HSBC Large & Mid Cap Fund

Fund of the Month: HSBC Large & Mid Cap Fund

Fund Manager: Cheenu Gupta, Mayank Chaturvedi

SEBI Categorisation:Large & Mid Cap Fund

Type & Investment Objective

To seek long term capital growth through investments in both large cap and mid cap stocks. However, there is no assurance that the investment objective of the Scheme will be achieved.

Fund Investment Strategy

The fund invests a minimum of 35% in Large Caps and 35% in Mid Caps, providing the right balance between stability and growth potential. With Indian valuations now at more reasonable levels, the fund enables investors to benefit from both established large-cap companies and faster-growing mid-cap businesses. Portfolio is built using Leaders (20–30%), Challengers (40–60%), and Themes/Turnarounds (20–30%), ensuring multiple sources of alpha across market cycles. Large caps provide downside resilience, while mid-cap and selective small-cap exposure enhance long-term wealth creation potential. The fund maintains a high active share, investing meaningfully away from the benchmark to generate sustainable alpha rather than merely replicating the index.


Outlook

• Global markets recovered in August after the weakness seen in July. The recovery was supported by strong earnings from large technology companies, which brought the AI investment theme back into focus. However, markets are now paying greater attention to rising global bond yields, particularly in Japan, the US and Europe. Higher yields could remain a source of volatility for equities. The global macro environment remains challenging, with geopolitical tensions, tariff-related uncertainty and uneven economic growth weighing on the outlook.

• Nifty consensus EPS estimate for CY26/27 were largely unchanged in August 2026 as per Bloomberg. Accordingly, Nifty now trades at 18.1x 1-year forward PE. This is now at a 7% discount to its 5-year average and 4% discount with its 10-year average.

• Overall, AMC remains constructive on Indian equities from a medium- to long-term perspective. India's strong domestic growth, improving earnings outlook, steady domestic flows and reasonable valuations provide support. However, near-term returns could remain volatile as global bond yields, crude oil prices, geopolitical developments, monsoon conditions and global monetary policy remain important risks. In this environment, corporate earnings growth is likely to remain a key driver of market returns.

Sectoral Overweights

• Capital Markets: Structural Shift to Equities, Market Depth Expansion, Operating Leverage.

• Industrial Manufacturing:Capex Revival, China+1 Opportunity, Make in India & PLI

Sectoral Underweights

• Banking and Finance:Moderating Credit Growth,Net Interest Margin (NIM) Pressure, Rich Valuations

• Automobile: Demand Normalisation, High Base Effect, Margin Pressure, Intense Competition

Sectoral Attribution - Fund Vs Benchmark - 1 Year Performance

• Top 3 Contributors: 1. Electrical Equipment 2. Retailing 3. Capital Markets

• Top 3 detractors: 1. Banks & Finance 2. Industrial Products 3. Automobiles

Scheme Features
   

• Options: Growth and Income Distribution cum capital withdrawal (IDCW)

• Minimum Investment amount: Rs. 5000

• Load Structure Exit Load: "If redeemed before 1 Year ; Exit Load is 1%; If the units redeemed or switched out are up to 10% of the units purchased or switched in (â??the limitâ?) within 1 year from the date of allotment - Nil If units redeemed or switched out are over and above the limit within 1 year from the date of allotment - 1% If units are redeemed or switched out on or after 1 year from the date of allotment - Nil A switch-out or a withdrawal under SWP may also attract an Exit Load like any Redemption. No Exit load will be chargeable in case of switches made between different options of the Scheme. No Exit load will be chargeable in case of Units allotted on account of dividend reinvestments, if any."

• Benchmark Index: NIFTY Large Midcap 250 TRI

• August 2026 [Fund Size in Crs] 5,931.25

• NAV: 52 Week High / Low: Rs. 30.72 / 24.49

Product Label

This product is suitable for investors who are seeking*:

• Long term wealth creation and income
• Investment predominantly in equity and equity related securities of Large and Mi cap companies
  
  *Investors should consult their financial advisers if in doubt about whether the product is suitable for them.

Source for entire data stated above is ICRA Analytics Ltd. (For Disclaimer of ICRA Analytics Ltd, refer https://icraanalytics.com/home/disclaimer)

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