Capture a groundbreaking opportunity with HSBC's first Greater China ETF series Golden Dragon ETF (3088.HK) Hong Kong ETF (3000.HK) China ETF (3033.HK) Taiwan ETF (3083.HK)
IMPORTANT: If you are in any doubt about the HSBC ETFs Trust, you should consult your stockbroker, bank manager, solicitor, accountant or other financial adviser for independent financial advice. to the performance of its underlying index. countries with interdependent economies. the derivative if the counterparty fails to perform its obligation. Index Fund's return may deviate from that of its underlying index. greater political, economic, taxation, currency and regulatory risks and risks linked to volatility and market liquidity, etc. Index Fund will also decrease in value. Investors may then lose part or all of their investment. based on market trading factors such as demand and supply and may deviate significantly from the net asset value per unit of the relevant Index Fund. of the HSBC ETFs Trust for details. HSBC offers a range of developed and emerging market ETFs on major exchanges, including in France, Germany, Switzerland and the United Kingdom. We are now proud to introduce our first series of ETFs in Hong Kong. With the launch of HSBC Greater China ETF series, investors can capture the dynamic opportunities in this region, easily and conveniently. It s as simple as swiping a barcode! HSBC your quality choice 100% confidence The whole process from start to finish is looked after by HSBC, one of the world s most trusted financial institutions, from investment management to market making and custodian services. Emerging markets investment experts Our 7,500 offices in 87 countries and territories, and our US$145 billion assets under management in emerging markets 1, allow us to offer quality and efficient Emerging Markets ETFs because we offer a more robust structure and exceptional tracking. Prudent risk management We believe in prudent risk management through transparency, simplicity, liquidity, good value and accessibility that make a successful product. Controlled risks HSBC ETFs are manufactured to keep risks managed. Using physical replication to track their benchmark indices, HSBC ETFs substantially reduces counterparty risk. Back to ETF basics HSBC believes ETFs should be simple to understand, transparent, liquid and flexible. We aim to provide our clients with asset allocation building blocs which respect these principles and are consistent with the HSBC brand. 1 Source: HSBC Global Asset Management, data as at 31 December 2010.
The HSBC Greater China ETF series 3088.HK HSBC MSCI Golden Dragon ETF 3033.HK HSBC MSCI China ETF 3000.HK HSBC MSCI Hong Kong ETF 3083.HK HSBC MSCI Taiwan ETF HSBC Global Asset Management manages different domestic and off-shore Greater China portfolios for institutional and retail investors. With assets under management over US$10 billion 2, we are one of the largest investment managers for the asset class globally. China Hong Kong Taiwan Why Greater China? Growth in Greater China has remained robust in the Greater China will see massive growth potential in the mid to long term based on robust domestic demand in China. for RMB offshore settlement and capital raising among benefit. 2010 2011 GDP growth forecast Region 2010F 2011F Greater China 7.5 6.2 China 10.0 8.9 Taiwan 7.3 4.9 5.4 4.7 Emerging World 7.2 6.2 2.4 1.8 Source: HSBC Research, Bloomberg as at 17 January 2011. 2 Source: HSBC Global Asset Management, as at 28 February 2011.
China Sectors such as consumption, industrials, materials, infrastructure and property are likely to benefit as the government maintains stable economic growth, shifts the economic model to be more consumption driven, improves industrial efficiency and focuses on inland development. 2011 is to promote domestic consumption and income redistribution, improve industrial efficiency and focus on resource conservation, regional development and when government officials discussed China's next We therefore believe that Chinese equities could valuations and strong earnings prospects. China's 12 th Five-Year Plan key targets Policy focus Indicator Target Income growth and redistribution Urban per capita disposable income >7% annual growth Rural per capita net income Minimum wages >7% annual growth 13% increase Urban registered unemployment <5% 45% increase Social security Urban basic pension coverage 39% increase Basic medical insurance participation rate 3% Social housing 36 million units Environmental protection Fall by 16% Fall by 17% Regional development Urbanisation rate Industry upgrading 0.4% increase Source: HSBC, Citigroup Global Markets and People's Daily, as at 7 March 2011.
Hong Kong Taiwan from its status as a financial centre. Mainland Chinese companies continue to list and raise capital financial services companies. Chinese investors also providing a welcome boost to the retail sector. Specific sectors, such as property, continue to benefit from the low interest rate environment and negative real interest rates. Government land policies, high rental costs and low inventory should continue to benefit such sectors. Strong economic growth, robust labour conditions and ample liquidity should provide support for the HS Property Index vs Real Mortage Rates 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 % 16 14 12 10 8 6 4 2 0 The Taiwan market could be poised for a rally ahead of the 2012 presidential election, as closer market. Tourism and business investment are also likely to the global recovery could hugely benefit the technology and manufacturing sectors. Taiwan's domestic demand also shows strong signs of momentum, as wage growth and employment conditions strengthen. TWSE Index performance during the previous three presidential elections Election Year 2000 36.8% 2004 37.4% 2008 14.1% TWSE Index performance Source: Bloomberg, based on TWSE Index price return in local currency, data from the beginning of one year ahead of the election until the end of April of the election year. i.e. 2000 election: 12/31/1998-04/30/2000; 2004 election: 12/31/2002-04/30/2004; 2008 election: 12/31/2006-04/30/2008. Source: CLSA, as at 31 December 2010. The key reasons for MSCI's market success in ETFs The MSCI index family is perfectly designed for benchmarking based on its index philosophy and construction process, having built a wealth of experience over 40 years. MSCI regularly reviews market developments and trends to reflect changing market conditions. MSCI indices, highlighting its popularity with investors, who appreciate its liquidity and transparency.
Fund details The HSBC Greater China ETF series HSBC MSCI Golden Dragon ETF (3088.HK) HSBC MSCI China ETF (3033.HK) HSBC MSCI Hong Kong ETF (3000.HK) HSBC MSCI Taiwan ETF (3083.HK) Structure of fund The Index Fund is to provide investment results that, before fees and expenses, closely correspond to the performance of the corresponding index Equity Fund currency Trading currency on the Exchange 0.5% Investment manager Investment advisor Trustee ETF basics Q: What is an ETF? Objectives of ETFs: Index tracking: managed with exposure to a specific market or industry and aim to achieve investment returns that correspond closely to the index performance. Publicly listed and traded: ETFs are listed and traded on stock exchanges. They are bought and sold like ordinary stocks and investors can purchase or sell them through their brokers during trading hours. Portfolio diversification: Management of ETFs: ETF managers apply various methodologies in a bid to replicate as closely as possible the performances of the benchmark indices. The most common replication strategies are full replication, representative sampling and synthetic replication. *SFC authorisation is not a recommendation or endorsement of a scheme nor does it guarantee the commercial merits of a scheme or its performance. It does not mean the scheme is suitable for all investors nor is it an endorsement of its suitability for any particular investor or class of investors.
Q: What are the benefits of ETFs? Risk diversification ETFs generally track diversified benchmarks, so they are not as volatile as individual stock holdings. Cost efficient ETFs track indices, so they normally charge lower management fees than actively managed funds. Cost effective ETFs generally contain a diversified portfolio of stocks which gives investors diversification at a low cost. Market access ETFs allow investors to gain exposure to overseas markets and sectors that otherwise would not be easily accessible. Convenience ETFs can be traded throughout the day during market hours, meaning investors can instantly implement broker or an internet account. Liquidity appointed market makers to provide liquidity during trading hours. Q: How are ETFs different from other investment vehicles? ETFs Mutual funds Individual stocks Diversification Generally high, a portfolio of stocks Generally high, None a portfolio of stocks Trading according to the prevailing market calculated once per day hours according to the price on the listed stock exchanges prevailing market price Sales charges No sales charges, needed to pay No sales charges, brokerage and other levies when sales charge needed to pay trading on the exchanges brokerage and other levies when trading on the exchanges Management fees Cash settlement T+2 # T+2 # Accessibility distributors appointed by the fund company Long/short position May long or short, depends on the In general long only May long or short, ETF depends on the stock # Being the settlement time on the stock exchange of Hong Kong, T+2 means two business days after trade date.
Q: How to trade ETFs Investors can buy or sell ETFs through their brokers, in the same way they would trade stocks. There is no need to open separate trading accounts. ETFs are traded on the stock exchange according to their market prices which are determined by market market value of the securities and other investments held by the funds. that the fund holds at the time of transaction. On the other hand, when a market price is lower than its units directly, this method of investment is more suitable for institutional investors and market professionals. Individual investors should talk to their bank or security broker about the details and investment procedures for ETFs. Talk to your investment adviser today to check out the HSBC ETFs for more details. Customer Hotline 2284 1108 www.etf.hsbc.com/hk WWW.ETF.HSBC.COM/HK further details including the risk factors. The document has not been reviewed by the Securities and Futures Commission. The ETFs referred to herein are not sponsored, endorsed or promoted by MSCI, and MSCI bears no liability with respect to any description of the limited relationship MSCI has with HSBC ETFs Trust and any related funds. should seek independent advice on the suitability or otherwise of the particular investment. Issued by HSBC Global Asset Management (Hong Kong) Limited