HSBC Portfolios. Unaudited Semi-Annual Report for the period ended 31 January 2015

Transcription

1 HSBC Portfolios Unaudited Semi-Annual Report for the period ended 31 January 2015 R.C.S. Luxembourg B , boulevard d Avranches L-1160 Luxembourg Grand Duchy of Luxembourg

2 No subscription can be received on the basis of financial reports. Subscriptions are only valid if made on the basis of the current Prospectus accompanied by the latest annual and the most recent semi-annual report, if published thereafter. Unaudited report for the period 1 August 2014 to 31 January 2015

3 Table of Contents General Information 2 Statement of Net Assets 5 Statement of Operations 6 Statement of Changes in Net Assets 7 Statement of Changes in Shares Issued 8 Statistical Information 10 Notes to the Financial Statements 12 Schedules of Investments and Other Net Assets HSBC Portfolios World Selection 1 24 HSBC Portfolios World Selection 2 32 HSBC Portfolios World Selection 3 41 HSBC Portfolios World Selection 4 49 HSBC Portfolios World Selection 5 50 Fund Holiday Calendar for

4 General Information Directors George Efthimiou (Chairman), Global Chief Operating Officer HSBC Global Asset Management Limited, 78 St James Street, London SW1A 1HL, United Kingdom Dr. Michael Boehm, Chief Operating Officer HSBC Global Asset Management (Deutschland) GmbH Königsallee 21/23, Düsseldorf, Germany Dean Lam, Managing Director HSBC Bank (Mauritius) Limited, 6 th Floor, HSBC Centre, 18 CyberCity, Ebene, Mauritius Eimear Cowhey, Independent Director (Appointed with effect from 14 August 2014) Resident in the Republic of Ireland Peter Dew, Independent Director (Appointed with effect from 29 August 2014) Resident in the United Kingdom Jean de Courrèges, Independent Director Carne Global Financial Services Luxembourg S.à r.l., European Banking and Business Centre, 6B route de Trèves, L-2633 Senningerberg, Grand Duchy of Luxembourg John Li, Independent Director The Directors Office, 19 Rue de Bitbourg, L-1273, Luxembourg Joanna Munro, Global Head of Fiduciary Governance (Appointed with effect from 28 November 2014) HSBC Global Asset Management Limited, 78 St James Street, London SW1A 1HL, United Kingdom David Silvester, Head of Product Governance and Regulation Global Funds (Resigned 23 September 2014) HSBC Global Asset Management (UK) Limited, 78 St James Street, London SW1A 1HL, United Kingdom 2

5 General Information (continued) Registered Office 16, boulevard d Avranches L-1160 Luxembourg Grand Duchy of Luxembourg Administration Agent, Depositary Bank, Paying Agent, Corporate and Domiciliary Agent HSBC Bank plc, Luxembourg Branch * (From 15 November 2014) 16, boulevard d Avranches L-1160 Luxembourg Grand Duchy of Luxembourg HSBC Securities Services (Luxembourg) S.A. (Until 14 November 2014) Registrar and Transfer Agent HSBC Bank plc, Luxembourg Branch * (From 15 November 2014) 16, boulevard d Avranches L-1160 Luxembourg Grand Duchy of Luxembourg HSBC Securities Services (Luxembourg) S.A. (Until 14 November 2014) Management Company HSBC Investment Funds (Luxembourg) S.A. 16, boulevard d Avranches L-1160 Luxembourg Grand Duchy of Luxembourg Réviseur d'entreprises agréé KPMG Luxembourg, Société Coopérative 39, Avenue John F. Kennedy L-1855 Luxembourg Legal Advisers Elvinger, Hoss & Prussen 2, Place Winston Churchill L-1340 Luxembourg Grand Duchy of Luxembourg Investment Adviser HSBC Global Asset Management (UK) Limited 78 St James s Street London SW1A 1EJ United Kingdom Distributors Global Distributor HSBC Investment Funds (Luxembourg) S.A. 16, boulevard d Avranches L-1160 Luxembourg Grand Duchy of Luxembourg * HSBC Securities Services (Luxembourg) S.A. has transferred its activities to HSBC Bank Plc, Luxembourg Branch with effect from the date disclosed in brackets. 3

6 General Information (continued) Distributors (continued) Austria and Eastern Europe Distributor HSBC Trinkaus & Burkhardt AG Königsallee 21/23 D Düsseldorf Germany Continental Europe Distributor HSBC Global Asset Management (France) Immeuble Ile de France, 4, Place de la Pyramide, La Défense Puteaux France Hong Kong Representative and Distributor HSBC Investment Funds (Hong Kong) Limited HSBC Main Building, 1 Queen s Road Central Hong Kong Jersey Representative and Distributor HSBC Global Asset Management (International) Limited HSBC House, Esplanade, St Helier Jersey JE4 8WP Channel Islands Middle East Distributor HSBC Bank Middle East Limited HSBC House, Esplanade, St Helier Jersey JE4 8UB Channel Islands Singapore Representative and Distributor HSBC Global Asset Management (Singapore) Limited 21 Collyer Quay, #06-01 HSBC Building Singapore Singapore United Kingdom Representative and Distributor HSBC Global Asset Management (UK) Limited 8 Canada Square London E14 5HQ United Kingdom Note on the risk management HSBC Investment Funds (Luxembourg) S.A. (the Management Company ) uses a risk management process that allows monitoring the risk of the portfolio positions and their share of the overall risk profile of the portfolios on the managed funds at any time. In accordance with the Law of 17 December 2010 and the applicable regulatory requirements of the Commission de Surveillance du Secteur Financier ( CSSF ), the Management Company reports to the CSSF on a regular basis on the risk management process. The Management Company assures, at the basis of appropriate and reasonable methods, that the overall risk, associated with derivatives, does not exceed the net asset value of the portfolio. 4

7 General Information (continued) For the current sub-fund of HSBC Portfolios, the Management Company uses the commitment approach for the calculation of the global exposure. The commitment approach is based on the positions of derivative financial instruments, converted into their corresponding underlying equivalents using the delta approach. Netting and hedging might be considered for derivative financial instruments and their underlying assets. The sum of these underlying equivalents must not exceed the net asset value of the portfolio. 5

8 Statement of Net Assets as at 31 January 2015 HSBC Portfolios HSBC Portfolios HSBC Portfolios HSBC Portfolios HSBC Portfolios Notes Combined World Selection 1 World Selection 2 World Selection 3 World Selection 4 World Selection 5 USD USD USD USD USD USD ASSETS Investments in securities at cost 2,441,554, ,015, ,293, ,053, ,044, ,147,470 Unrealised appreciation / (depreciation) 9,043,247 10,933,100 10,511,592 3,218,448 (9,260,020) (6,359,873) Investments in securities at market value 3 b 2,450,597, ,948, ,804, ,272, ,784, ,787,597 Unrealised gain on forw ard foreign exchange contracts 3 h, 6 1,537, , , Unrealised appreciation on futures contracts 3 i, 7 2,370, , , , , ,418 OTHER ASSETS Cash at bank 169,084,120 25,302,124 38,499,302 37,127,368 44,817,097 23,338,229 Amounts receivable on sale of Investments 7,898,486 5,552,163 2,346, Amounts receivable on subscriptions 18,410,455 7,010,370 4,712,441 3,758,323 2,044, ,719 Accounts receivable and accrued income 9,576,728 2,008,244 2,587,687 2,513,796 1,383,391 1,083,610 OTHER ASSETS 204,969,789 39,872,901 48,145,753 43,399,487 48,245,090 25,306,558 TOTAL ASSETS 2,659,476, ,650, ,011, ,144, ,958, ,711,573 LIABILITIES Unrealised loss on forw ard foreign exchange contracts 3 h, 6 9,100, ,986 5,928,148 2,183,290 Bank overdraft 1,992,369 1,365, , ,368 37,180 Amounts payable on purchase of Investments 14,765,841 6,560,972 5,002,969-3,201,900 - Amounts payable on redemptions 13,588,183 3,080,637 1,704,332 5,176,754 2,479,539 1,146,921 Management fees payable 2,449, , , , , ,719 Accounts payable and accrued expenses 1,175, , , , , ,352 Dividends payable 39,426 21, ,303 3,471 5,458 TOTAL LIABILITIES 43,110,864 11,620,403 7,598,161 7,070,896 12,939,484 3,881,920 NET ASSETS 2,616,365, ,030, ,412, ,073, ,018, ,829,653 The accompanying notes form an integral part of these financial statements. 6

9 Statement of Operations for the period ended 31 January 2015 HSBC Portfolios HSBC Portfolios HSBC Portfolios HSBC Portfolios HSBC Portfolios Notes Combined World Selection 1 World Selection 2 World Selection 3 World Selection 4 World Selection 5 USD USD USD USD USD USD INCOME Income from investments 3 c 15,105,643 2,965,868 3,552,518 3,459,745 3,280,864 1,846,648 Deposit interest 13,311 13, Other income 976,287 19, , , , ,725 TOTAL INCOME 16,095,241 2,998,184 3,682,940 3,742,848 3,543,888 2,127,381 EXPENSES 3 c Management fees 4 a 15,304,607 2,232,377 2,434,868 3,741,760 4,514,875 2,380,727 Operating, administrative and servicing expenses 4 b 2,765, , , , , ,440 Bank interest and charges 5, ,278 1,802 1, TOTAL EXPENSES 18,075,249 2,752,470 2,959,302 4,405,308 5,197,918 2,760,251 NET OPERATING (LOSS) / PROFIT FOR THE PERIOD (1,980,008) 245, ,638 (662,460) (1,654,030) (632,870) The accompanying notes form an integral part of these financial statements. 7

10 Statement of Changes in Net Assets for the period ended 31 January 2015 HSBC Portfolios HSBC Portfolios HSBC Portfolios HSBC Portfolios HSBC Portfolios Notes Combined World Selection 1 World Selection 2 World Selection 3 World Selection 4 World Selection 5 USD USD USD USD USD USD Net operating (loss) / profit for the period (1,980,008) 245, ,638 (662,460) (1,654,030) (632,870) Net realised gains / (losses) on: - Investments in securities 3 b, 3 e 8,654,127 3,229,432 1,812,061 4,477, ,932 (1,515,535) - Forw ard foreign exchange contracts 3 h (248,637,630) (37,336,880) (36,875,636) (51,768,504) (88,611,036) (34,045,574) - Futures contracts 3 i (2,973,574) (277,817) (309,566) (136,975) (777,059) (1,472,157) - Foreign exchange transactions 3 d (54,593,418) (22,213,326) (19,313,668) (11,217,767) (1,625,351) (223,306) NET REALISED LOSS (299,530,503) (56,352,877) (53,963,171) (59,308,469) (92,016,544) (37,889,442) Net change in unrealised (depreciation) / appreciation on: - Investments in securities (9,452,354) 8,863,455 6,025,037 (5,365,865) (13,321,401) (5,653,580) - Forw ard foreign exchange contracts 3 h 1,865,210 1,420,385 2,143,579 1,125,144 (2,162,820) (661,078) - Futures contracts 3 i 2,370, , , , , ,418 DECREASE IN NET ASSETS FROM OPERATIONS (304,746,717) (45,925,634) (45,586,280) (63,076,118) (106,572,003) (43,586,682) CAPITAL TRANSACTIONS Received on issue of shares 511,195, ,944,841 96,869, ,885, ,381,224 55,113,615 Paid on redemptions of shares (292,162,190) (49,592,765) (55,467,548) (70,808,457) (61,489,291) (54,804,129) Dividends paid (235,008) (131,804) (1,433) (48,968) (18,993) (33,810) TOTAL (DECREASE) / INCREASE IN NET ASSETS FOR THE PERIOD (85,948,785) 23,294,638 (4,185,437) (20,047,917) (41,699,063) (43,311,006) NET ASSETS Beginning of period 2,702,313, ,735, ,598, ,121, ,717, ,140,659 End of period 2,616,365, ,030, ,412, ,073, ,018, ,829,653 The accompanying notes form an integral part of these financial statements. 8

11 Statement of Changes in Shares Issued for the period ended 31 January 2015 HSBC Portfolios HSBC Portfolios HSBC Portfolios HSBC Portfolios HSBC Portfolios World Selection 1 World Selection 2 World Selection 3 World Selection 4 World Selection 5 Class A (C) (USD) Shares outstanding, beginning of period 5,886, ,433, ,774, ,675, ,615, Shares issued 2,316, ,546, ,723, ,087, ,108, Shares redeemed (1,025,272.99) (1,820,517.02) (2,453,828.36) (2,426,918.58) (2,591,218.02) Shares outstanding, end of period 7,177, ,160, ,044, ,336, ,132, Class A (C) (HAUD)* Shares outstanding, beginning of period , , , Shares issued , , Shares redeemed - - (50,010.71) (7,225.48) (16,168.07) Shares outstanding, end of period , , , Class A (C) (HEUR)* Shares outstanding, beginning of period 20,634, ,090, ,750, ,433, ,160, Shares issued 4,638, ,298, ,219, ,163, ,759, Shares redeemed (1,936,184.49) (1,445,399.24) (1,449,863.76) (892,478.14) (400,470.66) Shares outstanding, end of period 23,336, ,944, ,520, ,703, ,519, Class A (C) (HGBP)* Shares outstanding, beginning of period 1,405, ,936, ,569, ,646, ,679, Shares issued 264, , , , , Shares redeemed (184,240.83) (454,937.55) (500,114.85) (615,287.26) (538,750.51) Shares outstanding, end of period 1,485, ,013, ,895, ,520, ,461, Class A (C) (HSGD)* Shares outstanding, beginning of period Shares issued - - 3, Shares redeemed Shares outstanding, end of period , Class A (M) (USD) Shares outstanding, beginning of period 92, , , Shares issued 558, , , , , Shares redeemed (209,542.86) (0.03) (15,453.25) (124,008.53) (1,798.98) Shares outstanding, end of period 441, , , , , Class A (M ) (HKD) Shares outstanding, beginning of period 821, ,229, , , Shares issued 5,531, , , , , Shares redeemed (417,273.83) (0.20) (2,135,002.69) (316,110.31) (95,405.53) Shares outstanding, end of period 5,935, , , , , Class A (M) (HAUD)* Shares outstanding, beginning of period , Shares issued 123, , , , , Shares redeemed (59,207.90) (1,475.44) (12,387.71) (24,339.57) (57,138.08) Shares outstanding, end of period 63, , , , Class A (M) (HEUR)* Shares outstanding, beginning of period , Shares issued 13, , , Shares redeemed (10.05) (10.80) (0.47) (0.02) (0.37) Shares outstanding, end of period 13, , , * Hedged Classes 9

12 Statement of Changes in Shares Issued (continued) for the period ended 31 January 2015 HSBC Portfolios HSBC Portfolios HSBC Portfolios HSBC Portfolios HSBC Portfolios World Selection 1 World Selection 2 World Selection 3 World Selection 4 World Selection 5 Class A (M) (HGBP)* Shares outstanding, beginning of period , , , Shares issued , , , Shares redeemed (0.02) (0.62) (23,220.22) (19,631.54) (81,512.39) Shares outstanding, end of period , , , Class A (M) (HSGD)* Shares outstanding, beginning of period Shares issued Shares redeemed Shares outstanding, end of period Class B (C) (USD) Shares outstanding, beginning of period , , , Shares issued - 12, , , , Shares redeemed Shares outstanding, end of period , , , , Class B (C) (HEUR)* Shares outstanding, beginning of period - 10, , , Shares issued , , Shares redeemed Shares outstanding, end of period - 10, , , , Class B (C) (HGBP)* Shares outstanding, beginning of period 68, , , , , Shares issued 63, , , , , Shares redeemed - (4,607.17) (42,453.90) - (4,607.54) Shares outstanding, end of period 132, , , , , Class Z (C) (USD) Shares outstanding, beginning of period , Shares issued Shares redeemed (29.26) - Shares outstanding, end of period , Class Z (C) (HEUR)* Shares outstanding, beginning of period 11, , Shares issued 1, Shares redeemed Shares outstanding, end of period 13, , Class S1 (C) (USD) Shares outstanding, beginning of period 7, , , Shares issued Shares redeemed (7,676.54) - (7,797.77) - (3,978.16) Shares outstanding, end of period * Hedged Classes 10

13 Statistical Information HSBC Portfolios HSBC Portfolios HSBC Portfolios HSBC Portfolios HSBC Portfolios World Selection 1 World Selection 2 World Selection 3 World Selection 4 World Selection 5 NUMBER OF SHARES OUTSTANDING: as at 31 January 2015 Class A (C) (USD) 7,177, ,160, ,044, ,336, ,132, Class A (C) (HAUD)* , , , Class A (C) (HEUR)* 23,336, ,944, ,520, ,703, ,519, Class A (C) (HGBP)* 1,485, ,013, ,895, ,520, ,461, Class A (C) (HSGD)* , Class A (M) (USD) 441, , , , , Class A (M) (HKD) 5,935, , , , , Class A (M) (HAUD)* 63, , , , Class A (M) (HEUR)* 13, , , Class A (M) (HGBP)* , , , Class A (M) (HSGD)* Class B (C) (USD) , , , , Class B (C) (HEUR)* - 10, , , , Class B (C) (HGBP)* 132, , , , , Class Z (C) (USD) , Class Z (C) (HEUR)* 13, , NET ASSET VALUE PER SHARE: as at 31 January 2015 Class A (C) (USD) USD USD USD USD USD Class A (C) (HAUD)* - - AUD AUD AUD Class A (C) (HEUR)* EUR EUR EUR EUR EUR Class A (C) (HGBP)* GBP GBP GBP GBP GBP Class A (C) (HSGD)* SGD SGD SGD Class A (M) (USD) USD USD USD USD USD Class A (M) (HKD) HKD HKD HKD HKD HKD Class A (M) (HAUD)* AUD AUD AUD AUD AUD Class A (M) (HEUR)* EUR EUR EUR EUR EUR Class A (M) (HGBP)* GBP GBP GBP GBP GBP Class A (M) (HSGD)* SGD SGD SGD Class B (C) (USD) USD USD USD USD USD Class B (C) (HEUR)* - EUR EUR EUR EUR Class B (C) (HGBP)* GBP GBP GBP GBP GBP Class Z (C) (USD) USD Class Z (C) (HEUR)* EUR EUR NUMBER OF SHARES OUTSTANDING: as at 31 July 2014 Class A (C) (USD) 5,886, ,433, ,774, ,675, ,615, Class A (C) (HAUD)* , , , Class A (C) (HEUR)* 20,634, ,090, ,750, ,433, ,160, Class A (C) (HGBP)* 1,405, ,936, ,569, ,646, ,679, Class A (C) (HSGD)* Class A (M) (USD) 92, , , Class A (M) (HKD) 821, ,229, , , Class A (M) (HAUD)* , Class A (M) (HEUR)* , Class A (M) (HGBP)* , , , Class A (M) (HSGD)* Class B (C) (USD) , , , Class B (C) (HEUR)* - 10, , , Class B (C) (HGBP)* 68, , , , , Class Z (C) (USD) , Class Z (C) (HEUR)* 11, , Class S1 (C) (USD) 7, , , * Hedged Classes 11

14 Statistical Information (continued) HSBC Portfolios HSBC Portfolios HSBC Portfolios HSBC Portfolios HSBC Portfolios World Selection 1 World Selection 2 World Selection 3 World Selection 4 World Selection 5 NET ASSET VALUE PER SHARE: as at 31 July 2014 Class A (C) (USD) USD USD USD USD USD Class A (C) (HAUD)* - - AUD AUD AUD Class A (C) (HEUR)* EUR EUR EUR EUR EUR Class A (C) (HGBP)* GBP GBP GBP GBP GBP Class A (C) (HSGD)* SGD SGD SGD Class A (M) (USD) USD USD USD USD USD Class A (M) (HKD) HKD HKD HKD HKD HKD Class A (M) (HAUD)* AUD AUD AUD AUD AUD Class A (M) (HEUR)* EUR EUR EUR EUR EUR Class A (M) (HGBP)* GBP GBP GBP GBP GBP Class A (M) (HSGD)* SGD SGD SGD Class B (C) (USD) USD USD USD USD USD Class B (C) (HEUR)* - EUR EUR EUR Class B (C) (HGBP)* GBP GBP GBP GBP GBP Class Z (C) (USD) USD Class Z (C) (HEUR)* EUR EUR Class S1 (C) (USD) USD USD USD NUMBER OF SHARES OUTSTANDING: as at 31 July 2013 Class A (C) (USD) 6,803, ,971, ,240, ,304, ,033, Class A (C) (HEUR)* 26,822, ,986, ,560, ,589, ,557, Class A (C) (HGBP)* 1,642, ,295, ,050, ,786, ,957, Class B (C) (HGBP)* 7, , , , , Class Z (C) (USD) , Class Z (C) (HEUR)* 10, , Class Z (C) (HGBP)* , Class S1 (C) (USD) 19, , , NET ASSET VALUE PER SHARE: as at 31 July 2013 Class A (C) (USD) USD USD USD USD USD Class A (C) (HEUR)* EUR EUR EUR EUR EUR Class A (C) (HGBP)* GBP GBP GBP GBP GBP Class B (C) (HGBP)* GBP GBP GBP GBP GBP Class Z (C) (USD) USD Class Z (C) (HEUR)* EUR EUR Class Z (C) (HGBP)* - - GBP Class S1 (C) (USD) USD USD USD * Hedged Classes 12

15 Notes to the Financial Statements for the period ended 31 January General Information HSBC Portfolios (the Company ) was incorporated under the laws of the Grand Duchy of Luxembourg as an investment company (Société d Investissement à Capital Variable or SICAV ) on 21 July 2009 with different compartments (hereafter called a Portfolio ). Within each Portfolio, various classes of shares may be issued. Each Portfolio consists of securities, cash and other sundry assets and liabilities. The accompanying Financial Statements present the assets and liabilities of the individual Portfolios and of the Company taken as a whole. The Financial Statements of each individual Portfolio are expressed in the currency designated in the prospectus for that particular Portfolio and the Financial Statements of the Company are expressed in US Dollar ( USD ). The financial statements have been prepared in accordance with the format prescribed by the Luxembourg authorities for Luxembourg investment companies. The Company is an officially registered investment fund under part I of the Luxembourg law of 17 December 2010 on undertakings for collective investment (the 2010 Law ) and qualifies as a UCITS fund under the European directive 2009/65/EC. The Company seeks to provide a comprehensive range of Portfolios with the purpose of spreading investment risk and satisfying the requirements of investors seeking to emphasise income, capital conservation and/or capital growth. The Company offers investors, within the same vehicle, a choice of investments in one or more Portfolios. The Company may issue different classes of shares in one or several Portfolios. Details of the characteristics of such share classes, if and when offered, by one or several Portfolios will be determined by the directors of the Company (the Directors and each a Director ). As at 31 January 2015, the Company was comprised of the following Portfolios: HSBC Portfolios World Selection 1 HSBC Portfolios World Selection 2 HSBC Portfolios World Selection 3 HSBC Portfolios World Selection 4 HSBC Portfolios World Selection 5 2. Share Capital The Company currently offers the following classes of shares: Class Class A Class B Class E Class S* Class Z Description A Shares are available to all investors. B Shares are available in the United Kingdom and Jersey through specific distributors selected by the Distributor. B Shares may be available in other countries through specific distributors selected by the Distributor on application to the Company. E Shares will be available in certain countries, subject to the relevant regulatory approval, through specific distributors selected by the Distributor on application to the Company. S Shares are available in certain jurisdictions or through certain distributors selected by the Distributor provided that the investors qualify as institutional investors within the meaning of article 174 of 2010 Law. Z Shares are available to investors having entered into a discretionary management agreement with an HSBC Group entity and to investors subscribing via distributors selected by the Distributor provided that such investors qualify as institutional investors within the meaning of article 174 of 2010 Law. * Successive issue of Classes S Shares are numbered 1, 2, 3, etc. and respectively referred to as S 1, S 2, S 3, etc. A series of Class S Shares may be issued in one or more Portfolios and each series may or may not be available in all Portfolios. Within each share class of a Portfolio, the Company is entitled to create different sub-classes, distinguished by their class name, by their distribution policy (Capital-Accumulation ( C ), Distribution ( D ), Quarterly Distribution ( Q ) and Monthly Distribution ( M ) shares), their reference currency, their hedging activity ( H ) and/or by any other criterion to be stipulated by the board of directors of the Company (the Board of Directors ). Within each share class of a Portfolio, separate currency hedged classes may be issued (suffixed by H and the currency into which the Base Currency is hedged e.g. HEUR or HGBP ). Any fees relating to the execution of the currency hedging policy will be borne by the relevant currency hedged class. 13

16 Notes to the Financial Statements for the period ended 31 January 2015 (continued) 2. Share Capital (continued) Investment Minima: Class of Shares A, B and E S and Z Dealing Currency USD EUR GBP USD EUR GBP Minimum initial investment and minimum holding 5,000 5,000 5,000 1,000,000 1,000,000 1,000,000 Minimum subsequent investment 1,000 1,000 1, , , , Accounting Policies The following accounting policies have been used consistently in dealing with items which are considered material in relation to the Company s financial statements. a) Accounting convention The financial statements have been prepared under the historical cost convention modified by the revaluation of investments. b) Assets and portfolio securities valuation Securities are initially recognised at cost, being the fair value of the consideration given. All purchases and sales of securities are recognised on the trade date, i.e. the date the Company commits to purchase or sell the security. Portfolio securities and/or financial derivative instruments which are listed on an official stock exchange are valued at the last available price on the principal market on which such securities are traded. Securities traded on other organised markets are valued at the last available price or yield equivalents obtained from one or more dealers in such organised markets at the time of valuation. If such prices are not representative of their fair value, all such securities and all other permitted assets shall be valued at their fair value at which it is expected they may be resold as determined in good faith by or under the direction of the Directors. Shares or units in open-ended undertakings for collective investment, which do not have a price quotation on a regulated market, will be valued at the actual net asset value for such shares or units as of the relevant dealing day, failing which they shall be valued at the last available net asset value which is calculated prior to such dealing day. In the case where events have occurred which have resulted in a material change in the net asset value of such shares or units since the last net asset value was calculated, the value of such shares or units may be adjusted at their fair value in order to reflect, in the reasonable opinion of the Board of Directors, such change. The financial derivative instruments which are not listed on any official stock exchange or traded on any other organised market are valued in a reliable and verifiable manner on a daily basis and verified by a competent professional appointed by the Company. The Financial Statements are presented on the basis of the net sasset value calculated on 30 January c) Income and Expenses Interest is accrued on a day-to-day basis. Dividends are accounted for on an ex-dividend basis. Expenses are recognised on an accrual basis. d) Foreign Exchange The cost of investments, income and expenses in currencies other than the Company relevant reporting currency have been recorded at the rate of exchange ruling at the time of the transaction. The market value of the investments and other assets and liabilities in currencies other than the relevant reporting currency has been converted at the rates of exchange ruling at the date of these financial statements. The exchange rates used as at 31 January 2015 are as follows: USD/EUR: USD/GBP: e) Realised Profit/(Loss) on Sale of Investments Realised profit/(loss) on sale of investments is the difference between the historical average cost of the investment and the sale proceeds. 14

17 Notes to the Financial Statements for the period ended 31 January 2015 (continued) 3. Accounting Policies (continued) f) Segregated Liability The Company has segregated liability between its Portfolios; meaning, the assets of a Portfolio are exclusively available to satisfy the rights of shareholders in relation to that Portfolio and the rights of creditors whose claims have arisen in connection with the creation, operation and liquidation of that Portfolio. g) Dividends payable Dividends payable by the Company are recorded on the ex-date. h) Forward Foreign Exchange Contracts Outstanding forward currency contracts are valued at the closing date by reference to the forward rate of exchange applicable to the outstanding life of the contract. The unrealised gain or loss is shown in the Statement of Net Assets. Realised gains or losses and change in unrealised appreciation or depreciation are disclosed in the Statement of Changes in Net Assets. i) Futures contracts Futures contracts, which are carried at market value, provide for the delayed delivery of the underlying instrument at a fixed price or for a cash amount based on the change in the value of the underlying instrument at a specific date in the future. The unrealised gain or loss on futures contracts is disclosed in the Statement of Net Assets. Changes in the market value of open futures contracts and realised gains or losses are reported in the Statement of Changes in Net Assets. j) Net Asset Value per Share The net asset value per share of the Company (the Net Asset Value per Share ) is calculated by dividing the net assets of the relevant Class of Shares in a Portfolio included in the Statement of Net Assets by the number of Shares of the relevant class in that Portfolio in issue at the period end. 4. Charges and Expenses a) Management Fee The Company pays to the Management Company an annual management fee calculated as a percentage of the net asset value of each Portfolio or share class ( Management Fee ). The Management Fee is accrued daily and payable monthly in arrears. The fee rate per annum actually charged and applicable to each Class of Shares is set below: HSBC Portfolios World Selection 1 Class A Shares 1.00% Class B Shares 0.50% Class E Shares 1.30% Class S 1 Shares 0.50% Class Z Shares 0.00% HSBC Portfolios World Selection 2 Class A Shares 1.00% Class B Shares 0.50% Class E Shares 1.30% Class S 1 Shares 0.50% Class Z Shares 0.00% HSBC Portfolios World Selection 3 Class A Shares 1.20% Class B Shares 0.60% Class E Shares 1.30% Class S 1 Shares 0.60% Class Z Shares 0.00% 15

18 Notes to the Financial Statements for the period ended 31 January 2015 (continued) 4. Charges and Expenses (continued) a) Management Fee (continued) HSBC Portfolios World Selection 4 Class A Shares 1.20% Class B Shares 0.60% Class E Shares 1.30% Class S 1 Shares 0.60% Class Z Shares 0.00% HSBC Portfolios World Selection 5 Class A Shares 1.30% Class B Shares 0.65% Class E Shares 1.30% Class S 1 Shares 0.65% Class Z Shares 0.00% The Management Fee covers management and distribution services provided in relation to the relevant Portfolio of the Company by the Management Company, the Investment Advisers and the Share Distributors. The Management Company is responsible for discharging, out of such fee, the fees of the Investment Advisers and the Share Distributors and may pay part of such fee to recognised intermediaries or such other person as the Management Company may determine, at its discretion. The Management Company may instruct the Company to pay a portion of the Management Fee directly out of the assets of the Company to any of such service providers. In such case the Management Fee due to Management Company is reduced accordingly. The Management Company is also acting as a management company for other investment funds, namely HSBC Global Investment Funds, HSBC International Select Fund and HSBC Amanah Funds. Management Fees Rebate The Directors endeavour to reduce duplication of management charges by negotiating rebates where applicable in favour of the Company with the collective investment schemes or their managers. There were no rebates for the period ended 31 January 2015 (USD 3,119,622 for year ended 31 July 2014). b) Operating, Administrative and Servicing Expenses There are certain operating, administrative and servicing expenses ( the expenses ) incurred throughout the lifetime of a Portfolio or share class. These expenses are associated with services rendered to a relevant Portfolio which are overseen by either the Management Company or the Company. Many of the services are delegated to other service providers who are paid directly by the Company. Operating, Administrative and Servicing Expenses cover the ongoing custody fees and safekeeping charges payable to the Custodian and its correspondent banks, fees for fund accounting and administration services (including domiciliary services) payable to the Administrative Agent and transfer agency fees for registrar and transfer agency services payable to the Transfer Agent. Operating, Administrative and Servicing Expenses also cover expenses relating to the Luxembourg asset-based taxe d abonnement; reasonable out-of-pocket expenses incurred by the Board of Directors; legal expenses for advice on behalf of the Company; audit fees; ongoing registration and listing fees (if applicable); the costs of preparing, printing, translating and distributing the Company s Prospectus, financial reports, statements and other documents made available directly or through intermediaries to its shareholders. These expenses also cover formation expenses for current and new Portfolios including initial registration fees (these expenses are amortised over a period not exceeding 5 years from the formation date of the Portfolio). The only operating expenses which are not covered by the fee rate paid to the management company and which are included under this caption are hedging fees incurred by the respective portfolios for hedging the different share classes. The Company pays the expenses directly to the service providers and as such the ongoing charge for each share class will vary. The expenses paid by the Company will not exceed 0.25% of the net assets per annum on a rolling basis of each share class. Where actual expenses exceed 0.25% per annum, the excess will be borne directly by the Management Company or by HSBC Asset Management distributors. 16

19 Notes to the Financial Statements for the period ended 31 January 2015 (continued) b) Operating, Administrative and Servicing Expenses (continued) The expenses will be accrued daily and will be payable monthly in arrears. The accrual amount will be reviewed each quarter using the previous 12 months expenses as an initial basis and amending when necessary. c) Directors Fees, Expenses and Interests A Director may be a party to, or otherwise interested in, any transaction or arrangement with the Company or in which the Company is interested, provided that he has disclosed to the other Directors, prior to the conclusion of any such transaction or arrangement, the nature and extent of any interest of his therein. A Director may vote in respect of any contract or arrangement or any proposal whatsoever in which he has an interest, having first disclosed such interest. He shall not be disqualified by his office from contracting with the Company. If a Director declares his interest in any contract which the Company is considering entering into, he may be counted in the quorum of any meeting to consider the contract and may vote on any resolution to enter into such contract. The Company pays an annual fee to each of the independent directors amounting to EUR 10,000. The amount is accrued with every NAV calculation and paid quarterly in arrears. As at 31 January 2015, EUR 5,000 was payable to the Independent Directors. d) Other Charges Other charges are the remaining charges incurred by the Portfolios. They are paid by the Company depending on the services rendered to the share class. They consist of, but are not limited to, the following: Duties, taxes and transaction costs associated with buying and selling the underlying assets of the Company; Brokerage fees and commissions; Interest on borrowing and bank charges incurred in negotiating borrowing; Payments incurred for the holding of financial derivative instruments for the purposes of investment, efficient portfolio management and hedging. Hedging includes currency hedging for the underlying assets of the Company or for the currency hedging of share classes denominated in a currency other than the base currency. 5. Taxation The Company is liable in Luxembourg to a tax (taxe d abonnement) of 0.05% per annum of its net assets, such tax being payable quarterly and calculated on the Net Asset Value of the Company at the end of the relevant calendar quarter. The taxe d abonnement is levied at a rate of 0.01% per annum on Portfolios or Classes reserved to Institutional Investors. This tax is not due on that portion of the Company s assets invested in other Luxembourg UCIs. In addition, the issue of shares in the Company is not subject to any registration duties or other taxes in Luxembourg. Under current law and practice, the Company is not liable to Luxembourg taxes on income or capital gains, nor the dividends paid by the Company, are liable to any Luxembourg withholding tax. Interest, dividends and capital gains on securities may be subject to withholding or capital gains taxes in certain countries. The taxe d abonnement is paid out of the operating, administrative and servicing expenses fees. Worldwide In many markets the Company, as a foreign investment fund, may be subject to non-recoverable tax on income and gains (either by withholding or direct assessment) in relation to the investment returns it realizes from its holdings of shares and securities in those markets. Where practicable the Company will make claims under the relevant double tax treaties and domestic law of the countries concerned in order to minimize the impact of local taxation on the investment return and to obtain the best return for its shareholders. Those claims will be made on the basis of the Company s understanding of the validity of such claims given the information available from the Company s custodians, external advisers and other sources as` to the interpretation and application of the relevant legal provisions by the tax authorities in the country concerned. The Company will seek to provide for tax on capital gains where it considers that it is more likely than not that the tax will be payable, given the advice and information available to the Company at the date concerned. However, any provision held may be insufficient to cover, or be in excess of, any final liability. The Company will seek to claim concessionary tax treatment and account for tax on a best efforts basis, given the tax law and practice at that date. Any change in tax law or practice in any country where the Company is registered, marketed or invested could affect the value of the Company s investments in the affected country. 17

20 Notes to the Financial Statements for the period ended 31 January 2015 (continued) 5. Taxation (continued) In particular, where retrospective changes to tax law or practice are applied by the legislature or tax authorities in a particular country these may result in a loss for current Shareholders in the affected sub fund. The Company does not offer any warranty as to the tax position of returns from investments held in a particular market nor of the risk of a retrospective assessment to tax in a particular market or country. 6. Forward Foreign Exchange Contracts As at 31 January 2015, the Company had entered into various forward foreign currency contracts, for the purpose of portfolio and share class hedging, which obliges the Company to deliver currencies at specified dates. The counterparty for all the below forward foreign exchange contracts is HSBC Bank Plc. Open contracts are as follows: Currency Bought Currency Sold Unrealised Maturity Date Bought Amount Sold Amount Gain / (Loss) USD HSBC Portfolios - World Selection 1 4 February 2015 AUD 1,243,562 USD (1,008,008) (39,866) 4 February 2015 EUR 292,439,595 USD (333,886,901) (3,870,596) 4 February 2015 GBP 20,320,971 USD (30,663,413) (144,250) 4 February 2015 SGD 2,047 USD (1,533) (21) 4 February 2015 USD 978,286 AUD (1,243,562) 10,144 4 February 2015 USD 331,655,452 EUR (292,439,595) 1,639,148 4 February 2015 USD 30,643,211 GBP (20,320,971) 124,049 4 February 2015 USD 1,515 SGD (2,047) 2 6 February 2015 EUR 925,000 USD (1,095,226) (51,384) 6 February 2015 JPY 145,237,000 USD (1,233,107) 3,355 6 February 2015 USD 13,022,921 AUD (16,082,000) 501,325 6 February 2015 USD 5,973,960 CAD (7,052,000) 412,459 6 February 2015 USD 57,270,301 EUR (48,001,000) 3,102,259 6 February 2015 USD 41,431,742 GBP (27,156,000) 646,887 6 February 2015 USD 5,417,074 JPY (651,767,000) (131,686) 11 February 2015 AUD 653,645 USD (508,870) (200) 11 February 2015 EUR 294,147,937 USD (333,624,943) (1,662,853) 11 February 2015 GBP 20,446,254 USD (30,831,417) (125,389) 11 February 2015 SGD 2,055 USD (1,520) (2) 13 February 2015 USD 5,230,535 EUR (4,610,464) 27, February 2015 USD 3,787,455 GBP (2,496,013) 39, February 2015 USD 3,234,265 JPY (380,677,900) (6,920) 12 March 2015 USD 697,140 DKK (4,364,000) 34, March 2015 USD 4,310,123 SEK (34,173,000) 177, ,501 HSBC Portfolios - World Selection 2 4 February 2015 AUD 140 USD (113) (5) 4 February 2015 EUR 238,729,664 USD (272,644,424) (3,239,450) 4 February 2015 GBP 45,574,824 USD (68,766,439) (319,637) 4 February 2015 USD 109 AUD (140) - 4 February 2015 USD 270,743,073 EUR (238,729,664) 1,338,099 4 February 2015 USD 68,725,011 GBP (45,574,824) 278,210 6 February 2015 AUD 179,000 USD (146,783) (7,412) 6 February 2015 CAD 93,000 USD (77,687) (4,343) 6 February 2015 EUR 808,000 USD (940,856) (29,047) 18

21 Notes to the Financial Statements for the period ended 31 January 2015 (continued) 6. Forward Foreign Exchange Contracts (continued) Currency Bought Currency Sold Unrealised Maturity Date Bought Amount Sold Amount Gain / (Loss) USD HSBC Portfolios - World Selection 2 (continued) 6 February 2015 GBP 509,000 USD (769,768) (5,314) 6 February 2015 JPY 58,547,000 USD (496,109) 2,326 6 February 2015 USD 5,721,105 AUD (7,065,000) 220,230 6 February 2015 USD 3,296,182 CAD (3,891,000) 227,578 6 February 2015 USD 65,036,976 EUR (54,505,000) 3,529,316 6 February 2015 USD 30,118,207 GBP (19,739,000) 472,743 6 February 2015 USD 2,458,373 JPY (295,820,000) (60,065) 11 February 2015 AUD 141 USD (110) - 11 February 2015 EUR 242,973,363 USD (275,582,332) (1,373,557) 11 February 2015 GBP 45,751,913 USD (68,990,453) (280,579) 13 February 2015 EUR 316,427 USD (358,984) (1,873) 13 February 2015 JPY 28,789,160 USD (244,595) February 2015 USD 5,858,552 EUR (5,164,181) 30, February 2015 USD 5,576,185 JPY (656,381,652) (12,410) 12 March 2015 USD 387,932 DKK (2,426,000) 19, March 2015 USD 1,616,799 SEK (12,819,000) 66, ,209 HSBC Portfolios - World Selection 3 4 February 2015 AUD 457,762 USD (371,053) (14,675) 4 February 2015 EUR 253,560,754 USD (289,582,609) (3,440,840) 4 February 2015 GBP 63,143,029 USD (95,274,559) (442,851) 4 February 2015 SGD 32,943 USD (24,682) (338) 4 February 2015 USD 356,521 AUD (457,762) February 2015 USD 287,562,998 EUR (253,560,754) 1,421,229 4 February 2015 USD 95,217,162 GBP (63,143,029) 385,454 4 February 2015 USD 24,382 SGD (32,943) 38 6 February 2015 USD 49,554,952 EUR (41,521,000) 2,699,443 6 February 2015 USD 14,304,187 GBP (9,373,000) 227, February 2015 AUD 460,799 USD (358,737) (141) 11 February 2015 EUR 255,205,271 USD (289,455,859) (1,442,705) 11 February 2015 GBP 63,604,352 USD (95,910,592) (390,061) 11 February 2015 SGD 33,136 USD (24,522) (40) 13 February 2015 EUR 80,911 USD (91,793) (479) 13 February 2015 JPY 16,195,168 USD (137,595) February 2015 USD 6,486,223 EUR (5,717,293) 33, February 2015 USD 11,421,363 JPY (1,344,311,580) (24,436) (988,986) 19

22 Notes to the Financial Statements for the period ended 31 January 2015 (continued) 6. Forward Foreign Exchange Contracts (continued) Currency Bought Currency Sold Unrealised Maturity Date Bought Amount Sold Amount Gain / (Loss) USD HSBC Portfolios - World Selection 4 4 February 2015 AUD 1,063,398 USD (860,951) (33,071) 4 February 2015 EUR 399,773,522 USD (456,566,948) (5,424,960) 4 February 2015 GBP 64,110,055 USD (96,733,285) (449,243) 4 February 2015 USD 828,212 AUD (1,063,398) February 2015 USD 453,382,752 EUR (399,773,522) 2,240,764 4 February 2015 USD 96,675,399 GBP (64,110,055) 391, February 2015 AUD 1,066,937 USD (830,622) (326) 11 February 2015 EUR 401,702,429 USD (455,614,109) (2,270,871) 11 February 2015 GBP 64,500,015 USD (97,261,185) (395,553) 13 February 2015 EUR 56,899 USD (64,551) (337) 13 February 2015 JPY 11,389,012 USD (96,762) February 2015 USD 8,153,290 EUR (7,186,732) 42, February 2015 USD 13,549,778 JPY (1,594,829,144) (28,991) (5,928,148) HSBC Portfolios - World Selection 5 4 February 2015 AUD 1,696,191 USD (1,368,872) (48,348) 4 February 2015 EUR 137,345,183 USD (156,856,989) (1,863,785) 4 February 2015 GBP 35,433,170 USD (53,464,011) (248,509) 4 February 2015 SGD 1,933 USD (1,448) (20) 4 February 2015 USD 1,321,055 AUD (1,696,191) February 2015 USD 155,763,035 EUR (137,345,183) 769,831 4 February 2015 USD 53,431,802 GBP (35,433,170) 216,300 4 February 2015 USD 1,431 SGD (1,933) 2 11 February 2015 AUD 1,705,998 USD (1,328,138) (521) 11 February 2015 EUR 138,185,519 USD (156,731,122) (781,179) 11 February 2015 GBP 35,138,719 USD (52,986,553) (215,492) 11 February 2015 SGD 1,942 USD (1,437) (2) 13 February 2015 USD 5,654,242 JPY (665,512,812) (12,098) (2,183,290) 20

23 Notes to the Financial Statements for the period ended 31 January 2015 (continued) 7. Futures Contracts As at 31 January 2015, the Company had entered in the following outstanding futures contracts. The margin accounts and the unrealized gain/(loss) on these futures contracts are recognized under the cash at bank figures in the statement of net assets. Number of Unrealised Underlying contracts Currency Commitment Maturity date Gain / (Loss) USD USD HSBC Portfolios - World Selection 1 EUX EURO STOXX 14 EUR 2,514,142 06/03/ ,896 OSE Topix Index 46 JPY 5,505,981 12/03/2015 (151,994) CBT US 10Yr Note (68) USD 17,788,376 20/03/2015 (278,315) LIFFE FTSE 100 Index 75 GBP 7,575,211 20/03/ , ,403 HSBC Portfolios - World Selection 2 EUX EURO STOXX 28 EUR 5,028,285 06/03/ ,791 OSE Topix Index 67 JPY 8,019,580 12/03/2015 (168,654) CBT US 10Yr Note (125) USD 32,699,220 20/03/2015 (492,346) LIFFE FTSE 100 Index 102 GBP 10,302,288 20/03/ , ,275 HSBC Portfolios - World Selection 3 EUX EURO STOXX 23 EUR 4,130,377 06/03/ ,543 OSE Topix Index 89 JPY 10,652,875 12/03/2015 (340,195) CBT US 10Yr Note (127) USD 33,222,408 20/03/2015 (488,810) LIFFE FTSE 100 Index 159 GBP 16,059,448 20/03/2015 1,144, ,072 HSBC Portfolios - World Selection 4 OSE Topix Index 102 JPY 12,208,913 12/03/2015 (389,886) LIFFE FTSE 100 Index 199 GBP 20,099,561 20/03/2015 1,318, ,762 HSBC Portfolios - World Selection 5 OSE Topix Index 63 JPY 7,540,799 12/03/2015 (226,510) LIFFE FTSE 100 Index 114 GBP 11,514,321 20/03/ , ,418 The broker linked to all of the above futures contracts is HSBC Bank Plc. 21

24 Notes to the Financial Statements for the period ended 31 January 2015 (continued) 8. Soft Commission Arrangements The Investment Adviser of the Portfolios may from time to time receive goods and services which are paid for out of broker commissions provided that they relate to execution and research services which meet the criteria laid down by United Kingdom s Financial Conduct Authority Rules. There were no soft commissions paid or accrued during the period. 9. Transactions with connected persons Transaction costs such as brokerage fees have no impact on the Company as these fees are paid out of Operating, Administrative and Servicing Expenses, which is set, for each Portfolio or share class, at a fixed percentage of the Net Asset Value of the relevant Portfolio or share class. No additional transaction costs have been paid out of the assets of the Company. 10. Publication of TER (Total Expense Ratio) Total Expense Ratio (%) for the active Portfolios and share classes for the period ended 31 January 2015: HSBC Portfolios World Selection 1 HSBC Portfolios World Selection 2 HSBC Portfolios World Selection 3 HSBC Portfolios World Selection 4 HSBC Portfolios World Selection 5 Class A (C) (USD) 1.30% 1.26% 1.48% 1.46% 1.53% Class A (C) (HAUD) % 1.66% 1.72% Class A (C) (HEUR) 1.33% 1.34% 1.56% 1.49% 1.61% Class A (C) (HGBP) 1.38% 1.34% 1.56% 1.49% 1.61% Class A (C) (HSGD) 1.53% % % Class A (M) (HKD) 1.35% 0.89% 1.60% 1.57% 1.63% Class A (M) (USD) 1.35% 1.40% 1.58% 1.58% 1.62% Class A (M) (HAUD) 1.44% 1.51% 1.68% 1.60% 1.71% Class A (M) (HEUR) 1.43% 1.45% 1.71% 0.66% 1.71% Class A (M) (HGBP) 0.59% 1.47% 1.67% 1.63% 1.67% Class A (M) (HSGD) 1.53% % % Class B (C) (USD) 0.84% 0.91% 0.93% 0.91% 0.97% Class B (C) (HEUR) % 1.07% 1.09% 0.95% Class B (C) (HGBP) 0.94% 0.94% 1.07% 1.05% 1.05% Class Z (C) (USD) % - Class Z (C) (HEUR) 0.43% % Publication of PTR (Portfolio Turnover Ratio) Portfolio Turnover Ratio (%) for the period ended 31 January 2015: HSBC Portfolios World Selection HSBC Portfolios World Selection HSBC Portfolios World Selection HSBC Portfolios World Selection HSBC Portfolios World Selection