HSBC GH Diversified Strategy Fund. Product Disclosure Statement

Transcription

1 HSBC GH Diversified Strategy Fnd Prodct Disclosre Statement ARSN Responsible Entity: Perpetal Trst Services Limited ABN , AFSL Investment Manager: HSBC Alternative Investments Limited ARBN Issed 17 December 2009 HSBC01288.indd 1

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3 Important Notice and Disclaimer This Prodct Disclosre Statement (PDS) is dated 17 December This PDS contains the terms of offers for nits (Units) in the HSBC GH Diversified Strategy Fnd (Fnd). Perpetal Trst Services Limited (Responsible Entity) is the responsible entity of the Fnd and is the isser of this PDS and the Units in the Fnd. This PDS contains important information abot investing in the Fnd and may be sed by Direct Investors to apply for Units in the Fnd and for Indirect Investors to provide them with information in respect of the Fnd. This PDS does not constitte an offer or invitation in any place where, or to any person to whom, it wold be nlawfl to make sch an offer or invitation. The offer to which this PDS relates is available to persons receiving the PDS (inclding electronically) in Astralia. Terms sed in this PDS are defined in the Glossary in section 11. Unless otherwise specified, all dollar amonts in this PDS are Astralian dollars. The Fnd is sbject to investment risk, inclding possible delays in repayment and loss of income and principal invested. Yor investment does not represent deposits or other liabilities of the Responsible Entity, HSBC Alternative Investments Limited (Investment Manager), any other entity of the HSBC Grop (inclding HSBC Bank Astralia Limited (HSBC Astralia)) or any other person. None of the Fnd, the Responsible Entity, the Investment Manager, any other entity of the HSBC Grop (inclding HSBC Astralia) or any other person garantees the performance of the Fnd, that the Fnd will meet its objective, that capital will be repaid or that there will be any particlar retrn from, or any increase in the vale of, the Fnd. The Fnd invests in the AF Class of HSBC GH Fnd (the Underlying Fnd), one of a nmber of separate sbfnds constitted nder the HSBC Portfolio Selection Fnd (the Umbrella Fnd). None of the Underlying Fnd, the management company of the Underlying Fnd or any investment adviser of the Underlying Fnd has in any way been involved in the preparation of this PDS, makes any statement in this PDS (express or implied) or is in any way associated with this invitation to apply for Units. PLEASE READ THIS PDS IN FULL BEFORE DECIDING WHETHER TO INVEST. The information in this PDS is crrent as at the date on which it was issed, except where otherwise stated. The Responsible Entity reserves the right to change the terms and conditions in this PDS from time to time. Changes to information relating to the Fnd that are not materially adverse may be pdated and made available to investors at A paper copy of any pdated information is also available free of charge on reqest from HSBC Investor Inqiries (see section 12). The information in this PDS is general information only and has been prepared withot taking into accont yor individal objectives, financial sitation or needs. Yo shold consider whether the information in this PDS or an investment in the Units is appropriate for yo in light of yor objectives, financial sitation and needs. Yo shold seek professional legal, taxation and financial advice to determine whether an investment in the Fnd is appropriate for yor needs. 1 HSBC01288.indd 1

4 TABLE OF CONTENTS 1. THE RELEVANT PARTIES...3 Abot the Responsible Entity...3 Abot the HSBC Grop...3 Abot the Investment Manager...3 Abot the Distribtor...3 Abot the Cstodian and Administrator KEY FEATURES THE FUND THE UNDERLYING FUND BENEFITS OF INVESTING IN THE FUND RISKS TO CONSIDER FEES AND OTHER COSTS TAX CONSIDERATIONS TRANSACTING YOUR INVESTMENT APPLICATIONS, WITHDRAWALS AND DISTRIBUTIONS ADDITIONAL INFORMATION GLOSSARY CORPORATE DIRECTORY HSBC01288.indd 2

5 1. The Relevant Parties Abot the Responsible Entity Perpetal Trst Services Limited (ABN , AFSL nmber ), the Responsible Entity, is part of the Perpetal Limited grop of companies which has been in operation for over 120 years. The Responsible Entity is responsible for the operation of the Fnd and has the power to delegate certain of its dties. The Responsible Entity has appointed the Investment Manager to provide investment management services to the Fnd and RBC Dexia Investor Services Trst as the cstodian of the Fnd s assets (Cstodian) and administrator of the Fnd (Administrator). Abot the HSBC Grop The Investment Manager and the Distribtor are part of the HSBC Grop. Headqartered in London, the HSBC Grop is one of the largest banking and financial services organisations in the world, with arond 8,500 offices, in 86 contries and territories in Erope, the Asia-Pacific region, the Americas, the Middle East and Africa. The HSBC Grop serves over 100 million cstomers and has assets of over USD 2,422 billion at 30 Jne management, of which USD 2.9 billion was invested via the fnd of hedge fnds managed by the Investment Manager. The Investment Manager does not hold an AFSL and is exempt from the reqirement to hold an AFSL for the investment management services which it provides to the Responsible Entity in respect of the Fnd. This exemption is granted on terms determined by ASIC and on the basis that the Investment Manager is reglated by the FSA nder United Kingdom laws, which differ from Astralian laws. Abot the Distribtor HSBC Bank Astralia Limited (ABN , AFSL nmber ) (HSBC Astralia) has the exclsive role as the distribtor to ndertake the sales and marketing activities of the Fnd throgh its Global Investments division. HSBC Astralia is a sbsidiary of the HSBC Grop and offers an extensive range of financial services in Astralia. Abot the Cstodian and Administrator RBC Dexia Investor Services Trst (ABN , AFSL nmber ) is a company established by joint ventre and is eqally owned by Royal Bank of Canada and Dexia. It is incorporated nder the laws of Canada and has an AFSL. With listings on the London, Hong Kong, New York, Paris and Bermda stock exchanges, shares in HSBC Holdings plc are held by arond 220,000 shareholders in some 119 contries and territories. Throgh an international network linked by advanced technology, inclding a rapidly growing e-commerce capability, HSBC Grop provides a comprehensive range of financial services throgh for cstomer grops and global bsinesses: Personal Financial Services (inclding consmer finance); Commercial Banking; Global Banking and Markets; and Private Banking. Abot the Investment Manager HSBC Alternative Investments Limited (ARBN ), the Investment Manager of the Fnd, is a company incorporated with limited liability in the United Kingdom nder company nmber and is athorised and reglated by the Financial Services Athority (FSA) in the condct of designated investment bsiness. The company was incorporated in 1993 and is the alternative investment bsiness of the HSBC Grop. The Investment Manager is a registered foreign company in Astralia and has its principal place of bsiness in London. The offer of Units in this PDS is not reglated by the FSA. The Investment Manager is the HSBC Grop s designated investment adviser for fnd of hedge fnds. The Investment Manager is part of the HSBC Alternative Investment Grop, which is made p of several regional teams and which provides alternative investments discretionary services to high net worth and instittional clients of the HSBC Grop. As of 30 September 2009, the HSBC Alternative Investment Grop had USD 27.2 billion of total hedge fnd assets nder 3 HSBC01288.indd 3

6 2. Key Featres This table indicates the kind of information yo can find in this PDS. It is not intended to be a complete smmary. Yo shold read the entire PDS before deciding whether to invest in the Fnd. Topic Highlights For more information Fnd HSBC GH Diversified Strategy Fnd ARSN Section 3 Responsible Entity Perpetal Trst Services Limited Section 1 Investment Manager HSBC Alternative Investments Limited Section 1 Cstodian and Administrator RBC Dexia Investor Services Trst Section 1 Direct Investors who are wholesale clients as defined in section 761G of the Corporations Act (eg trstees of sperannation fnds, incorporated bodies and Operators); and Who can invest? Indirect Investors via an Operator (ie retail investors investing throgh an IDPS). Indirect Investors do not become Unitholders in the Fnd. The Responsible Entity athorises the se of this PDS as disclosre to Indirect Investors investing throgh an IDPS. Section 9 Sggested minimm investment period 5 years or more Section 3 What is the Fnd s investment objective? The Fnd aims to provide a total retrn from selective investment in a nmber of hedge fnds, which tilise and trade a range of different strategies and markets worldwide. It aims to do this by directly investing a sbstantial proportion of its assets in nits of the AF Class of the Underlying Fnd ( Underlying Units ). Section 3 Volatility Medim Sections 3 & 4 Crrency Strategy What is the Underlying Fnd? Benchmark What is the Underlying Fnd s investment objective? Inception date of the Underlying Fnd What are the benefits of investing in the Fnd? Crrency exposre is normally hedged back to AUD by the Underlying Fnd. The Underlying Fnd is the HSBC GH Fnd, a separate sbfnd constitted nder the Umbrella Fnd, the HSBC Portfolio Selection Fnd. The Fnd invests in the AF Class of the Underlying Fnd. The benchmark of the AF Class is twice AUD 3 month LIBOR ( Index ). The Underlying Fnd seeks to provide a level of retrn commensrate with the risks associated with investment in a diversified portfolio of high risk, bt potentially high reward hedge fnds as measred in Index terms. The Underlying Fnd invests in hedge fnds tilising a range of different alternative strategies, inclding, withot limitation, long/short eqity on a regional, global or sectoral basis, global macro, arbitrage and event driven strategies. 13 Jne 1996 Investing in the Fnd provides exposre to a diversified portfolio of high risk, bt potentially high reward hedge fnds as measred in Index terms via investment in the Underlying Fnd. Section 6 Section 4 Section 4 Section 4 Section 5 4 HSBC01288.indd 4

7 Topic What are the key risks of the Fnd? Highlights Investing in the Fnd involves risks, inclding the risk that yo may lose all of the money yo invest. There is no garantee of the performance of the Fnd, that the Fnd will meet its objective, that capital will be repaid or that there will be any particlar retrn from, or increase in, the vale of the Fnd. Additionally, an investment in the Fnd is sbject to specific risks sch as market risk, credit risk and liqidity risk. Yo shold read section 6 careflly before investing in the Fnd. For more information Section 6 What are the fees and other costs? How to invest in the Fnd Management costs: 1.50% per annm of the net asset vale (NAV) of the Fnd accred daily and paid monthly in arrears and a performance fee payable to the Management Company in respect of the Underlying Units. Crrently, the Fnd does not charge a by/sell spread, contribtion fee or withdrawal fee. Applications are processed monthly, as at the last Bsiness Day of a calendar month (each, an Application Pricing Date ). If yor completed application form (inclding identification docments) and cleared application monies are received and accepted by the Administrator by 3pm (Melborne time) on the seventh Astralian Bsiness Day prior to the next Application Pricing Date (the Application Ct-Off ), yor application will (nless the Responsible Entity determines otherwise) be processed as at that Application Pricing Date. It is expected that applications received after the Application Ct-Off and before the start of the next calendar month will not be accepted, and any application forms or cleared application monies received dring this time are expected to be retrned. The Responsible Entity may accept or reject an application in its absolte discretion. Indirect Investors shold contact their Operator to make an application for Units. Section 7 Section 9 Minimm initial investment $500,000* Section 9 Minimm additional investment Whole mltiples of $50,000* Section 9 Minimm Unit holding $500,000* Section 9 How to withdraw from the Fnd Withdrawals are processed monthly, as at the last Bsiness Day of a calendar month (each, a Withdrawal Pricing Date ). If yor withdrawal reqest is received and accepted by the Administrator by 3pm (Melborne time) on the Astralian Bsiness Day that falls one calendar month and seven Astralian Bsiness Days prior to the relevant Withdrawal Pricing Date (the Withdrawal Ct-Off ), yor withdrawal reqest will be processed as at that Withdrawal Pricing Date. If yor withdrawal reqest is received and accepted after the Withdrawal Ct-Off, yor reqest will (nless the Responsible Entity determines otherwise) be processed as at the following Withdrawal Pricing Date. Withdrawal proceeds are generally paid within 6 Bsiness Days of the 15th calendar day of the relevant month following the Withdrawal Pricing Date in respect of which the withdrawal reqest was accepted. Withdrawals from the Fnd may be sspended in certain circmstances, please see section 9 for more information. Indirect Investors shold contact their Operator to make a withdrawal reqest. Section 9 5 HSBC01288.indd 5

8 Topic Unit pricing Distribtions Taxation Cooling off Highlights Applications and withdrawals will be processed at the Unit price calclated as at the last Bsiness Day of the calendar month in respect of which the application or withdrawal reqest is processed. Unitholders will direct the Responsible Entity to reinvest distribtions (if any) in the Fnd annally as at 30 Jne, nless the Responsible Entity determines to pay the distribtions to a Unitholder s nominated bank accont. For information abot the significant tax implications relating to investing in the Fnd, see section 8. Tax may be dedcted from any payment made to yo if yo do not provide a Tax File Nmber (TFN), Astralian Bsiness Nmber (ABN) or relevant exemption or if yo are a non-resident. Applicants nder this PDS do not have cooling off rights. For Indirect Investors, yor Operator can provide yo with details of any cooling off rights yo may have in relation to yor IDPS, master trst or wrap platform. For more information Section 9 Section 8 Section 10 * The Responsible Entity may accept lesser amonts or change these amonts from time to time. Indirect Investors shold contact their Operator for any applicable minimm amonts. 6 HSBC01288.indd 6

9 3. The Fnd When yo invest in the Fnd, yo are investing in an Astralian-domiciled nit trst which is a managed investment scheme registered with ASIC nder the Corporations Act. The Fnd aims to provide Astralian investors with a total retrn from selective investment in a nmber of hedge fnds, which tilise and trade a range of different strategies and markets worldwide. The Fnd aims to provide a level of retrn commensrate with the risks associated with investment in a diversified portfolio of high risk, bt potentially high reward hedge fnds as measred in Index terms. The Fnd aims to do this by investing a sbstantial proportion of its assets in nits of the Underlying Fnd, which in trn invests in hedge fnds. The Fnd may also invest part of its assets in cash in an interest-bearing Astralian-dollar bank accont held by the Cstodian. The Fnd s asset allocation range is: Asset Class Units in the AF Class of the Underlying Fnd. (An investment in the Underlying Fnd gives Investors in the Fnd an exposre to a nmber of hedge fnds, which tilise and trade a range of different strategies and markets worldwide.) Minimm Holding Maximm Holding 90% 100% Cash 0% 10% The Fnd s asset allocation can change within these ranges significantly and sometimes qickly. Frther, the Fnd may temporarily move otside these ranges de to short-term factors sch as significant cash flows into the Fnd. If this occrs, the Investment Manager will bring the Fnd back within these ranges as soon as practical. Althogh the Constittion permits the Responsible Entity to borrow or raise money, the Responsible Entity does not crrently intend to enter into any long-term borrowings in relation to the Fnd. Short-term borrowings may occr infreqently in the ongoing management of the Fnd. De to the natre of exposre to the Underlying Fnd, an investment in the Fnd shold be viewed as a longterm investment. An exposre to the Underlying Fnd is most likely to be sitable for investors with a long-term investment horizon (ie 5 years or more). The Fnd gains its exposre to a nmber of hedge fnds, which tilise and trade a range of different strategies and markets worldwide, by investing in the Underlying Fnd, as set ot below. For information on the Underlying Fnd, see section 4. Simlated past performance of the Fnd The table below shows the simlated past performance of the Fnd. It is not the actal past performance of either the Fnd or the AF Class of the Underlying Fnd, bt is based on the actal performance of the US Dollar Class of nits of the Underlying Fnd (the US Dollar Class), which has been in existence since 13 Jne As at the date of this PDS, no past performance figres are available for the AF Class of the Underlying Fnd or the Fnd itself as neither the AF Class nor the Fnd are, as at the date of this PDS, in operation. The assets of the Fnd are intended to be invested exclsively (other than cash) in the Underlying Fnd, and the performance of the Fnd is therefore expected to be almost entirely dependant on the performance of the Underlying Fnd. However, the performance of the Underlying Fnd and the Fnd will not be identical, as, for example: while it is expected that sbstantially all of the Fnd s assets will be invested in the Underlying Fnd at all times, it will also hold some cash from time to time; the Fnd will have different fees and expenses than the Underlying Fnd; and there will be differences de to the effects of crrency hedging. The simlated performance is based on the performance of the US Dollar Class of the Underlying Fnd and has been prepared sing a strict methodology to adjst the performance of the US Dollar Class of the Underlying Fnd to reflect the different fees and hedging costs (and benefits) that wold have applied to an investment in the Fnd in The methodology sed to calclate the simlated past performance can be smmarised as follows: Cash HSBC GH Diversified Strategy Fnd Underlying Fnd (Gernsey-domiciled) Portfolio of hedge fnds the gross monthly retrns of the US Dollar Class (in USD) were determined. This was done by taking the performance of the US Dollar Class and stripping ot the fees charged in respect of that class each month; the gross monthly retrns of the US Dollar Class were then converted to gross AUD hedged monthly retrns. This was done by adding the interest differential between 1 month AUD LIBOR rate 7 HSBC01288.indd 7

10 and 1 month USD LIBOR rate. This reflects the 1 month foreign exchange forwards sed for crrency hedging by the Underlying Fnd; the gross AUD hedged monthly retrns were then compared to the Index of the AF Class (ie 2 times the 3 month AUD LIBOR) to determine the performance fee that wold have accred each month; frther adjstments were then made to reflect the performance fee that wold have been paid; i.e. 10% of the performance over the Index was dedcted from the gross AUD hedged retrns; and finally, an amont eqivalent to 1.5% of the simlated NAV of the AF Class (after dedcting any performance fees that were payable) was dedcted to reflect the management fee that wold have applied in respect of the Fnd. Copies of the crrency exchange and LIBOR rates sed in calclating the simlated retrns set ot above are available from the Investment Manager pon reqest. The following assmptions were made in calclating the simlated performance: all of the assets of the Fnd were invested in the Underlying Fnd at all times (as stated above, while it is expected that sbstantially all of the Fnd s assets will be invested in the Underlying Fnd, it will also hold some cash from time to time); the crrency exposre between the AUD and USD were perfectly hedged at all times; and neither the Fnd nor the Underlying Fnd were liable to pay any amont of tax. The performance set ot in the table below is a simlated performance of the Fnd, not the actal past performance of the Fnd. Year Growth% % % % % 2009* 11.03% * Calendar year ntil 31 October 2009 Past performance is not indicative of ftre performance. There is no garantee that the AF Class, the Underlying Fnd or the Fnd will have any particlar rate of retrn in the ftre. Information abot the actal performance of the Fnd is available from the website at globalinvestments. None of the Responsible Entity, Investment Manager or any member of the HSBC Grop makes any representation as to the ftre performance of the Fnd or the Underlying Fnd or garantees that either the Fnd or the Underlying Fnd will achieve any particlar rate of retrn. 4. The Underlying Fnd 4.1 Abot the Underlying Fnd The Underlying Fnd is the HSBC GH Fnd, one of a nmber of separate sb-fnds constitted nder the Umbrella Fnd, HSBC Portfolio Selection Fnd. The Umbrella Fnd is an mbrella Gernsey nit trst originally constitted by a trst deed dated 15 May 1995 which was replaced by a trst deed dated 31 May 1996 as sbseqently amended, and is athorised by the Gernsey Financial Services Commission as a Class B Collective Investment Scheme nder the Gernsey Law and the Class B Rles. Each sb-fnd of the Umbrella Fnd is also a Class B Collective Scheme and, nder the Umbrella Fnd trst deed, the assets and liabilities of each sb-fnd are segregated from those of the other sb-fnds. This means that the assets of the Underlying Fnd are exclsively available to satisfy the rights of nitholders of all share classes of that sb-fnd (inclding, in the case of the Underlying Fnd, the AF Class, US Dollar Class and all other classes of nits), and the rights of creditors whose claims have arisen in connection with the creation, operation or liqidation of that sb-fnd. The base crrency of the Underlying Fnd is USD. The Underlying Fnd is available in several classes of nits, and the Fnd invests in the AF Class, which is denominated in AUD. The benchmark of the AF Class is twice AUD 3 month LIBOR and is referred to as the Index in this PDS. 4.2 Who manages the Underlying Fnd? The manager of the Underlying Fnd is HSBC Management (Gernsey) Limited (Management Company). For the prposes of the Gernsey Law and the Class B Rles, the Management Company is the designated manager of the Umbrella Fnd and the Underlying Fnd. The Management Company has delegated the investment advisory services for the Underlying Fnd to HSBC Alternative Investments Limited. The Responsible Entity has also appointed HSBC Alternative Investments Limited as the investment manager of the Fnd. The trstee of the Underlying Fnd is HSBC Private Bank (C.I.) Limited. For the prposes of the Gernsey Law and the Class B Rles, HSBC Private Bank (C.I.) Limited is the designated trstee of the Umbrella Fnd and the Underlying Fnd. 4.3 What does the Underlying Fnd invest in? The Underlying Fnd invests in a nmber of hedge fnds, which tilise and trade a range of different strategies and markets worldwide. 4.4 What is the investment objective and approach of the Underlying Fnd? The Underlying Fnd seeks to provide a total retrn from selective investments in a nmber of hedge fnds which 8 HSBC01288.indd 8

11 tilise and trade a range of different strategies and markets worldwide. The Underlying Fnd s investment policy is to provide a level of retrn commensrate with the risks associated with investment in a diversified portfolio of high risk, bt potentially high reward hedge fnds as measred in Index terms. The Underlying Fnd invests in hedge fnds tilising a range of different alternative strategies, inclding, withot limitation, long/short eqity on a regional, global or sectoral basis, global macro, arbitrage and event driven strategies. Long/short eqity strategies involve bying certain stocks long (on the expectation that the price will rise) and selling others short (on the expectation that the price will decrease). Global macro strategies aim to generate significant retrns from movements in eqity, crrency, interest rates and commodity markets globally. This strategy is based on the managers se of macro-economic principles to identify dislocations in asset prices, and any profits are derived from correctly anticipating price trends and captring spread moves. Arbitrage strategies focs on exploiting the movements in the stock price of companies ndergoing mergers. Arbitrage managers by shares of the target and short sell shares of the acqirer, constrcting a trade that seeks to benefit from the closre of the spread between the two share prices at the completion of the deal, whilst remaining netral to broader market movements. Event driven strategies seek to exploit relative global mispricings between stocks which are involved in mergers, divestitres, restrctrings or other corporate events. As of 30 October 2009, assets of the Underlying Fnd totalled USD1.744 billion. 4.5 Borrowing capability of the Underlying Fnd The Underlying Fnd may borrow p to 10% of its NAV to facilitate additional investment in target hedge fnds. The Underlying Fnd may, in addition, borrow p to 15% of its NAV for a period of p to one month to cover a cash shortfall cased by mismatched settlement dates on prchase and sale transactions and, for a period of p to three months, to fnd redemptions. 4.6 Sspension of redemption from the Underlying Fnd The Management Company may limit the nmber of nits in the Underlying Fnd which may be redeemed on any dealing day of the Underlying Fnd to not more than 10% of the total nmber of nits on isse immediately before sch date. Sch 10% limit shall be calclated in respect of the Underlying Fnd as a whole and not in respect of each individal nit class. Any nits failing to be redeemed on the exercise of this discretion by the Management Company will be carried forward to the next dealing day of the Underlying Fnd and will be redeemed pro-rata in priority to any other nits in respect of which a redemption notice has sbseqently been received. A dealing day in the Underlying Fnd sally occrs as at the last bsiness day of each month. The Management Company may sspend the determination of the NAV of the Underlying Fnd and related valations for the whole or any part of any period:- in which trading is sspended or restricted on any market on which a sbstantial part of the Underlying Fnd s investments are normally traded; or dring the existence of any state of affairs which constittes an emergency as a reslt of which valation of assets of the Underlying Fnd wold, in the opinion of the Management Company, be impractical; or in which the reprchase of nits from nitholders of the Underlying Fnd wold, in the opinion of the Management Company, reslt in a violation of applicable law; or where there are circmstances which, in the opinion of the Management Company, make it impracticable to realise any sbstantial portion of the Underlying Fnd s investments or to effect sch realisation withot nde delay or, where applicable, at normal rates of exchange or otherwise to receive the cash proceeds of sch realisation; or there is a sspension of dealings in the nits of the Underlying Fnd or the calclation of the NAV of any other hedge fnd in which the Underlying Fnd is invested. If it is expected that sch a sspension will last more than five bsiness days, all nitholders of the Underlying Fnd will be notified of any sch sspension and the termination of any sch sspension by means of a written notice which, where possible, will appear in La Gazette Officielle in Gernsey and other pblications in which the price of sch nits is normally pblished. No isse or redemption of nits will take place dring any period when the calclation of the NAV of the Underlying Fnd is sspended. The Management Company may at any time determine that the acceptance of sbscriptions be sspended and no issance of nits in the Underlying Fnd made. Any limitation or sspension of the redemption of nits in the Underlying Fnd cold reslt in a sspension of withdrawals from the Fnd. See section Benefits of Investing in the Fnd The Fnd is an Astralian-domiciled nit trst which invests into the Underlying Fnd. The Fnd enables Astralian investors to gain exposre to hedge fnds tilising a range of different alternative strategies, inclding, withot limitation, long/short eqity on a regional, global or sectoral basis, global macro, arbitrage and event driven strategies. The Investment Manager, based in London, is 100% owned by HSBC Holdings, plc and operates within the HSBC Private Bank (the international private banking bsinesses of the HSBC Grop) network. The Investment Manager 9 HSBC01288.indd 9

12 is the HSBC Grop s designated investment advisor for fnds of hedge fnds and is part of the HSBC Alternative Investment Grop which is made p of several regional teams and which provides alternative investment services to high net worth and instittional clients of the HSBC Grop. The HSBC Alternative Investment Grop also has teams based in Geneva, New York, Hong Kong, Singapore, Sydney and Japan, spported by a global hedge fnd research de diligence platform. The HSBC Grop is one of the world s biggest hedge fnd investors and, as of 30 September 2009, the HSBC Alternative Investment Grop had USD 27.2 billion of total hedge fnd assets nder management, of which USD 2.9 billion was invested via the fnd of hedge fnds managed by Investment Manager. In addition to advising a nmber of fnds of hedge fnds, the Investment Manager also advises on a series of segregated hedge fnd mandates for instittional clients as well as real estate and private eqity investments. The Investment Manager s strengths can be seen to stem from for main areas: people, philosophy, investment process and performance: People the Investment Manager s hedge fnd research team is comprised of experienced investment professionals and is responsible for monitoring and rating crrent and potential hedge fnd investments. Philosophy the Investment Manager s investment philosophy for hedge fnds is to deliver the best soltions for its clients by focsing on their retrn expectations with the appropriate level of risk to achieve sch desired retrns. Process the Investment Manager s hedge fnd de diligence process has been developed over the last thirteen years and offers investors comprehensive qalitative and qantitative research with disciplined investment management practices. Performance the Investment Manager s performance strength flows from the people, philosophy and process areas otlined above. The combination of these strengths has enabled the Investment Manager to systematically avoid hedge fnd collapses and deliver compelling absolte retrns across the fnd of hedge fnds bsiness since inception. 6. Risks to Consider Yo shold careflly consider the risk factors otlined in this section, as well as the other information contained in this PDS, before deciding if the Fnd is a sitable investment for yo. Yo shold consider factors sch as (bt not limited to) yor financial targets, investment time frame and what degree of risk yo are prepared to accept in order to achieve yor investment objectives. We recommend that yo seek independent legal, tax and financial advice before investing. Investing in the Fnd involves risks, inclding the risk that yo may lose all of the money yo invest. There is no garantee of the performance of the Fnd, that the Fnd will meet its objective, that capital will be repaid or that there will be any particlar retrn from, or increase in the vale of, the Fnd. Some of the risks of investing in the Fnd are otlined below, however this is not an exhastive list. Market Risk (1) General Investment in any market may be extremely volatile and sbject to sdden flctations of varying magnitde de to a wide range of direct, and indirect, inflences. Sch inflences inclde, bt are not limited to, local and foreign government intervention and interference in domestic trade, fiscal, and monetary policies, the imposition of exchange control restrictions, international political events, changes in interest rates, and traders inherent confidence in crrent indicators and the otlook for the ftre. All these variables inject into sch markets a degree of volatility and sentiment which at times, can make it almost impossible to predict or anticipate flctations in vales and rates. Sch characteristics can lead to considerable losses being incrred by those exposed to sch markets. (2) Eqity Investments Market risks associated with holding an eqity investment can be split into three categories: specific risk, indstry risk and systemic or index risk. Specific risk arises from factors which affect only the issing company of the secrity, and not the rest of the market. Examples of sch factors are management changes in the issing company and loss of market share becase of new competitors or law sits. Indstry risk arises where an indstry grop, containing several similar issing companies (e.g. a grop of food retailers), responds differently from other grops to, for example, changes in economic conditions or government reglations. Systemic or index risk arises where external inflences affect the market as a whole rather than individal companies or grops of similar companies. Sch inflences inclde fiscal and monetary policies, political events and changes in interest rates. In the worst case, the vale of an eqity can fall to zero. Therefore, these risks can each lead to considerable losses being incrred by those exposed to sch instrments. (3) Fixed Income and Debt Instrments The vale of investments in fixed income and debt secrities may be sbject to considerable losses as a reslt of flctations in prevailing market interest rates. Specifically, where interest rates rise, this typically has an adverse effect on the price or vale of a fixed income instrment. Therefore, considerable losses may be incrred by those exposed to sch instrments. (4) Fnd of Hedge Fnds The Underlying Fnd, which is a fnd of hedge fnds, may be sbject to valation risk de to the manner in 10 HSBC01288.indd 10

13 which its target investments are themselves valed. Some of these target investments may be valed by fnd administrators affiliated to fnd managers, or by the fnd managers themselves, reslting in valations which are not verified by an independent third party on a reglar or timely basis. Accordingly there is a risk that the valations of the Underlying Fnd may not reflect the tre vale of sch target investment holdings at a specific valation point, which cold reslt in significant losses for the Underlying Fnd. (5) Crrency Exposre The Underlying Fnd will invest in target investments denominated in different crrencies. The vale of investments, as measred in the base crrency of the investment, can be sbject to both gains and/or losses arising from flctations in exchange rates. These flctations can lead to considerable losses being incrred by those exposed to crrency markets. (6) Derivative Instrments The vale of investments in derivative instrments is sbject to considerable flctations. Given the natre of these instrments, in the worst case, their vale can fall to zero. Therefore, there is a risk that considerable losses may be incrred by those exposed to sch instrments. Credit Risk (1) Fixed Income Associated with holding any fixed income secrity is the risk that the isser cannot complete the payment obligations of the secrity. Any defalt on a fixed income secrity held directly or indirectly (as a holding in a collective investment scheme) wold reslt in a loss for the Fnd. (2) Conterparty Risk Trading in fixed income secrities, instrments involving crrencies and related derivative instrments, eqities and eqity related derivative instrments are not always sbject to some kind of governmental reglation or control. Conterparty risk occrs when a party to a contract fails to honor and defalts on its obligations therender. Fnds which are party to these risks can incr considerable losses. (3) Cstody and settlement risk The assets of each separate sb-fnd constitted nder the Umbrella Fnd may be safegarded by a cstodian or sb-cstodian on the sb-fnd trstee s behalf. There is a risk that the cstodian or sb-cstodian may not properly segregate the assets of a sb-fnd or prove to be ncreditworthy or be responsible for errors or omissions which may reslt in considerable losses for the sb-fnd. Settlement risk occrs when a transaction is not completed as dly agreed between the parties. This may be de to an error or omission in the necessary settlement, clearing or registration processes or de to the lack of creditworthiness of one of the parties to the transaction. Liqidity Risk (1) General Investment limits generally provide that a certain degree of liqidity is maintained for investment prposes. However, there may be sitations within the Underlying Fnd where redemption proceeds cannot be paid in the normal manner within the anticipated time scale de to restraints incrred in realising sfficient cash. Conseqently a restraint may prevail in respect of the ability to pay ot redemption proceeds on any nitholding. (2) Conterparty risk Fixed income secrities and fixed income derivatives, instrments involving crrencies and related derivative instrments and eqities and eqity related derivative instrments are not always sbject to some kind of governmental reglation or control. Trading conterparties may from time to time refrain from making a market in a particlar contract or instrment, with the reslt that those persons already holding sch a contract or instrment are nable to liqidate their exposre. Sch characteristics can lead to considerable losses being incrred by those exposed to sch instrments. (3) Fnd of Hedge Fnds If the Underlying Fnd, being a fnd of hedge fnds, was forced to liqidate all of its assets at short-notice, it is likely that certain assets wold not be capable of liqidation immediately and the Management Company, at its discretion, wold distribte those assets to nitholders pro-rata and seek to treat all nitholders eqitably. Fnds in which the Underlying Fnd invests may hold back a percentage of redemption proceeds ntil adited acconts for the relevant financial year have been completed. This may reslt in a delay in the Underlying Fnd s nitholders receiving the entirety of their redemption proceeds. In addition, the Underlying Fnd may be sbject to risks associated with its target investments tilising side pockets to hold any illiqid investments, or otherwise becoming illiqid, difficlt to vale or sbject to some temporary redemption restriction. This may restrict the ability of the Underlying Fnd to flly redeem ot of the target investment and the Underlying Fnd may be exposed to the performance of sch fnd s investment for an indefinite period of time. Concentration Risk (1) General Significant losses may be incrred if a large position in a particlar investment, or grop of similar investments is maintained, that declines in vale, that cannot be liqidated withot adverse market reaction, or is otherwise adversely affected by changes in market conditions or circmstances. 11 HSBC01288.indd 11

14 (2) Fnd of Hedge Fnds The Underlying Fnd is permitted to invest p to 20% of its NAV in any one investment. Whilst this may seem high, it mst be borne in mind that the Underlying Fnd is investing in a nmber of instrments in the target markets. Normally a nmber of investments will be maintained so that the concentration in any one particlar market is redced and, where two investments concentrate on the same market, they will have different styles of trading so that exposre to sch a market is balanced. Nevertheless, as explained above nder the heading Market Risk, sitations can prevail which occasionally have a negative inflence on all global markets and the resltant impact on market vales and rates will be reflected in the vale of a nit in the Underlying Fnd. It is also possible that portfolios of investments may from time to time have eqal and opposite positions in the same markets. Leverage Risk Where a hedge fnd permits leverage, the nderlying volatility of the hedge fnd will be significantly greater than wold otherwise have been the case withot the permitted leverage. Whilst this gives a fnd the ability to participate in higher retrns associated with greater exposre, it also gives a fnd exposre to increased losses where markets in general, and a fnd in particlar, invest in assets where prices sffer declines. Legislative Risk The investment strategies of the Underlying Fnd s nderlying investments may be affected by the actions of governments and reglatory bodies. Legislation cold be imposed retrospectively or may be issed in the form of internal reglations which the pblic may not be aware of. Legislation (inclding legislation relating to tax) or reglation may be introdced which inhibits any of the nderlying investments from prsing their strategies or which renders an existing strategy less profitable than anticipated. Sch actions may take any form, for example nationalisation of any instittion or restrictions on investment strategies in any given market sector (for example restrictions on short selling in the financial sector) or changing reqirements (for example increased disclosre to market) and imposed withot prior warning by any reglator. Investment Advisers and Investment Restrictions The Management Company will appoint an investment adviser(s) to each separate sb-fnd constitted nder the Umbrella Fnd and will contract with the investment adviser(s) sch that within each separate sb-fnd there will be implemented in each case potentially different investment restrictions and gidelines to those contained in the Umbrella Fnd prospects. In all cases, the investment restrictions docmented in the Umbrella Fnd prospects shall remain as the lowest common denominator in relation to limitations and restrictions and it is envisaged that the investment adviser(s) will generally be constrained to a greater degree than is otlined in these limitations. Details of each investment adviser(s) specific contractal obligations in relation to investment limitations and restrictions will be provided by the Management Company pon written reqest by nitholders in the relevant separate sb-fnd. The Management Company will review and monitor the performance of each investment adviser and will make sch changes to the composition of investment advice given to the separate sb-fnds as the Management Company in its sole discretion may determine. Any changes in the investment adviser to a sb-fnd will be notified to nitholders in the relevant sb-fnd bt they will not be entitled to vote in respect thereof. Fnd risk There is a risk that the Fnd cold terminate, the Investment Manager cold be replaced or the investment professionals of the Investment Manager cold change. Investing in the Fnd will also give different reslts compared with investing directly in the Underlying Fnd becase of income or capital gains accred in the Fnd, the impact of fees and expenses, and the conseqences of investment and withdrawal by other investors. 7. Fees and Other Costs DID YOU KNOW? Small differences in both investment performance and fees and costs can have a sbstantial impact on yor long term retrns. For example, total annal fees and costs of 2% of yor fnd balance rather than 1% cold redce yor final retrn by p to 20% over a 30 year period (for example, redce it from $100, 000 to $80, 000). Yo shold consider whether featres sch as sperior investment performance or the provision of better member services jstify higher fees and costs. Yo may be able to negotiate to pay lower contribtion fees and management costs where applicable. Ask the fnd or yor financial adviser. TO FIND OUT MORE If yo wold like to find ot more, or see the impact of the fees based on yor own circmstances, the Astralian Secrities and Investments Commission (ASIC) website ( has a managed investment fee calclator to help yo check ot different fee options. 12 HSBC01288.indd 12

15 Fees and other costs This section shows fees and other costs that yo may be charged. These fees and costs may be dedcted from yor money, from the retrns on yor investment or from the Fnd assets as a whole. Yo shold read all the information abot fees and costs becase it is important to nderstand their impact on yor investment. Taxes are set ot in another part of this docment. Please refer to section 8. Type of Fee or Cost Amont How and when paid Fees when yor money moves in or ot of the Fnd Establishment fee The fee to open yor investment. Contribtion fee The fee on each amont contribted to yor investment. Withdrawal fee The fee on each amont yo take ot of yor investment. Termination fee The fee to close yor investment. Management Costs 1 The fees and costs for managing yor investment. Service Fees Investment Switching fee The fee for changing investment options. Nil Nil Nil Nil Management fee 1.50% per annm of the NAV of the Fnd. For example, if yo had a $500,000 investment in the Fnd, yo wold be charged a management fee of $7,500. Performance fee 10.00% per annm of the amont by which the AF Class of the Underlying Fnd otperformed the Index. 2 Nil Not applicable Not applicable Not applicable Not applicable Management costs inclde fees paid to the Responsible Entity and ordinary expenses of the Fnd (inclding bt not limited to the fees paid to the Cstodian, Administrator, Investment Manager and Distribtor), as well as performance fees paid to the Management Company and ordinary expenses of the Underlying Fnd. Management costs are accred daily and paid monthly in arrears from the assets of the Fnd (or Underlying Fnd). Management costs redce the NAV of the Fnd and are reflected in the Unit price. The amont of management costs can be negotiated. Refer to section 7.8 for frther details. Not applicable 1. All amonts in this section are inclsive of GST and net of anticipated redced inpt tax credits (to the extent either are applicable). 2. Please see Additional Explanation of Fees and Costs on the following page for more information abot the performance fees payable to the Management Company. Example of annal fees and costs This table gives an example of how the fees and costs for this prodct can affect yor investment over a one year period. Yo shold se this table to compare this prodct with other managed investment prodcts. EXAMPLE BALANCE OF $500,000 WITH A CONTRIBUTION OF $50,000 DURING YEAR. Contribtion Fees Nil For every additional $50,000 yo pt in yo will be charged $0. PLUS Management costs 1 EQUALS Cost of Fnd 1.50% of NAV And, for every $500,000 yo have in the Fnd yo will be charged $7,500 each year. If yo had an investment of $500,000 at the beginning of the year and yo pt in an additional $50,000 dring that year, yo wold be charged fees of $7,500. What it costs yo will depend on the fees yo negotiate with yor fnd or financial advisor (if any). 1 We have assmed a constant investment balance of $500,000 dring the year. This example does not take into accont any abnormal operating expenses of the Fnd or Underlying Fnd. 13 HSBC01288.indd 13

16 Additional Explanation of Fees and Costs 7.1 Management costs Base Management Fee of Fnd The management costs of the Fnd are 1.50% per annm of the NAV of the Fnd. Management costs inclde fees payable to the Responsible Entity and the ordinary expenses of the Fnd (inclding bt not limited to the fees paid to the Cstodian, Administrator, Investment Manager and Distribtor). The management costs also inclde performance fees paid to the Management Company and administration fees (which incldes the ordinary expenses of the Underlying Fnd). The performance fee is calclated by reference to the Underlying Units and therefore the base management fee of 1.50% is not dedcted before calclating the performance fee. Expense Recovery Under the Constittion, the Responsible Entity is entitled to recover all expenses reasonably and properly incrred in connection with the Fnd. This incldes expenses incrred in the operation, management, compliance and promotion of the Fnd. The management costs do not inclde transactional and operational costs (see section 7.3 below) or abnormal operating expenses (see section 7.2 below). Performance Fee of Underlying Fnd The Management Company will be entitled to a performance fee in respect of the AF Class of the Underlying Fnd as set ot below. The following definitions apply for the prpose of describing the calclation and accral of performance fees: High Watermark means the greater of AUD100 (being the initial Underlying Unit price) and the highest NAV per Underlying Unit as at the end of all previos Performance Periods; Increase means the percentage increase in the NAV per Underlying Unit at the relevant Valation Point compared with the NAV per Underlying Unit at the start of the crrent Performance Period; Index Retrn means the retrn on the Index, calclated as the percentage increase of an impted investment in the Index over the Performance Period, inclding appropriate componding effects where applicable, with the Index being pdated in line with prevailing market interest rates as at the last Valation Point in March, Jne, September and December; Performance Fee Rate means 10 per cent; Performance Period means the period from lanch of the AF Class (which will reflect the lanch of the Fnd) to 31 December 2010 and each 12 month period thereafter; (i) (ii) Targeted Fnd NAV means the vale that the High Watermark wold have grown to over the period since it was last changed assming it had achieved retrns in line with the Index each month, inclding appropriate componding effects; and Valation Point means the end of the last Gernsey bsiness day of each calendar month. The Management Company will be entitled to accre a performance fee at the Performance Fee Rate in respect of the AF Class of the Underlying Fnd at each Valation Point if: the Increase exceeds the Index Retrn; and the NAV per Underlying Unit at the start of the Performance Period is not less than the High Watermark. The performance fee is calclated on a High Watermark basis, as follows: (a) (b) If the NAV per Underlying Unit at the end of a Performance Period (before dedction of the crrent Performance Period s performance fee) is higher than the crrent Targeted Fnd NAV per Underlying Unit, then the performance fee will be eqal to the Performance Fee Rate mltiplied by the difference between the NAV per Underlying Unit and the Targeted Fnd NAV per Underlying Unit mltiplied by the total nmber of Underlying Units in isse. The NAV per Underlying Unit will then be recalclated (after the dedction of the payment de to the Management Company) and sch vale will become the High Watermark per Underlying Unit; and If the NAV per Underlying Unit is less than the crrent Targeted Fnd NAV, then no performance fee will be payable to the Management Company and the crrent High Watermark will contine to be the High Watermark. The performance fees accre in the Underlying Fnd and have the effect of redcing the NAV of the Underlying Units which will be held in the Fnd for the benefit of Unitholders of the Fnd. Any performance fee accring as at 31 December in each year will be paid to the Management Company ot of the Underlying Fnd. Once performance fees are paid, they are not liable to repayment. If a performance fee accres at an earlier Valation Point dring a Performance Period, bt the performance of the Underlying Units as compared to the High Watermark has diminished, then any previosly accred performance fee as at the earlier Valation Point may also be diminished to reflect the decrease in performance, except in respect of any Underlying Units that had been redeemed dring that Performance Period. If Underlying Units are redeemed dring a Performance Period, then the performance fee in respect of sch Underlying Units shall be crystallized by calclating the performance fee in accordance with the methodology set ot above, bt sing the nmber of Underlying Units 14 HSBC01288.indd 14

17 redeemed instead of the total nmber of Underlying Units in isse as a base. Any sch crystallized performance fees will be dedcted from the property of the Underlying Fnd and will be paid to the Management Company at the end of each calendar qarter and sch performance fee once crystallised will not be liable to repayment. The Management Company may waive its rights to the performance fee in whole or in part, at its sole discretion. The Management Company may in its absolte discretion, in relation to any performance fee paid to it, rebate all or any part of that fee. The performance fee arrangement may create an incentive for the Management Company to make investments that are more speclative or sbject to a greater risk of loss than wold be the case if no sch fee arrangement existed. Investors shold note that the calclation of the performance fee is based, in part, pon nrealised profits (as well as nrealised losses) and that sch nrealised profits may never be realised by the Fnd. 7.2 Abnormal operating expenses The Responsible Entity is entitled to be reimbrsed for any abnormal operating expenses properly incrred in connection with the Fnd. Abnormal operating expenses are not generally incrred in the day-to-day operation of the Fnd and are de to abnormal events like convening a Unitholders meeting, legal proceedings or amendments to the Constittion. It is not possible to provide an estimate of these expenses and, as sch, abnormal operating expenses are not inclded in amont of the management costs set ot in the Fee table above. Any abnormal operating expenses will, however, be paid ot of the assets of the Fnd as and when incrred. 7.3 Transactional and operational costs Certain expenses may be incrred in managing the Fnd s investments, sch as brokerage and government dties (transaction costs). The Fnd does not crrently incr significant transaction costs in investing in its assets (ie Underlying Units and cash). Any transaction costs incrred in connection with the Fnd will be paid directly from the Fnd and reflected in the Unit price. 7.4 Fees in relation to the Underlying Fnd The Underlying Fnd charges the Fnd an administration fee which is reflected in the amont of the management costs disclosed in the Fee table above. In addition, the Management Company, as manager of the Underlying Fnd, may be entitled to a performance fee which is described nder section 7.1 above. The Underlying Fnd may also incr extraordinary expenses inclding, withot limitation, litigation expenses, tax, levies, dty or similar charges and any nforseen charges imposed on the Underlying Fnd or its assets. It is not possible to provide an estimate of these expenses and as sch they are not inclded in the amont of the management costs set ot in the Fee table above. reflected in the vale of the Underlying Units (which are held by the Fnd and therefore affect the performance of the Fnd). 7.5 Increases or alterations to fees Under the Constittion, the Responsible Entity may charge a maximm fee of p to 3% (inclsive of GST), per annm of the gross asset vale, a contribtion fee of p to 5% (inclsive of GST) of the application price and a withdrawal fee of p to 5% (inclsive of GST) of the withdrawal proceeds. The fees crrently charged are below these maximms. The Responsible Entity can introdce or increase the fees charged p to these maximms withot yor consent, at its discretion, inclding as a reslt of increased costs or significant changes to economic conditions. Unitholders will be given 30 days prior notice of any proposed increase in fees. The Constittion does not impose a limit on the amont that the Responsible Entity can recover from the Fnd as expenses, provided they are reasonably and properly incrred in connection with the Fnd. 7.6 Indirect Investors Indirect Investors that invest throgh an IDPS may be charged additional fees nder the IDPS. Indirect Investors shold contact their IDPS Operator for details. 7.7 Taxation and GST Unless otherwise noted, all fees and management costs specified in this PDS (inclding in the worked example above) are GST inclsive, net of any inpt tax credits (inclding redced inpt tax credits) available to the Fnd. If expenses are recovered from the Fnd, and the Responsible Entity is reqired to pay GST in respect of that expense, the Responsible Entity may recover an amont eqal to the GST from the assets of the Fnd. Please refer to section 8 for more information. 7.8 Differential fee arrangements The Distribtor has the ability to negotiate redced management costs on a case by case basis for Direct Investors who invest large amonts into the Fnd. The Distribtor may also have a rebate arrangement in place with some Direct Investors. Please contact HSBC Investor Inqiries (see section 12) if yo are a Direct Investor and wish to discss a redction in management costs. 7.9 Payments to Operators The Distribtor may make payments to Operators from its fees (and not from the assets of the Fnd) if the Operators offer the Fnd on their investment mens. The amont of these payments may change dring the life of this PDS. There will be no commissions or trail fees paid by the Fnd to financial advisers in relation to this Fnd. All fees and expenses of the Underlying Fnd are dedcted from the assets of the Underlying Fnd, and are therefore 15 HSBC01288.indd 15

18 8. Tax Considerations This smmary of taxation matters affecting the Fnd and its Astralian resident Unitholders is intended as an otline of the general tax position and not as tax advice. It does not take into accont the specific circmstances of each Unitholder that may invest in the Fnd and mst not be sed as the basis pon which potential investors shold make an investment decision. As Astralian tax law is complex and changes freqently, the tax conseqences of investing in the Fnd may be different for different taxpayers at different times. This smmary is based on Astralian tax laws in force and administrative practices generally accepted as at the date of this PDS. Any of these may change in ftre withot notice and legislation introdced to give effect to annoncements may contain provisions that are crrently not contemplated. Ftre changes in taxation laws, their interpretation or associated administrative practices cold affect the tax treatment of the Unitholders investments. All references in this smmary to legislative provisions are to provisions of the Income Tax Assessment Act 1936 or the Income Tax Assessment Act 1997 (together, the Tax Act). This smmary does not deal with the position of Unitholders who are assessed on the disposal of their Units in the Fnd otherwise than nder the Astralian capital gains tax provisions, sch as Unitholders who are in the bsiness of trading or dealing in nits or secrities. It is recommended that all potential investors seek their own independent taxation advice regarding the tax conseqences of an investment in the Fnd, taking into accont their particlar circmstances, before making any investment or other decision in relation to the Fnd. The financial year of the Fnd begins on 1 Jly each year and ends on 30 Jne of the following calendar year. Any statements referred to in this section will be provided only to Direct Investors of the Fnd (inclding Operators), bt Indirect Investors will not receive sch statements. 8.1 Taxation of the Fnd Under the Constittion, the distribtable income (as that term is defined in the Constittion) of the Fnd in respect of a financial year will be allocated to Unitholders. Accordingly, no Astralian income tax shold be payable by the Responsible Entity on behalf of the Fnd, provided there is an amont of distribtable income in respect of a financial year. Whether there is an amont of distribtable income in respect of a financial year will depend on, among other things, the terms of the Constittion and trst law. This area of law will be reviewed by the High Cort as a reslt of the taxpayer and the Commissioner of Taxation being granted special leave to appeal the decision in Bamford v Commissioner of Taxation [2009] FCAFC 66. In that case it was held in the Fll Federal Cort, among other things, that a trstee had wide discretion to determine the income of a trst estate if the trst deed gave it the express power to do so and in sch circmstances the income of a trst estate was not limited to income in accordance with ordinary concepts. Potential investors shold monitor developments in this area. The taxable income of the Fnd for a financial year ending 30 Jne will form part of a Unitholder s assessable income for that year, in proportion to their entitlement to distribtable income, even thogh distribtable income may not be paid ntil after the end of the year or may be reinvested. As a reslt, a Unitholder may be sbject to tax on more than they receive in cash. 8.2 Astralian tax conseqences of distribtable income allocated to Unitholders Unitholders who are allocated a share of the distribtable income of the Fnd in a financial year will be provided with an annal statement detailing relevant taxation information, inclding any foreign taxes withheld and non-assessable retrns of capital. The tax conseqences for Unitholders depend on the components of the distribtable income of the Fnd to which Unitholders have become entitled. 8.3 Components of distribtable income The distribtable income may inclde: (a) (b) (c) income attribted from a controlled foreign company (CFC) if the Fnd holds an interest in a CFC; foreign investment fnd (FIF) income if the Fnd holds Underlying Units at the end of its financial year; gains from the redemption of Underlying Units. The annal statement provided to Unitholders will set ot the Unitholder s entitlement to the income of the Fnd (inclding whether it incldes a CFC or FIF component, assessable gains or non-assessable retrns of capital), if any. 8.4 The controlled foreign company (CFC) regime It is not expected that the Fnd wold have an interest in a CFC via the Underlying Fnd. However, this may change if the Fnd together with 4 or fewer other Astralian entities and their associates hold 50% or more of the Underlying Fnd. 8.5 The foreign investment fnd (FIF) regime The Fnd may be sbject to the FIF regime in respect of Underlying Units held by the Fnd. As a reslt of the manner in which the Responsible Entity intends to manage the Fnd, the Fnd shold not be sbject to the FIF regime, as it is nlikely that the Fnd will hold FIF assets at the end of each financial year (see section 8.6). However, if it shold happen that the Fnd holds Underlying Units on the last day of a financial year and the FIF regime applies to these Underlying Units, Unitholders may be assessed on their portion of any gains in the vale of these Underlying Units at the end of the financial year, even thogh those gains are nrealised. 16 HSBC01288.indd 16

19 Assessable amonts on the disposal of Underlying Units will generally be redced to take into accont amonts previosly assessed nder the FIF regime (if any). If the FIF rles shold happen to apply to the Fnd (eg, where it does not dispose of the Underlying Units prior to the end of the financial year), Unitholders shold seek professional advice in relation to the tax conseqences of investing in the Fnd and in particlar whether they can benefit from previosly assessed FIF amonts. On 12 May 2009, the Government annonced as part of the 2009 bdget, a proposal to repeal the FIF regime and replace it with a specific, narrowly defined anti-avoidance rle. As at the date of this PDS, the Government has not released any frther details with respect to these proposed amendments. Unitholders shold seek professional advice in relation to the impact of this annoncement, once details of the proposed provisions and the date of their application (inclding the date of repeal of the FIF regime) are intended to have effect. 8.6 Gains from redemption of Underlying Units It is expected that the Underlying Units will be disposed of before the end of each financial year and re-acqired immediately in the following financial year. If the Underlying Units are disposed of before the end of each financial year, the distribtable income of the Fnd for the financial year will inclde any gain arising for the Fnd from that disposal. To the extent that there is any distribtable income arising from the disposal of Underlying Units in this manner, that amont will be allocated to Unitholders. The main conseqences for Unitholders shold be that: (a) (b) each Unitholder wold be assessed on his or her proportionate share of any income arising to the Fnd pon the disposal of the Underlying Units (bt discont capital gains concessional treatment shold not be available); and to the extent that any entitlement to a share of distribtable income is reinvested by a Unitholder, the Unitholder shold obtain a cost base for his or her additional Units eqal to their isse price at that time. On the ltimate disposal of the Underlying Units (ie. where they are not sbseqently re-acqired), the Fnd may also realise assessable income. Generally, a gain arising on the disposal of Underlying Units will be inclded in the distribtable income of the Fnd where the sm of the gains realised by the Fnd exceeds any losses. The Fnd is not expected to obtain discont capital gains concessional treatment in respect of the disposal of interests in the Underlying Units. To the extent that a gain on redemption of Underlying Units incldes non-assessable retrns of capital, the cost base of Units will be redced or, to the extent the amont of the non-assessable retrn exceeds the cost base of the Units, will generate a capital gain. 8.7 Foreign Income Tax Offsets Unitholders may be entitled to foreign income tax offsets in respect of certain foreign taxes withheld from distribtions made by the Underlying Fnd. The annal distribtion statement will provide details of foreign taxes withheld from distribtions received by the Fnd. Unitholders shold seek their own independent taxation advice regarding the availability of foreign income tax offsets. 8.8 Astralian tax conseqences of withdrawal or disposal of Units in the Fnd Under the capital gains tax provisions, Unitholders who withdraw or otherwise dispose of their Units in the Fnd will realise a capital gain which is, broadly, eqal to the excess of the consideration they receive for the withdrawal or disposal over the cost base of their Units (as adjsted for any non-assessable capital retrns). To the extent that the Unitholder is treated as having received a distribtion of Fnd income (inclding gains from the redemption of Underlying Units) pon withdrawal of the Units, the amont of capital gain arising on withdrawal wold be redced accordingly (so as to prevent a doble taxation of the same amont). If the withdrawal amont (or other disposal consideration) is less than the redced cost base of the Units, a capital loss wold arise pon withdrawal of their Units. A capital loss is not dedctible against income, bt may be sed to redce tax payable on capital gains from other investments in the crrent or ftre tax years, sbject to the loss integrity rles. Unitholders that are individals, trsts or certain sperannation entities may be able to claim the benefit of the capital gains tax discont depending on their individal circmstances. Unitholders shold seek professional tax advice in determining the amont of taxable capital gain arising on the withdrawal of their Units. 8.9 Tax File Nmbers (TFN) or Astralian Bsiness Nmbers (ABN) Collection of yor TFN is athorised and its se and disclosre are strictly reglated by the tax laws and the Privacy Act. Yo may qote a TFN or claim a TFN exemption in relation to yor investment in the Fnd when completing yor application. Yo may qote yor ABN instead of yor TFN if yor investment in the Fnd is made in the corse or frtherance of an enterprise carried on by yo. Qotation of a TFN or ABN is not complsory bt if a TFN or ABN is not qoted (and no exemption is claimed), the Responsible Entity is reqired to dedct tax from yor income at the highest marginal tax rate pls the Medicare Levy (crrently 46.5%) Goods and Services Tax (GST Fees and charges payable in respect of the management of the Fnd (sch as fees paid to the Responsible Entity and the Investment Manager) may inclde a GST component. The GST component is inclded in the amont of the fees 17 HSBC01288.indd 17

20 otlined in this PDS nless stated otherwise. Where the fee is expressed to be GST exclsive, any GST will be charged in addition to the fee. To the extent that the Responsible Entity incrs expenditre on behalf of the Fnd, it is entitled to recover the GST inclsive amont of sch expenditre from the Fnd. On the basis that the Fnd wold be making inpt taxed financial spplies, the Fnd cannot claim fll inpt tax credits in respect of expenses incrred by the Fnd, bt may be entitled to redced inpt tax credits (crrently eqal to 75% of the GST incrred) in respect of some of these expenses Taxation of Financial Arrangements (TOFA) The Tax Laws Amendment (Taxation of Financial Arrangements) Act 2009 ( TOFA Act ) received Royal Assent on 26 March The TOFA Act contains amendments to the Tax Act ( TOFA provisions ) that will operate to tax gains and losses arising from certain financial arrangements on revene accont and in some cases on a componding accrals basis. The TOFA provisions apply to tax years commencing on or after 1 Jly 2010 (nless an election is made for the TOFA provisions to apply to tax years commencing on or after 1 Jly 2009). The TOFA provisions will only apply to financial arrangements entered into after the relevant start date, nless an election is made for them to apply to existing financial arrangements held at that time (in which case a balancing adjstment will be reqired to be recognised). There are a nmber of exceptions to the application of the TOFA provisions. Broadly, these inclde financial arrangements that are not qalifying secrities, and which are held by: (a) (b) (c) individals; sperannation fnds or managed investment schemes whose total assets are less than $100 million; or other types of (non-financial) entities whose annal trnover is less than $100 million, whose financial assets are less than $100 million and whose total assets are less than $300 million. Accordingly, if the Fnd satisfies paragraph (b) above and doesn t otherwise elect to be sbject to the TOFA provisions, the TOFA provisions shold not apply to the financial arrangements held by the Fnd for the prpose of calclating its taxable income. In addition, there is a specific exclsion from the TOFA provisions for interests that are sbject to the FIF regime. In respect of Unitholders, the TOFA provisions do not apply to a financial arrangement that is constitted by an interest in a trst where the interest in the trst is an eqity interest, or an interest in a trst managed by a responsible entity of a registered scheme (nless a fair vale election or an election to rely on financial reports has been made). On this basis, the TOFA provisions shold not apply to Unitholders in relation to their Units. In any event, Unitholders shold seek their own independent advice in respect of the applicability of the TOFA provisions to their individal circmstances. 9. Transacting yor Investment Applications, Withdrawals and Distrbtions 9.1 How to apply for Units in the Fnd Indirect Investors Indirect Investors shold contact their Operator for instrctions on how to invest. Do not send applications directly to the Administrator. The following provisions in this section 9.1 do not apply to Indirect Investors. Direct Investors Direct Investors can make initial applications for Units in the Fnd by completing the application form (and providing the identification docments) accompanying this PDS. Additional investments can be made at any time by completing another application form or by faxing an instrction to the Administrator. Additional investments are made in accordance with the PDS crrent at the time of the additional investment. A copy of the crrent PDS is available, free of charge, from HSBC Investor Inqiries (see section 12). The minimm initial investment is $500,000. Additional investments mst be in whole mltiples of $50,000. The Responsible Entity may accept lesser amonts or change these amonts from time to time. Application monies mst be paid by electronic fnds transfer into the bank accont detailed in the application form. Please note that payments by cash or cheqe will not be accepted. Applications are processed monthly, as at the last Bsiness Day of a calendar month (each, an Application Pricing Date ). If yor completed application form (inclding identification docments) and cleared application monies are received and accepted by the Administrator by 3pm (Melborne time) on the seventh Astralian Bsiness Day prior to the next Application Pricing Date (the Application Ct-Off ), yor application will (nless the Responsible Entity determines otherwise) be processed as at that Application Pricing Date. It is expected that applications received after the Application Ct-Off and before the start of the next calendar month will not be accepted, and any application forms or cleared application monies received dring this time are expected to be retrned. The Responsible Entity may change the ct off time or place at which applications are to be received. The Responsible Entity may refse or reject an application in whole or in part withot giving any reasons. If yor application is rejected, yor application money will be retrned to yo. Yo will not be entitled to any interest earned on yor application money. Any interest earned will be paid into the Fnd. Units will be issed at the application price calclated as at the Application Pricing Date in respect of which yor application is processed. After yor application is accepted 18 HSBC01288.indd 18

21 and yor name is entered in the Fnd register, yo become a Unitholder even if the application price is yet to be ascertained and the nmber of Units yo hold remains nknown. Yo will be issed with an investment confirmation, setting ot the details of the Units issed to yo, even if the application price has not yet been ascertained. No Unit certificates will be issed. The entry of a Unitholder s name in the Fnd s register gives the presmption of ownership. 9.2 Withdrawals Indirect Investors withdrawals may only be made in accordance with the Corporations Act. 9.3 Sspension of applications and withdrawals from the Fnd Under the Constittion, the Responsible Entity may, if it determines it is desirable for the Fnd or in the interests of Unitholders, sspend applications and withdrawals of Units, the calclation of Unit prices or the payment of withdrawal proceeds inclding whilst: trading on any relevant stock market or foreign exchange market is closed or restricted; Indirect Investors shold follow the instrctions of their Operator to make a withdrawal from the Fnd. Do not send withdrawal reqests directly to the Administrator. The following provisions in this section 9.2 do not apply to Indirect Investors. an emergency or state of affairs exists as a reslt of which it is not reasonably practicable for the Responsible Entity to acqire or dispose of the Fnd s assets or to determine fairly the application price or withdrawal price; Direct Investors Direct Investors can make withdrawals by sending a written reqest by mail or fax to the Administrator specifying their client ID, their investor nmber and the dollar amont or nmber of Units to be withdrawn. The contact details of the Administrator are set ot in section 12. Withdrawals are processed monthly, as at the last Bsiness Day of a calendar month (each, a Withdrawal Pricing Date ). If yor withdrawal reqest is received and accepted by the Administrator by 3pm (Melborne time) on the Astralian Bsiness Day that falls one calendar month and seven Astralian Bsiness Days prior to the relevant Withdrawal Pricing Date (the Withdrawal Ct-Off ), yor withdrawal will be processed as at that Withdrawal Pricing Date. If yor withdrawal reqest is received and accepted after the Withdrawal Ct-Off, yor reqest will, nless the Responsible Entity determines otherwise, be processed as at the following Withdrawal Pricing Date. The Responsible Entity reserves the right to change the ct off time or place at which withdrawal reqests are to be received. Units will be redeemed at the withdrawal price calclated as at the Withdrawal Pricing Date in respect of which the withdrawal reqest is accepted. In normal circmstances, withdrawal proceeds will be paid within 6 Bsiness Days of the 15th calendar day of the relevant month following the Withdrawal Pricing Date in respect of which the withdrawal reqest was accepted. However, nder the Constittion, withdrawal proceeds may be paid p to 30 Bsiness Days from the Withdrawal Pricing Date. Withdrawal proceeds will not be paid to third parties. A Direct Investor mst maintain a minimm holding of $500,000 in the Fnd. If yor holding is valed at less than the crrent minimm holding amont (based on the withdrawal price), the Responsible Entity may redeem yor entire holding withot a withdrawal reqest. If the Fnd ceases to be liqid (as that term is defined in the Corporations Act), then while the Fnd is not liqid, there is a sspension of dealings in an interest of the Underlying Fnd or calclation of NAV of the Underlying Fnd or Underlying Unit prices (see section 4.5 for when this may occr); any moratorim declared by a government of any contry in which a significant proportion of the Fnd is invested exists; or the Responsible Entity otherwise determines it is in the best interests of Unitholders. The Constittion also allows the Responsible Entity to delay withdrawals when Unitholders reqest the withdrawal of a nmber of Units that in aggregate exceed 10% of the nmber of Units on isse as at any one Withdrawal Pricing Date. Where this occrs, the Responsible Entity may, in its discretion, limit the nmber of Units, which may be redeemed as at sch Withdrawal Pricing Date, to not more than 10% of the nmber of Units in isse immediately before sch date. Any Units failing to be redeemed pon the exercise of this discretion will be carried forward to the next Withdrawal Pricing Date and shall be redeemed pro rata in priority to any other Units in respect of which a withdrawal reqest has sbseqently been received. 9.4 Unit prices Unit prices are generally calclated as at the last Bsiness Day of each month sing the NAV of the Fnd for that calendar month. The Unit price is calclated by dividing the NAV of the Fnd by the total nmber of Units on isse in the Fnd. Application and withdrawal prices are calclated sing the Unit prices and are not crrently adjsted for any by/sell spread. The Unit price will inclde any net income accred since the end of the last distribtion period for the Fnd. The NAV of the Fnd will generally be based on the crrent market vale of the assets of the Fnd, nless there is no market for the assets or it is determined that the valation does not represent a fair vale of the assets. The NAV of the Fnd will be calclated in accordance with the Constittion. 19 HSBC01288.indd 19

22 The calclation of Unit prices may be sspended. See sections 9.3 and Unit pricing discretions The Responsible Entity is athorised nder the Constittion to exercise certain discretions in calclating Unit prices. Under ASIC Class Order 05/26, the Responsible Entity is reqired to prepare certain docments, describing how these discretions will be exercised when calclating Unit prices. These docments are available on reqest from the Responsible Entity at no charge. 9.6 Distribtions A distribtion comprises a Unitholder s share of any distribtable income (inclding taxable capital gains) earned by the Fnd. A Unitholder s share of any distribtable income is generally based on the nmber of Units held by the Unitholder at the end of the distribtion period. Distribtions (if any) will be made on an annal basis. The Responsible Entity has the ability to make interim distribtions. Annal income distribtions are declared as at 30 Jne. It is crrently intended that a Unitholder will direct the Responsible Entity to reinvest any distribtions, to which they are entitled, in the Fnd. This means that, if there are any sch distribtions, a Unitholder will, nless the Responsible Entity determines to pay them to the Unitholder, be issed additional Units. The Unitholder will not receive cash from the Fnd and therefore will have to fnd any tax liability in respect of sch distribtions from other sorces. The amont distribted in relation to the Fnd is calclated taking into accont the taxable income of the Fnd. 10. Additional Information 10.1 Reports Indirect Investors will receive reports directly from their Operator and not the Responsible Entity. Direct Investors (inclding Operators) will receive: a monthly statement detailing the vale of their investment, transactions and distribtions received; an annal tax statement containing a smmary of the Unitholder s distribtions for the financial year to assist the Unitholder in completing their tax retrn; and the annal acconts for the Fnd (Direct Investors may elect not to receive these). If the Fnd becomes a disclosing entity nder the Corporations Act, it will be sbject to reglar reporting and disclosre obligations. Generally, the Fnd will be a disclosing entity when it has 100 members or more. At the date of this PDS, the Fnd is not a disclosing entity. If the Fnd becomes a disclosing entity, copies of certain docments lodged with ASIC can be obtained from, or inspected at, an ASIC office or can be obtained from HSBC Investor Inqiries (see section 12). These docments inclde the Fnd s annal financial report most recently lodged with ASIC and, if available, any half-yearly financial report. In the event that the Fnd becomes a disclosing entity, the Responsible Entity will be sbject to continos disclosre obligations for so long as the Fnd remains a disclosing entity. These obligations reqire the Responsible Entity to disclose to members any information that a reasonable person wold expect to have a material effect on the price or vale of the Units. In order to flfil these obligations, the Responsible Entity will comply with ASIC s good practice gidance for website disclosre by making this information available at as soon as practicable pon becoming aware of the information Privacy The Responsible Entity will not hold personal information abot Indirect Investors. Indirect Investors shold contact their Operator in relation to privacy isses. For Direct Investors, the Responsible Entity will collect personal information from yo for the prposes of processing yor application and administering yor investment. If yo choose not to provide the information reqired, it may not be able to spply yor investments or services to yo. Sbject to the Privacy Act 1988 (Cth), on yor reqest, the Responsible Entity will give yo access to the personal information collected abot yo. The Responsible Entity mst give access to yor information entered on the Fnd s register to others as reqired by the Corporations Act or nder relevant laws. The Responsible Entity may also give yor personal information to service providers of the Fnd, inclding the Investment Manager, the Distribtor, the Administrator and their related bodies corporate (the service providers). The Responsible Entity and the service providers may se personal information collected abot yo to notify yo of other prodcts. By completing and retrning the application form, yo consent, for the prposes of the Spam Act 2003 (Cth) to receiving commercial electronic messages from the Responsible Entity and the service providers. If yo do not want yor personal information to be sed in this way please contact the Responsible Entity (see section 12). The Responsible Entity s privacy policy is available on its website Anti-money landering and conter-terrorism financing laws The Anti-Money Landering and Conter-Terrorism Financing Act 2006 (AML Act) reglates financial services and transactions in a way that is designed to detect and prevent money landering and terrorism financing. Under the AML Act, the Responsible Entity has a nmber of obligations, inclding the reqirement: to verify yor identity before providing services to yo, and to re-identify yo if it is considered necessary to do so; and 20 HSBC01288.indd 20

23 where yo spply docmentation relating to the verification of yor identity, to keep a record of this docmentation for 7 years. The Responsible Entity has implemented a nmber of measres and controls to ensre they comply with its obligations nder the AML Act, inclding careflly identifying and monitoring investors. As a reslt of the implementation of these measres and controls: transactions may be delayed, blocked, frozen or refsed where the Responsible Entity has reasonable gronds to believe that the transaction breaches the law or sanctions of Astralia or any other contry; where transactions are delayed, blocked, frozen or refsed, the Responsible Entity will not be liable for any loss yo sffer (inclding conseqential loss) as a reslt of its actions aimed at compliance with the AML Act; and the Responsible Entity may from time to time reqire additional information from yo to assist it in this process. The Responsible Entity has certain reporting obligations nder the AML Act and is prevented from informing yo that any sch reporting has taken place. Where reqired by law, the Responsible Entity may disclose the information gathered to reglatory or law enforcement agencies, inclding the Astralian Transaction Reports and Analysis Centre (AUSTRAC) Related party disclosres By virte of its bsinesses, the HSBC Grop, the Investment Manager, the Distribtor or any of their related bodies corporate may from time to time have a direct or indirect material or non-material interest in or related to, any of the investment activities of the Fnd or of the Underlying Fnd. Sch parties shall not be liable in any way for, nor obligated to accont for, any of these interests to investors in the Fnd, the Underlying Fnd or to the Umbrella Fnd. Cash held by the Fnd or the Underlying Fnd may be retained and deposited with a related body corporate of the HSBC Grop (inclding bt not limited to HSBC Astralia, which is an Astralian bank). The Fnd or the Underlying Fnd may borrow from a related body corporate of the HSBC Grop (inclding bt not limited to HSBC Astralia) or any other sch bank, provided the Fnd or the Underlying Fnd is not in breach of its borrowing limitations or restrictions. The Responsible Entity, the Distribtor or any of their associates or related bodies corporate may invest in the Fnd from time to time and may enter into or be interested on their own accont in any transactions entered into on behalf of the Fnd, or with any company or body in which the Fnd or the Underlying Fnd is invested or who provides services to the Fnd. The Management Company of the Underlying Fnd may earn fees from transactions in respect of its role in managing the Underlying Fnd. Any sch transactions will be on arm s length commercial terms. The Distribtor and other members of the HSBC Grop may condct transactions and be paid commissions in varios transactions, instrments or secrities which constitte the portfolio of the Underlying Fnd or the Fnd, or transactions with respect to yor investment in the Fnd Constittion The Fnd was established nder the Constittion which, together with this PDS, the Corporations Act and other relevant laws, governs the legal relationship between Unitholders and the Responsible Entity. The Constittion binds the Responsible Entity and all Unitholders. A copy of the Constittion is available free of charge from the Responsible Entity on reqest. This PDS sets ot a smmary of some of the material provisions of the Constittion. To the extent of any inconsistency between this PDS and the Constittion, the terms of the Constittion prevail. The Constittion incldes provisions dealing with: the natre of Units identical rights attach to Units within the same class; the dration of the Fnd inclding termination; dties and obligations of the Responsible Entity (and the power to delegate); how the Responsible Entity mst calclate the NAV of the Units, a component of the application price and withdrawal price for each Unit; the Responsible Entity s powers (which inclde the power to invest the assets of the Fnd and to borrow); fees and recoverable expenses, and the limitation of the Responsible Entity s liability and indemnification from the assets of the Fnd; the Responsible Entity s rights to change the Fnd s Constittion; the method by which complaints are dealt with; Unitholder meetings, which mst be condcted in accordance with the Constittion and the Corporations Act; the calclation, entitlement to and distribtion of income; and the calclation of Unit prices and related mechanisms. The Fnd may offer different classes of Units. Identical rights attach to all Units within a class. However, the rights and obligations attaching to different classes of Units may vary, and are set ot in the relevant offer docment for that class. At the date of this PDS, all Units of the Fnd are of the same class. The Constittion may be amended by the Responsible Entity at any time if the amendments are not adverse to the rights of Unitholders. Otherwise, approval of Unitholders by special resoltion at a Unitholder meeting mst generally be obtained. 21 HSBC01288.indd 21

24 The Fnd terminates two days before 80 years from the date of the Constittion, bt it will terminate earlier if, amongst other things, the Underlying Fnd is terminated or the Underlying Units held in the Fnd are complsorily redeemed by the Underlying Fnd. The Responsible Entity may also terminate it earlier by at least one month s prior written notice to Unitholders. On termination, the Responsible Entity will realise the assets and pay to Unitholders their share of the net proceeds of realisation. The Constittion seeks to limit the liability of Unitholders so that a Unitholder will not, by reason of being a Unitholder alone, be personally liable to indemnify the Responsible Entity or any creditor shold the Fnd be nable to meet its debts. However, no assrance can be given abot a Unitholder s liability becase the isse has not been finally determined by a sperior cort. Sbject to the Corporations Act, the Responsible Entity is entitled to be indemnified in fll ot of the assets of the Fnd for any liability incrred by it in the proper performance of its dties or powers in respect of the Fnd, and is not liable to Unitholders for any loss sffered in relation to the Fnd in these circmstances Compliance plan The Responsible Entity has prepared and lodged a compliance plan for the Fnd with ASIC. The compliance plan describes the procedres sed by the Responsible Entity to comply with the Corporations Act and the Constittion. Each year the plan is adited and the adit report is lodged with ASIC Consents The Investment Manager, the Distribtor, the Management Company and HSBC Private Bank (C.I.) Limited has each given, and not withdrawn as at the date of this PDS, their respective consent to their name, the statements attribtable to each of them, and the wording in respect of the consent given by each of them being inclded in this PDS in the form and context in which they are inclded in this PDS Indirect investors The Responsible Entity athorises the se of this PDS for investors or prospective investors who wish to access the Fnd throgh an IDPS. Indirect Investors who wish to access the Fnd throgh the IDPS do not themselves become Unitholders in the Fnd. Instead, the Operator invests for each Indirect Investor and so has the rights of a Unitholder. The Operator may exercise the rights in accordance with their arrangements with yo. If a Direct Investor has a complaint in relation to their investment in the Fnd, they can contact the Responsible Entity dring bsiness hors (see section 12). The Responsible Entity has established procedres for dealing with complaints and will se reasonable endeavors to deal with and resolve the complaint within a reasonable time and no later than 45 days of receipt of the complaint. If a Direct Investor is not satisfied with the otcome, the complaint can be referred to an external complaints resoltion scheme of which the Responsible Entity is a member, the Financial Ombdsman Service (FOS). FOS can be contacted: from 9am to 5pm Astralian Eastern Standard Time on , or ; by facsimile on ; by mail at GPO Box 3, Melborne, Victoria 3001, Astralia; and by at info@fos.org.a Frther details abot FOS can be fond at the FOS website: Labor standards, environmental, social and ethical considerations Decisions abot the selection, retention or realisation of investments for the Fnd are primarily based on fnd, company and indstry fndamentals of investments comprising the Underlying Fnd. The Responsible Entity and the Investment Manager do not take into accont labor standards, environmental, social or ethical isses when making decisions abot the selection, retention or realisation of investments for the Fnd, except to the extent that these isses have a material impact on either investment risk or retrn Cooling off rights Direct Investors (inclding Operators) who are wholesale clients as defined in section 761G of the Corporations Act will not have any cooling off rights. Indirect Investors shold contact their Operator abot any cooling off rights yo may have in relation to yor IDPS. An Indirect Investor s inqiries shold be directed to their Operator. Some provisions of the Constittion are not relevant to Indirect Investors. For example, Indirect Investors cannot attend Unitholder meetings Complaints Indirect Investors shold contact their Operator with any complaints in relation to their investment in the Fnd. 22 HSBC01288.indd 22

25 11. Glossary ABN Administrator AFSL AML Act Application Ct-Off Application Pricing Date ASIC ARBN ARSN AUD AF Class Astralian Bsiness Day AUSTRAC Bsiness Day Astralian Bsiness Nmber. RBC Dexia Investor Services Trst (ABN , AFSL nmber ), or sch other person appointed by the Responsible Entity from time to time. Astralian Financial Services Licence. Anti-Money Landering and Conter-Terrorism Financing Act 2006 (Cth). 3pm (Melborne time) on the seventh Astralian Bsiness Day prior to the next Application Pricing Date. The last Bsiness Day of a calendar month. Astralian Secrities and Investments Commission. Astralian Registered Bsiness Nmber. Astralian Registered Scheme Nmber. Astralian Dollars. Means the class of shares of the Underlying Fnd denominated in AUD into which the assets of the Fnd will invest. Any day which is not a Satrday, a Snday, a pblic holiday or a bank holiday in Melborne. Astralian Transaction Reports and Analysis Centre. A calendar day which is an Astralian Bsiness Day on which the Underlying Fnd is open for sbscriptions and redemptions. Class B Rles The Collective Investment Schemes (Class B) Rles Constittion Corporations Act Cstodian Direct Investor The Constittion establishing the Fnd dated 25 November 2009, as amended from time to time. Corporations Act 2001 (Cth). RBC Dexia Investor Services Trst (ABN , AFSL nmber ) or sch other person appointed by the Responsible Entity from time to time. A person investing directly into Units of the Fnd who is a wholesale client as defined in section 761G of the Corporations Act. This incldes an Operator. Distribtor HSBC Bank Astralia Limited (ABN , AFSL nmber ). FOS FSA Financial Ombdsman Service. Financial Services Athority of the United Kingdom. Fnd HSBC GH Diversified Strategy Fnd (ARSN ). Gernsey Law The Protection of Investors (Bailiwick of Gernsey) Law Highwater Mark Has the meaning given to it in section 7.1. HSBC Astralia HSBC Bank Astralia Limited (ABN , AFSL nmber ). HSBC Grop IDPS HSBC Holdings plc, its sbsidiaries and associated companies. An Investor Directed Portfolio Service, or like service, inclding a master trst, wrap accont or platform. Increase Has the meaning given to it in section HSBC01288.indd 23

26 Index The benchmark of the AF Class, being twice AUD 3 month LIBOR. Index Retrn Has the meaning given to it in section 7.1. Indirect Investor A person investing in the Fnd throgh an IDPS. An Indirect Investor is not a Unitholder of the Fnd. Investment Manager HSBC Alternative Investments Limited ARBN LIBOR Management Company NAV Operator PDS London Interbank Offered Rate. HSBC Management (Gernsey) Limited. Net Asset Vale. An IDPS operator. This Prodct Disclosre Statement. Performance Fee Rate Has the meaning given to it in section 7.1. Performance Period The period from lanch of the AF Class (which will reflect the lanch of the Fnd) to 31 December 2010 and each 12 month period thereafter. Responsible Entity Perpetal Trst Services Limited (ABN , AFSL nmber ). Targeted Fnd NAV Has the meaning given to it in section 7.1. Tax Act TFN TOFA Umbrella Fnd Underlying Fnd Underlying Unit Unit Unitholder USD US Dollar Class Valation Point Withdrawal Ct-Off Withdrawal Pricing Date Income Tax Assessment Act 1936 (Cth) and the Income Tax Assessment Act 1997 (Cth). Tax File Nmber. Tax Laws Amendment (Taxation of Financial Arrangements) Act 2009 (Cth). HSBC Portfolio Selection Fnd. HSBC GH Fnd, a separate sb-fnd constitted nder the Umbrella Fnd, an mbrella Gernsey nit trst originally constitted by a trst deed dated 15 May 1995 which was replaced by a trst deed dated 31 May 1996 as sbseqently amended, and athorised by the Gernsey Financial Services Commission as a Class B Collective Investment Scheme nder the Gernsey Law and the Class B Rles. A nit in the AF Class of the Underlying Fnd. A nit in the Fnd. A person appearing in the Fnd s register as the holder of a Unit of the Fnd. US Dollars. The US Dollar Class of nits of the Underlying Fnd. For the prposes of the Underlying Fnd, the last Gernsey bsiness day of each calendar month. 3pm (Melborne time) on the Astralian Bsiness Day that is one calendar month and seven Astralian Bsiness Days prior to the relevant Withdrawal Pricing Date. The last Bsiness Day of a calendar month. 24 HSBC01288.indd 24

27 12. Corporate Directory HSBC Investor Inqiries Contact: Global Investments, HSBC Bank Astralia Limited Telephone: Facsimile: globalinvestments@hsbc.com.a Responsible Entity Perpetal Trst Services Limited Level 12, 123 Pitt Street Sydney NSW 2000 Astralia Telephone: Investment Manager HSBC Alternative Investments Limited 5th Floor, 78 St James s Street London SW1A 1JB United Kingdom Cstodian and Administrator RBC DEXIA Investor Services Trst Level 17, 2 Park Street Sydney NSW 2000 Astralia Aditor KPMG 10 Shelley Street Sydney NSW 2000 Astralia 25 HSBC01288.indd 25

28 Application Form HSBC GH Diversified Strategy Fnd ARSN This application form relates to the Prodct Disclosre Statement dated 17 December 2009 (PDS) issed by Perpetal Trst Services Limited ABN , AFSL Please read the PDS in fll before completing this Application Form. Unless otherwise specified, terms defined in the PDS have the same meaning in this Application Form. INDIVIDUALS, AUSTRALIAN COMPANIES, TRUSTS & TRUSTEES INVESTOR & INVESTMENT DETAILS Is this an application from a new investor or an existing investor? - New investor - Existing investor If this is an application from an existing investor please provide yor: Client ID I / We am an existing investor and I / we have previosly completed the Identification Docmentation parts of this docment sfficient for Anti-Money Landering/Conter Terrorism Financing Legislation No Yes If yo are an existing investor, have there been any significant changes in yor circmstances or Identification Docments since yor last application? No Yes If Yes please complete the Identification Docmentation sections 1 throgh 4 (as applicable). INVESTOR CONTACT DETAILS Investor Nmber Fll given name(s) Srname Company name / Trstee Name / Accont Name ACN or ABN Contact address (PO Box is NOT acceptable) Street Sbrb State Postcode Contry Telephone Facsimile ADVISER DETAILS Adviser Code (if applicable) Contact Name Dealer Grop / Instittion Street/PO Box Sbrb State Postcode Contry Telephone Mobile 26 HSBC01288.indd 26