PRODUCT HIGHLIGHTS SHEET

Transcription

1 PRODUCT HIGHLIGHTS SHEET Investment Risk Rating: 5 Prepared on: 26 September 2017 Important Notes: Information mentioned in this document is intended to provide you with a general summary of the ILP Sub-Fund and are subject to change. Please read the Policy (including Benefit Illustration, Product Summary and Fund Summary) for the full details of the standard terms and conditions and the exclusions of the insurance product and ILP Sub-Fund. This Product Highlights Sheet ( PHS ) is an important document. It highlights the key terms and risks of the ILP Sub-Fund and complements the Product Summary and Fund Summary. It is important to read the Product Summary and the Fund Summary before deciding whether to purchase the ILP Sub-Fund. If you do not have a copy, please contact us to ask for one. You should not invest in the ILP Sub-Fund if you do not understand it or are not comfortable with the accompanying risks. Unless otherwise defined, capitalised terms in this PHS have been defined in the Fund Summary. Investment risk rating is used as a guide to determine the ILP Sub-Fund that is suitable to the risk profile as indicated in the Bank's Risk Profile Questionnaire (RPQ). It is currently only applicable to customers of HSBC Bank (Singapore) Limited (the Bank ). HSBC Insurance Europe Dynamic Equity Fund (the "ILP Sub-Fund") Product Type ILP Sub-Fund 1 Launch Date 18 January 2016 Manager JPMorgan Asset Management Custodian HSBC Insurance (Singapore) Pte. Limited (Singapore) Limited Capital Guaranteed No Dealing Frequency Every Business Day Name of Guarantor N.A. Expense Ratio for the financial year ended % June 2016 Underlying Sub-Fund JPMorgan Funds Europe Dynamic Fund (Class A (acc) - SGD (hedged)) ILP SUB-FUND SUITABILITY WHO IS THE ILP SUB-FUND SUITABLE FOR? The ILP Sub-Fund is only suitable for potential investors who: are looking for an equities investing in an aggressively managed portfolio of European companies. are looking for a higher risk equity strategy to complement an existing core portfolio, or looking to potentially enhance long-term returns and who are comfortable with the extra risks inherent in the Underlying Sub-Fund; have, at least, a five-year investment horizon; and understand that the principal investment of the ILP Sub-Fund will be at risk. KEY FEATURES OF THE ILP SUB-FUND WHAT ARE YOU INVESTING IN? The ILP Sub-Fund is a single ILP sub-fund which feeds (invests all or substantially all of its assets) into an underlying sub-fund, JPMorgan Funds Europe Dynamic Fund (Class A (acc) - SGD (hedged)) (the "Underlying Sub-Fund") which is a sub-fund of the JPMorgan Funds (the "Underlying Fund"), an open-ended investment company with an umbrella structure, domiciled in Luxembourg. The Underlying Sub-Fund aims to maximize long-term capital growth by investing primarily in aggressively managed portfolio of European companies. Further Information Refer to Section 5 on page 2 and Section 7 on pages 2 to 7 of the Fund Summary for further information on the ILP Sub- Fund. Refer to Section 2 on page 1, Section 5 on page 2 and Section 16 on pages 10 and 11 of the Fund Summary for further information on features of the ILP Sub-Fund 1 As the ILP Sub-Fund feeds all or substantially all of its assets into the Underlying Sub-Fund, some of the information provided below could be similar to the Underlying Sub-Fund. 21 Collyer Quay #02-01 Singapore , Monday to Friday 9.30am to 5pm. 1

2 PRODUCT HIGHLIGHTS SHEET The suffix "(acc)" refers to an accumulation share class of the Underlying Sub-Fund, and accordingly dividends will not normally be paid by the Underlying Sub-Fund. There will be no distribution of income, capital or dividends by the ILP Sub-Fund. Investment Strategy The investment objective of the ILP Sub-Fund is achieved through investments in the Underlying Sub-Fund. At least 67% of the Underlying Sub-Fund's assets (excluding cash and cash equivalents) will be invested in equity securities of companies that are domiciled in, or carrying out the main part of their economic activity in, a European country. The Underlying Sub-Fund uses an investment process that is based on systematic investments in equity securities with specific style characteristics, such as value, quality and momentum in price and earnings trends. Historical research has demonstrated that such securities can outperform over a market cycle as they exploit psychological factors (the behavioural and cognitive biases of investors) in equity markets. For example, investor overconfidence, the expectation that a security's earnings will continue to grow in perpetuity, or loss aversion, the reluctance of an investor to sell a security that is decreasing in price. Debt securities, cash and cash equivalents may be held on an ancillary basis. The Underlying Sub-Fund may also invest in UCITS and other UCIs. The Underlying Sub-Fund may invest in assets denominated in any currency and currency exposure may be hedged. The Underlying Sub-Fund may use financial derivative instruments for the purposes of hedging and Efficient Portfolio Management. All of the above investments will be made in accordance with the limits set out in "Appendix II Investment Restrictions and Powers" of the Luxembourg Prospectus of the Underlying Sub-Fund. Parties Involved WHO ARE YOU INVESTING WITH? The Manager of the ILP Sub-Fund is JPMorgan Asset Management (Singapore) Limited. The Management Company of the Underlying Sub-Fund is JPMorgan Asset Management (Europe) S.àr.l.. The Investment Manager of the Underlying Sub-Fund is JPMorgan Asset Management (UK) Limited. The Depositary of the Underlying Sub-Fund is J.P. Morgan Bank Luxembourg S.A.. KEY RISKS WHAT ARE THE KEY RISKS OF THIS INVESTMENT? While the ILP Sub-Fund offers potential for capital appreciation, no assurance can be given that this objective will be achieved. The price of units in the ILP Sub-Fund may fall or rise and you may not get back your original investment. You should not expect to obtain short-term gains, as investments in the ILP-Sub Fund are designed to produce returns over the long-term and are not suitable for short-term speculation. The ILP Sub-Fund may be subject to different degrees of economic, political, foreign exchange rate, interest rate, liquidity, default, regulatory and possible repatriation risks depending on the countries and asset classes that the Underlying Sub-Fund invests into or has exposure to. Refer to Section 5 on page 2 of the Fund Summary for further information on the investment focus and approach of the ILP Sub- Fund. Refer to Section 3 on pages 1 to 2 of the Fund Summary for further information on the roles and responsibilities of these entities and what happens if they become insolvent. Refer to Section 7.1 on pages 2 to 3 of the Fund Summary for further information on risks of the ILP Sub- Fund. 21 Collyer Quay #02-01 Singapore , Monday to Friday 9.30am to 5pm. 2

3 PRODUCT HIGHLIGHTS SHEET Market and Credit Risks You are exposed to market risk. Because the Underlying Sub-Fund is aggressively managed, volatility may be high as the Underlying Sub-Fund may take larger position sizes, may have high turnover of holdings and at times may have a significant exposure to certain areas of the market. The value of equity securities may go down as well as up in response to the performance of individual companies and general market conditions. Liquidity Risks You are exposed to liquidity risk. The ILP Sub-Fund is not listed and has no secondary market. You can only redeem your investment through the Company on a day on which dealing is permitted. Redemption of units in the ILP Sub-Fund may be suspended under certain circumstances. This will affect your ability to dispose units. The assets of the Underlying Sub-Fund may be relatively illiquid which may restrict its ability to dispose of the investments at a price and time that it wishes to do so. This may result in a loss to the ILP Sub-Fund. The liquidity of the ILP Sub- Fund may also be limited if a significant portion of the assets of the Underlying Sub-Fund is to be sold to meet redemptions requests within a short time frame. Product-Specific Risks You are exposed to equity risk. The Underlying Sub-Fund may invest in equities and other equity derivatives which are subject to market risks that historically have resulted in greater price volatility than that experienced by debt securities. You are exposed to derivative risks. The Underlying Sub-Fund may, within its prescribed limits, invest in financial derivative instruments for hedging purposes and for Efficient Portfolio Management. Participation in certain financial derivative instruments involves potential investment returns which the Underlying Sub-Fund would not receive, and risks of a type, level or nature to which the Underlying Sub-Fund would not be subject, in the absence of using these instruments. In an extreme scenario, investments made through derivative transactions may cause the investor to lose his entire principal amount invested. You are exposed to currency risk. Movements in currency exchange rates may adversely affect the return of your investment. The Underlying Sub-Fund may invest in assets denominated in any currency and currency exposure might not be hedged. Even if currency hedging is used by the Underlying Sub- Fund to minimize the effect of currency fluctuations, such currency hedging may not always be successful. The reference currency of the Underlying Sub-Fund is in EUR (the "Reference Currency"). While the ILP Sub-Fund invests in Class A (acc) SGD (hedged) which is a currency hedged share class, such currency hedging may not cover the full value of the ILP Sub- Fund's holding in the Underlying Sub-Fund. Notwithstanding the fact that currency hedging may be done to a limited extent for currency hedged share classes, the Underlying Sub-Fund may invest in assets denominated in any currency and such currency exposure may not be hedged for units held by the ILP Sub-Fund in the Underlying Sub-Fund, as the relevant Investment Manager reserves the discretion to determine if currency exposure should be hedged actively, passively or not at all depending on the relevant circumstances. You should be aware that any currency hedging process may not give a precise hedge. Furthermore, there is no guarantee that the hedging will be totally successful. Investors in the currency hedged share class may have exposure to currencies other than the currency of their Share Class. Refer to Section on page 3 of the Fund Summary for further information on market risk of the Underlying Sub- Fund. Refer to Section 7.1 on pages 2 to 3 of the Fund Summary for liquidity risks of the ILP Sub-Fund and Section 9 on page 8 of the Fund Summary for further information on Suspension of Dealings of the ILP Sub-Fund. Refer to Section 7.2 on pages 3 to 7 of the Fund Summary for further information on specific risks of the Underlying Sub- Fund. 21 Collyer Quay #02-01 Singapore , Monday to Friday 9.30am to 5pm. 3

4 PRODUCT HIGHLIGHTS SHEET FEES AND CHARGES WHAT ARE THE FEES AND CHARGES OF THIS INVESTMENT? Payable directly by you as a percentage of your investment amount: Bid-Offer Spread Currently Nil* + Surrender Penalty Switching Fee Surrender penalty may apply. You should also refer to the Product Summary for information on the surrender penalty, if applicable*. Currently Nil* Payable by the ILP Sub-Fund from asset value of the ILP Sub-Fund: Annual Management Fee Currently 1.5% p.a. (maximum 2% per annum)* Accounting & Valuation Fee Currently does not exceed 0.05% per annum* Refer to Section 8 on page 7 and 8 of the Fund Summary, and Section 5 of the Product Summary for further information on fees, charges and Surrender Penalty (if applicable). Additional fees charged by the Underlying Sub-Fund in which the ILP Sub-Fund invests: Operating and Administrative Expenses 0.3% per annum (maximum) * The Company reserves the right to review and amend the fees and charges by giving you at least thirty (30) days' advance notice. + This applies to GrowthInvest Insurance Plan only. VALUATIONS AND EXITING FROM THIS INVESTMENT HOW OFTEN ARE VALUATIONS AVAILABLE? Bid price of the ILP Sub-Fund is published on the next day after valuation of the respective funds and can be found in HOW CAN YOU EXIT FROM THIS INVESTMENT AND WHAT ARE THE RISKS AND COSTS IN DOING SO? You can exit or partially exit the ILP Sub-Fund at any time by informing the Company, either directly or through your Financial Consultant from whom you purchased the ILP Sub- Fund. If your application reaches our correspondence address before 3.30pm on a business day, it will be processed on the same business day. If your application is received after 3:30pm, it will be processed on the next business day. The units withdrawn will be realised at the bid price of the ILP Sub-Fund on the valuation date immediately following the date we accept your written application. The withdrawal proceeds will usually be paid out within 6 business days from the day we process your valid application to exit or partially exit the ILP Sub-Fund. The following is an illustration of the withdrawal amount** that you will receive from the ILP Sub-Fund based on withdrawal of 1,000 units, and bid price of $1.50 assuming the policy is surrendered in the first year with surrender penalty charge of 70% on the account value. (1,000 x $1.50) - 70% (1,000 x $1.50) = $450 Gross withdrawal amount - surrender penalty charge = Net withdrawal amount ** You should also refer to the Product Summary for information on any surrender penalty that may be applicable. If you decide to terminate the Investment-Linked Policy within the free-look period upon receiving your Investment-Linked Policy, the Company will refund the initial premium you paid without interest, without incurring the fees and charges as stated above, less any medical and/or underwriting expenses incurred in accepting your application; and a sum to account for market fluctuation in respect of your units as determined by the Company. Please note that no top-up, fund switching, partial withdrawal or surrender is allowed during the free-look period. CONTACT INFORMATION HOW DO YOU CONTACT US? Please contact your Financial Consultant or call Customer Service Hotline at (65) , Mondays to Fridays, 9am to 5pm. Refer to Section 11 of the Product Summary for more information on valuation, and to Sections 7 and of the Product Summary for more information on withdrawal and switching. 21 Collyer Quay #02-01 Singapore , Monday to Friday 9.30am to 5pm. 4

5 PRODUCT HIGHLIGHTS SHEET GLOSSARY "Debt securities" refers to bonds, certificates of deposit, preferred shares and other forms of securitised debt. "Efficient Portfolio Management" is an investment technique aimed at either reducing risk, reducing costs or generating additional capital or income with a level of risk consistent with the risk profile of the Underlying Sub-Fund. "Equity securities" are a type of investment that represents an interest in a company. Equity exposure may be achieved through investment in shares, depository receipts, warrants and other participation rights. Subject to the foregoing, and unless otherwise stated in "Appendix III Sub-Fund Details" in the Luxembourg Prospectus of the Underlying Sub- Fund, equity exposure may also be achieved, to a limited extent, through investment in convertible securities, index and participation notes and equity linked notes. "UCI" is an undertaking for collective investment that is not a UCITS fund. "UCITS" is an Undertaking for Collective Investments in Transferable Securities, which is a type of collective investment scheme established in accordance with the framework set out in EC Directive 2009/65 of 13 July "Umbrella structure" refers to a fund structure whereby a collective investment scheme exists as a single legal entity but has several distinct sub-funds. 21 Collyer Quay #02-01 Singapore , Monday to Friday 9.30am to 5pm. 5

6 HSBC Insurance Europe Dynamic Equity Fund Fund Summary 1. Description of the ILP Sub-Fund HSBC Insurance Europe Dynamic Equity Fund (the "ILP Sub-Fund") is an investment-linked policy sub-fund offered by HSBC Insurance (Singapore) Pte. Limited (the "Company") which also acts as the custodian of the ILP Sub-Fund. Investment risk rating is used as a guide to determine the ILP Sub-Fund that is suitable to the risk profile as indicated in the Bank's Risk Profile Questionnaire (RPQ). It is currently only applicable to customers of HSBC Bank (Singapore) Limited (the Bank ). 2. Structure of the ILP Sub-Fund The ILP Sub-Fund is a single ILP sub-fund which feeds (invests all or substantially all of its assets) into an underlying sub-fund, JPMorgan Funds Europe Dynamic Fund (Class A (acc) - SGD (hedged)) (the "Underlying Sub-Fund") which is a sub-fund of the JPMorgan Funds (the "Underlying Fund"), an open-ended investment company with an umbrella structure, domiciled in Luxembourg. The suffix "(acc)" refers to an accumulation Share Class of the Underlying Sub-Fund, and accordingly dividends will not normally be paid by the Underlying Sub-Fund. The ILP Sub-Fund is not classified as an Excluded Investment Product (as defined within the MAS Notice 307 on Investment-Linked Policies (the "MAS Notice 307")). 3. Information on the Manager JPMorgan Asset Management (Singapore) Limited is the manager of the ILP Sub-Fund (the "Manager"). The Manager was incorporated in Singapore and has been managing collective investment schemes and discretionary funds since As at 31 December 2016, JPMorgan Asset Management (Singapore) Limited has US$4,139 million worth of assets under its management. The monies and assets of the ILP Sub-Fund are not expected to be affected by the insolvency of the Manager as monies and assets belonging to the ILP Sub-Fund are segregated from the Manager's assets through the maintenance of separate bank and custodian accounts for ILP Sub-Fund, and it is not permissible for monies and assets of the ILP Sub-Fund to be used for payment of the Manager's debts and liabilities under law. 3.1 Information on the Investment Manager and Management Company of the Underlying Sub-Fund JPMorgan Asset Management (UK) Limited is the investment manager of the Underlying Sub-Fund (the "Investment Manager"). The Investment Manager is incorporated and domiciled in the United Kingdom and as at November2016 has managed collective investment schemes or discretionary funds for approximately 42 years. JPMorgan Asset Management (Europe) S.àr.l is the management company of the Underlying Sub-Fund (the "Management Company"). The Management Company is incorporated in Luxembourg and as at November2016 has managed collective investment schemes or discretionary funds for approximately 28 years. 3.2 Information on the Depositary of the Underlying Sub-Fund J.P. Morgan Bank Luxembourg S.A. is the depositary of the Underlying Sub-Fund (the "Depositary"). The Depositary shall provide depositary, custodial, settlement and certain other associated services to the Underlying Fund. In addition, the Depositary shall act independently from the Underlying Fund and the Management Company and solely in the interest of the Underlying Fund and its Shareholders. A summary of the conflicts of interest that relate to 1 21 Collyer Quay #02-01 Singapore , Monday to Friday 9.30am to 5pm.

7 the Depositary can be found under Conflicts of Interest within General Information in the Underlying Sub-Fund s Luxembourg prospectus. The Depositary may entrust all or part of the assets of the Underlying Fund that it holds in custody to such sub-custodians (which are licensed or authorised to carry out their duties as sub-custodians in their relevant jurisdictions) as may be determined by the Depositary from time to time. The Depositary s liability shall not be affected by the fact that it has entrusted all or part of the assets in its care to a third party. When selecting and appointing a sub-custodian or other delegate, the Depositary shall exercise all due skill, care and diligence as required by the UCITS V Legislation to ensure that it entrusts the Underlying Fund s assets only to a delegate that may provide an adequate standard of protection. 4. The Auditor The auditor of the ILP Sub-Fund is PriceWaterhouseCoopers LLP. 5. Investment Objectives, Focus and Approach 5.1 Investment Objectives The investment objective of the ILP Sub-Fund is to maximise long-term capital growth by investing primarily in an aggressively managed portfolio of European companies. 5.2 Investment Focus and Approach The objective of the ILP Sub-Fund is achieved through investments in the Underlying Sub-Fund, JPMorgan Funds Europe Dynamic Fund (Class A (acc) - SGD (hedged)). At least 67% of the Underlying Sub-Fund's assets (excluding cash and cash equivalents) will be invested in equity securities of companies that are domiciled in, or carrying out the main part of their economic activity in, a European country. The Underlying Sub-Fund uses an investment process that is based on systematic investments in equity securities with specific style characteristics, such as value, quality and momentum in price and earnings trends. Historical research has demonstrated that such securities can outperform over a market cycle as they exploit psychological factors (the behavioural and cognitive biases of investors) in equity markets. For example, investor overconfidence, the expectation that a security's earnings will continue to grow in perpetuity, or loss aversion, the reluctance of an investor to sell a security that is decreasing in price. Debt securities, cash and cash equivalents may be held on an ancillary basis. The Underlying Sub-Fund may also invest in UCITS and other UCIs. The Underlying Sub-Fund may invest in assets denominated in any currency and currency exposure may be hedged. The Underlying Sub-Fund may use financial derivative instruments for the purposes of hedging and Efficient Portfolio Management. All of the above investments will be made in accordance with the limits set out in "Appendix II Investment Restrictions and Powers" of the Underlying Sub-Fund's Luxembourg Prospectus. 5.3 Investor Profile The Underlying Sub-Fund is an aggressively managed equity fund investing in a portfolio of European equities chosen for their specific style characteristics. Therefore, the Underlying Sub-Fund may be suitable for investors looking for a higher risk equity strategy to complement an existing core portfolio, or looking to potentially enhance long-term returns and who are comfortable with the extra risks inherent in the Sub-Fund. Investors should have at least a five year investment horizon. 6. Central Provident Fund ("CPF") Investment Scheme The ILP Sub-Fund is not currently included under the CPF Investment Scheme. 21 Collyer Quay #02-01 Singapore , Monday to Friday 9.30am to 5pm. 2

8 7. Risks 7.1 General Risks Investors should consider and satisfy themselves as to the risks of investing in the ILP Sub-Fund. While the ILP Sub- Fund offers potential for capital appreciation, no assurance can be given that this objective will be achieved. Investors should also be aware that the price of units in the ILP Sub-Fund, and the income from them (if any), may fall or rise and investors may not get back their original investment. Investments in the ILP-Sub Fund are designed to produce returns over the long-term and are not suitable for short-term speculation. Investors should not expect to obtain shortterm gains from such investments. The ILP Sub-Fund may be subject to different degrees of economic, political, foreign exchange rate, interest rate, liquidity, default, regulatory and possible repatriation risks depending on the countries and asset classes that the Underlying Sub-Fund invests into or has exposure to. There are general uncertainties and risks associated with investments and transactions in transferable securities and other financial instruments, including investments in financial derivative instruments for the purposes of hedging (and/or Efficient Portfolio Management) or as direct investments. The ILP Sub-Fund may also be exposed to foreign exchange rate risks where it feeds into an Underlying Sub-Fund which invests in assets denominated in foreign currencies, or where the share class is denominated in a currency other than the Singapore dollar. Where the share class is the Singapore dollar hedged share class, the ILP Sub-Fund may still be subject to foreign exchange risks as the currency hedging process may not give a precise hedge. The ILP Sub-Fund is not listed and has no secondary market. Investors can only redeem their investment through the Company on a day on which dealing is permitted. Redemption of units in the ILP Sub-Fund may be suspended under certain circumstances. This will affect an investor's ability to dispose of units. The assets of the Underlying Sub-Fund may be relatively illiquid which may restrict its ability to dispose of the investments at a price and time that it wishes to do so. This may result in a loss to the ILP Sub-Fund. The liquidity of the ILP Sub-Fund may also be limited if a significant portion of the assets of the Underlying Sub-Fund is to be sold to meet redemption requests within a short time frame. Please refer to Section 7.2 of this Fund Summary for more information risks specific to the ILP Sub-fund. 7.2 Specific Risks Investors in the ILP Sub-Fund should carefully consider the following risks of the Underlying Sub-Fund. A comprehensive description of the following risks can be obtained from "Appendix IV Risk Factors" and "Appendix III Sub-Fund Details" in the Luxembourg Prospectus and to Section 8 of the Underlying Sub-Fund's Singapore Prospectus Market Risk The value of equity securities may go down as well as up in response to the performance of individual companies and general market conditions. Because the Underlying Sub-Fund is aggressively managed, volatility may be high as the Underlying Sub-Fund may take larger position sizes, may have high turnover of holdings and at times may have a significant exposure to certain areas of the market. Emerging market currencies and securities may be subject to higher and more volatile price movements than nonemerging market currencies and securities Equity Risk The Underlying Sub-Fund may invest in equities and other equity derivatives which are subject to market risks that historically have resulted in greater price volatility than that experienced by debt securities Currency Risk Movements in currency exchange rates may adversely affect the return of your investment. The Underlying Sub-Fund may invest in assets denominated in any currency and currency exposure might not be hedged. Even if currency hedging 21 Collyer Quay #02-01 Singapore , Monday to Friday 9.30am to 5pm. 3

9 is used by the Underlying Sub-Fund to minimize the effect of currency fluctuations, such currency hedging may not always be successful. Where a purchase involves a foreign exchange transaction, it may be subject to the fluctuations of currency values. The reference currency of the Underlying Sub-Fund is in EUR (the "Reference Currency"). While the ILP Sub-Fund invests in Class A (acc) SGD (hedged), which is a currency hedged share class, such currency hedging may not cover the full value of the ILP Sub-Fund's holding in the Underlying Sub-Fund. In respect of currency hedged share classes, the Underlying Sub-Fund may invest in assets denominated in any currency and currency exposure may be hedged. Notwithstanding the fact that currency hedging may be done to a limited extent for currency hedged share classes, the Underlying Sub-Fund may invest in assets denominated in any currency and such currency exposure may not be hedged for units held by the ILP Sub-Fund in the Underlying Sub-Fund, as the relevant Investment Manager reserves the discretion to determine if currency exposure should be hedged actively, passively or not at all depending on the relevant circumstances. Accordingly, foreign currency exchange rate movements are likely to influence the returns to investors in Singapore, and investors may be exposed to exchange rate risks. Please also refer to sections and of the Singapore Prospectus for details on the currency hedging relating to the Underlying Sub-Fund. Investors should be aware that any currency hedging process, where applicable, may not give a precise hedge. Furthermore, there is no guarantee that the hedging will be totally successful. Investors in the currency hedged share classes may have exposure to currencies other than the currency of their share class Futures and Options Under certain conditions, the Underlying Sub-Fund may use options and futures on securities, indices and interest rates, for the purpose of Efficient Portfolio Management. Also, where appropriate, the Underlying Sub-Fund may hedge market, currency and interest rate risks using futures, options or forward foreign exchange contracts. There is no guarantee that hedging techniques will achieve the desired result. In order to facilitate Efficient Portfolio Management and to better replicate the performance of the benchmark, the Underlying Sub-Fund may finally, for a purpose other than hedging, invest in derivative instruments. Transactions in futures carry a high degree of risk. The amount of the initial margin is small relative to the value of the futures contract so that transactions are "leveraged" or "geared". A relatively small market movement will have a proportionately larger impact which may work for or against the investor. The placing of certain orders which are intended to limit losses to certain amounts may not be effective because market conditions may make it impossible to execute such orders. Transactions in options also carry a high degree of risk. Selling ("writing" or "granting") an option generally entails considerably greater risk than purchasing options. Although the premium received by the seller is fixed, the seller may sustain a loss well in excess of that amount. The seller will also be exposed to the risk of the purchaser exercising the option and the seller will be obliged either to settle the option in cash or to acquire or deliver the underlying investment. If the option is "covered" by the seller holding a corresponding position in the underlying investment or a future on another option, the risk may be reduced Warrants When the Underlying Sub-Fund invests in warrants, the values of these warrants are likely to fluctuate more than the prices of the underlying securities because of the greater volatility of warrant prices Derivative Risks The Underlying Sub-Fund may use financial derivative instruments including but not limited to financial futures contracts, options (on equities, interest rates, indices, bonds, currencies, commodity indices or other instruments), forward contracts (including foreign exchange contracts), swaps (including total return swaps, foreign exchange swaps, commodity index swaps, interest rate swaps, and swaps on baskets of equities, volatility swaps and variance swaps), credit derivatives (including credit default derivatives, credit default swaps and credit spread derivatives), warrants, mortgage TBAs (To-Be-Announced), and structured financial derivative instruments such as credit-linked and equitylinked securities, for Efficient Portfolio Management and/or hedging purposes. The use of financial derivative instruments may not cause the Underlying Sub-Fund to deviate from the investment objectives set out in Underlying Sub-Fund's Appendix to the Singapore Prospectus. 21 Collyer Quay #02-01 Singapore , Monday to Friday 9.30am to 5pm. 4

10 The Underlying Sub-Fund may invest in financial derivative instruments within the limits laid down in restriction 3) a) v) and vi) of Appendix II Investment Restrictions and Powers of the Underlying Sub-Fund's Luxembourg Prospectus, provided that the exposure to the underlying assets does not exceed in aggregate the investment limits laid down in restrictions 3) a) i) to vi) of Appendix II Investment Restrictions and Powers of the Luxembourg Prospectus. When the Underlying Sub-Fund invests in a total return swap or other financial derivative instrument with similar characteristics, the underlying assets and investment strategies to which exposure will be gained are described in the Underlying Sub-Fund's investment objective and policy set out in the Underlying Sub-Fund's Appendix to the Singapore Prospectus. When the Underlying Sub-Fund invests in index-based financial derivative instruments, these investments do not have to be combined to the limits laid down in restriction 3) a) of Appendix II Investment Restrictions and Powers of the Luxembourg Prospectus. The rebalancing frequency of the underlying index of such financial derivative instruments is determined by the index provider and there is no cost to the Underlying Sub-Fund when the index itself rebalances. When a transferable security or money market instrument embeds a derivative, the latter must be taken into account when complying with the requirements of this restriction. Where the Underlying Sub-Fund enters into financial derivative positions, it will hold sufficient liquid assets (including, if applicable, sufficient liquid long positions) to cover at all times the Underlying Sub-Fund's obligations arising from its financial derivative positions (including short positions). Participation in certain financial derivative instruments involves potential investment returns which the Underlying Sub- Fund would not receive, and risks of a type, level or nature to which the Underlying Sub-Fund would not be subject, in the absence of using these instruments. In an extreme scenario, investments made through derivative transactions may cause the investor to lose his entire principal amount invested. Investors may obtain supplementary information relating to the risk management methods employed by the Underlying Sub-Fund including the quantitative limits that are applied and any recent developments in the risk and yield characteristics of the main categories of investments from the Manager. Please refer to the section headed "Derivative Risks" in Appendix IV Risk Factors of the Underlying Sub-Fund s Luxembourg Prospectus for a general discussion of the risks factors concerning the use of derivatives. Please also refer to the section headed I Financial Derivative Instruments in Appendix II Investment Restrictions and Powers of the Underlying Sub-Fund's Luxembourg Prospectus on the investment restrictions and techniques and instruments in relation to the use of derivatives Investing in Technology Related Companies The Underlying Sub-Fund which may invest in technology related companies may fluctuate in value more than other investments because of the greater potential volatility of equity prices of technology related companies Investing in Global Natural Resources and Mining Companies Equities The Underlying Sub-Fund which may invest in global natural resources and mining companies equities may be significantly affected by (often rapid) changes in supply of, or demand for, various natural resources. They may also be affected by changes in energy prices, international political and economic developments, terrorist attacks, clean-up and litigation costs relating to oil spills and environmental damage, reduced demand as a result of increases in energy efficiency and energy conservation, the success of exploration projects, changes in commodity prices, tax and other government regulations and interventions. Global natural resources equities are also influenced by, inter alia, interest rates, trade, fiscal, monetary policies and foreign exchange controls. Mining companies equity may be affected by the varying expected life spans of the mines. Securities of mining companies that have mines with a short expected life span may experience greater price volatility than those that have a long expected life span Investing in Concentrated Portfolios The Underlying Sub-Fund which may invest in a concentrated portfolio may be subject to greater volatility than those investments with a more diversified portfolio Balance Sheet Risk Where there is an accounting loss that does not directly affect the income statement (profit and loss account) and cash flow statement of a firm to which the Underlying Sub-Fund has exposure to, the value of the Underlying Sub-Fund may be affected if the loss impacts the valuation of that firm. For example, a risk of loss caused by the devaluation of a 21 Collyer Quay #02-01 Singapore , Monday to Friday 9.30am to 5pm. 5

11 foreign currency asset (or from revaluation of foreign currency liabilities) shown on the firm's balance sheet. There would not be any direct impact on the Underlying Sub-Fund unless such a loss occurred and impacted the valuation of the firm to which the Underlying Sub-Fund has exposure Investing in Participation Notes Participation Notes are a type of equity-linked structured product involving an OTC transaction with a third party. Therefore the Underlying Sub-Fund investing in Participation Notes is exposed not only to movements in the value of the underlying equity, but also to the risk of counterparty default, which may result in the loss of the full market value of the equity Investment in Emerging and Less Developed Markets In emerging and less developed markets, in which the Underlying Sub-Fund will invest, the legal, judicial and regulatory infrastructure is still developing but there is much legal uncertainty both for local market participants and their overseas counterparts. Some markets may carry higher risks for investors who should therefore ensure that, before investing, they understand the risks involved and are satisfied that an investment is suitable as part of their portfolio. Investments in emerging and less developed markets should be made only by sophisticated investors or professionals who have independent knowledge of the relevant markets, are able to consider and weigh the various risks presented by such investments, and have the financial resources necessary to bear the substantial risk of loss of investment in such investments. Countries with emerging and less developed markets include, but are not limited to (1) countries that have an emerging equity market in a developing economy as defined by the International Finance Corporation, (2) countries that have low or middle income economies according to the World Bank, and (3) countries listed in World Bank publication as developing. The list of emerging and less developed markets is subject to continuous change; broadly they include any country or region other than the United States of America, Canada, Japan, Australia, New Zealand and Western Europe. Please refer to the section entitled "Appendix IV Investment in Emerging and Less Developed Markets" in the Luxembourg Prospectus for details Indirect Exposure to Emerging and Less Developed Markets The Underlying Sub-Fund may have indirect exposure to emerging and less developed markets by investing in companies that are incorporated under the laws of, and have their registered office in, developed markets but carry out some or all of their economic activity in emerging markets. Investments in emerging and less developed markets are subject to increased political, regulatory and economic instability, poor transparency and greater financial risks Investment in Real Estate Investments in equity securities issued by companies which are principally engaged in the business of real estate will subject the strategy to risks associated with the direct ownership of real estate. These risks include, among others, possible declines in the value of real estate; risks related to general and local economic conditions; possible lack of availability of mortgage funds; overbuilding; extended vacancies of properties; increases in competition; property taxes and transaction, operating and foreclosure expenses; changes in zoning laws; costs resulting from the clean up of, and liability to third parties for damages resulting from, environmental problems; casualty or condemnation losses; uninsured damages from floods, earthquakes or other natural disasters and acts of terrorism; limitations on and variations in rents; and changes in interest rates. The strategy may invest in securities of small to mid-size companies which may trade in lower volumes and be less liquid than the securities of larger, more established companies, there are therefore risks of fluctuations in value due to the greater potential volatility in share prices of smaller companies (see the section headed "Sub-Funds Investing in Smaller Companies") in Appendix IV Risk Factors" of the Underlying Sub-Fund s Luxembourg Prospectus) Depository Receipts Investment into a given country may be made via direct investments into that market or by depository receipts traded on other international exchanges in order to benefit from increased liquidity in a particular security and other advantages. A depository receipt admitted to the official listing on a stock exchange in an Eligible State or traded on a Regulated Market may be deemed an eligible transferable security regardless of the eligibility of the market in which the security to which it relates normally trades. Unsponsored depositary receipts may not provide as much information about the underlying issuer and may not carry the same voting privileges as sponsored depositary receipts. 21 Collyer Quay #02-01 Singapore , Monday to Friday 9.30am to 5pm. 6

12 Investments in UCITS and UCIs As the Underlying Sub-Fund may invest some or all of its assets in UCITS and UCIs, the risks identified in this Appendix IV of the Underlying Sub-Fund Prospectus will apply whether the Underlying Sub-Fund invests directly or indirectly through the UCITS and UCIs. Investment decisions in respect of the the UCITS and UCIs will be made independently of the Sub-Fund and it is possible that certain UCITS and UCIs may invest in the same security or in issues of the same asset class, industry, currency, country or commodity at the same time. Accordingly, there can be no assurance that effective diversification of the Underlying Sub-Fund's portfolio will always be achieved Political and Regulatory Risk The Underlying Sub-Fund is governed by European Union legislation, specifically the UCITS Directive and is a Luxembourg domiciled UCITS. Investors should note that the regulatory protections provided by their local regulatory authorities may differ or may not apply. Investors should consult their financial or other professional adviser for further information in this area. The value of the Underlying Sub-Fund's assets may be affected by uncertainties such as international political developments, civil conflicts and war, changes in government policies, changes in taxation, restrictions on foreign investment and currency repatriation, currency fluctuations and other developments in the laws and regulations of countries in which investment may be made. For example, assets could be compulsorily re-acquired without adequate compensation. Events and evolving conditions in certain economies or markets may alter the risks associated with investments in countries or regions that historically were perceived as comparatively stable becoming riskier and more volatile. These risks are magnified in countries in emerging markets. Recent legislative changes in the United States are relevant to JPMorgan Chase & Co. and may be relevant to the Underlying Sub-Fund and its investors. The Dodd-Frank Act includes certain provisions (known as the "Volcker Rule") that restrict the ability of a banking entity, such as JPMorgan Chase & Co. and its affiliates, from acquiring or retaining any equity, partnership or other ownership interest in, or sponsoring, a covered fund and prohibit certain transactions between such funds and JPMorgan Chase & Co. Under the Volcker Rule, if JPMorgan Chase & Co., together with its employees and directors, owns 15% or more of the ownership interests of the Underlying Sub-Fund outside of the permitted seeding time period, the Underlying Sub-Fund could be treated as a covered fund. Because JPMorgan Chase & Co. does not intend to operate the Underlying Sub-Fund as a covered fund, it may be required to reduce its ownership interests in a Underlying Sub-Fund at a time that is sooner than would otherwise be desirable. This may require the sale of portfolio securities, which may result in losses, increased transaction costs and adverse tax consequences. In addition, in cases where JPMorgan Chase & Co. continues to hold a seed position representing a significant portion of the Underlying Sub-Fund s assets at the end of the permitted seeding period, the anticipated or actual redemption of shares owned by JPMorgan Chase & Co. could adversely impact the Underlying Sub-Fund and could result in the Underlying Sub-Fund s liquidation. The full impact of the Volcker Rule on the Underlying Sub-Fund is not fully known at this time Taxation Risk Investors should note in particular that (i) the proceeds from the sale of securities in some markets or the receipt of any dividends or other income may be or may become subject to tax, levies, duties or other fees or charges imposed by the authorities in that market including taxation levied by withholding at source and/or (ii) the Underlying Sub-Fund's investments may be subject to specific taxes or charges imposed by authorities in some markets. Tax law and practice in certain countries into which an Underlying Sub-Fund invests or may invest in the future is not clearly established. It is possible therefore that the current interpretation of the law or understanding of practice might change, or that the law might be changed with retrospective effect. It is therefore possible that the Underlying Sub-Fund could become subject to additional taxation in such countries that is not anticipated either at the date of the Underlying Sub-Fund s Prospectus or when investments are made, valued or disposed of. 8. Fees and Charges 8.1 Payable through deduction from asset value of the ILP Sub-Fund Management fee is currently at 1.5% per annum (maximum 2% per annum). The accounting and valuation fee currently does not exceed 0.05% per annum. 21 Collyer Quay #02-01 Singapore , Monday to Friday 9.30am to 5pm. 7

13 8.2 Payable by cancellation of units Please refer to Section 5 (5.1 to 5.4) of the Product Summary. 8.3 Additional fees charged by the Underlying Sub-Fund in which the ILP Sub-Fund invests Operating and administrative expenses is 0.3% per annum (maximum). The other charges reflected in the Singapore Prospectus under "Payable by the Investor" (in Section 2 "Fees, Charges and Expenses") such as initial charge, redemption charge and annual management and advisory fee are not applicable. Please refer to the Singapore Prospectus of the Underlying Sub-Fund for further details or updates on the additional fees above as may be determined by the Manager from time to time. 9. Suspension of Dealings 9.1 The Company may suspend the issue and/or realization of units by the Policyholder as and when the issue, realization and/or cancellation of units in the Underlying Sub-Fund is suspended. 9.2 The circumstances under which the issue, realization and/or cancellation of units in the Underlying Sub-Fund may be suspended are set out in the Singapore Prospectus of the Underlying Fund (as may be supplemented or replaced from time to time). 9.3 In addition, the Company may suspend the issue, realization and/or cancellation of units by the Policyholder under the following circumstances: (a) (b) (c) any 48-hour period (or such longer period as the Company may agree) prior to the date of any meeting of Policyholders (or any adjourned meeting thereof); any period when the dealing of units is suspended pursuant to any order or direction of the MAS; or any period when the business operations of the Company in relation to the operation of the ILP Sub-Fund is substantially interrupted or closed as a result of or arising from pestilence, acts of war, terrorism, insurrection, revolution, civil unrest, riots, strikes or acts of God. 9.4 Such suspension shall take effect forthwith upon the declaration in writing thereof by the Company and shall terminate on the day following the first business day on which the condition giving rise to the suspension shall have ceased to exist and no other conditions under which suspension is authorized under this paragraph shall exist upon the declaration in writing thereof by the Company. 10. Performance of the ILP Sub-Fund The performance of the ILP Sub-Fund as at 31 July 2017 is as shown below. Cumulative Total Returns Period HSBC Insurance Europe Dynamic Equity Fund (Class A (acc) SGD MSCI Europe Index (Total Return Net) hedged to SGD (hedged)) 3-month -0.36% 1.28% 6-month 6.48% 7.90% 1-year 18.11% 17.88% 3-year N.A. N.A 5-year N.A N.A 10-year N.A N.A Since Inception* 25.22% 27.70% 21 Collyer Quay #02-01 Singapore , Monday to Friday 9.30am to 5pm. 8

14 Average Annual Compounded Returns Period HSBC Insurance Europe Dynamic Equity Fund (Class A (acc) SGD MSCI Europe Index (Total Return Net) hedged to SGD (hedged)) 1-year 18.11% 17.88% 3-year N.A N.A 5-year N.A N.A 10-year N.A N.A Since Inception* 16.00% 17.51% *Inception date: 25 January 2016 Source: HSBC Insurance (Singapore) Pte Limited, JPMorgan Asset Management (Singapore) Limited, Bloomberg L.P. Note: The performance of the ILP Sub-Fund is not guaranteed and the value of investments and income from them may fall as well as rise. Past performance of the ILP Sub-Fund is not necessarily indicative of future performance. In addition, although the past performance of the ILP Sub-Fund is to a large extent dependent on the on the past performance of the Underlying Sub-Fund, the latter should not be taken to be an accurate proxy for the performance of the ILP Sub-Fund Basis of Calculating the Return The performance figures are calculated in Singapore Dollars using bid-to-bid prices/nav-to-nav prices, with any income or dividends reinvested. Fees and charges payable through deduction of premium or cancellation of units are excluded from this calculation. 11. Expense Ratio The expense ratio of the ILP Sub-Fund for the period 1 July 2015 to 30 June 2016 is 1.79%. The expense ratio of the Underlying Sub-Fund for the period 1 July 2015 to 30 June 2016 was 1.80%. The expense ratio of the ILP Sub-Fund does not include charges for insurance coverage, brokerage and other transactions costs, interest expenses, performance fee, foreign exchange gains and losses, front and back end loads and other costs arising from the purchase or sales of other funds, tax deducted at source or arising out of income received and dividends and other distributions to shareholders. The expense ratio of the ILP Sub-Fund is calculated in accordance to the Investment Management Association of Singapore's guidelines as required by MAS Notice Turnover Ratio The turnover ratio of the ILP Sub-Fund for the period 1 July 2015 to 30 June 2016 is %. The turnover ratio of the Underlying Sub-Fund for the period 1 July 2015 to 30 June 2016 was %. The turnover ratios of the ILP Sub-Fund and the Underlying Sub-Fund are calculated based on the lesser of purchases or sales expressed as a percentage over average daily net asset value. 13. Soft Dollar Commissions/Arrangements The Company does not receive any soft dollar commission in respect of the ILP Sub-Fund. Soft dollars refers to arrangements under which products or services, other than the execution of securities transactions, are obtained from or through a broker in exchange for the direction by the manager of transactions to the broker. The Manager does not receive or enter into soft-dollar commissions or arrangements in respect of the ILP Sub-Fund, but may do so in future. The Investment Manager may enter into commission sharing arrangements only where there is a direct and identifiable benefit to the clients of the Investment Manager, including the Underlying Sub-Fund, where the Investment Manager are satisfied that the transactions generating the shared commissions are made in good faith, in strict compliance with applicable regulatory requirements and in the best interest of the Underlying Sub-Fund and the investors. Any such arrangements must be made by the Investment Manager on terms commensurate with best market practice. Depending on its local regulatory rights, the Investment Manager may make use of soft commission to pay for research or executions 21 Collyer Quay #02-01 Singapore , Monday to Friday 9.30am to 5pm. 9