Indian fund houses have caught a foreign bug as is clear from the industry seeing a spate of internationally-oriented offer documents and launches from different fund houses. The most recent being the HSBC Mutual Fund, which has filed for permission for a similar product with market regulator the Securities and Exchange Board of India (SEBI), the HSBC Brazil Equity Fund, an open ended Fund of Funds (FoF).
Five international funds have been launched since July 2009 with one such fund Fidelity Global Real Assets Fund launched in January 2010. These funds invest the money they collect from Indian investors overseas to provide diversification not just over asset classes, but also across economies.
The scheme's objective is to provide long term capital appreciation by investing predominantly in units/shares of HSBC Global Investment Funds (HGIF) Brazil Equity Fund. In case it eyes other horizons, then the scheme will endeavour to restrict itself to similar overseas mutual fund products. The indicative allocation of the scheme is to invest a minimum of 80 per cent or a maximum of 100 per cent in the units/shares of the net assets in HGIF Brazil Equity Fund – this carries a medium-to-high risk weightage. The scheme may invest anything between 0-to20 per cent of the net assets in money market instruments and/or units of liquid mutual fund schemes – this carries a low-to-medium risk weightage.
According to the offer document, HGIF is an investment company incorporated in the Grand Duchy of Luxembourg and qualifies as an undertaking for Collective Investment in Transferable Securities. HGIF – Brazil Equity is a sub-fund of HGIF.
HGIF Brazil Equity fund invests in equity and equity-equivalent securities of companies which have regular office in and an official listing on a major stock exchange or other regulated markets in Brazil. It also invests in companies which carry out their business in Brazil.
The fund has been benchmarked against the MSCI Brazil 10/40 Index. The fund would be managed by Niren Parekh. He also manages HSBC Emerging Market Fund and is the dedicated fund manager for managing overseas investments. He is the associate vice-president, Investment Management and holds a post-graduate diploma in Business Management and is a Chartered Accountant apart from having four years of experience in research.
The fund offers both growth and dividend options. The minimum application amount would be Rs 10,000. One per cent exit load would be applicable if redeemed within one year while no exit load would be applicable in case of switches between equity schemes of HSBC Mutual Fund.