HSBC Low Duration Fund
Low Duration Fund - An open ended low duration debt scheme investing in instruments such that the Macaulay duration of the portfolio is between 6 months to 12 months. Please refer Page no. 9 of the SID for explanation on Macaulay duration. Relatively low interest rate risk and moderate credit risk.
(Formerly known as L&T Low Duration Fund. HSBC Low Duration Fund has merged into L&T Low Duration Fund and the surviving scheme has been renamed)
Investment Objective
The investment objective is to provide liquidity and reasonable returns by investing primarily in a mix of short term debt and money market instruments such that the Macaulay duration of the portfolio is between 6 months to 12 months. However, there can be no assurance or guarantee that the investment objective of the scheme would be achieved.
Our philosophy
- We deploy a balanced approach to credit and risk management
- Transparency in investment methodology
- Active investment opportunity supported by proprietary credit research
Our process
Proprietary research drives security selection:
- Balanced approach for security selection to achieve optimal risk adjusted returns
- Balanced approach in managing risk – well managed issuer concentration
- Benefits from global investment network and research sharing platform
Why HSBC Low Duration Fund?
- Aims to allocate the assets of the Scheme between various money market and fixed income securities, such that the Macaulay duration of the portfolio is between 6 to 12 months with the objective of providing liquidity and achieving optimal returns with the surplus funds
- Liquidity will be maintained through a combination of cash, reverse repo, daily put/call MIBOR papers and liquid CPs / CDs of strong credits
- True to label fund – The fund will stay true to its objective in keeping with the mandate reposed by the investor whilst investing in the fund
- To create a corpus through generating inflation-adjusted returns
This product is suitable for investors who are seeking*:
- Liquidity over short term
- Investment in a mix of debt and money market instruments such that the Macaulay1 duration of the portfolio is between 6 months to 12 months
Investors understand that their principal
will be at Low to Moderate Risk
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.
1The Macaulay duration is the weighted average term to maturity of the cash flows from a bond. The weight of each cash flow is determined by dividing the present value of the cash flow by the price.
Potential Risk Class (‘PRC’) matrix indicates the maximum interest rate risk (measured by Macaulay Duration of the scheme) and maximum credit risk (measured by Credit Risk Value of the scheme) the fund manager can take in the scheme. PRC matrix classification is done in accordance with and subject to the methodology/guidelines prescribed by SEBI to help investors take informed decision based on the maximum interest rate risk and maximum credit risk the fund manager can take in the scheme, as depicted in the PRC matrix.
^ Medium to Long Duration Fund - An open ended medium to long term debt scheme investing in instruments such that the Macaulay duration of the portfolio is between 4 years to 7 years. Please refer Page no. 9 of the SID for explanation on Macaulay duration.
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