HSBC Mutual launches dynamic fund

MUMBAI: HSBC Mutual Fund has launched a new scheme that will have a flexibility to move the entire portfolio to fixed income securities to reduce the impact of sharp falls in the market.

The scheme called HSBC Dynamic Fund will be open for subscription from August 3 and close on August 30.

Speaking to reporters HSBC Investments CEO (India) Sanjay Prakash said the new scheme has the flexibility to invest across sectors with no market cap bias and will have 90 per cent of the funds invested in not more than 30 shares.

He said it will only be second such scheme ever to be launched by the mutual fund industry.

Only ICICI Prudential has a scheme similar to the one being launched by HSBC and it has done very well on the markets.

Prakash said the scheme is not suitable for those who believe in "buy and hold" strategy. "It is more suited for investors who seek to diversify their portfolio albeit at a higher tolerance for risk".

The BSE 200 index will be the benchmark for this scheme. According to Prakash, factors that fund managers would be looking for while managing the fund would be global liquidity, global interest rate, earnings growth and movement of Japanese yen.

The fund will make use of the derivatives like options and futures for hedging purposes, he added.