This fund house has managed to build a fairly sizeable business over a relatively short period of time. Equally impressive is the fact that the fund house did not resort to buying out another AMC. It has stuck to growing organically. Of course, in retrospect, its timing could not have been better. The bull run shortly after the start of operations towards the end of 2002 helped tremendously.
The fund house has regularly come out with equity funds. Except for the year 2003, the AMC has launched equity funds every single year from 2002. In the last three years (2006-2008), there have been two equity NFOs in each year. Each of the products have been well defined and thought out. HSBC Emerging Markets is the one with the international flavour.
HSBC Equity is the fund that put this AMC on the investment map. The timing being great, its performance in 2003 and 2004 was excellent. The way the fund raced ahead in terms of its size is more of a fund-led success, rather than a brand-led one. The fund's sensational start earned tremendous brand equity for the fund family. But after that, it faltered. Recently, there have been signs of revival and this fund once again is looking like a fairly good pick.
HSBC Midcap Equity, launched in 2005, has also disappointed in performance and has a 1-star rating.
Another factor to look out for is the expense ratios of its equity funds. Though not the steepest in the industry, they tend to be on the higher side.
From the debt funds launched in 2002, HSBC Income Investment also had a great start but hit a rough patch in 2004 and 2005. It has picked up again. HSBC Income Short Term has not even been an average performer over these years. HSBC Cash has been a reasonable performer.
By and large, this is a well-run and organised fund company. It faltered by way of performance but it’s more of a temporary setback than an inherent flaw with the fund house.