HSBC MUTUAL FUND NOTICE CUM ADDENDUM

Transcription

1 Changes in the amental Attributes of various schemes of HSBC Mutual We would like to inform you that in order to bring the uniformity in the practice across Mutual s and to standardize the scheme categories and their characteristics, SEBI vide its circular no. SEBI/HO/IMD/DF3/CIR/P/2017/114 dated October 06, 2017 and SEBI circular SEBI/HO/IMD/DF3/CIR/P/2017/126 dated December 04, 2017, has issued guidelines for categorization and rationalization of Mutual schemes. Accordingly, the following changes will be carried out in certain schemes of HSBC Mutual ( HMF ) to align the same with the requirements specified in the aforesaid circulars. The Board of Directors of the HSBC Asset Management (India) Pvt. Ltd. (the AMC) and the Board of Trustees (the Trustees) have approved the following changes, which will be effective from March 14, 2018 and will be effected in the Information Document (SID) and Key Information Memorandum (KIM) of the respective. 1. HSBC EQUITY FUND 1. Name of the HSBC Equity HSBC Large Cap Equity 2. Large cap equity scheme Large Cap 3. Type of An open-ended diversified Equity Large Cap An open ended equity scheme predominantly investing in large cap stocks 4. Investment To generate long-term capital growth To generate long-term capital growth Objective from an actively managed portfolio of from an actively managed portfolio of equity and equity. equity and equity of predominantly large cap companies. However, there can be no assurance or guarantee that the investment objective of the scheme would be achieved. pattern 65% 100% High securities Debt securities 0% 35% Low to & 30% of the corpus of the and if the decides to invest in ADRs / 30% of the assets of the. The shall have derivative The may review the above pattern of investments based on views on the equity s and asset liability management needs. However, at all times the portfolio will adhere to the overall investment objective of the. Investors may note that securities which provide higher returns, typically display higher volatility. Accordingly, the investment portfolio of the would reflect moderate to high volatility in its equity and equity related investments and low to moderate volatility in its debt and money investments. The aim of HSBC Equity is to deliver above-benchmark returns by an actively managed portfolio, mainly comprising companies registered in and / or listed on a regulated of India. Income is not a primary consideration in the investment policies of HEF. The will invest across a range of capitalisations with a preference for medium and large companies. related. Investments will be will be done from these sectors. The fund manager in selecting scrips will focus on the fundamentals of the business, the industry structure, the quality of management, sensitivity to economic factors, the financial strength of the company and the key earnings drivers. construction process. Stock specific risk will be minimized by investing only in those companies that have been analyzed by the Investment Team at the AMC. Risk will also be reduced through adequate diversification of the portfolio. Diversification will be achieved by spreading the investments over a range of industries / sectors. The may however, invest in unlisted and / or privately placed and / or unrated debt securities, subject to the limits indicated under Investment 80% 100% High securities of large cap companies 0% 20% High securities of other than large cap companies Debt securities 0% 20% Low to & 20% of the corpus of the and if the decides to invest in ADRs / 35% of the assets of the. The shall have derivative The may review the above pattern of investments based on views on the equity s and asset liability management needs. However, at all times the portfolio will adhere to the overall investment objective of the. The will adopt the list of large cap companies as defined by SEBI, from time to time. Presently as per SEBI circular no. SEBI/HO/IMD/DF3/CIR/P/ 2017/114 dated October 06, 2017 and SEBI/HO/IMD/DF3/CIR/P/2017/126 dated December 04, 2017 large cap companies will comprise of companies from 1st to 100th companies in terms of full capitalization. The would adopt the list of large cap companies prepared by AMFI for this purpose in accordance with the SEBI circular no. SEBI/HO/IMD/DF3/CIR/P/2017/114 dated October 06, 2017 and SEBI/HO/IMD/DF3/ CIR/P/2017/126 dated December 04, If there is any updation in the list of large cap companies, the fund would rebalance its portfolio (if required) in line with the updated list, within a period of one month. Investors may note that securities which provide higher returns, typically display higher volatility. Accordingly, the investment portfolio of the would reflect high volatility in its equity and equity related investments and low to moderate volatility in its debt and money investments. The aim of HSBC Large Cap Equity is to deliver above-benchmark returns by an actively managed portfolio, mainly comprising companies registered in and / or listed on a regulated of India. The will invest at least 80% in large cap companies and may also invest in equity and equity related of companies other than large cap companies. related. Investments will be will be done from these sectors. The fund manager in selecting scrips will focus on the fundamentals of the business, the industry structure, the quality of management, sensitivity to economic factors, the financial strength of the company and the key earnings drivers. construction process. Stock specific risk will be minimized by investing only in those companies that have been analyzed by the Investment Team at the AMC. Risk will also be reduced through adequate diversification of the portfolio. Diversification will be achieved by spreading the investments over a range of industries / sectors. As per the asset pattern, the may invest a part 7. Risk-o-meter - Investment in equity and equity 2. HSBC MIDCAP EQUITY FUND - Investment in predominantly large cap equity and equity 1. Name of the HSBC Midcap Equity HSBC Small Cap Equity 2. Mid-cap Equity Small Cap 3. Type of An open-ended diversified Equity An open ended equity scheme predominantly investing in small cap stocks 4. Investment To generate long term capital growth from To generate long term capital growth from Objective an actively managed portfolio of equity and an actively managed portfolio of equity and equity primarily being equity of predominantly Midcap stocks. However, it could move a small cap companies. However, it could move portion of its assets towards fixed income a portion of its assets towards fixed income pattern Restrictions for the as per this SID, from issuers of repute and sound financial standing. If investment is made in unrated debt securities, the approval of the Board of the AMC and the Trustees or the Investment Management Committee (within the broad parameters approved by the Board of the AMC and the Trustees) shall be obtained, as per the As per the asset pattern, the may invest a part managed by the AMC or in the investment objectives of the securities if the fund manager becomes negative on the Indian equity s. Equities & equity 65% 100% High of companies whose capitalization (a) does not exceed the capitalization of the largest constituent and (b) is not less than the capitalization of the smallest constituent of S&P BSE MID CAP Index Other equity and 0% 35% High equity related securities Debt securities 0% 35% Low to & Under normal circumstances, the shall invest at least 65% of the net assets under the in equity and equity which fall within the definition of midcap companies. The may review the above pattern of investments based on views on the equity and debt s and asset liability management needs. The portfolio of the shall be reviewed on half yearly basis against the stated definition of Midcap Stock/Companies and necessary rebalancing, if any required, will be carried out within 90 days of the half yearly review. However, at all times the portfolio will adhere to the overall investment objective of the. Midcap stocks will comprise equity stocks of companies whose capitalization (a) does not exceed the capitalization of the largest constituent and (b) is not less than the capitalization of the smallest constituent of S&P BSE MID CAP Index. Investors may note that securities which provide higher returns, typically display higher volatility. Accordingly, the investment portfolio of the would reflect government or supported by managed by the AMC or in the investment objectives of the securities if the fund manager becomes negative on the Indian equity s. However, there can be no assurance or guarantee that the investment objective of the scheme would be achieved. Equity 65% 100% High of small cap companies Equity 0% 35% High of other than small cap companies Debt securities & 0% 35% Low to The will adopt the list of small cap companies as defined by SEBI, from time to time. Presently, as per SEBI circular no. SEBI/HO/IMD/DF3/CIR/P/ 2017/114 dated October 06, 2017 and SEBI/HO/IMD/DF3/ CIR/P/2017/126 dated December 04, 2017, small cap companies will comprise of companies from 251st company onwards in terms of full capitalization. The would adopt the list of small cap companies prepared by AMFI for this purpose in accordance with the SEBI circular no. SEBI/HO/IMD/DF3/CIR/P/ 2017/114 dated October 06, 2017 and SEBI/HO/IMD/DF3/ CIR/P/2017/126 dated December 04, If there is any updation in the list of small cap companies, the fund would rebalance its portfolio (if required) in line with the updated list, within a period of one month. Investors may note that securities which provide higher returns, typically display higher volatility. Accordingly, the investment portfolio of the would reflect high volatility in its equity and equity related investments and low to moderate volatility in its debt and money investments. 35% of the corpus of the and if the decides to invest in ADRs /

2 moderate to high volatility in its equity and equity related investments and low to moderate volatility in its debt and money investments. 30% of the corpus of the and if the decides to invest in ADRs / 30% of the assets of the. Securitized debt, while relatively illiquid only if the Manager becomes equity s for a reasonably long period of time would he consider investing in such to improve the yield to the fund and investors as opposed to putting the monies in reverse repo and short term money. No investments shall be made in foreign securitized debt. For investments in ADRs / GDRs, the Manager would consider the premium / discount to the underlying stock and the possibility of the discount narrowing or the premium expanding, liquidity management of the portfolio, secondary and primary offerings of ADRs / GDRs. The shall have derivative The aim of HSBC Midcap is to deliver above-benchmark returns by an actively managed portfolio, primarily comprising of midcap stocks. Income is not a primary consideration in the investment policies of HMEF. The aims to be predominantly invested in midcap equity and equity and also invest in small cap equity and equity related securities. However, it could move a portion of its assets towards fixed income securities if the fund becomes cautious or negative on equity s. related. Investments will be will be done from these sectors. The fund manager in selecting scrips will focus on the fundamentals of the business, the industry structure, the quality of management, corporate governance trends, sensitivity to economic factors, the financial strength of the company and the key earnings drivers. construction process. Risk will also be reduced through adequate diversification of the portfolio. Diversification will be achieved by spreading the investments over a range of industries / sectors. The may however, invest in unlisted and / or privately placed and / or unrated debt securities subject to the limits indicated under Investment Restrictions for the (s) prescribed in this SID, from issuers of repute and sound financial standing. If investment is made in unrated debt securities, the approval of the Board of the AMC and the Trustees or the Investment Management Committee (within the broad parameters approved by the Board of the AMC and the Trustees) shall be obtained, as per the As per the asset pattern, the may invest a part proposed to be invested in managed by the AMC or in the investment objectives of the 35% of the assets of the. Securitized debt, while relatively illiquid only if the Manager becomes equity s for a reasonably long period of time would he consider investing in such to improve the yield to the fund and investors as opposed to putting the monies in reverse repo and short term money. No investments shall be made in foreign securitized debt. For investments in ADRs / GDRs, the Manager would consider the premium / discount to the underlying stock and the possibility of the discount narrowing or the premium expanding, liquidity management of the portfolio, secondary and primary offerings of ADRs / GDRs. The shall have derivative The aim of HSBC Small Cap Equity is to deliver above-benchmark returns by an actively managed portfolio, primarily comprising of small cap stocks. The aims to be predominantly invested in small cap equity and equity and may also invest in equity and equity of other than small cap companies. However, it could move a portion of its assets towards fixed income securities if the fund becomes cautious or negative on equity s. related. Investments will be will be done from these sectors. The fund manager in selecting scrips will focus on the fundamentals of the business, the industry structure, the quality of management, corporate governance trends, sensitivity to economic factors, the financial strength of the company and the key earnings drivers. construction process. Risk will also be reduced through adequate diversification of the portfolio. Diversification will be achieved by spreading the investments over a range of industries / sectors. As per the asset pattern, the may invest a part government or supported by proposed to be invested in managed by the AMC or in the schemes of any other mutual fund, provided it is in conformity with the investment objectives of the and in terms of the prevailing As per the Regulations, no investment management fees will be 7. Benchmark S&P BSE Midcap Index. S&P BSE 250 Small Cap Index 8. Risk-o-meter - Investment in predominantly mid cap equity and equity 3. HSBC INFRASTRUCTURE EQUITY FUND 1. Name of the Equity scheme Thematic 2. Type of An open ended equity scheme An open ended equity scheme following Infrastructure theme 3. Asset table Equities & Equity 65% 100% High of companies operating in Infrastructure Sector* equity 0% 35% High related of other than Infrastructure Sector* Debt securities & 0% 35% Low to & cash *The fund will seek to invest, though not limited to, in the following sectors that are beneficiaries of the infrastructure growth and economic reforms expected in the country in the coming years viz Banking/Financial Services(Excluding Retail banks, being largely retail lending institutions); Capital Goods; Energy; Materials; Transportation; Utilities; Port & Logistics; Cement & Construction; Infrastructure Asset owners and Turnkey or services providers in infrastructure or any business benefiting from infrastructure investment. 4. HSBC ULTRA SHORT TERM BOND FUND 1. Name of the HSBC Ultra Short Term Bond HSBC Low Duration 2. Debt Low Duration 3. Type of An open-ended Debt An open ended low duration debt scheme investing in such that the Macaulay duration of the between 6 months to 12 months 4. Investment Seeks to provide liquidity and reasonable To seek to provide liquidity and reasonable Objective returns by investing primarily in a mix of returns by investing primarily in a mix of short term debt and money debt and money such. that the Macaulay duration of the portfolio is between 6 months to 12 months. However there can be no assurance or guarantee that the investment objective of the scheme would be achieved. & 70% 100% Low Debt with maturity/ average maturity /interest rate reset not greater than 1 year Debt 0% 30% Low to with maturity greater than 1 year * foreign 30% of the assets of the. However, the AMC with a view to protecting the interests of the investors, may increase exposure in foreign securities as deemed fi t from time to time. The shall have derivative The portfolio duration will undergo a change according to the expected movement in interest rates. Liquidity conditions and other macroeconomic factors affecting interest rates shall be taken into account for varying the portfolio duration. Under normal circumstances, if the interest rates move down, the duration of the portfolio shall be increased and vice versa. The may review the above pattern of investments based on views on the debt s and asset liability management needs and the portfolio shall be reviewed and rebalanced on a regular basis. However, at all times the portfolio will adhere to the overall investment objective of the. - Investment in predominantly small cap equity and equity Equity 80% 100% High of companies operating in Infrastructure * Equity 0% 20% High related of companies operating in other than Infrastructure * Debt securities & 0% 20% Low to *The fund will seek to invest in the sectors that are beneficiaries of the infrastructure growth and economic reforms expected in the country in the coming years eg. Banking/Financial Services (Excluding Retail banks, being largely retail lending institutions); Capital Goods; Energy; Materials; Transportation; Utilities; Port & Logistics; Cement & Construction; Infrastructure Asset owners and Turnkey or services providers in infrastructure or any business benefiting from infrastructure investment. such that Macaulay between 6 to 12 months *The Macaulay duration is the weighted average term to maturity of the cash flows from a bond/ instrument. The weight of each cash flow is determined by dividing the present value of the cash flow by the price. foreign 30% of the assets of the. However, the AMC with a view to protecting the interests of the investors, may increase exposure in foreign securities as deemed fit from time to time. The shall have derivative Securitized debt, while relatively illiquid only if the Manager becomes s for a reasonably long period of time he would consider investing in such to improve the yield to the fund and investors as opposed to putting the monies in reverse repo and short term money upto 50% of net assets of the. No investments shall be made in foreign securitized debt.

3 Securitised debt, while relatively illiquid only if the Manager becomes s for a reasonably long period of time he would consider investing in such to improve the yield to the fund and investors as opposed to putting the monies in reverse repo and short term money upto 50% of net assets of the. No investments shall be made in foreign securitised debt. The aim of the Investment Manager will be to allocate the assets of the between various money and fixed income securities (predominantly short duration ) with the objective of providing liquidity and achieving optimal returns with the surplus funds. Since providing liquidity is of paramount importance, the focus will be to ensure liquidity while seeking to maximize the yield. An appropriate mix of money and debt will be used to achieve his. The Investment Team of the AMC will carry out rigorous in depth credit evaluation of the money and debt proposed to be invested in. The credit evaluation includes a study of the operating environment of the issuer, the past track record as well as the future prospects of the issuer and the short term / long term financial health of the issuer. The AMC will study the macro economic conditions, including the political and economic environment and factors affecting liquidity and yields in an attempt to predict the direction of interest rates. Liquidity will be maintained through a combination of cash, reverse repo, daily put/call MIBOR papers and liquid CPs / CDs of strong credits. As compared to a liquid scheme, the higher portfolio maturity would mean higher to 6-12 months and a mix of structured credits in the 1 year segment as well as moving down the credit curve to improve yield. The scheme could run a mark to component slightly higher than a liquid scheme (whose regulatory maximum is 10%) but sharply lower than an STP (in the region of 40-60%). With the aim of controlling risks, a credit evaluation of the proposed to be invested in will be carried out by the Investment Team of the AMC. The credit evaluation includes a study of the operating environment of the company, the past track record as well as the future prospects of the issuer, the short as well as long-term financial health of the issuer. The AMC will also be guided by the ratings of rating agencies such as CRISIL, CARE and ICRA or any other rating agency as approved by the regulators. AMC would use this analysis to attempt to predict the likely direction of interest rates and position the portfolio appropriately to take advantage of the same. The may invest a part of the portfolio in various debt securities from the Treasury or supported only by India s sovereign guarantee or of the state government or supported by GOI / state managed by the AMC or in the investment objectives of the schemes 7. Benchmark CRISIL Liquid Index - 90%, CRISIL Short Term Bond Index - 10%. 8. Risk-o-meter - Liquidity over short term - Investment in Debt / The aim of the Investment Manager will be to allocate the assets of the between various money and fixed income securities, such that the Macaulay duration of the between 6 to 12 months with the objective of providing liquidity and achieving optimal returns with the surplus funds. Since providing liquidity is of paramount importance, the focus will be to ensure liquidity while seeking to maximize the yield. An appropriate mix of money and debt will be used to achieve this. The Investment Team of the AMC will carry out rigorous in depth credit evaluation of the money and debt proposed to be invested in. The credit evaluation includes a study of the operating environment of the issuer, the past track record as well as the future prospects of the issuer and the short term / long term financial health of the issuer. The AMC will study the macro economic conditions, including the political and affecting liquidity and yields in an attempt to predict the direction of interest rates. Liquidity will be maintained through a combination of cash, reverse repo, daily put/call MIBOR papers and liquid CPs / CDs of strong credits. With the aim of controlling risks, a credit evaluation of the proposed to be invested in will be carried out by the Investment Team of the AMC. The credit evaluation includes a study of the operating environment of the company, the past track record as well as the future prospects of the issuer, the short as well as long-term financial health of the issuer. The AMC will also be guided CRISIL, CARE and ICRA or any other rating agency as approved by the regulators. The AMC would use this analysis to attempt to predict the likely direction of interest rates and position the portfolio appropriately to take advantage of the same. The may invest a part of the portfolio in various debt securities from the Treasury or supported only by India s sovereign guarantee or of the state government or supported by The may invest in other managed by the AMC or in the schemes of any other mutual fund, provided it is in conformity with the investment objectives of the schemes and in terms of the prevailing As per the Regulations, no investment management fees will be charged for such investments. CRISIL Ultra Short Term Debt Index - Liquidity over short term - Investment in a mix of debt and money such that the Macaulay^ duration of the between 6 months to 12 months. ^ The Macaulay duration is the weighted from a bond. The weight of each cash flow is determined by dividing the present 5. (a) HSBC INCOME FUND - SHORT TERM PLAN 1. Name of the HSBC Income - Short Term Plan HSBC Short Duration 2. Short Term Plan Short Duration 3. Type of An open-ended Income An open ended short term debt scheme investing in such that the Macaulay duration of the between 1 year to 3 years 4. Investment To provide a reasonable income through a To provide reasonable income through a Objective diversified portfolio of fixed income diversified portfolio of fixed income securities. The AMC s view of interest rate securities such that the Macaulay duration trends will be reflected in the type and of the between 1 year to 3 years. maturities of securities in which the Short However, there can be no assurance or Term Plan has invested. guarantee that the investment objective of the scheme would be achieved. Debt and Money 80% 100% Low to Market with duration of upto 3 years Debt 0% 20% Low to with duration of greater than 3 years If the Plan decides to invest in securitized debt, it is the intention of the Investment Manager that such investments will not normally exceed 50% of the corpus of the Plan and if the Plan decides to invest in foreign 25% of the assets of the Plan. The Plan shall under normal derivative. Investments in the SEBI The Plan will endeavour to invest in shorter duration in line with the investment objective. Investments will be in money and debt depending on prevailing interest rates and a view of the. The portfolio duration will undergo a change according to the expected movement in interest rates. Liquidity conditions and other macro-economic factors affecting interest rates shall be taken into account for varying the portfolio duration. Under normal circumstances, if the interest rates move down, the duration of the portfolio shall be increased and vice versa. It is expected that the modified duration for the Short Term Plan could range between 1-3 years depending on interest rate views. However, this can undergo a change in case the conditions warrant and according to the fund manager s view. The Plan may review the above pattern of investments based on views on interest rates and asset liability management needs. However, at all times the portfolio will adhere to the overall investment objectives of the. The Plan may participate in securities lending as permitted under the HIF - Short Term Plan will invest predominantly in debt and money where interest rate risk is low. dates of in which funds are should be recognised that the best overall The aims to provide investors money. The portfolios may also include liquid assets and other assets permitted from time to time, with a short remaining maturity, especially in times of rising interest rates. In the Short Term Plan, exposure to bearing price risk will be controlled, such that the Plan offers an appropriate mix of liquidity and returns. The may invest in unlisted and / or privately placed and / or unrated debt securities subject to the limits indicated under Investment Restrictions for the (s) in this SID, from issuers of repute and sound financial standing. If investment is made in unrated debt securities, the approval of the Board of the AMC and the Trustees or the Investment Management Committee (within the broad parameters approved by the Board of the AMC and the Trustees) shall be obtained, as per the proposed to be invested in such that Macaulay between 1 year to 3 years *The Macaulay duration is the weighted from a bond. The weight of each cash flow is determined by dividing the present 50% of the corpus of the and if the decides to invest in foreign 35% of the assets of the. The shall under normal derivative. Investments in the SEBI The may participate in securities lending as permitted under the The will invest predominantly in debt and money such that the Macaulay duration of the between 1 year to 3 years. dates of in which funds are should be recognized that the best overall The aims to provide investors money. The portfolios may also include liquid assets and other assets permitted from time to time, with a short remaining maturity, especially in times of rising interest rates. The exposure to bearing price risk will be controlled, such that the offers an appropriate mix of liquidity and return. With the aim of controlling risks, rigorous proposed to be invested in will be carried out by the Investment Team of the AMC. The credit evaluation includes a study of the operating environment of the company, the past track record as well as the future prospects of the issuer, the short as well as long-term financial health of the issuer. The AMC will also be guided by the ratings of rating agencies such as CRISIL, CARE and ICRA or any other rating agency as approved by the regulators. The may invest a part of the portfolio in various debt securities government or supported by

4 The may invest a part of the portfolio in various debt securities issued by corporates and / or state and central government. Such government securities may include securities which are supported by the ability to borrow from the treasury or supported only by the sovereign guarantee or of the state Given that the liquidity of fixed income is currently limited, the AMC will try to provide liquidity by staggering maturities for various, as well as holding a sufficient portion of the portfolio in more liquid government and corporate paper as well as money securities. (s) managed by the AMC or in the investment objectives of the and in terms of the prevailing regulations. As per the Regulations, no investment management fees will be charged for such investments. 7. Risk-o-meter - Regular income over medium term fixed income securities ^ The Macaulay duration is the weighted from a bond. The weight of each cash flow is determined by dividing the present 5. (b) HSBC INCOME FUND - INVESTMENT PLAN 1. Name of the HSBC Income Investment Plan HSBC Debt 2. Income to Long Duration 3. Type of An open-ended Income An open ended medium to long term debt scheme investing in such that the Macaulay duration of the between 4 years to 7 years. 4. Investment To provide a reasonable income through To provide reasonable income through a Objective a diversified portfolio of fixed income diversified portfolio of fixed income securities. The AMC s view of interest rate securities such that the Macaulay duration trends will be reflected in the type and of the between 4 years to maturities of securities in which the 7 years. However, there can be no Investment Plan has invested. guarantee that the investment objective of the scheme would be achieved. Debt 40% 100% Low to with residual maturity/average maturity greater than 182 days 0% 60% Low to and debt, money at call) with residual maturity/average maturity less than 183 days and floating rate where the reset tenor is one year or less. If the Plan decides to invest in 50% of the corpus of the Plan and if the Plan decides to invest in foreign debt 25% of the assets of the Plan. The Plan shall under normal derivative. Investments in the SEBI The portfolio duration will undergo a change according to the expected movement in interest rates. Liquidity conditions and other macroeconomic factors affecting interest rates shall be taken into account for varying the portfolio duration. Under normal circumstances, if the interest rates move down, the duration of the portfolio shall be increased and vice versa. It is expected that the modified duration for the Investment Plan will be in a range of 6 months - 8 years depending on the interest rate view. However, this can undergo a change in case the conditions warrant and according to the fund manager s view. The Plan may review the above pattern of investments based on views on interest rates and asset liability management needs. However, at all times the portfolio will adhere to the overall investment objectives of the. The Plan may participate in securities lending as permitted under the Given that the liquidity of fixed income is currently limited, the AMC will try to provide liquidity by staggering maturities for various, as well as holding a sufficient portion of the portfolio in more liquid government and corporate paper as well as money securities. (s) managed by the AMC or in the investment objectives of the - Regular income over medium term fixed income securities such that the Macaulay^ duration of the between 1 year to 3 years such that Macaulay between 4 years# to 7 years Asset under anticipated adverse situation such that Macaulay between 1 years# to 7 years *The Macaulay duration is the weighted average term to maturity of the cash flows from a bond/ instrument. The weight of each cash flow is determined by dividing the present value of the cash flow by the price. #The fund manager, in the interest of investors, may reduce the portfolio duration up to one year, in case the fund manager has a view on interest rate movements in light of anticipated adverse situation. Hence, Portfolio Macaulay duration under such anticipated adverse situation would be between 1 year to 7 years. Whenever the portfolio Macaulay duration is reduced below the specified floors of 4 years, the AMC shall record the reasons for the same with adequate justification and maintain the same for inspection. The written justifications shall also be placed before the Trustees in the subsequent Trustee meeting. 50% of the corpus of the and if the decides to invest in foreign debt 25% of the assets of the. The shall under normal derivative. Investments in the SEBI The may participate in securities lending as permitted under the HIF Investment Plan aims to provide investors with income, with appropriate liquidity, and therefore will invest in a mix of debt and money, over varying maturities. dates of in which funds are should be recognised that the best overall The aims to provide investors money. The portfolios may also include liquid assets and other assets permitted from time to time, with a short remaining maturity, especially in times of rising interest rates. In the Investment Plan, investments will be made mainly into debt, with an appropriate to money to maintain the overall liquidity of the portfolio. The may invest in unlisted and / or privately placed and / or unrated debt securities subject to the limits indicated under Investment Restrictions for the (s) in this SID, from issuers of repute and sound financial standing. If investment is made in unrated debt securities, the approval of the Board of the AMC and the Trustees or the Investment Management Committee (within the broad parameters approved by the Board of the AMC and the Trustees) shall be obtained, as per the proposed to be invested in The may invest a part of the portfolio in various debt securities issued by corporates and / or state and central government. Such government securities may include securities which are supported by the ability to borrow from the treasury or supported only by the sovereign guarantee or of the state Given that the liquidity of fixed income is currently limited, the AMC will try to provide liquidity by staggering maturities for various, as well as holding a sufficient portion of the portfolio in more liquid government and corporate paper as well as money securities. (s) managed by the AMC or in the investment objectives of the 7. Risk-o-meter - Regular income over long term fixed income securities The aims to provide investors with income, with appropriate liquidity, and therefore will invest in a mix of debt and money, over varying maturities. dates of in which funds are should be recognized that the best overall The aims to provide investors money. proposed to be invested in The may invest a part of the portfolio in various debt securities issued by corporates and / or state and central government. Such government securities may include securities which are supported by the ability to borrow from the treasury or supported only by the sovereign guarantee or of the state government or supported by Government of India (GOI) / state government in some other way. Given that the liquidity of fixed income is currently limited, the AMC will try to provide liquidity by staggering maturities for various, as well as holding a sufficient portion of the portfolio in more liquid government and corporate paper as well as money securities. (s) managed by the AMC or in the investment objectives of the - Regular income over long term fixed income securities such that the Macaulay^ duration of the between 4 years to 7 years ^ The Macaulay duration is the weighted from a bond. The weight of each cash flow is determined by dividing the present 6. HSBC MONTHLY INCOME PLAN 1. Name of the HSBC Monthly Income Plan HSBC Regular Savings 2. Income Conservative Hybrid 3. Type of An open ended. Monthly income is An open ended hybrid scheme investing not assured and is subject to the availability predominantly in debt. of distributable surplus.

5 4. Asset 5. Risk-o-meter - Regular income over medium term - Investment in fixed income (debt and money ) as well as equity and equity Profile Debt 0% 100% Low to and Money Market, money at call and reverse repos) Equities and 0% 25% 50% of the corpus of the and if the decides to invest in ADRs / 25% of the assets of the. The shall have derivative It is expected that the modified duration of the portion of the portfolio invested in debt and money instrument will be in the range of 6 months - 8 years. However, this can undergo a change in case the conditions warrant and according to the fund manager s view. The may review the above pattern of investments based on views on the debt and equity s and asset liability management needs and the portfolio shall be reviewed and rebalanced on a regular basis. However, at all times the portfolio will adhere to the overall investment objective of the. Debt 75% 90% Low to and Money Market, money at call and reverse repos) Equities and 10% 25% High 50% of the corpus of the and if the decides to invest in ADRs / Regulations, it is the intention of the 25% of the assets of the. The shall under normal more than 25% of its net assets in derivative. Investments in the SEBI Regulations issued from time to time. - Investment in fixed income (debt and money ) as well as equity and equity - Capital appreciation over medium to long term Profile 7. HSBC EMERGING MARKETS FUND 1. Name of the HSBC Emerging Markets HSBC Global Emerging Markets 2. of s of s (Overseas) 3. Type of An open-ended An open ended fund of fund scheme investing in HSBC Global Investment s - Global Emerging Markets Equity 4. Investment To provide long term capital appreciation The primary investment objective of the Objective by investing in India and in the emerging is to provide long term capital s, in equity and equity related appreciation by investing predominantly, share classes and units/ in units/shares of HSBC Global Investment securities issued by overseas mutual s - Global Emerging Markets Equity funds or unit trusts. The fund may also. The may also invest a invest a limited proportion in debt and certain proportion of its corpus in money money. and / or units of liquid mutual fund schemes, in order to meet liquidity requirements from time to time. However, there can be no assurance or guarantee that the investment objective of the scheme would be achieved. table Units/securities 80% 100% issued by overseas mutual funds or unit trusts of emerging s* Domestic Debt, 0% 20% Low to (including CBLO & reverse repo) and units of domestic mutual funds. * Currently HSBC GEM Equity is envisaged to be used for investing in the emerging s however, HEMF could use any other global fund of HSBC Group to invest in emerging s. 10% of the corpus of the. HEMF will not invest into an underlying global scheme which invests more than 10% of their net assets in unlisted equity shares or equity related. The may review the above pattern of investments based on views on the equity and debt s and asset liability management needs and the portfolio shall be reviewed and rebalanced on a regular basis. However, at all times the portfolio will adhere to the overall investment objective of the. The aim of HSBC Emerging Markets is to provide long-term capital appreciation from an actively managed portfolio, primarily comprising of a mix of small, mid and large cap stocks. Units issued by 95% 100% HSBC Global Investment s Global Emerging Markets Equity 0% 5% Low to (including CBLO & reverse repo) and units of domestic liquid mutual funds. The will invest predominantly in units / shares of HSBC Global Investment s Global Emerging Markets Equity. The may also invest a certain proportion of its Income is not a primary consideration in the investment policies of HEMF. The aims to be predominantly invested in equity and equity related securities. The may also invest in fixed income securities. HEMF may invest in the Emerging Markets through overseas funds or overseas equity and equity related securities share classes /Units of equity as permitted by SEBI. HEMF proposes to invest in the overseas by investing in units / securities issued by overseas mutual funds managed by HSBC globally, for example HSBC GEM Equity (GEM) etc. The may undertake currency hedge to protect the investors from the risk associated with movement in currency s as mentioned in the risk factors earlier. A top down and bottom up approach will be used to invest in equity and equity related. Investments will be pursued in select sectors based on the Investment Team s analysis of business cycles, regulatory reforms, competitive will be done from these sectors. The fund manager in selecting scrips will focus on the fundamentals of the business, the industry structure, the quality of management, corporate governance trends, sensitivity to economic factors, the financial strength of the company and the key earnings drivers. Since investing requires disciplined risk construction process. Risk will also be reduced through adequate diversification of the portfolio. Diversification will be achieved by spreading the investments over a range of industries / sectors. The may however, invest in unlisted and / or privately placed and / or unrated debt securities subject to the limits indicated under Investment Restrictions for the prescribed in this SID, from issuers of repute and sound financial standing. If investment is made in unrated debt securities, the approval of the Board of the AMC and the Trustees or the Investment Management Committee (within the broad parameters approved by the Board of the AMC and the Trustees) shall be obtained, as per the As per the asset pattern indicated above, for investment in debt, the may invest a part of the portfolio in various debt securities issued by corporates and / or state and central government. Such government securities may include securities which are supported by the ability to borrow from the treasury or supported only by the sovereign guarantee or of the state government or supported by GOI / state With the aim of controlling risks, rigorous in depth credit evaluation of the proposed to be invested in will be carried out by the Investment Team of the AMC. The credit evaluation includes a study of the operating environment of the company, the past track record as well as the future prospects of the issuer, the short as well as long-term financial health of the issuer. The AMC will also be guided by the ratings of rating agencies such as CRISIL, CARE and ICRA or any other rating agency as approved by the regulators. In addition, the Investment Team of the AMC will study the macro economic conditions, including the political, economic environment and factors affecting liquidity and interest rates. The AMC would use this analysis to attempt to predict the likely direction of interest rates and position the portfolio appropriately to (s) managed by the AMC or in the investment objectives of the 7. Risk-o-meter - Investment in equity and equity of Emerging economies corpus in money and / or units of liquid mutual fund schemes, in order to meet liquidity requirements from time to time. The may undertake currency hedging to protect the investors from the risk associated with movement in currency s. Investment in units / shares of overseas mutual fund schemes other than HSBC Global Investment s - Global Emerging Markets Equity, will be considered as a change in the fundamental attribute of the and all applicable provisions under the SEBI (Mutual s) Regulations, 1996 read with any amendments thereto, would be complied with, including giving an option to investors for a period of 30 days, to exit at the prevailing NAV of the, without being charged any exit load. - Investment predominantly in units of HSBC Global Investment s - Global Emerging Markets Equity

6 8. HSBC MANAGED SOLUTIONS 1. Name of the of s of s (Overseas/Domestic) 2. Type of An open ended of s An open ended fund of fund scheme investing in a basket of equity, debt, Gold and other Exchange Traded s 3. Asset Growth Plan Asset Moderate Plan Equity 55% 90% High (Units of Domestic Offshore Equity) Debt 10% 30% Low to Gold and other 0% 15% Exchange Traded 0% 20% Low to /Liquid s (including upto 5% in money ) Equity 30% 70% High (Units of Domestic Offshore Equity) Debt 30% 70% Low to Gold and other 0% 15% Exchange Traded 0% 25% Low to /Liquid s (including upto 5% in money ) Units of various 95% 100% High Mutual (Domestic and Offshore funds) out of which a) Equity 55% 90% High (Units of Domestic Offshore Equity) b) Debt 10% 30% Low to c) Gold and 0% 15% other Exchange Traded d) 0% 20% Low / Liquid s Money 0% 5% Low Units of various 95% 100% High Mutual (Domestic and Offshore funds) out of which a) Equity 30% 70% High (Units of Domestic Offshore Equity) b) Debt 30% 70% Low to c) Gold and 0% 15% other Exchange Traded d) 0% 25% Low / Liquid s Money 0% 5% Low Asset Conservative Plan Securities and Exchange Board of India vide its letter no. IMD/DF3/OW/P/2018/89/1 dated January 02, 2018 conveyed it's no objection to the aforesaid change(s) in fundamental attributes of the respective of HMF. As per Regulation 18(15A) of the SEBI (Mutual s) Regulations, 1996, the above proposed changes are construed as changes in the fundamental attributes of the respective of HMF. Hence, unit holders who do not wish to continue to hold units in view of the proposed changes, have an option to switch their investments held in the aforesaid schemes of HMF to any other schemes of the HMF or redeem their investments at prevailing applicable Net Asset Value, without payment of any exit load, if any, by submitting their application at any of the designated Official Points of Acceptance, during a period of 30 days starting from February 12, 2018 to March 13, 2018 (both days inclusive). It should be noted that currently there is no exit load applicable under the aforesaid schemes. Unit holders who have pledged / marked lien on their units will have the option to exit only if they submit a release of their pledges / lien prior to submitting their redemption / switch requests during the exit option period. In case a lien is marked on units held by a unit holder or units have been frozen / locked pursuant to an order of a governmental authority or a court, redemption / switch-out can be executed only after the lien / order is vacated / revoked within the exit option period specified above. Unit holders, who have registered for Systematic Investment Plan/Systematic Transfer Plan facility prior to the above effective date and wish to discontinue investment of their future installments, shall make a written request to the in this regard. The will take at least 25 business days to process such requests and the intervening installments will continue to be processed. Unit holders should ensure that change in address / pay out bank details, if any required by them, are updated in HSBC Mutual s records before exercising the exit option. Unit holders holding units in dematerialized form may approach their Depository Participant for such changes. It should be noted that no action is required to be taken by those unit holders who are in agreement with the proposed changes, and the same shall be deemed as their acceptance to the proposed changes. Such unit holders will continue to hold units in the respective (s) with the revised features after completion of the exit option period i.e. with effect from March 14, A written/ communication is also being sent to all the unit holders of the respective schemes informing them of the proposed changes and the exit option details. This Notice-cum-Addendum forms an integral part of the SID and KIM of the, as amended from time to time. All other terms and conditions except as mentioned above, of the respective (s) remain unchanged. Applicants/Unit holders may contact our Investor Service Centers/their distributors, for any additional information/ clarifications. Also, please visit our website for any other related information. Investors may obtain Statement of Additional Information, Information Document and Key Information Memorandums along with application forms from the Investor Service Centres of HSBC Mutual or call on Tel: (Can be dialled from all phones within India) or Tel: (can be dialled from outside India). For & on behalf of HSBC Asset Management (India) Private Limited (Investment Manager to HSBC Mutual ) Sd/- Authorised Signatory Mumbai, February 02, 2018 Equity 0% 15% High (Units of Domestic Offshore Equity) Debt 55% 100% Low to Gold and other 0% 5% Exchange Traded 0% 25% Low to /Liquid s (including upto 5% in money ) Units of various 95% 100% High Mutual (Domestic and Offshore funds) out of which a) Equity 0% 15% High (Units of Domestic Offshore Equity) b) Debt 55% 100% Low to c) Gold and 0% 5% other Exchange Traded d) 0% 25% Low / Liquid s Money 0% 5% Low HSBC_FA Change Consolidate_Notice AD_Financial Exp Size: 32.9 x 31 cms.