Skip to main content

Mutual Fund Review: HSBC MIP Savings Plan

Name: HSBC MIP Savings Plan-Growth
Type: Open-Ended Debt-MIP
Fund Manager: Mr. Shailendra Jhingan, Mr. Jitendra Sriram & Mr. Viresh Mehta
Inception Date: February 13, 2004

Monthly Income Plan (MIP) are the marginal equity funds that provides a conservative investors the stability of debt and growth potential of equities. In MIPs, typically a large portion (75-100%) of the fund is invested in debt and money market instruments and the rest in equity. MIPs are typically suitable for investors who want to largely play it safe, but don't mind taking a little risk in order to increase the potential returns than pure income/debt funds would provide.

HSBC MIP is an open-ended income scheme with the primary objective to seek generation of reasonable income through investments in debt and money market instruments. The secondary objective of the scheme is to invest in equity and equity related instruments to seek capital appreciation. The scheme's savings plan is aggressive in its equity allocation and could invest up to 25% in equities and equity related instruments and up to 100% in debt and money market instruments (including cash and money at call).
 
The scheme has grown at a CAGR of 9.25% since its inception in February 2004 and has comfortably outpaced its benchmark and peers during the selected time frame. Higher equity allocation and vibrant equity markets along with the judicious asset allocation in debt & money market instruments has enhanced the returns of the scheme. Its one year and two year returns at 9.91% and 10.68% are superior to the returns posted by peers and benchmark for the same period As on August 2006 the scheme has an asset base of Rs 80.36 crore and has declined by Rs 21 crore compared to the pervious year same period.
 
Although the scheme could invest upto 25% of its assets in equities but the scheme have restricted its average equity allocation to 20.4% in last one year. As on August 2006 it has apportioned 48.34% of its assets in debt, 20.48% in equities and rest in cash & equivalent. Its debt component has been fluctuating in the range of 39% to 61% over last one year with average allocation at 48.3%.
 
 
 
The scheme has allocated 24.8% of its debt portfolio in securitised debt securities and 13.7% in commercial bond. It has invested 16% of its assets in AAA rated papers, 8.6% in AAA (SO) rated and 9.95% in AA+ (SO) rated paper. As on August 2006 it had an average maturity of 555 days and is higher than the category average. On the equity side its portfolio is spread across 16 stocks which seem to be large for fund with an asset base of Rs 80 crore and equity allocation at 20%. Top five holdings account for less than half of its equity portfolio with Reliance in top place. The scheme has large cap oriented portfolio and IT sector has received highest exposure at 24% followed by Diversified and Oil & Gas sector at 17% and 9% respectively.
 
Minimum investment required to enter the scheme is Rs 5000 in growth option and Rs 25000 in monthly dividend option and Rs 10000 in quarterly dividend option. It charges an Exit load of 0.5% for investments less than Rs 10 lakh and if redeemed within 6 months and nil for investment amount greater than Rs 10 lakh. While no entry load is charged for the scheme. It is benchmarked against Crisil MIP Blended Index. Expense Ratio of the scheme as on July 31, 2006 is 1.95% and is in line with the category average of 1.95%.

MIP schemes have been doing well from quite some time thanks to the soaring equity markets. HSBC MIP Savings Plan is an aggressively managed MIP scheme as it could invest upto 25% of its assets in equities and is thus suitable for the investors having risk appetite for the same.
 

Popular posts from this blog

Tata Mutual Fund

Being a part of the Tata group, the fund has the backing of a very trusted brand name with strong retail connect. While the current CEO has done an excellent job in leveraging the Tata brand name to AMC's advantage, it is ironic that this was just not capitalised on at the start. Incorporated in 1995, Tata Mutual Fund remained an 'also-ran' fund house for around eight years. Till March 2003, it had a little over Rs 1,000 crore in assets and 19 AMCs were ahead of it. But soon after that the equation changed. It was the fastest growing fund house in 2004 and 2005. During these two years, it aggressively launched six equity funds, two debt funds and one MIP. The fund house as of now stands at No. 8 in terms of asset size. This fund house has a lot to offer by way of choice. And, it also has a number of well performing schemes. Tata Pure Equity, Tata Equity PE and Tata Infrastructure are all good funds. It also has quite a few good debt funds. The funds of Tata AMC are known to...
Read more

UTI Mutual Fund

Even though only a few of UTI’s funds are great performers, this public sector fund house has many advantages that its rivals do not. It has a huge base of retail equity investors and a vast distribution network. As a business, it looks stronger than ever, especially in the aftermath of credit crunch. UTI is, by a large margin, the most profitable fund company in the country. This is not surprising, since managing equity funds is more profitable than debt. Its conservative approach and stable parentage is likely to make it look more attractive to investors in times to come. UTI’s big problem is the dragging performance that many of its equity funds suffer from. In recent times, the management has made a concerted effort to improve performance. However, these moves have coincided with a disastrous phase in the stock markets and that has made it impossible to judge whether the overhaul will eventually be a success. UTI’s top performers are a few index funds, some hybrid funds and its inf...
Read more

Salary planning Article

1. The salary (basic + DA) should be low. The rest should come by way of such allowances on which the employer pays FBT and you don't pay any tax thereon. 2. Interest paid on housing loan is deductible u/s 24 up to Rs 1.5 lakh (Rs 150,000) on self-occupied property and without any limit on a commercial or rented house. 3. The repayment of housing loan from specified sources is also deductible irrespective of whether the house is self-occupied or given on rent within the overall ceiling of Rs 1 lakh of Sec. 80C. 4. Where the accommodation provided to the employee is taken on lease by the employer, the perk value is the actual amount of lease rental or 20 per cent of the salary, whichever is lower. Understandably, if the house belongs to a family member who is at a low or nil tax zone the family benefits. Yes, the maximum benefit accrues when the rent is over 20 per cent of the salary. 5. A chauffeur driven motor car provided by the employer has no perk value. True, the company would...
Read more

8 Investing Strategy

The stock market ‘meltdown’ witnessed since the start of 2005 (notwithstanding the recent marginal recovery) has once again brought to the forefront an inherent weakness existent in our markets. This is the fact that FIIs, indisputably and almost entirely, dominate the Indian stock market sentiments and consequently the market movements. In this article, we make an attempt to list down a few points that would aid an investor in mitigating the risks and curtailing the losses during times of volatility as large investors (read FIIs) enter and exit stocks. Read on Manage greed/fear: This is an important point, which every investor must keep in mind owing to its great influencing ability in equity investment decisions. This point simply means that in a bull run - control the greed factor, which could entice you, the investor, to compromise with your investment principles. By this we mean that while an investor could get lured into investing in penny and small-cap stocks owing to their eye-...
Read more

Debt Funds - Check The Expiry Date

This time we give you an insight into something that most debt fund investors would be unaware of, the Average Portfolio Maturity. As we all know, debt funds invest in bonds and securities. These instruments mature over a certain period of time, which is called maturity. The maturity is the length of time till the principal amount is returned to the security-holder or bond-holder. A debt fund invests in a number of such instruments and each of these instruments would be having different maturity times. Hence, the fund calculates a weighted average maturity, which would give a fair idea of the fund's maturity period. For example, if a fund owns three bonds of 2-year (Rs 30,000), 3-year (Rs 10,000) and 5-year (Rs 20,000) maturities, its weighted average maturity would be 3.17 years. What is the big deal about average maturity then, you may ask. Well, knowing a fund's average maturity is important because it tells you how sensitive a fund is to the change in interest rates. It is ...
Read more
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now