The Asset. Factsheet June 2018

Transcription

1 The Asset Factsheet June 2018

2 Index Fund Manager Commentary HSBC Mutual Fund Products HSBC Large Cap Equity Fund HSBC Multi Cap Equity Fund HSBC Small Cap Equity Fund HSBC Infrastructure Equity Fund HSBC Tax Saver Equity Fund HSBC Dynamic Asset Allocation Fund HSBC Global Emerging Markets Fund HSBC Asia Pacific (Ex Japan) Dividend Yield Fund HSBC Brazil Fund HSBC Managed Solutions India - Growth HSBC Managed Solutions India - Moderate HSBC Managed Solutions India - Conservative HSBC Global Consumer Opportunities Fund Fund Managers - Equity Fund Manager Wise Comparative Performance of Equity Schemes SIP Performance of Equity Schemes HSBC Regular Savings Fund HSBC Debt Fund HSBC Short Duration Fund HSBC Cash Fund HSBC Duration Fund HSBC Flexi Debt Fund Fund Managers - Debt Fund Manager Wise Comparative Performance of Debt Schemes Section II - How to read Factsheet

3 Fund Manager Commentary Equity markets remained sideways during May The Midcap and Smallcap indices continued to slip and trailed the large cap market indices meaningfully. Though the broader market momentum remained weak for the second consecutive month, the market indices held up well and recorded a flattish performance during June. S&P BSE Sensex and NSE CNX Nifty recorded returns of 0.5% and 0% for the month while the S&P BSE Midcap and Smallcap indices were down 3.5% and 7% respectively. (*+ returns on Total Return or TR variants of indices). Returns % 1.0% 0.0% -1.0% -2.0% -3.0% -4.0% -5.0% -6.0% -7.0% -8.0% Indices Performance - June 2018* - Sensex Nifty BSE200 BSE500 BSE MidCap BSE SmallCap Source: Bloomberg; Bombay Stock Exchange (BSE) After showing some signs of moderation, the global crude oil prices inched up to record an increase of 2.4% on a MoM basis. This was led by increasing threat of decline in oil supply from Iran, Libya and Venezuela which overshadowed anticipated fall in oil prices due to OPEC s decision to increase oil production. So essentially, higher oil prices remain a macro headwind for India being a net importer of the commodity. The currency has also seen a further 1.6% depreciation during the month and also hit all-time lows during the month. The Southwest monsoon trends have been mixed so far. While the monsoon has advanced faster than expected to cover the entire country, the cumulative rainfall recorded till 27 June as per IMD is at a 10% deficit. Indian government increased customs duty tariff on selected items imported from the US in a retaliatory move on latter s decision earlier in the year to impose higher tariffs on certain steel and aluminium products which would have implication for exports from India. The higher duty imposed by the US on certain steel and aluminium products had an estimated about USD 240 mn worth of tariff implication for India. The removal of concessions on these imports is estimated to equally offset the higher duty imposed by the US. However the overall impact of this decision is not very meaningful and the expectation is that both parties may look at negotiations to diffuse the situation. RBI hiked the repo rate by 25 bps to 6.25% but broadly on expected lines and this was voted unanimously by the Monetary Policy Committee. The Committee increased the 2HFY19 inflation estimate by 30 bps to 4.7%. External Institutional Fund Flows The Foreign Institutional Investor (FII) segment were net sellers for the third consecutive month though the net outflows from them moderated to about ~USD 380 mn during Jun-18 (about ~USD 1.43 bn of net outflows in May-18). On a calendar year till date basis (i.e. first 6 months), FIIs have seen net outflows to the tune of about ~USD 620 mn (about ~USD 7.71 bn of net inflows in CY2017). The Domestic Institutional Investor (DII) segment continued to see net inflows (~USD 2.08 bn) driven by net inflows from the domestic MFs as well as Insurers. The MF segment net bought equities worth ~USD 1.31 bn during the month while the domestic insurers improved the net buying momentum meaningfully to ~USD 773 mn and marked the best month of net inflows for the segment since June On a CYTD perspective, the MF segment has seen net inflows of ~USD bn, while at an overall DII level, the net inflows stood at ~USD 9.5 bn, accounting for the net outflows from the domestic insurers (~USD 935 mn of net outflows from insurers). Global Economic Scenario In the US, the Federal Reserve raised the target range for the federal funds rate by 25 bps to 1.75% %. The Fed s median forecast now signals two additional rate hikes in 2018 and another three in Elsewhere in the EU region, the ECB announced its intention to wind up the net bond buying programme by the end of ECB aims to phase out the monetary stimulus by reducing bond purchases from the current EUR 30 bn / month to EUR 15 bn / month during the last quarter of Additionally, the ECB expects to keep interest rates unchanged for as long as necessary to allow inflation to return to target on a sustained basis. Meanwhile global protectionism concerns grew as US imposed tariffs on steel and aluminium imports from EU, Canada and Mexico earlier in the month, while counter tariffs on US goods were also proposed by these countries / region.added to this, the US China trade tensions escalated with the US moving ahead with the proposal on imposing higher tariffs on ~USD 50 bn worth of Chinese exports to the US. The US further warned of higher tariffs on additional ~USD 200 bn worth of imports if Chinese authorities were to retaliate on the first proposal. 01

4 Fund Manager Commentary Market View Equity Market Outlook We continued to see divergence in the performance of Large caps and that of Mid / Small caps. On a calendar year to date basis, the market indices S&P BSE Sensex and NSE CNX Nifty have gained 4.7% and 2.6% respectively, while the BSE Midcap & Smallcap indices have seen significant declines of 13.1% and 16.5% respectively (returns on Total Return or TR variants of indices). The current cycle of re-rating in mid / small caps and subsequent correction is as a result of valuations in the space running ahead of actual earnings delivery / expectations coupled with headwinds from increase in commodity prices especially global crude oil and INR depreciation. Valuations at an aggregate level and for individual stocks within the mid / small cap space have now moderated as the premium of mid / small caps over large caps had reached unsustainable levels during the peak. The commodity and currency depreciation are actually beneficial for the key larger cap names but is detrimental for the profitability of mid & small caps as reflected in the recent quarterly results. Having said that, this phase of correction in mid / small caps is throwing up good opportunities as some quality names are now available at reasonable valuations. The macro economic variables have worsened at the margin after seeing significant improvement post the 'taper tantrum' phase in The fiscal deficit may move marginally higher while inflation expectations have inched up. On the external front, the Current Account Deficit has widened while exports growth momentum is yet to pick up sustainably. er global crude oil price is a headwind in this connection. Having said that, all of these macro variables are in a far better shape when compared to bouts of crises phases we have witnessed in the past decade. The Central bank is also acting proactively and decisively to manage the inflation effectively as demonstrated by the rate hike decision in the last policy meeting. On the global front, the rate hike process is expected to continue in the US and while this is broadly priced in as far markets are concerned, however there could be some impact of external flows drying up for emerging markets. The US - China trade spat has been in a threatening mode for some time now, though the issue snowballing to a full blown trade war would not be in the best interests of both nations and hence is likely to be avoided. The US - N Korea historic summit has cooled down the heat on geo-political concerns which was lingering earlier. We remain constructive on the India story from a medium to long term perspective. Looking ahead, the GST regime will lead to faster formalization of the economy, broaden the tax base, improve the fiscal situation and improve the ease of doing business. IBC is another key reform that will lead to structural repair in the banking industry and this may go a long way in reviving the credit offtake in the economy, early signs of which we are already witnessing. Government has taken some steps to address the growth issue and the bank recapitalisation and infrastructure push announced are to tackle growth challenges and that will help in hastening the overall economic growth revival process. GDP growth rebound after the twin disruptions of Demonetization and GST implementation provides the optimism and we are entering a high growth phase again. Also, the corporate earnings recovery cycle is already underway as the trends from the just concluded earnings season suggest. We are likely to see meaningful acceleration in corporate earnings growth over the next 2-3 years driven by the favourable base as well as genuine uptick in domestic demand and consumption. The factors to closely track in the near to medium term would be the RBI s policy actions, election calendar culminating in the general elections, global crude price dynamics, rising trends of protectionism in the developed economies and the interest rate actions in the US. RBI's Monetary Policy, Economic Indicators RBI Actions (Policy rate) RBI Monetary Policy Committee or MPC hiked policy rate by 25 bps while keeping its stance neutral. With crude prices increasing by over 10% from the previous policy to the current policy, part of the upside risks mentioned by RBI in the earlier policy had materialised. Moderation in food inflation and uptick in core inflation was also noted by RBI. In the post policy call, MPC mentioned that there is enough uncertainty in the future inflation trajectory to keep neutral stance while hiking rates. Policy notes that economic growth is recovering well and output gap has almost closed. GDP growth for FY 19 retained at 7.4% as on April policy with 1H in the range of 7.5%-7.6% and 2H 7.3%-7.4%. Inflation for FY 19 was revised upwardsinflation for 1H FY 19 is now pegged at % (vs 4.7%-5.1% earlier) and 2HFY19 at 4.7% (from 4.4%). RBI minutes released later in the month was similar to the policy statement. RBI Actions (SDL valuation, treasury losses) In the investment portfolio of banks, RBI has directed the State Development Loan (SDL) securities to be valued at market prices versus existing practice of uniform mark-up of 25bps over Government bonds. Additionally, it has also allowed banks to spread out their treasury losses of for the quarter ended June 2018 quarter over the next four quarters. For banks trying to meet their Liquidity Coverage Ratio (LCR) requirements, the RBI allowed banks to carve out an additional 2% from the Statutory Liquidity Ratio (SLR). The change in SDL valuation norms could have a dampening effect on the demand of SDLs from the banks. GST GST collections for the month of May 2018 (collected in June 2018) was INR 956 bn which have reached a run rate of INR 977 bn for the first three months. While this is a tad lower than the INR 1 trillion per month target, improved compliance with e-way bill being rolled out is expected to bring the desired results. Inflation Consumer Price Index or CPI Consumer Price Index or CPI inflation for the month of May came in at 4.87%, in-line with market expectations. Core inflation continued to inch up higher to 6.15% from 5.90%, partially on base effects while the sequential momentum in core inflation also continued to be high, though lower than in the previous month. Food inflation stayed muted at 3.1%, inching up marginally from 2.8%, due to base effects. Inflation Growth (%) 7% 6% 5% 4% 3% 2% 1% 0 CPI Inflation (%) Apr-15 Sep-15 Feb-16 Jun-16 Nov-16 Mar-17 Aug-17 Jan-18 May-18 Source: Bloomberg; Central Statistical Organization (CSO) India 02

5 Fund Manager Commentary Wholesale Price Index or WPI Wholesale Price Index or WPI inflation rose to 4.4% from 3.2% in April, partly due to an unfavorable base. Food inflation stayed muted at 1.6% y-o-y while core WPI increased sharply to 4.4% from 3.6%, with a significant increase month-on-month increase seen in segments such as basic metals and chemical products. Index of Industrial Production or IIP April IIP grew by 4.9% y-o-y in April from an upwardly revised 4.6% in March (revised from 4.4%). Uptick was primarily on a favorable base while sequential momentum across various categories was muted. Y-o-y growth slowed down in segments such as consumer durables (7% v/s 12.7% in March) while capital goods showed improvement, benefiting from a favorable base. 14% Index of Industrial Production (IIP)* new series data 9% Growth % 4% -1% -6% May/13 Oct/13 Mar/14 Aug/14 Jan/15 Jun/15 Nov/15 Apr/16 Aug/16 Jan/17 Jun/17 Nov/17 Apr/18 Series1 Source: Bloomberg Trade deficit India trade deficit was at USD bn in May v/s USD 13.7 bn. However on a y-o-y basis, exports saw good growth at 20% y-o-y while import growth was at 13.8% y-o-y, primarily led by oil import growth of 49.5% y-o-y. Currency Rupee was significantly weak for most part of the month driven by rising crude prices, FPI selling and USD strength. Towards the end of the month, Rupee touched 69 before seeing some relief to 68.5 levels towards the end of the month as crude prices tempered towards 75/77 per barrel. Fiscal Deficit For first two months of FY19, government reached 55.3% of its fiscal deficit target as compared to 62.8% last year. Overall, government continues to emphasise that it will meet the budgeted fiscal targets of 3.3% of GDP. Markets Fixed income markets have largely range bound with a bearish sentiment. Post policy, minutes and Open Market Operation or OMO announcement there were some bouts of positive action in the market. Also, global developments around prospective higher oil supply post OPEC meeting provided some relief but it was short lived. Overall markets have been range bound with a bearish tone throughout with intermittent bouts of positive reaction. Rupee weakness driven by overall emerging market weakness has also been another factor for the bearish actions. Despite SDL valuation news, SDL auctions have been well absorbed so far. However the quantum of supply has not been large and the reaction remains to be seen going forward. Liquidity Liquidity hovered between being neutral to deficit. In the middle of June advance tax outflows and Cash Management Bills or CMB pushed the liquidity trajectory to deficit. Towards the end of the month, some government spending has brought the system back to neutral. RBI s simultaneous OMO and CMB actions have sent mixed signals to the market. Going Forward Market is likely trade in a range of in the near term. In the near term Minimum Support Price or MSP announcement and inflation numbers will be the key triggers. In addition, oil, FPI flows and currency will be the important variables watched for. 10% Repo Rate (%) 9% Rate % 8% 7% 6% 5% 4% Jul/10 Dec/10 May/11 Oct/11 Mar/12 Aug/12 Jan/13 Jun/13 Nov/13 Apr/14 Sep/14 Feb/15 Jul/15 Dec/15 May/16 Oct/16 Mar/17 Aug/17 Jan/18 Jun/18 Source: Bloomberg, for all data except where mentioned otherwise 03

6 Fund Manager Commentary Sectors HSBC Large Cap Equity Fund # HSBC Multi Cap Equity Fund # HSBC Small Cap Equity Fund Consumer Discretionary Consumer Staples Energy Financials Healthcare Industrials Information Technology Materials Telecommunication Utilities Overweight Underweight Neutral #The benchmark for HSBC Large Cap Equity Fund and HSBC Multi Cap Equity Fund have changed w.e.f. 11th November, 2016 as a more suitable benchmark was identified which better matched the portfolio strategy.there has been no change to investment management of the scheme. Review: HSBC Large Cap Equity Fund Positive Contributors Energy - certain stock (s) selection helped performance Utilities - being underweight & certain stock (s) selection helped performance Negative Contributors Consumer Discretionary & Financials - being overweight & certain stock (s) selection hurt performance Healthcare - being underweight & certain stock (s) selection hurt performance Industrials being overweight hurt performance Review: HSBC Multi Cap Equity Fund Positive Contributors Financials & Energy - certain stock (s) selection helped performance Utilities being underweight helped performance Negative Contributors Materials & Industrials - being overweight & certain stock (s) selection hurt performance Consumer Staples & Healthcare - being underweight & certain stock (s) selection hurt performance Consumer Discretionary - certain stock (s) selection hurt performance Information Technology being underweight hurt performance Review: HSBC Small Cap Equity Fund Positive Contributors Financials - certain stock (s) selection helped performance Telecommunication being underweight helped performance Negative Contributors Consumer Discretionary & Information Technology - being underweight & certain stock (s) selection hurt performance Materials - being overweight & certain stock (s) selection hurt performance Healthcare being underweight hurt performance Energy being overweight hurt performance Consumer Staples - certain stock (s) selection hurt performance Review: HSBC Dynamic Asset Allocation Fund The cash levels and sector allocation in the fund are likely to change depending on the market conditions and technical factors. Review: HSBC Regular Savings Fund Our current equity exposure is 25.30%. Currently it is more biased towards large caps than mid or small caps. 04

7 HSBC Mutual Fund Products Pursuant to the circular issued by Securities and Exchange Board of India(SEBI) on Categorization and Rationalization of Mutual Fund Schemes in order to bring uniformity in the practice and standardize the scheme categories across the Mutual Funds, placed below is the HSBC Mutual Fund s product spectrum, effective from 14th March,2018. Scheme Scheme HSBC Large Cap Equity Fund (Previous Name - HSBC Equity Fund) HSBC Small Cap Equity Fund (Previous Name - HSBC Midcap Equity Fund) HSBC Multi Cap Equity Fund (Previous Name - HSBC India Opportunities Fund) HSBC Tax Saver Equity Fund Type Large Cap Fund An open ended equity scheme predominantly investing in largecap stocks. Small Cap Fund - An open ended equity scheme predominantly investing in small cap stocks Multi Cap Fund - An open ended equity scheme investing across large cap, mid cap, small cap stocks An open ended equity linked saving scheme with a statutory lock-in of 3 years and tax benefit Equity Schemes Benchmark Category Large Cap Fund (Previous Category - Large cap equity scheme) Small Cap Fund (Previous Category - Mid-cap Equity Scheme) Multi cap Fund (Previous Category - Flexi-Cap Equity Scheme) Equity Linked Savings Scheme Nifty 50 S&P BSE 250 Small Cap Index (Previous Benchmark - S&P BSE Midcap Index) S&P BSE 200 S&P BSE 200 Benchmark HSBC Infrastructure Equity Fund HSBC Debt Fund (Previous Name - HSBC Income Fund - Investment Plan) HSBC Short Duration Fund (Previous Name - HSBC Income Fund - Short Term Plan) An open ended equity scheme following Infrastructure theme. 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. An open ended Short Term Debt Scheme ^^ investing in instruments such that the Macaulay duration of the portfolio is between 1 year to 3 years. Thematic Fund (Previous Category - Equity Scheme) Debt Schemes Medium to Long Duration Fund (Previous category - Income Scheme) Short Duration Fund (Previous category - Short Term Plan) S&P BSE India Infrastructure Index CRISIL Composite Bond Fund Index CRISIL Short Term Bond Fund Index HSBC Cash Fund An Open Ended Liquid Scheme Liquid Fund CRISIL Liquid Fund Index HSBC Duration Fund (Previous Name - HSBC Ultra Short Term Bond Fund) An open ended Duration Debt Scheme ^^ investing in instruments such that the Macaulay duration of the portfolio is between 6 months to 12 months. Duration Fund (Previous category - Debt Fund) ^ CRISIL Duration Debt Index (Previously named as CRISIL Ultra Short Term Debt Index) (Previous benchmark CRISIL Liquid Fund Index - 90%, CRISIL Short Term Bond Fund Index HSBC Flexi Debt Fund HSBC Dynamic Asset Allocation Fund (Previous Name - HSBC Dynamic Fund) HSBC Regular Savings Fund (Previous Name - HSBC Monthly Income Plan ) # HSBC Managed Solutions India - Growth An open ended Dynamic Debt Scheme investing across duration An open ended Dynamic Asset Allocation Fund. An open ended Hybrid Scheme investing predominantly in debt instruments. An Open Ended Fund of Funds Scheme investing in a basket of equity, debt, Gold and other Exchange Traded Funds Dynamic Bond Fund (Previous category - An open - ended Debt Scheme) Hybrid Scheme Dynamic Asset Allocation (Previous Category - Dynamic Equity Scheme) Conservative Hybrid Fund (Previous category - Income Scheme) Other Schemes Fund of Funds (Overseas/Domestic) CRISIL Composite Bond Fund Index S&P BSE 200 CRISIL Hybrid Conservative Index ( renamed from existing MIP Blended Fund Index) Composite Index constituting 80% of S&P BSE 200 Index and 20% of CRISIL Composite Bond Index. ^ # HSBC Managed Solutions India - Moderate An Open Ended Fund of Funds Scheme investing in a basket of equity, debt, Gold and other Exchange Traded Funds Fund of Funds (Overseas/Domestic) ^ CRISIL Hybrid Aggressive Index (renamed from existing CRISIL Balanced Fund Aggressive Index) HSBC Managed Solutions India - Conservative HSBC Global Emerging Markets Fund (Previous Name - HSBC Emerging Markets Fund) An Open Ended Fund of Funds Scheme investing in a basket of equity, debt, Gold and other Exchange Traded Funds An open ended fund of fund scheme investing in HSBC Global Investment Funds - Global Emerging Markets Equity Fund Fund of Funds (Overseas/Domestic) Fund of Funds (Overseas) (Previous Category - Fund of Funds) Composite Index constituting of 90% of CRISIL Composite Bond Index and 10% of S&P BSE 200 Index. MSCI Emerging Markets Index HSBC Asia Pacific (Ex Japan) Dividend Yield Fund HSBC Brazil Fund An Open Ended Fund of Funds Scheme investing in HSBC Global Investments Fund - (HGIF) Asia Pacific Ex Japan Equity Dividend Fund An Open-Ended Fund of Funds Scheme investing in HSBC Global InvestmentsFund - (HGIF) Brazil Equity Fund Fund of Funds (Overseas) (Previous Category - Fund of Funds) Fund of Funds (Overseas) (Previous Category - Fund of Funds) MSCI AC Asia Pacific ex Japan MSCI Brazil 10/40 Index HSBC Global Consumer Opportunities Fund An Open Ended Fund of Funds Schemeinvesting HSBC Global Investment Funds (HGIF) China Consumer Opportunities Fund Fund of Funds (Overseas) (Previous Category - Fund of Funds) MSCI AC World Index ^Debt Allocation of 85% and 35% in respective indices represented by CRISIL Composite Bond Index. The equity component of the Index has been changed from Nifty 50 to S&P BSE and will be represented by Total Return variant of S&P BSE # Monthly income is not assured and is subject to the availability of distributable surplus. ^^The 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. Criteria for Large, Mid & Small companies - SEBI has demarcated the definitions of large cap, mid cap and small cap companies as given below. Large Cap: 1st -100th company in terms of full market capitalization, Mid Cap: 101st -250th company in terms of full market capitalization, Small Cap: 251st company onwards in terms of full market capitalization of large/mid/small cap companies Note - A list of stocks as per above criteria will be uploaded on AMFI website and updated every six months by AMFI. 05

8 HSBC Large Cap Equity Fund Large Cap Fund - An open ended equity scheme predominantly investing in large cap stocks. Investment Objective: To generate long-term capital growth from an actively managed portfolio of equity and equity related securities of predominantly large cap companies.however, there can be no assurance or guarantee that the investment objective of the scheme would be achieved. FUND DETAILS Date of Allotment $ Benchmark NAV (Growth) per unit (as on ) Monthly Average AUM (In Lakhs) Fund Manager SIP Minimum Application Amount Exit Load Statistical Ratios disclosed are as per monthly returns (Annualized) for the last 3 years. $ The benchmark was changed w.e.f. 11th November, 2016 as a more suitable benchmark was identified which better matched the portfolio strategy. There has been no change to investment management of the scheme. Effective from March 14, 2018 for prospective investments. **Risk free rate: 6.25% (FIMMDA-NSE Mibor) as on June 29, 2018) Portfolio Turnover Ratio is computed for the last 12 months. Asset Allocation 10-Dec-02 Nifty 50 ` , Neelotpal Sahai Available `5,000 (Lumpsum) `1,000 p.m.(sip) In respect of each purchase /switch-in of Units, an Exit Load of 1% is payable if Units are redeemed / switchedout within 1 year from the date of allotment. No Exit Load will be charged if Units are redeemed/ switched - out after 1 year from the date of allotment. Statistical Ratios Standard Deviation 14.70% Beta (Slope) Sharpe Ratio** Month End Total Expenses ratios (Annualized) Regular 2.47% Direct Plan 1.77% Includes GST on Investment Management fees of 0.24% of Total NetAssets. Portfolio Turnover 0.81 Auto 9.60% AutoAncillaries 2.61% Banks 30.75% Cement 1.59% Construction Project 5.11% Consumer Non Durables 5.26% Ferrous Metals 2.48% Finance 10.65% Hotels, ResortsAnd Other RecreationalActivities 1.15% Non - Ferrous Metals 3.10% Petroleum Products 4.96% Pharmaceuticals 1.77% Power 2.56% Software 12.47% Telecom - Services 1.95% Transportation 1.09% Other Equity Investments 2.33% Reverse Repos/CBLOs 1.35% Net CurrentAssets -0.78% Total NetAssets % HSBC Large Cap Equity Fund This product is suitable for investors who are seeking*: To create wealth over long term Investment in predominantly large cap equity and equity related securities LOW Riskometer Moderate Investors understand that their principal will be at risk HIGH * Investors should consult their financial advisers if in doubt about whether the product is suitable for them. FUND PORTFOLIO Issuer Auto Maruti Suzuki India 3, % Mahindra & Mahindra 2, % Tata Motors % Auto Ancillaries MRF % Motherson Sumi Systems % Banks HDFC Bank 6, % ICICI Bank 3, % Yes Bank 3, % Kotak Mahindra Bank 3, % IndusInd Bank 2, % Axis Bank 2, % Cement Shree Cement 1, % Construction Project Larsen & Toubro 3, % Consumer Non Durables ITC 2, % Asian Paints % Ferrous Metals Tata Steel 1, % Finance HDFC 4, % Indiabulls Housing Finance 1, % Shriram Transport Finance Co. 1, % Hotels, Resorts And Other Recreational Activities Indian Hotels Co % Non - Ferrous Metals Vedanta 2, % Petroleum Products Reliance Industries 3, % Pharmaceuticals Aurobindo Pharma 1, % Power NTPC 1, % Software Infosys 5, % HCL Technologies 2, % Tata Consultancy Services 1, % Telecom - Services Bharti Airtel 1, % Transportation Adani Ports & Special Economic Zone % Other Equity Investments 1, % Cash Equivalents Market Value ( ` in Lacs) % to Net Assets CBLO % Net Current Assets % Total Net Assets as on 30-Jun , % Dividend Declaration Record Date / period of dividend declared Non-Institutional Institutional NAV ( `) per unit (cum dividend) HSBC Large Cap Equity Fund - Dividend 10-Nov Nov Dec HSBC Large Cap Equity Fund - Dividend - Direct Plan 10-Nov Nov Dec Upon payment of dividend, the NAV per unit falls to the extent of payout and statutory levy, if any. Face value: `10 per unit. 06

9 HSBC Multi Cap Equity Fund Multi Cap Fund - An open ended equity scheme Investing across large cap, mid cap, small cap stocks. Investment Objective: Seeks long term capital growth through investments across all market capitalisations, including small, mid and large cap stocks. It aims to be predominantly invested in equity & equity related securities. However it could move a significant portion of its assets towards fixed income securities if the fund manager becomes negative on equity markets. However, there can be no assurance or guarantee that the investment objective of the scheme would be achieved. FUND DETAILS Date of Allotment 24-Feb-04 $ Benchmark S&P BSE 200 NAV (Growth) per unit ` (as on ) Monthly Average AUM (In Lakhs) 62, Fund Manager Neelotpal Sahai SIP Available Minimum `5,000 (Lumpsum) Application Amount `1,000 p.m.(sip) Exit Load In respect of each purchase /switch-in of Units, an Exit Load of 1% is payable if Units are redeemed / switchedout within 1 year from the date of allotment. No Exit Load will be charged if Units are redeemed/ switched - out after 1 year from the date of allotment. Statistical Ratios Standard Deviation Beta (Slope) Sharpe Ratio** Month End Total Expenses ratios (Annualized) Regular 2.43% Direct Plan 1.73% Includes GST on Investment Management fees of 0.18% of Total NetAssets. Portfolio Turnover 0.45 Statistical Ratios disclosed are as per monthly returns (Annualized) for the last 3 years. $ The benchmark was changed w.e.f. 11th November, 2016 as a more suitable benchmark was identified which better matched the portfolio strategy. There has been no change to investment management of the scheme. Effective from March 14, 2018 for prospective investments. **Risk free rate: 6.25 % (FIMMDA-NSE Mibor) as on June 29, 2018) Portfolio Turnover Ratio is computed for the last 12 months. Asset Allocation Auto 9.62% AutoAncillaries 1.02% Banks 23.48% Cement 1.68% Chemicals 2.21% Construction 2.54% Construction Project 3.12% Consumer Non Durables 3.04% Ferrous Metals 3.56% Finance 12.52% Hotels, ResortsAnd Other RecreationalActivities 1.72% Industrial Capital Goods 1.24% Industrial Products 1.57% Non - Ferrous Metals 2.89% Petroleum Products 3.97% Pharmaceuticals 1.49% Software 8.14% Textile Products 1.14% Other Equity Investments 13.18% Reverse Repos/CBLOs 2.04% Net CurrentAssets -0.17% Total Net Assets % HSBC Multi Cap Equity Fund This product is suitable for investors who are seeking*: To create wealth over long term Invests in equity and equity related securities across market capitalisations LOW Riskometer Moderate 16.07% Investors understand that their principal will be at risk * Investors should consult their financial advisers if in doubt about whether the product is suitable for them. HIGH FUND PORTFOLIO Issuer Auto Mahindra & Mahindra 1, % Eicher Motors 1, % Tata Motors 1, % Maruti Suzuki India 1, % Auto Ancillaries Balkrishna Industries % Banks HDFC Bank 6, % ICICI Bank 3, % Yes Bank 3, % Axis Bank 1, % Cement Dalmia Bharat 1, % Chemicals Vinati Organics % Galaxy Surfactants % Construction Gayatri Projects % Somany Ceramics % Construction Project Larsen & Toubro 1, % Consumer Non Durables ITC 1, % Ferrous Metals Tata Steel 1, % Jindal Steel & Power % Finance Bharat Financial Inclusion 3, % Bajaj Finance 3, % Cholamandalam Investment & Fin Co % Hotels, Resorts And Other Recreational Activities Indian Hotels Co. 1, % Industrial Capital Goods Sanghvi Movers % Industrial Products Supreme Industries % Non - Ferrous Metals Vedanta 1, % Petroleum Products Reliance Industries 2, % Pharmaceuticals Aurobindo Pharma % Software Infosys 2, % HCL Technologies 1, % Wipro % Textile Products Arvind % Other Equity Investments 8, % Cash Equivalents Market Value ( ` in Lacs) % to Net Assets CBLO 1, % Net Current Assets % Total Net Assets as on 30-Jun , % Dividend Declaration Record Date / period of dividend declared Non-Institutional Institutional NAV ( `) per unit (cum dividend) HSBC Multi Cap Equity Fund - Dividend 10-Nov Mar Feb HSBC Multi Cap Equity Fund - Dividend Direct Plan 10-Nov Mar Feb Upon payment of dividend, the NAV per unit falls to the extent of payout and statutory levy, if any. Face value: `10 per unit. 07

10 HSBC Small Cap Equity Fund Small Cap Fund - An open ended equity scheme predominantly investing in small cap stocks. Investment Objective: To generate long term capital growth from an actively managed portfolio of equity and equity related securities of predominantly small cap companies. However, it could move a portion of its assets towards fixed income securities if the fund manager becomes negative on the Indian equity markets. However, there can be no assurance or guarantee that the investment objective of the scheme would be achieved. FUND DETAILS Date of Allotment 19-May-05 Benchmark S&P BSE 250 Small Cap Index NAV (Growth) per unit ` (as on ) Monthly Average AUM 60, (In Lakhs) Fund Manager Neelotpal Sahai SIP Available Minimum `5,000 (Lumpsum) Application Amount `1,000 p.m.(sip) Exit Load In respect of each purchase /switch-in of Units, an Exit Load of 1% is payable if Units are redeemed / switchedout within 1 year from the date of allotment. No Exit Load will be charged if Units are redeemed/ switched - out after 1 year from the date of allotment. Statistical Ratios Standard Deviation Beta (Slope) Sharpe Ratio** Month End Total Expenses ratios (Annualized) Regular 2.45% Direct Plan 1.75% Includes GST on Investment Management fees of 0.18% of Total NetAssets. Portfolio Turnover 0.45 Statistical Ratios disclosed are as per monthly returns (Annualized) for the last 3 years. Effective from March 14, 2018 for prospective investments. **Risk free rate: 6.25 % (FIMMDA-NSE Mibor) as on June 29, 2018) Portfolio Turnover Ratio is computed for the last 12 months. The said Fund is managed by Neelotpal Sahai effective 11 May 2018 Asset Allocation 22.20% Auto 3.28% AutoAncillaries 2.65% Banks 3.03% Cement 3.15% Chemicals 12.81% Construction 3.70% Construction Project 3.88% Consumer Durables 1.09% Consumer Non Durables 8.39% Engineering Services 1.01% Ferrous Metals 5.83% Finance 13.36% Gas 1.48% Hotels, ResortsAnd Other RecreationalActivities 1.48% Industrial Capital Goods 3.28% Industrial Products 8.98% Media & Entertainment 2.39% Oil 1.24% Petroleum Products 1.35% Pharmaceuticals 1.58% Power 1.60% Software 2.99% Textiles - Synthetic 1.03% Other Equity Investments 5.25% Reverse Repos/CBLOs 3.78% Net CurrentAssets 1.39% Total NetAssets % HSBC Small Cap Equity Fund This product is suitable for investors who are seeking*: To create wealth over long term Investment in predominantly small cap equity and equity related securities LOW Riskometer Moderate Investors understand that their principal will be at risk * Investors should consult their financial advisers if in doubt about whether the product is suitable for them. HIGH FUND PORTFOLIO Issuer Market Value ( ` in Lacs) % to Net Assets Auto VST Tillers Tractors 1, % Auto Ancillaries Apollo Tyres 1, % Banks City Union Bank % DCB Bank % Cement Deccan Cements 1, % Chemicals Balaji Amines 2, % Vinati Organics 2, % GOCL Corporation 1, % Galaxy Surfactants % Navin Fluorine International % Construction Ahluwalia Contracts (India) % KNR Constructions % Somany Ceramics % Construction Project NCC % Sadbhav Engineering % Kridhan Infra % Consumer Durables Orient Electric % Consumer Non Durables Kaveri Seed Company 2, % CCL Products (India) 1, % Apex Frozen Foods 1, % Engineering Services VA Tech Wabag % Ferrous Metals Srikalahasthi Pipes 1, % Jindal Steel & Power % APL Apollo Tubes % Finance Indiabulls Housing Finance 1, % Cholamandalam Investment & Fin Co. 1, % Manappuram Finance 1, % Motilal Oswal Financial Services 1, % Muthoot Finance % JM Financial % Gas Aegis Logistics % Hotels, Resorts And Other Recreational Activities EIH % Industrial Capital Goods Sanghvi Movers 1, % Macpower CNC Machines % Industrial Products Graphite India 1, % Ramkrishna Forgings 1, % CMI % KEI Industries % Jain Irrigation Systems % Media & Entertainment Jagran Prakashan 1, % Oil South West Pinnacle Exploration % Petroleum Products Hindustan Petroleum Corporation % Pharmaceuticals Aurobindo Pharma % Power Kalpataru Power Transmission % Software Sonata Software 1, % Textiles - Synthetic Sarla Performance Fibers % Other Equity Investments 3, % Cash Equivalents CBLO 2, % Net Current Assets % Total Net Assets as on 30-Jun , % Dividend Declaration Record Date / period of dividend declared Non-Institutional Institutional NAV ( `) per unit (cum dividend) HSBC Small Cap Equity Fund - Dividend 10-Nov Nov May HSBC Small Cap Equity Fund - Dividend - Direct Plan 02-Nov May Upon payment of dividend, the NAV per unit falls to the extent of payout and statutory levy, if any. Face value: `10 per unit. 08

11 HSBC Infrastructure Equity Fund An open ended equity scheme following Infrastructure theme Investment Objective: Seeks to generate long term capital growth from an actively managed portfolio of equity and equity related securities by investing primarily in sectors, areas and themes that play an important role in, and/or benefit from India's progress, reform process and economic development. However, there can be no assurance or guarantee that the investment objective of the scheme would be achieved. FUND DETAILS Date of Allotment 23-Feb-06 $ Benchmark S&P BSE India Infrastructure Index NAV (Growth) per unit ` (as on ) Monthly Average AUM 15, (In Lakhs) Fund Manager Gautam Bhupal SIP Available Minimum `5,000 (Lumpsum) Application Amount `1,000 p.m.(sip) Exit Load In respect of each purchase /switch-in of Units, an Exit Load of 1% is payable if Units are redeemed / switchedout within 1 year from the date of allotment. No Exit Load will be charged if Units are redeemed/ switched - out after 1 year from the date of allotment. Statistical Ratios Standard Deviation Beta (Slope) Sharpe Ratio** 22.85% Month End Total Expenses ratios (Annualized) Regular 2.74% Direct Plan 2.04% Includes GST on Investment Management fees of 0.27% of Total NetAssets. Portfolio Turnover 0.46 Statistical Ratios disclosed are as per monthly returns (Annualized) for the last 3 years. $ The benchmark was changed w.e.f. 11th November, 2016 as a more suitable benchmark was identified which better matched the portfolio strategy. There has been no change to investment management of the scheme. Effective from March 14, 2018 for prospective investments. **Risk free rate: 6.25 % (FIMMDA-NSE Mibor) as on June 29, 2018) Portfolio Turnover Ratio is computed for the last 12 months. The said Fund is managed by Gautam Bhupal effective 11 May 2018 Asset Allocation Cement 4.76% Chemicals 3.62% Construction 9.87% Construction Project 15.15% Ferrous Metals 11.90% Finance 1.72% Gas 2.18% Industrial Capital Goods 10.75% Industrial Products 13.09% Minerals/Mining 4.05% Non - Ferrous Metals 1.14% Oil 1.09% Petroleum Products 7.17% Power 4.70% Transportation 4.29% Other Equity Investments 3.49% Reverse Repos/CBLOs 1.72% Net CurrentAssets -0.69% Total Net Assets % HSBC Infrastructure Equity Fund This product is suitable for investors who are seeking*: To create wealth over long term Invests in equity and equity related securities, primarily in themes that play an important role in India's economic development LOW Riskometer Moderate Investors understand that their principal will be at risk * Investors should consult their financial advisers if in doubt about whether the product is suitable for them. HIGH FUND PORTFOLIO Issuer Cement Deccan Cements % Chemicals GOCL Corporation % Construction KNR Constructions % Ahluwalia Contracts (India) % Indiabulls Real Estate % NBCC India % Construction Project Larsen & Toubro % Sadbhav Engineering % Kridhan Infra % NCC % HG Infra Engineering % Ferrous Metals Srikalahasthi Pipes % Jindal Steel & Power % Jindal Saw % APL Apollo Tubes % Finance Rural Electrification Corporation % Gas Gujarat State Petronet % Industrial Capital Goods Sanghvi Movers % Voltamp Transformers % Macpower Cnc Machines % Industrial Products CMI % KEI Industries % Graphite India % Schaeffler India % Minerals/Mining Gujarat Mineral Development Corporation % Non - Ferrous Metals Vedanta % Oil South West Pinnacle Exploration % Petroleum Products Indian Oil Corporation % Hindustan Petroleum Corporation % Power NTPC % PTC India % Transportation Adani Ports & Special Economic Zone % Other Equity Investments % Cash Equivalents Market Value ( ` in Lacs) % to Net Assets CBLO % Net Current Assets % Total Net Assets as on 30-Jun , % Dividend Declaration Record Date / period of dividend declared Non-Institutional Institutional NAV ( `) per unit (cum dividend) HSBC Infrastructure Equity Fund Dividend 11-May May Upon payment of dividend, the NAV per unit falls to the extent of payout and statutory levy, if any. Face value: `10 per unit. 09

12 HSBC Tax Saver Equity Fund An Open Ended Equity Linked Savings Scheme with a statutory lock - in of 3 years and tax benefit. Investment Objective: Aims to provide long term capital appreciation by investing in a diversified portfolio of equity & equity related instruments of companies across various sectors and industries, with no capitalisation bias. The Fund may also invest in fixed income securities. However, there can be no assurance or guarantee that the investment objective of the scheme would be achieved. FUND DETAILS Date of Allotment Benchmark NAV (Growth) per unit (as on ) Monthly Average AUM (In Lakhs) Fund Manager SIP Minimum Application Amount Exit Load Statistical Ratios Standard Deviation Beta (Slope) Sharpe Ratio** 05-Jan-07 S&P BSE 200 ` , Aditya Khemani Available `500 (Lumpsum & SIP) Nil 15.85% Month End Total Expenses ratios (Annualized) Regular 2.67% Direct Plan 1.97% Includes GST on Investment Management fees of 0.27% of Total NetAssets. Portfolio Turnover Asset Allocation 0.45 Statistical Ratios disclosed are as per monthly returns (Annualized) for the last 3 years. **Risk free rate: 6.25 % (FIMMDA-NSE Mibor) as on June 29, 2018) Portfolio Turnover Ratio is computed for the last 12 months. Auto 10.30% AutoAncillaries 4.19% Banks 31.04% Cement 5.63% Chemicals 1.54% Construction 2.27% Construction Project 3.84% Consumer Durables 2.57% Consumer Non Durables 4.52% Finance 3.48% Hotels, ResortsAnd Other RecreationalActivities 2.23% Industrial Products 4.49% Non - Ferrous Metals 3.73% Petroleum Products 2.36% Pharmaceuticals 2.97% Software 4.51% Telecom - Services 1.90% Textile Products 1.33% Transportation 3.52% Other Equity Investments 1.91% Reverse Repos/CBLOs 1.64% Net CurrentAssets 0.03% Total Net Assets % HSBC Tax Saver Equity Fund This product is suitable for investors who are seeking*: To create wealth over long term Invests in equity and equity related securities with no market capitilastion bias LOW Riskometer Moderate Investors understand that their principal will be at risk * Investors should consult their financial advisers if in doubt about whether the product is suitable for them. HIGH FUND PORTFOLIO Issuer Market Value ( ` in Lacs) % to Net Assets Auto Maruti Suzuki India % Mahindra & Mahindra % Tata Motors % Auto Ancillaries Exide Industries % MRF % Banks HDFC Bank 1, % ICICI Bank 1, % IndusInd Bank 1, % Federal Bank % Axis Bank % Cement NCL Industries % OCL India % Chemicals Galaxy Surfactants % Construction Somany Ceramics % Construction Project Larsen & Toubro % Consumer Durables Crompton Greaves Consumer Electrical % Consumer Non Durables ITC % Heritage Foods % Finance Cholamandalam Investment & Fin Co % JM Financial % Hotels, Resorts And Other Recreational Activities Indian Hotels Co % Industrial Products Nilkamal % Finolex Cables % Non - Ferrous Metals Vedanta % Petroleum Products Reliance Industries % Pharmaceuticals Sun Pharmaceutical Industries % Torrent Pharmaceuticals % Software Infosys % Telecom - Services Bharti Airtel % Textile Products Indian Terrain Fashions % Transportation Adani Ports & Special Economic Zone % Interglobe Aviation % Other Equity Investments % Cash Equivalents CBLO % Net Current Assets % Total Net Assets as on 30-Jun , % Dividend Declaration Record Date / period of dividend declared Non-Institutional Institutional NAV ( `) per unit (cum dividend) HSBC Tax Saver Equity Fund Dividend 23-Mar Mar Jan HSBC Tax Saver Equity Fund Dividend Direct 23-Mar Mar Jan Upon payment of dividend, the NAV per unit falls to the extent of payout and statutory levy, if any. Face value: `10 per unit. 10

13 HSBC Dynamic Asset Allocation Fund An open ended Dynamic Asset Allocation Fund. Investment Objective: To provide long term capital appreciation by allocating funds in equity and equity related instruments. It also has the flexibility to move, entirely if required, into debt instruments in times that the view on equity markets seems negative. However, there can be no assurance or guarantee that the investment objective of the scheme would be achieved. FUND DETAILS Date of Allotment Benchmark NAV (Growth) per unit (as on ) Monthly Average AUM (In Lakhs) Fund Managers SIP Minimum Application Amount Exit Load In respect of each purchase /switch-in of Units, an Exit Load of 1% is payable if Units are redeemed / switchedout within 1 year from the date of allotment. No Exit Load will be charged if Units are redeemed/ switched - out after 1 year from the date of allotment. Statistical Ratios Standard Deviation Beta (Slope) Sharpe Ratio** 24-Sep-07 S&P BSE 200 ` , Neelotpal Sahai (for Equity portion) Sanjay Shah (for Fixed Income portion) Available `5,000 (Lumpsum) `1,000 p.m.(sip) 12.19% Month End Total Expenses ratios (Annualized) Regular 2.85% Direct Plan 2.15% Includes GST on Investment Management fees of 0.33% of Total NetAssets. Portfolio Turnover 0.53 Statistical Ratios disclosed are as per monthly returns (Annualized) for the last 3 years. Effective from March 14, 2018 for prospective investments. **Risk free rate: 6.25 % (FIMMDA-NSE Mibor) as on June 29, 2018) Portfolio Turnover Ratio is computed for the last 12 months. FUND PORTFOLIO Issuer Auto Market Value ( ` in Lacs) % to Net Assets Maruti Suzuki India % Mahindra & Mahindra % Banks HDFC Bank % Kotak Mahindra Bank % ICICI Bank % IndusInd Bank % Yes Bank % Cement Shree Cement % Construction Project Larsen & Toubro % Consumer Non Durables ITC % Britannia Industries % Ferrous Metals Tata Steel % Finance Indiabulls Housing Finance % Hotels, Resorts And Other Recreational Activities Indian Hotels Co % Non - Ferrous Metals Vedanta % Petroleum Products Reliance Industries % Asset Allocation Auto 8.61% Banks 29.03% Cement 2.51% Construction Project 4.70% Consumer Non Durables 9.57% Ferrous Metals 3.01% Finance 3.16% Hotels, ResortsAnd Other RecreationalActivities 1.98% Non - Ferrous Metals 2.94% Petroleum Products 8.51% Pharmaceuticals 2.80% Power 2.94% Software 10.77% Telecom - Services 1.32% Transportation 1.98% Reverse Repos/CBLOs 6.77% Net CurrentAssets -0.60% Total Net Assets % HSBC Dynamic Asset Allocation Fund This product is suitable for investors who are seeking*: To create wealth over long term Invests in equity and equity related securities and in debt instruments when view on equity markets is negative LOW Riskometer Moderate Investors understand that their principal will be at risk HIGH * Investors should consult their financial advisers if in doubt about whether the product is suitable for them. Pharmaceuticals Aurobindo Pharma % Power NTPC % Software Infosys % HCL Technologies % Telecom - Services Bharti Airtel % Transportation Adani Ports & Special Economic Zone % Cash Equivalents CBLO % Net Current Assets % Total Net Assets as on 30-Jun , % 11