Comments on: HSBC Brazil Equity Fund

By: Manshu

Manshu — Sun, 24 Apr 2011 17:22:12 +0000

Those are all fair points Parth, but when I look at how BOVESPA and Sensex have behaved in the last few years – they have mirrored each other quite closely. So, if I was looking for diversification by buying an international fund I think Brazil may not help in that much. If on the other hand – I want to take a bet on Brazil specifically, then yeah you need a fund. Which is what I meant earlier – most people look abroad for diversification, but that may not work out too well for Indians investing in other emerging markets.

There aren’t any ETFs that trade Aus are there? I think that’s a good play if you want to go into an international index which benefits from commodity prices.

By: Parth

Parth — Fri, 22 Apr 2011 08:58:09 +0000

Well, I would beg to differ on that..

The primary difference between India and Brazil would be the net commodity export/import positions.
Brazil has huge oil reserves and is a net exporter for oil as well as a number of important commodities like metals, agri products, etc.
In a hyper-inflationary world (esp. Oil), Brazil would benefit from the price increases while India could have a big problem.

Another reason would be diversification between governments and corruption. Its a question of sensibly diversifying unknown risks that exist due to various political factors while keeping the return profile almost same.

Last but definitely not the least, Brazil has a lower valuation relative to India.

All in all, it can be good value-added diversification for your portfolio.
But then, you also have to develop a level of understanding for a whole new country and economy, its major players, ethics, etc..

By: Manshu

Manshu — Thu, 21 Apr 2011 13:39:52 +0000

Hi Parth – thanks for your comments – what you say makes sense and I would also recommend checking the thesis on why an Indian investor should invest in another BRIC country? I mean what is the additional benefit – you are getting the same type of returns here and in fact the same type of risks as well, so why go for another emerging market fund?

By: Parth

Parth — Thu, 21 Apr 2011 07:48:49 +0000

Hi Manshu,

The fund cannot even be called a pure FoF, it is more like an investment facilitating vehicle for the HSBC GIF Brazil Equity Fund, as its going to invest 95-100% in the fund.

Meanwhile, the past performance of the base fund does not inspire much confidence as it has underperformed the Brazilian market by quite a bit. Plus the high fees that you mentioned.

All in all, I would wait for similar offerings that are bound to come from other companies as well.

Regards,
Parth

By: Chirag

Chirag — Wed, 12 Jan 2011 09:56:54 +0000

Brazil gave awesome returns in last 10 years more than India.
A mutual fund looks good for diversification..

By: How can Indian investors invest in Brazil?

How can Indian investors invest in Brazil? — Wed, 26 May 2010 01:40:25 +0000

[...] I searched for mutual funds that help investors take exposure to Brazil. I have written about the HSBC Brazil Equity fund earlier, and though that fund is not yet launched, when it does get launched – it will be the [...]

By: Vinod Lalwaney

Vinod Lalwaney — Mon, 15 Mar 2010 12:07:11 +0000

Its good that we now have oppurtunities to invest, which can provide geographical diversification (Brazil F-O-F here, and HangSeng ETF from benchmark). Also read that the Nifty is listed now on the chicago exchange, so truly we are now merging onto the global economy.
Specifically on the topic above, value add from my side is
a) I would go for this if i strongly felt the need for diversification within the BRIC economies. As of now i apart from China (which is on a positive because for tremedous growth – stimulus package continuing – ) i have not seen conclusive data if the other economies provide a corelation with Indian securities which will justify the move.
b) the insurance offered is a general insurance and not a life insurance cover. Critical Illness covers provide for compensation on detection of the notified critical illnesses AND “Survival” of the assured for a certain period (approx 30 days) after the detection of the illness. So Firstly, Its not Life Insurance cover and Secondly, need to survive some period before you can file a claim.

By: Indian Thoughts

Indian Thoughts — Wed, 03 Mar 2010 05:16:16 +0000

Thanks aton for this information.

By: Manshu

Manshu — Tue, 02 Mar 2010 11:18:32 +0000

Yes it is present in the offer document, and most of the time you can find it on the website somewhere – Statement of Additional Information or Key Information Memorandum…..one of those documents will have it. Just search for “expense” in the document and you will find it.

By: Indian Thoughts

Indian Thoughts — Tue, 02 Mar 2010 05:25:38 +0000

Hi,

I have a question.
How can I find “Expenses of the fund” for any mutual fund. Is it in offer document?