advantage Earnings and cash flow sustainability Position size: Fair Value Target Strength of conviction Upside potential Market expectations 60 to 100 stocks held TE range of 4-12% Client guideline compliance Multi-faceted risk analysis Valuation 12

13 HSBC GIF Indian Equity Fund Driver Management Focus Effective Management Strategy Defined strategy for earnings growth, cash flows and returns on capital Advantage Operations/Financials Valuation Corporate Governance Identifiable competitive advantage Efficient operations contributing to financial strength Compare market price to valuation Focus on corporate governance improvements/deterioration Stock Selection 13

14 HSBC GIF Indian Equity Fund Portfolio Composition (30 June 2009) Stock Weight Cairn Energy Plc 9.14% Jindal Steel & Power Ltd 8.94% Maruti Udyog Ltd 6.09% Unitech Ltd 4.64% HCL Technologies Ltd 4.51% Wipro Limited 4.04% Aditya Birla Muvo Ltd Ord INR % DLF Limited 2.98% Dr Reddy s Laboratories 2.69% Tata Iron & Steel Co Ltd 2.68% Sector Weight Consumer Goods 15.45% Industrials 15.37% Basic Materials 15.22% Financials 12.59% Technology 12.44% Oil & Gas 10.91% Health Care 6.42% Telecommunications 3.19% Utilities 1.32% Cash 7.08% 14

15 HSBC GIF Indian Equity Fund Performances (30 June 2009) Performance in USD (% Change)* Rolling time period 30/06/ /06/ /06/ /06/ /06/ /06/ /06/ /06/ /06/ /06/2005 HSBC GIF Indian Equity Rolling time period 1 month 3 months 6 months 1 year 3 years 5 years Fund Morningstar mean Benchmark Fund rank 35/72 7/72 3/72 53/65 26/48 18/25 3/72 52/59 10/52 9/43 Quartile rank * The above performance figures refer to the past and are not a reliable indicator of future returns. The value of investments and any income from them, can go down as well as up. The above performance figures are calculated in USD, and changes in the rate of currency exchange may affect the value of your investment. Source: Morningstar, bid to bid, gross income reinvested. Performance information is up to 30 June 2009, Morningstar run date 09 July Morningstar Sector used Offshore and International Funds, Eq India. Benchmark source: Datastream. Prior to 30/09/98, the benchmark of this fund was the India BSE Dollex excluding income. Please note quartile rank is a term widely used in financial services to denote performance of a fund within its sector. For example a ranking of 1 denotes a Fund in the top 25% of its peer group sector, with a ranking of 4 denoting a fund in the bottom 25% of it's peer group sector. Total return, sector median performance and ranks - Data Source - Copyright 2008 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. There are specific risks that apply to each sub-fund within the HSBC Global Investment Funds range. Investors and potential investors should read the relevant simplified prospectus and full prospectus for a full list of risk warnings before choosing to invest. HSBC Global Investment Funds is a Luxembourg domiciled SICAV and UK and Isle of Man based investors are advised that they may not be afforded some of the protections conveyed by the provisions in the Financial Services and Markets Act 2000 including the UK Financial Services Compensation Scheme. 15

16 HSBC GIF Indian Equity Fund Statistics (30 June 2009) Fund size (in millions USD): 4, Portfolio Turnover*: 0.42 Volatility**: Tracking error**: Information Ratio**: * Source : HSBC, calculation uses the lesser of sales and purchases over the past year ** Source : HSBC, based on monthly returns over the past three years where available 16

17 HSBC GIF Indian Equity Fund Fund Description and Manager Profile HSB1005a Sanjiv Duggal Investment Director, Indian equities, Halbis Capital Management (Singapore) Sanjiv Duggal has been working in the industry since Prior to joining Halbis in 1996, Sanjiv worked for the Hill Samuel Group where he spent nearly five years, initially in internal audit and latterly as an Emerging Markets fund manager. Sanjiv is a fully qualified Chartered Accountant. The fund offers investors access to one of the largest and fastest-growing economies in the world through a well-diversified portfolio of Indian equities The portfolio - which currently ranks among the largest Indian equity funds globally - is a blend of growth and value styles with an emphasis on business cycle and valuation checks It is managed by a team with over 40 years of collective experience who seek to deliver performance through top-down sector/theme selection, coupled with fundamental research This presentation should be viewed in conjunction with the relevant simplified prospectus and full prospectus for a full list of risk warnings prior to making an investment in a fund. 17

18 HSBC GIF Indian Equity Fund Fund Details Legal form Base currency Sub-fund of Luxembourg UCITS HSBC Global Investment Funds US$ Launch date 04 March 1996 ISIN code Management fees Performance fees Subscription fees Benchmark LU % tax included NONE 5.54% maximum, tax included IFCI India Redemption fees Dealing Valuation Settlement Management company Investment advisor Custodian Fund Manager NONE Daily before 10:00 (CET) Daily Trade day + 4 business days HSBC Investment Funds (Luxembourg) SA HSBC Global Asset Management (Singapore) Limited RBC Dexia Investor Services Bank S.A. Sanjiv Duggal 18

19 Summary 19

20 Summary A recognised leader in the management of Asian financial assets 37 investment professionals based in Hong Kong and Singapore Opportunity to invest in the fastest growing economy through diversified portfolio Over US$4bn in funds under management of Indian equities (as at end of December 2008) 20

21 What kind of investor should consider the HSBC GIF Indian Equity Fund? Experienced investors with a long term investment horizon Investors seeking lower-beta and relatively uncorrelated investments in more nascent areas of growth Investors comfortable with Exposure to emerging markets and smaller capitalisation companies that can increase the volatility of returns and may restrict liquidity 21

22 Important information This presentation is intended for investment professionals only and not for distribution to Retail Clients. The contents of this presentation are confidential and may not be reproduced or further distributed to any person or entity, whether in whole or in part, for any purpose. The material contained in this presentation is for information only and does not constitute investment advice or a recommendation to any reader of this material to buy or sell investments. The HSBC Global Investment Fund ( GIF ) range is a Luxembourg domiciled SICAV and is regulated by the CSSF. The funds mentioned in this document may not be registered for sale or available in all jurisdictions. For available funds please contact your local HSBC office. HSBC Global Investment Funds range cannot be sold by anyone in any jurisdiction in which such offer or solicitation is not lawful or in which the person making such an offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make such offer or solicitation. All applications are made on the basis of the current HSBC Global Investment Funds Prospectus, simplified prospectus and most recent annual and semi-annual reports. These can be obtained on request and free of charge from HSBC Global Asset Management (UK) Limited or the local distributors. The value of investments may go down as well as up and you may not get back the full amount you invested. Where overseas investments are held the rate of exchange may cause the value of investments to go down as well as up. Markets in some countries can be described as emerging markets. Some of these may involve a higher risk than where an investment is within a more established market. Where a sub-fund invests predominately in one geographical area, any decline in economic conditions may affect prices and the value of underlying investments. The securities representing interests in the HSBC Global Investment Funds range have not been and will not be registered under the US Securities Act of 1933 and will not be offered for sale or sold in the United States of America, its territories or possessions and all areas subject to its jurisdiction, or United States person, except in a transaction which does not violate the Securities Law of the United States of America. This document is issued by HSBC Global Asset Management (UK) Limited, 8 Canada Square, Canary Wharf, London, E14 5HQ, UK. Authorised and regulated by the Financial Services Authority and registered as number Copyright. HSBC Global Asset Management All Rights Reserved. This product is marketed in a sub-distributing capacity on a principal to principal basis by the HSBC Global Asset Management MENA, a unit that is part of HSBC Bank Middle East Limited, PO Box 66, Dubai, UAE, which is incorporated and regulated by the Jersey Financial Services Commission. Services are subject to the Bank s terms and conditions. HSBC Bank Middle East Limited is a member of the HSBC Group. The information provided has not been prepared taking into account the particular investment objectives, financial situation and needs of any particular investor. As a result, investors using this information should assess whether it is appropriate in the light of their own individual circumstances before acting on it. The information in this document is derived from sources believed to be reliable, but which have not been independently verified. However, HSBC Bank Middle East Limited makes no guarantee of its accuracy and completeness and is not responsible for errors of transmission of factual or analytical data, nor shall HSBC Bank Middle East Limited be liable for damages arising out of any person s reliance upon this information. All charts and graphs are from publicly available sources or proprietary data. The opinions in this document constitute the present judgment of the issuer, which is subject to change without notice. This document is neither an offer to sell, purchase or subscribe for any investment nor a solicitation of such an offer. This document is intended for the use of institutional and professional customers and is not intended for the use of private customers. This document is intended to be distributed in its entirety. No consideration has been given to the particular investment objectives, financial situation or particular needs of any recipient. Any transaction will be subject to HSBC Bank s Terms of Business /ME/