Flexi Cap Investing: Managing Volatility Across Market Caps | HSBC Mutual Fund

HSBC Mutual Fund India • 3 days ago

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What This Video Is About

The HSBC Flexiap Fund video discusses the fund's investment approach and strategy, focusing on identifying opportunities in a constantly evolving market. The fund combines flexibility and discipline in portfolio allocation, evaluating opportunities across market capitalization through a consistent investment framework.

Major Ideas Discussed

  • The fund's approach brings together sectoral diversification, identifying under-researched quality businesses, and a risk-reward mechanism to manage stock weights.
  • Earning growth estimates vary across market capitalization segments, with large caps expected to grow at 14% and 16% for FY27 and FY28, respectively, while midcaps and small caps are expected to grow at 21% and 34% for FY27, and 20% and 26% for FY28.
  • Valuations are another important consideration, with the latest 12-month blended forward P/E multiple standing at around 17 times for Nifty large cap, 22.7 times for midcap, and 22.6 times for small cap.
  • The fund currently sees opportunities in electrical equipments, capital markets, industrial manufacturing, and diversified NBFCs, while being cautious in commercial banks, insurers, telecom, and energy.
  • The fund prefers component makers over OEMs in the auto sector.
  • The market cap allocation is 46.5% in large cap, 20.3% in midcaps, 31.9% in small cap, and 1.2% in cash.

What to Watch Next

The fund suggests monitoring developments in the electrical equipments, capital markets, and industrial manufacturing sectors, as well as the performance of diversified NBFCs and component makers in the auto sector.