2009 is a year that HSBC Mutual Fund would gladly forget.
The year began with its chief investment officer Mihir Vora putting in his papers. He was out by March while Tushar Pradhan (ex AIG Mutual Fund and HDFC Mutual Fund) took over only by the end of June that year.
Besides a change at the helm, performance was also an issue. The fund house's highly defensive call backfired and its equity schemes faltered. Worse still, its flagship scheme HSBC Equity has not been having a great run for a while, barring 2008 when its defensive posture helped.
How the tables have turned! HSBC Equity had a great start. The timing of its launch could not have been better. The bull run that began shortly after the fund house started operations helped tremendously. And it was this fund that put the asset management company (AMC) on the investment map with excellent numbers in 2003 and 2004.
Added to the fabulous performance was the traction that the HSBC brand gave it. Having said that, it was the fund's sensational start that earned tremendous brand equity for the fund family, not the other way around. Now, years down the road, the reverse holds true. Investors consider HSBC Mutual Fund only for the brand name, the performance has disappointed. HSBC Equity has never been able to match up to that performance again. It turned out to be an extremely average performer from 2005 onwards. Its saving grace was that it protected the downside very well in 2008 and was a top quartile performer that year. Come 2009 and the fund faltered, once again.
Blame it on a very defensive stance in 2009 (see interview The Conservative Tilt), last year's equity performances left much to be desired (see How the performance stacks up). Investors have shown their displeasure. The total assets under management (AUM) have seen a significant dip over the recent years. Its AUM has dropped from Rs 16,684.49 crore (February 2008) to Rs 6,562.62 crore (February 2010). Along with it, market share too has fallen to just above 1 per cent.
This AMC must pull its socks up if it plans to stay on as a serious contender.
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