New Delhi, Oct. 27: The Hongkong and Shanghai Banking Corporation (HSBC), a fully-owned unit of the UK based HSBC Holdings Plc, is set to launch three to four open-ended mutual funds in November.
“We have obtained the necessary approvals from Sebi and RBI. The schemes should hit the market by the middle of November... the IPO will be open for public subscription for a month,” sources said. This will be the first time HSBC will be venturing into the Indian mutual fund market.
The bank, which completes 150 years of operations in India this month, also has eight separate business divisions other than banking services. These include HSBC Asset Management Company, HSBC Securities and Capital Markets, HSBC Insurance Services and HSBC Software Development.
The bank’s asset management division, which will handle the newly floated mutual funds, is currently only into retailing and distribution of fund schemes managed by other asset management companies.
“To begin with, we will have an exposure to debt and equity funds only. Once we have an experience of running these, we will launch other schemes, like balanced or schematic funds,” he said.
The top three broad-market equity funds based on the industry benchmark Sharpe ratio measures (a ratio of the risk premium and the standard deviation of the returns) are Zurich (I) Equity Fund, Templeton India Growth Fund and Pioneer ITI Prima Plus. In the debt market, the performer schemes are Alliance Income Fund followed by Birla Income Plus and Zurich (I) High Interest Fund.
Asked how the schemes would perform since the equity market is bearish and investor confidence is low, the official said, “The market response should be good...we have a solid brand name and a million account holders to bank upon.”