TABLE OF CONTENTS HSBC Mutual Funds HSBC Canadian Money Market Fund HSBC U.S. Dollar Money Market Fund HSBC Mortgage Fund HSBC Canadian Bond Fund HSBC Emerging Markets Debt Fund HSBC Monthly Income Fund HSBC U.S. Dollar Monthly Income Fund HSBC Canadian Balanced Fund HSBC Dividend Fund HSBC Equity Fund HSBC Small Cap Growth Fund HSBC Global Equity Fund HSBC U.S. Equity Fund HSBC European Fund HSBC AsiaPacific Fund HSBC Global Real Estate Equity Fund HSBC Chinese Equity Fund HSBC Indian Equity Fund HSBC Emerging Markets Fund HSBC BRIC Equity Fund HSBC World Selection Diversified Conservative Fund HSBC World Selection Diversified Moderate Conservative Fund HSBC World Selection Diversified Balanced Fund HSBC World Selection Diversified Growth Fund HSBC World Selection Diversified Aggressive Growth Fund
HSBC Mutual Funds Interim Management Report of Fund Performance for the six months ended,
HSBC Mutual Funds Interim Report to Unitholders for the six months ended,
HSBC Mutual Funds Interim Report to Unitholders Interim Management Report of Fund Performance for the six months ended,
A NOTE ON FORWARD-LOOKING STATEMENTS This report may contain forward-looking statements about the Fund, including its strategy, expected performance and condition. Forward-looking statements include statements that are predictive in nature that depend upon or refer to future events or conditions, or that include words such as expects, anticipates, intends, plans, believes, estimates or negative versions thereof and similar expressions. In addition, any statement that may be made concerning future performance, strategies or prospects, and possible future Fund action, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the Fund and economic factors. Forward-looking statements are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied in any forward-looking statements made by the Fund. Any number of important factors could contribute to these digressions, including, but not limited to, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, and catastrophic events. We stress that the above-mentioned list of important factors is not exhaustive. We encourage you to consider these and other factors carefully before making any investment decisions and we urge you to avoid placing undue reliance on forward-looking statements. Further, you should be aware of the fact that the Fund has no specific intention of updating any forward-looking statements, whether as a result of new information, future events or otherwise. Sources: HSBC Global Asset Management (Canada) Limited, Bloomberg, MSCI, FTSE TMX Global Debt Capital Markets Inc., Bank of Canada. Neither MSCI nor any other party involved in or related to compiling, computing or creating the MSCI data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any of such data. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in or related to compiling, computing or creating the data have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits), even if notified of the possibility of such damages. No further distribution or dissemination of the MSCI data is permitted without MSCI s express written consent. FTSE TMX Global Debt Capital Markets Inc. ( FTDCM ), FTSE International Limited ( FTSE ), the London Stock Exchange Group companies (the Exchange ) or TSX Inc. ( TSX and together with FTDCM, FTSE and the Exchange, the Licensor Parties ). The Licensor Parties make no warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the FTSE TMX Canada Index and/or the figure at which the said Index stands at any particular time on any particular day or otherwise. The Index is compiled and calculated by FTDCM and all copyright in the Index values and constituent lists vests in FTDCM. The Licensor Parties shall not be liable (whether in negligence or otherwise) to any person for any error in the Index and the Licensor Parties shall not be under any obligation to advise any person of any error therein. TMX is a trade mark of TSX Inc. and is used under licence. FTSE is a trade mark of FTSE International Limited and is used by FTDCM under licence. Unauthorized reproduction, distribution, transmission or publication without our prior written consent is strictly prohibited.
How to reach us Vancouver HSBC Global Asset Management (Canada) Limited 3 rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8 Tel: 1-888-390-3333 Fax: 604-669-2756 Toronto Suite 300 70 York Street Toronto, ON M5J 1S9 Montreal Suite 300 2001 McGill College Avenue Montreal, QC H3A 1G1 For more information You can find more information about HSBC Mutual Funds in the Fund s Simplified Prospectus, Annual Information Form, Annual and Semi-Annual Report and Fund Facts. You can get a copy of these documents, as well as the Fund s Financial Statements, at no cost by calling 1-888-390-3333, by contacting your authorized dealer or by visiting our website at www.hsbc.ca/investment-resources. These documents and other information about the HSBC Mutual Funds, such as information circulars and material contracts, are also available at www.sedar.com. Copies of the Annual Report and Semi-Annual Report, Simplified Prospectus, Annual Information Form, Annual and Interim Management Report of Fund Performance and Fund Facts are available on our website at www.hsbc.ca/ investment-resources. Issued by HSBC Global Asset Management (Canada) Limited (-08) RRD
HSBC Canadian Money Market Fund Interim Management Report of Fund Performance for the six months ended,
HSBC Canadian Money Market Fund Management Discussion of Fund Performance In this document, you and your refer to the unitholder of the Fund; we, us and our refer to HSBC Global Asset Management (Canada) Limited; and the Fund refers to the HSBC Canadian Money Market Fund. We are the manager, trustee and primary investment advisor of the Fund. Introduction This Interim Management Report of Fund Performance contains financial highlights but does not contain the complete annual or semiannual financial statements of the investment fund. You may obtain a copy of the Fund s annual or semi-annual financial statements at your request, at no cost, by calling us toll-free at 1-888-390-3333, by visiting our website at www.hsbc.ca/investment-resources, by visiting the SEDAR website at www.sedar.com or by writing to us at: Corporate Secretary HSBC Global Asset Management (Canada) Limited 3 rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8 You may also contact us using one of these methods to request a copy of the Fund s proxy voting policies and procedures, proxy voting disclosure record or quarterly statement of investment portfolio. Results of Operations As of,, the Fund s net assets decreased by 2.1% to $211.3 million from $215.9 million at the end of. Of this decrease, a $0.4 million gain was attributable to investment performance and $5 million was attributable to net withdrawals from Fund. Investment Performance The HSBC Canadian Money Market Fund (Investor Series) rose 0.03% for the six months ending,. The benchmark, 5 FTSE TMX Canada 30-Day Treasury Bill Index (5) and the FTSE TMX Canada 60-Day Treasury Bill Index (5), rose 0.35% over the same period. A defensive position in corporate debt was taken over the period, with a focus on high-quality issues where credit risk and liquidity risk were minimized. This protected the Fund s primary objectives of preserving capital and providing liquidity. The return, over and above alternative government notes, from the defensive corporate position was modest over the six months but generally commensurate with the reduced level of risk. An allocation to corporate notes is usually positive for performance due to the higher yields they can offer over government-backed alternatives. However, these notes come with additional risks that may be unsuitable for the Fund at any level of compensation. We work within an extensive network of global credit research analysts to ensure that a prudent security selection process is in place. We also look to add value by adjusting the weightedaverage-maturity (or duration) of the Fund s holdings relative to its benchmark. For the first half of the year, the Fund s duration was targeted close to its blended 45-day benchmark, mitigating any relative interest rate risk. Recent Developments The Bank of Canada s January 25-basis-point rate cut was taken to aid the economy s transition to non-energy manufacturing growth, while cushioning it from the near-term energy sector hit. Economic activity did contract over the first four months of the year as energy sector investment was reduced in response to lower oil prices. As the year unfolds, other segments of the economy should strengthen and provide an important offset, supported by an improving US outlook and weaker Canadian dollar. Recent readings on consumer price inflation remain muted and the outlook continues to be quite benign, as the recent upward price pressures appear to be temporary, wage pressures remain generally tame and surveyed inflation expectations remain wellanchored within the Bank of Canada s 1-3% target range. A modest growth outlook and soft underlying price pressures should allow the Bank of Canada to remain on hold or potentially cut rates again later in the year. The Fund remains focused on high-quality government and corporate issues where liquidity risk and credit risk are minimized. The Fund s primary objectives are to preserve capital and provide liquidity. Related Party Transactions We, on behalf of the Fund, or the Fund Manager, may, from time to time, enter into transactions or arrangements with or involving other members of the HSBC Group or other people or companies related or connected to us or the Fund. To proceed with the transactions, the Fund relies on the positive recommendation of the Fund s Independent Review Committee. A condition of this positive recommendation is that the transactions are performed in accordance with our policy on Related Party Transactions. For more general information on persons related to the Fund and the types of potential transactions, see the Fund s Simplified Prospectus. The following is a summary of current transactions and arrangements with entities that are related to us or the Fund. Manager, Trustee and Investment Advisor We are the manager, trustee and primary investment advisor of the Fund. As manager, we manage the overall business and operations of the Fund. As trustee, we hold legal title to the property of the 1
HSBC Canadian Money Market Fund Fund on your behalf. As primary investment advisor, we provide investment advice and portfolio management services to the Fund. We receive a fee from the Fund for these services based on assets under management, calculated daily and paid monthly. Distribution Services The Fund is distributed through us, HSBC Investment Funds (Canada) Inc. (our wholly owned subsidiary); HSBC Private Wealth Services (Canada) Inc. and through HSBC Securities (Canada) Inc. (an affiliate) directly or through its division, HSBC InvestDirect. We pay distribution and servicing fees to them based on the amount of assets held in the investor s account, and additionally, in some cases, on the amount of the initial purchase. If you hold units of this Fund and/or other HSBC Mutual Funds in a registered plan with HSBC Investment Funds (Canada) Inc., they may charge you an annual fee to cover the annual administration costs of the plan. We permit HSBC Investment Funds (Canada) Inc. to collect these fees by redeeming sufficient units of the Fund with the highest market value in your registered plan. Financial Highlights The following tables show selected key financial information about the Fund and are intended to help you understand the Fund s financial performance for the six-month period ended, and for the last five years ended December 31, as applicable. In the year a fund is established, period represents the period from inception to December 31 or of that fiscal year, as applicable. This information is derived from the Fund s unaudited semi-annual financial statements and audited annual financial statements. The information in the following tables is based on prescribed regulations, and as a result, is not expected to add due to the increase/decrease in net assets from operations being based on average units outstanding during the period and all other numbers being based on actual units outstanding at the relevant point in time. HSBC Canadian Money Market Fund Investor Series Net Assets per Unit (1) Period ended, (unaudited) and years ended December 31 Inception: January 1989 Net assets per unit, beginning of period (2) $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 Increase (decrease) from operations: Total revenue 0.04 0.10 0.11 0.11 0.11 0.06 Total expenses (0.04) (0.10) (0.10) (0.10) (0.10) (0.06) Realized gains (losses) Unrealized gains (losses) 0.01 Total increase (decrease) from operations (2) $ $0.01 $0.01 $0.01 $0.01 $ Distributions to unitholders: From income (excluding dividends) (0.01) (0.01) (0.01) (0.01) From dividends From capital gains From return of capital Total annual distributions (2,3) $ $(0.01) $(0.01) $(0.01) $(0.01) $ Net assets per unit, end of period (2) $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 NAV (in 000s) (4) $114,785 $121,931 $144,603 $161,660 $199,156 $255,441 Units outstanding (in 000s) (4) 11,478 12,193 14,460 16,166 19,916 25,544 Management expense ratio ( MER ) (5) 0.84% 0.98% 1.03% 1.02% 1.0 0.62% MER before absorbed or waived fees (5) 0.98% 0.98% 1.03% 1.02% 1.0 1.02% Portfolio turnover rate (6) n/a n/a n/a n/a n/a n/a Trading expense ratio (7) n/a n/a n/a n/a n/a n/a NAV per unit (4) $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 2
HSBC Canadian Money Market Fund HSBC Canadian Money Market Fund Advisor Series Net Assets per Unit (1) Period ended, (unaudited) and years ended December 31 Inception: December 2001 Net assets per unit, beginning of period (2) $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 Increase (decrease) from operations: Total revenue 0.04 0.10 0.11 0.11 0.11 0.06 Total expenses (0.04) (0.10) (0.10) (0.10) (0.10) (0.06) Realizedgains(losses) Unrealizedgains(losses) Total increase (decrease) from operations (2) $ $ $0.01 $0.01 $0.01 $ Distributions to unitholders: From income (excluding dividends) (0.01) (0.01) (0.01) From dividends From capital gains From return of capital Total annual distributions (2,3) $ $ $(0.01) $(0.01) $(0.01) $ Net assets per unit, end of period (2) $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 HSBC Canadian Money Market Fund Premium Series Net Assets per Unit (1) Period ended, (unaudited) and years ended December 31 Inception: December 2007 Net assets per unit, beginning of period (2) $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 Increase (decrease) from operations: Total revenue 0.04 0.10 0.11 0.11 0.11 0.06 Total expenses (0.02) (0.04) (0.05) (0.05) (0.04) (0.04) Realized gains (losses) Unrealized gains (losses) 0.01 Total increase (decrease) from operations (2) $0.02 $0.07 $0.06 $0.06 $0.07 $0.02 Distributions to unitholders: From income (excluding dividends) (0.02) (0.07) (0.06) (0.06) (0.07) (0.02) From dividends From capital gains From return of capital Total annual distributions (2,3) $(0.02) $(0.07) $(0.06) $(0.06) $(0.07) $(0.02) Netassetsperunit,endof period (2) $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 NAV (in 000s) (4) $106 $123 $445 $886 $1,000 $1,180 Units outstanding (in 000s) (4) 11 12 44 89 100 118 Management expense ratio ( MER ) (5) 0.84% 1.02% 1.03% 1.0 0.97% 0.65% MER before absorbed or waived fees (5) 1.97% 1.02% 1.05% 1.01% 0.97% 1.01% Portfolio turnover rate (6) n/a n/a n/a n/a n/a n/a Trading expense ratio (7) n/a n/a n/a n/a n/a n/a NAV per unit (4) $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 NAV (in 000s) (4) $27,246 $37,120 $43,608 $46,002 $68,787 $99,295 Units outstanding (in 000s) (4) 2,725 3,712 4,361 4,600 6,879 9,929 Management expense ratio ( MER ) (5) 0.43% 0.43% 0.48% 0.47% 0.45% 0.44% MER before absorbed or waived fees (5) 0.43% 0.43% 0.48% 0.47% 0.45% 0.48% Portfolio turnover rate (6) n/a n/a n/a n/a n/a n/a Trading expense ratio (7) n/a n/a n/a n/a n/a n/a NAV per unit (4) $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 3
HSBC Canadian Money Market Fund HSBC Canadian Money Market Fund Manager Series Net Assets per Unit (1) Period ended, (unaudited) and years ended December 31 Inception: December 2001 Net assets per unit, beginning of period (2) $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 Increase (decrease) from operations: Total revenue 0.04 0.10 0.11 0.11 0.11 0.06 Total expenses (0.04) (0.07) (0.07) (0.07) (0.07) (0.05) Realized gains (losses) Unrealized gains (losses) 0.01 Total increase (decrease) from operations (2) $ $0.04 $0.04 $0.04 $0.04 $0.01 Distributions to unitholders: From income (excluding dividends) (0.01) (0.04) (0.04) (0.04) (0.04) (0.01) From dividends From capital gains From return of capital Total annual distributions (2,3) $(0.01) $(0.04) $(0.04) $(0.04) $(0.04) $(0.01) Net assets per unit, end of period (2) $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 NAV (in 000s) (4) $891 $1,161 $1,398 $1,639 $4,173 $4,121 Units outstanding (in 000s) (4) 89 116 140 164 417 412 Management expense ratio ( MER ) (5) 0.74% 0.7 0.74% 0.71% 0.69% 0.56% MER before absorbed or waived fees (5) 0.75% 0.7 0.74% 0.71% 0.69% 0.74% Portfolio turnover rate (6) n/a n/a n/a n/a n/a n/a Trading expense ratio (7) n/a n/a n/a n/a n/a n/a NAV per unit (4) $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 HSBC Canadian Money Market Fund Institutional Series Net Assets per Unit (1) Period ended, (unaudited) and years ended December 31 Inception: December 2001 Net assets per unit, beginning of period (2) $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 Increase (decrease) from operations: Total revenue 0.04 0.09 0.11 0.11 0.11 0.06 Total expenses (0.01) (0.01) (0.01) (0.01) (0.01) Realized gains (losses) Unrealized gains (losses) 0.01 Total increase (decrease) from operations (2) $0.04 $0.09 $0.10 $0.10 $0.10 $0.05 Distributions to unitholders: From income (excluding dividends) (0.06) (0.09) (0.10) (0.10) (0.10) (0.05) From dividends From capital gains From return of capital Total annual distributions (2,3) $(0.06) $(0.09) $(0.10) $(0.10) $(0.10) $(0.05) Netassetsperunit,endof period (2) $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 NAV (in 000s) (4) $68,287 $55,543 $51,187 $42,681 $51,335 $71,809 Units outstanding (in 000s) (4) 6,829 5,554 5,119 4,268 5,134 7,181 Management expense ratio ( MER ) (5) 0.06% 0.06% 0.1 0.08% 0.06% 0.1 MER before absorbed or waived fees (5) 0.06% 0.06% 0.1 0.08% 0.06% 0.1 Portfolio turnover rate (6) n/a n/a n/a n/a n/a n/a Trading expense ratio (7) n/a n/a n/a n/a n/a n/a NAV per unit (4) $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 (1) This information is derived from the Fund s unaudited semi-annual financial statements and audited annual financial statements. The net assets per unit presented in the financial statements differ from the net asset value calculated for fund pricing purposes. (2) Net assets per unit and distributions per unit are based on the actual number of units outstanding for the relevant series at the relevant time. The increase/decrease in net assets from operations per unit is based on the weighted average number of units outstanding for the relevant series over the fiscal period. (3) Distributions are automatically reinvested in additional units of the Fund, unless the unitholder withdraws from the automatic reinvestment plan by providing written notice to us. (4) This information is provided as at period-end. (5) MER includes the total expenses of each Fund, including the Goods and Services Tax and/or Harmonized Sales Tax thereon, other than brokerage commissions on securities transactions and any foreign withholding taxes on income, as an annualized percentage of average net asset value ( NAV ) of the respective series of unit for the period. In the period a series is established, the MER is annualized from the date of inception to the end of the period. The MER may vary from one mutual fund to another and from one series of units to another. 4
HSBC Canadian Money Market Fund We may have waived or absorbed certain fees and expenses otherwise payable by the Fund. The amount of expenses absorbed or waived is at the discretion of and can be terminated at any time by us. (6) The Fund s portfolio turnover rate indicates how actively the Fund s portfolio advisor manages its portfolio investments. A portfolio turnover rate of 10 is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the period. The higher the Fund s portfolio turnover rate in a period, the greater the trading costs payable by the Fund in the period, and the greater the chance of an investor receiving taxable capital gains in the period. There is not necessarily a relationship between a high turnover rate and the performance of the Fund. The rate is calculated based on the lesser of purchases or sales of securities divided by the average weighted market value of the portfolio securities, excluding short-term securities. (7) The trading expense ratio represents commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the period. Management Fees For the six months ended,, the Fund paid us management fees of $556,699. The management fee for each series is calculated as a percentage of the daily net asset value for that series. The fees are reduced, where required, so that these fees do not duplicate fees payable by mutual funds in which the Fund invests for the same service. The Fund s management fees were used by us to pay costs for managing the investment portfolio, providing investment analysis and recommendations, making investment decisions, making brokerage arrangements for the purchase and sale of the investment portfolio and providing other services. The management fees also funded commission payments and other compensation to sales representatives and registered dealers and brokers (collectively distribution costs ), including HSBC Bank Canada, for units of the Fund bought and held by unitholders. Finally, we used management fees to pay for additional marketing and distribution services to the Fund. For the six months ended,, approximately 45% of the total management fees collected from all HSBC Mutual Funds were used to fund distribution costs. In comparison, for the Fund, such distribution costs represented 45% of the management fees collected. This may vary by series depending on the assets invested in each of the series. Past Performance The performance information shown assumes that all distributions made by the Fund in the periods shown were reinvested in additional securities of the Fund. The performance information does not take into account sales, redemption, distribution, optional charges or expenses you may be charged outside of the Fund or the effect of any income tax you may have to pay as a result of your investment in the Fund that would have reduced returns or performance. The Fund s past performance does not necessarily indicate how it will perform in the future. Year-by-Year Returns The following bar charts show the Fund s performance for the six-month period ended,, and for each of the previous 12-month periods ended December 31. In percentage terms, the bar charts show how much an investment made on the first day of each financial period would have grown or decreased by the last day of each financial period. Returns Investor Series period ended, 15% 1 5% 1.8% 2005 2.9% 2006 3.4% 2007 2.3% 2008 0.1% 2009 0. 0.1% 0.1% 0.1% 0.1% 0. Returns Advisor Series period ended, 15% 1 5% 1.8% 2.9% 3.4% 2.3% 2005 2006 2007 2008 0.1% 0. 0.1% 0.1% 0.1% 0.1% 0. 2009 Returns Premium Series period ended, 15% 1 5% 0.3% 0.2% 0.7% 0.6% 0.6% 0.6% 0.2% 2009 5
HSBC Canadian Money Market Fund Returns Manager Series period ended, 15% 1 5% 1.9% 2005 3.1% 3.7% 2.6% 2006 2007 2008 0.2% 0.1% 0.4% 0.4% 0.3% 0.4% 0.1% 2009 Returns Institutional Series period ended, 15% 1 5% 2.7% 3.8% 4.3% 3.2% 2005 2006 2007 2008 0.6% 0.6% 1. 1. 1. 1. 0.4% 2009 Top 25 Holdings Percentage of NAV Bank of Nova Scotia, 0.7 07/02/15 7.1 Government of Canada, 0.64% 07/30/15 6.14% Province of Newfoundland and Labrador, 0.75% 07/31/15 4.73% BNP Paribas, 0.89% 08/20/15 3.31% National Bank Financial, 0.65% 07/02/15 3.31% Province of British Columbia, 0.73% 09/11/15 3.07% Government of Canada, 0.63% 08/27/15 2.83% Province of Newfoundland and Labrador, 0.76% 09/17/15 2.83% Toronto-Dominion Bank, 0.85% 08/31/15 2.6 CPPIB Capital Inc., 0.79% 09/01/15 2.36% OMERS Finance Trust, 0.84% 08/12/15 2.36% Province of New Brunswick, 0.73% 07/21/15 2.36% Bank of America Corp., 0.82% 07/21/15 1.89% Bank of Montreal, 0.84% 07/09/15 1.89% Bank of Tokyo-Mitsubishi UFJ, 0.91% 07/23/15 1.89% CAFO Inc., 0.96% 09/10/15 1.89% Caisse Centrale Desjardins, 0.83% 09/29/15 1.89% Government of Canada, 0.6 09/10/15 1.89% Imperial Oil Limited, 0.87% 09/11/15 1.89% National Bank of Canada, 0.82% 07/31/15 1.89% OMERS Finance Trust, 0.84% 08/20/15 1.89% Province of Manitoba, 0.75% 07/22/15 1.89% Royal Bank of Canada, 0.84% 08/31/15 1.89% Financiere CDP Inc., 0.78% 09/04/15 1.65% Manulife Bank of Canada, 0.86% 07/08/15 1.65% Total top 25 investments 67.09% Summary of Investment Portfolio As at, Asset Mix Percentage of NAV Corporate 65.6 Government 34.16% Cash & Equivalents 0.24% Total 100.0 The Summary of Investment Portfolio may change due to ongoing portfolio transactions of the Fund, and is available quarterly. 6
For more information You can find more information about HSBC Mutual Funds in the Fund s Simplified Prospectus, Annual Information Form, Annual and Semi-Annual Report and Fund Facts. You can get a copy of these documents, as well as the Fund s Financial Statements, at no cost by calling 1-888-390-3333, by contacting your authorized dealer or by visiting our website at www.hsbc.ca/investment-resources. These documents and other information about the HSBC Mutual Funds, such as information circulars and material contracts, are also available at www.sedar.com. Copies of the Annual Report and Semi-Annual Report, Simplified Prospectus, Annual Information Form, Annual and Interim Management Report of Fund Performance and Fund Facts are available on our website at www.hsbc.ca/investment-resources. How to reach us Vancouver HSBC Global Asset Management (Canada) Limited 3 rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8 Tel: 1-888-390-3333 Fax: 604-669-2756 Toronto Suite 300 70 York Street Toronto, ON M5J 1S9 Montreal Suite 300 2001 McGill College Avenue Montreal, QC H3A 1G1 A NOTE ON FORWARD-LOOKING STATEMENTS This report may contain forward-looking statements about the Fund, including its strategy, expected performance and condition. Forward-looking statements include statements that are predictive in nature that depend upon or refer to future events or conditions, or that include words such as expects, anticipates, intends, plans, believes, estimates or negative versions thereof and similar expressions. In addition, any statement that may be made concerning future performance, strategies or prospects, and possible future Fund action, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the Fund and economic factors. Forward-looking statements are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied in any forward-looking statements made by the Fund. Any number of important factors could contribute to these digressions, including, but not limited to, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, and catastrophic events. We stress that the above-mentioned list of important factors is not exhaustive. We encourage you to consider these and other factors carefully before making any investment decisions and we urge you to avoid placing undue reliance on forward-looking statements. Further, you should be aware of the fact that the Fund has no specific intention of updating any forward-looking statements, whether as a result of new information, future events or otherwise. Sources: HSBC Global Asset Management (Canada) Limited, FTSE TMX Global Debt Capital Markets Inc. FTSE TMX Global Debt Capital Markets Inc. ( FTDCM ), FTSE International Limited ( FTSE ), the London Stock Exchange Group companies (the Exchange ) or TSX Inc. ( TSX and together with FTDCM, FTSE and the Exchange, the Licensor Parties ). The Licensor Parties make no warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the FTSE TMX Canada Index and/or the figure at which the said Index stands at any particular time on any particular day or otherwise. The Index is compiled and calculated by FTDCM and all copyright in the Index values and constituent lists vests in FTDCM. The Licensor Parties shall not be liable (whether in negligence or otherwise) to any person for any error in the Index and the Licensor Parties shall not be under any obligation to advise any person of any error therein. TMX is a trade mark of TSX Inc. and is used under licence. FTSE is a trade mark of FTSE International Limited and is used by FTDCM under licence. Unauthorized reproduction, distribution, transmission or publication without our prior written consent is strictly prohibited. Issued by HSBC Global Asset Management (Canada) Limited (-08) RRD
HSBC U.S. Dollar Money Market Fund Interim Management Report of Fund Performance for the six months ended,
HSBC U.S. Dollar Money Market Fund Management Discussion of Fund Performance In this document, you and your refer to the unitholder of the Fund; we, us and our refer to HSBC Global Asset Management (Canada) Limited; and the Fund refers to the HSBC U.S. Dollar Money Market Fund. We are the manager, trustee and primary investment advisor of the Fund. Introduction This Interim Management Report of Fund Performance contains financial highlights but does not contain the complete annual or semiannual financial statements of the investment fund. You may obtain a copy of the Fund s annual or semi-annual financial statements at your request, at no cost, by calling us toll-free at 1-888-390-3333, by visiting our website at www.hsbc.ca/investment-resources, by visiting the SEDAR website at www.sedar.com or by writing to us at: Corporate Secretary HSBC Global Asset Management (Canada) Limited 3 rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8 You may also contact us using one of these methods to request a copy of the Fund s proxy voting policies and procedures, proxy voting disclosure record or quarterly statement of investment portfolio. Results of Operations As of,, the Fund s net assets decreased by 14.5% to $50.6 million from $59.2 million at the end of. Of this decrease, a $8.6 million was attributable to net withdrawals from Fund. Investment Performance The HSBC U.S. Dollar Money Market Fund (Investor Series) rose 0.01% for the six months ending,. The benchmark, 75% Citigroup 1-month Treasury Bill Index (75%) and the Citigroup 3-month Treasury Bill Index (25%), also rose 0.01% over the same period. A defensive position versus the corporate debt sector was taken over the period, with a focus on high-quality issues where credit risk and liquidity risk were minimized. This protected the Fund s primary objectives of preserving capital and providing liquidity. The return, over and above alternative government notes, from the defensive corporate position was modest over the six months but generally commensurate with the reduced level of risk. An allocation to corporate notes is usually positive for performance due to the higher yields they can offer over government-backed alternatives. However, these notes come with additional risks that may be unsuitable for the Fund at any level of compensation. We work within an extensive network of global credit research analysts to ensure that a prudent security selection process is in place. We also look to add value by adjusting the weightedaverage-maturity (or duration) of the Fund s holdings relative to its benchmark. For the first half of the year, the Fund s duration was targeted to its blended 45-day benchmark, mitigating any relative interest rate risk. Recent Developments The Federal Open Market Committee (FOMC) held a neutral policy stance over the first half of. It paused from purchasing or selling assets and raising or lowering rates, and held the size of its balance sheet by continuing the existing policy of reinvesting principal payments from its holdings. Strengthening economic growth momentum and reduced risks surrounding its outlook have provided a better environment for the FOMC to finally take its foot off the accelerator, but further progress is still required. Labour market conditions continue to improve, but weak labour-force participation and other labourmarket indicators continue to indicate underutilization of labour resources. Inflation remained muted and under some downward pressure in the first half of from lower energy prices. This decline in inflation has allowed FOMC policymakers to remain patient in their path to further normalizing monetary policy. Based on their policy guidance and our outlook for the US economy, we expect the FOMC will begin to gradually increase its target range for the federal funds rate before year-end. Related Party Transactions We, on behalf of the Fund, or the Fund Manager, may, from time to time, enter into transactions or arrangements with or involving other members of the HSBC Group or other people or companies related or connected to us or the Fund. To proceed with the transactions, the Fund relies on the positive recommendation of the Fund s Independent Review Committee. A condition of this positive recommendation is that the transactions are performed in accordance with our policy on Related Party Transactions. For more general information on persons related to the Fund and the types of potential transactions, see the Fund s Simplified Prospectus. The following is a summary of current transactions and arrangements with entities that are related to us or the Fund. Manager, Trustee and Investment Advisor We are the manager, trustee and primary investment advisor of the Fund. As manager, we manage the overall business and operations of the Fund. As trustee, we hold legal title to the property of the Fund on your behalf. As primary investment advisor, we provide investment advice and portfolio management services to the Fund. 1
HSBC U.S. Dollar Money Market Fund We receive a fee from the Fund for these services based on assets under management, calculated daily and paid monthly. Distribution Services The Fund is distributed through us, HSBC Investment Funds (Canada) Inc. (our wholly owned subsidiary); HSBC Private Wealth Services (Canada) Inc. and through HSBC Securities (Canada) Inc. (an affiliate) directly or through its division, HSBC InvestDirect. We pay distribution and servicing fees to them based on the amount of assets held in the investor s account, and additionally, in some cases, on the amount of the initial purchase. If you hold units of this Fund and/or other HSBC Mutual Funds in a registered plan with HSBC Investment Funds (Canada) Inc., they may charge you an annual fee to cover the annual administration costs of the plan. We permit HSBC Investment Funds (Canada) Inc. to collect these fees by redeeming sufficient units of the Fund with the highest market value in your registered plan. Financial Highlights The following tables show selected key financial information about the Fund and are intended to help you understand the Fund s financial performance for the six-month period ended, and for the last five years ended December 31, as applicable. In the year a fund is established, period represents the period from inception to December 31 or of that fiscal year, as applicable. This information is derived from the Fund s unaudited semi-annual financial statements and audited annual financial statements. The information in the following tables is based on prescribed regulations, and as a result, is not expected to add due to the increase/decrease in net assets from operations being based on average units outstanding during the period and all other numbers being based on actual units outstanding at the relevant point in time. All figures are stated in US dollars. HSBC U.S. Dollar Money Market Fund Investor Series Net Assets per Unit (1) Period ended, (unaudited) and years ended December 31 Inception: January 1998 Net assets per unit, beginning of period (2) $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 Increase (decrease) from operations: Total revenue 0.01 0.01 0.02 0.02 0.03 Total expenses (0.01) (0.01) (0.01) (0.02) Realized gains (losses) Unrealized gains (losses) Total increase (decrease) from operations (2) $0.01 $ $ $0.01 $0.01 $0.01 Distributions to unitholders: From income (excluding dividends) (0.01) From dividends From capital gains From return of capital Total annual distributions (2,3) $ $ $ $(0.01) $ $ Net assets per unit, end of period (2) $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 NAV (in 000s) (4) $35,817 $41,155 $40,566 $32,414 $32,469 $45,882 Units outstanding (in 000s) (4) 3,582 4,115 4,057 3,241 3,247 4,588 Management expense ratio ( MER ) (5) 0.09% 0.11% 0.12% 0.15% 0.14% 0.22% MER before absorbed or waived fees (5) 1.26% 1.23% 1.24% 1.26% 1.24% 1.18% Portfolio turnover rate (6) n/a n/a n/a n/a n/a n/a Trading expense ratio (7) n/a n/a n/a n/a n/a n/a NAV per unit (4) $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 2
HSBC U.S. Dollar Money Market Fund HSBC U.S. Dollar Money Market Fund Advisor Series Net Assets per Unit (1) Period ended, (unaudited) and years ended December 31 Inception: December 2001* Net assets per unit, beginning of period (2) $ $10.00 $10.00 $10.00 $10.00 $10.00 Increase (decrease) from operations: Total revenue 0.01 0.02 0.02 0.03 Total expenses (0.01) (0.01) (0.01) (0.02) Realized gains (losses) Unrealized gains (losses) Total increase (decrease) from operations (2) $ $ $ $0.01 $0.01 $0.01 Distributions to unitholders: From income (excluding dividends) (0.01) From dividends From capital gains From return of capital Total annual distributions (2,3) $ $ $ $(0.01) $ $ Net assets per unit, end of period (2) $ $ $10.00 $10.00 $10.00 $10.00 * The Advisor Series was fully redeemed during ; however, it remains in operation at period-end. NAV (in 000s) (4) $ $ $220 $292 $320 $443 Units outstanding (in 000s) (4) 22 29 32 44 Management expense ratio ( MER ) (5) 0.0 0.1 0.12% 0.15% 0.14% 0.23% MER before absorbed or waived fees (5) 0.0 1.36% 1.26% 1.23% 1.22% 1.17% Portfolio turnover rate (6) n/a n/a n/a n/a n/a n/a Trading expense ratio (7) n/a n/a n/a n/a n/a n/a NAV per unit (4) $ $ $10.00 $10.00 $10.00 $10.00 HSBC U.S. Dollar Money Market Fund Premium Series Net Assets per Unit (1) Period ended, (unaudited) and years ended December 31 Inception: December 2007 Net assets per unit, beginning of period (2) $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 Increase (decrease) from operations: Total revenue 0.01 0.01 0.01 0.02 0.02 0.03 Total expenses (0.01) (0.01) (0.01) (0.01) (0.02) Realized gains (losses) Unrealized gains (losses) Total increase (decrease) from operations (2) $0.01 $ $ $0.01 $0.01 $0.01 Distributions to unitholders: From income (excluding dividends) (0.01) From dividends From capital gains From return of capital Total annual distributions (2,3) $ $ $ $(0.01) $ $ Netassetsperunit,endof period (2) $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 NAV (in 000s) (4) $9,295 $11,277 $10,774 $21,700 $33,737 $50,676 Units outstanding (in 000s) (4) 929 1,128 1,077 2,170 3,374 5,068 Management expense ratio ( MER ) (5) 0.09% 0.1 0.12% 0.15% 0.14% 0.22% MER before absorbed or waived fees (5) 0.61% 0.58% 0.56% 0.58% 0.57% 0.54% Portfolio turnover rate (6) n/a n/a n/a n/a n/a n/a Trading expense ratio (7) n/a n/a n/a n/a n/a n/a NAV per unit (4) $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 3
HSBC U.S. Dollar Money Market Fund HSBC U.S. Dollar Money Market Fund Manager Series Net Assets per Unit (1) Period ended, (unaudited) and years ended December 31 Inception: December 2001* Net assets per unit, beginning of period (2) $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 Increase (decrease) from operations: Total revenue 0.01 0.01 0.02 0.02 0.03 Total expenses (0.01) (0.01) (0.01) (0.01) (0.02) Realized gains (losses) Unrealized gains (losses) Total increase (decrease) from operations (2) $ $ $ $0.01 $0.01 $0.01 Distributions to unitholders: From income (excluding dividends) (0.01) From dividends From capital gains From return of capital Total annual distributions (2,3) $ $ $ $(0.01) $ $ Net assets per unit, end of period (2) $ $10.00 $10.00 $10.00 $10.00 $10.00 * The Manager Series commenced operations on June 25, 2005. NAV (in 000s) (4) $ $32 $327 $4,327 $4,465 $9,479 Units outstanding (in 000s) (4) 3 33 433 446 948 Management expense ratio ( MER ) (5) 0.09% 0.1 0.13% 0.15% 0.15% 0.22% MER before absorbed or waived fees (5) 2.95% 0.91% 0.92% 0.94% 0.92% 0.88% Portfolio turnover rate (6) n/a n/a n/a n/a n/a n/a Trading expense ratio (7) n/a n/a n/a n/a n/a n/a NAV per unit (4) $ $10.00 $10.00 $10.00 $10.00 $10.00 HSBC U.S. Dollar Money Market Fund Institutional Series Net Assets per Unit (1) Period ended, (unaudited) and years ended December 31 Inception: December 2001* Net assets per unit, beginning of period (2) $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 Increase (decrease) from operations: Total revenue 0.01 0.01 0.01 0.02 0.02 0.03 Total expenses Realized gains (losses) Unrealized gains (losses) Total increase (decrease) from operations (2) $0.01 $0.01 $0.01 $0.02 $0.02 $0.03 Distributions to unitholders: From income (excluding dividends) (0.01) (0.01) (0.02) (0.02) (0.02) From dividends From capital gains From return of capital Total annual distributions (2,3) $ $(0.01) $(0.01) $(0.02) $(0.02) $(0.02) Netassetsperunit,endof period (2) $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 * The Institutional Series commenced operations on May 1, 2004. NAV (in 000s) (4) $5,497 $6,757 $6,103 $8,563 $8,569 $5,867 Units outstanding (in 000s) (4) 550 676 610 856 857 587 Management expense ratio ( MER ) (5) (0.04%) (0.01%) (0.02%) (0.01%) (0.06%) 0.02% MER before absorbed or waived fees (5) 0.18% 0.17% 0.14% 0.15% 0.14% 0.11% Portfolio turnover rate (6) n/a n/a n/a n/a n/a n/a Trading expense ratio (7) n/a n/a n/a n/a n/a n/a NAV per unit (4) $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 (1) This information is derived from the Fund s unaudited semi-annual financial statements and audited annual financial statements. The net assets per unit presented in the financial statements differ from the net asset value calculated for fund pricing purposes. (2) Net assets per unit and distributions per unit are based on the actual number of units outstanding for the relevant series at the relevant time. The increase/decrease in net assets from operations per unit is based on the weighted average number of units outstanding for the relevant series over the fiscal period. (3) Distributions are automatically reinvested in additional units of the Fund; cash distributions are not available. (4) This information is provided as at period-end. (5) MER includes the total expenses of each Fund, including the Goods and Services Tax and/or Harmonized Sales Tax thereon, other than brokerage commissions on securities transactions and any foreign withholding taxes on income, as an annualized percentage of average net asset value ( NAV ) of the respective series of unit for the period. 4
HSBC U.S. Dollar Money Market Fund In the period a series is established, the MER is annualized from the date of inception to the end of the period. The MER may vary from one mutual fund to another and from one series of units to another. In the year, we waived certain fees and expenses otherwise payable by this Fund. We will continue to waive management and operating fees until such time as market yields rise above the MER of the Fund. (6) The Fund s portfolio turnover rate indicates how actively the Fund s portfolio advisor manages its portfolio investments. A portfolio turnover rate of 10 is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the period. The higher the Fund s portfolio turnover rate in a period, the greater the trading costs payable by the Fund in the period, and the greater the chance of an investor receiving taxable capital gains in the period. There is not necessarily a relationship between a high turnover rate and the performance of the Fund. The rate is calculated based on the lesser of purchases or sales of securities divided by the average weighted market value of the portfolio securities, excluding short-term securities. (7) The trading expense ratio represents commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the period. Management Fees For the six months ended,, the Fund paid us management fees of $210,347. The management fee for each series is calculated as a percentage of the daily net asset value for that series. The fees are reduced, where required, so that these fees do not duplicate fees payable by mutual funds in which the Fund invests for the same service. The Fund s management fees were used by us to pay costs for managing the investment portfolio, providing investment analysis and recommendations, making investment decisions, making brokerage arrangements for the purchase and sale of the investment portfolio and providing other services. The management fees also funded commission payments and other compensation to sales representatives and registered dealers and brokers (collectively distribution costs ), including HSBC Bank Canada, for units of the Fund bought and held by unitholders. Finally, we used management fees to pay for additional marketing and distribution services to the Fund. For the six months ended,, approximately 45% of the total management fees collected from all HSBC Mutual Funds were used to fund distribution costs. In comparison, for the Fund, such distribution costs represented 29% of the management fees collected. This may vary by series depending on the assets invested in each of the series. performance. The Fund s past performance does not necessarily indicate how it will perform in the future. Year-by-Year Returns The following bar charts show the Fund s performance for the six-month period ended,, and for each of the previous 12-month periods ended December 31. In percentage terms, the bar charts show how much an investment made on the first day of each financial period would have grown or decreased by the last day of each financial period. Returns Investor Series period ended, 15% 1 5% 2.1% 2005 3.8% 4.1% 1.6% 2006 2007 2008 0.1% 0. 2009 0. 0. 0. 0. 0. Returns Advisor Series period ended, 15% 1 5% 4.1% 2006 4.1% 2007 1.6% 2008 0.1% 0. 2009 0. 0. 0. 0. 0. Returns Premium Series period ended, 15% Past Performance The performance information shown assumes that all distributions made by the Fund in the periods shown were reinvested in additional securities of the Fund. The performance information does not take into account sales, redemption, distribution, optional charges or expenses you may be charged outside of the Fund or the effect of any income tax you may have to pay as a result of your investment in the Fund that would have reduced returns or 1 5% 0.2% 0. 0. 0. 0. 0. 0. 2009 5
HSBC U.S. Dollar Money Market Fund Returns Manager Series period ended, 15% 1 5% 4. 4.4% 1.9% 2006 2007 2008 0.1% 0. 0. 0. 0. 0. 0. 2009 Returns Institutional Series period ended, 15% 1 5% 3.2% 2005 4.9% 5.2% 2.7% 2006 2007 2008 0.4% 0.2% 0.2% 2009 0.2% 0.1% 0.1% 0.1% Top 25 Holdings Percentage of NAV Bank of Nova Scotia, 0.1 07/02/15 5.93% National Bank Financial, 0.03% 07/02/15 5.93% Province of Ontario, 0.1 07/07/15 5.93% Caisse Centrale Desjardins, 0.23% 07/30/15 5.92% Export Development Corp., 0.15% 10/08/15 4.94% Government of Canada, 0.2 09/24/15 3.98% Export Development Corp., 0.14% 08/24/15 3.95% Federal Home Loan Bank, 0.05% 07/28/15 3.95% KfW, 0.19% 10/27/15 3.95% Province of Quebec, 0.18% 10/29/15 3.95% Bank of Montreal, 0.11% 08/04/15 3.36% Royal Bank of Canada, 0.09% 07/23/15 2.96% Toronto-Dominion Bank, 0.12% 07/06/15 2.37% Societe Generale North America Inc., 0.39% 07/31/15 2.17% Caisse Centrale Desjardins, 0.17% 08/17/15 1.98% CDP Financial Inc., 0.16% 07/13/15 1.98% Credit Agricole SA, 0.18% 08/03/15 1.98% Export Development Canada, 0.1 07/13/15 1.98% Metlife Short-Term Funding LLC, 0.14% 07/02/15 1.98% Nestle Capital Canada Ltd., 0.08% 07/02/15 1.98% Prudential PLC, 0.15% 08/12/15 1.98% PSP Capital Inc., 0.16% 09/02/15 1.98% Bank of China, 0.25% 08/14/15 1.97% CAFO Inc., 0.26% 08/14/15 1.97% Commonwealth Bank of Australia, 0.21% 09/28/15 1.97% Total top 25 investments 81.04% Summary of Investment Portfolio As at, Asset Mix Percentage of NAV Corporate 84.19% Government 15.83% Cash & Equivalents 0.02% Total 100.0 The Summary of Investment Portfolio may change due to ongoing portfolio transactions of the Fund, and is available quarterly. 6