HSBC Global Investment Funds - Chinese Equity S Share Class 31 Jul 2018 31/07/2018 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 1Y 3Y¹ 5Y¹ -6.95-3.13-6.72 4.02 8.29 9.56 10.06 (Net) 2-11.84-8.21-11.61-1.44 6.36 8.38 9.83-4.00-1.96-6.30 7.55 9.00 9.95 5.20 Calendar Year Performance (%) 5.51 11.89-6.44-1.75 50.42 (Net) 2-0.03 6.02-11.35-6.91 42.52 3.74 8.38-8.01 0.43 49.33 3-Year Risk Measures Since Inception¹ 2013 2014 2015 2016 2017 Characteristics Fund Valuation Time Min. Initial Investment Yes Distributing Annually Daily 17:00 Luxembourg 1,000 5.00% Luxembourg LU0039217434 30 Jun 1992 Volatility 18.6% 18.7% Number of Holdings NAV per Share 106.48 72 447 Tracking ex Cash Fund Size 1,436,474,868 3.3% - Error Avg Market Bloomberg Ticker HSBCHEI LX Information Cap ( 122,364 118,605-0.21 - MSCI China 10/40 Net Ratio mil) Beta 0.98 - Manager Share Class Details UCITS V Compliant Subscription Mode Distribution Type Distribution Frequency Dealing Frequency Annual Management Fee 1.50% Max. Initial Charge Base Currency Domicile ISIN Inception Date Cash / SRS (Supplementary Retirement Scheme) Mandy Chan Past performance is not an indicator of future returns. The figures are calculated in the share class base currency, dividend reinvested. 1 Result is annualised when calculation period is over one year. 2 Net of relevant prevailing sales charge Risk Disclosure General Risk: The Fund's unit value can go up as well as down, and any capital invested in the Fund may be at risk. Market 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. Emerging Markets Risk: 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 Risk: Derivatives may be used by the Fund, and these can behave unexpectedly. Hedging Risk: 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 Risk: 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.. Documentation Statement: Further information on the Fund's potential risks can be found in the Key Investor Information Document and Prospectus. 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 Market dropped again in July with MSCI China 10/40 index finished with 2% loss in terms. Trade tensions between China and the U.S. continued to escalate during the month. On July 6, US s $34bn worth of tariffs against China took effect. On July 11, US unveiled another US$200bn Chinese imports that are subject to 10% tariff that could take effect in September to October. The heightened trade tension has also led to increased concerns on the economic growth outlook of China, which in turn depressed on RMB. During the period, CNY further depreciated by 3.0%. In light of the rising risk of slowing growth amid the trade tension, China s State Council in July announced measures to stabilize domestic demand. Fiscal policy measures adopted include tax and fee reductions, targeted tax rebates, and faster local government bond issuance to support ongoing infrastructure investment. Monetary policy will ensure ample liquidity and reasonable TSF growth, encouraging lending to SMEs. China 2Q GDP grew 6.7% YoY as expected. Industrial profits grew 20.0% YoY in June, slowing from 21.1% in May. July PMI continued to expand with a reading of 51.2, though slightly slower than 51.5 recorded for June. Portfolio review Our overweight to the healthcare sector hurt performance as this relatively expensive sector saw profit-taking during the month. Our underweight to industrial and telecommunication sectors also undermined relative performance as investors were buying into these defensive sectors amid rising macro headwinds and lower risk appetite. On stock level, Tal Education detracted performance most as the Company s Q2 revenue guidance was softer than expected, which triggered a correction in the share price. On the positive side, stock selection in the financial sector was successful in July. In particular, Chinese insurers including Ping An Insurance and China Taiping were among the top contributors as their share prices rose higher on the back of strong life insurance sales achieved in June. Key overweights at month end were healthcare, consumer staples and energy. Key underweights were telecommunications and industrial. Outlook Rising concerns on US-China trade war continued to depress equity market performance, which also resulted in bigger deviation of share price from fair value. That said, we do not believe such headwinds are altering the resilient economic fundamentals of China. In our view, the direct economic impact through trade flows may be moderate and manageable, especially considering China has a large domestic market. However, the indirect impact through a hit to confidence on business profits and growth outlook may bring further weakness in the equity market in the near term. Recent CNY depreciation may also revive investors memory of 2015. However in our view, China is less vulnerable today. Fundamentally, China s economic remains resilient in our view. Latest macro data has been steady. Implementation of supply-side and SOE reforms, in addition to a further opening up of capital/financial markets is helping to support the Chinese economy and equity market. Debt levels and credit risks should be contained, as macro policy adjustments to offset potential negative impacts from slowing domestic activity and rising external headwinds are unlikely to derail financial deleveraging efforts. On the liquidity front, as CPI remains reasonably low globally, liquidity should be quite supportive to the equity market. We believe given the underlying strength of the economy and the attractive valuation after the recent corrections, the offshore Chinese equity market warrants a further gain in the remaining of 2018.
Sector Allocation (%) Financials Information Technology Energy Health Care Consumer Discretionary Consumer Staples Real Estate Utilities Telecommunication Services Industrials Materials Cash & Others 8.32 6.09 8.15 3.91 7.94 10.28 5.66 2.88 4.77 6.27 3.16 3.36 1.76 4.93 1.69 5.40 0.72 2.37 1.96 0.00 28.53 25.06 27.33 29.44 Top 10 Holdings (%) Location Sector Weight (%) Alibaba Group Holding Ltd Tencent Holdings Ltd China Construction Bank Corp Ping An Ins Grp Co of China Ltd Baidu Inc Indl and Comm Bank of China Ltd China Petroleum & Chemical Corp China Resources Enterprise Ltd CNOOC Ltd Sino Biopharmaceutical Ltd China Information Technology 9.86 China Information Technology 8.32 China Financials 6.53 China Financials 6.29 China Information Technology 5.83 China Financials 4.74 China Energy 3.52 China Consumer Staples 2.82 China Energy 2.80 China Health Care 2.48 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
HSBC Global Investment Funds - Chinese Equity Supplement Information Sheet 31 Jul 2018 Since Performance (%) Return Currency YTD 1M 3M 6M 1Y 3Y 1 5Y 1 Inception 1 AC -6.95-3.13-6.72-15.77 4.02 8.30 9.55 13.13 AC (Net) 2-11.84-8.21-11.61-20.19-1.44 6.37 8.37 12.73 EUR EUR -4.51-3.33-3.67-10.32 4.82 6.24 12.36 10.86 EUR (Net) 2 EUR -9.52-8.41-8.73-15.02-0.68 4.35 11.16 10.63 SGD SGD -5.22-3.28-4.09-12.41 4.34 8.11 11.02 9.34 SGD (Net) 2 SGD -10.19-8.36-9.13-17.01-1.14 6.18 9.83 9.11-6.95-3.13-6.72-15.77 4.02 8.29 9.56 10.06 (Net) 2-11.84-8.21-11.61-20.19-1.44 6.36 8.38 9.83 IC -6.49-3.06-6.52-15.41 4.91 9.22 10.48 10.14 IC (Net) 2-11.40-8.14-11.42-19.85-0.60 7.28 9.30 9.68 Calendar Year Performance (%) Return Currency 2013 2014 2015 2016 2017 AC 5.51 11.89-6.49-1.73 50.41 AC (Net) 2-0.03 6.01-11.40-6.89 42.51 EUR EUR 0.95 27.42 4.22 1.19 32.12 EUR (Net) 2 EUR -4.35 20.73-1.25-4.12 25.19 SGD SGD 9.06 17.43 0.17 0.05 39.14 SGD (Net) 2 SGD 3.33 11.27-5.09-5.20 31.84 5.51 11.89-6.44-1.75 50.42 (Net) 2-0.03 6.02-11.35-6.91 42.52 IC 6.40 12.84-5.69-0.89 51.69 IC (Net) 2 0.82 6.92-10.64-6.10 43.72 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 1,000 1,000 1,000,000 106.48 115.03 128.48 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.