HSBC, L&T MF schemes’ merger to be effective from 26 Nov: Key things to know

In a notice to investors on its website, HSBC Mutual Fund said that it has planned a scheduled maintenance of their systems. “Therefore, you  will not be able to access the website properly or input online transactions for HSBC Mutual Fund on 25 November 2022 (Friday) from 3.01 PM IST to 28 November 2022 (Monday) 9.00 AM IST,” the fund house said.

Post the specified time, the mutual fund schemes operated by L&T Mutual Fund will be either transferred to HSBC Mutual Fund with a different name or will be consolidated with identified mutual fund schemes of HSBC.

Notably, post the merger, the residents of the US and Canada will not be permitted to invest in HSBC MF schemes. For existing investors and their investments, there will be no change. However, from effective date, HSBC AMC will not accept any fresh transactions requests (other than non-financial transactions and redemptions requests) from the US or Canada investors of L&T Mutual Fund.

Separately, mutual Fund platform MF Utilities in a notice said that the unit holdings with respect to certain schemes of L&T MF is likely to change. The platform has requested users to verify the correctness of their holding data by 30 November.

“In case of orders placed in the merged scheme(s) before market hours of 25 November 2022 and pending for investor approval as at 3PM, MFU will update the scheme with the corresponding target (surviving) scheme name,” it said.

According to HSBC Mutual Fund, the merger will affect 31 schemes of the both the funds houses.

As many as 15 schemes between the fund houses will be merged, 12 L&T Mutual Fund schemes will see a change in fundamental attributes, two L&T MF schemes will see change in names, while two schemes of HSBC Mutual Fund will see discontinuation of subscription and a change in fundamental attribute.

Among the key L&T schemes that have been affected by the merger are L&T Emerging Business, L&T Value Fund and L&T Triple ACE.

L&T Emerging Businesses Fund, which has AUM of ₹8,496 crore as of 31 October will be merged with HSBC Small Cap Fund with an AUM of ₹300 crore.

On a one-year, three-year and five-year basis, L&T Emerging Businesses Fund has delivered a return of 6.57%, 27.97% and 11.63%, respectively.

L&T Value Fund with an AUM of ₹8,014 crore will now become HSBC Value Fund. On one-year, three-year and five-year basis, the L&T MF has given 5.30%, 19.44% and 9.83% returns, respectively.

L&T Triple ACE with assets of ₹6,742 crore will now become HSBC Corporate Bond Fund.

To see the complete list of changes in the schemes, click here. (https://www.assetmanagement.hsbc.co.in/en/mutual-funds/acquisition-of-lt-mutual-fund)

HSBC Mutual Fund is yet to announce the fund managers to the new set of schemes.

HSBC Holdings Plc’s Indian asset management unit in December last year had announced plans to acquire the mutual fund unit of L&T Finance Holdings Ltd for about ₹3,191 crore.

As per the Association of Mutual Funds in India (Amfi) data, average assets under management (AAUM) of HSBC Mutual Fund stood at ₹13,620 crore for the quarter of July-September, while it was ₹71,703 crore for L&T Mutual Fund during the same period.