The Asset Factsheet December 2016

Transcription

1 The Asset Factsheet December 2016

2 Index Fund Manager Commentary HSBC Equity Fund HSBC India Opportunities Fund HSBC Midcap Equity Fund HSBC Infrastructure Equity Fund HSBC Tax Saver Equity Fund HSBC Dynamic Fund HSBC Dividend Yield Equity Fund HSBC 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 Comparative Performance of Equity Schemes Performance of Equity Schemes HSBC Monthly Income Plan HSBC Income Fund - Investment Plan HSBC Income Fund - Short Term Plan HSBC Cash Fund HSBC Ultra Short Term Bond Fund HSBC Flexi Debt Fund Fund Managers - MIP & Debt Comparative Performance of MIP & Debt Schemes Section II - How to read Factsheet

3 Fund Manager Commentary RBI maintains status quo on rates Contrary to market expectations, Reserve Bank of India (RBI) decided to maintain status-quo on rates in the December 2016 bi-monthly policy meeting. This unanimous decision from MPC (Monetary Policy Committee) came on the back of (i) expectations of uptick in inflation due to base effect, higher oil prices and the demonetisation exercise and (ii) global macroeconomic developments especially the monetary and fiscal policy stance of the US Federal Reserve. December 2016 saw a flat performance from the Indian equity markets but remained an event heavy month following an action packed month of November. Demonetization related news flows continued to dominate the domestic headlines while the government announced various measures and incentives for promoting digital transactions while the cash withdrawal restrictions from banks are expected to continue for some more time. In a New Year s Eve address to the nation, Prime Minister Narendra Modi announced schemes targeted at the weaker sections of the society. These measures are aimed at improving the sentiments as the cash crunch situation on the back of demonetisation exercise which would have impacted the lower sections of the social pyramid more. The winter session of the Parliament disappointed and turned out to be one - of the least productive sessions in the recent years owing to disruptions in both the Houses. The focus will now move to the Budget session which will commence on 31 January 2017, with the Union Budget slated to be presented on 01 February The Goods & Services Tax (GST) council meetings held during the month helped to reach a consensus on aspects related to the Central & State GST laws but certain issues such as the Integrated GST legislation and the issue of dual control remain unresolved. The 01 April 2017 deadline for rolling out GST across the country may be a challenging timeline in this context. Domestic market indices S&P BSE Sensex and Nifty 50 traded flat during December 2016 at -0.1% & -0.5% respectively, while the midcap to largecap premium again came off as the S&P BSE Midcap index underperformed the market indices and was down 3.7%. The S&P BSE Smallcap index also underperformed at -2.3% returns during December % -0.5% -1.0% -1.5% -2.0% -2.5% -3.0% -3.5% -4.0% Indices Performance - Dec 2016 Sensex BSE100 BSE200 BSE500 BSE MidCap BSE SmallCap Source: Bloomberg; Bombay Stock Exchange (BSE) Economic Indicators Inflation moderates led by lower food prices Inflation cooled off during November 2016, a month characterised by demonetisation. India's wholesale inflation as represented by the WPI (wholesale price index) came lower at 3.15% in November 2016 from 3.39% in the previous month. The main trigger was softer food prices as food inflation declined to 1.54% vis-à-vis 4.34% last month. Retail inflation, as measured by the consumer price index (CPI), dropped sharply to 3.63% YoY in November 2016 (4.2% in October 2016) on the back of lower food prices from normal monsoons this year CPI Inflation (%) Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Consumer Price Index (CPI) Source: Bloomberg; Central Statistical Organization (CSO) India 01

4 Fund Manager Commentary Exports climb third month running, but deficit swells November 2016 was the third month running that saw the country's merchandise exports expand as 20 of the 30 export sectors posted growth in outward shipments. However, this was nullified by a surge in imports led by gold purchases resulting in widening trade deficit of USD 13 billion (USD 10.2 billion last month). Oil imports in November 2016 expanded nearly 5.9%, while non-oil imports rose 11.7%. November 2016 saw exports growing 2.3% year-on-year (YoY) to USD 20 billion compared to USD 19.5 billion last year. October 2016 exports were at USD 23.5 billion; lower November 2016 exports are attributed to the US Federal Reserve (Fed) rate hike and demonetisation among other factors. The overhang from these two factors will dictate how trade pans out over the next few months. IIP maintains see-saw trend Industrial production continued its see-saw trend with October 2016 witnessing a decline after posting small growth in September The IIP (Index of Industrial Production) declined 1.9% (0.7% growth in September 2016) compared to 9.9% growth for same period last year. Over the April-October 2016 period, industrial production declined 0.3% vis-à-vis 4.8% growth for same period last year. IIP reading may continue to remain volatile and hence should be seen in conjunction with other macro indicators to make an assessment of the underlying growth momentum. Also, the demonetisation process could have implications on the IIP data in the near term, starting from the month of Nov-16. Index of Industrial Production (IIP) 15.0% 10.0% 5.0% 0.0% -5.0% Jan/13 Apr/13 Jul/13 Oct/13 Jan/14 Apr/14 Jul/14 Oct/14 Jan/15 Apr/15 Jul/15 Oct/15 Jan/16 Apr/16 Jul/16 Oct/16 IIP YoY Growth (New Series; base ) Source: Bloomberg; Central Statistical Organization (CSO) India RBI raises Market Stabilisation Scheme (MSS) limit RBI revised the MSS limit from INR crore to INR 6 Lakh crore in lieu of the increase in banking system liquidity due to demonetisation and the shortage of Government of India (GOI) securities held by the RBI to conduct Liquidity Adjustment Facility (LAF) operations. RBI continues to operate under neutral liquidity framework and hence the step to suck out excess liquidity in the banking system. RBI also reversed the temporary CRR hike and restored normalcy for CRR maintenance. External Institutional Fund Flows Institutional flows continued to show the trend of net selling by Foreign Institutional Investors (FII) and net buying by the Domestic Institutional Investors (DIIs). After significantly high net outflows in November 2016 by FIIs, the month of December 2016 saw net outflows to the tune of ~USD 1.25 billion from the segment. For the calendar year of 2016, the net inflow tally from FIIs has now shrunk to USD 2.9 billion which is lower than USD 3.27 billion of net inflows recorded in Domestic Institutional Investors (DIIs) continued to be net buyers and net bought equities worth USD 1.34 billion during the month driven by MF segment (~USD 1.35 billion of net inflows) From a calendar year 2016 perspective, the DII tally of net buying stood at ~USD 5.26 billion driven entirely by ~USD 7.12 billion of net inflows from the MF segment, while the domestic insurers saw net outflows to the tune of USD 1.85 billion during the year. Global Economic Scenario The US Fed hiked rates by 25 basis points, which was a foregone conclusion given the build up in estimates in the lead up to the meeting. The new government is aiming at consumption based approach to taxation and other measures to attract money back into the US. With the dollar strengthening it will be challenging for emerging economies like India to compete with the US for fund flows. India can continue to attract funds despite the narrowing interest rate differential with the US so long as its macroeconomics is on a sure footing. 02

5 Fund Manager Commentary Market View Equity Market Outlook Equity markets delivered a flat performance during the month following on from a weak month of November While it may be bit too early to quantify the short term impact on growth of the demonetisation move, the initial indications suggest that the consumption oriented sectors are likely to see disruption in the near term. There is likely to be a slowdown in sectors where the dependence of cash based transactions is high. Given the unprecedented nature of this exercise, there may be a case for earnings volatility to rise for a couple of quarters, as companies take necessary steps to mitigate the adverse impact on their operations. However, the medium to long term implications of the demonetisation exercise is expected to be positive, given that this move will hasten the shift to formal economy. This will also lead to level playing field being created for the organised players across domestic sectors and eventually churning out gains for them in the medium to long term. Demonetisation is also expected to progressively improve tax compliance in the system and the adoption of GST would provide further impetus in this regard. Government's focus on promoting digital payments and a gradual shift to an economy with less reliance on cash has the potential to provide long term benefits. Apart from the implications of the demonetisation process, markets will be closely watching GST rollout time frame and if the 01 April, 2017 deadline is missed, then the wait could increase by another three to six months. The Union Budget expectations, will also increasingly weigh in on the markets from now on. As we look ahead from a medium to long term perspective, there is much to be optimistic about the Indian equity markets. Inflation has reduced sharply, interest rates too have shown a substantial reduction and surge in bank deposits following the demonetisation move has further improved the liquidity situation with banks. Asset quality, a key concern with the banks in the country has shown marginal improvement, either due to increased M&A activity or by a sharp reduction in the cost of servicing the debt capital itself. While industrial capex remains elusive, there seem to be incipient signs of demand recovery. While they may be masked by the demonetisation move, the general trend was picking up. With more optimism in the United States, following a stellar rally in their stock markets and a visibly improving domestic demand, the prospects for recovery seem bright. Escalation in international oil prices could be an interim risk, given that India is a net importer of the commodity. Debt Market Update RBI announced its policy on December 07, 2016 and turned cautious due to global sell off yields, higher crude prices, expansionary fiscal policies expected by US and sticky domestic core inflation. Pre-policy, markets were trading firm with 10 year benchmark yield touching a low of 6.16%. However, post policy markets have turned choppy and yields touched a high of 6.62%.The 10 year benchmark was the best performing stock as spreads across various maturities, State Development Loan and corporate bonds have expanded to highs. Markets closed the month at 6.52% on the 10 year point. Short term securities pre-policy were pricing in a rate cut.as the same did not fructify yields have stabilised closer to the repo rate. Yields have inched higher by bps across various money market assets. Repo Rate Movement 10.00% 9.00% 8.00% 7.00% 6.00% 5.00% 4.00% Aug/07 Dec/07 Apr/08 Aug/08 Dec/08 Apr/09 Aug/09 Dec/09 Apr/10 Aug/10 Dec/10 Apr/11 Aug/11 Dec/11 Apr/12 Aug/12 Dec/12 Apr/13 Aug/13 Dec/13 Apr/14 Aug/14 Dec/14 Apr/15 Aug/15 Dec/15 Apr/16 Aug/16 Dec/16 Repo Rate Debt Market Outlook RBI believes demonetisation effects to be transitory however it will wait for further data before reacting on the same. Trump policy announcements and global commodity prices are likely to be key drivers for further rate action by RBI.Source: Bloomberg, for all data except where mentioned otherwiseindian Bond markets are likely to trade range of 6.30%-6.50% ahead of Trump policy announcements and India Budget. Source: Bloomberg, for all data except where mentioned otherwise 03

6 Fund Manager Commentary Sectors HSBC Equity Fund # HSBC India Opportunities Fund # HSBC Midcap Equity Fund Consumer Discretionary Consumer Staples Energy Financials Healthcare Industrials Information Technology Materials Telecommunication Utilities Overweight Underweight Neutral #The benchmark for HSBC Equity Fund and HSBC India Opportunities 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 Equity Fund Positive Contributors Consumer Discretionary, Information Technology, Energy & Industrials - certain stock (s) selection helped performance Telecom being underweight helped performance. Negative Contributors Materials being overweight hurt performance Healthcare certain stock (s) selection hurt performance Review: HSBC India Opportunities Fund Positive Contributors Materials, Healthcare & Consumer Staples - certain stock (s) selection helped performance Telecom being underweight helped performance. Negative Contributors Consumer Discretionary & Industrials - certain stock (s) selection hurt performance Financials being overweight & certain stock (s) selection hurt performance Information Technology, Energy & Utilities being underweight hurt performance Review: HSBC Midcap Equity Fund Positive Contributors Information Technology being overweight & certain stock (s) selection helped performance Consumer Staples certain stock (s) selection helped performance Materials & Industrials being overweight helped performance Healthcare & Telecom being underweight helped performance. Negative Contributors Financials & Energy certain stock (s) selection hurt performance Utilities being underweight hurt performance Review: HSBC Dynamic Fund The cash levels and sector allocation in the fund are likely to change depending on the market conditions and technical factors. Review: HSBC Monthly Income Plan Our current equity exposure is 24.45% in HMIP. Currently it is more biased towards large caps than mid or small caps. 04

7 HSBC Equity Fund (HEF) An Open Ended Diversified Equity Scheme Investment Objective: Aims to generate long term capital growth from an actively managed portfolio of equity and equity related securities. FUND DETAILS Date of Allotment $ Benchmark NAV (Growth) per unit (as on ) Monthly Average AUM (In Lakhs) Fund Manager Minimum Application Exit Load Statistical Ratios Standard Deviation Beta (Slope) Sharpe Ratio** Weighted Average Monthly Total Expenses ratios (Annualized) Regular 2.42% Direct Plan 1.72% Excludes service tax on Investment Management fees of 0.23% of Total NetAssets. Portfolio Turnover 0.87 Statistical ratios disclosed as per monthly returns (absolute) 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 Effective from March 1, 2013 for prospective investments. **Risk free rate: 6.25% (FIMMDA-NSE Mibor) as on December 30, 2016) Asset Allocation Auto 8.92% AutoAncillaries 1.76% Banks 30.03% Cement 3.05% Construction 1.28% Construction Project 3.64% Consumer Non Durables 6.52% Finance 3.41% Non - Ferrous Metals 3.11% Pesticides 2.91% Petroleum Products 8.78% Pharmaceuticals 6.54% Power 2.22% Software 14.37% Transportation 1.11% Other Equity Investments 1.15% Reverse Repos/CBLOs 1.50% Net CurrentAssets -0.30% Total Net Assets % This product is suitable for investors who are seeking*: To create wealth over long term Investment in equity and equity related securities HSBC Equity Fund (HEF) LOW 10-Dec-02 Nifty 50 ` , Neelotpal Sahai Available `10,000 `1,000 p.m.() Nil Riskometer Moderate Investors understand that their principal will be at risk 4.52% HIGH * Investors should consult their financial advisers if in doubt about whether the product is suitable for them. FUND PORTFOLIO Issuer Auto Tata Motors 2, % Maruti Suzuki India 2, % Auto Ancillaries Motherson Sumi Systems % Banks HDFC Bank 5, % ICICI Bank 3, % Yes Bank 2, % IndusInd Bank 1, % State Bank of India 1, % Axis Bank 1, % Bank of Baroda % Cement Dalmia Bharat 1, % Ultratech Cement % Construction J.Kumar Infraprojects % Construction Project Larsen & Toubro 2, % Consumer Non Durables ITC 3, % Finance HDFC 1, % Non - Ferrous Metals Vedanta 1, % Pesticides UPL 1, % Petroleum Products Reliance Industries 3, % Indian Oil Corporation % Hindustan Petroleum Corporation % Pharmaceuticals Aurobindo Pharma 1, % Glenmark Pharmaceuticals 1, % Sun Pharmaceutical Industries % Power NTPC 1, % Software Infosys 3, % HCL Technologies 2, % Tata Consultancy Services 1, % Tech Mahindra % Transportation Interglobe Aviation % Other Equity Investments % Cash Equivalents Market Value ( ` in Lacs) % to Net Assets CBLO % Net Current Assets % Total Net Assets as on 31-Dec , % Dividend Declaration Record Date / period of dividend declared Non-Institutional Institutional NAV ( `) per unit (cum dividend) HSBC Equity Fund - Dividend 27-Jun Nov Nov HSBC Equity Fund - Dividend - Direct Plan 27-Jun Nov Nov Upon payment of dividend, the NAV per unit falls to the extent of payout and statutory levy, if any. Face value: `10 per unit. 05

8 HSBC India Opportunities Fund (HIOF) An Open Ended Flexi-Cap Equity Scheme 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. FUND DETAILS Date of Allotment $ Benchmark NAV (Growth) per unit (as on ) Monthly Average AUM (In Lakhs) Fund Manager Minimum Application Exit Load Statistical Ratios Standard Deviation Beta (Slope) Sharpe Ratio** Weighted Average (Annualized) Portfolio Turnover Monthly Total Expenses ratios Regular 2.50% Direct Plan 1.80% Excludes service tax on Investment Management fees of 0.23% of Total NetAssets. Asset Allocation 0.40 Statistical ratios disclosed as per monthly returns (absolute) 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 from March 1, 2013 for prospective investments. **Risk free rate: 6.25% (FIMMDA-NSE Mibor) as on December 30, 2016) Auto 9.42% AutoAncillaries 1.74% Banks 28.06% Cement 3.00% Chemicals 1.43% Construction 1.26% Consumer Durables 1.15% Consumer Non Durables 5.27% Finance 7.18% Industrial Products 2.20% Media & Entertainment 1.85% Non - Ferrous Metals 2.62% Pesticides 3.13% Petroleum Products 3.93% Pharmaceuticals 8.32% Software 9.52% Textile Products 3.01% Other Equity Investments 4.27% Reverse Repos/CBLOs 3.59% Net CurrentAssets -0.95% Total Net Assets % HSBC India Opportunities Fund (HIOF) 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 24-Feb-04 S&P BSE 200 ` , Neelotpal Sahai Available `10,000 `1,000 p.m.() Nil Riskometer Moderate 4.89% 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 Tata Motors 2, % Eicher Motors 1, % Auto Ancillaries Exide Industries % Banks HDFC Bank 3, % ICICI Bank 2, % Yes Bank 2, % IndusInd Bank 1, % State Bank of India % Axis Bank % Cement JK Cement % Heidelbergcement India % Chemicals Vinati Organics % Construction Ahluwalia Contracts (India) % Consumer Durables Blue Star % Consumer Non Durables ITC 2, % Finance Bajaj Finance 1, % Bharat Financial Inclusion 1, % Manappuram Finance % Industrial Products Supreme Industries % Media & Entertainment Dish TV India % Non - Ferrous Metals Vedanta 1, % Pesticides UPL 1, % Petroleum Products Reliance Industries 1, % Pharmaceuticals Aurobindo Pharma 1, % Glenmark Pharmaceuticals 1, % Torrent Pharmaceuticals % Software Infosys 2, % HCL Technologies 1, % Textile Products Welspun India % Arvind % Other Equity Investments 1, % Cash Equivalents Market Value ( ` in Lacs) % to Net Assets CBLO 1, % Net Current Assets % Total Net Assets as on 31-Dec , % Dividend Declaration Record Date / period of dividend declared Non-Institutional Institutional NAV ( `) per unit (cum dividend) HSBC India Opportunities Fund - Dividend 27-Jun Mar Nov HSBC India Opportunities Fund - Dividend Direct Plan 27-Jun Mar Nov 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 Midcap Equity Fund (HMEF) An Open Ended Diversified Equity Scheme Investment Objective: Seeks to generate long term capital growth from an actively managed portfolio of equity and equity related securities primarily being midcap stocks. However, it could move a portion of its assets towards fixed income securities if the fund manager becomes negative on the Indian equity markets. FUND DETAILS Date of Allotment Benchmark NAV (Growth) per unit (as on ) Monthly Average AUM (In Lakhs) Fund Manager Minimum Application Exit Load Statistical Ratios Standard Deviation Beta (Slope) Sharpe Ratio** Weighted Average Monthly Total Expenses ratios (Annualized) Regular 2.52% Direct Plan 1.82% Excludes service tax on Investment Management fees of 0.25% of Total NetAssets. Portfolio Turnover 0.30 Statistical ratios disclosed as per monthly returns (absolute) for the last 3 Effective from March 1, 2013 for prospective investments. **Risk free rate: 6.25% (FIMMDA-NSE Mibor) as on December 30, 2016) Asset Allocation 19-May-05 S&P BSE Midcap ` , Dhiraj Sachdev Available `10,000 `1,000 p.m.() Nil 6.03% Auto 3.99% AutoAncillaries 1.73% Cement 3.55% Chemicals 8.11% Construction 4.15% Construction Project 2.34% Consumer Non Durables 6.06% Finance 23.49% Industrial Capital Goods 4.60% Industrial Products 4.61% Media & Entertainment 5.77% Pesticides 5.05% Petroleum Products 6.61% Pharmaceuticals 7.29% Power 1.28% Software 3.24% Textile Products 1.78% Textiles - Synthetic 2.40% Other Equity Investments 3.44% Reverse Repos/CBLOs 0.44% Net CurrentAssets 0.07% Total Net Assets % HSBC Midcap Equity Fund (HMEF) This product is suitable for investors who are seeking*: To create wealth over long term Invests in predominantly mid 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 % Cement Deccan Cements 1, % Chemicals Vinati Organics 1, % Navin Fluorine International % Balaji Amines % Construction IRB Infrastructure Developers % Ahluwalia Contracts (India) % Construction Project Power Mech Projects % Consumer Non Durables CCL Products (India) 1, % Kaveri Seed Company % Finance Motilal Oswal Financial Services 1, % Manappuram Finance 1, % Dewan Housing Finance Corporation 1, % Cholamandalam Investment & Fin Co. 1, % Muthoot Finance % Indiabulls Housing Finance % Bharat Financial Inclusion % Industrial Capital Goods Sanghvi Movers 1, % Inox Wind % Industrial Products Finolex Industries 1, % Ramkrishna Forgings % Media & Entertainment Jagran Prakashan 1, % Hindustan Media Ventures % Pesticides UPL 1, % PI Industries % Petroleum Products Hindustan Petroleum Corporation % Gulf Oil Lubricants India % Gocl Corporation % Pharmaceuticals Aurobindo Pharma 1, % Wockhardt % Torrent Pharmaceuticals % Power Kalpataru Power Transmission % Software Sonata Software 1, % Textile Products Welspun India % Textiles - Synthetic Sarla Performance Fibers % Other Equity Investments 1, % Cash Equivalents CBLO % Net Current Assets % Total Net Assets as on 31-Dec , % Dividend Declaration Record Date / period of dividend declared Non-Institutional Institutional NAV ( `) per unit (cum dividend) HSBC Midcap Equity Fund - Dividend 19-Nov Nov Nov HSBC Midcap Equity Fund - Dividend - Direct Plan 02-Nov 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 Infrastructure Equity Fund (HIEF) An Open Ended Equity Scheme 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. FUND DETAILS Date of Allotment $ Benchmark NAV (Growth) per unit (as on ) Monthly Average AUM (In Lakhs) Fund Manager Minimum Application Exit Load Statistical Ratios Standard Deviation Beta (Slope) Sharpe Ratio** 23-Feb-06 S&P BSE India Infrastructure Index ` , Dhiraj Sachdev Available `10,000 `1,000 p.m.() Nil 7.00% Weighted Average Monthly Total Expenses ratios (Annualized) Regular 2.67% Direct Plan 1.97% Excludes service tax on Investment Management fees of 0.24% of Total NetAssets. Portfolio Turnover 0.26 Statistical ratios disclosed as per monthly returns (absolute) 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 Effective from March 1, 2013 for prospective investments. **Risk free rate: 6.25% (FIMMDA-NSE Mibor) as on December 30, 2016) Asset Allocation Banks 2.58% Cement 8.50% Construction 13.75% Construction Project 2.51% Ferrous Metals 1.93% Finance 5.58% Gas 3.38% Industrial Capital Goods 6.65% Industrial Products 5.39% Minerals/Mining 4.52% Oil 1.11% Petroleum Products 12.99% Power 17.71% Transportation 10.26% Other Equity Investments 2.82% Reverse Repos/CBLOs 1.07% Net CurrentAssets -0.75% Total Net Assets % HSBC Infrastructure Equity Fund (HIEF) 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 Banks Karnataka Bank % Cement Deccan Cements % Everest Industries % Construction IRB Infrastructure Developers % Ahluwalia Contracts (India) % KNR Constructions % NBCC India % Construction Project Larsen & Toubro % Power Mech Projects % Ferrous Metals Jindal Saw % Finance Rural Electrification Corporation % Gas Gujarat State Petronet % Industrial Capital Goods Sanghvi Movers % Inox Wind % Industrial Products KEI Industries % FAG Bearings India % Minerals/Mining Gujarat Mineral Development Corporation % Oil Aban Offshore % Petroleum Products Hindustan Petroleum Corporation % Indian Oil Corporation % Power Adani Transmission % Power Grid Corporation of India % Reliance Infrastructure % PTC India % RattanIndia Power % JSW Energy % Transportation Adani Ports & Special Economic Zone % Gateway Distriparks % Gujarat Pipavav Port % Other Equity Investments % Cash Equivalents Market Value ( ` in Lacs) % to Net Assets CBLO % Net Current Assets % Total Net Assets as on 31-Dec , % 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. 08

11 HSBC Tax Saver Equity Fund (HTSF) An Open Ended Equity Linked Savings Scheme (ELSS) 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. FUND DETAILS Date of Allotment Benchmark NAV (Growth) per unit (as on ) Monthly Average AUM (In Lakhs) Fund Manager Minimum Application Exit Load Statistical Ratios Standard Deviation Beta (Slope) Sharpe Ratio** 05-Jan-07 S&P BSE 200 ` , Aditya Khemani Available `500 (Lumpsum & ) Nil 4.80% Weighted Average Monthly Total Expenses ratios (Annualized) Regular 2.60% Direct Plan 1.90% Excludes service tax on Investment Management fees of 0.23% of Total NetAssets. Portfolio Turnover 0.66 Statistical ratios disclosed as per monthly returns (absolute) for the last 3 Effective from March 1, 2013 for prospective investments. **Risk free rate: 6.25% (FIMMDA-NSE Mibor) as on December 30, 2016) Asset Allocation Auto 4.78% AutoAncillaries 4.29% Banks 26.31% Cement 6.57% Construction 4.97% Consumer Durables 3.73% Consumer Non Durables 12.87% Finance 5.95% Petroleum Products 3.44% Pharmaceuticals 6.22% Software 9.47% Textile Products 5.74% Textiles - Cotton 2.02% Transportation 1.63% Other Equity Investments 1.07% Reverse Repos/CBLOs 1.36% Net CurrentAssets -0.42% Total Net Assets % HSBC Tax Saver Equity Fund (HTSF) 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 % Auto Ancillaries MRF % Exide Industries % Banks HDFC Bank 1, % ICICI Bank 1, % IndusInd Bank % Federal Bank % Axis Bank % Jammu & Kashmir Bank % Cement The Ramco Cements % NCL Industries % OCL India % Ultratech Cement % Construction Somany Ceramics % IRB Infrastructure Developers % Ahluwalia Contracts (India) % Consumer Durables Crompton Greaves Consumer Electrical % Blue Star % Consumer Non Durables ITC % Glaxosmithkline Consumer Healthcare % United Spirits % Heritage Foods % CCL Products (India) % Hindustan Unilever % Finance HDFC % LIC Housing Finance % Petroleum Products Reliance Industries % Pharmaceuticals Torrent Pharmaceuticals % Aurobindo Pharma % Sun Pharmaceutical Industries % Software Infosys % Tata Consultancy Services % Oracle Financial Services Software % Textile Products Indian Terrain Fashions % SRF % Welspun India % Textiles - Cotton Indo Count Industries % Transportation Gateway Distriparks % Other Equity Investments % Cash Equivalents CBLO % Net Current Assets % Total Net Assets as on 31-Dec , % Dividend Declaration Record Date / period of dividend declared Non-Institutional Institutional NAV ( `) per unit (cum dividend) HSBC Tax Saver Equity Fund Dividend 17-Oct Mar Mar HSBC Tax Saver Equity Fund Dividend Direct 17-Oct Mar Mar 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 Dynamic Fund (HDF) An Open Ended Scheme 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. FUND DETAILS Date of Allotment Benchmark NAV (Growth) per unit (as on ) Monthly Average AUM (In Lakhs) Fund Managers Minimum Application Exit Load 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 `10,000 `1,000 p.m.() Nil 3.45% Weighted Average Monthly Total Expenses ratios (Annualized) Regular 2.68% Direct Plan 1.98% Excludes service tax on Investment Management fees of 0.24% of Total NetAssets. Portfolio Turnover 0.82 Statistical ratios disclosed as per monthly returns (absolute) for the last 3 Effective from March 1, 2013 for prospective investments. **Risk free rate: 6.25% (FIMMDA-NSE Mibor) as on December 30, 2016) Asset Allocation Auto 9.28% Banks 20.22% Construction Project 3.12% Consumer Non Durables 10.71% Finance 4.38% Non - Ferrous Metals 3.50% Petroleum Products 10.01% Pharmaceuticals 5.15% Power 6.14% Software 11.99% Reverse Repos/CBLOs 16.15% Net CurrentAssets -0.65% Total Net Assets % HSBC Dynamic Fund (HDF) 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 FUND PORTFOLIO Issuer Auto Market Value ( ` in Lacs) % to Net Assets Maruti Suzuki India % Tata Motors % Banks HDFC Bank % ICICI Bank % Yes Bank % State Bank of India % Construction Project Larsen & Toubro % Consumer Non Durables ITC % Asian Paints % Hindustan Unilever % Glaxosmithkline Consumer Healthcare % Finance HDFC % Non - Ferrous Metals Vedanta % Petroleum Products Reliance Industries % Indian Oil Corporation % Pharmaceuticals Aurobindo Pharma % Lupin % Power NTPC % Power Grid Corporation of India % Software Infosys % Tata Consultancy Services % HCL Technologies % Cash Equivalents CBLO % Net Current Assets % Total Net Assets as on 31-Dec , % * Investors should consult their financial advisers if in doubt about whether the product is suitable for them. 10

13 HSBC Dividend Yield Equity Fund (HDYEF) An Open Ended Equity Scheme Investment Objective: The Scheme aims to generate dividend yield and capital appreciation by primarily investing into equities and equity related securities of domestic Indian companies. FUND DETAILS Date of Allotment Benchmark NAV (Growth) per unit (as on ) Monthly Average AUM (In Lakhs) Fund Managers Minimum Application Exit Load Statistical Ratios Standard Deviation Beta (Slope) Sharpe Ratio** 21-Mar-07 S&P BSE 200 ` , Gautam Bhupal & Amaresh Mishra Available `10,000 `1,000 p.m.() Nil 4.13% Weighted Average Monthly Total Expenses ratios (Annualized) Regular 2.33% Direct Plan 1.63% Excludes service tax on Investment Management fees of 0.21% of Total NetAssets. Portfolio Turnover 0.17 Statistical ratios disclosed as per monthly returns (absolute) for the last 3 Effective from March 1, 2013 for prospective investments. **Risk free rate: 6.25% (FIMMDA-NSE Mibor) as on December 30, 2016) Asset Allocation Auto 8.25% AutoAncillaries 3.97% Banks 19.64% Cement 1.97% Chemicals 1.99% Construction Project 1.87% Consumer Non Durables 9.58% Finance 9.17% Industrial Capital Goods 2.80% Minerals/Mining 1.98% Non - Ferrous Metals 3.24% Oil 3.52% Petroleum Products 6.12% Pharmaceuticals 3.62% Power 4.12% Software 14.61% Textile Products 1.32% Transportation 1.68% Reverse Repos/CBLOs 1.00% Net CurrentAssets -0.45% Total Net Assets % HSBC Dividend Yield Equity Fund (HDYEF) This product is suitable for investors who are seeking*: To create wealth over long term Invests in equity and equity r e l a t e d s e c u r i t i e s o f companies facing "out-ofordinary" conditions 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 Auto Market Value ( ` in Lacs) % to Net Assets Maruti Suzuki India % Hero Motocorp % Auto Ancillaries MRF % Banks ICICI Bank % HDFC Bank % Karur Vysya Bank % Axis Bank % Jammu & Kashmir Bank % Cement Deccan Cements % Chemicals Tata Chemicals % Construction Project Larsen & Toubro % Consumer Non Durables ITC % Hindustan Unilever % Finance HDFC % Manappuram Finance % Indiabulls Housing Finance % Industrial Capital Goods V-Guard Industries % Minerals/Mining Coal India % Non - Ferrous Metals Hindustan Zinc % Oil Oil & Natural Gas Corporation % Petroleum Products Bharat Petroleum Corporation % Reliance Industries % Pharmaceuticals Lupin % Sun Pharmaceutical Industries % Power NTPC % Software Infosys % HCL Technologies % Tata Consultancy Services % Textile Products Welspun India % Transportation Gateway Distriparks % Cash Equivalents CBLO % Net Current Assets % Total Net Assets as on 31-Dec , % 11

14 HSBC Emerging Markets Fund (HEMF) An Open Ended Scheme Investment Objective: To provide long term capital appreciation by investing in India and in the emerging markets, in equity and equity related instruments, share classes and units/securities issued by overseas mutual funds or unit trusts. The fund may also invest a limited proportion in domestic debt and money market instruments. FUND DETAILS Date of Allotment Benchmark NAV (Growth) per unit (as on ) Monthly Average AUM (In Lakhs) Fund Manager Minimum Application Exit Load Statistical Ratios Standard Deviation Beta (Slope) Sharpe Ratio** 17-Mar-08 MSCI Emerging Markets Index ` Anitha Rangan (Dedicated fund manager for overseas investments) Available `10,000 `1,000 p.m.() Nil 4.21% Weighted Average Monthly Total Expenses ratios (Annualized) Regular 2.69% Direct Plan 1.99% (inclusive of underlying scheme's expenses) Excludes service tax on Investment Management fees of 0.07% of Total NetAssets. Statistical ratios disclosed as per monthly returns (absolute) for the last 3 Effective from March 1, 2013 for prospective investments. **Risk free rate: 6.25% (FIMMDA-NSE Mibor) as on December 30, 2016) FUND PORTFOLIO Issuer Overseas Mutual Fund HSBC GIF Glob Emerg Mkts Eq S1 Dis % Cash Equivalents Market Value ( ` in Lacs) % to Net Assets CBLO % Net Current Assets % Total Net Assets as on 31-Dec % Dividend Declaration Record Date / period of dividend declared Non-Institutional Institutional NAV ( `) per unit (cum dividend) HSBC - Emerging Market Fund - Dividend 27-Jun HSBC - Emerging Market Fund - Dividend - Direct Plan 27-Jun Upon payment of dividend, the NAV per unit falls to the extent of payout and statutory levy, if any. Face value: `10 per unit. Asset Allocation Overseas Mutual Fund 98.14% Reverse Repos/CBLOs 2.39% Net CurrentAssets -0.53% Total Net Assets % HSBC Emerging Markets Fund (HEMF) This product is suitable for investors who are seeking*: To create wealth over long term Investment in equity and equity related securities of Emerging economies 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 12

15 HSBC Asia Pacific (Ex Japan)Dividend Yield Fund (HAPDF) An Open Ended Fund of Funds Scheme Investment Objective: The primary investment objective of the Scheme is to provide long term capital appreciation by investing predominantly in units of HSBC Global Investment Funds (HGIF) Asia Pacific Ex Japan Equity Dividend Fund (HEHDF). The Scheme 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. However, there is no assurance that the investment objective of the Scheme will be achieved. FUND DETAILS Date of Allotment Benchmark NAV (Growth) per unit (as on ) Monthly Average AUM (In Lakhs) Fund Manager Minimum Application Exit Load 24-Feb-14 MSCI AC Asia Pacific ex Japan ` Anitha Rangan (for overseas investments), Sanjay Shah (for investments in Indian Market) Available `10,000 `1,000 p.m.() Nil FUND PORTFOLIO Issuer Overseas Mutual Fund HSBC GIF ASIA PACIFIC EX JAPAN EQ HD-S9D % Cash Equivalents Market Value ( ` in Lacs) % to Net Assets CBLO % Net Current Assets % Total Net Assets as on 31-Dec % Weighted Average Monthly Total Expenses ratios (Annualized) Regular 2.28% Direct Plan 1.58% (inclusive of underlying scheme's expenses) Excludes service tax on Investment Management fees of 0.06% of Total Effective from March 1, 2013 for prospective investments. Asset Allocation Overseas Mutual Fund 98.37% Reverse Repos/CBLOs 2.79% Net CurrentAssets -1.16% Total Net Assets % HSBC Asia Pacific (Ex Japan)Dividend Yield Fund (HAPDF) This product is suitable for investors who are seeking*: To create wealth over long term Investment in equity and equity related securities of Asia Pacific countries (excluding Japan) through fund of funds route 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. 13

16 HSBC Brazil Fund (HBF) An Open-Ended Fund of Funds Scheme Investment Objective: The primary investment objective of the Scheme is to provide long term capital appreciation by investing predominantly in units/shares of HSBC Global Investment Funds (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 Scheme 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. FUND DETAILS Date of Allotment Benchmark NAV (Growth) per unit (as on ) Monthly Average AUM (In Lakhs) Fund Manager Minimum Application Exit Load Statistical Ratios Standard Deviation Beta (Slope) Sharpe Ratio** 06-May-11 MSCI Brazil 10/40 Index ` , Anitha Rangan (Dedicated fund manager for overseas investments) Available `10,000 `1,000 p.m.() Nil 10.56% FUND PORTFOLIO Issuer Overseas Mutual Fund HSBC GIF BRAZIL EQUITY S3D 2, % Cash Equivalents Market Value ( ` in Lacs) % to Net Assets CBLO % Net Current Assets % Total Net Assets as on 31-Dec , % Weighted Average Monthly Total Expenses ratios (Annualized) Regular 2.69% Direct Plan 1.99% (inclusive of underlying scheme's expenses) Excludes service tax on Investment Management fees of 0.13% of Total NetAssets. Statistical ratios disclosed as per monthly returns (absolute) for the last 3 Effective from March 1, 2013 for prospective investments. **Risk free rate: 6.25% (FIMMDA-NSE Mibor) as on December 30, 2016) Asset Allocation Overseas Mutual Fund 98.27% Reverse Repos/CBLOs 3.16% Net CurrentAssets -1.43% Total Net Assets % HSBC Brazil Fund (HBF) This product is suitable for investors who are seeking*: To create wealth over long term Invests in equity and equity related securities through feeder route in Brazilian markets 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 14

17 HSBC Managed Solutions India - Growth (HMSG) An Open Ended Fund of Funds Scheme Investment Objective: The objective of the Plan is to provide long term total return primarily by seeking capital appreciation through an active asset allocation with diversification commensurate with the risk profile of investments by investing predominantly in units of equity mutual funds as well as in a basket of debt mutual funds gold exchange traded funds (ETFs) and other ETFs, offshore mutual funds and money market instruments. FUND DETAILS Date of Allotment Benchmark NAV (Growth) per unit (as on ) Monthly Average AUM (In Lakhs) Fund Managers 30-Apr-14 Composite Index constituting 80% of S&P BSE 200 Index and 20% of CRISIL Composite Bond Index ` , Anitha Rangan (Dedicated Fund Manager for investments in foreign securities) Gautam Bhupal (For managing investments in Indian Market Equity Portion) Sanjay Shah (For managing investments in Indian Market Fixed Income Portion) FUND PORTFOLIO Issuer Mutual Fund HSBC Equity Fund - Growth Direct 7, % HSBC Midcap Equity Fund - Growth Direct 2, % HSBC Income Fund Short Term - Growth Direct % HSBC Income Fund Inv Plan Growth Direct % HSBC Flexi Debt Fund Growth Direct % Cash Equivalents Market Value ( ` in Lacs) % to Net Assets CBLO % Net Current Assets % Minimum Application Exit Load Available `5,000 `1,000 p.m.() Nil Total Net Assets as on 31-Dec , % Weighted Average Monthly Total Expenses ratios (Annualized) Regular 2.43% Direct Plan 2.16% (inclusive of underlying scheme's expenses) Excludes service tax on Investment Management fees of 0.00% of Total Net Assets and of 0.24% on the underlying scheme's in which the fund of fund Effective from March 1, 2013 for prospective investments. Asset Allocation Mutual Fund 99.02% Reverse Repos/CBLOs 1.05% Net CurrentAssets -0.07% Total Net Assets % HSBC Managed Solutions India - Growth This product is suitable for investors who are seeking*: To create wealth over long term Investing predominantly in units of equity mutual funds as well as in a basket of debt mutual funds, gold & exchange traded funds, offshore mutual funds and money market instruments. 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 15