In order to give investors in India an opportunity to reap the rewards of investing in Brazil, HSBC Mutual Fund is set to launch an open-ended fund of fund schemes called HSBC Brazil Equity Fund. The fund has filed an offer document with the market regulator Securities and Exchange Board of India (Sebi).
While some funds do have a partial exposure to some Latin American countries, this would be the first fund with an exposure exclusive to a South American country. Brazil, known to be rich in raw materials, is among the four countries of the BRIC set of nations together with Russia, China and India whose economies are expected to show strong growth over the next decade.
The offer document filed by the HSBC Mutual fund states, “The primary investment objective of the scheme is to provide long term capital appreciation by investing predominantly in units/shares of HGIF Brazil Equity Fund. The scheme may, at the discretion of the investment manager, also invest in the units of other similar overseas mutual fund schemes, which may constitute a significant part of its corpus. The fund may also invest a certain proportion of its corpus in money market instruments and/or units of liquid mutual fund schemes, in order to meet liquidity requirements from time to time.”
In the past, several fund houses have launched schemes, the corpuses of which have been invested in China. In July, JP Morgan asset management had also launched ‘Greater China Equity Offshore Fund’ while in September Mirae asset global investment launched its, ‘Mirae Asset China Advantage Fund’. Recently, Benchmark Mutual Fund, had launched its first international ETF, Hang Seng BeES, based on Hong Kong stock exchange’s Hang Seng index.
Dhirendra Kumar, CEO of Valueresearch online says, “After China the fund houses are offering other options to the investors like Brazil. There were several funds for Latin America, China but this is the first time that pure Brazil fund of fund will be launched in India.” The scheme’s performance will be benchmarked against MSCI Brazil 10/40 Index and The minimum application amount is Rs 10,000 and in multiples of Rs 1 thereafter. On Friday, Brazil?s Bovespa index closed the day at 67,597.43.