equity product deck - hsbc bank india · source: bse, crisil research, s&p bse sensex returns,...

October 2020

Equity Product Deck

1

Content

Mutual Fund investments are subject to market risk. Please refer to the scheme type and riskometer on page no. 27, 45, 64, 80, 98

Equities Why invest in Equities? 02

Large Cap Why HSBC Large Cap Equity Fund? 09

Small Cap Why HSBC Small Cap Equity Fund? 31

Multi Cap Why HSBC Multi Cap Equity Fund? 50

Thematic Why HSBC Infrastructure Equity Fund? 71

Tax Why HSBC Tax Saver Equity Fund? 91

Market View Indian Market View 114

Global HSBC Global Asset Management 118

Capability India Investment Capabilities 121

2

Sharp equity market declines have been followed by recovery

Source: BSE, CRISIL Research, data as at September 2020

Returns for period less than one-year are absolute otherwise annualised,

Investments are subject to market risk. Past performance may or may not sustain in the future and does not guarantee or assure future returns

Equity asset class is one of the logical investment instrument and beneficial in the long term

– Equity is exposed to volatility in the short term

– As seen in the chart, while the linear trend of the asset class is positive in the long term, the short term shows volatility

– An example of this volatility is the subprime crisis in early 2008, which trimmed the market gains, while the quantitative

easing by global central banks subsequently pushed the markets higher

In equity markets crisis periods are recurrent, so are growth cycles

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Feb'00-Sept'01:

Tech bubble

Nifty TRI lost ~(50%)

Sep'01-Jan'08: Bull phase

Nifty TRI rose ~724%

Jan'08-Mar'09:

Sub-prime crisis

Nifty TRI fell ~(59%)

Mar'09-Jan'11:

Bounce back

post sub-prime crisis

Nifty TRI rose ~144%

Jan'11-Jan'12:

European crisis

Nifty TRI fell ~(15%)

Jan'12-Mar'15:

Post European crisis

Nifty TRI rose ~79%

Nov'16 - Nov'16

Demonetisation

Nifty fell ~(7%)

Nov '16 - Dec '18

Post Demonetisation

Nifty rose ~42%

Dec'18 -

Feb'19

Geopolitical

jitters in the

sub-continent

Nifty fell

~(3%)

Feb'19-Jan‘20

Corporate tax cut,

trade deal

Nifty TRI rose ~18%

Jan ‘20 -

June‘20

Corona

virus spread

Nifty TRI fell

~(18%)

?

3

Why invest in equities?

Source: NSE, CRISIL Research, CY – Calendar Year returns as at December 2019. Equity represented by Nifty 50, Debt represented by Crisil Composite Bond Fund Index and gold represented by

CRISIL Gold Index, Source: CRISIL, Labour bureau.nic.in, Inflation represented average of monthly inflation of industrial workers declared since January 1988 till December 2019, Source: BSE,

CRISIL Research, S&P BSE Sensex returns, Period: December 2004 – December 2019; Returns frequency: Monthly rolling

Mutual Fund investments are subject to market risk. Past performance may or may not sustain in the future and does not guarantee or assure future returns

Monthly rolling returns for respective holding periods since 1979. For instance, in case of 15-year monthly rolling returns, there will be 307 return periods. The first return period will be June 1979 to

June 1994 and last return period will be December 2004 to December 2019. * Positive returns – The number of investment periods during which returns have been positive. For example, where

investment returns have been computed for a 15-year rolling period, 307 months offered positive returns (profits), the number of positive returns period = 307. ^ Negative returns – Number of

investment periods during which returns have been negative. For example, where investment returns have been computed for a 5-year rolling period, 33 months offered negative returns (losses), the

number of negative returns = 33.

High growth over a long term Beat inflation

Potential of high returns Achieve goals

-60.0%

-40.0%

-20.0%

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20.0%

40.0%

60.0%

80.0%

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9Cale

ndar

year

retu

rns

Debt Equity Gold

100000

71299

5083536245

25842

0

20000

40000

60000

80000

100000

120000

Today 5 yr 10 yr 15 yr 20 yr

Rs

Years

Value of today’s Rs 100,000 over time

-5% -1%4% 5% 5%

60%

46%

29%21% 18%16% 15% 14% 13% 13%

-20%

0%

20%

40%

60%

80%

3 years 5 years 7 years 10 years 15 years

Lowest CAGR Highest CAGR Average CAGR

BSE Sensex

(Daily rolling return)

3-year

rolling

returns

5-year

rolling

returns

7-year

rolling

returns

10-year

rolling

returns

15-year

rolling

returns

Average rolling period

returns16.62% 16.23% 15.87% 15.82% 15.15%

Positive investment

periods89% 92% 94% 99% 100%

4

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1

2

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4

5

6

7

After a sharp decline in march, market has seen a rally and largely

recovered the losses

NIFTY50: +53%^ (from lowest levels YTD), YTD*: -4%

BSE200: +54%^ (from lowest levels YTD), YTD*: -2.5%

Recovery is not broad based and has been led by only few sectors

like Healthcare (+44% YTD), IT (+42% YTD) and Energy (+25%)

Some sectors well below pre-covid levels and offer potential upside

Financials (large part of market with 30-35% weight) down -24%

YTD

Select opportunities in Telecom (-11% YTD), Industrial (-18% YTD)

and Real Estate (-26% YTD) exits

Markets subject to the near term uncertainty. But incremental data

points suggest steady movement towards recovery and which is

reflected in our portfolios

From medium to long term perspective we expect select stocks in

some of these sectors to return to normalcy and hence offer a good

upside potential

We believe that overall equities still offer significant investment

opportunities.

Source: Bloomberg, Nifty Price to Book (PB) ratio, Data as at October 2020, ̂ Period - 23-Mar-20 to 15-Oct-20) *YTD data is from period 01-Mar-2020 to 15-Oct-2020.

Past performance may or may not sustain in the future and does not guarantee or assure future returns, Any views expressed were held at the time of preparation and are subject to change without notice. While any forecast,

projection or target where provided is indicative only and not guaranteed in any way. HSBC Asset Management India accepts no liability for any failure to meet such forecast, projection or target.

Why equity now?

2003

SARS

2008

Financial

crisis

2011

European

sovereign

debt crisis

2015

China

growth

concerns

2020 :

COVID-19?

2018 US –

China trade

tension /

IL&FS

2016 – 17

India

Demonetizatio

n

+ GST

2013

Taper Tantrum

NSE Nifty 50 – Price to Book ratio (PB)

Valuations look reasonable on a price to book basis and especially in select sectors

Current PB 2.6x

PB Average 3x

Nifty 50 – 1 year forward Price to Earnings ratio (P/E) (x) Nifty 50 – 1 year forward Price to Book ratio (P/B) (x)

Trend in India’s market cap-to-GDP (%) – trading below its long-period averages

Source: Bloomberg & Motilal Oswal Securities Ltd, Data as at September 2020, PE – Price to earnings ratio, PB – Price to book ratio

Past performance may or may not sustain in the future and does not guarantee or assure future returns, Any views expressed were held at the time of preparation and are subject to change without notice. While any forecast, projection or target

where provided is indicative only and not guaranteed in any way. HSBC Asset Management India accepts no liability for any fai lure to meet such forecast, projection or target.

Reasonable valuations post correction

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10 Year Avg: 18.9x2.5

1.5

2.3

3.0

3.8

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10 Year Avg: 2.6x

4252

82 83

103

55

9588

7164 66

81

69

79 83 79

56

80

FY0

4

FY0

5

FY0

6

FY0

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FY0

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FY0

9

FY1

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FY1

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FY1

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FY1

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FY1

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FY1

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FY1

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FY1

7

FY1

8

FY1

9

FY2

0

FY2

1E

Average of 74% for the period

Source: Bloomberg, Data as at September 2020

Past performance may or may not sustain in the future and does not guarantee or assure future returns, Any views expressed were held at the time of preparation and are subject to change without notice. While any forecast, projection or

target where provided is indicative only and not guaranteed in any way. HSBC Asset Management India accepts no liability for any failure to meet such forecast, projection or target.


-8%

-6%

-4%

-2%

0%

2%

4%

Apr-06 Apr-07 Apr-08 Apr-09 Apr-10 Apr-11 Apr-12 Apr-13 Apr-14 Apr-15 Apr-16 Apr-17 Apr-18 Apr-19 Apr-20

Bond Yield (1Y T Bill) - Nifty Earnings Yield

GFC Crisis

European Debt crisis

TaperTantrum

Demonetisation

COVID-19

-8%

-6%

-4%

-2%

0%

2%

4%

Apr-06 Apr-07 Apr-08 Apr-09 Apr-10 Apr-11 Apr-12 Apr-13 Apr-14 Apr-15 Apr-16 Apr-17 Apr-18 Apr-19 Apr-20

Bond Yield (10Y GSec) - Nifty Earnings Yield

GFC

European Debt crisis

TaperTantrum

Demonetisation

COVID-19

7

HSBC Large Cap Equity Fund (HLEF)Large cap fund - An open ended equity scheme predominantly investing in large cap stocks.

Large-cap strategy

8


Source – MOSL, Data as at September 2020, ^ Source – Bloomberg - Price to earnings (PE)

Investments are subject to market risk. Past performance may or may not sustain in the future and does not guarantee or assure future returns

Large cap companies are well positioned in current market scenario

Reasonable valuations in large caps

– Corporate profit to GDP ratio shows scope for improvement as it is well below long term average

– Nifty is currently trading at 27.4x/19.1x on FY21/FY22 consensus earnings of Rs. 410/588 respectively. Current

valuations provide reasonable opportunities. ^

Valuations - Corporate profits to GDP %

4.7

5.4

6.3

7.37.8

5.5

6.56.3

4.8

4.3 4.3

3.73.2

3.6

2.93.1

3.4

FY

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FY

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FY

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FY

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FY

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FY

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FY

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FY

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FY

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FY

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FY

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FY

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FY

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FY

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FY

19

FY

20E

Average of 5%

• Over-the-top market pessimism often presents opportunities to buy companies with good prospects at lower valuations

• Examples: 2003 global SARS outbreak and 2008 – 2009 global financial crisis

Source: Bloomberg, Nifty Price to Book (PB) ratio, Data as at September 2020

NSE Nifty 50 – Price to Book ratio (PB)

Valuations look reasonable on a price to book basis

Market downturns can create significant opportunities!

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5

6

7

Jan-03 Mar-04 May-05 Jul-06 Sep-07 Nov-08 Jan-10 Mar-11 May-12 Jul-13 Sep-14 Nov-15 Jan-17 Mar-18 May-19 Jul-20

2003

SARS

2008

Financial

crisis2011

European

sovereign

debt crisis

2015

China

growth

concerns

2020 :

COVID-19?

2018 US –

China trade

tension /

IL&FS

2016 – 17

India

Demonetization

+ GST

2013

Taper Tantrum

Current PB 2.6x

PB Average 3x

10

Earnings growth

Source: MOSL, data as at September 2020, LPA – Long Period Average

Past performance is not indicative of future performance,

Earnings growth remained volatile in FY20

Nifty PAT growth

-20

-15

19

27

16

34

24

4

10

0

12

29

6

24

5

-2

10

28 10

20

5

-6

-12

-2 0

-7

1

-3 -3

77

-6

15 14

510 9 5

15

3

-1

7

-20

-41

-10-4

35

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21E

LPA: 6%

11

India’s equity market moves with earnings

Source: MOSL, ACE MF, data as at September 2020

Past performance may or may not sustain in the future and does not guarantee or assure future returns

FY01 to FY20, Nifty EPS growth is 10.3% CAGR

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14000

Nif

ty E

PS

Nif

ty5

0 in

dex

Nifty EPS (INR) Nifty50

FY01 - FY20: 10.3% CAGR

39%

52%

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30%

35%

40%

45%

50%

55%

60% Ratio of Top 20 Indian profitable companies’ profit to the Total corporate profit

Profitability of companies is getting concentrated among few players

Source: Bloomberg, MOSL, Data as at March 2019, For illustration purposes only. Profit of 20 most profitable listed companies in India to the total profit of India’s listed corporates

Past performance may or may not sustain in the future and does not guarantee or assure future returns, Any views expressed were held at the time of preparation and are subject to change without notice. While any forecast, projection or target

where provided is indicative only and not guaranteed in any way. HSBC Asset Management India accepts no liability for any failure to meet such forecast, projection or target.

Top profitable companies share in the overall corporate profits has risen significantly

In last 16 years, top 20

companies profit share

has increased by 13%

Profit pool is getting consolidated with the dominant players in

respective sectors/industries. The trend is likely to accelerate due to

current disruption.

Profit Consolidation at overall level

‒ In last 16 years, top 20 companies profit share (in all listed companies) has

increased by 13% (from 39% to 52%)

Profit consolidation with sectors

In financials, profit share of Private sector banks has increased at the cost of

Public sector banks. HDFC Bank profit share has increased from 1.06% in

FY10 to 5.7% in FY20.

In Consumer Staples, HUL profit share has increase from 0.76% in FY10 to

1.4% in FY20.

In IT, TCS profit share has increase from 2.5% in FY10 to 6.8% in FY20 and

Infosys profit share has increase from 2.2% in FY10 to 3.5% in FY20.

We expect the overall market to do well but companies which are

dominant in their segment and / or gaining market share are likely to

do better than the overall market.

13

• Largecaps have potential to deliver above average performance in an economic up-cycle

Performance

• May subject to relatively lower volatility

Volatility

• Potential to deliver stable earnings growth

Earnings growth

• Can offer more visibility on earnings growth

Well-researched

• May support stock valuations in up as well as down trend

Well-owned

• In an economic up-cycle as well as downturn large cap tend to show relatively reasonable valuations

Valuation

• Positioned well to achieve economies of scale

Economies of scale

Advantage Large Cap Funds as underlying large cap stocks offer

Case for Large caps Funds

Investments are subject to market risk. Past performance may or may not sustain in the future and does not guarantee or assure future returns Mutual fund investments are subject to market

risks, read all scheme related documents carefully.

Large Caps: a core asset class within equities

14

HSBC Large Cap Equity Fund

Large cap fund - An open ended equity scheme predominantly investing in large cap stocks.

A portfolio strategy centered around superior quality and dominant businesses

Well researched and well

owned large caps that

have the potential to

deliver consistent

earnings growth with

sustainable competitive

advantage.

Relatively less volatiles as

being the dominant

companies in their sectors

and higher predictability of

growth, leading to

resilience.

HLEF portfolio strategy is

centered around superior

quality and dominant

businesses with the

potential to generate

sustainable growth.

Consistent earnings

growth

Low volatility and high

cashflow

HSBC Large Cap

Equity Fund (HLEF)

15

HSBC Large Cap Equity Fund 1 / 2

Fund strategy

HSBC Large Cap Equity Fund primarily comprises of large cap stocks, without exposure to excessive risk - inline with the risk appetite of investors

Fund strategy is centered around superior quality businesses that generate sustainable growth

Disciplined, repeatable approach to select good stocks at inexpensive valuations that can get re-rated v/s popular stocks at high valuations

Aim to benefit from the power of compounding

Avoiding stocks with poor corporate governance, inefficient capital allocators, and poor quality of business

8 As on 30 September 2020 of Growth option. During the same period, scheme benchmark (Nifty 50 TRI) has moved by 13.5X to Rs 135,069 from Rs 10,000 and delivered return of 15.73% 9 During the

same period, scheme benchmark (Nifty 50 TRI) has delivered return of 12.11%1 Pursuant to the circular issued by SEBI on ‘Categorization and Rationalization of the Schemes, there has been change in the fundamental attribute(s) of the aforesaid effective from Mar 14, 2018.2 The benchmark was changed w.e.f. 11th November, 2016 as a more suitable benchmark was identified which better matched the portfolio strategy. There has been no change to investment

management of the scheme.

Please refer slide no. 26 for detailed performance of HSBC Large Cap Equity Fund. For other schemes performance managed by Neelotpal Sahai refer respective slides in this presentation 63

Past performance may or may not sustain in the future and does not guarantee or assure future returns

12.1%SIP returns since

inception 8

20.9Xsince inception 7

INR 2,09,306Value of INR 10,000 since

inception 7

18.6%CAGR since inception 7

A large cap strategy with 20.9X growth in ~17 years

16

Fund Manager Neelotpal Sahai

Benchmark Nifty 50 TRI 2

Standard Deviation 20.04 3

Beta / Sharpe 0.91 3 / 0.07 3 / 4

Portfolio Turnover 6 0.99

Inception Date 10 December 2002

Portfolio Characteristics Fund Nifty 50 TRI

Number of portfolio holdings 26 50

Price to book 5 3.61 2.72

Dividend yield 5 0.74 1.29

Price to earnings 5 34.82 36.67

Return on Equity (%) 5 10.29 11.07

Weighted average market cap of the fund: Rs.4,11,533 Cr

HSBC Large Cap Equity Fund 1

An open ended equity scheme predominantly investing in large cap stocks

Data as of 30 September 2020

• Standard deviation is a statistical measure of the range of an investment's performance. When a mutual fund has a high standard deviation, its means its range of performance is wide, implying greater volatility.

• Beta is a measure of an investment's volatility vis-a-vis the market. Beta < 1 means the security will be less volatile than the market. A beta of greater than 1 implies that the security's price will be more volatile than the market.

• Portfolio turnover is a measure of how frequently assets within a fund are bought and sold by the managers.

• Price to Book (PB) and Price to Earnings (PE) are stocks valuation parameters relative to its earnings

• Dividend Yield is a financial ratio that indicates how much a company pays out in dividends each year relative to its share price.

• Return on equity (ROE) is a measure of profitability that calculates how much of profit a company generates on shareholders' equity.

• The weighted average market capitalization is a fund’s portfolio weighted by the market capitalization of each stock in the portfolio. In such a weighting companies with large weight account for a greater portion of the portfolio.

1 Pursuant to the circular issued by SEBI on ‘Categorization and Rationalization of the Schemes, there has been change in the fundamental attribute(s) of the aforesaid effective from Mar 14, 2018. 2 The benchmark (BM) was changed w.e.f. 11 Nov ‘16 as a more suitable BM was identified to better match with portfolio strategy. There has been no change to investment management of the scheme.3 Statistical Ratios disclosed are as per monthly returns (Annualized) for the last 3 years.4 Risk free rate: 4.81% (FIMMDA-NSE MIBOR)5 PE Trailing (weighted average method), Trailing 12 month Price to earnings adjusted for negative earnings, Weighted average method, PB – Price to book value, Trailing 12 month Price to earnings,

Index method aggregation. 6 Portfolio Turnover Ratio is computed for the last 12 months, Dividend Yield, ROE

17

Data as at September 2020

Past performance may or may not sustain and doesn’t guarantee the future performance

Current broader investment themes across equity funds

Our fund’s philosophy is to invest in dominant businesses having scalable potential and that have reasonable

valuations.

Over the past few years, we’ve witnessed a trend of profit pool consolidating with the dominant players in

respective sectors/industries.

We believe that the trend will accelerate as the current disruption has higher magnitude as well as it

encompasses more sectors. This has increased our resolve to be true to our philosophy. We believe that these

stocks would gain market share in the sluggish phase of the economy and gain revenue traction when the

economy returns to normalcy.

From a medium to long term perspective, the current phase of disruption shall also pave way for accelerated

digital adoption by consumers as well as enterprises.

We see telecom, internet economy, ecommerce, technology vendors etc., to benefit from this disruption.

Another long term theme is that of diversification of the global supply chain due to ‘China + 1’ strategy which

could be adopted by corporates as well as economies and India could stand to benefit out of that.

In the short term as we see the recovery phase playing out for corporate India, growth will be scarce and the

balance sheet strength will come to fore. Therefore, we are positively disposed towards companies with

relatively higher earnings resilience and ones with stronger balance sheets. As a result, we hold a positive view

on Healthcare, Consumer Discretionary and Telecom sectors.

We are also positive on Cement and Specialty chemicals, owing to strong demand recovery in the former while

the latter being a beneficiary of the global supply chain diversification away from China.

Within the discretionary basket, we are positive on companies that have rebounded in the pandemic phase itself

(eg: auto OEMs due to preference for personal mobility), companies that saw demand rebound within the

recovery phase (eg: white goods, apparels etc.) and companies still to see meaningful rebound but expected to

be beneficiaries of industry consolidation and formalization (eg: retailers, QSR etc.).

Positively disposed towards companies with relatively higher earnings resilience

and ones with stronger balance sheets

18Data as at September 2020


Current broader investment themes across equity funds

We are neutral on Financials, Consumer Staples and Technology sectors. Within Financials, we are positive on

large private banks and select large NBFCs and negative on PSU Banks, old or small private banks, and other

NBFCs.

Our positive stance on select lending institutions is driven by our assessment that the market is currently

assuming that the loan slippages and consequent credit costs to be much higher than what is being guided by

banks on account or what the market is ascribing to the rest of the economy.

Hence, we think that there is a relative divergence in the assessment of risks and the valuations of private

lending financials/banks. So this could lead to re-rating potential owing to better delivery on asset quality

parameters.

In Staples, we have moderated our earlier positive stance to neutral owing to rich valuations and lack of positive

triggers from hereon.

Our neutral position in Technology sector is on account of the sector’s ability to navigate the current phase much

better and being a beneficiary of shift to digital and increased demand for technology in the medium term.

We continue to have a negative view on Industrials, Energy and Utilities. We believe that private sector capex as

well as government capex will get delayed and hence we are not constructive on sectors that are dependent on

capex for revival.

Our negative view of the energy companies is due to subdued demand, weak profitability ratios, and volatile

prices (which are not in control of the companies).

Positive stance on select lending institutions

19

Current key focused sectors in HLEF


Sectors Comments

Healthcare

Our positive stance is on account of the earnings resilience coupled with revenue visibility. Over the medium term, we

believe that the profit pool of pharma companies will improve owing to reduction in fixed costs, secular domestic market

growth and US business showing signs of improvement. Most of the companies have significantly deleveraged their

balance sheets which will aid earnings and returns profile going ahead. Valuations can improve further as the sector

offers mid-teens earnings growth visibility and improving return ratios. Our exposure to the sector, is primarily through

companies having exposure to US generic business. We also own domestic focused businesses with a higher degree of

vertical integration.

Consumer

Discretionary

The pandemic disruption has not been felt uniformly across all Consumer Discretionary players. We remain positive on

three types of companies. a) Those companies that have rebounded in the pandemic phase itself. e.g. Auto OEMs have

witnessed good traction due to increase in need for personal mobility. b) Those companies that have rebounded in the

recovery phase e.g. White goods, apparels etc. c) Segments and companies that may not have rebounded but we

believe that the disruption will affect weaker players and unorganized players more. And in the post pandemic phase,

these companies will come out stronger. We used the correction to reorient our exposure within the sector and added to

names where the price correction has been steeper than the value destruction in the business. Also, our exposure is

through companies that are dominant players in their respective businesses.

Telecom

Services

Telecom sector is a beneficiary of industry consolidation and improving pricing power. As a result, the profitability of the

sector is anticipated to come back strongly. We believe that players who are better positioned on network / spectrum

along with better access and ability to deploy future capital, will have dominance going forward. The long pending AGR

liability issue has also been put to rest after the SC ruling and it is no longer an overhang. Additionally, the sector is a

beneficiary from the pandemic disruption, which is leading to higher data usage. Given the accelerated digital adoption

across users and industries coupled with behavioural changes; the demand for telecom services is expected to remain

robust and this should increase the wallet share of players. Our preference is for sector leaders, which also have

stronger balance sheet and have shown better execution on the ground.

HSBC Large Cap Equity Fund (HLEF) portfolio strategy

In HLEF, in line with the thought process outlined above, we are overweight in Healthcare, Telecom and Consumer Discretionary

sectors. We are underweight in Energy and Utilities sectors. We have a neutral position in Technology, Financials, Consumer Staples,

Materials and Industrials sectors.

20

HSBC Large Cap Equity Fund – Sector allocation

Sector weightings (%) ( Active sector weightings (%)

Active sector weightings - The difference in allocation of an individual security or portfolio segment between portfolio and the benchmark. Average weight, Attribution for 1 month,

HSBC Global Asset Management, Data as on 30 September 2020

35.9

16.9

9.8

8.8

8.6

6.3

6.0

3.9

2.7

1.2

0 5 10 15 20 25 30 35 40

Financials

Information Technology

Energy

Consumer Staples

Consumer Discretionary

Materials

Health Care

Communication Services

Industrials

Not Classified

2.51.9 1.8 1.8

1.2

0.1 0.1

-0.1 -0.2

-2.0

-7.1-8.00

-6.00

-4.00

-2.00

0.00

2.00

4.00

Fin

an

cia

ls

Hea

lth

Ca

re

Com

mu

nic

ation

Se

rvic

es

Con

su

me

r D

iscre

tion

ary

Not

Cla

ssifie

d

Info

rmation

Te

ch

no

logy

Ma

teria

ls

Indu

str

ials

Con

su

me

r S

tap

les

Utilit

ies

En

erg

y

21

Top stock holdings in portfolio (%)

HSBC Large Cap Equity Fund - Stock positioning

Past performance may or may not be sustained in the future, The returns provided above have been rounded off and hence there may be minor differences between point-to-point returns vis-a-vis

returns indicated above. Data as on 30 September 2020.

9.8

9.6

9.4

8.1

5.8

4.8

4.6

4.4

3.9

3.9

0 2 4 6 8 10 12

RELIANCE INDUSTRIES LTD

HDFC BANK LIMITED

INFOSYS LTD

ICICI BANK LTD

HINDUSTAN UNILEVER LTD

KOTAK MAHINDRA BANK LTD

MARUTI SUZUKI INDIA LTD

HOUSING DEVELOPMENT FINANCE

AXIS BANK LTD

BHARTI AIRTEL LTD

22

0

200

400

600

800

1000

1200

1400

Jul-

07

Jan

-08

Jul-

08

Jan

-09

Jul-

09

Jan

-10

Jul-

10

Jan

-11

Jul-

11

Jan

-12

Jul-

12

Jan

-13

Jul-

13

Jan

-14

Jul-

14

Jan

-15

Jul-

15

Jan

-16

Jul-

16

Jan

-17

Jul-

17

Jan

-18

Jul-

18

Jan

-19

Jul-

19

Jan

-20

Jul-

20

HDFC Bank

0

100

200

300

400

500

600

700

800

900

Au

g-0

4

Jun

-05

Ap

r-06

Fe

b-0

7

Dec-0

7

Oct-

08

Au

g-0

9

Jun

-10

Ap

r-11

Fe

b-1

2

Dec-1

2

Oct-

13

Au

g-1

4

Jun

-15

Ap

r-16

Fe

b-1

7

Dec-1

7

Oct-

18

Au

g-1

9

Jun

-20

HCL Tech

HCL Technologies

– The stock is appreciated by more than 8X since

initiated


Track record of key stock picks

HLEF Entry

PointStock growth

of 8.1X in

HLEF portfolio

Bloomberg, data as at September 2020

The stock named above is for illustration purposes only and does not constitute investment research, investment advice or a recommendation to any reader of this content to buy or sell investment product.

Investors should seek financial advice regarding the appropriateness of investing in any securities or investment strategies that may have been discussed in this report and

should understand that the views regarding future prospects may or may not be realised.

Currently in the portfolio, does not guarantee the position in the future. (Please refer latest portfolio for the reference)

Past performance may or may not be sustained in the future, Past performance is not indicative of future performance.

The returns provided above have been rounded off and hence there may be minor differences between point-to-point returns vis-a-vis returns indicated above.

HDFC Bank

– The stock has gained over 12X since initiated

Stock growth

of 12.9X in

HLEF portfolio

HLEF Entry

Point

23

HSBC Large Cap Equity Fund - portfolio

Data as on 30 September 2020

24

HSBC Large Cap Equity Fund - performance

Returns are of growth option. The returns for the respective periods are provided as on Last business day of Sep 2020 for the respective Schemes

Returns above 1 year are Compounded Annualized. Standard benchmark is prescribed by SEBI and is used for comparison purposes. Returns on 10,000 are

point-to-point returns for the specific time period, invested at the start of the period. The returns provided above have been rounded off and hence there may be minor differences between

point-to-point returns vis-a-vis returns indicated above. Different plans shall have a different expense structure. The performance details provided herein are of other than Direct plan.

Investment of Rs.10000/- 1 year (INR) 3Y (INR) 5Y (INR)Since Inception

(INR)

HSBC Large Cap Equity Fund – Growth 9,821 10,974 14,496 209,306

Nifty 50 TRI (Benchmark) 9,903 11,921 15,064 135,069

Alpha (82) (947) (568) 74,237

SIP performanceP2P performance

Data as at Sep 2020, Past performance may or may not be sustained in the future.

Please check the detailed performance on the slide number 26, For other schemes performance managed by Neelotpal Sahai refer respective slides in this presentation 63, 100

The Fund offers flexible and convenient Systematic Investment Plan (SIP) facility. To illustrate the advantages of SIP investments, this is how your investments would have grown if you had

invested say 10,000 systematically on the first Business Day of every month over a period of time in the Growth Option of Respective Scheme. The returns are calculated by XIRR approach

assuming investment of 10,000/- on the 1st working day of every month. XIRR helps in calculating return on investments given an initial and final value and a series of cash inflows and outflows

with correct allowance for the time impact of the transactions.

-5%

0%

5%

10%

15%

20%

1Y 3Y 5Y Since Inception

HSBC Large Cap Equity Fund - Growth

Nifty 50 (Benchmark)

0%

2%

4%

6%

8%

10%

12%

14%


HSBC Large Cap Equity Fund -…

25

Rolling performance – HSBC Large Cap Equity Fund

In the long term , probability of negative returns reduces and

creates an opportunity to generate better risk adjusted returns

Methodology - example:

Note - Rolling returns are calculated since inception. As inception date is different for different fund so the returns of one fund is not comparable with other fund.

10 years rolling returns for HSBC Large Cap Equity Fund are calculated using the data since its inception i.e. 10 Dec 2002 to 30 September 2020.

10 year data calculation has number of sets of two NAVs starting from 10 Dec 2002 to 9 Dec 2012, 11 Dec 2002 to 10 Dec 2012,..... and so on up to 1 Apr 2010 to 30 September 2020. The CAGR

returns are calculated for each of these number of NAV sets. The maximum, average and minimum returns number is taken out from these number of returns set. From this set of number of CAGR

returns other numbers are extracted such as the number of times where the fund has delivered less than Zero, more than 7%, 10% and more than 15% has been identified and converted into % times.

Similar daily rolling returns are calculated for other 10, 5, 3 and 1 year periods and above data is extracted.

Source ACE MF – as at September 2020, Nifty 50 TRI

^ ^ The above table shows the performance on daily rolling returns basis for respective periods (1, 3, 5 and 10 years) since the inception date of the scheme. The maximum, minimum and average

returns are calculated on the basis of total observations for respective rolling period.

Rolling return period for HSBC Large Cap Equity Fund – 10-Dec-02 – 30 September 2020,

Rolling return period for Nifty 50 TRI – 10-Dec-02 – 30 September 2020,

Please refer to page no 26 for performance in SEBI prescribed performance format of the above fund. Past performance may or may not be sustained in the future, For other schemes

performance managed by Neelotpal Sahai refer respective slides in this presentation 63 and 100

Returns - Daily Rolling CAGR%

Since Inception ^

Period (Y=Years) 10Y 5Y 3Y 1Y 10Y 5Y 3Y 1Y

Minimum returns% 4.5 -1.7 -5.5 -50.4 5.1 -1.0 -5.2 -55.3

Maximum returns% 27.1 63.0 85.3 196.3 22.4 44.8 62.0 107.5

Average Returns 12.6 13.9 16.5 22.0 13.1 13.8 15.8 18.9

Negative returns % times 0% 2% 6% 22% 0.0% 0.1% 2.3% 19%

Returns more than 7% (% times) 94% 77% 73% 65% 97.3% 82.2% 75.7% 70%



HSBC Large Cap Equity Fund(G)Nifty 50

(Benchmark )

26

HSBC Large Cap Equity Fund - performance

ICRA MFI Explorer, Data as on 30 September 2020. For other schemes performance managed by Neelotpal Sahai refer respective slides in this presentation 63 and 100

Performance of the respective benchmark is calculated as per the Total Return Index (TRI)

Pursuant to the circular issued by SEBI on ‘Categorization and Rationalization of the Schemes, there has been change in the fundamental attribute(s) of the aforesaid effective from Mar 14, 2018.

The performance details provided herein are of other than Direct Plan - Growth Option. Returns on Rs.10,000 are point-to-point returns for the specific time period, invested at the start of the period. The

returns for the respective periods are provided as on last available NAV of September 2020 for the respective Schemes. Returns 1 year and Above are Compounded Annualised. Load is not taken into

consideration for computation of performance. Different plans shall have a different expense structure. The expenses of the Direct Plan under the Scheme will be lower to the extent of the distribution

expenses / commission charged to the Other than Direct Plan. The performance data of the scheme(s) managed by the respective Fund Manager which has/have not completed 1 year is not provided.

Considering the varying maturities of the close ended schemes, the performance of close-ended schemes is not provided as it is strictly not comparable with that of open ended schemes.

Funds Managed by Neelotpal Sahai (Total Schemes Managed 5)


Incep

tion

Date

: 10-D

ec-0

2

Fund / Benchmark

(Value of `10,000 invested)

1 Year 3 Years 5 Years Since Inception

Amount in

`Returns

(%)

Amount in

`Returns

(%)

Amount in

`Returns

(%)

Amount in

`Returns

(%)

HSBC Large Cap Equity Fund 9,821 -1.79 10,974 3.14 14,496 7.70 209,306 18.61

Scheme Benchmark (Nifty 50 TRI) 9,903 -0.97 11,921 6.02 15,064 8.53 135,069 15.73

Additional Benchmark

(S&P BSE Sensex TRI)9,956 -0.44 12,602 8.00 15,500 9.15 150,852 16.45

The said Fund is managed by Neelotpal Sahai Effective (27 May 2013)

27

HSBC Large Cap Equity Fund – Key features

Benchmark Index Nifty 50 TRI

Minimum Application Amount

Lump sum = INR 5,000, SIP = INR 500

Options Growth, Dividend (Payout & Dividend Reinvestment)

Load StructureEntry Load – Nil;

Exit Load 4 – 1% if redeemed / switched out within 1 year from allotment else NIL

SIP/STP/SEP SIP/STP/SEP available


Investment Objective

To generate long-term capital growth from an actively managed portfolio of equity

and equity related securities of predominantly large cap companies. However,

there can be no assurance or guarantee that the investment objective of the

scheme would be achieved.

4 Applicable with effect from 14 March, 2018, In respect of each purchase /switch-in of Units, an Exit Load of 1% is

payable if Units are redeemed / switched-out within 1 year from the date of allotment, No Exit Load will be charged, if

Units are redeemed/switched-out after 1 year from the date of allotment.

28

HSBC Small Cap Equity Fund (HSEF)Small Cap Fund - An open ended equity scheme predominantly investing in small cap stocks

Small Cap strategy

29

• Small Caps have potential to outperform in an economic up-cycle

Performance

• Subject to relatively very high volatility

Volatility

• Better earnings acceleration effect v/s large/midcaps due to base effect and emerging businesses

Earnings acceleration

• May lead to mis-appraisal and mis-pricing by the market

Under-researched

• Provides opportunities to accumulate small cap stocks at lower valuations

Under-owned

• On account of above average growth but at the same time unknown due to less research coverage on small caps

Valuation discount

• Offers diversity with potential to generate better performance

Diversity and alpha

Case for Small Cap funds


Small Caps: High growth asset class within equities

Underlying Small Cap stock features:

30

Small Caps can be Mid & Large caps of tomorrow

Historically, Index constituents change by ~50% every decade

Small caps today have potential to become Midcaps and may graduate to become the large caps of

tomorrow thereby, replacing the current Nifty constituents

Small cap investment is also one of the best way for aggressive investors to gain exposure to some of

the rapidly growing industries and business

Over the last 3 years some of the small cap stocks that have entered become Mid cap or Large caps

But 5 years prior to their inclusion, they were small or mid caps, much smaller in size and much less

discussed!

Source - Ambit Capital Research, Data as at September 2020. Note: “t-0” denotes the year of Nifty Midcap index inclusion. T-1 to t-5 are the years before inclusion in Nifty Midcap index. Past

performance may or may not sustain in the future and does not guarantee or assure future returns

Small Cap progress in size before Mid Cap inclusion

Don’t ignore todays small caps: tomorrows potential mid and large caps

80

90

100

110

120

130

140

t-5 t-3 t-1 t-0

Ave

rag

e M

ca

p (

Rs

bn

)

31

Source – AMBIT Capital Research, Note: For this exhibit, we have considered the stock inclusions in the Nifty Midcap 100 index since 2005. The performance denoted as 3 year CAGR from t-3 to t-0

reflects the median annualized returns of these inclusions over a 3 year period prior to inclusion in the Nifty Midcap index. Similarly, the 1 year CAGR from t-1 to t-0 reflects the average return over a 1

Year period prior to inclusion. The returns from t-0 to t+1 & t-0 to t+3 reflect the median returns of these inclusions over a 1 year & 3 year period post inclusion in the Nifty Midcap index. Data as at Sep

2020

Transition phase offers opportunity

The value in investing in Small Cap stocks is before they enter the index and not after!

Small cap stocks should be tapped at an early stage of their life-cycle

A look at the price-performance of all Nifty entrants historically suggests that the value in investing in

these stocks is before they enter the index and not after!

75

85

95

105

115

125

135

145

155

t-3 t-1 t-0 t+1 t+3Inclusions (relative to Nifty Midcap)

3-yr CAGR: 10%

1-yr CAGR: 20%

1-yr CAGR: -4%

3-yr CAGR: -11%

Nif

ty M

idcap e

ntr

y

32

Small caps have done well over the long run historically*

Source: Bloomberg, Capitaline, Ambit Capital research. Note: Universe is top 500 stocks based on 6 month average market cap each year. Large-caps are defined as top 100

stocks on market capitalization, between 101-250 as mid-caps, and between 251–500 as small-caps. *Performance has been calculated on a Mar-Mar basis starting from Mar-03,

latest year performance is updated as at June 2020.

Ambit Capital research. Note: Universe is top 500 stocks based on 6 month average market cap each year. Large-caps are defined as top 100 stocks on market capitalization, between 101-250 as mid-caps,

and between 251–500 as small-caps. *Institutional ownership as at Mar’20, #Analyst coverage and average daily liquidity as at Sep 20

Past performance may or may not sustained in the future, as at September 2020.

Higher returns attributable to inefficient price

discovery owing to lower analyst coverage…#

Lower institutional ownership* … and lower activity levels#

Case for long term investing in small caps

Gain from inefficient price discovery in Small Caps

-

1,000

2,000

3,000

Mar-

03

Mar-

04

Mar-

05

Mar-

06

Mar-

07

Mar-

08

Mar-

09

Mar-

10

Mar-

11

Mar-

12

Mar-

13

Mar-

14

Mar-

15

Mar-

16

Mar-

17

Mar-

18

Mar-

19

Mar-

20

Sep

-2

0

Large-Cap Mid-Cap Small-Cap

CAGR ReturnsSmallcaps: 18.4%Midcaps: 18.1%Largecaps: 17.3%

15

17

19

21

23

25

27

29

Mid Cap Small Cap

Mid Cap Small Cap

-

5

10

15

20

Mid Cap Small Cap

Mid Cap Small Cap

- 1 2 3 4 5 6 7 8 9

10 11

Mid Cap Small Cap

Mid Cap Small Cap

33

HSBC Small Cap Equity Fund

Small Cap Fund - An open ended equity scheme predominantly investing in small cap stocks

Aims to invests in small cap companies that can become mid/large caps of tomorrow

Emerging businesses with

high growth potential

demonstrated by earnings

acceleration.

Provide opportunities to

accumulate small cap

stocks at lower valuations.

HSEF employs bottom-up

fundamental approach to

find small cap stocks with

the potential of high

earning expansion which

can become Mid and

Large caps of tomorrow.

Earning accelerationUnder researched /

Under owned

HSBC Small Cap

Equity Fund (HSEF)

34

HSBC Small Cap Equity Fund 1

Fund strategy

Fund strategy is centered around superior quality businesses that generate sustainable growth with good capital efficiency

Bottom-up fundamental approach; looking for stocks that are in the growth phase of the business lifecycle, experiencing higher earnings

expansion as compared to their mid / large cap counterparts

Long term horizon; looking to identify companies that may migrate from small caps to midcaps and eventually large caps

Disciplined, repeatable approach to generate long-term alpha – good stocks at inexpensive valuations that can get re-rated v/s popular stocks at

high valuations

Avoid stocks with poor corporate governance, inefficient capital allocators, value traps and poor quality of business

7 As on 30 September 2020 of Growth option. The launch date of the S&P BSE 250 Small Cap Index (INR) is November 30, 2017 whereas the inception date of the scheme is May 19, 2005. All

information presented prior to the index launch date is back-tested which is available from Mar 31, 2008. During the same period, scheme benchmark (S&P BSE 250 small cap index TRI) has moved by

1.2X to Rs. 12,681 from Rs.10,000 and delivered return of 4.86%. 8 During the same period, scheme benchmark (S&P BSE 250 small cap index TRI) has delivered return of 1.28%1 Pursuant to the circular issued by SEBI on ‘Categorization and Rationalization of the Schemes, there has been change in the fundamental attribute(s) of the aforesaid effective from Mar 14, 2018.

1.16%SIP returns

over 5 years 8

1.2XIn 5 years 7

INR12,140Value of INR 10,000 in 5

years 7

3.95%CAGR over 5 years 7

35

Fund Manager Ankur Arora

Benchmark 2 S&P BSE 250 Small Cap Index TRI

Standard Deviation 3 28.94%

Beta / Sharpe 3 / 4 0.90 / -0.13


Inception Date 19 May 2005

Portfolio Characteristics FundS&P BSE 250 Small

Cap Index TRI

Number of holdings 45 250




Return on Equity (ROE %) 5 13.06 9.68

Weighted average market cap of the fund: Rs.12,522 Cr

HSBC Small Cap Equity Fund 1 , 2

An open ended equity scheme predominantly investing in small cap stocks

HSBC Global Asset Management, data as of 30 September 2020


• Beta is a measure of an investment's volatility vis-a-vis the market. Beta of less than 1 means that the security will be less volatile than the market. A beta of greater than 1 implies that the security's price will be more volatile than

the market.






1 Pursuant to the circular issued by SEBI on ‘Categorization and Rationalization of the Schemes, there has been change in the fundamental attribute(s) of the aforesaid effective from Mar 14, 2018. 2 The benchmark was changed w.e.f. 14th March 2018 as a more suitable benchmark was identified which better matched the portfolio strategy3 Statistical Ratios disclosed are as per monthly returns (Annualized) for the last 3 years.4 Risk free rate: 4.81% (FIMMDA-NSE MIBOR)5 PE Trailing (weighted average method), Trailing 12 month Price to earnings adjusted for negative earnings, Weighted average method, PB – Price to book value, Trailing 12 month Price to earnings,

Index method aggregation. 6 Portfolio Turnover Ratio is computed for the last 12 months, Dividend Yield, ROE6 Portfolio Turnover Ratio is computed for the last 12 months


HSEF portfolio strategy

The fund is small cap focused fund which aims to gain from the long term growth potential of small and emerging

companies. We have been very consistent in our view on the markets and our portfolio continues to reflect the

same. After the COVID-19 led disruption, market has recovered almost all its losses and small cap indices are

actually in positive on year to date basis. However, a quick glance on the constituents of this recovery clearly

differentiates the winners and losers in the market.

Most of the recovery has been led by leading players in their respective segment who had strong balance sheets

and had the ability to survive the COVID-19 led disruption. The basic premise being that stronger players would

gain disproportionate market share at the cost of smaller players in the current disruption. We have maintained a

similar view on the market for some time and have built the portfolio in line with the same theme.

We remain invested in the names which we believe will emerge stronger in the medium term, notwithstanding the

short term outcomes. A few segments of economy have got structurally impacted in the current environment while

a few other are facing only transitionary challenges. We are aligning our portfolio to the segments where we

believe the impact is transitionary in nature and they will emerge stronger post this disruption.

We continue to maintain a positive stance on the consumer discretionary space led by long term strengths of

these businesses.

We are maintained a positive stance on cash rich companies as these are the companies that will be able to

deliver superior performance in the current stressed environment.

We maintain our positive stance on material space primarily due to our positive stance on chemical companies

that we believe will continue to grow strongly in the medium to long term as global customers continue to diversify

supply chains from China alone.

We have also turned more positive on healthcare space primarily due to strong opportunity in API business. A

small shift in supply chains away from China can lead to huge growth opportunities for these players and many

companies have been able to demonstrate the potential growth opportunity in last few quarterly results leading to

our positive stance.

Mutual fund investments are subject to market risks, read all scheme-related documents carefully. Past performance may or may not sustain and doesn’t guarantee the future performance

HSEF maintained positive stance on cash rich companies

37

Current key focused sectors in HSEF


Sectors Comments

Consumer

Discretionary

We remain positive on small ticket discretionary spends as we believe many of these companies will come back very

strongly post COVID-19 led slowdown. We are also positive on home improvement segment which should see a

pick-up in demand as things return to normalcy.

Healthcare

We find attractive opportunities in healthcare space given the large opportunity in API market. As the end customers

diversify their supply chain from China alone, Indian API manufacturers stand to benefit significantly. We also remain

positive on select hospital and diagnostic players that we believe can gain substantially in the medium to long term

given the current unorganized nature of the market.

Industrial

We continue to remain negative on industrial space as the capacity utilization in the system remain low leading to

little need for a new capex cycle to begin. On infra side, government continues to spend but opportunities in that

space also remain far and few between given the longer execution cycles and stretched balance sheet of many

players in the sector.

38

HSBC Small Cap Equity Fund - Sector allocation

Sector weightings (%) Active sector weightings (%)

HSBC Global Asset Management, Data as of 30 September 2020, Active sector weightings - The difference in allocation of an individual security or portfolio segment between portfolio and the

benchmark. Average weight, Monthly Attribution.

24.5

21.3

16.0

12.7

9.4

5.6

3.7

3.2

2.6

1.1

0 5 10 15 20 25 30

Materials


Industrials

Health Care

Financials

Consumer Staples

Real Estate



Not Classified

7.0

1.9 1.71.1

0.1

-0.1 -0.2 -0.5-1.2

-1.5

-3.2

-5.1 -6

-4

-2

0

2

4

6

8

Con

su

me

r D

iscre

tion

ary

Rea

l E

sta

te

Ma

teria

ls

Not

Cla

ssifie

d

Con

su

me

r S

tap

les

Fin

an

cia

ls

Hea

lth

Ca

re

Utilit

ies

Com

mu

nic

ation

Se

rvic

es

En

erg

y

Indu

str

ials

Info

rmation

Te

ch

no

logy

39

Top stock weightings in portfolio

HSBC Small Cap Equity Fund - Stock positioning

HSBC Global Asset Management, Data as of 30 September 2020 Past performance may or may not be sustained in the future, The returns provided above have been rounded off and hence there may be

minor differences between point-to-point returns vis-a-vis returns indicated above. Average weight, Attribution for 1 year

5.6

5.5

5.2

4.5

3.7

3.7

3.4

3.1

3.0

3.0

0 1 2 3 4 5 6

DIXON TECHNOLOGIES INDIA LTD

J.B. CHEMICALS & PHARMA LTD

AMBER ENTERPRISES INDIA LTD

VINATI ORGANICS LTD

APL APOLLO TUBES LTD

LAURUS LABS LTD

ESCORTS LTD

VMART RETAIL LTD

KEC INTERNATIONAL LTD

CAN FIN HOMES LTD

40

0

200

400

600

800

1000

1200

1400

1600S

ep-1

4

Ma

r-1

5

Se

p-1

5

Ma

r-1

6

Se

p-1

6

Ma

r-1

7

Se

p-1

7

Ma

r-1

8

Se

p-1

8

Ma

r-1

9

Se

p-1

9

Ma

r-2

0

Se

p-2

0

Vinati Organics

Vinati Organics –

– The stock has grown by more than 6 times since initiated



HSEF Entry

Point

Stock growth

of 6.7X

in HSEF

portfolio

Bloomberg, Data as at September 2020

The stock named above is for illustration purposes only and does not constitute investment research, investment advice or a recommendation to any reader of this content to buy or sell investment

product.






41

HSBC Small Cap Equity Fund – portfolio


42

HSBC Small Cap Equity Fund - performance

Source : ICRA MFI Explorer, as at September 2020, Please check the detailed performance on the slide number 44.

The Fund offers flexible and convenient Systematic Investment Plan (SIP) facility. To illustrate the advantages of SIP investments, this is how your investments would have grown if you had invested say Rs.10,000 systematically

on the first Business Day of every month over a period of time in the Growth Option of Respective Scheme. The returns are calculated by XIRR approach assuming investment of Rs.10,000/- on the 1st working day of every

month. XIRR helps in calculating return on investments given an initial and final value and a series of cash inflows and outflows with correct allowance for the time impact of the transactions.

Please Note : “NA means not available

Pursuant to the circular issued by SEBI on ‘Categorization and Rationalization of the Schemes, there has been change in the fundamental attribute(s) of the aforesaid scheme including change in the benchmark to S&P BSE 250

Small Cap Index TRI effective from Mar 14, 2018. The launch date of the S&P BSE 250 Small Cap Index (INR) is November 30, 2017 whereas the inception date of the scheme is May 19, 2005. All information presented prior to

the index launch date is back-tested which is available from Mar 31, 2008. The corresponding benchmark returns since inception of the scheme is not available. All index data is available on the website of Asia Index Pvt. Ltd. a

joint venture between BSE Ltd. and S&PDow Jones Indices LLC. (source: http://www.asiaindex.co.in).

Returns are of growth option. The returns for the respective periods are provided as on Last business day of June 2020 for the respective Schemes. Returns above 1 year are Compounded Annualized. Standard benchmark is

prescribed by SEBI and is used for comparison purposes. Returns on 10,000 are point-to-point returns for the specific time period, invested at the start of the period. The returns provided above have been rounded off and hence

there may be minor differences between point-to-point returns vis-a-vis returns indicated above. Different plans shall have a different expense structure. The performance details provided herein are of other than Direct plan. Past

performance may or may not be sustained in the future.

Scheme count for the total schemes managed by the Fund Managers does not include closed ended scheme.

Investment of Rs.10,000/- 1Y (INR) 3Y (INR) 5Y (INR) Since Inception (INR) *

HSBC Small Cap Equity Fund – Growth 10,545 8,754 12,140 47,149

S&P BSE Small Cap 250 TRI (Benchmark) (Rs.) 10,719 8,604 12,681 -

Alpha (Rs.) (174) 150 (541) -


-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%


HSBC Small Cap Equity Fund - Growth S&P BSE Small Cap 250

-5%

0%

5%

10%

15%

20%

25%

30%

35%


HSBC Small Cap Equity Fund - Growth S&P BSE Small Cap 250

http://www.asiaindex.co.in/

43

Rolling performance – HSBC Small Cap Equity Fund

In the long term, probability of negative returns reduces and




10 years rolling returns for HSBC Small Cap Equity Fund are calculated using the data since its inception i.e. 19 May 2005 to 30 September 2020.

This calculation has number of sets of two NAVs starting from 19 May 2005 to 9 Dec 2012, 11 Dec 2002 to 10 Dec 2012,..... and so on up to 1 Apr 2010 to 30 September 2020. The CAGR returns are

calculated for each of these number of NAV sets. The maximum, average and minimum returns number is taken out from these number of returns set. From this set of number of CAGR returns other

numbers are extracted such as the number of times where the fund has delivered less than Zero, more than 7%, 10% and more than 15% has been identified and converted into % times. Similar daily

rolling returns are calculated for other 5, 3 and 1 year periods and above data is extracted.

Source ACE MF – as at September 2020, Please Note :NA means not available. S&P BSE 250 Small Cap TRI

S&P BSE 250 Small Cap Index TRI - Pursuant to the circular issued by SEBI on ‘Categorization and Rationalization of the Schemes, there has been change in the fundamental attribute(s) of the

aforesaid scheme including change in the benchmark to S&P BSE 250 Small Cap Index TRI effective from Mar 14, 2018. The launch date of the S&P BSE 250 Small Cap Index (INR) is November 30,

2017 whereas the inception date of the scheme is May 19, 2005. The corresponding benchmark returns since inception of the scheme is not available.

^ ^ The above table shows the performance on daily rolling returns basis for respective periods (1, 3, 5 and 10 years) since the inception date of the scheme. The maximum, minimum and average


Rolling return period for HSBC Small Cap Equity Fund – 19 May 2005 – 30 September 2020,

Please refer to page no 44 for performance in SEBI prescribed performance format of the above funds.


Since Inception ^


Minimum returns% 3 -9 -21 -67 NA NA NA NA

Maximum returns% 18.71 32.43 48.73 142.82 NA NA NA NA

Average Returns 10.13 10.55 9.34 14.39 NA NA NA NA

Negative returns % times 0.0% 21.3% 28.5% 42% NA NA NA NA

Returns more than 7% (% times) 88.6% 63.0% 47.6% 51% NA NA NA NA



HSBC Small Cap Equity Fund(G)S&P BSE 250 Small Cap

(Benchmark)

44

HSBC Small Cap Equity Fund - performance

Past performance may or may not be sustained in the future,

Please Note :NA means not available.

ICRA MFI Explorer, Data as on 30 September 2020

11 Pursuant to the circular issued by SEBI on ‘Categorization and Rationalization of the Schemes, there has been change in the fundamental attribute(s) of the aforesaid scheme

including change in the benchmark to S&P BSE 250 Small Cap Index effective from Mar 14, 2018. The launch date of the S&P BSE 250 Small Cap Index (INR) is November 30, 2017

whereas the inception date of the scheme is May 19, 2005. All information presented prior to the index launch date is back-tested which is available from Mar 31, 2008. The

corresponding benchmark returns since inception of the scheme is not available. All index data is available on the website ofAsia Index Pvt. Ltd. a joint venture between BSE Ltd. and

S&PDow Jones Indices LLC. (source: http://www.asiaindex.co.in).

The performance details provided herein are of other than Direct Plan - Growth Option. Returns on Rs.10,000 are point-to-point returns for the specific time period, invested at the start of

the period. The returns for the respective periods are provided as on last available NAV of September 2020 for the respective Schemes. Returns 1 year and Above are Compounded

Annualised. Load is not taken into consideration for computation of performance. Different plans shall have a different expense structure. The expenses of the Direct Plan under the

Scheme will be lower to the extent of the distribution expenses / commission charged to the Other than Direct Plan. The performance data of the scheme(s) managed by the

respective Fund Manager which has/have not completed 1 year is not provided. Considering the varying maturities of the close ended schemes, the performance of close-ended

schemes is not provided as it is strictly not comparable with that of open ended schemes.

Past performance may or may not be sustained in the future. Refer note below.

The said Fund is managed by Ankur AroraEffective (05 Aug 2019)

Funds Managed by Ankur Arora (Total Schemes Managed 1)


Incep

tion

Date

: 19-M

ay-0

5

Fund / Benchmark



Amount in

`Returns

(%)

Amount in

`Returns

(%)

Amount in

`Returns

(%)

Amount in

`Returns

(%)

HSBC Small Cap Equity Fund 10,545 5.43 8,754 -4.33 12,140 3.95 47,149 10.61

S&P BSE 250 Small Cap Index TRI

(Scheme Benchmark) 1110,719 7.17 8,604 -4.88 12,681 4.86 NA NA

Nifty 50 TRI (Standard Benchmark) 9,903 -0.97 11,921 6.02 15,064 8.53 68,598 13.34


45

HSBC Small Cap Equity Fund – Key features

Benchmark Index S&P BSE 250 Small Cap Index TRI





Exit Load 4 – 1% if redeemed / switched out within 1 year from allotment


Fund Manager Ankur Arora


To generate long term capital growth from an actively managed portfolio of equityand equity related securities of predominantly small cap companies. However, itcould move a portion of its assets towards fixed income securities if the fundmanager becomes negative on the Indian equity markets. However, there can beno assurance or guarantee that the investment objective of the scheme would beachieved.

4 Applicable with effect from 14 March, 2018, In respect of each purchase /switch-in of Units, an Exit Load of 1% is payable

if Units are redeemed / switched-out within 1 year from the date of allotment, No Exit Load will be charged, if Units are

redeemed/switched-out after 1 year from the date of allotment.

46

HSBC Multi Cap Equity Fund (HMEF)Multi cap fund - An open ended equity scheme investing across large cap, mid cap, small cap stocks

Multi Cap strategy

47

Largecap + Midcap + Smallcap = Multi Cap advantage

Case for Multi Cap Funds

• Multi Cap positioning can bring in performance consistency with the combination of Large, Mid and Small Caps as the investment scenario changes

Performance

• Multi Caps show relatively moderate volatility

Volatility

• Multi Cap investment offers combination of stable as well as accelerated earnings

Earnings growth

• Well research Large Caps have visibility on earnings growth

• Mid & Small Caps may subject to the market mis-appraisal and mis-pricing as they are under researched stocks

Well-researched and under-researched

• Support stock valuations in up as well as down trend

• Offers opportunity to accumulate midcaps at lower valuations

Well-owned and

under owned

• Mid Caps and Small Caps may offer valuation discount on account of under-research characteristics

Valuation

• While Large Caps can achieve economies of scale, Mid & Small Caps may offer relatively better growth / performance

Economies of scale and alpha

Mutual fund investments are subject to market risks, read all scheme related documents carefully. Past performance may or may not sustain and doesn’t guarantee the future performance

Multi Cap funds offer Triple Advantage

48

Bringing performance balance

ACE MF, HSBC Global Asset Management , data as of 31 December 2019

Largecaps investment support the overall portfolio with stable growth, while Mid and Small Caps help

to generate high alpha

– Largecap and Midcap stocks generally do not perform in similar time periods

– The need for the all season performance could be achieved with the flavor of combination of Large-Mid-

Small-caps in the portfolio

– Changing investment conditions call for active re-allocation between Large, Mid and Smallcaps

– Flexicap funds shift asset allocation between Large-Mid-Small-caps to gain from the periodic favourable

investment scenario for the stocks belonging to particular market cap segment

Multi cap strategy can outperform in the different time periods

-80

-60

-40

-20

0

20

40

60

80

100

120

Retu

rns %

Year

Large Cap Mid Cap

2005 2006 2010 2011 2014 2016 20182012 2013 2015 20172007 2008 2009 2019

49

Bringing performance consistency

Source – ACE MF, Chart representation - Large cap – S&PBSE Sensex, Mid Cap – S&P BSE Midcap, Small Cap – S&P BSE Small Cap index, HSBC Global Asset Management , data as of 31 Dec 2019

Switching makes sense between anticipated winners based on favourable or unfavorable market

conditions

– Large cap stocks have outperformed / fallen less in 2006, 2008, 2010, 2011, 2013, 2018 and 2019

– Midcap stocks have outperformed in 2012, 2015 & 2016

– Small cap stocks were the best performers in the year 2005, 2007, 2009, 2014 & 2017

– It makes sense to invest across market caps with multi cap investment strategy

Large, Mid, Small Caps outperform in the different time periods

-100.0

-50.0

0.0

50.0

100.0

150.0

Large Cap Mid Cap Small Cap

2005 2007 2010 2011 2013 2015 20172006 2008 2009 2012 2014 2016 2018 2019

50

Advantage Multi Cap strategy

Source – ACE MF, Data as of 31 December 2019

Riding with leaders with changing market conditions

– Large cap stocks have outperformed / fallen less in 2006, 2008, 2010, 2011, 2013, 2018 and 2019

– Midcap stocks have outperformed in 2012, 2015 & 2016

– Small cap stocks were the best performers in the year 2005, 2007, 2009, 2014 & 2017

– Investing across market caps with multi cap investment strategy at favourable times could be rewarding

Multi Cap portfolio offers an exposure to a potential winner across investment cycles

MFI ICRA, Chart representation - Large cap – S&PBSE Sensex, Mid Cap – S&P BSE Midcap, Small Cap – S&P BSE Small Cap index, HSBC Global Asset Management , data as of 31 Dec 18

-100.0

-50.0

0.0

50.0

100.0

150.0

Large Cap Mid Cap Small Cap Flexi Cap

2005 2007 2010 2011 2013 2015 20172006 2008 2009 2012 2014 2016 2018 2019

51

HSBC Multi Cap Equity Fund

Multi cap fund - An open ended equity scheme investing across large cap, mid cap, small cap stocks

HMEF invests in dominant players across market caps

Large caps support the

overall portfolio with

consistent growth &

stability, while Mid and

Small caps help to

generate alpha.

Potential to deliver across

time periods by identifying

and positioning for

favourable investment

cycles.

HMEF employs market-

cap diversification

approach comprising of

dominant players, which

can navigate market

cycles effectively with

focus on quality stocks.

Power of 3Focus on favourable

cycles

HSBC Multi Cap

Equity Fund (HMEF)

52

HSBC Multi Cap Equity Fund 1 , 2

Fund strategy

HSBC Multi Cap Equity Fund maintains a portfolio that comprises of combination of Large, Mid, Small Cap stocks.

Fund strategy is centered around superior quality businesses that generate sustainable growth.

Disciplined, repeatable approach to generate long-term growth with the flavor of alpha. Focus on basket of quality stocks at an inexpensive

valuations that can deliver stable growth while some get re-rated v/s high valuation popular stocks.

Avoiding accidents by ignoring stocks with poor corporate governance, inefficient capital allocators, and poor quality of business.

7 As on 30 September 2020 of Growth option. During the same period, scheme benchmark (Nifty 500 TRI) has moved by 7.9x to Rs. 79,581 from Rs.10,000 and delivered return of 13.30%. Please

refer page no. 62 for detailed performance of HSBC Multi Cap Equity Fund. 8 During the same period, scheme benchmark (Nifty 500 TRI) has delivered return of 10.95%

Past performance may or may not be sustained in the future. 1 Pursuant to the circular issued by SEBI on ‘Categorization and Rationalization of the Schemes, there has been change in the fundamental attribute(s) of the aforesaid effective from Mar 14, 2018. 2 The benchmark was changed w.e.f. 14 March 2018 as a more suitable benchmark was identified which better matched the portfolio strategy.


inception 8


INR 83,155Value of INR 10,000 since

inception 7

13.6%CAGR since inception 7

53


Benchmark Nifty 500 TRI


Beta / Sharpe 3 / 4 1.01/-0.04


Inception Date 24 February 2004

Portfolio Characteristics FundNifty 500

TRI

Number of holdings 40 500




Return on Equity (ROE (%)) 5 10.67 8.15


HSBC Multi Cap Equity Fund 1 , 2

An open ended equity scheme investing across large cap, mid cap, small cap stocks

HSBC Global Asset Management, data as of 30 September 2020


• Beta is a measure of an investment's volatility vis-a-vis the market. Beta of less than 1 means that the security will be less volatile than the market. A beta of greater than 1 implies that the security's price will be more volatile than

the market.






1 Pursuant to the circular issued by SEBI on ‘Categorization and Rationalization of the Schemes, there has been change in the fundamental attribute(s) of the aforesaid effective from Mar 14, 2018. 2 The benchmark was changed w.e.f. 14th March 2018 as a more suitable benchmark was identified which better matched the portfolio strategy3 Statistical Ratios disclosed are as per monthly returns (Annualized) for the last 3 years.4 Risk free rate: 4.81% (FIMMDA-NSE MIBOR)5 PE Trailing (weighted average method), Trailing 12 month Price to earnings adjusted for negative earnings, Weighted average method, PB – Price to book value, Trailing 12 month Price to earnings,



HMEF portfolio strategy

Our fund’s philosophy is to invest in dominant businesses having scalable potential and that have reasonable

valuations. Over the past few years, we’ve witnessed a trend of profit pool consolidating with the dominant players

in respective sectors/industries.

We believe that the trend will accelerate as the current disruption has higher magnitude as well as it encompasses

more sectors. This has increased our resolve to be true to our philosophy.

We believe that these stocks would gain market share in the sluggish phase of the economy and gain revenue

traction when the economy returns to normalcy. From a medium to long term perspective, the current phase of

disruption shall also pave way for accelerated digital adoption by consumers as well as enterprises.

We see telecom, internet economy, ecommerce, technology vendors etc., to benefit from this disruption. Another

long term theme is that of diversification of the global supply chain due to ‘China + 1’ strategy which could be

adopted by corporates as well as economies and India could stand to benefit out of that.

In the short term as we see the recovery phase playing out for corporate India, growth will be scarce and the

balance sheet strength will come to fore.

Therefore, we are positively disposed towards companies with relatively higher earnings resilience and ones with

stronger balance sheets. As a result, we hold a positive view on Healthcare and Telecom sectors.

We are also positive on Cement and Specialty chemicals, owing to strong demand recovery in the former while the

latter being a beneficiary of the global supply chain diversification away from China.


A trend of profit pool consolidating with the dominant players in respective sectors/industries


HMEF portfolio strategy

We are neutral on Financials, Consumer Staples and Technology sectors. Within Financials, we are positive on large

private banks and select large NBFCs and negative on PSU Banks, old or small private banks, and other NBFCs.

Our positive stance on select lending institutions is driven by our assessment that the market is currently assuming

that the loan slippages and consequent credit costs to be much higher than what is being guided by banks on account

or what the market is ascribing to the rest of the economy.

Hence, we think that there is a relative divergence in the assessment of risks and the valuations of private lending

financials/banks. So this could lead to re-rating potential owing to better delivery on asset quality parameters. In

Staples, we have moderated our earlier positive stance to neutral owing to rich valuations and lack of positive triggers

from hereon.

Our neutral position in Technology sector is on account of the sector’s ability to navigate the current phase much

better and being a beneficiary of shift to digital and increased demand for technology in the medium term. We

continue to have a negative view on Industrials, Energy and Utilities.

We believe that private sector capex as well as government capex will get delayed and hence we are not constructive

on sectors that are dependent on capex for revival. Our negative view of the energy companies is due to subdued

demand, weak profitability ratios, and volatile prices (which are not in control of the companies).


Neutral on Financials, Consumer Staples and Technology sectors

56

Current key focused sectors in HMEF


Sectors Comments

Healthcare

Our positive stance is on account of the earnings resilience coupled with revenue visibility. Over the medium term,

we believe that the profit pool of pharma companies will improve owing to reduction in fixed costs, secular

domestic market growth and US business showing signs of improvement. Most of the companies have

significantly deleveraged their balance sheets which will aid earnings and returns profile going ahead. Valuations

can improve further as the sector offers mid-teens earnings growth visibility and improving return ratios. Our

exposure to the sector, is primarily through companies having exposure to US generic business. We also own

domestic focused businesses with a higher degree of vertical integration.

Materials

We have a preference for cement and we have a negative view on global cyclicals. Our negative stance global

cyclicals is due to weak demand (ex-China) and volatile prices. Our preference for cement is due to a gradually

improving demand scenario (driven by rural housing and some government projects getting fast tracked). Further,

capacity utilisation for the cement sector is expected to improve (on account of delay in new capacity additions),

which can keep prices firm in various regional markets. We have a positive view on Specialty chemicals space, as

we believe it will benefit on demand arising from end user industries like agrochemicals, pharma etc.

Diversification of global supply chain away from China could further benefit Indian companies as they are already

a part of the global supply chain. Our exposure to the sector is through market leaders with a good track record in

terms of delivering consistent revenue growth and with order book visibility.

Communication

Services

Telecom sector is a beneficiary of industry consolidation and improving pricing power. As a result, the profitability

of the sector is anticipated to come back strongly. We believe that players who are better positioned on network /

spectrum along with better access and ability to deploy future capital, will have dominance going forward. The

long pending AGR liability issue has also been put to rest after the SC ruling and it is no longer an overhang.

Additionally, the sector is a beneficiary from the pandemic disruption, which is leading to higher data usage. Given

the accelerated digital adoption across users and industries coupled with behavioural changes; the demand for

telecom services is expected to remain robust and this should increase the wallet share of players. Our

preference is for sector leaders, which also have stronger balance sheet and have shown better execution on the

ground.

Sector allocation: In the fund we are overweight in Healthcare, Communication Services and Materials sectors while having a

neutral position in Consumer Staples, Technology and Financials amongst the key sectors. Within Materials, our exposures are into

Cement and Specialty Chemicals space, latter being a beneficiary of the global supply chain diversification. In this fund we are

underweight in Industrials, Energy, Consumer Discretionary and Utilities sectors.

57

HSBC Multi Cap Equity Fund – Sector allocation


Active sector weightings - The difference in allocation of an individual security or portfolio segment between portfolio and the benchmark. Average weight, Attribution for 1 month, HSBC Global Asset

Management, Data as on 30 September 2020

29.8

13.3

10.8

10.6

10.3

8.6

6.6

4.1

3.4

1.5

0.9

0 5 10 15 20 25 30 35

Financials


Consumer Staples

Health Care

Materials

Energy


Industrials


Real Estate

Not Classified

-5.00-4.00-3.00-2.00-1.000.001.002.003.004.00

Hea

lth

Ca

re

Ma

teria

ls

Rea

l E

sta

te

Con

su

me

r S

tap

les

Fin

an

cia

ls

Not

Cla

ssifie

d

Com

mu

nic

ation

Se

rvic

es

Info

rmation

Te

ch

no

logy

Indu

str

ials

Con

su

me

r D

iscre

tion

ary

Utilit

ies

En

erg

y

58

Top stock weightings in portfolio (%)

HSBC Multi Cap Equity Fund - Stock positioning


minor differences between point-to-point returns vis-a-vis returns indicated above. Average weight, Attribution for 1 year.

9.6

8.6

7.1

6.2

5.4

4.4

4.0

3.3

3.1

2.6

0 2 4 6 8 10 12

HDFC BANK LIMITED


ICICI BANK LTD

INFOSYS LTD


HCL TECHNOLOGIES LTD

BAJAJ FINANCE LTD

AXIS BANK LTD


BHARTI AIRTEL LTD

59

0

200

400

600

800

1000

1200

1400

1600

Se

p-1

4

Ma

r-1

5

Se

p-1

5

Ma

r-1

6

Se

p-1

6

Ma

r-1

7

Se

p-1

7

Ma

r-1

8

Se

p-1

8

Ma

r-1

9

Se

p-1

9

Ma

r-2

0

Se

p-2

0

Vinati Organics

0

200

400

600

800

1000

1200

1400

Jul-

07

Jul-

08

Jul-

09

Jul-

10

Jul-

11

Jul-

12

Jul-

13

Jul-

14

Jul-

15

Jul-

16

Jul-

17

Jul-

18

Jul-

19

Jul-

20

HDFC Bank

0

1000

2000

3000

4000

5000

6000

Jan

-15

Jun

-15

Nov-1

5

Ap

r-16

Se

p-1

6

Fe

b-1

7

Jul-

17

Dec-1

7

Ma

y-1

8

Oct-

18

Ma

r-1

9

Au

g-1

9

Jan

-20

Jun

-20

Bajaj Finance

Bajaj Finance

– One of the financial services

company has moved up by more

than 9 times since initiated



HMEF Entry

Point

Stock growth

of 9.4X in

HMEF portfolio

Bloomberg, Data as at September 2020







HMEF Entry

Point

Stock growth

of 4.3X in

HMEF portfolio

HMEF Entry

Point

Stock growth

of 6.4X in HMEF

portfolio

HDFC Bank

– One of the private bank

from gained over 4X

since initiated

Vinati Organics

– The stocks has moved up

by 6x since initiated

60

HSBC Multi Cap Equity Fund - portfolio


61

HSBC Multi Cap Equity Fund - performance

Investment of Rs.10000/- 1Y (INR) 3Y (INR) 5Y (INR) Since Inception (INR)

HSBC Multi Cap Equity – Growth 9,821 10,974 14,496 209,306

Nifty 500 TRI 9,903 11,921 15,064 135,069

Alpha -82 -947 -568 74237

ICRA MFI Explorer, Data as on 30 September 2020. Past performance may or may not be sustained in the future, Please check the detailed performance on the slide number 63.

For other schemes performance managed by Neelotpal Sahai refer respective slides in this presentation 26, 100

The Fund offers flexible and convenient Systematic Investment Plan (SIP) facility. To illustrate the advantages of SIP investments, this is how your investments would have grown if you had invested say

Rs10,000 systematically on the first Business Day of every month over a period of time in the Growth Option of Respective Scheme. The returns are calculated by XIRR approach assuming investment of

Rs10,000/- on the 1st working day of every month. XIRR helps in calculating return on investments given an initial and final value and a series of cash inflows and outflows with correct allowance for the

time impact of the transactions.

Returns are of growth option. Returns above 1 year are Compounded Annualized. Standard benchmark is prescribed by SEBI and is used for comparison purposes. Returns on 10,000 are point-to-point

returns for the specific time period, invested at the start of the period. The returns provided above have been rounded off and hence there may be minor differences between point-to-point returns vis-a-vis

returns indicated above. Different plans shall have a different expense structure. The performance details provided herein are of other than Direct plan. Scheme count for the total schemes managed by

the Fund Managers does not include closed ended scheme.


Pursuant to the circular issued by SEBI on ‘Categorization and Rationalization of the Schemes, there has been change in the fundamental attribute(s) of the aforesaid effective from

Mar 14, 2018.


0%

2%

4%

6%

8%

10%

12%

14%

16%


HSBC Multi Cap Equity - Growth Nifty 500 TRI

0%

2%

4%

6%

8%

10%

12%

14%


HSBC Multi Cap Equity - Growth Nifty 500 TRI

62

Rolling performance – HSBC Multi Cap Equity Fund

In the long term, probability of negative returns reduces and

create an opportunity to generate better risk adjusted returns



10 years rolling returns for HSBC Multi Cap Equity Fund are calculated using the data since its inception i.e. 24 Feb 2004 to 30 September 2020.





Source ACE MF – as at Sep 2020, Nifty 500 TRI

^ The above table shows the performance on daily rolling returns basis for respective periods (1, 3, 5 and 10 years) since the inception date of the scheme. The maximum, minimum and average


TRI data of Standard Benchmark is not available since inception of the scheme. Standard Benchmark performance is calculated using Composite CAGR of S&P BSE 200 PRI values from date 24-

Feb-2004 to date 28-June-2007 and TRI values since date 29-June-2007.

Rolling return period for HSBC Multi Cap Equity Fund – 24 Feb 04 – 30 September 2020

Please check the detailed performance on the slide number 63 in SEBI prescribed performance format of the above fund. Past performance may or may not be sustained in the future.

For other schemes performance managed by Neelotpal Sahai refer respective slides in this presentation on page no 26 and 100


Since Inception ^


Minimum returns% 5.8 -3.6 -9.7 -56.4 5.0 -1.4 -9.0 -59.2

Maximum returns% 19.8 24.9 52.7 110.2 19.3 26.2 49.7 118.5

Average Returns 12.6 12.4 13.5 17.0 12.2 12.3 13.4 17.1

Negative returns % times 0.0% 2.9% 10.1% 26% 0.0% 1.4% 8.2% 22%

Returns more than 7% (% times) 99.5% 73.0% 64.1% 61% 97.9% 81.0% 71.8% 64%



HSBC Multi Cap Equity Fund(G)Nifty 500

(Benchmark )

63

HSBC Multi Cap Equity Fund - performance

Past performance may or may not be sustained in the future,

For other schemes performance managed by Neelotpal Sahai refer respective slides in this presentation on page no. 26 and 100

Returns are of growth option. The returns for the respective periods are provided as on 30 September 2020. Returns above 1 year are Compounded Annualized. Standard benchmark is prescribed by

SEBI and is used for comparison purposes. Returns on 10,000 are point-to-point returns for the specific time period, invested at the start of the period. The returns provided above have been rounded off

and hence there may be minor differences between point-to-point returns vis-a-vis returns indicated above. Different plans shall have a different expense structure. The performance details provided

herein are of other than Direct plan. Scheme count for the total schemes managed by the Fund Managers does not include closed ended scheme.



The benchmark of the scheme has been changed from S&P BSE 200 TRI to NIFTY 500 TRI with effect from November 18, 2019.

Pursuant to the circular issued by SEBI on ‘Categorization and Rationalization of the Schemes, there has been change in the fundamental attribute(s) of the aforesaid effective from 14 March 2018.


The said Fund is managed by Neelotpal Sahai Effective (27 May 2013)

Funds Managed by Neelotpal Sahai (Total Schemes Managed 5)


Incep

tion

Date

: 24-F

eb

- 04

Fund / Benchmark



Amount in

`Returns

(%)

Amount in

`Returns

(%)

Amount in

`Returns

(%)

Amount in

`Returns

(%)

HSBC Multi Cap Equity Fund 10,082 0.82 10,003 0.01 13,482 6.15 83,155 13.60

Scheme Benchmark (Nifty 500 TRI) 1 10,102 1.02 11,241 3.97 14,912 8.31 79,581 13.30

Additional Benchmark (Nifty 50 TRI) 9,903 -0.97 11,921 6.02 15,064 8.53 76,714 13.05

64

HSBC Multi Cap Equity Fund – Key features

Benchmark Index S&P BSE 200 TRI

Minimum Application Amount Lump sum = INR 5,000, SIP = INR 500







Seeks long term capital growth through investments across all marketcapitalisations, including small, mid and large cap stocks. The fund aims to bepredominantly invested in equity & equity related securities. However it could movea significant portion of its assets towards fixed income securities if the fundmanager becomes negative on equity markets. However, there can be noassurance or guarantee that the investment objective of the scheme would beachieved.

4 Applicable with effect from 14 March, 2018, In respect of each purchase /switch-in of Units, an Exit Load of 1% is payable

if Units are redeemed / switched-out within 1 year from the date of allotment, No Exit Load will be charged, if Units are


65

HSBC Infrastructure Equity Fund (HIEF)Sector Fund –An open ended equity scheme following Infrastructure theme.

Thematic strategy

66

• Infrastructure sector has potential to deliver above average performance in an economic up-cycle

Performance

• Government has increased focused on higher infra spending

Government spending

• Cyclicals are exhibiting strong recovery driven by factors such as a depressed base, interest rate moderation and a recovery in commodity prices

Earnings growth

• With governments push for Make in India sectors such as defence provide huge potential and more sectors to gain

Make in India

• Focus on connecting India more effectively and providing for needs such as roads, Airports, Power, Railways and Housing

Infrastructure Needs

• Environmental Clearances streamlined

No more project delays

• Public Private Partnership (PPP) to further accelerate infrastructure growth

PPP

Infrastructure advantage

Case for Infrastructure Equity Funds

Mutual fund investments are subject to market risks, read all scheme related documents carefully. Past performance may or may not sustain and doesn’t guarantee the future performance

A capable engine for the growth of your portfolio

67

Government led initiatives for infrastructure developments

Source: IBEF, Bloomberg, December 2019

Focus on building smart and sustainable infrastructure; key driver of India’s economic growth

• Potential for catapulting India to 3rd largest construction globally

Housing for all by 2022

• Availability of 24 X 7 power to all, One nation one grid, Sobhagya scheme for electricity connection, scheme for electrification of villages (DDUGJY)

• Achieve 175 GW renewable energy generation capacity by 2022

Energy

• India is the world's largest importer of defence equipment. India has heavily relied on foreign players

Defence

• Bharat broadband network to create national optical fiber network connecting 2.5 lakh gram panchayats across India

Digital Infrastructure

• Accorded status of infrastructure, to boost investments in this sector

Logistics

68

Government’s capex target and achievement

Source: Union Budget, NHAI, * Railways figure includes both Centre’s budgetary allocation & Railway’s planned capex, Roads and transportation only Bharatmala program

• Government’s actual spending on roads, rural – urban development and railways stands at Rs.10,570bn with average 98% achievement vs budget estimates (BE) between from FY15 to FY19.

• Expected spending over 5 years (FY20E to FY24E) is Rs.20,300bn for Roads, Urban development and Railways *

Government capex progress

High government spending on infrastructure to drive growth over a long term

274

99

443

100

494

99

611

99

773

98

0

100

200

300

400

500

600

700

800

900

Actu

al R

s.b

n

Achie

ved %

Actu

al R

s.b

n

Achie

ved %

Actu

al R

s.b

n

Achie

ved %

Actu

al R

s.b

n

Achie

ved %

Actu

al R

s.b

n

Achie

ved %

FY15 FY15 FY16 FY16 FY17 FY17 FY18 FY18 FY19 FY19

Road Transport & Highways Ministry

698

99

789

99

967

99

1086

99

1118

99

0

200

400

600

800

1000

1200

Actu

al R

s.b

n

Achie

ved %

Actu

al R

s.b

n

Achie

ved %

Actu

al R

s.b

n

Achie

ved %

Actu

al R

s.b

n

Achie

ved %

Actu

al R

s.b

n

Achie

ved %


Rural Development Ministry

102 99

153

101

259

89

305

89

406

95

0

50

100

150

200

250

300

350

400

450

Actu

al R

s.b

n

Achie

ved %

Actu

al R

s.b

n

Achie

ved %

Actu

al R

s.b

n

Achie

ved %

Actu

al R

s.b

n

Achie

ved %

Actu

al R

s.b

n

Achie

ved %


Urban Development Ministry

289

96

350

109

453

98

452

108

549

99

0

100

200

300

400

500

600

Actu

al R

s.b

n

Achie

ved %

Actu

al R

s.b

n

Achie

ved %

Actu

al R

s.b

n

Achie

ved %

Actu

al R

s.b

n

Achie

ved %

Actu

al R

s.b

n

Achie

ved %


Railways Ministry

69

HSBC Infrastructure Equity Fund (HIEF)

Why Invest?

Given the Government’s thrust on infrastructure, we believe there is a multi-year investment opportunity across infrastructure

businesses in India

Past legacy issues are being eliminated through government efforts

Global multilateral funding like Japan International Cooperation Agency (JICA) and International Monetary Fund (IMF) and fall

in interest rates is improving economic viability of several projects

We are still in the early stages of a long drawn infrastructure investment cycle

Current Positioning

Being thematic infrastructure focused, the fund is overweight on Construction, Industrials sector

HIEF can invest across the market capitalisation within the infrastructure theme

Infrastructure sector outlook is positive with government spending on roads, railways, power, rural infrastructure besides

expected contribution from private sector over time

Investment Philosophy

Follows a comprehensive equity investment philosophy which takes into account profitability of the companies in addition to

their respective valuations and cash flow generation capability

Invests in themes that play an important role in and/or benefit from India’s infrastructure development

In a standard investment environment, aim to invest at least 90% of the funds in the infrastructure sector

Gain from the early stages of a long drawn infrastructure investment cycle in India

70

HSBC Infrastructure Equity Fund

Sector Fund – An open ended equity scheme following Infrastructure theme.

Aims to be a capable engine for the growth of your portfolio

Infrastructure sector has

the potential to deliver

above average

performance in an

economic up-cycle.

With an increased focus

on higher infra spending

and a need to connect

India more effectively to

provide basic

infrastructure needs make

this theme a potential

leader.

HIEF aims to be a capable

engine for the growth of

your portfolio by investing

superior quality

infrastructure businesses.

High potential Government focusHSBC Infrastructure

Equity Fund (HIEF)

71

HSBC Infrastructure Equity Fund (HIEF) 1

Fund strategy

Being thematic infrastructure focused, the fund is overweight on Construction, Industrials, and Transportation sector

Fund strategy is centered around superior quality businesses that generate sustainable growth

Disciplined, repeatable approach to generate long-term alpha – good stocks at inexpensive valuations that can get re-rated v/s popular

stocks at high valuations

Avoiding accidents by ignoring stocks with poor corporate governance, inefficient capital allocators, and poor quality of business

7 As on 30 September 2020 of Growth option. The launch date of the S&P BSE India Infrastructure Index (INR) is May 19, 2014 whereas the inception date of the scheme is Feb 23, 2006.

Information presented for 5 year return is back-tested which is available from Mar 31, 2008. During the same period of 5 years, scheme benchmark (S&P BSE India Infrastructure TRI) has moved by

0.9x to Rs 9,801 from Rs 10,000 and delivered return of -0.40%. 8 During the same period of 5 years, scheme benchmark (S&P BSE India Infrastructure TRI) has delivered SIP return of -8.10%. Past

performance may or may not be sustained in the future. Refer slide 79 for detailed performance.

1 Pursuant to the circular issued by SEBI on ‘Categorization and Rationalization of the Schemes, there has been change in the fundamental attribute(s) of the aforesaid effective from Mar 14, 2018.

Please refer page no. 86 for detailed performance of HSBC Infrastructure Equity Fund.

0.7xin 5 years 7

-10.18%SIP returns in 5 years 8

Rs.7,482Growth of Rs. 10,000 in 5

years 7

-5.63%CAGR over 5 years 7

72

Fund Manager Gautam Bhupal

BenchmarkS&P BSE India Infrastructure

Index TRI


Beta / Sharpe 3 / 4 1.07 / -0.58


Inception Date 23 February 2006

Portfolio Characteristics FundS&P BSE India

Infra Index TRI







HSBC Infrastructure Equity Fund 1

An open ended equity scheme following Infrastructure theme

HSBC Global Asset Management, Data as of 30 September 2020


• Beta is a measure of an investment's volatility vis-a-vis the market. Beta of less than 1 means that the security will be less volatile than the market. A beta > 1 implies that the security's price will be more volatile than the market.






1 Pursuant to the circular issued by SEBI on ‘Categorization and Rationalization of the Schemes, there has been change in the fundamental attribute(s) of the aforesaid effective from Mar 14, 2018. 3 Statistical Ratios disclosed are as per monthly returns (Annualized) for the last 3 years.4 Risk free rate: 4.81% (FIMMDA-NSE MIBOR)5 PE Trailing (weighted average method), Trailing 12 month Price to earnings adjusted for negative earnings, Weighted average method, PB – Price to book value, Trailing 12 month Price to earnings,


73

HSBC Infrastructure Equity Fund - Sector positioning



Management, Data as of 30 September 2020

1.1

2.2

2.3

2.5

4.4

9.7

14.8

17.6

45.3

0 10 20 30 40 50

ConsumerDiscretionary

Not Classified

Financials

InformationTechnology

Real Estate

Utilities

Energy

Materials

Industrials

17.6

4.4 3.7 2.5 2.2 1.1

-5.3-7.2

-19.0-25

-20

-15

-10

-5

0

5

10

15

20

Ma

teria

ls

Re

al E

sta

te

En

erg

y

Info

rmation

Te

ch

no

logy

Not

Cla

ssifie

d

Con

su

me

r D

iscre

tion

ary

Fin

an

cia

ls

Indu

str

ials

Utilit

ies

74

Top stock weightings in portfolio (%)

HSBC Infrastructure Equity Fund - Stock positioning

Past performance may or may not be sustained in the future, The returns provided above have been rounded off and hence there may be minor differences between point-to-point returns vis-a-vis

returns indicated above. Average weight, Attribution for 1 year HSBC Global Asset Management, Data as of 30 September 2020.

9.64

8.57

8.15

6.87

6.48

5.17

4.32

3.24

3.21

3.13

0.00 2.00 4.00 6.00 8.00 10.00 12.00


ADANI PORTS AND SPECIAL ECON

LARSEN & TOUBRO LTD

APL APOLLO TUBES LTD

NTPC LTD

KEI INDUSTRIES LTD

ULTRATECH CEMENT LTD

GUJARAT GAS LTD

BHARAT PETROLEUM CORP LTD

KNR CONSTRUCTIONS LTD

75

0

1000

2000

3000

4000

5000

6000

7000O

ct-

10

Ma

y-1

1

Dec-1

1

Jul-

12

Fe

b-1

3

Se

p-1

3

Ap

r-14

Nov-1

4

Jun

-15

Jan

-16

Au

g-1

6

Ma

r-1

7

Oct-

17

Ma

y-1

8

Dec-1

8

Jul-

19

Fe

b-2

0

Se

p-2

0

Schaeffler

HSBC Infrastructure Equity FundTrack record of key stock picks

Data as at September 2020, Bloomberg







Stock growth

of 4.4X in

HIEF portfolio

Schaeffler India (Fag Bearing)

– Auto ancillary company gained over 4X since initiated

HIEF Entry Point

76

HSBC Infrastructure Equity Fund - portfolio


77

HSBC Infrastructure Equity Fund - performance


HSBC Infrastructure Equity Fund – Growth 8,765 5,848 12,140 13,260

S&P BSE India Infrastructure TRI (Benchmark) 8,008 6,826 12,681 NA

Alpha 757 -978 -541 NA

Past performance may or may not be sustained in the future. Refer slide 79 for SEBI format performance. For other schemes performance managed by the Fund Manager refer slide number

97, 100. Please Note :NA means not available. Data as on 30 Sep 2020, ICRA MFI Explorer ,


The Fund offers flexible and convenient Systematic Investment Plan (SIP) facility. To illustrate the advantages of SIP investments, this is how your investments would have grown if you had

invested say 10,000 systematically on the first Business Day of every month over a period of time in the Growth Option of Respective Scheme. The returns are calculated by XIRR approach

assuming investment of 10,000/- on the 1st working day of every month. XIRR helps in calculating return on investments given an initial and final value and a series of cash inflows and outflows

with correct allowance for the time impact of the transactions. .

The launch date of the S&PBSE India Infrastructure Index TRI (INR) is May 19, 2014 whereas the inception date of the scheme is Feb 23, 2006. Information presented for 5 year return is back-

tested which is available from Mar 31, 2008. The corresponding benchmark returns since inception of the scheme is not available. All index data is available on the website of Asia Index Pvt. Ltd.

a joint venture between BSE Ltd. and S&PDowJones Indices LLC. (source: http://www.asiaindex.co.in).


Returns are of growth option. The returns for the respective periods are provided as on Last business day of Sep 2020 for the respective Schemes. Returns above 1 year are Compounded

Annualized. Standard benchmark is prescribed by SEBI and is used for comparison purposes. Returns on 10,000 are point-to-point returns for the specific time period, invested at the start of the

period. The returns provided above have been rounded off and hence there may be minor differences between point-to-point returns vis-a-vis returns indicated above. Different plans shall have a

different expense structure. The performance details provided herein are of other than Direct plan. Scheme count for the total schemes managed by the Fund Managers does not include closed

ended scheme.


-25%

-20%

-15%

-10%

-5%

0%

5%


HSBC Infrastructure Equity Fund – Growth

S&P BSE India Infrastructure (Benchmark) -20%

-15%

-10%

-5%

0%

5%


HSBC Infrastructure Equity Fund – Growth

S&P BSE India Infrastructure (Benchmark)


78

Rolling performance – HSBC Infrastructure Equity Fund

In the long term probability of negative returns reduces and




10 years rolling returns for HSBC Infrastructure Equity Fund are calculated using the data since its inception i.e. 23 Feb 2006 to 30 Sep 2020.





Source ACE MF – as at September 2020, S&P BSE India Infrastructure Index TRI

S&P BSE India Infrastructure Index TRI (Benchmark) - The launch date of the S&PBSE India Infrastructure Index (INR) is May 19, 2014 whereas the inception date of the scheme is Feb 23, 2006. The

corresponding benchmark returns since inception of the scheme is not available.



Rolling return period for HSBC Infrastructure Equity Fund – 23 Feb 06 – 30 September 2020

Please refer to page no 79 for performance in SEBI prescribed performance format of the above fund. Past performance may or may not be sustained in the future, For other schemes performance

managed by the Fund Manager refer slide number 97, 100


Since Inception ^


Minimum returns% -3 -13 -23.25 -60 NA NA NA NA

Maximum returns% 8.91 23.25 34.25 119.95 NA NA NA NA

Average Returns 3.74 4.11 3.65 6.85 NA NA NA NA

Negative returns % times 10.6% 34.9% 44.1% 51% NA NA NA NA




HSBC Infrastructure Equity Fund (G)S&P BSE India Infrastructure Index

(Benchmark)

79

HSBC Infrastructure Equity Fund - performance


Past performance may or may not be sustained in the future. For other schemes performance managed by the Fund Manager refer slide number 97, 100

Note :NA means not available.

1 The launch date of the S&PBSE India Infrastructure Index (INR) is May 19, 2014 whereas the inception date of the scheme is Feb 23, 2006. Information presented for 5 year return is back-

tested which is available from Mar 31, 2008. The corresponding benchmark returns since inception of the scheme is not available. All index data is available on the website of Asia Index Pvt. Ltd.

a joint venture between BSE Ltd. and S&PDowJones Indices LLC. (source: http://www.asiaindex.co.in).

Returns are of growth option. The returns for the respective periods are provided as on Last business day of September 2020 for the respective Schemes. Returns above 1 year are Compounded

Annualized. Standard benchmark is prescribed by SEBI and is used for comparison purposes. Returns on 10,000 are point-to-point returns for the specific time period, invested at the start of the

period. The returns provided above have been rounded off and hence there may be minor differences between point-to-point returns vis-a-vis returns indicated above. Different plans shall have a

different expense structure. The performance details provided herein are of other than Direct plan. Scheme count for the total schemes managed by the Fund Managers does not include closed

ended scheme.

Funds Managed by - Gautam Bhupal (Total Schemes Managed 7)

HSBC Infrastructure Equity Fund

Incep

tion

Date

: 23-F

eb

-06

Fund / Benchmark(Value of `10,000 invested)


Amount in

`Returns

(%)

Amount in

`Returns

(%)

Amount in

`Returns

(%)

Amount in

`Returns

(%)

HSBC Infrastructure Equity Fund 8,765 -12.32 5,848 -16.35 7,482 -5.63 13,260 1.95

S&P BSE India Infrastructure TRI (Scheme

Benchmark)18,008 -19.87 6,826 -11.93 9,801 -0.40 NA NA


Past performance may or may not be sustained in the future. Refer note below

The said Fund is managed by Gautam Bhupal Effective (11 May 2018)


80

HSBC Infrastructure Equity Fund – Key features

Benchmark Index S&P BSE India Infrastructure Index TRI









To generate long term capital appreciation from an actively managed portfolio of

equity and equity related securities by investing predominantly in equity and equity

related securities of companies engaged in or expected to benefit from growth and

development of Infrastructure in India. However, there can be no assurance or

guarantee that the investment objective of the scheme would be achieved.

4 Applicable with effect from 14 March, 2018, In respect of each purchase /switch-in of Units, an Exit Load of 1% is payable if

Units are redeemed / switched-out within 1 year from the date of allotment, No Exit Load will be charged, if Units are


81

HSBC Tax Saver Equity Fund (HTSF)ELSS - An open ended equity linked saving scheme with a statutory lock-in of 3 years and tax benefit

82

What are our tax saving options?

• Here are some tax saving options available under different sections of the Income Tax Act.

Source – CRISIL, data as at March 2020, The above list is for an illustration purpose only and it is not an exhaustive list.

It is recommended to consult financial advisor before taking any investment decisions

^^ELSS funds are subject to the Capital gains which will be charged at 10% if above INR 1 lakh. ^ Dividend is subjected to 10% tax.

Past performance may or may not be sustained in the future.

Mutual fund investments are subject to market risks, read all scheme related documents carefully.

Section of IT Act Particular Tax exemption limit

Investment linked

80C

Employee provident fund

Rs 1,50,000

Life insurance premiums (ULIPs)

ELSS (3 years)^^

National pension system (NPS)

FDs (5 years)

NSC

Sukanya Samriddhi Yojana

Senior Citizen Saving Scheme

Public provident fund (PPF)

80 CCD (1B)NPS Rs 50,000 (over and above Rs 1.50 lakh

under 80C)

Non-investment linked

80D Medical insurance Rs 25,000

80E Education loan interest No limit

24B Payment of interest on home loans Rs 2,00,000

ELSS funds offer one of the best tax saving options with lowest lock in

83

Equity Linked Saving Schemes (ELSS) offers many benefits

Source – CRISIL, A word of caution: Investors must remember that as returns are market-linked, they are prone to volatility. Hence, ELSS may not be suitable for very risk-averse investors. Also, investors must

remain invested for at least three years to claim tax benefits. Data as at March 2020.

^^ELSS funds are subject to the Capital gains which will be charged at 10% if above INR 1 lakh. ^ Dividend is subjected to 10% tax.

Past performance may or may not be sustained in the future.


Diversified portfolio

Tax benefit of Rs 1.5

lakh under Section 80C

Professional management

Lower lock-in period

among 80C investment

options

Minimum investment of just Rs

500

Returns

Convenience

Capital gains and dividend are tax free^^

Evens out market

volatility through

SIP

One fund offers many benefits including tax savings and growth

84

SIP through the year

• SIPs allow investors to park funds in ELSS, starting with Rs 500 per month, at regular intervals. They help investors

benefit from rupee cost averaging and, thus, offset volatility in the equity market.

• SIPs also negate the need to time the market, as they rely on time spent in the market to generate returns (read:

discipline). Thus, investors can invest in SIPs through the year.

For illustration purpose only

Data an at December 2019

Performance of ELSS represented by CRISIL ranked ELSS funds

SIP returns are annualised

Past performance may or may not be sustained in the future. Mutual fund investments are subject to market risks, read all scheme related documents carefully.

ELSS Funds

Period SIP start date Total amount invested( Rs) Market value (Rs) SIP returns (%)

3-Years SIP 1-Jan-16 18000 20167 7.53

5-Years SIP 1-Jan-14 30000 38128 9.52

7-Years SIP 2-Jan-12 42000 66553 12.92

10-Years SIP 1-Jan-09 60000 119097 13.15

85

• Longer investment horizon increases the probability of better risk-adjusted returns for investors

Long term investment can deliver performance

• ELSS funds offer tax saving^ opportunity under section 80C

• Withdrawals are subjected to capital gains tax^

Tax Savings ^^

• Relatively lower volatility due to long term investments

Volatility

• Flexibility to invest on a monthly basis through systematic investment plans (SIPs)

• Reduces market volatility and averages out the cost for investor

Low investment

• Professionally managed by fund managers with experience and research driven processes

Professional Fund Managers and Processes

• A tax saving scheme^^ that predominantly invests in equity securities

• Diversified portfolio across sectors and market cap

Diversified portfolio

of equities

Tax Saving^ + Growth advantage

Case for Equity Linked Savings Schemes (ELSS)

HSBC MF, CRISIL, Investments are subject to market risk and, hence, investors must consider their age and risk appetite

Mutual fund investments are subject to market risks, read all scheme related documents carefully. Past performance may or may not be sustained in the future.

^^ELSS funds are subject to the Capital gains which will be charged at 10% if above INR 1 lakh. Dividend is subjected to 10% tax.

Tax saving^ + Growth = Double benefit

86

HSBC Tax Saver Equity Fund

^^ ELSS funds are subject to the Capital gains which will be charged at 10% if above INR 1 lakh. ^Dividend is subjected to 10% tax.

ELSS - An open ended equity linked saving scheme with a statutory lock-in of 3 years and tax benefit

One of the best tax saving solution for equity investors

A diversified portfolio

across sectors and market

caps provides the

potential growth over a

long term.

Equity Linked Savings

Schemes (ELSS) offer tax

saving^^ opportunity

under section 80C.

HTSF focuses to build a

diversified portfolio across

sectors and market caps

while offering tax saving

^^ opportunity under

section 80C.

Long term growth Tax benefit HSBC Tax Saver

Equity Fund (HTSF)

87

HSBC Tax Saver Equity Fund (HTSF) ^^

Fund strategy

• The fund maintains a balanced mix of Large and Mid Cap stocks

• An emphasis is on bottom up stock picking within the midcap space with a longer investment horizon

• Quality and stability are of primary importance in our approach towards portfolio management

• Disciplined, repeatable approach to generate long-term alpha – good stocks at inexpensive valuations that can get re-rated v/s popular stocks at

high valuations

• Avoiding accidents by ignoring stocks with poor corporate governance, inefficient capital allocators, and poor quality of business

1 As on 30 September 2020 of Growth option. During the same period, scheme benchmark (S&P BSE 200 TRI) has moved by 3.4X to Rs 34,640 from Rs 10,000 and delivered return of 9.46%.

2 During the same period, scheme benchmark (S&P BSE 200 TRI) has delivered return of 10.01%. Refer slide 97 for detailed performance.

^^ELSS funds are subject to the Capital gains which will be charged at 10% if above Rs.1 lakh. Dividend is subjected to 10% tax.


inception 2


INR 34,814Value of INR 10,000

since inception 1

9.50%CAGR since

inception 1

88

Fund Manager Gautam Bhupal^^

Benchmark S&P BSE 200 TRI

Standard Deviation 4 / 5 22.55%

Beta 4 /Sharpe Ratio 4 / 5 0.99 / -0.09


Inception Date 5 January 2007

Portfolio Characteristics FundS&P BSE 200

TRI







HSBC Tax Saver Equity Fund 3

An open ended equity linked saving scheme with a statutory lock-in of 3 years and tax benefit


• Standard deviation is a statistical measure of the range of an investment's performance. When a MF has a high standard deviation, its means its range of performance is wide, implying greater volatility.

• Beta is a measure of an investment's volatility vis-a-vis the market. Beta of < 1 means that the security will be less volatile than the market. A beta of greater than 1 implies that the security's price will be

more volatile than the market. Statistical Ratios disclosed are as per monthly returns (Annualized) for the last 3 years.




• The weighted average market capitalization is a fund’s portfolio weighted by the market capitalization of each stock in the portfolio. In such a weighting companies with large weight account for a greater

portion of the portfolio.

^^ Fund managed since 23 July 20193 Pursuant to the circular issued by SEBI on ‘Categorization and Rationalization of the Schemes, there has been change in the fundamental attribute(s) of the aforesaid effective from Mar 14, 2018.4 Statistical Ratios disclosed are as per monthly returns (Annualized) for the last 3 years.5 Risk free rate: 4.81% (FIMMDA-NSE Manor)6 Portfolio Turnover Ratio is computed for the last 12 months7 PE Trailing (weighted average method), Trailing 12 month Price to earnings adjusted for negative earnings, Weighted average method, PB – Price to book value, Trailing 12 month Price to earnings,

Index method aggregation. 6 Portfolio Turnover Ratio is computed for the last 12 months, Dividend Yield, ROE


HTSF portfolio strategy

HTSEF follows a flexi-cap strategy with a flexibility to invest across the market capitalization spectrum. The Indian

equity markets have rallied just shy of 50% from the March lows with the broader markets catching up during the

past month. Initial recovery was driven by attractive valuations in sectors that were to do relatively better in an

uncertain environment. The recent rally is driven by optimism around the reopening of the economy, pent-up

demand and rebound in economic activity indicators.

We remain positive on the recovery in medium to long term but at the same time, are mindful of challenges being

faced by companies in the near term.

The most prominent theme that drive our portfolio construction is of profit pool consolidating with the dominant

players in respective sectors/industries.

We believe that the trend will accelerate due to current disruption. In the short term as we see the recovery phase

playing out for corporate India, growth will be scarce and the balance sheet strength will come to fore. Therefore,

we are positively disposed towards companies with relatively higher earnings resilience and ones with stronger

balance sheets.

From a medium to long term perspective, the current phase of disruption shall also pave way for accelerated

digital adoption by consumers as well as enterprises.

We see telecom, internet economy, ecommerce, technology vendors etc., to benefit from this disruption. Another

long term theme is that of diversification of the global supply chain due to ‘China + 1’ strategy which could be

adopted by corporates as well as economies and India could stand to benefit out of that.

We are also positive on segments where we believe the impacts are transitionary in nature and they will emerge

stronger post this disruption.

The Fund is overweight in Healthcare, Industrials, Real Estate and Communication Services, neutral weight in

Consumer Discretionary, Consumer Staples, and Financials, while underweight in Utilities, Energy, Technology

and Materials.


Positive on the recovery in medium to long term

90

Current key focused sectors in HTSF


Sectors Comments

Communication

Services

Telecom sector is a beneficiary of industry consolidation and improving pricing power. As a result, the profitability

of the sector is anticipated to come back strongly. We believe that players who are better positioned on network /

spectrum along with better access and ability to deploy future capital, will have dominance going forward. The long

pending AGR liability issue has also been put to rest after the SC ruling and it is no longer an overhang.

Additionally, the sector is a beneficiary from the pandemic disruption, which is leading to higher data usage. Given

the accelerated digital adoption across users and industries coupled with behavioral changes; the demand for

telecom services is expected to remain robust and this should increase the wallet share of players. Our preference

is for sector leaders, which also have stronger balance sheet and have shown better execution on the ground.

Healthcare

Our positive stance is on account of the earnings resilience coupled with revenue visibility. Over the medium term,

we believe that the profit pool of pharma companies will improve owing to reduction in fixed costs, secular

domestic market growth and US business showing signs of improvement. Most of the companies have

significantly deleveraged their balance sheets which will aid earnings and returns profile going ahead. Valuations

can improve further as the sector offers mid-teens earnings growth visibility and improving return ratios. Our

exposure to the sector, is primarily through companies having exposure to US generic business. We also own

domestic focused businesses with a higher degree of vertical integration.

Real Estate

The sector has witnessed improvement in the affordability and listed players are turning out to be beneficiaries of

industry consolidation. With low interest rates (coupled with negative real rates), the home purchase affordability is

at a decadal high. In addition, the current crisis will accelerate the consolidation amongst the residential

developers in favor of the major players especially, the listed companies. Commercial assets such as Grade A

office spaces and malls will also see consolidation as new supply will be restricted due to current cash flow issues

faced by developers coupled high gestation business models. Our current exposure are to developers who have a

mix of commercial assets and residential portfolio, along with strong balance sheet.

91

HSBC Tax Saver Equity Fund - Sector positioning


Management, Data as of 30 September 2020.


30.0

12.1

10.0

9.7

9.2

7.7

6.9

6.7

4.4

2.3

1.0

0 5 10 15 20 25 30 35

Financials


Energy

Health Care

Consumer Staples


Materials

Industrials


Real Estate

Not Classified

-4

-3

-2

-1

0

1

2

3

4

Hea

lth

Ca

re

Indu

str

ials

Rea

l E

sta

te

Com

mu

nic

ation

Se

rvic

es

Not

Cla

ssifie

d

Fin

an

cia

ls

Con

su

me

r D

iscre

tion

ary

Con

su

me

r S

tap

les

Ma

teria

ls

Info

rmation

Te

ch

no

logy

Utilit

ies

En

erg

y

92

Top active stock weightings in portfolio (%)

HSBC Tax Saver Equity Fund - Stock positioning


minor differences between point-to-point returns vis-a-vis returns indicated above. Average weight, Attribution for 1 year

10.0

9.1

8.2

7.9

6.1

3.6

3.6

3.3

3.0

2.8

0 2 4 6 8 10 12


HDFC BANK LIMITED

INFOSYS LTD

ICICI BANK LTD


BAJAJ FINANCE LTD

KOTAK MAHINDRA BANK LTD

BHARTI AIRTEL LTD


SUN PHARMACEUTICAL INDUS

93

0

2000

4000

6000

8000

10000

12000

Jan

-14

Ap

r-14

Jul-

14

Oct-

14

Jan

-15

Ap

r-15

Jul-

15

Oct-

15

Jan

-16

Ap

r-16

Jul-

16

Oct-

16

Jan

-17

Ap

r-17

Jul-

17

Oct-

17

Jan

-18

Ap

r-18

Jul-

18

Oct-

18

Jan

-19

Ap

r-19

Jul-

19

Oct-

19

Jan

-20

0

200

400

600

800

1000

1200

1400

Jul-

07

Jan

-08

Jul-

08

Jan

-09

Jul-

09

Jan

-10

Jul-

10

Jan

-11

Jul-

11

Jan

-12

Jul-

12

Jan

-13

Jul-

13

Jan

-14

Jul-

14

Jan

-15

Jul-

15

Jan

-16

Jul-

16

Jan

-17

Jul-

17

Jan

-18

Jul-

18

Jan

-19

Jul-

19

Jan

-20

Jul-

20

HDFC Bank

HDFC Bank

– One of the private sector bank has delivered

more than 4X since added in HTSF

HSBC Tax Saver Equity FundTrack record of key stock picks

HTSF Entry Point

Stock growth

of 4X in

HTSF portfolio

Source: Bloomberg, Data as at September 2020.

The stock named above is for illustration purposes only and does not constitute investment research, investment advice or a recommendation to any reader of this content to buy or sell investment

product.

Investors should seek financial advice regarding the appropriateness of investing in any securities or investment strategies that may have been discussed in this report and should understand that

the views regarding future prospects may or may not be realised.




Stock growth

of 2X in

HTSF portfolio

HTSF Entry Point

Maruti Suzuki

– This auto sector stock has given 2X since the

fund initiated

94

HSBC Tax Saver Equity Fund - portfolio


95

HSBC Tax Saver Equity Fund - performance

Data as on 30 Sep 2020, ICRA MFI Explorer , Returns CAGR – Compounded Annualised Growth Rate, S&P BSE 200 TRI index used above as a benchmark


HSBC Tax Saver Equity Fund – Growth 9,610 9,750 13,117 34,814

S&P BSE 200 TRI (Benchmark) 10,097 11,596 15211 34640

Alpha -487 -1,846 -2,094 174

The Fund offers flexible and convenient Systematic Investment Plan (SIP) facility. To illustrate the advantages of SIP investments, this is how your investments would have

grown if you had invested say Rs.10,000 systematically on the first Business Day of every month over a period of time in the Growth Option of Respective Scheme.

The returns are calculated by XIRR approach assuming investment of Rs.10,000/- on the 1st working day of every month. XIRR helps in calculating return on investments given

an initial and final value and a series of cash inflows and outflows with correct allowance for the time impact of the transactions.

Past performance may or may not be sustained in the future. Please check the detailed performance on the slide number 97

For other schemes performance managed by Gautam Bhupal refer slide number 79, 100

Returns are of growth option. Returns above 1 year are Compounded Annualized. Standard benchmark is prescribed by SEBI and is used for comparison purposes. Returns on 10,000 are

point-to-point returns for the specific time period, invested at the start of the period. The returns provided above have been rounded off and hence there may be minor differences between

point-to-point returns vis-a-vis returns indicated above. Different plans shall have a different expense structure. The performance details provided herein are of other than Direct plan.


-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%


HSBC Tax Saver Equity Fund – GrowthS&P BSE 200 (Benchmark)

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

14%


HSBC Tax Saver Equity Fund – Growth

S&P BSE 200 (Benchmark)

96

Rolling performance – HSBC Tax Saver Equity Fund

In the long term probability of negative returns reduces and




10 years rolling returns for HSBC Infrastructure Equity Fund are calculated using the data since its inception i.e. 5 Jan 2007 to 30 September 2020.





ACE MF data as at September 2020, S&P BSE 200 TRI



Rolling return period for HSBC Tax Saver Equity Fund – 5 Jan 07 – 30 September 2020

Please refer to page no 97 for performance in SEBI prescribed performance format of the above fund. Past performance may or may not be sustained in the future, For other schemes performance

managed by the Fund Manager refer slide number 79, 100


Since Inception ^


Minimum returns% 6 -1.6 -8 -53.9 5 -2.1 -5 -59.3

Maximum returns% 18.59 22.84 30.25 105.6 18.89 23.68 32.80 126.2

Average Returns 12.52 12.82 12.6 12.5 10.61 10.90 11.2 11.8

Negative returns % times 0.0% 0.3% 5.3% 30% 0.0% 2.8% 5.9% 26%




HSBC Tax Saver Equity Fund (G)S&P BSE 200

(Benchmark )

97

HSBC Tax Saver Equity Fund - performance

Source - ICRA MFI Explorer, Data as on 30 September 2020, For other schemes performance managed by the Fund Manager refer slide number 79, 100

Past performance may or may not be sustained in the future, Returns are of growth option.

The performance details provided herein are of other than Direct Plan - Growth Option. Returns on 10,000 are point-to-point returns for the specific time period, invested at the start of

the period. The returns for the respective periods are provided as on last available NAV of September 2020 for the respective Schemes. Returns 1 year and Above are Compounded

Annualised. Load is not taken into consideration for computation of performance. Different plans shall have a different expense structure. The expenses of the Direct Plan under the

Scheme will be lower to the extent of the distribution expenses / commission charged to the Other than Direct Plan. The performance data of the scheme(s) managed by the

respective Fund Manager which has/have not completed 1 year is not provided. Considering the varying maturities of the close ended schemes, the performance of close-ended

schemes is not provided as it is strictly not comparable with that of open ended schemes.

Gautam Bhupal is managing HSBC Tax Saver schemes with effect from 23 July 2019


The said Fund is managed by Gautam Bhupal Effective (23 July 2019)

Funds Managed by - Gautam Bhupal (Total Schemes Managed 7)


Incep

tion

Date

: 05-J

an

-07

Fund / Benchmark



Amount in

`Returns

(%)

Amount in

`Returns

(%)

Amount in `

Returns

(%)

Amount in

`Returns

(%)

HSBC Tax Saver Equity Fund 9,610 -3.89 9,750 -0.84 13,117 5.57 34,814 9.50

S&P BSE 200 TRI (Scheme Benchmark) 10,097 0.97 11,596 5.05 15,211 8.74 34,640 9.46


98


Key Features

Benchmark Index S&P BSE 200 TRI


Lump sum - INR 5000 / SIP – INR 500


Load Structure Entry Load – NA; Exit Load - Nil




Aims to provide long term capital appreciation by investing in a diversified portfolioof equity & equity related instruments of companies across various sectors andindustries, with no capitalisation bias. The Fund may also invest in fixed incomesecurities. However, there can be no assurance or guarantee that the investmentobjective of the scheme would be achieved.

99

Equity Market Outlook

Source: HSBC Asset Management Company, India, Data as of September 2020 except otherwise mentioned.

• Equity markets lost the upward momentum during September and this coincided with the negative trading bias seen in global

equities as well.

• Concerns around the emergence of second wave of the virus globally halted the continued optimism path for global equities.

• In India however, the high frequency indicators continued to show improvement along with economic activity levels. Additionally,

there were signs of the infection curve flattening for the country as a whole with the daily new cases showing first signs of

peaking out during the month.

• India manufacturing PMI witnessed a significant jump to 56.8 in September compared to 52 in August, continuing on a trend of

expansion. The railway freight data registered a growth in September while the electricity consumption demand returned to pre-

COVID levels during September.

• The GST collection data for August (collected in September) also showed a growth (3.9% YoY) for the first time in 6 months.

• We believe, that there would be a dichotomy between the real economy and the performance of the dominant companies in the

listed universe. This we believe is due to the ability of the larger companies (including dominant companies) to adapt and ride the

disruption much more efficiently owing to its scale of economies (cost advantage), technological superiority (digital readiness)

and balance sheet strength.

• From a P/E perspective, Nifty is currently trading at 27.4x/19.1x on FY21/FY22 consensus earnings of Rs. 410/588 respectively.

It implies a flat growth in FY21 and a strong 43% growth in FY22.

• From a P/E perspective, Nifty is currently trading at 27.4x/19.1x on FY21/FY22 consensus earnings of Rs. 410/588 respectively.

It implies a flat growth in FY21 and a strong 43% growth in FY22.

• Our fund’s philosophy has been to invest in dominant businesses having scalable potential and that have reasonable valuations.

• We see telecom, internet economy, ecommerce, technology vendors etc., to benefit from this disruption.

• Another long term theme is that of diversification of the global supply chain due to ‘China + 1’ strategy which could be adopted by

corporates as well as economies and India could stand to benefit out of that.

Market focus could be firmly on the revival phase post the survival phase

100

Gautam Bhupal is managing above 3 HMS schemes with effect from 23 July 2019

ICRA MFI Explorer, Data as on 30 September 2020,

1 The said Fund has been in existence for more than 1 year but less than 3 years

HSBC Regular Saving Fund is managed by Kapil Punjabi since 18 February 2019 and by Gautam Bhupal since 23 July 2019

HSBC Focused Equity Fund performance is not given as it has not completed 1 year.

Performance of the respective benchmark is calculated as per the Total Return Index (TRI) . For other schemes performance managed by the Fund Manager refer other performance slides of the

presentation.


Past performance may or may not be sustained in the future, Note :NA means not available.

Returns are of growth option. The returns for the respective periods are provided as on Last business day of September 2020 for the respective Schemes. Returns above 1 year are Compounded

Annualized. Standard benchmark is prescribed by SEBI and is used for comparison purposes. Returns on 10,000 are point-to-point returns for the specific time period, invested at the start of the period.

The returns provided above have been rounded off and hence there may be minor differences between point-to-point returns vis-a-vis returns indicated above. Different plans shall have a different

expense structure. The performance details provided herein are of other than Direct plan. Scheme count for the total schemes managed by the Fund Managers does not include closed ended scheme.

Other Funds Managed by the above schemes Fund Managers

2

101

HSBC Global Asset Management

India investment capabilities and process

102

Fixed Income (158.4)

Equity (73.1)

Multi-Asset (123.4)

Liquidity (117.4)

Alternatives (32.1)*

Other (24.6)**

A global network of local experts

Investment professionals working across key locations

1. Asia-Pacific includes employees and assets of Hang Seng Bank, in which HSBC has a majority holding.

2. HSBC Jintrust Fund Management company is a joint venture between HSBC Global Asset Management and Shanxi Trust Corporation Limited.

*Alternatives assets include USD 4.3bn from committed capital (“dry powder”).

**Other is the assets of Hang Seng Bank, in which HSBC has a majority holding, and of HSBC Jintrust Fund Management, a joint venture between HSBC Global Asset Management and Shanxi Trust Corporation Limited.

Source: HSBC Global Asset Management as at 30 June 2020. Any differences are due to rounding.

HSBC Global Asset Management offices - Countries and territories where our investment teams

sit are in bold

Canada

USA

Mexico

Argentina

Bermuda

UK

Swede

n

Luxembourg

JerseyFrance

Spai

n

Switzerland

Malta

Italy

Germany

Turkey

Saudi

ArabiaUAE

India

Singapore

Hong Kong

Taiwan

Japan

Australi

a

Mainland

China2

Presence in

25 locations

617investment

professionals

88America

s

353EMEA

176Asia-

Pacific1

USD 528.9bn under management

By asset class (USD bn)

Americas (133.7)

EMEA (272.2)

Asia Pacific (123.0)

By region (USD bn)

Wholesale(276.5)

By client type (USD bn)

103

HSBC Asset Management, India – expertise and experience

The investment management team manages/advises strategies with assets across investment categories

Data as at Sep 2020, Any differences are due to rounding

INR 9983 Cr

AUM as at last day of quarter ended Sep ‘20 Expertise in managing Indian equity and debt

Managers/sub-advisors of Indian equity and debt assets from last 17 years

Differentiate Product offerings

Clear and differentiated product offerings across asset classes

Recognised leader in emerging markets asset management

International experience

Global presence, local knowledge

Ability to identify and position for global trends

Supported by global perspective on long term asset prices

Inputs on impact of macro economic developments on Indian fixed income markets

On the ground presence combined with global oversight

Personal local relationships combined with Executive Management engagement

and global support through dedicated Official Sector Institutions team based in

London

Tailored and bespoke approach when working with Official Sector Institutions

Offshore advisory (Equity and Fixed Income):

Rs.19193 Cr

AUM for the quarter ended (30 Sep 2020)

Asset class wise disclosure of AUM & AAUM

Disclosure of percentage of AUM by geography

Category AUM as on the last

day of the Quarter

Average AUM for

the Quarter

Income 264,904 204,376

Equity (other than ELSS) 280,991 273,086

Liquid 418,954 436,308

Equity - ELSS 13,741 13,728

Fund of Fund investing overseas 3,748 3,851

Fund of Fund investing in Domestic 16,051 16,599

Total 998,387 947,948

Geographical

Spread

% of Total AUM as on the

last day of the Quarter

Top 5 Cities 71.27

Next 10 Cities 15.73

Next 20 Cities 4.93

Next 75 Cities 4.08

Others 3.98Total 100.00

104

Equity Investment Process - A globally disciplined and structured approach

Our investment framework integrates global perspective

with local insight in a continuous cycle

Consistency

of investment

decisions

Portfolio

construction

Top down

insight

Bottom up

input

Forums and

committees

Globally

shared

tools

Consistent

philosophy

and approach

Macro

and

Strategy

team

Local

teams

insight

Local

Research

teams

Portfolio

Design

teams

Trading

Risk

Team based

approach

Global framework

Macro views

Expected returns

Asset allocation

Sectors and regions

Informed investment

decision

Risk budgeting

Portfolio optimisation

Tactical opportunities

Portfolio-specific constraints

Local insight

Stock-specific analysis

Relative valuation

Investment themes

Technicals

The information above is provided by and represents the opinions of HSBC Global Asset Management and is subject to change without notice

105

India Investment Capabilities - Investment philosophy

The information above is provided by and represents the opinions of HSBC Asset Management, India (HSBC AMC) and is subject to change without notice

Overarching investment philosophy – HSBC Global Asset Management, India

Price to Book / Return on Equity (PBRoE) effective for Global Emerging Markets – Price to book (PB) is often quoted as the best performing

factor in this space

Screening companies on the basis of

High Profitability (RoE)

Low Valuations (P/BV)

Ranking on the basis of PBRoE

Focused on the resilience of underlying fundamentals of the company

Concentrating on companies most likely to outperform- not the entire universe

Eliminating noise and person-centric decision making

Risk mitigation using portfolio construction tools

There is a well-established relationship between profitability and valuation

Excess volatility in equity markets implies that stocks are often mispriced

This creates the potential for an active investment opportunity that can be confirmed with proprietary fundamental research

Markets revert to a measure of “relative intrinsic value” over time, hence we are patient investors with a strict valuation discipline

and long-term investment horizon

We believe that concentrating overweight positions in profitable companies at below-average valuations will enhance returns

106

For illustrative purposes only

Universe is assembled

and filtered periodically

Stocks are ranked

according to a

combination

of valuation and

profitability

Data validity is verified

Begins with the top

ranked outliers

Stock analysis focuses

on 5 key issues:

– Corporate governance,

balance sheet,

profitability drivers,

growth shocks,

dynamic factors

Benefits from global

information sharing

Bottom-up

implementation of stock

ideas

Top-down use for

prudent risk control

Continuous monitoring/

reassessment of risk at

the stock and portfolio

level

Compliance monitoring

and internal controls

HSBC Group risk

management and audit

Output: Stock ‘outliers’ Output: Stock ideas Output: Stock portfolio Output: Stock reassessment

1. Universe

analysis

2.

Stock

analysis

3. Portfolio

construction

4.

Risk

management

Global investment process overviewOur process is focused on fundamental research within a proven valuation framework


Valuation model

PBRoE: PB – Price to book (Valuations) vs RoE – Return on equity (Profitability)

For illustrative purposes only. The above asset allocation and strategy may not have all details. For more details please refer to the SID (Scheme Information Document) of HSBC Focused Equity Fund

Placement of stocks through proprietary PBRoE process makes it more efficient

Inflated Buy Growth Buy

Value BuyAttractive

Buy

RoE of stocks

PB

of

sto

cks

Profitability

Va

lua

tio

ns

108

The PBROE & risk mitigation model differentiates HSBC MF from the market

The PBROE Edge

Screening for best sources of alpha : companies with below-average valuation for a given profitability

Particularly applicable in the Emerging Markets universe

The price-to-book ratio works over large groups of stocks

Consistent and sustainable outperformance over time and across cycles

The framework has been tested by the HSBC GAM Research team and shown to outperform (over a period of years) at both regional

and country levels

Globally adopted investing framework

Focusing analysts on companies most likely to outperform

Key takeaways of Equity Investment Process


109

HSBC Global Asset Management India - Investment Team

Tushar has over 25 years of experience in various roles through his career. He is an

MBA in Investment Finance, having graduated from the University of Hartford,

Connecticut, USA in 1992. Prior to joining HSBC Global Asset Management, India in

June 2009, Tushar has also worked in international positions in the United States for

a couple of years before returning to India. In India he has worked with HDFC Asset

Management and more recently with AIG Global Asset Management in senior asset

management roles.

Tushar Pradhan

CIO, HSBC Global Asset Management, India

110

Gautam Bhupal is Vice President and Fund Manager in the India Equity Investment team since 2008 and has over 13 years of experience

in areas of research and Fund Management. Prior to joining HSBC Global Asset Management, India in 2008, Gautam has worked with UTI

Asset Management Company as Equity Research Analyst. He holds a Post Graduate Diploma in Business Management from Management

Development Institute, Gurgaon and has completed his CA and CS.

Gautam Bhupal

VP & Fund Manager

Amaresh Mishra is Vice President and Fund Manager in the India Equity Investment team since 2007. He has over 12 years of experience

in Equities and Sales. Prior to joining HSBC Global Asset Management, India in 2005, he has worked Centre for Science and Environment

in New Delhi. He holds a PGDM from XIM, Bhuvneshwar.

Amaresh Mishra

VP & Fund Manager

Ranjithgopal K A is a Vice President and the Fund Manager in the India Equity Investment team and has over 11 years of experience in

Equity Research & Sales. He holds a Bachelor of Arts (Economics) degree and holds a Post Graduate Diploma in Business Management

from FORE School of Management, New Delhi.

Ranjithgopal K A

VP and Fund Manager

HSBC Global Asset Management India – Equity Investment Team

Nikunj Mehta has recently joined as Associate Vice President in the equity investment team. Nikunj is a B. Tech in Computer Science from

VJTI (Veermata Jijabai technology Institute), Mumbai. Nikunj has completed CFA (US) and is currently awaiting his Charter. Nikunj has

over 6 years of experience in sell side equity research having covered companies in energy, FMCG and real estate space. Prior to joining

HSBC Global Asset Management, Nikunj has worked in equity research department in well-known domestic and international broking firms.

Nikunj Mehta

AVP

Neelotpal Sahai is currently Head of Equities and Fund Manager since September 2017. He has been a Senior Vice President and

Portfolio Manager in the Onshore India Equity team in Mumbai since 2013, when he joined HSBC. Neelotpal is responsible for managing

three HSBC Mutual Fund equity funds. Neelotpal has been working in the industry since 1991. Previously, Neelotpal was Director at

IDFC Asset Management Company Ltd in Mumbai, responsible for equity fund management, and held a variety of positions at Motilal

Oswal Securities Ltd. in Mumbai, Infosys Technologies in Mumbai, Vickers Ballas Securities Ltd. in Mumbai, SBC Warburg in Mumbai,

UTI Securities Ltd. in Mumbai and HCL HP Ltd. in Mumbai. Neelotpal holds a Bachelor’s degree in Engineering from IIT BHU – Varanasi

and a Post-Graduate Diploma in Business Management from IIM Kolkata, both in India.

Neelotpal Sahai,

Head of Equities & Fund

Manager

Ankur Arora is a Senior Vice President and Fund Manager – Equities in the onshore India Equity Team. Ankur brings with him more than 15

years of experience spread across fund management, research and strategy. Prior to joining HSBC, Ankur has worked with Aegon Life

Insurance, Arvind Ltd, IDFC Asset management, ING Investment Management, Macquarie Securities, Evalueserve and UTI Asset

Management in various capacities. A management graduate from of Indian Institute of Management, Lucknow, Ankur also holds a CFA

from CFA Institute and a B. Com from Guru Nanak Dev University. Amritsar.

Ankur Arora

SVP & Fund Manager

Priyankar has over 4.5 years of experience in areas of research across different sectors. He has joined HSBC Asset Management (India)

Private Limited Associate Vice President - Equities since 6 May 2019. Prior to this he has worked with Motilal Oswal Asset Management

Company as an Equity Research Analyst from Nov 2014 to April 2019.

Priyankar Sarkar

AVP & Fund Manager

111

RiskometersHSBC Regular Savings Fund

This product is suitable for investors

who are seeking*:

• Capital appreciation over medium to long

term.

• Investment in fixed income

(debt and money market instruments) as

well as equity and equity related securities.

*Investors should consult their financial advisers if in doubt about

whether the product is suitable for them.

Investors understand that their principal

will be at Moderately High risk

HSBC Managed Solutions India -

Moderate


who are seeking*:

• To create wealth over long term

• Investing predominantly in units of equity

mutual funds as well as in a basket of debt

mutual funds, gold & exchange traded

funds, offshore mutual funds and money

market instruments.






Growth


who are seeking*:

• To create wealth over long term

• Investing predominantly in units of equity

mutual funds as well as in a basket of debt

mutual funds, gold & exchange traded

funds, offshore mutual funds and money

market instruments.






Conservative


who are seeking*:

• To provide income over the long-term;

• Investing predominantly in units of debt

mutual funds as well as in a basket of equity

mutual funds, gold & other exchange traded

funds and money market instruments.




will be at Moderate risk


who are seeking*:

• Long term wealth creation

• Investment in equity and equity related

securities across market capitalization

in maximum 30 stocks



HSBC Focused Equity Fund



HSBC Equity Hybrid Fund




who are seeking*:

• Long term wealth creation and income

• Invests in equity and equity related

securities and fixed Income

instrumentsInvestors understand that their principal


HSBC Large & Mid Cap Equity Fund




who are seeking*:

• Long term wealth creation and income

• Investment predominantly in equity and

equity related securities of Large and Mid

cap companiesInvestors understand that their principal


112

Disclaimer

This document has been prepared by HSBC Asset Management (India) Private Limited (HSBC) for information purposes only and should not be construed as i) an offer or recommendation to buy or sell securities, commodities, currencies or other investments referred to herein; or ii) an offer to sell or a solicitation or an offer for purchase of any of the funds of HSBC Mutual Fund; or iii) an investment research or investment advice. It does not have regard to specific investment objectives, financial situation and the particular needs of any specific person who may receive this document. Investors should seek personal and independent advice regarding the appropriateness of investing in any of the funds, securities, other investment or investment strategies that may have been discussed or referred herein and should understand that the views regarding future prospects may or may not be realized. In no event shall HSBC Mutual Fund/HSBC Asset management (India) Private Limited and / or its affiliates or any of their directors, trustees, officers and employees be liable for any direct, indirect, special, incidental or consequential damages arising out of the use of information / opinion herein.

This document is intended only for those who access it from within India and approved for distribution in Indian jurisdiction only. Distribution of this document to anyone (including investors, prospective investors or distributors) who are located outside India or foreign nationals residing in India, is strictly prohibited. Neither this document nor the units of HSBC Mutual Fund have been registered under Securities law/Regulations in any foreign jurisdiction. The distribution of this document in certain jurisdictions may be unlawful or restricted or totally prohibited and accordingly, persons who come into possession of this document are required to inform themselves about, and to observe, any such restrictions. If any person chooses to access this document from a jurisdiction other than India, then such person do so at his/her own risk and HSBC and its group companies will not be liable for any breach of local law or regulation that such person commits as a result of doing so.

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