1. HSBC COLLECTIVE INVESTMENT TRUST 1.1 HSBC CHINA MULTI-ASSET INCOME FUND 1.2 HSBC RQFII CHINESE FIXED INCOME FUND 1

Transcription

1 HSBC Collective Investment Trust Annual Report

2 Contents 1. HSBC COLLECTIVE INVESTMENT TRUST 1.1 HSBC CHINA MULTI-ASSET INCOME FUND 1.2 HSBC RQFII CHINESE FIXED INCOME FUND 1.3 HSBC ASIA PACIFIC EX JAPAN EQUITY VOLATILITY FOCUSED FUND 1.4 HSBC EURO MULTI-ASSET INCOME FUND Investment Adviser s Reports 1 Trustee s Report 3 Independent Auditors Report to the Unitholders 4 Statement of Assets and Liabilities 7 Statement of Comprehensive Income 10 Statement of Changes in Net Assets Attributable to Unitholders 13 Cash Flow Statement 16 Distribution Statement 19 Notes to the Financial Statements 27 Portfolio Statement (Unaudited) 69 Statement of Movements in Portfolio Holdings (Unaudited) 78 Performance Record (Unaudited) ADMINISTRATION 89 Page

3 Investment Adviser s Report HSBC China Multi-Asset The HSBC China Multi Asset- registered a positive return for the 1-year period ended 31 March, mainly driven by the strong performance of Chinese equities. In the second half of 2016, market sentiment was positive as activity data continued to show growth stabilization on the back of government policy support and improved external demand and a rebound in infrastructure investment. In addition, credit growth suggested fiscal and credit policy to continue to be accommodative. However, markets declined towards the end of 2016 with concerns that the election of Donald Trump as US president could introduce the risk of increased trade protectionism, alongside fears of a more aggressive Fed rate hiking cycle following the rate increase implemented in December. This has been corrected in the beginning of where the Chinese stock markets performed strongly, catching up some of the underperformance earlier. This was boosted by robust global macro data, upbeat corporate earnings and continuing expectations of a US fiscal package. To complement the gains in equities, most bond asset classes produced positive returns as well. US dollar denominated Chinese fixed income provided good diversification effect over the period, giving support to the performance as well. Looking ahead with uncertainties around the potential form and timing of US fiscal stimulus, and the possible introduction of protectionist trade measures against China, at present we maintain a diverse portfolio of Chinese equities and bonds, which we believe offers investors an attractive way to gain exposure to Chinese stocks with reduced volatility, the defensive nature of the Chinese bond market adding significant stability, as well as attractive yield, to the portfolio. HSBC RQFII Chinese Fixed With greater market volatility since Q and the depreciation of the Renminbi against the US dollar, the subfund registered returns in negative territory in both Renminbi and US Dollar terms, for the year ended 31 March. The market had been performing well until late October 2016, when it started to see some correction amid the increase in money market interest rates and potential regulatory risks. With signs of stabilization in economic growth, Chinese authorities have been showing their determination to discourage excessive leverage in the bond markets. Specifically, they have tightened the regulation on banks off-balance sheet wealth management products and certificates of deposits, the proceeds of which may be invested in the bond markets. Meanwhile, the People s Bank of China ( PBoC ) also raised the cost of its various lending facilities to banks in Q1 to increase cost of leveraging and reduce leverage in the financial systems. That said, by injecting adequate liquidity into the system, they have managed to strike a balance between curbing financial leverage and avoiding systematic crisis. Despite recent measures by the PBoC to guide money market rates higher, it is not our base scenario that we have entered a rate hike cycle, as economic fundamentals have not improved to a stage where aggressive tightening is warranted. We believe the overall monetary policy stance remains broadly neutral with a tightening bias on liquidity. We expect the government s effort to curb leverage is likely to bring longer term benefits to the market. Although at the same time, this could lead to more volatility in the onshore bond market over the short term. On a more positive, yield levels have become more attractive. The hike in short-term interest rates has also eased Renminbi depreciation pressure, as it will enhance the capacity of the PBOC to defend the Renminbi given the uncertain path of the US dollar. This coupled with the improved growth outlook for the Chinese economy could mean that the Renmibi deprecation pressure in is less than what was expected by the market. HSBC Asia Pacific ex Japan Equity Volatility Focused Fund For the reported period, the fund delivered positive returns but underperformed the benchmark. Asia Pacific equity markets endured a tough start to 2016 on concerns around slowing economic activity, the collapse of the Chinese onshore stock markets, the prospect of further declines in the value of the Renminbi and the continued fall in oil prices. Markets steadily recovered during the second and third quarter of 2016, helped by the Federal Reserve s comments assuring the markets it would go slowly on future adjustments to monetary policy. Asia Pacific equities showed resilience despite the decision of UK voting to leave the EU at 23 June s referendum sent shock to global markets. The surprise U.S. Presidential election results on 8 November whipsawed Asian equity markets initially but most ended the year lower. Post Brexit, cyclical sectors like resource companies and financials led the market while defensive sectors lagged materially. Commodity prices firmed on talk of fiscal expansion in the US, while the banks and insurance sectors benefitted from a steepening yield curve. A demonetization announcement in India jolted its market, sending stocks sharply lower at the end of The Asia region had a strong start to the year in the first quarter of. The Asian region was buoyed by solid economic data from China. India has been the best performer in the first quarter of as confidence was boosted by the success 1

4 Investment Adviser s Report of the incumbent government, Bharatiya Janata Party, in the Uttar Pradesh state elections, a credible Union budget and the encouraging progress on the passage of GST legislation. Asian economies stand to benefit from the reflationary trend in the US and prospects for a pickup in global economic growth. While the Trump presidency has introduced more uncertainty into markets, in particular on the issue of potential trade barriers, the backdrop of a stronger global economy has historically been positive for growth in Asia and Asia ex Japan equity markets. Key risks are a stronger than expected US Dollar, a more aggressive rate hike cycle in the US, and rising geopolitical tensions. Macro indicators suggest growth stabilization in the Chinese economy. There are potential positive catalysts on the horizon around economic and structural reforms. The reform agenda of state-owned enterprises will be keenly watched by the market. In India, the government s reform agenda is incrementally adding to India s growth potential and attractiveness as a destination for capital. The recent passing of the long-awaited Goods and Services Tax Bill is evidence of this. HSBC Euro Multi-Asset The HSBC Euro Multi-Asset Income fund registered a positive total return for 12-month ended 31 March. All asset classes made a positive contribution to the overall performance except the more defensive government bond sleeve. Overall, Eurozone assets have been supported by the action of the European Central Bank ( ECB ). The extension of the ECB repurchase program to corporate bonds acted as a strong tailwind to the Euro credit market, both investmentgrade and high-yield, and to government bonds. Credit quality has been also supported by the pick-up in the economic growth, the low leverage of Euro corporates and the small size of the challenged energy sector. These factors supported Euro equity markets as well, although uncertainties around global monetary policies and, more importantly, the referendum on Brexit, weighed negatively on investors sentiment. began on a more positive note for most risk assets. On the back of improving corporate earnings, euro equity markets performed well, significantly outperforming the other regions. Surprisingly in such a context, yield curves in the Eurozone flattened, reflecting the easing of inflationary pressures led by cheaper oil prices. The ECB, like other central banks, consequently hold a cautious and moderate stance. It mainly played for time, indicating that no rate hike should be expected before On the flip side, the eurozone s heavy political calendar in is expected to act as a headwind for euro markets. The political uncertainties led to a widening of the spread between German treasury yields and those of Italian, Spanish and to a lesser extent French sovereign bonds. Looking forward, the Eurozone has strong competitive advantages, although political risks remain elevated. However, the economic uncertainties around Trump s actual economic policy are likely to push US markets under pressure as well. Besides, the divergence of monetary policy between the Eurozone and the US is expected to strongly benefit Euro risk assets. In the credit space, default rates are expected to remain close to all time low. Since Investment Grade bonds offer limited upside, we remain focused on higher-quality balanced sheets and robust business models. Government bond yields are close to zero but still offer strong diversification properties when combined with riskier asset classes. The outlook for Euro equity markets has also strongly improved, showing a robust cyclical recovery. Composite PMIs have risen to a six-year high while the PMI composite employment sub-index also rose to its highest level since July Besides, February CPI inflation reached 2%, its highest level in years. Eurozone s equity earnings are expected to grow by 28% in, benefiting from several supporting forces: the end of the banking deleveraging, an overdue recovery in credit growth, a stabilization and growth in emerging markets and a potential for share buybacks. The last quarter of 2016 has seen risk assets react positively to Donald Trump s election, mainly benefiting from rising inflation expectations. While bond investors suffered from rising interest rates, european cyclical equities such as industrials, energy and financials posted strong positive returns while the more defensive sectors underperformed. In Europe, renewed concerns over the financial sector s health weighed negatively on investors sentiment. In Italy, the prime minister s resignation fueled uncertainties around the Eurozone governance. 2

5 Trustee s Report HSBC Collective Investment Trust ( the Trust ) We hereby confirm that, in our opinion, the Manager of HSBC China Multi-Asset, HSBC RQFII Chinese Fixed, HSBC Asia Pacific ex Japan Equity Volatility Focused Fund and HSBC Euro Multi-Asset within the Trust ( the sub-funds ) has, in all material respects, managed the sub-funds in accordance with the provisions of the Trust Deed dated 27 February 2014 for the year/period ended 31 March. ) Bertha TAM ) For and on behalf of Dickson LEE ) HSBC Institutional Trust Services (Asia) Limited, ) Trustee ) 3

6 Independent Auditor s Report to the Unitholders Report on the audit of financial statements Opinion We have audited the financial statements of HSBC China Multi-Asset, HSBC RQFII Chinese Fixed, HSBC Asia Pacific ex Japan Equity Volatility Focused Fund and HSBC Euro Multi-Asset ( the sub-funds ) within HSBC Collective Investment Trust set out on pages 7 to 68, which comprise the statement of assets and liabilities as at 31 March, the statement of comprehensive income, the statement of changes in net assets attributable to unitholders, the cash flow statement and the distribution statement for the year/period then ended and notes to the financial statements, including a summary of significant accounting policies. In our opinion, the financial statements give a true and fair view of the financial disposition of the sub-funds as at 31 March and of its financial transactions and cash flows for the year/period then ended in accordance with Hong Kong Financial Reporting Standards ( HKFRSs ) issued by the Hong Kong Institute of Certified Public Accountants ( HKICPA ). Basis for Opinion We conducted our audit in accordance with Hong Kong Standards on Auditing ( HKSAs ) issued by the HKICPA. Our responsibilities under those standards are further described in the Auditor s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the sub-funds in accordance with the HKICPA s Code of Ethics for Professional Accountants ( the Code ) and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Information Other than the Financial Statements and Auditor s Report Thereon The Manager and the Trustee of the sub-funds are responsible for the other information. The other information comprises all the information included in the annual report, other than the financial statements and our auditor s report thereon. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Manager and the Trustee of the Sub-funds for the Financial Statements The Manager and the Trustee of the sub-funds are responsible for the preparation of financial statements that give a true and fair view in accordance with HKFRSs issued by the HKICPA and for such internal control as the Manager and the Trustee of the sub-funds determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Manager and the Trustee of the sub-funds are responsible for assessing the sub-funds ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Manager and the Trustee of the sub-funds either intend to liquidate the sub-funds or to cease operations, or have no realistic alternative but to do so. 4

7 Independent Auditor s Report to the Unitholders In addition, the Manager and the Trustee of the sub-funds are required to ensure that the financial statements have been properly prepared in accordance with the relevant provisions of the Trust Deed and the relevant disclosure provisions of Appendix E of the Code on Unit Trusts and Mutual Funds ( the SFC Code ) issued by the Hong Kong Securities and Futures Commission. Auditor s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor s report that includes our opinion. This report is made solely to you, as a body, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with HKSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. In addition, we are required to assess whether the financial statements of the sub-funds have been properly prepared, in all material respects, in accordance with the relevant provisions of the Trust Deed and the relevant disclosure provisions of Appendix E of the SFC Code. As part of an audit in accordance with HKSAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the sub-funds internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Manager and the Trustee of the sub-funds. Conclude on the appropriateness of the Manager s and the Trustee s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the sub-funds ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor s report. However, future events or conditions may cause the sub-funds to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with the Manager and the Trustee of the sub-funds regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. 5

8 Independent Auditor s Report to the Unitholders Report on matters under the relevant provisions of the Trust Deed and the relevant disclosure provisions of Appendix E of the SFC Code In our opinion, the financial statements have been properly prepared, in all material respects, in accordance with the relevant provisions of the Trust Deed and the relevant disclosure provisions of Appendix E of the SFC Code. KPMG Certified Public Accountants 8th Floor, Prince s Building 10 Chater Road Central, Hong Kong 28 July 6

9 Statement of Assets and Liabilities HSBC Collective Investment Trust as at 31 March Note HSBC China Multi-Asset HKD HSBC RQFII Chinese Fixed RMB ASSETS Financial assets at fair value through profit or loss 5, 11(a), 11(g), 12 3,050,090, ,354,675 Dividend receivable 7,920 Interest receivable 20,104,353 4,293,719 Subscription receivable 5,757,468 Amounts due from brokers 6(e) 62,932, ,267 Cash and cash equivalents 6(d), 7 32,986,555 7,530,421 3,171,879, ,571,082 LIABILITIES Financial liabilities at fair value through profit or loss 5, 11(a), 11(g), 12 2,479,500 Bank overdraft 6(d), 7 96,218 Redemption payable 34,965,314 1,611,028 Amounts due to brokers 6(e) 36,238, ,680 Distribution payable 13 9,736, ,146 Tax payables 4 2,876,500 Other payables 6(a), 6(b), 6(c) 4,762, ,072 88,182,896 5,770,644 NET ASSETS ATTRIBUTABLE TO UNITHOLDERS 9 3,083,696, ,800,438 Representing: Financial liabilities 3,083,696, ,800,438 Number of units in issue 8 Class AC USD 172,682 Class AM2 USD (formerly known as Class AM USD) 17,655, ,025 Class AC RMB 2,265,430 Class AM2 RMB (formerly known as Class AM RMB) 15,428,935 4,716,994 Class AM2 HKD (formerly known as Class AM HKD) 138,538,831 2,518,625 Net asset value per unit 8 Class AC USD Class AM2 USD (formerly known as Class AM USD) Class AC RMB Class AM2 RMB (formerly known as Class AM RMB) Class AM2 HKD (formerly known as Class AM HKD)

10 Statement of Assets and Liabilities HSBC Collective Investment Trust as at 31 March Note HSBC Asia Pacific ex Japan Equity Volatility Focused Fund (1) USD HSBC Euro Multi-Asset (2) EUR ASSETS Financial assets at fair value through profit or loss 5, 11(a), 11(g), 12 71,627,160 24,482,663 Dividend receivable 387,522 30,647 Interest receivable 7 9,230 Subscription receivable 14,301,356 1,804,618 Amounts due from brokers 6(e) 351,234 2,497,712 Cash and cash equivalents 6(d), 7 320,626 1,985,587 86,987,905 30,810,457 LIABILITIES Financial liabilities at fair value through profit or loss 5, 11(a), 11(g), 12 Bank overdraft 6(d), 7 Redemption payable 2,234, ,838 Amounts due to brokers 6(e) 424,460 2,899,670 Distribution payable ,589 80,332 Tax payables 4 Other payables 6(a), 6(b), 6(c) 347, ,173 3,227,812 3,369,013 NET ASSETS ATTRIBUTABLE TO UNITHOLDERS 9 83,760,093 27,441,444 Representing: Financial liabilities 83,760,093 27,441,444 Number of units in issue 8 Class AM2 USD (formerly known as Class AM USD) 5,534,311 Class AM3H USD 1,213,610 Class AM3H RMB 618,303 Class AM2 HKD (formerly known as Class AM HKD) 23,899,412 Class AM3H HKD 7,402,636 Class AM2 EUR 183,334 Class AM3H AUD 213,252 Class AM3H CAD 243,727 Class AM3H NZD 45,134 Net asset value per unit 8 Class AM2 USD (formerly known as Class AM USD) Class AM3H USD Class AM3H RMB Class AM2 HKD (formerly known as Class AM HKD) Class AM3H HKD Class AM2 EUR Class AM3H AUD Class AM3H CAD Class AM3H NZD (1) The date of commencement for HSBC Asia Pacific ex Japan Equity Volatility Focused Fund was 27 March (2) The date of commencement for HSBC Euro Multi-Asset was 18 March

11 Statement of Assets and Liabilities HSBC Collective Investment Trust as at 31 March 9 Note 2016 HSBC China HSBC RQFII HSBC Asia Pacific ex Japan Multi-Asset Chinese Fixed Equity Volatility Focused Fund (1) HKD RMB USD ASSETS Financial assets at fair value through profit or loss 5, 11(a), 11(g), 12 5,213,847, ,438,290 71,096,407 Dividend receivable 433,877 Interest receivable 35,528,262 8,110,071 Subscription receivable 8,421,362 96,448 Amounts due from brokers 6(e) 9,642,899 5,113,720 93,758 Cash and cash equivalents 6(d), 7 159,590,451 23,329, ,823 5,427,030, ,991,698 72,634,313 LIABILITIES Financial liabilities at fair value through profit or loss 5, 11(a), 11(g), 12 16,262,400 Redemption payable 84,875,529 5,974,234 1,230,837 Amounts due to brokers 6(e) 32,264,000 15,165, ,149 Distribution payable 13 19,149, , ,640 Tax payables 4 2,127,200 Other payables 6(a), 6(b), 6(c) 9,038, , , ,589,921 25,123,467 1,867,959 NET ASSETS ATTRIBUTABLE TO UNITHOLDERS 9 5,265,440, ,868,231 70,766,354 Representing: Financial liabilities 5,265,440, ,868,231 70,766,354 Number of units in issue 8 Class AC USD 304,989 Class AM2 USD (formerly known as Class AM USD) 30,527,377 1,923,893 4,132,537 Class AC RMB 3,680,684 Class AM2 RMB (formerly known as Class AM RMB) 38,743,324 16,590,426 Class AC HKD 39,996 Class AM2 HKD (formerly known as Class AM HKD) 250,462,445 4,981,954 29,732,119 Net asset value per unit 8 Class AC USD Class AM2 USD (formerly known as Class AM USD) Class AC RMB Class AM2 RMB (formerly known as Class AM RMB) Class AC HKD Class AM2 HKD (formerly known as Class AM HKD) Approved by the Trustee and the Manager on 28 July ) Bertha TAM ) For and on behalf of Dickson LEE ) HSBC Institutional Trust Services (Asia) Limited, ) Trustee ) Chun Pong Stephen TAM ) For and on behalf of Pedro Augusto BOTELHO BASTOS ) HSBC Investment Funds (Hong Kong) Limited, ) Manager (1) The date of commencement for HSBC Asia Pacific ex Japan Equity Volatility Focused Fund was 27 March The notes on pages 27 to 68 form part of these financial statements.

12 Statement of Comprehensive Income HSBC Collective Investment Trust for the year/period ended 31 March Note HSBC China Multi-Asset HKD HSBC RQFII Chinese Fixed RMB Interest income 6(d) 89,675,708 15,394,518 Dividend income 60,143,003 Net gains/(losses) from financial assets at fair value through profit or loss 3 336,135,825 (16,536,236) Net foreign exchange loss (13,469,066) (233,554) Other income 116,354 Total revenue 472,601,824 (1,375,272) Management fees 6(a) 54,257,419 3,698,730 Transaction costs 6(e) 9,064,483 32,996 Trustee s fees 6(b) 4,575,817 1,198,477 Auditor s remuneration (404,820) 96,648 Registrar s fees 6(c) 893,011 44,376 Establishment cost Professional fees Safe custody fees, bank charges and miscellaneous expenses 6(b) 2,466, ,161 Total operating expenses 70,852,162 5,293,388 Net profit/(loss) from operations before taxation 401,749,662 (6,668,660) Taxation 4 (3,988,943) (345,523) Net profit/(loss) from operations before distributions 397,760,719 (7,014,183) Distributions to unitholders 13 (137,061,185) (9,786,865) Increase/(decrease) in net assets attributable to unitholders and total comprehensive income for the year/period 260,699,534 (16,801,048) 10

13 Statement of Comprehensive Income HSBC Collective Investment Trust for the year/period ended 31 March Note HSBC Asia Pacific ex Japan Equity Volatility Focused Fund (1) USD HSBC Euro Multi-Asset (2) EUR Interest income 6(d) 4, ,530 Dividend income 2,266,854 2,754,362 Net gains from financial assets at fair value through profit or loss 3 8,328,816 1,531,631 Net foreign exchange (loss)/gain (83,076) 4,560,244 Other income Total revenue 10,517,282 9,079,767 Management fees 6(a) 1,132,968 1,007,914 Transaction costs 6(e) 368, ,553 Trustee s fees 6(b) 114, ,253 Auditor s remuneration 7,296 11,904 Registrar s fees 6(c) 26,801 42,372 Establishment cost 46,605 Professional fees 10,403 Safe custody fees, bank charges and miscellaneous expenses 6(b) 151,165 85,436 Total operating expenses 1,801,437 1,792,440 Net profit from operations before taxation 8,715,845 7,287,327 Taxation 4 (158,234) (708,677) Net profit from operations before distributions 8,557,611 6,578,650 Distributions to unitholders 13 (2,495,905) (2,426,131) Increase in net assets attributable to unitholders and total comprehensive income for the year/period 6,061,706 4,152,519 (1) The date of commencement for HSBC Asia Pacific ex Japan Equity Volatility Focused Fund was 27 March (2) The date of commencement for HSBC Euro Multi-Asset was 18 March

14 Statement of Comprehensive Income HSBC Collective Investment Trust for the year/period ended 31 March Note 2016 HSBC China Multi-Asset HSBC RQFII Chinese Fixed HSBC Asia Pacific ex Japan Equity Volatility Focused Fund (1) HKD RMB USD Interest income 6(d) 148,149,192 24,496, Dividend income 91,791,467 4,632,570 Net (losses)/gains from financial assets at fair value through profit or loss 3 (926,383,069) 27,811,428 (19,617,785) Net foreign exchange (loss)/gain (12,264,005) (81,290) 448,737 Other income 257,687 Total revenue (698,448,728) 52,226,531 (14,536,465) Management fees 6(a) 89,205,756 5,647,555 2,185,776 Transaction costs 6(e) 20,542,409 50, ,240 Trustee s fees 6(b) 7,161,426 1,579, ,283 Auditor s remuneration 740, ,900 20,063 Registrar s fees 6(c) 1,568,442 15,042 37,682 Establishment cost 71,000 Professional fees Safe custody fees, bank charges and miscellaneous expenses 6(b) 2,723, , ,585 Total operating expenses 121,942,553 8,068,125 3,223,629 Net (loss)/profit from operations before taxation (820,391,281) 44,158,406 (17,760,094) Taxation 4 (6,826,115) (187,885) (403,875) Net (loss)/profit from operations before distributions (827,217,396) 43,970,521 (18,163,969) Distributions to unitholders 13 (239,239,289) (16,603,572) (4,620,910) (Decrease)/increase in net assets attributable to unitholders and total comprehensive income for the year/period (1,066,456,685) 27,366,949 (22,784,879) (1) The date of commencement for HSBC Asia Pacific ex Japan Equity Volatility Focused Fund was 27 March The notes on pages 27 to 68 form part of these financial statements. 12

15 Statement of Changes in Net Assets Attributable to Unitholders HSBC Collective Investment Trust for the year/period ended 31 March HSBC China Multi-Asset HKD HSBC RQFII Chinese Fixed RMB Balance at the beginning of the year/period 5,265,440, ,868,231 Increase/(decrease) in net assets attributable to unitholders and total comprehensive income for the year/period 260,699,534 (16,801,048) Subscriptions of units Class AM2 USD (formerly known as Class AM USD) 976,975,981 11,816,939 Class AC RMB 3,924,649 Class AM2 RMB (formerly known as Class AM RMB) 24,364,036 58,337,353 Class AM2 HKD (formerly known as Class AM HKD) 563,376,423 1,564,716,440 74,078,941 Redemptions of units Class AC USD (9,204,929) Class AM2 USD (formerly known as Class AM USD) (1,982,134,610) (72,460,358) Class AC RMB (19,230,382) Class AM2 RMB (formerly known as Class AM RMB) (323,975,080) (176,030,529) Class AC HKD (350,979) Class AM2 HKD (formerly known as Class AM HKD) (1,701,050,204) (20,068,509) (4,007,159,894) (297,345,686) Total transactions with unitholders (2,442,443,454) (223,266,745) Balance at the end of the year/period 3,083,696, ,800,438 13

16 Statement of Changes in Net Assets Attributable to Unitholders HSBC Collective Investment Trust for the year/period ended 31 March HSBC Asia Pacific ex Japan Equity Volatility Focused Fund (1) USD HSBC Euro Multi-Asset (2) EUR Balance at the beginning of the year/period 70,766,354 Increase in net assets attributable to unitholders and total comprehensive income for the year/period 6,061,706 4,152,519 Subscriptions of units Class AM2 USD (formerly known as Class AM USD) 53,430,409 Class AM3H USD 121,191,309 Class AM3H RMB 4,513,775 Class AM2 HKD (formerly known as Class AM HKD) 29,246,585 Class AM3H HKD 79,748,106 Class AM2 EUR 4,840,774 Class AM3H AUD 14,601,158 Class AM3H CAD 4,364,469 Class AM3H NZD 4,159,906 82,676, ,419,497 Redemptions of units Class AM2 USD (formerly known as Class AM USD) (39,548,220) Class AM3H USD (111,579,067) Class AM3H RMB (3,671,086) Class AM2 HKD (formerly known as Class AM HKD) (36,196,741) Class AM3H HKD (71,876,899) Class AM2 EUR (3,020,211) Class AM3H AUD (13,283,211) Class AM3H CAD (2,710,121) Class AM3H NZD (3,989,977) (75,744,961) (210,130,572) Total transactions with unitholders 6,932,033 23,288,925 Balance at the end of the year/period 83,760,093 27,441,444 (1) The date of commencement for HSBC Asia Pacific ex Japan Equity Volatility Focused Fund was 27 March (2) The date of commencement for HSBC Euro Multi-Asset was 18 March

17 Statement of Changes in Net Assets Attributable to Unitholders HSBC Collective Investment Trust for the year/period ended 31 March 2016 HSBC China Multi-Asset HSBC RQFII Chinese Fixed HSBC Asia Pacific ex Japan Equity Volatility Focused Fund (1) HKD RMB USD Balance at the beginning of the year/period 4,695,071, ,873,371 (Decrease)/increase in net assets attributable to unitholders and total comprehensive income for the year/period (1,066,456,685) 27,366,949 (22,784,879) Subscriptions of units Class AC USD 2,481,200 Class AM2 USD (formerly known as Class AM USD) 4,539,381,440 56,835, ,071,433 Class AC RMB 8,974,848 Class AM2 RMB (formerly known as Class AM RMB) 1,259,315, ,409,374 Class AM2 HKD (formerly known as Class AM HKD) 3,932,124,154 1,057, ,490,072 9,730,820, ,758, ,561,505 Redemptions of units Class AC USD (16,503,557) Class AM2 USD (formerly known as Class AM USD) (3,795,228,596) (94,499,930) (114,115,353) Class AC RMB (15,908,074) Class AM2 RMB (formerly known as Class AM RMB) (1,220,057,753) (159,543,140) Class AC HKD (1,618,418) Class AM2 HKD (formerly known as Class AM HKD) (3,078,708,934) (70,057,590) (73,894,919) (8,093,995,283) (358,130,709) (188,010,272) Total transactions with unitholders 1,636,825,646 (183,372,089) 93,551,233 Balance at the end of the year/period 5,265,440, ,868,231 70,766,354 (1) The date of commencement for HSBC Asia Pacific ex Japan Equity Volatility Focused Fund was 27 March The notes on pages 27 to 68 form part of these financial statements. 15

18 Cash Flow Statement HSBC Collective Investment Trust for the year/period ended 31 March Note HSBC China Multi-Asset HKD HSBC RQFII Chinese Fixed RMB Operating activities Interest received 105,099,617 19,210,870 Dividends received 60,135,083 Management fees paid (56,752,919) (3,923,335) Trustee s fees paid (4,755,963) (1,253,659) Payments for purchase of investments (1,874,714,779) (140,619,388) Proceeds from sale of investments 4,311,509, ,115,867 Tax (paid)/recovered (3,988,943) 403,777 Other operating expenses paid (26,972,176) (968,211) Cash generated from operating activities 2,509,559, ,965,921 Financing activities Proceeds from issue of units 1,567,380,334 74,078,941 Payments for redemption of units (4,057,070,109) (301,708,892) Distributions paid (146,473,890) (10,231,384) Cash used in financing activities (2,636,163,665) (237,861,335) Net decrease in cash and cash equivalents (126,603,896) (15,895,414) Cash and cash equivalents at the beginning of the year/period 159,590,451 23,329,617 Cash and cash equivalents at the end of the year/period 7 32,986,555 7,434,203 16

19 Cash Flow Statement HSBC Collective Investment Trust for the year/period ended 31 March Note HSBC Asia Pacific ex Japan Equity Volatility Focused Fund (1) USD HSBC Euro Multi-Asset (2) EUR Operating activities Interest received 4, ,300 Dividends received 2,313,209 2,723,715 Management fees paid (1,128,753) (977,268) Trustee s fees paid (113,692) (210,481) Payments for purchase of investments (98,597,785) (192,447,903) Proceeds from sale of investments 106,384, ,898,829 Tax paid (158,234) (708,677) Other operating expenses paid (491,416) 4,132,726 Cash generated from/(used in) operating activities 8,212,693 (17,364,759) Financing activities Proceeds from issue of units 68,472, ,614,879 Payments for redemption of units (74,741,020) (209,918,734) Distributions paid (2,536,956) (2,345,799) Cash (used in)/generated from financing activities (8,805,890) 19,350,346 Net (decrease)/increase in cash and cash equivalents (593,197) 1,985,587 Cash and cash equivalents at the beginning of the year/period 913,823 Cash and cash equivalents at the end of the year/period 7 320,626 1,985,587 (1) The date of commencement for HSBC Asia Pacific ex Japan Equity Volatility Focused Fund was 27 March (2) The date of commencement for HSBC Euro Multi-Asset was 18 March

20 Cash Flow Statement HSBC Collective Investment Trust for the year/period ended 31 March Note 2016 HSBC China Multi-Asset HSBC RQFII Chinese Fixed HSBC Asia Pacific ex Japan Equity Volatility Focused Fund (1) HKD RMB USD Operating activities Interest received 140,788,648 32,663, Dividends received 91,791,467 4,198,693 Management fees paid (88,363,479) (5,822,492) (2,080,400) Trustee s fees paid (7,049,905) (1,587,633) (164,062) Payments for purchase of investments (9,543,936,735) (193,323,821) (252,456,874) Proceeds from sale of investments 7,979,325, ,115, ,827,073 Tax (paid)/recovered (6,826,115) 611,775 (403,875) Other operating expenses paid (37,508,358) (844,088) (333,097) Cash (used in)/generated from operating activities (1,471,779,404) 214,812,609 (89,412,529) Financing activities Proceeds from issue of units 9,853,753, ,758, ,465,057 Payments for redemption of units (8,111,318,878) (355,800,633) (186,779,435) Distributions paid (235,514,282) (17,398,522) (4,359,270) Cash generated from/(used in) financing activities 1,506,920,509 (198,440,535) 90,326,352 Net increase in cash and cash equivalents 35,141,105 16,372, ,823 Cash and cash equivalents at the beginning of the year/ period 124,449,346 6,957,543 Cash and cash equivalents at the end of the year/period 7 159,590,451 23,329, ,823 (1) The date of commencement for HSBC Asia Pacific ex Japan Equity Volatility Focused Fund was 27 March The notes on pages 27 to 68 form part of these financial statements. 18

21 Distribution Statement HSBC Collective Investment Trust for the year/period ended 31 March Note HSBC China Multi-Asset HKD HSBC RQFII Chinese Fixed RMB Amount available for distribution at the beginning of the year/ period 5,265,440, ,868,231 Net paid or payable on issue and redemption of units (2,442,443,454) (223,266,745) Profit/(loss) before distributions after taxation 397,760,719 (7,014,183) Amount available for distributions to unitholders* 3,220,757, ,587,303 Distributions to unitholders 13 (137,061,185) (9,786,865) Amount available for distribution at the end of the year/period 3,083,696, ,800,438 Note HSBC Asia Pacific ex Japan Equity Volatility Focused Fund (1) USD HSBC Euro Multi-Asset (2) EUR Amount available for distribution at the beginning of the year/ period 70,766,354 Net received or receivable on issue and redemption of units 6,932,033 23,288,925 Profit before distributions after taxation 8,557,611 6,578,650 Amount available for distributions to unitholders* 86,255,998 29,867,575 Distributions to unitholders 13 (2,495,905) (2,426,131) Amount available for distribution at the end of the year/period 83,760,093 27,441,444 * Amount available for distributions to unitholders is derived based on the relevant clauses of the Trust Deed. (1) The date of commencement for HSBC Asia Pacific ex Japan Equity Volatility Focused Fund was 27 March (2) The date of commencement for HSBC Euro Multi-Asset was 18 March

22 Distribution Statement HSBC Collective Investment Trust for the year/period ended 31 March Note 2016 HSBC China Multi-Asset HSBC RQFII Chinese Fixed HSBC Asia Pacific ex Japan Equity Volatility Focused Fund (1) HKD RMB USD Amount available for distribution at the beginning of the year/period 4,695,071, ,873,371 Net received or receivable/(paid or payable) on issue and redemption of units 1,636,825,646 (183,372,089) 93,551,233 (Loss)/profit before distributions after taxation (827,217,396) 43,970,521 (18,163,969) Amount available for distributions to unitholders* 5,504,679, ,471,803 75,387,264 Distributions to unitholders 13 (239,239,289) (16,603,572) (4,620,910) Amount available for distribution at the end of the year/period 5,265,440, ,868,231 70,766,354 * Amount available for distributions to unitholders is derived based on the relevant clauses of the Trust Deed. (1) The date of commencement for HSBC Asia Pacific ex Japan Equity Volatility Focused Fund was 27 March The notes on pages 27 to 68 form part of these financial statements. 20

23 Distribution Statement HSBC Collective Investment Trust for the year/period ended 31 March Distribution history HSBC China Multi-Asset Year ended 31 March Year ended 31 March 2016 Distribution Distribution Note per unit Date of distribution per unit Date of distribution HKD HKD Class AM2 USD (formerly known as Class AM USD) First distribution April April 2015 Second distribution May May 2015 Third distribution June June 2015 Fourth distribution July July 2015 Fifth distribution August August 2015 Sixth distribution September September 2015 Seventh distribution October October 2015 Eighth distribution November November 2015 Ninth distribution December December 2015 Tenth distribution January January 2016 Eleventh distribution February February 2016 Twelfth distribution March March 2016 Class AM2 RMB (formerly known as Class AM RMB) First distribution April April 2015 Second distribution May May 2015 Third distribution June June 2015 Fourth distribution July July 2015 Fifth distribution August August 2015 Sixth distribution September September 2015 Seventh distribution October October 2015 Eighth distribution November November 2015 Ninth distribution December December 2015 Tenth distribution January January 2016 Eleventh distribution February February 2016 Twelfth distribution March March 2016 Class AM2 HKD (formerly known as Class AM HKD) First distribution April April 2015 Second distribution May May 2015 Third distribution June June 2015 Fourth distribution July July 2015 Fifth distribution August August 2015 Sixth distribution September September 2015 Seventh distribution October October 2015 Eighth distribution November November 2015 Ninth distribution December December 2015 Tenth distribution January January 2016 Eleventh distribution February February 2016 Twelfth distribution March March

24 Distribution Statement HSBC Collective Investment Trust for the year ended 31 March Distribution history HSBC RQFII Chinese Fixed Year ended 31 March Year ended 31 March 2016 Distribution Distribution Note per unit Date of distribution per unit Date of distribution RMB RMB Class AM2 USD (formerly known as Class AM USD) First distribution April April 2015 Second distribution May May 2015 Third distribution June June 2015 Fourth distribution July July 2015 Fifth distribution August August 2015 Sixth distribution September September 2015 Seventh distribution October October 2015 Eighth distribution November November 2015 Ninth distribution December December 2015 Tenth distribution January January 2016 Eleventh distribution February February 2016 Twelfth distribution March March 2016 Class AM2 RMB (formerly known as Class AM RMB) First distribution April April 2015 Second distribution May May 2015 Third distribution June June 2015 Fourth distribution July July 2015 Fifth distribution August August 2015 Sixth distribution September September 2015 Seventh distribution October October 2015 Eighth distribution November November 2015 Ninth distribution December December 2015 Tenth distribution January January 2016 Eleventh distribution February February 2016 Twelfth distribution March March 2016 Class AM2 HKD (formerly known as Class AM HKD) First distribution April April 2015 Second distribution May May 2015 Third distribution June June 2015 Fourth distribution July July 2015 Fifth distribution August August 2015 Sixth distribution September September 2015 Seventh distribution October October 2015 Eighth distribution November November 2015 Ninth distribution December December 2015 Tenth distribution January January 2016 Eleventh distribution February February 2016 Twelfth distribution March March

25 Distribution Statement HSBC Collective Investment Trust for the year/period ended 31 March Distribution history HSBC Asia Pacific ex Japan Equity Volatility Focused Fund Period from 27 March 2015 (commencement of operations) to Year ended 31 March 31 March 2016 Distribution Distribution Note per unit Date of distribution per unit Date of distribution USD USD Class AM2 USD (formerly known as Class AM USD) First distribution April April 2015 Second distribution May May 2015 Third distribution June June 2015 Fourth distribution July July 2015 Fifth distribution August August 2015 Sixth distribution September September 2015 Seventh distribution October October 2015 Eighth distribution November November 2015 Ninth distribution December December 2015 Tenth distribution January January 2016 Eleventh distribution February February 2016 Twelfth distribution March March 2016 Class AM2 HKD (formerly known as Class AM HKD) First distribution April April 2015 Second distribution May May 2015 Third distribution June June 2015 Fourth distribution July July 2015 Fifth distribution August August 2015 Sixth distribution September September 2015 Seventh distribution October October 2015 Eighth distribution November November 2015 Ninth distribution December December 2015 Tenth distribution January January 2016 Eleventh distribution February February 2016 Twelfth distribution March March

26 Distribution Statement HSBC Collective Investment Trust for the year/period ended 31 March Distribution history HSBC Euro Multi-Asset Period from 18 March 2016 (commencement of operations) to 31 March Distribution Note per unit Date of distribution EUR Class AM3H USD First distribution April 2016 Second distribution May 2016 Third distribution June 2016 Fourth distribution July 2016 Fifth distribution August 2016 Sixth distribution September 2016 Seventh distribution October 2016 Eighth distribution November 2016 Ninth distribution December 2016 Tenth distribution January Eleventh distribution February Twelfth distribution March Class AM3H RMB First distribution April 2016 Second distribution May 2016 Third distribution June 2016 Fourth distribution July 2016 Fifth distribution August 2016 Sixth distribution September 2016 Seventh distribution October 2016 Eighth distribution November 2016 Ninth distribution December 2016 Tenth distribution January Eleventh distribution February Twelfth distribution March Class AM3H HKD First distribution April 2016 Second distribution May 2016 Third distribution June 2016 Fourth distribution July 2016 Fifth distribution August 2016 Sixth distribution September 2016 Seventh distribution October 2016 Eighth distribution November 2016 Ninth distribution December 2016 Tenth distribution January Eleventh distribution February Twelfth distribution March 24

27 Distribution Statement HSBC Collective Investment Trust for the year/period ended 31 March Distribution history HSBC Euro Multi-Asset Period from 18 March 2016 (commencement of operations) to 31 March Distribution Note per unit Date of distribution EUR Class AM2 EUR First distribution April 2016 Second distribution May 2016 Third distribution June 2016 Fourth distribution July 2016 Fifth distribution August 2016 Sixth distribution September 2016 Seventh distribution October 2016 Eighth distribution November 2016 Ninth distribution December 2016 Tenth distribution January Eleventh distribution February Twelfth distribution March Class AM3H CAD First distribution April 2016 Second distribution May 2016 Third distribution June 2016 Fourth distribution July 2016 Fifth distribution August 2016 Sixth distribution September 2016 Seventh distribution October 2016 Eighth distribution November 2016 Ninth distribution December 2016 Tenth distribution January Eleventh distribution February Twelfth distribution March Class AM3H AUD First distribution April 2016 Second distribution May 2016 Third distribution June 2016 Fourth distribution July 2016 Fifth distribution August 2016 Sixth distribution September 2016 Seventh distribution October 2016 Eighth distribution November 2016 Ninth distribution December 2016 Tenth distribution January Eleventh distribution February Twelfth distribution March 25