HSBC Global Investment Funds - Chinese Equity S Share Class 31 Jan 2019 31/01/2019 Fund Objective and Strategy Investment Objective The Fund seeks long-term capital growth by investing in a portfolio of shares (or securities that are similar to shares). The companies issuing these shares have a registered office and official stock-market listing in the People s Republic of China, or carry out most of their business there. The Fund can also invest in companies based in the Hong Kong Special Administrative Region (SAR). Investment Strategy There aren t restrictions on the market values of the companies held in the Fund. The Fund's maximum exposure to China A-shares and China B-shares is 70% of its assets. In addition, the Fund may invest into other funds. See the Prospectus for a full description of the investment objectives and derivative usage. Performance (%) YTD 1M 3M 8.84 8.84 10.29-21.80 14.24 7.48 9.56 (Net) 2 3.13 3.13 4.50-25.90 12.21 6.33 9.33 10.48 10.48 10.41-19.28 15.84 7.67 4.86 Calendar Year Performance (%) 11.89-6.44-1.75 50.42-20.63 (Net) 2 6.02-11.35-6.91 42.52-24.80 8.38-8.01 0.43 49.33-18.25 3-Year Risk Measures 1Y 3Y¹ 5Y¹ 2014 2015 2016 2017 Characteristics Since Inception¹ Share Class Details UCITS V Compliant Subscription Mode Valuation Time Min. Initial Investment Yes Distributing Annually Daily 17:00 Luxembourg 5.00% Luxembourg LU0039217434 30 Jun 1992 Volatility 17.42% 17.50% Number of Holdings NAV per Share 98.85 74 459 Information ex Cash Fund Size 1,252,124,862-0.45 - Ratio Avg Market Bloomberg Ticker HSBCHEI LX Beta 0.97 - Cap ( 139,572 116,847 MSCI China 10/40 Net mil) Fund Past performance is not an indicator of future returns. The figures are calculated in the share class base currency, dividend reinvested. 2018 Risk Disclosure The Fund's unit value can go up as well as down, and any capital invested in the Fund may be at risk. The value of investible securities can change over time due to a wide variety of factors, including but not limited to: political and economic news, government policy, changes in demographics, cultures and populations, natural or human-caused disasters etc. The Fund may invest in Emerging Markets, these markets are less established, and often more volatile, than developed markets and involve higher risks, particularly market, liquidity and currency risks. Derivatives may be used by the Fund, and these can behave unexpectedly. The pricing and volatility of many derivatives may diverge from strictly reflecting the pricing or volatility of their underlying reference(s), instrument or asset. Investment Leverage occurs when the economic exposure is greater than the amount invested, such as when derivatives are used. A Fund that employs leverage may experience greater gains and/or losses due to the amplification effect from a movement in the price of the reference source. Further information on the Fund's potential risks can be found in the Key Investor Information Document and Prospectus. Distribution Type Distribution Frequency Dealing Frequency Max. Initial Charge Base Currency Domicile ISIN Inception Date Manager Cash / SRS (Supplementary Retirement Scheme) Annual Management Fee 1.50% Mandy Chan 1 Result is annualised when calculation period is over one year. 2 Net of relevant prevailing sales charge The reference benchmark was applied to the fund with effect from 30 June 2016 to align with global disclosures and is applied to the performance data provided above across all periods
Monthly Performance Commentary Market review The Chinese equity market ended the first month of 2019 on a very strong note with MSCI China 10/40 index gaining 10.5% in terms. The stellar performance was driven by steady progress on US-China trade talk, strong domestic policy support and importantly, a more dovish tone from the US Fed. In term of supportive policies on the domestic front, we have seen RRR cut, relaxation of SME loan definition, introduction of new quota for local government debt etc. December activity indicators showed sign of stabalisation. FAI growth held up stable, backed by solid growth in manufacturing and recovery in infrastructure FAI, while real estate FAI eased moderately. Aggregate credit came in slightly above expectations. Retail sales also recovered modestly. On the negative side, trade numbers surprised the market on the downside with both exports and imports fell sharply in December, and broad based declines were noted for all major trading partners. Portfolio review The fund underperformed the benchmark in January mainly driven by unfavourable stock selection effect in financials and industrials sectors. While sector allocation is mainly an outcome of our bottom up stock selection, the portfolio s underweight to consumer discretionary during the period was unfavourable given it was among the best performing sectors. Railway companies China Railways Construction group and China Railway group detracted performance as January was the month where laggard outperformed, but both rail companies has performed strongly last year and therefore were not favoured by investors in January. Our overweight position in Link REIT undermined performance as well because this defensive name rose less than the market amid the strong rally. On the plus side, ecommerce company Alibaba rose higher after announcing solid quarterly result. Key overweights at month end were financials, real estate and consumer staple services. Key underweights were technology and consumer discretionary. Outlook The lingering concerns on US-China trade war has been depressed the equity market performance. MSCI China declined by nearly 20% in 2018, and is trading on 10x 1-yr forward PE, below its long-term historical average of about 11x. We believe the current low valuations and high risk premiums have largely priced in an expected further drop in economic growth and a down case for US-China trade deal negotiations. With the government s continued supportive policies, we are not too concerned on the domestic side for the coming quarters. Intensive easing and stimulus policies/guidelines such as the boost of infrastructure investment, tax cut for households and corporates, and import tariffs cut were announced in recent months to mitigate trade war impact and accelerate reforms. We continue to expect policy makers to flexibly adjust policies as needed and maintain an easing bias in general, to avoid any sharp slowdown in growth. The latest dovish tone of the Fed and the potential earlier ending of the US rate hike cycle are also supportive to RMB, which in turn should bode well for overall investment sentiment in Chinese equities market. We believe given the underlying strength of the economy, the availability of policy options for the government to stimulate growth, and the attractive valuation after the corrections, the Chinese equity market warrants a recovery in 2019.
Sector Allocation (%) Financials Communication Services Real Estate Consumer Discretionary Consumer Staples Industrials Energy Health Care Utilities Materials Information Technology Cash & Others 10.48 6.66 6.74 9.25 4.86 2.79 4.54 5.85 4.09 5.95 1.95 3.28 1.18 3.29 0.34 2.35 0.24 2.91 0.99 0.00 26.48 32.31 32.30 31.20 Top 10 Holdings (%) Sector Weight (%) Tencent Holdings Ltd Alibaba Group Holding Ltd China Construction Bank Corp Indl and Comm Bank of China Ltd China Mobile Ltd Ping An Ins Grp Co of China Ltd China Overseas Land & Inv Ltd China Life Insurance Co Ltd Agricultural Bank Of China-H Kweichow Moutai Co Ltd-A Communication Services 9.88 Communication Services 9.88 Financials 9.55 Financials 4.89 Communication Services 4.82 Financials 4.14 Real Estate 3.46 Financials 3.22 Financials 2.79 Consumer Staples 2.23 Index Disclaimer Source: MSCI. The MSCI information may only be used for your internal use, may not be reproduced or redisseminated in any form and may not be used as a basis for or a component of any financial instruments or products or indices. None of the MSCI information is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. Historical data and analysis should not be taken as an indication or guarantee of any future performance analysis, forecast or prediction. The MSCI information is provided on an as is basis and the user of this information assumes the entire risk of any use made of this information. MSCI, each of its affiliates and each other person involved in or related to compiling, computing or creating any MSCI information (collectively, the MSCI Parties ) expressly disclaims all warranties (including, without limitation, any warranties of originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose) with respect to this information. Without limiting any of the foregoing, in no event shall any MSCI Party have any liability for any direct, indirect, special, incidental, punitive, consequential (including, without limitation, lost profits) or any other damages. (www.msci.com)
Important Information This document does not constitute an offering document and should not be construed as a recommendation, an offer to sell or the solicitation of an offer to purchase or subscribe to any investment. This document is for information only and is not an advertisement, investment recommendation, research, or advice. Any views and opinions expressed are subject to change without notice. It does not have regard to the specific investment objectives, financial situation, or needs of any specific person. Investors and potential investors should not invest in the Fund solely based on the information provided in this document and should read the prospectus (including the risk warnings) and the product highlights sheets, which are available upon request at HSBC Global Asset Management (Singapore) Limited ( AMSG ) or our authorised distributors, before investing. You should seek advice from a financial adviser. Investment involves risk. Past performance of the managers and the funds, and any forecasts on the economy, stock or bond market, or economic trends that are targeted by the funds, are not indicative of future performance. The value of the units of the funds and income accruing to them, if any, may fall or rise and investor may not get back the original sum invested. Changes in rates of currency exchange may affect significantly the value of the investment. AMSG has based this document on information obtained from sources it reasonably believes to be reliable. However, AMSG does not warrant, guarantee or represent, expressly or by implication, the accuracy, validity or completeness of such information. HSBC Global Asset Management (Singapore) Limited 21 Collyer Quay #06-01 HSBC Building Singapore 049320 Telephone: (65) 6658 2900 Facsimile: (65) 6225 4324 Website: www.assetmanagement.hsbc.com/sg Company Registration No. 198602036R Should there be any discrepancy, the English version shall prevail. This document has not been reviewed by the Monetary Authority of Singapore.
HSBC Global Investment Funds - Chinese Equity Supplement Information Sheet 31 Jan 2019 Since Performance (%) Return Currency YTD 1M 3M 6M 1Y 3Y 1 5Y 1 Inception 1 AC 8.84 8.84 10.29-7.16-21.80 14.25 7.47 12.16 AC (Net) 2 3.13 3.13 4.50-12.04-25.90 12.21 6.32 11.78 EUR EUR 8.43 8.43 8.90-5.33-15.10 12.03 11.01 10.42 EUR (Net) 2 EUR 2.74 2.74 3.19-10.30-19.56 10.03 9.82 10.19 SGD SGD 7.38 7.38 7.09-8.30-19.68 12.10 8.58 8.80 SGD (Net) 2 SGD 1.74 1.74 1.47-13.11-23.90 10.10 7.41 8.58 8.84 8.84 10.29-7.16-21.80 14.24 7.48 9.56 (Net) 2 3.13 3.13 4.50-12.04-25.90 12.21 6.33 9.33 IC 8.92 8.92 10.53-6.76-21.13 15.22 8.39 9.17 IC (Net) 2 3.20 3.20 4.72-11.66-25.27 13.17 7.23 8.74 Calendar Year Performance (%) Return Currency 2014 2015 2016 2017 2018 AC 11.89-6.49-1.73 50.41-20.63 AC (Net) 2 6.01-11.40-6.89 42.51-24.80 EUR EUR 27.42 4.22 1.19 32.12-16.63 EUR (Net) 2 EUR 20.73-1.25-4.12 25.19-21.01 SGD SGD 17.43 0.17 0.05 39.14-19.05 SGD (Net) 2 SGD 11.27-5.09-5.20 31.84-23.30 11.89-6.44-1.75 50.42-20.63 (Net) 2 6.02-11.35-6.91 42.52-24.80 IC 12.84-5.69-0.89 51.69-19.95 IC (Net) 2 6.92-10.64-6.10 43.72-24.15 1 Result is annualised when calculation period is over one year. 2 Net of relevant prevailing sales charge Past performance is not an indicator of future returns. The figures are calculated in the share class base currency, dividend reinvested. Share Class Base Currency Distribution Frequency Dividend ex-date Last Paid Dividend Annualised Yield Annually 11 Jul 2018 0.033699 0.03% AC - - - - IC - - - - The above table cites the last dividend paid within the last 12 months only. Dividend is not guaranteed and may be paid out of distributable income, capital or both, which could result in capital erosion and reduction in net asset value. A positive distribution yield does not imply a positive return. Past payout yields and payments do not represent future payout yields and payments. The calculation method of annualised yield: (dividend value / NAV per share or unit as of ex-dividend date) x n, n depends on the distributing frequency. Annually distribution is 1; semi-annually distribution is 2; quarterly distribution is 4; monthly distribution is 12. The annualised dividend yield is calculated based on the dividend distribution on the relevant date with dividend reinvested, and may be higher or lower than the actual annual dividend yield. Investors and potential investors should refer to the details on dividend distributions of the Fund, which are available on HSBC Global Asset Management (Singapore) Limited website. Share Class Inception Date ISIN Base Currency Min. Initial Investment NAV per Share Annual Management Fee Distribution Type AC IC 30 Jun 1992 14 Apr 2003 27 Jul 2005 LU0039217434 LU0164865239 LU0164867441,000 98.85 106.79 119.79 1.50% 1.50% 0.75% Distributing Accumulating Accumulating Different classes may have different performances, dividend yields and expense ratios. For hedged classes, the effects of hedging will be reflected in the net asset values of such classes. Expenses arising from hedging transactions may be significant and will be borne by the relevant hedged classes. Hedged class performs the required hedging on a best efforts basis.