HSBC Small Cap Fund

HSBC has launched a Small cap fund. I am unsure how this will take given the recent carnage in the small and mid cap segment.

It's Investment Objective is to provide long-term capital appreciation primarily from a diversified portfolio of equity and equity related instruments of small cap companies. It is a a close-ended equity scheme with automatic conversion into an open-ended equity scheme at the end of 3 years from date of allotment of units
Options.

The definition of a small cap company will be Companies with the market capitalization which is 1) lower than or equal to the market capitalization of the stock in the BSE Small Cap Index with the largest market capitalization and 2) higher than or equal to the market capitalization of the stock in the BSE Small Cap Index with the smallest market capitalization.

Asset Allocation
Equity & equity related instruments of Small Cap Companies: 65 - 100%
Equity & equity related instruments of other than Small Cap Companies: 0-35%
& Money Market Instruments: 0-35%

Scheme Details
Issue Opens: January 19, 2008
Issue Closes: February 3, 2008
Type: Closed-end, equity scheme with automatic conversion to an open ended fund after 3 years
Plan : Dividend Option,Dividend Reinvestment, Growth Option
Minimum Investment: Rs. 10,000. Additional amount in 1000 and in multiples of 1 thereafter
Entry Load: Nil. Upon conversion into an open-ended scheme**: 2.25% for investments/Switch ins below Rs 5 crores, otherwise Nil.
Exit Load : If the investments are redeemed/switched out within: 1 year: 2%; 2 years: 1.5%; 3 years: 1%; otherwise Nil; Upon conversion, Exit: Nil. Balance proportionate unamortised NFO expenses to be recovered in case of exit within close-ended period.
Benchmark : BSE Small Cap Index
Liquidity :During the close-ended period: Units can be redeemed/switched out on the last 3 business days of every month at NAV based prices, subject to provisions of exit load, if any and recovery of balance proportionate unamortised NFO expenses. Upon conversion into an open-ended scheme: Daily redemption available at Repurchase