HSBC to launch Dynamic Fund

HSBC Mutual Fund has come out with the HSBC Dynamic Fund "" an open ended scheme that will respond to the higher risk appetite of investors in the equity segment and yet give them the protection of shifting to the relatively less risk area of cash.

Chief executive officer of HSBC Asset Management India Sanjay Prakash told reporters on Tuesday that the fund has been conceptualised as an aggressive equity fund which will have the flexibility to invest across sectors or themes with no market capitalisation bias.

The Dynamic Fund will at a time have upwards of 90 per cent of its investment in equities. It will have the freedom to invest as high as 40 per cent of its corpus in a particular sector, if there is an appropriate opportunity, he said.

The fund will have the flexibility to move to money market instruments to react to the bear phase in the market, he added.

"The fund can be 100 per cent invested in equity or 100 per cent in money market instruments, as guided by the dynamics of the investment scenario," Sanjay said. The Fund will also use derivatives for the purposes of hedging the risk, he explained.

Sanjay said the fund will invest in a maximum of 30 high growth equity shares and would be more suitable for investors who seek to diversify their portfolio and are at a higher tolerance for risk.

The fund is expected to collect about Rs 1,000 crore over the four-week period for which it will be open as a new fund offer, Sanjay said, adding that the investor will have to pay an exit load if he wants to redeem in less than one year.