Emerging Markets Debt · 2. Source: HSBC Global Asset Management as at 4 July 2016. 4 • The team...

Emerging Markets DebtHSBC Global Investment Funds

A broad offering benefiting from our global vision

and local presence

September 2016

This publication is intended for Professional Clients only and should

not be distributed to or relied upon by Retail Clients. The information

contained in this publication is not intended as investment advice

or recommendation. Non contractual document.

2

Contents

HSBC Global Asset Management Page 3

Global emerging market debt investment team and investment process Page 4

Broad product offering Page 5

Core funds

- HSBC GIF Global Emerging Markets Bond Page 6

- HSBC GIF Global Emerging Markets Local Debt Page 7

- HSBC GIF Global Emerging Markets Local Currency Rates Page 8

- HSBC GIF GEM Debt Total Return Page 9

Thematic funds

- HSBC GIF GEM Inflation Linked Bond Page 10

- HSBC GIF Global Emerging Markets Corporate Debt Page 11

- HSBC GIF Global Emerging Markets Investment Grade Page 12

• Portfolio managers Page 13

• Important information Page 14

Sources: http://www.europeanpensions.net/awards/ and http://www.ukpensionsawards.com

The methodology used to grant the award can be found on the website.

For illustrative purposes only. The performance figures displayed in this document relate to the past and past performance should not be seen as an

indication of future returns.

A recognised emerging markets asset manager

EUROPEAN PENSIONS AWARDS 2016Emerging Markets Manager of the Year

Non-contractual document

3

HSBC Global Asset Management A natural partner to invest in emerging markets

Source: HSBC Global Asset Management. Data as at 31 March 2016.

Differences due to rounding.

A leading emerging markets asset manager

A recognised leader* with global, regional and country

capabilities

• Longstanding presence in emerging markets

• USD133.4 billion in emerging markets assets worldwide1

• Offices in 26 locations including 10 emerging markets2

• Local, regional, and global capabilities

• Domestic and cross-border offerings

• Commingled funds and separate mandates

Expertise in emerging market fixed income

• Management of emerging markets fixed income for two

decades

• USD99.8 billion in emerging markets fixed income,

representing 75% of total emerging markets assets

• Extensive emerging markets debt capability: global EMD,

regional strategies (Asia, LatAm, RMB bonds), single

country portfolios (Brazil, India, Mexico, Turkey…)

• Global EMD assets managed by the team in New York

total USD 18 billion

HSBC Global Asset Management, one of the leading asset manager for HSBC's clients

HSBC Group

• Established in 1865

• Offices in 70 countries and territories

• Market cap: USD 155.6 billion

HSBC Global Asset Management

• Asset management branch of the HSBC Group with

operations in approximately 30 countries

• USD429.3 billion under management as at 31 March 2016

• Strong global investment platform supporting local

investment teams

Data as at 31 March 2016. Differences due to rounding. Includes assets

managed in Hong Kong and Singapore.

Source: HSBC Global Asset Management as at 31 March 2016.

Any differences are due to rounding.

* Awarded “Emerging Markets Manager of the Year” by European

Pensions Awards 2015 and by UK Pensions Awards

AUM by regional capability (USDbn)

EM (133.4)

Europe (125.2)

Global (69.7)

North America (63.4)

Asia Pacific (13.0)

Other (24.4)*

Emerging Markets Assets Growth (USDbn)

Emerging Markets AUM by asset class (USDbn)

Equity (USD 19.9bn)

Fixed Income (USD 99.8bn)

Liquidity (USD 6.0bn)

Multi-asset (USD 7.8bn)


81.5

19.8

13.918.2

0

25

50

75

100

125

150

175

2007 2008 2009 2010 2011 2012 2013 2014 2015 1Q16

USD billions

EM Fixed Income (ex-NY EMD) EM Equity

EM Other NY EMD Team

1. Source: Assets under management as at 31 March 2016 includes

USD21.8bn AUM of HSBC Global Asset Management Brazil, which has

been sold on 1 July 2016 and is no longer part of HSBC. Differences due

to rounding.

2. Source: HSBC Global Asset Management as at 4 July 2016.

4

• The team is fully dedicated to managing global emerging market assets

An average of 12 years of experience in the industry

USD18 billion in assets under management as at 31 March 2016

Supported by HSBC’s extensive global credit platform, organised by sector and by region

Global emerging market debt investment team and investment process

Investment team and resources

Investment process: Active fundamental approach for emerging markets

Top down

Risk positioning,

asset class

expectations,

macro themes,

global scenarios

Bottom-up

- Construction of ranking of

country credits, currencies

and rates based on relative

attractiveness

- Valuation analysis

determines whether asset

prices reflect our views on

relative attractiveness

Portfolio

Engineering

Stress testing

Risk

monitoring

Model Portfolio

Construction

Estimated alpha

& volatilities

determine

position sizing

Source : HSBC Global Asset Management. March 2016. Representative overview of the investment process, which may differ by product, client mandate or

market conditions. For illustrative purposes only.

1.Christina Ronac reports functionally to Rick Deutsch, Global Head of Credit Research and locally to Nishant Upadhyay, Head of Global Emerging Markets Debt.

2.Covers both developed and emerging market companies

3.Employees of HSBC Jintrust

4.Binqi Liu is a portfolio manager for HSBC Global Asset Mgt UK based in London. She is currently serving as a strategist for the NY EMD team. Prior to her

relocation to London from New York early in 2015, she served as a portfolio manager for the NY EMD team. It is anticipated that she will resume such duties upon

the fulfillment of UK regulatory requirements

5.Not an exhaustive list of members

6.Macro investment strategies

Source: HSBC Global Asset Management, as of end July 2016.

EM Credit Research Analysts

London

Cagdas Hatinoglu2

Mumbai

Anitha Rangan

Aswin Kumar

Mexico City

Juan Pablo Arizaleta

Pablo San Jose

Buenos Aires

Maria Jose Luisi

Hernan Torre

New York

Christina Ronac1

Tatiana Brikulskaya

Dusseldorf

Frank Joachim2

Hong Kong

Elizabeth Allen

Wilson Yip

Seok Poh Yeoh

Jaywon Jung

Alex Choi

Tony Xiao

Kingston Lam

Shanghai3

Rollin Cai

William Fan

Wang Zhaoyi

Global EMD Portfolio Management Team

Nishant Upadhyay

Head of Global Emerging Markets Debt

Portfolio Engineering

Hugo Novaro

Head of Portfolio

Engineering Trading, Risk

Management

Adolfo Cheong

Risk Management

Christian Daniello

Trading

Scott Davis

Trading

Portfolio Management

Billy Lang

Portfolio Manager / Local

Markets & Currencies

Binqi Liu4

Economist / Local Markets

Jaymeson Kumm

Portfolio Manager / External

Corporates

Vinayak Potti

Portfolio Manager / Total

Return

Olga Yangol

Portfolio Manager / Country

Research

Credit Research

Christina Ronac1

Head of EMD Credit

Research

Tatiana Brikulskaya

Credit Research Analyst

Global Investment Strategy6

10+ Professionals

David Semmens (Global & US)

Marcus Sonntag (Global & Europe)

Rabia Bhopal (Global & Frontier)

Sam Pham (Global)

Hussain Mehdi (Global)

Renee Chen (Asia)

Herve Lievore (Asia)

Additional resources

Local Macro-economists Global Credit Research Local Investment Teams

Product Management

Brian Dunnett

Head of Product Specialists

Amanda LaMarca

Senior Product Specialist

Local Fixed Income Investment

Teams (# staff)5

Asia Pacific (29)

EMEA (69)

Latin America (7)

North America (26)


5

Broad product offering

Global Emerging Markets Debt capabilities

HSBC GIF GEM Debt funds are sub-funds of HSBC Global Investment Funds, a Luxembourg domiciled SICAV. *Benchmarked strategies are those that have

a comparative index. Source: HSBC Global Asset Management as at 30 June 2016. For illustrative purposes only.

HSBC GIF Global Emerging Market Debt funds

Source: HSBC Global Asset Management. Data as at 30 June 2016.

The other GEM Debt strategy not available in the HSBC GIF range is “EMD HC Sovereign/Corporate blend” which is benchmarked against the Barclays

USD EM Credit and boasts 868 million in AUM (one open-ended fund and one segregated mandate).

Benchmarked*

strategies

Flexible strategy

Duration

< 3 yrs

Duration

> 3 yrs

Hard currency Local currency

HSBC GIF Global Emerging Markets

Local Debt


Local Currency Rates


Bond

HSBC GIF GEM Inflation Linked BondHSBC GIF Global Emerging Markets

Corporate Debt

HSBC GIF Global Emerging Markets Investment Grade Bond

HSBC GIF GEM Debt Total Return


StrategyInception

dateBenchmark Benchmark description

EMD Core

(Hard Currency)1998 JP Morgan EMBI Global

• Contains investable hard currency-denominated bonds issued

by sovereign and quasi-sovereign entities from index-eligible EM

countries (inclusion based on the World Bank classification and

each country's debt-restructuring history)

EMD Local Debt 2007

JPM GBI-EM Global

Diversified and/or 50%

JPM GBI-EM Global

Diversified + 50% JPM

ELMI+

• JPM GBI-EM GD contains investable local currency bonds issued

by EM governments. Excludes countries with explicit capital

controls but does not factor in regulatory/tax hurdles. Limits the

weight of countries with larger debt by only including a specified

portion of these countries’ debt

• JPM ELMI+ contains local currency money market instruments

of EM countries

EMD Total Return 1999 N/A

• Benchmark agnostic approach

• Flexible access to the full emerging markets debt opportunity set as

well as cash and EM equity

EMD Corporate 2010JP Morgan CEMBI

Diversified

• Contains USD-denominated EM corporate bonds with a maturity

of at least 5 years and a minimum face amount of $500mm

• Limits the weight of the countries with larger corporate debt by only

including a portion of these countries’ outstanding debt (like JPM

GBI-EM GD)

EMD Inflation-Linked

Bonds2012

Barclays EM Tradable

Inflation-Linked Bond

• Provides a diversified exposure to a tradable sub-set of local

currency inflation-linked bonds from EM sovereign issuers

EMD Investment

Grade2010

50% JP Morgan GBI-EM

GD IG / 50% JP Morgan

EMBI Global IG

• Contains Investment Grade-rated EM debt across both hard

currency and local currency (sub-indices of JP Morgan indices

above)

6

Fund details

Domicile UCITS IV Luxembourg SICAV Minimum initial

investment

A share: USD5,000 or equivalent

I share: USD1,000,000

Mgt. company HSBC Investment Funds (Luxembourg) S.A. Dealing Daily at 10:00am (CET)

Investment

advisor

HSBC Global Asset Management (USA) Inc. Valuation Daily at 5:00pm (CET)

ISIN code AC: LU0566116140; ACEUR: LU0551370132ACHEUR: LU0811140721; AD: LU0566116223; ADEUR: LU0551370215; ADHEUR: LU0543814684IC: LU0164944026; ICEUR: LU0551370306ICHEUR: LU0747734787; ID: LU0149732736IDEUR: LU0551370561; IDHEUR: LU0431287282

Ongoing charge Management fees

A share: 1.25%

I share: 0.50%

Administration fees

A share: 0.35%

I share: 0.25%

Risk/Reward

Profile1

Main risks Credit risk, interest rate risk, emerging markets risk, capital loss risk

*Index given for comparative and illustrative purposes only. The fund is not managed to the index, is actively managed and returns may deviate materially from

the performance of the specified index. **Characteristics and weightings are for illustrative purposes only, are not guaranteed and are subject to change over

time, and without prior notice, taking into account any changes in markets. The performance figures displayed in the document relate to the past and past

performance should not be seen as an indication of future returns. Representative overview of the investment process, which may differ by product, client

mandate or market conditions. Source: HSBC Global Asset Management. Data Source - © Copyright 2016 Morningstar, Inc. All Rights Reserved. The

information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be

accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. 1Rating is based on price volatility over the last five years, and is an indicator of absolute risk; historical data may not be a reliable indication for the future; the

rating is not guaranteed to remain unchanged and the categorization may shift over time; the lowest rating does not mean a risk-free investment.

HSBC GIF Global EmergingMarkets Bond

Strategy highlights

Strategy details

Launch 24/07/1998

Base currency USD

AUM as at

30/06/20163,987.2 million

Comparative Index*JP Morgan EMBI

Global

Morningstar category Global Emerging

Markets Bond

Liquidity Daily

• Invests in emerging market sovereign and quasi-sovereign bonds and in bonds issued by companies

which have their registered office in emerging markets, primarily denominated in USD (EM hard

currency)

• Average credit quality BBB and tactical use of EM corporate debt and local sovereigns and currencies

• Seeks to manage credit quality in emerging economies while reducing currency risk: spread

compression and yield have been key drivers of performance

Nishant Upadhyay

Performance (%) as at 30 June 2016

YTD 3Y 5Y 2015 2014 2013

Fund (A share class Net) 8.9 13.1 24.8 -1.5 5.0 -7.8

Comparative index 9.3 6.6 12.5 -4.3 -0.2 -5.0

Excess return -0.4 6.5 12.3 2.8 5.2 -2.8


Potential sources of performance**

Country allocation 50%

Issuer selection 15%

Currency selection 10%

Yield curve positioning 10%

Instrument selection 10%

Duration management 5%

Investment guidelines**

Hard currency sovereigns

70 - 90%

Hard currency quasi-sovereigns

15 - 25%

Hard currency corporates

5 - 15%

Local currency 5 - 15%

Duration+/- 2 year of

benchmark*

Typical number of securities

200 - 300

Typical number of countries

30 - 45

7

Fund details


investment




Investment

advisor


ISIN code AC: LU0234585437 AD: LU0234592995ADEUR: LU0551371536IC: LU0234594009ICEUR: LU0551371700ID: LU0234594348IDEUR: LU0551371965


A share: 1.25%

I share: 0.625%

Administration fees

A share: 0.35%

I share: 0.25%

Risk/Reward

Profile1

Main risks Credit risk, interest rate risk, foreign exchange risk, liquidity risk, emerging markets risk, capital loss risk

*Index given for comparative and illustrative purposes only. The fund is not managed to the index, is actively managed and returns may deviate materially

from the performance of the specified index. **Characteristics and weightings are for illustrative purposes only, are not guaranteed and are subject to change

over time, and without prior notice, taking into account any changes in markets. The performance figures displayed in the document relate to the past and

past performance should not be seen as an indication of future returns. Representative overview of the investment process, which may differ by product, client





HSBC GIF Global Emerging Markets Local Debt

Strategy highlights

Strategy details

Launch 30/07/2007

Base currency USD

AUM as at

30/06/20161,945.7

Comparative Index*

50% JP Morgan

GBI EM Global

Diversified 50% JP

Morgan ELMI+

Morningstar category GEM Bond Local

Currency

Liquidity Daily

• Invests in local currency sovereign bonds and emerging market currencies

• Investments are in investment grade and non investment grade bonds. BBB+ average credit quality

• Price compression, yield and currency appreciation are the key drivers of performance

• Designed to exploit opportunities in local currency fixed income beyond the bond markets of the G7 countries within

a rigorously applied risk management framework

Nishant Upadhyay


YTD 3Y 5Y 2015 2014 2013

Fund (A share class Net) 10.2 -10.8 -12.3 -12.5 -5.6 -6.7

Comparative index 12.1 -13.5 -17.2 -15.6 -6.9 -9.2

Excess return -1.9 2.7 4.9 3.1 1.3 2.5







Issuer selection 5%


Local currency sovereigns (rates)

40 - 80%

Local currency (FX) 40 - 80%

Hard currency 0 - 10%

Duration+/- 2 years of

benchmark*


100 – 200


15 - 25

8

Fund details


investment




Investment

advisor


ISIN code ACEUR: LU0992596477ACHEUR: LU0992598176ADEUR: LU0992596634ICEUR: LU0992597285ICHEUR: LU0992598929IDEUR: LU0992597442IDHEUR: LU1005214314


A share: 1.25%

I share: 0.625%

Administration fees

A share: 0.35%

I share: 0.25%

Risk/Reward

Profile1





past performance should not be seen as an indication of future returns. Representative overview of the investment process, which may differ by product, client





HSBC GIF Global Emerging Markets Local Currency Rates

Strategy details

Launch 13/12/2013

Base currency USD

AUM as at

30/06/2016250.33

Comparative Index*

JP Morgan

GBI-EM Global

Diversified

Morningstar category GEM Bond Local

Currency

Liquidity Daily

• Invests in emerging market currencies, local currency sovereign bonds or bonds issued by companies

which are based in or carry out the larger part of their business activities in emerging markets

• Local currency-denominated emerging market sovereign bonds have the potential to outperform

external sovereign emerging market and developed market bonds

• Curve positioning, yield and currency appreciation are the key drivers of performance

Nishant Upadhyay


YTD 3Y 5Y 2015 2014 2013

Fund (A share class Net) 5.7 - - -16.2 -5.1 -

Comparative index 5.2 - - -15.6 -6.9 -

Excess return 0.5 - - -0.6 1.8 -







Issuer selection 5%


Local currency sovereigns (rates)

60 - 80%

Local currency (FX) 20 - 40%

Hard currency 0 - 10%


benchmark*


75 – 150


15 - 25

Strategy highlights

9

HSBC GIF GEM Debt Total Return

Fund details


investment

M share: USD5,000 or equivalent

L share: USD1,000,000


Investment

advisor


ISIN code M1C: LU0283739885M1CEUR:LU0551372856M1CHEUR: LU0795840619M1D: LU0283740032M1DEUR: LU0551373078M1DHEUR:LU0795840700L1C: LU0310511422L1CEUR: LU0551372344

Ongoing charge Management fees1

M1 share: 1.00%

L1 share: 0.50%

Administration fees

M1 share: 0.35%

L1 share: 0.25%

Risk/Reward

Profile1


*Characteristics and weightings are for illustrative purposes only, are not guaranteed and are subject to change over time, and without prior notice, taking into

account any changes in markets. The performance figures displayed in the document relate to the past and past performance should not be seen as an

indication of future returns. 1The Management Company is also entitled to a Performance Fee as further detailed in the Full Prospectus (20% above 5%

annual performance or 5% of the NAV by share class – a hurdle rate). Representative overview of the investment process, which may differ by product, client





Strategy highlights

• Flexible access and allocation within the full emerging markets debt opportunity set, both hard and local

currency with an ability to express short, medium, and long-term views irrespective of a benchmark

• Seeks to generate enhanced total return from capital growth and income while reducing volatility normally

associated with emerging markets

• Asset allocation decision has been a key driver of returns

Nishant Upadhyay

Potential sources of performance*







Investment guidelines*

Hard currency Flexible

Local currency Flexible

USD cash Flexible

Duration 1-4 years


100 – 300


10 - 30

Strategy details

Launch 18/06/2007

Base currency USD

AUM as at 30/06/2016 3,610.5 million

Comparative Index n.a.

Morningstar category Global Emerging

Markets Bond

Liquidity Daily


YTD 3Y 5Y 2015 2014 2013

Fund (M1 share class Net) 5.3 9.7 15.3 -2.2 6.4 -1.8


10

HSBC GIF GEM Inflation Linked Bond

Fund details


investment




Investment

advisor


ISIN code AC: LU0630378858ACEUR: LU0630379823IC: LU0630379070ICEUR: LU0630380169


A share: 1.00%

I share: 0.50%

Administration fees

A share: 0.30%

I share: 0.25%

Risk/Reward

Profile1





past performance should not be seen as an indication of future returns. Representative overview of the investment process, which may differ by product,

client mandate or market conditions. Source: HSBC Global Asset Management. Data Source - © Copyright 2016 Morningstar, Inc. All Rights Reserved. The




• The fund invests in local currency sovereign bonds whose returns are linked to the inflation rate of an

emerging country and takes active overlay positions in Emerging Market local currencies

• The fund is an efficient diversification tool as it benefits from low correlation with traditional emerging market

debt

• The two main components driving the return of an emerging inflation-linked local currency bond have been

attractive carry (high inflation and real rates) and long-term currency appreciation

Nishant Upadhyay






Issuer selection 5%


Sovereign inflation-linked bonds and currencies

80 – 100%

Nominal bonds 0 – 10%

USD cash 0 – 10%


benchmark*


10 - 25

Strategy details

Launch 31/07/2012

Base currency USD

AUM as at 30/06/2016 25.46 million

Comparative Index*

Barclays Emerging

Markets Tradable

Inflation-linked Bond

(EMTIL)

Morningstar category Other Inflation-Linked

Bond

Liquidity Daily


Strategy highlights


YTD 3Y 5Y 2015 2014 2013

Fund (A share class Net) 17.4 -4.2 -6.9 -18.0 3.1 -12.8

Comparative index 14.9 -4.6 -5.8 -16.3 1.6 -11.8

Excess return 2.5 0.4 -1.1 -1.7 1.5 1.0

11

HSBC GIF Global Emerging MarketsCorporate Debt

Fund details


investment




Investment

advisor


ISIN code AC: LU0404503350ACEUR: LU0622167350AD: LU0404503517IC: LU0404503863ICEUR: LU0622167434ID: LU0404503947IDEUR: LU0622166972


A share: 1.50%

I share: 0.75%

Administration fees

A share: 0.35%

I share: 0.25%

Risk/Reward

Profile1










• Invests in bonds issued by companies in emerging markets

• Seeks to capture rapid growth of corporations in developing economies and benefit from improving credit

quality

• The fund benefits from HSBC’s extensive global fixed income credit platform which is an integral factor in

properly assessing emerging markets corporate bonds

Nishant Upadhyay








Strategy details

Launch 16/12/2010

Base currency USD

AUM as at 30/06/2016 13.77 million

Comparative Index*JP Morgan CEMBI

Diversified

Morningstar category GEM Corporate Bond

Liquidity Daily



YTD 3Y 5Y 2015 2014 2013

Fund (A share class Net) 5.6 11.5 20.2 -2.1 5.5 -3.3

Comparative index 7.9 9.9 19.2 -2.1 0.6 -1.3

Excess return -2.3 1.6 1.0 0.0 4.9 -2.0

Investment guidelines*

Hard currency corporates

75 - 100%

Hard currency quasi-sovereigns

0 - 25%

Hard currency sovereigns

0 - 10%

Local currency 0 - 10%


benchmark*


50 – 150


20 – 50

Strategy highlights

12

HSBC GIF Global Emerging MarketsInvestment Grade Bond

Fund details


investment




Investment

advisor


ISIN code AC: LU0563707651ACEUR: LU0622167863AD: LU0563701886ADEUR: LU0622167947IC: LU0563702421ICEUR: LU0622168168ID: LU0563702777IDEUR: LU0622168242


A share: 1.10%

I share: 0.475%

Administration fees

A share: 0.35%

I share: 0.25%

Risk/Reward

Profile1










• Invests in debt issued by sovereigns, quasi-sovereigns and corporates in both hard currency and local

currency

• Seeks to capture the growth and relative strength of investment grade rated emerging market debt assets

• The fund offers similar advantages to broad-market products such as external and local debt, but avoids

the risk of lower quality credits

Nishant Upadhyay

Strategy details

Launch 16/12/2010

Base currency USD

AUM as at

30/06/201613.25 million

Comparative

Index*

50% JP Morgan GBI-EM

GD IG / 50% JP Morgan

EMBI Global IG

Morningstar

category GEM Corporate Bond

Liquidity Daily



YTD 3Y 5Y 2015 2014 2013

Fund (A share class Net) 9.1 -0.4 2.3 -9.9 1.5 -8.3

Comparative index 9.3 6.6 12.5 -4.3 -0.2 -5.0

Excess return -0.2 -7.0 -10.2 -5.6 1.7 -3.3


Country selection 22%


Credit curve management 5%

External debt instrument selection

5%

Local currency selection 30%

Local currency duration management

15%

Local curve management 5%

Local instrument selection 5%


Hard currency 30 – 70%

Local currency 30 – 70%


benchmark*


100 – 300


20 – 30

Strategy highlights

13

Emerging Market DebtPortfolio managers


Nishant UpadhyayNishant is head of the Global EMD team and is responsible for managing total return portfolios as well as

benchmarked hard and local currency portfolios. He joined the team in September 2015 from PIMCO where he

was an EM and global credit portfolio manager for nine years. During his time at Pimco, he worked with Pimco’s

Global Bond portfolio management team with exposure to rates and currency products before managing EMD

portfolios and diversified income portfolios (hybrids of EMD and credit). Prior to joining the firm, Nishant held

positions at Citibank and ABN AMRO Bank and has been working in the financial industry since 2000. Mr.

Upadhyay has a Bachelor of Science from the Hindu College, Delhi University (India) and a MBA from the Indian

Institute of Management, Indore, India

Olga Yangol, CFA, FRM, CAIAOlga is a portfolio manager focused on Local Markets. Prior to joining HSBC, Olga was responsible for large

corporate relationships at PIMCO, representing USD15 billion in AUM across multiple asset classes, and advised

institutional clients on emerging markets, asset allocation and hedge fund investments. Prior to this, Olga was an

executive director at CIBC World Markets, specializing in interest rate, foreign exchange and equity derivatives

structuring, and working with corporate and private equity clients. She holds an MBA from MIT Sloan School of

Management and she received her undergraduate degree in Information Systems and Finance from McGill

University. Olga is a CFA Charterholder, and holds Financial Risk Manager and Chartered Alternative Investment

Analyst designations. She is fluent in Russian and proficient in French

Bill LangBilly is a portfolio manager focused on EMD local debt and currency strategies He joined HSBC Global Asset

Management at the end of July 2016 after ten years with Bank of America Securities. Throughout his tenure there,

he focused on LatAM Rates and Currency Trading, specializing in FX trading strategies and technologies. He holds

a Master of Science degree in Financial Engineering from Columbia University and a Bachelor’s degree in

Computer Science from the University of Minnesota—Twin Cities. He is a CFA charterholder and a member

certificate holder of the Professional Risk Managers’ International Association (PRMIA).

Binqi LiuMs. Liu is a portfolio manager for the Global EMD team. She joined the firm as an analyst in June 2008 focusing

on sovereign analysis and local markets developing the team's country credit and currency valuation models. Mrs

Liu became a portfolio manager since Jan 2011 when she was pointed as Co-portfolio manager for our flagship

local funds. Mrs Liu was relocated to HSBC Global Asset Management UK since Feb 2015, taking timezone and

geographic advantage of research and trading hours, as well as broader support of global fixed income platform in

London. Besides her role as a portfolio manager, Mrs Liu currently also serves as the economist of the Global

Emerging Markets Debt team, responsible for global marco and sovereign economic research for both local and

external markets. Before joining the firm, she worked as a research assistant for Robert A. Mundell, Nobel Prize

winner in Economics, since June 2007. Ms. Liu has a B.A. from Hunan University in China and an M.P.A. from

Columbia University. Ms. Liu is fluent in Mandarin and Cantonese

Vinayak Potti, CFAMr. Potti is a portfolio manager on the Global EMD team focusing on our Total Return EMD strategies. He

has been working in the industry since 2002. Prior to joining HSBC in 2009, Mr. Potti worked as a product

controller in emerging markets at Barclays Capital and before that, as a fund accountant at T. Rowe Price.

He holds a B.S. from the University of Maryland. He is a CFA Charterholder. Mr. Potti is fluent in Thulu

Jaymeson Kumm, CFAJaymeson is a portfolio manager on the Global Emerging Markets Debt team concentrating on hard

currency corporate and sovereign portfolios. He joined HSBC Global Asset Management in July 2012 as

part of HSBC’s Graduate program and has worked with the Performance team, the Business Transformation

team and the US Credit team. Prior to joining HSBC, Mr. Kumm worked at State Street Corporation as a

Mutual Fund Fixed Income Specialist from September 2009 until June 2011. He has been working in the

industry since 2009. Mr. Kumm holds a BA in Finance from the University of Rhode Island. He is a CFA

Charterholder

Source : HSBC Global Asset Management. For illustrative purposes only

14

Active investment/ESG integration

We believe that Environment, Social and Governance (ESG)

issues can have a material effect on company fundamentals,

in terms of both opportunities and risks. ESG analysis can

highlight latent risks and provide early warning signals of a

potential deterioration of company fundamentals. Considering

ESG factors is an essential part of our investment due

diligence for active strategies.

We would expect company management to actively consider

ESG issues within their company strategy and operations. If

they do, the company would be better placed to strengthen its

competitive position and deliver sustained or improving cash

flow and profitability. Such companies would contribute to

sustainable economic growth.

Individual security analysis is assigned to individual

investment team members, who are responsible for both

financial and ESG analysis and, ultimately, the security

recommendation. This ensures that ESG factors are given

appropriate weighting in investment recommendations and

decision-making.

We capture ESG research in our "Global ESG Intranet

Research Platform.“ We add four proprietary analyses to our

internal and external data:

1. ESG Roadmap: Materiality of ESG factors by sector

2. ESG Rating: Visible in our investment team’s desktop

decision support system alongside information that

supports idea generation and portfolio construction

3. ESG Risk Category: We consider an Absolute approach

by assessing the company’s compliance with the United

Nations Global Compact. We also consider a Relative

approach by considering the company ESG Rating relative

to other companies within sectors. An additional layer of

“due diligence” is required for high risk companies, which

requires the investment case to be reviewed by the local

CIO who would make the final investment decision

4. Executive Summary: summary snapshot by company

Responsible Investment

Voting ReportingEngagementActive investment/

ESG integration

Reporting

As a signatory to the Montreal Carbon Pledge, on 1 December

2015, we reported our carbon footprint for equity portfolios

managed in Hong Kong, London and Paris.

Engagement

For active strategies, the investment team meets regularly

with companies, both investees and potential investments,

providing opportunities to engage with senior management

and monitor company performance. The principal objective of

our discussions is to understand how company management

is delivering sustainable profitability and shareholder returns.

We will raise ESG issues to understand management’s

perspective and strategy.

In addition, we aim to undertake specific engagement activities

with companies in serious breach of principles outlined in the

United Nations Global Compact. These companies pose high

risks to longer-term economic sustainability and growth, and

therefore equity market returns.

HSBC is a signatory to:

United Nations Principles for Responsible Investment

(UN PRI) from June 2006

Montreal Carbon Pledge (September 2015)

United Nations Environment Programme Finance

Initiative and Equator Principles (founder)

UN PRI HSBC Global Asset Management’s RI

Transparency Report is publicly available through the UN

PRI website

Holistic responsible investing approach

Voting

Proxies are voted per client instructions or, secondarily, per

our Global Proxy Voting policy which reinforces good

governance practices. We maintain a record of our voting

decisions including the rationale when we do not support

management.

Non-contractual documentFor illustrative purposes only. Source: HSBC Global Asset Management – June 2016

15

Characteristics methodology.

• Cash equivalents are defined as any security with a maturity of less than 1 year.

• For all strategies except EMD – Total Return, data representing regional, sector and quality distribution characteristics of the strategy have

been calculated after removing cash and cash equivalents and rebalancing the remaining investments to 100%.

• Average Quality ratings are based on HSBC methodology and may differ from published sources. The average quality is calculated utilizing a

weighted average of each fund's holdings in accordance with HSBC’s internal methodology, which includes taking the highest rating of S&P,

Moody’s or Fitch where available. If a security is unrated, it will be assigned a rating in accordance with HSBC’s internal methodology. Unrated

categories reflect Cash and cash equivalents.

• Country distribution data reflects the total exposure to a country which includes local currency exposure.

• Duration calculations include cash and cash equivalents.

Attribution and Contribution to Returns for the components are based on the aggregate relative performance of the underlying holdings, which

includes both contributors and detractors.

Risk Considerations. There is no assurance that a portfolio will achieve its investment objective. In addition, there is no guarantee that any

investment strategy will work under all market conditions, and each investor should evaluate their ability to invest for the long-term, especially

during periods of downturn in the market. Portfolios are subject to market risk, which is the possibility that the market values of securities owned by

the portfolio will decline. Accordingly, you can lose money investing in any of these strategies. Please be aware that these strategies may be

subject to certain additional risks, which should be considered carefully along with the strategy’s investment objectives and fees before investing.

Foreign and emerging markets. Investments in foreign markets entail special risks such as currency, political, economic, and market risks. The

risks of investing in emerging-market countries are greater than the risks generally associated with foreign investments. Fixed income securities.

Subject to credit and interest-rate risk. Credit risk refers to the ability of an issuer to make timely payments of interest and principal. Interest-rate

risk refers to fluctuations in the value of a fixed-income security resulting from changes in the general level of interest rates. In a declining interest-

rate environment, the portfolio may generate less income. In a rising interest-rate environment, bond prices fall. Credit Quality. Investments in

high-yield securities (commonly referred to as “junk bonds”) are often considered speculative investments and have significantly higher credit risk

than investment-grade securities. The prices of high-yield securities, which may be less liquid than higher rated securities, may be more vulnerable

to adverse market, economic or political conditions. Convertibles. Subject to the risks of equity securities when the underlying stock price is high

relative to the conversion price (because more of the security’s value resides in the conversion feature) and debt instruments when the underlying

stock price is low relative to the conversion price (because the conversion feature is less valuable). A convertible bond is not as sensitive to

interest rate changes as a similar non-convertible debt instrument, and generally has less potential for gain or loss than the underlying equity

security. Exchange-Traded Fund Risk. Subject to the underlying securities the ETF is designed to track, although lack of liquidity in an ETF could

result in it being more volatile than the underlying portfolio of securities. Disruptions in the markets for the securities underlying ETFs could result in

losses on the Portfolio’s investments. ETFs also have management fees that increase their costs versus owning the underlying securities directly.

Derivative instruments. Derivatives can be illiquid, may disproportionately increase losses and may have a potentially large negative impact on

performance. Non-diversification. Focusing investments in a small number of issuers, industries, foreign currencies or particular countries or

regions increases the risks associated with a single economic, political or regulatory occurrence.

Index definitions. These indices are presented to provide you with an understanding of their historic long-term performance, and are not

presented to illustrate the performance of any security or trading strategy. All indices are unmanaged. Index returns do not reflect any fees,

expenses or sales charges associated with investing. Investors cannot invest directly in an index.

The JP Morgan EMBI-Global (EMBIG) Index includes US$-denominated Brady bonds, Eurobonds, and traded loans issued by sovereign and

quasi-sovereign entities, and is a traditional market-capitalization weighted index. The JP Morgan GBI-EM Diversified Index provides a measure

of local currency denominated, fixed rate, government debt issued in emerging markets. Weightings among the countries are more evenly

distributed within the diversified index compared to it’s three main composite indices consisting of the GBI-EM, GBI EM Global, and GBI EM Broad

indices. The JP Morgan GBI-EM Global Diversified Index is a comprehensive global local emerging markets index, and consists of liquid, fixed

rate, domestic currency government bonds. The JP Morgan ELMI+ Index is an emerging markets currency (FX) benchmark; the index contains

more countries and also brings in the currency aspect of the market, which is an important component of our strategy. The JPM Corporate

Emerging Markets Bond Index (JPM CEMBI) measures the performance of corporate bonds issued in emerging markets. The CEMBI Broad is a

comprehensive version of the CEMBI, and is also available in a Diversified version, in which weightings are more evenly distributed. The JPM US

Liquid Index (JULI) measures the performance of the investment grade dollar denominated corporate bond market. The JULI focuses on the

most liquid instruments with the objective of making the index a fair and true representation of the investable market Performance and statistics

are available by individual issuers, for sectors and sub-sectors, and maturity buckets (dating back to 31-Dec-1999) Liquid, US$ investment grade

corps; must be a bullet security paying a non-zero coupon semi-annually. Excludes convertibles, refundables, extendables and perpetuals. The

JPM Government Bond Index (JPM GBI) tracks fixed rate issuances from high-income countries spanning the globe. The JPM Global High

Yield Index is designed to mirror the investable universe of the US dollar high yield corporate debt market. The index is comprised of issuers

domiciled across the global markets. The international component of the index is comprised of emerging market and developed market domiciled

issuers. The JPM GBI US Country Index is comprised of the total return of USTs with greater than 13 months to maturity. The JPM Global

Aggregate Bond Index (JPM GABI) consists of the JPM GABI US, a U.S. dollar denominated, investment-grade index spanning asset classes

from developed to emerging markets, and the JPM GABI extends the U.S. index to also include multi-currency, investment-grade instruments. The

JPM GABI represents nine distinct asset classes: Developed Market Treasuries, Emerging Market Local Treasuries, Emerging Markets External

Debt, Emerging Markets Credit, US Credit, Euro Credit, US Agencies, US MBS, Pfandbriefe – represented by well-established J.P. Morgan

indices. The JPM GABI US is constructed from over 3,200 instruments issued from over 50 countries, and collectively represents US$8.6 trillion in

market value. The JPM GABI is constructed from over 5,500 instruments issued from over 60 countries and denominated in over 25 currencies,

collectively representing US$20 trillion in market value. The Barclays Emerging Markets Tradable Government Inflation-Linked Bond (EMTIL)

Index is a rules-based index that provides a diversified exposure to a tradable sub-set of local currency inflation-linked debt from Emerging

Markets (EM) Sovereign issuers represented in the broad benchmark Emerging Markets Government Inflation-Linked Bond (EMGILB)

Index. The Merrill Lynch 3-Month LIBOR Index represents a high-quality base rate for 3-month constant maturity dollar denominated deposits.

The BofA Merrill Lynch U.S. High Yield Master II Index tracks the performance of below investment grade US-dollar denominated corporate

bonds publicly issued in the US domestic markets. Source BofA Merrill Lynch, used with permission. BOFA MERRILL LYNCH IS LICENSING THE

BOFA MERRILL LYNCH INDICES "AS IS," MAKES NO WARRANTIES REGARDING SAME, DOES NOT GUARANTEE THE SUITABILITY,

QUALITY, ACCURACY, TIMELINESS, AND/OR COMPLETENESS OF THE BOFA MERRILL LYNCH INDICES OR ANY DATA INCLUDED IN,

RELATED TO, OR DERIVED THEREFROM, ASSUMES NO LIABILITY IN CONNECTION WITH THEIR USE, AND DOES NOT SPONSOR,

ENDORSE, OR RECOMMEND HSBC GLOBAL ASSET MANAGEMENT, OR ANY OF ITS PRODUCTS OR SERVICES.

Important information

16

Important information

Firm Disclosure

This document is distributed by HSBC Global Asset Management (France) and is only intended for professional investors as defined by MiFID. The information contained herein is subject to change without notice. All non-authorised reproduction or use of this commentary and analysis will be the responsibility of the user and will be likely to lead to legal proceedings. This document has no contractual value and is not by any means intended as a solicitation, nor a recommendation for the purchase or sale of any financial instrument in any jurisdiction in which such an offer is not lawful. The commentary and analysis presented in this document reflect the opinion of HSBC Global Asset Management on the markets, according to the information available to date. They do not constitute any kind of commitment from HSBC Global Asset Management (France). Consequently, HSBC Global Asset Management (France) will not be held responsible for any investment or disinvestment decision taken on the basis of the commentary and/or analysis in this document. All data from HSBC Global Asset Management unless otherwise specified. Any third party information has been obtained from sources webelieve to be reliable, but which we have not independently verified.

Any forecast, projection or target where provided is indicative only and is not guaranteed in any way. HSBC Global Asset Management (France) accepts no liability for any failure to meet such forecast, projection or target. The performance figures and simulation/backtestresults displayed in the document relate to the past and past performance should not be seen as an indication of future returns. It is important to remember that the value of investments and any income from them can go down as well as up and is not guaranteed.Capital is not guaranteed. Fluctuations in the rate of exchange of currencies may have a significant impact on sub-fund performance. Investments in emerging markets are by nature higher risk and potentially more volatile than those inherent in established markets. Investors are reminded that investments in High Yield issues represent a higher risk of default compared to Investment Grade issues. Investments in Credit Default Swaps (CDS) are less liquid than standard bond issues. Fluctuations in the rate of exchange of currencies may have a significant impact on performance. Investment in Financial Derivative Instruments (FDI) may result in losses in excess of the amount invested. This is because a small movement in the price of the underlying financial instrument may result in a substantial movement in the price of the FDI. The strategies can invest in sub investment grade bonds, which may produce a higher level of income than investment grade bonds, but carry increased risk of default on repayment. The value of the underlying assets are strongly affected by interest rate fluctuations and by changes in the credit ratings of the underlying issuer of the assets. The Total Return strategy does not imply there is any protection of capital or guarantee of a positive return over time. The sub-fund is subject to market risks at any time. As interest rates rise debt securities will fall in value. The value of debt securities is inversely proportional to interest rate movements. Issuers of debt securities may fail to meet their regular interest and/or capital repayment obligations. All credit instruments therefore have potential for default.

HSBC GIF Global Emerging Markets Bond, HSBC GIF GEM Debt Total Return, HSBC GIF GEM Inflation Linked Bond, HSBC GIF

Global Emerging Markets Local Debt, HSBC GIF Global Emerging Markets Local Currency Rates, HSBC GIF Global Emerging Markets

Debt Total Return, HSBC GIF Global Emerging Markets Inflation Linked Bond, HSBC GIF Global Emerging Markets Corporate Debt and

HSBC GIF Global Emerging Markets Investment Grade are sub-funds of HSBC Global Investment Funds, a Luxemburg domiciled

SICAV. This material is solely for the attention of institutional, professional, qualified or sophisticated investors and distributors. It is not

to be distributed to the general public, private customers or retail investors in any jurisdiction whatsoever nor to “US Persons”.

Important information for Luxembourg investors: HSBC entities in Luxembourg are regulated and authorised by the Commission de

Surveillance du Secteur Financier (CSSF).

Important information for Swiss investors: This document may be distributed in Switzerland only to qualified investors according to

Art. 10 para 3, 3bis and 3ter of the Federal Collective Investment Schemes Act (CISA). The presented fund is authorised for distribution

in Switzerland in the meaning of Art. 120 of the Federal Collective Investment Schemes Act. (Potential) investors are kindly asked to

consult the latest issued Key Investor Information Document (KIID), prospectus, articles of incorporation and the (semi-)annual report of

the fund which may be obtained free of charge at the head office of the representative: HSBC Global Asset Management (Switzerland)

Ltd., Bederstrasse 49, P.O. Box, CH-8002 Zurich. Paying agent in Switzerland: HSBC Private Bank (Suisse) SA, Quai des Bergues 9-

17, P.O Box 2888, CH-1211 Genève 1.

HSBC Global Asset Management is the brand name for the asset management business of HSBC Group. The above document has

been approved for distribution/issue by the following entity:

HSBC Global Asset Management (France)

421 345 489 RCS Nanterre. Portfolio management company authorised by the French regulatory authority AMF (no. GP99026) with

capital of 8.050.320 euros. Postal address: 75419 Paris cedex 08, France.

Offices: Immeuble Coeur Défense, 110, esplanade du Général Charles de Gaulle, 92400 Courbevoie - La Défense 4 . (Website:

www.assetmanagement.hsbc.com/fr).

HSBC Global Asset Management (Switzerland) Limited

Bederstrasse 49, P.O. Box, CH-8027 Zurich, Switzerland (Website: www.assetmanagement.hsbc.com/ch)

Copyright © 2016. HSBC Global Asset Management (France). All rights reserved.

Non contractual document, updated in September 2016

AMFR_Ext_404_2016 Valid until August 2017

Contact

Client Management

Tel: +33 (0)1 41 02 51 00

E-mail: [email protected]

http://www.assetmanagement.hsbc.com/fr

http://www.assetmanagement.hsbc.com/ch

mailto:[email protected]

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