Be SELECTIVE when Managing your Wealth. Portfolio Update Video > HSBC SELECT MODERATE (A) Monthly Report as at 30 April 2018.

Transcription

1 Be SELECTIVE when Managing your Wealth Portfolio Udate Video > HSBC SELECT MODERATE (A) 3

2 Objective and investment olicy The objective of the mutual fund is to offer flexible, active management on euity and fixed-income markets over a minimum investment eriod of three years. Desite oerating within larger allocation limits, the mutual fund s rofile may be comared with an allocation made u of 20% euities and 80% ublic and rivate bonds on average, invested in develoed markets with a euro bias as well as in emerging markets for diversification uroses. The investment strategy is discretionary and is based on a ortfolio management rocess organised around three illars: a medium/long-term strategic asset allocation deending on the manager s level of conviction (asset classes, geograhical areas, sectors), a tactical allocation resulting from the manager s short-term convictions in order to take advantage of market oortunities, a selection of undertakings for collective investment (UCI) and managers caable of generating erformance over time. Performance and risk analysis Base 100 Performances /04/15 Fund's erformance over the recommended investment horizon 30/04/16 Net Cumulated erformance Portfolio (1) MSCI EMU (NR) (2) Bloomberg Barclays Euro Agg (3) EONIA Indicators & ratios (weekly) 30/04/17 1 month 0.40% 4.86% -0.26% -0.03% 30/04/18 Base 100 Performances 1 year -1.80% 4.77% 1.63% -0.36% Fund's volatility 3.24% Share ratio Net erformance by calendar year Portfolio (1) MSCI EMU (NR) (2) Bloomberg Barclays Euro Agg (3) EONIA % 1.94% 0.47% -0.12% 1 year % 12.63% 0.68% -0.36% /04/15 Indices erformances over the recommended investment horizon 30/04/16 (1) MSCI EMU (NR) (3) EONIA 3 years -1.05% 12.48% 3.32% -0.90% 3 years 3.82% % 4.33% 3.32% -0.32% 5 years 12.87% 60.79% 16.78% -0.75% 5 years 3.79% % 9.82% 1.00% -0.11% 30/04/17 (2) Bloomberg Barclays Euro Agg 07/01/ % % 51.14% 1.51% 07/01/ % % 4.32% 11.10% 0.10% 30/04/ % 23.36% 2.17% 0.09% The above erformance figures refers to the ast and are not a reliable indicator of future returns. The investment objective has been modified on the 25th Setember Performance returns rior to this date have been realized under different circumstances. Risk rofile Lower risk Tyically lower rewards Average Allocation 20% Euities Historical data, such as those used to calculate this synthetic indicator, cannot be considered are liable indication of the fund s future risk rofile. Risk category shown is not guaranteed and may shift over time. The lowest category does not mean risk free. The fund is classified in category 3,00. This classification is euivalent to the volatility of the short-term Eurozone government bond market. Fund Details Net asset value (C)(EUR) Number of underlying funds 44 Legal Form Mutual Fund regulated under French law Investment horizon > 3 years Dividend Policy (C): Accumulation Shares Start Date of Management 07/01/2009 Indices* Higher risk 3 4 Total asset (EUR) (1) MSCI EMU (NR) Euroland Euity Index (2) Bloomberg Barclays Euro Agg Euro Bond Index (3) EONIA Euro Money Market Index Tyically higher rewards *Indices for information and comarison uroses only, as the fund has no official benchmark. 2

3 Portfolio Comosition 29/12/ /04/2018 % TNA % TNA Variation* Euities** 17.10% 17.66% 0 Euroe North America 8.85% 11.29% 2.88% 2.35% 1.51% 1.93% = Jaan 1.91% 1.11% Asia ex-jaan 1.39% 0.97% = Global 0.56% 0.00% ** 69.48% 62.73% 3 Euroe Global North America 38.88% 48.92% 13.53% 8.44% 12.57% 4.65% 4.50% 0.71% Absolute Return 2.64% 5.53% 0 Global 2.64% 5.53% Money Market & Cash 10.77% 14.08% 0 exit Total % % * There is a change over the eriod if the difference in weighting is greater than 0.5% in absolute value terms. ** Including fixed income and euity market exosure via derivatives (excet otions).,15 Asset Allocation as at 30/04/2018 Regional Allocation*** as at 30/04/2018 & Money Market 76,8% Euities 17,7% Absolute Return 5,5% Total : 100,0% Asia ex-jaan 1,0% 10,9% Euroe 73,1% Global 10,7% Jaan 1,2% North America 3,2% Total : 100,0% ***excet cash 3

4 To 5 Holdings Underlying Funds Asset Class Weight Monthly Performance* Performance Contribution** 1 HSBC EURO SHORT TERM BOND 8.23% 0.01% 0.00% 2 HSBC GIF EURO HIGH YIELD BD 7.28% 0.45% 0.03% 3 HSBC GIF EURO CREDIT TOTAL RETURN BD 7.20% 0.28% 0.02% 4 HSBC GIF EURO BOND 6.15% -0.19% -0.01% 5 HSBC EURO LIQUIDITY FUND Money Market & Cash 5.57% -0.04% 0.00% Total * Monthly return in Euro of underlying funds is based on HSBC SELECT MODERATE ortfolio at the end of 04/30/2018 and 03/29/2018. The return is calculated with the following formula : end of month valuation receding end of month valuation -1. ** The erformance contribution is calculated as follows : monthly return x monthly average weight % Main decisions taken during the month New ositions Asset Class Regional Zone u XTRACKERS ETF MSCI EMU Euities Euroe u HSBC GIF GLOBAL EM LOCAL CURRENCY RATES u ISHARES MSCI CANADA Euities North America Positions liuidated t t t t t HSBC GIF GLOBAL HIGH INCOME BD Global 1 HSBC GIF US DOLLAR BOND North America 1 ETF HSBC MSCI EMERGING MARKETS Euities 1 ETF LYXOR DAX Euities Euroe 1 HSBC SMALL CAP FRANCE Euities Euroe 1 Positions added HSBC GIF EURO BOND Euroe HSBC GIF EURO HIGH YIELD BD Euroe HSBC EURO SHORT TERM BOND Euroe ETF ISHARES MSCI EUROPE MIN VOL Euities Euroe HSBC GIF RMB FIXED INCOME Positions reduced HSBC GIF GLOBAL HIGH YIELD BD HSBC GIF BRAZIL BOND HSBC MONEY HSBC GIF GLOBAL EM MKT LOCAL DEBT HSBC GIF GLOBAL EMERGING MKT BOND Money Market & Cash Global Euroe 4

5 Portfolio's History 120 Historical Asset Allocation* /04/ /07/ /10/ /01/ /04/ /07/ /10/ /01/ /04/ /07/ /10/ /01/ /04/2018 Absolute Return & Money Market Euities *derivative roducts' off-balance-sheet commitment included (excet otions) Historical Allocation by Region** /04/ /07/ /10/ /01/ /04/ /07/ /10/ /01/ /04/ /07/ /10/ /01/ /04/2018 Pacific ex-jaan North America Jaan Global Euroe Asia ex-jaan **excet cash 5

6 Euity comonent Analysis* 24 Historical Allocation by Region Euities as at 30/04/ /04/ /07/ /10/ /01/ /04/ /07/ /10/ /01/ /04/ /07/ /10/ /01/2018 Pacific ex-jaan North America Jaan Global Euroe Asia ex-jaan 27/04/2018 Asia ex-jaan 5,3% 10,5% Euroe 52,6% Global 0,0% Jaan 4,8% North America 26,7% Pacific ex-jaan 0,0% Total : 100,0% *excet derivative roducts' off-balance-sheet commitment. Bond comonent Analysis* Historical Allocation by Strategy as at 30/04/ /04/ /07/ /10/ /01/ /04/ /07/ /10/ /01/ /04/ /07/ /10/ /01/2018 Multi-strategy Inflation Linked High Yield Government Em. Local Currency Em. Hard Currency Em. Diversified Cororate Convertible 27/04/2018 Convertible 7,1% Cororate 18,4% Em. Diversified 0,0% Em. Hard Currency 3,1% Em. Local Currency 10,7% Government 31,9% High Yield 13,7% Inflation Linked 15,0% Multi-strategy 0,0% Total : 100,0% *excet derivative roducts' off-balance-sheet commitment. 6

7 Fund Manager Commentary Economic Environment The geoolitical environment (tensions on trade agreements and the conflict in Syria) and high level of world growth (+2.4% in 2018 according to the IMF) triggered a shar rise in commodity rices (aluminium, +12.5% in USD; WTI oil rice, +5.7% in USD). While full emloyment in the US caused fears of wage ressures, soaring commodities refocused concerns about a return of inflation. US government borrowing rates tightened to above the symbolic 3% mark and the dollar areciated against most currencies (+2% against the euro). In Aril, Eurozone euities largely outerformed develoed and emerging markets (MSCI EMU NR EUR, +5.1%; MSCI World NR EUR, +2.9%; MSCI NR EUR, +1.3%). Play Video > Click here to watch the Portfolio Udate Video. Performance & current holdings We maintained our reference for euity markets and took some rofits at the end of the month. On euity markets, our reference for Euroe over the US was beneficial and more than offset our ositions in emerging markets. The latter, already weakened by the tariff negotiations, are imacted by bond stress and a stronger dollar. We continued to lighten our emerging ositions, reduced by 25% over a month. Regarding our investments, the Russian fund suffered from US sanctions, which weighed on Russian euities and the rouble. Conversely, our osition on frontier markets benefits from the rise in oil rices. We lightened the index and Asian funds to finance our urchase of Eurozone index funds. The US comonent was lightened by the artial sale of growth stocks and financials. We introduced a Canadian securities fund in order to take advantage of the rise in commodities. The bond comonent did not suffer from bond stress. Our low exosure to government bonds was aroriate. Inflation-linked bonds outerformed real-rate bonds (HSBC Oblig Inflation Euro, +0.13%; HSBC Euro Gvt Bond Fund, -0.27%). The best contributions came from high yield credit and bank subordinated credit, which benefited from renewed aetite for risk. Our low emerging bonds exosure meant we were not imacted heavily by widening sreads due to US interest rate tensions. In addition, emerging currencies fell by 1.4% on average against the euro. The Chinese debt fund (HSBC GIF RMB Fixed Income, +1.65%) contributed ositively to the erformance. We introduced a new local-currency emerging debt suort: HSBC GIF Emerging Market Local Currency Rate. Lastly, we comleted the sale of bond instruments invested in USD-denominated securities and hedged in euros. The cost of EUR/USD exchange rate hedging, higher than 3%, erases the exected return on these assets. Outlook World growth is strong, and cororate earnings have confirmed this: Q1 growth rate for S&P 500 comanies of 25%. Fears of inflationary ressures are resurfacing and, in this context, we refer to invest in euities, as inflation imacts fixed-rate investments. Among euities, we maintain broad geograhical diversification with a reference for Euroe and marginally, Jaan. We lightened our exosure to emerging markets, which are imacted by higher interest rates in the US. Valuations are currently high in the bond comonent. We maintain low exosure to debt roducts with a reference for inflation-linked bonds and subordinated bank credit. We also hold a significant ortion of absolute erformance funds, decorrelated from market erformance, and liuidity to limit ortfolio volatility. 7

8 Fund Management Team Stéhane Mesnard Fund manager Stéhane Mesnard has been a multi-asset fund manager since November 2012 and he has been working in this sector since he joined the HSBC grou in Before taking u his current osition, he worked in the financial engineering deartment at Louvre Gestion (formerly Banue du Louvre), an investment management firm dedicated to the HSBC grou's rivate banking activities in France. He gained a Master's degree in finance from Paris II - Panthéon Assas University and ualified as a Chartered Financial Analyst (CFA) in Christohe Machinot Fund manager Christohe Machinot has been a multi-asset fund manager since November From 2004 to 2012, he was an analyst-manager at HSBC Private Wealth Managers (formerly Louvre Gestion). He has worked in the industry since 2004, when he joined the HSBC grou. Before taking u his current osition, he was an organisational consultant at Vectis Conseil for two years. Christohe holds a ostgraduate degree in management sciences from IAE Toulouse. 8

9 Imortant Information This document is only intended for non-rofessional investors as defined by MIFID. The material contained herein is for information only and does not constitute investment advice or a recommendation to any reader of this material to buy or sell investments. There are risks involved with this tye of investment. Investors and otential investors should read and note the risk warnings in the rosectus and relevant KIID. Past erformance of investments is not necessarily a guide to future erformance and the value of investments and any income from them can go down as well as u and you may not get back the amount you originally invested. The rate of currency exchange, where alicable, may cause the value of such investments to go down as well as u. Investments in emerging markets are by their nature higher risk and otentially more volatile than those inherent in established markets. You should view this investment as medium to long-term, and should lan to kee it for at least three years. HSBC Select ortfolios are marketed in Malta in terms of the Directive on Undertakings for Collective Investment Schemes in Transferable Securities (UCITs). Units in HSBC Select Funds have not been and will not be offered for sale or sold in the United States of America, its territories or ossessions and all areas subject to its jurisdiction, or to United States Persons. All alications are made on the basis of the relevant and current HSBC Select rosectus, the Key Investor Information Document of the related Fund (KIID) and the most recent annual and semi-annual reorts (when available), which can be obtained uon reuest free of charge from HSBC Bank Malta.l.c which is licensed to conduct Investment Services business by the Malta Financial Services Authority. Aroved and issued by HSBC Global Asset Management (Malta) Limited, Business Banking Centre, Mill Street, Qormi QRM 3101 Comany Reg No C26053 which is licensed to rovide investment services in Malta by the Malta Financial Services Authority. The information contained herein is subject to change without notice. This document has no contractual value and in no way shall it constitute a solicitation or recommendation to buy or sell transferable securities in any jurisdiction in which any such offer is not authorised by the law. The commentary and analysis resented in this document reflect the oinion of HSBC Global Asset Management (France) on the markets, according to the information available to date. They do not constitute any kind of commitment from HSBC Global Asset Management (France). Conseuently, HSBC Global Asset Management (France) will not be held resonsible for any investment or disinvestment decision taken on the basis of the commentary and/or analysis in this document. The erformance figures dislayed in the document relate to the ast and ast erformance should not be seen as an indication of future returns. All non-authorized reroduction or use of this commentary and analysis will be the resonsibility of the user and will be likely to lead to legal roceedings. All data come from HSBC Global Asset Management (France) unless otherwise secified. Any third arty information has been obtained from sources we believe to be reliable, but which we have not indeendently verified. HSBC Global Asset Management (France) - RCS n (Nanterre). Portfolio Management Comany authorised by the French regulatory body AMF (n GP-99026). Postal address: Paris cedex 08. Offices: Immeuble Coeur Défense - 110, eslanade du Général de Gaulle - La Défense 4 - France. Any subscrition to any fund described in this document must be made on the basis of the information notice currently in force, which is available uon reuest from HSBC Global Asset Management (France), the centralising agent or your usual financial service rovider or reresentative or our Web site. Fund Details Legal Form Mutual Fund regulated under French law Investment horizon > 3 years Dividend Policy (C): Accumulation Shares Start Date of Management 07/01/2009 Base Currency EUR Valuation Daily Subscritions & Redemtions Ten thousandths of share Dealing / Payment Date Daily - D before 12:00 m (Paris) / D+2 Initial Fee / Exit Fee 2.00% / Nil Minimum Initial Investment Whole shares Portfolio Management Comany HSBC Global Asset Management (France) Custodian Caceis Bank Central Paying Agent Caceis Bank ISIN Code (C): FR Bloomberg Ticker (C): MODEVRM FP Fees Real internal management fees 0.80% inc. taxes Maximum internal management fees 0.80% inc. taxes Maximum external management fees 0.30% inc. taxes Maximum indirect fixed management fees 1.00% inc. taxes 9

10 Indices Bloomberg Barclays indices and associated data, Coyright 2018 Bloomberg Index Services Limited, Bloomberg Finance L.P., their affiliates and/or third arty licensors («Licensors»). Used with ermission. All rights reserved. Licensors make no warranties regarding use of or reliance uon such index data and shall have no liability in connection therewith. Eonia calculated by Thomson Reuters and Euribor-EBF. Neither Euribor-EBF, nor the resective Contributing Banks Steering Committees of Eonia nor Thomson Reuters can be held liable for any irregularity or inaccuracy of the Eonia Index. Eonia is a registered trademark of Euribor-EBF (Euribor Euroean Banking Federation a.i.s.b.l.). All rights reserved. For all commercial use of the registered trademarks rior exlicit authorisation needs to be obtained from Euribor-EBF. Source: MSCI. The MSCI information may only be used for your internal use, may not be reroduced or redisseminated in any form and may not be used as basis for or a comonent of any financial instruments or roducts or indices. None of the MSCI information is intended to constitute investment advice or a recommendation to make (or refrain for making) any kind of investment decision and may not be relied on as such. Historical data and analysis should not be taken as an indication or guarantee of any future erformance analysis, forecast or rediction. The MSCI information is rovided as an as is basis and the user of this information assumes the entire risk of any use made of this information. MSCI, each of its affiliates and each other erson involved in or related to comiling, comuting or creating any MSCI information (collectively 'the MSCI Parties') exressly disclaims all warranties (including, without limitation, all warranties of originality, accuracy, comleteness, timeliness, non-infringement, merchantability and fitness for a articular urose) with resect to this information. Without limiting any of the foregoing, in no event shall any MSCI Party have any liability for any direct, indirect, secial, incidental, unitive, conseuential (including, without limitation, lost rofits) or any other damages. ( If you have any doubts about the suitability of this investment, you should contact an indeendent financial adviser. Document udated on 12/05/2018. Coyright HSBC Global Asset Management (France). 10