HSBC Indian Equity Fund Produces Strong Return.
By Gordon Platt
Sanjiv Duggal, investment director of equities at Halbis, the active fundamental investment management arm of HSBC Global Asset Management, closely monitors the progress of the monsoons, as well as the trend in commodity prices. “Investors should expect that investing in India involves high volatility,” he says. If they stick with it for the long term, however, investors will benefit from India being one of the world’s fastest-growing economies, Duggal says. HSBC Global Investment Funds–Indian Equity, one of the largest offshore Indian equity funds, with more than $5 billion in assets, rose 130% in the year to date through October 15.
Duggal employs a top-down investment strategy, which has generated strong annualized returns since the fund was introduced in March 1996. At any given time, the fund is invested in about 50 companies that are either listed on Indian exchanges or do most of their business in India. Its top five holdings are Cairn Energy, Jindal Steel, Maruti Suzuki India, HCL Technologies and Unitech.
In the second half of 2008 and earlier this year, Duggal acquired cyclical growth sectors, such as automobiles and real estate, at what he calls cheap valuations.
“Economic improvement should boost earnings for domestic [Indian] growth industries, as disposable incomes and demand rise,” Duggal says. “We expect infrastructure and investment spending to pick up in the last quarter of this calendar year.”