Investment-linked policies sub funds - HSBC...Issued by HSBC Insurance (Singapore) Pte. Limited....

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Issued by HSBC Insurance (Singapore) Pte. Limited.

Investment-linked policies sub fundsSemi-annual unaudited report for the six months ended 31 December 2014.

HSBC Insurance (Singapore) Pte. Limited Investment-linked Fund Report

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Contents

Fund Updates 2�Fund Performance Summary 4�Notes to the fund disclosures 6�HSBC Insurance Asia Balanced Fund 7�HSBC Insurance Asia Equity Fund 11�HSBC Insurance Asia Focused Income Fund 14�HSBC Insurance Asian Bond Fund 17�HSBC Insurance Asian Dividend Equity Fund 21�HSBC Insurance China Balanced Fund 24�HSBC Insurance China Equity Fund 28�HSBC Insurance Climate Change Equity Fund 31�HSBC Insurance Emerging Europe Equity Fund 34�HSBC Insurance Emerging Markets Equity Fund 38�HSBC Insurance Ethical Global Equity Fund 41�HSBC Insurance Ethical Global Sukuk Fund 45�HSBC Insurance Europe Equity Fund 49�HSBC Insurance Global Bond Fund 52�HSBC Insurance Global Emerging Markets Bond Fund 55�HSBC Insurance Global Equity Fund 59�HSBC Insurance India Equity Fund 63�HSBC Insurance Japan Equity Fund 66�HSBC Insurance Pacific Equity Fund 69�HSBC Insurance Premium Balanced Fund 72�HSBC Insurance Premium Property Equity Fund 75�HSBC Insurance SGD Reserve Fund 81�HSBC Insurance Singapore Balanced Fund 85�HSBC Insurance Singapore Bond Fund 89�HSBC Insurance World Selection Funds 93�Financial Statements 101�Notes to the financial statements 110�

HSBC Insurance (Singapore) Pte. Limited Investment-linked Fund Report: Fund Updates

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Fund Updates

1. Change of Registrar and Transfer Agent of the Underlying Sub-Funds of HSBC Insurance Asian Dividend Equity Fund and HSBC Insurance Premium Property Equity Fund with effect from 13 October 2014

Henderson Global Investors (Singapore) Limited informed us of the changes for the following Underlying Sub-Funds:

Underlying Sub-Fund Changes

i) Henderson Horizon Fund – Asian Dividend Income Fund

ii) Henderson Horizon Fund – Global Property Equities Fund

iii) Henderson Horizon Fund – Pan European Property Equities Fund

iv) Henderson Horizon Fund – Asia Pacific Property Equities Fund

RBC Investor Services Bank SA (“RBC’) is appointed as Registrar and Transfer Agent of the Henderson Horizon Fund SICAV (umbrella funds) in replacement of BNP Paribas Securities Services Luxembourg Branch, with effect from 13 October 2014.

2. Change in names of Underlying Sub-Funds of HSBC Insurance Asia Equity Fund, HSBC Insurance China Balanced Fund, HSBC Insurance Premium Balanced Fund, HSBC Insurance Singapore Balanced Fund and HSBC Insurance Singapore Bond Fund with effect from 28 November 2014

HSBC Insurance ILP Sub-Fund

Underlying Sub-Fund old name

Underlying Sub-Fund new name

(i) HSBC Insurance Asia Equity Fund

� DWS Asia Premier Trust � Deutsche Asia Premier Trust

(ii) HSBC Insurance China Balanced Fund

� DWS Premier Investment Funds – DWS China Equity Fund

� DWS Lion Bond Fund

� Deutsche Premier Investment Funds – Deutsche China Equity Fund

� Deutsche Lion Bond Fund (iii) HSBC Insurance

Premium Balanced Fund � DWS Premier Select Trust � Deutsche Premier Select

Trust

(iv) HSBC Insurance Singapore Balanced Fund

� DWS Premier Investment Funds – DWS Singapore Equity Fund

� DWS Lion Bond Fund

� Deutsche Premier Investment Funds – Deutsche Singapore Equity Fund

� Deutsche Lion Bond Fund

(v) HSBC Insurance Singapore Bond Fund

� DWS Lion Bond Fund � Deutsche Lion Bond Fund

HSBC Insurance (Singapore) Pte. Limited Investment-linked Fund Report: Fund Updates

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3. Change in name of Underlying Sub-Fund of HSBC Insurance Ethical Global Sukuk Fund with effect from 27 February 2015

We have been informed by Templeton Asset Management Limited that the name of Underlying Sub-Fund of HSBC Insurance Ethical Global Sukuk Fund will be changed from Franklin Templeton GlobalSukuk Fund to Franklin Global Sukuk Fund with effect from 27 February 2015.

There will be no change to the investment strategy, and the purpose of the name change is to ensure that the Underlying Sub-Fund is similarly branded to other Franklin Templeton products.

HSBC Insurance (Singapore) Pte. Limited Investment-linked Fund Report: Fund Performance Summary

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Fund Performance Summary Cumulative Annualised

3-Mth (%)

6-Mth (%)

1-Year(%)

3-Year(%)

3-Year(%)

HSBC Insurance Asia Balanced Fund (1.30) (1.37) 4.50 26.14 8.05 Benchmark * 3.71 4.82 10.19 29.85 9.10

HSBC Insurance Asia Equity Fund (1.33) (1.27) 1.73 22.40 6.97 Benchmark * 4.16 4.52 8.62 34.70 10.44

HSBC Insurance Asia Focused Income Fund (1.47) (1.89) 5.03 N.A. N.A.The Fund has no benchmark

HSBC Insurance Asian Bond Fund (0.14) (0.43) 2.12 12.64 4.05 Benchmark * 0.11 0.18 0.17 1.05 0.35

HSBC Insurance Asian Dividend Equity Fund 3.63 3.21 6.51 34.12 10.28 Benchmark * 3.18 2.20 8.20 33.91 10.22

HSBC Insurance China Balanced Fund 5.72 8.63 5.10 25.22 7.79 Benchmark * 7.98 11.01 9.64 29.41 8.97

HSBC Insurance China Equity Fund 10.27 16.25 13.18 42.66 12.57 Benchmark * 11.36 15.53 13.31 40.36 11.96

HSBC Insurance Climate Change Equity Fund 5.07 0.60 0.27 43.63 12.83 Benchmark * 4.95 5.05 10.13 57.35 16.31

HSBC Insurance Emerging Europe Equity Fund (14.19) (21.56) (25.20) (0.10) (0.03)Benchmark * (16.82) (25.35) (26.03) (12.23) (4.26)

HSBC Insurance Emerging Markets Equity Fund (0.55) (1.84) 0.15 13.97 4.45 Benchmark * (0.78) (2.04) 2.65 15.10 4.80

HSBC Insurance Ethical Global Equity Fund (2.50) (6.99) (1.57) 22.75 7.07 Benchmark * 2.13 1.34 7.86 40.05 11.88

HSBC Insurance Ethical Global Sukuk Fund 3.89 4.84 8.37 33.86 10.21 Benchmark * 5.22 8.31 11.63 17.66 5.57

HSBC Insurance Europe Equity Fund 1.27 (7.20) (5.61) 50.47 14.59 Benchmark * (0.62) (5.45) (1.53) 43.04 12.67

HSBC Insurance Global Bond Fund 2.72 4.35 9.32 13.78 4.40 Benchmark * 2.82 4.68 9.59 14.90 4.74

HSBC Insurance Global Emerging Markets Bond Fund (1.20) (3.30) 4.55 N.A. N.A.Benchmark * 2.19 2.82 10.75 N.A. N.A.

HSBC Insurance Global Equity Fund 4.60 3.27 8.60 50.18 14.52 Benchmark * 4.95 5.05 10.13 57.35 16.31

HSBC Insurance India Equity Fund 5.96 1.26 37.30 61.13 17.24 Benchmark * 6.57 11.48 38.71 60.95 17.19

HSBC Insurance (Singapore) Pte. Limited Investment-linked Fund Report: Fund Performance Summary

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Cumulative Annualised 3-Mth

(%)6-Mth

(%)1-Year

(%)3-Year

(%) 3-Year

(%) HSBC Insurance Japan Equity Fund (2.25) (2.09) (3.07) 22.97 7.14 Benchmark * 1.02 1.00 1.45 34.95 10.51

HSBC Insurance Pacific Equity Fund 0.45 1.30 7.12 29.42 8.98 Benchmark * 3.18 2.20 8.20 33.91 10.21

HSBC Insurance Premium Balanced Fund 1.75 2.11 4.83 25.29 7.81 Benchmark * 2.59 3.06 5.85 28.79 8.80

HSBC Insurance Premium Property Equity Fund 9.84 6.31 12.98 52.50 15.10 Benchmark * 9.26 5.96 15.40 60.72 17.14

HSBC Insurance SGD Reserve Fund (0.16) (0.17) (0.19) (0.15) (0.05) Benchmark * 0.07 0.12 0.24 0.60 0.20

HSBC Insurance Singapore Balanced Fund 0.43 0.78 4.38 24.57 7.60 Benchmark * 2.43 3.24 5.82 28.53 8.73

HSBC Insurance Singapore Bond Fund 0.30 0.57 1.37 6.00 1.96 Benchmark * 0.09 0.18 0.35 0.99 0.33

HSBC Insurance World Selection 1 Fund 5.63 7.82 9.56 17.30 5.46 The Fund has no benchmark



* Refer to the respective funds for the benchmark used.

HSBC Insurance (Singapore) Pte. Limited Investment-linked Fund Report: Notes to the fund disclosures

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Notes to the fund disclosures

1. Performance figures

Performance figures are calculated using bid-to-bid prices, with any income or dividends reinvested and in Singapore dollars.

2. Expense ratio

Expense ratios are calculated in accordance with IMAS guidelines for the disclosure on expense ratios. The expense ratio does not include (where applicable) charges for insurance coverage, brokerage and other transaction costs, performance fee, foreign exchange gains or losses, front or back end loads arising from the purchase or sale of collective investment schemes and tax deducted at source or arising out of income received.

3. Turnover ratio

Turnover ratios represent the number of times per year that a dollar of assets is invested and is calculated based on the lower of purchases or sales for the 12 months preceding the reporting date expressed as a percentage of the daily average Net Asset Value.

4. Abbreviations Used

CPFIS : Central Provident Fund Investment Scheme GDP : Gross Domestic Product Ltd : Limited MV : Market Value N.A. : Not Applicable NAV : Net Asset Value OA : Ordinary Account SA : Special Account SRS : Supplementary Retirement Scheme

HSBC Insurance (Singapore) Pte. Limited Investment-linked Fund Report: HSBC Insurance Asia Balanced Fund

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HSBC Insurance Asia Balanced Fund

Fund Objective

HSBC Insurance Asia Balanced Fund seeks to achieve capital growth over the medium to longerterm by investing primarily 70% of the portfolio asset value in Asian equities and 30% in high quality debt securities of major bond market. The Fund invests substantially all or all its assets primarily 70% into the Legg Mason Western Asset Asian Enterprise Trust and 30% into the Legg Mason Western Asset Global Bond Trust.

Legg Mason Western Asset Asian Enterprise Trust

Investment and Market Review ^

FUND FACTS Underlying Funds 70%: Legg Mason Western

Asset Asian Enterprise Trust 30%: Legg Mason Western Asset Global Bond Trust

Fund Manager Western Asset Management Company Pte Ltd

Launch Date 1 Nov 2007 CPFIS/SRS SRS CPFIS Risk Classification

N.A.

As at 31 Dec 2014 Offer Price S$ 0.85998 Bid Price S$ 0.81698 Fund Size S$ 2.89 mil Units in Issue 3.54 mil

Asian markets are exiting 2014 on a low note. The festive season this year has been marked by poor market performance, no thanks to the relentless US dollar strength and the free fall in crude. The margin-fuelled, spectacular “A” Share rally in recent weeks stands out in sharp contrast as the sole exception. That aside,the year end, “clean-up trades” pressured stocks prices, especially in the energy services sector, industrials and most small caps at a time when market liquidity is at seasonal low.

The A-share market has been on a tear, emboldened by China’s asymmetrical rate cuts, the Shanghai-Hong Kong Stock Connect Program, plus the anticipation of Reserve Requirement Ratio (RRR) cuts to come. The anticipation of foreign participation through the HK-Shanghai Stock Connect program have caused a herd ofmainland Chinese retail investors to punt the highly momentum driven A-share market. The extreme mannerof speculation has caused us to adopt a wait and see approach.

Market Outlook and Investment Strategy ^

The collapse in the price of crude is focusing investors’ minds on separating the winners from the losers, butthis is an easier exercise in theory than in practice. Asian GDP will likely enjoy a boost from lower oil price,but we are circumspect about extrapolating past experiences of demand elasticity in the prevailing climate.Consumer and investors’ confidence remain fragile.

The ramifications of this crude awakening go well beyond the energy sector. Falling equity markets anddepreciating Asian currencies such as the Rupee, Ringgit and the Rupiah hint of this foreboding.Notwithstanding the significant macroeconomic adjustments that have already been made during the tapertantrum, and the fact that India is a major beneficiary of the crude collapse for example, investors wereexpressing a fear of a contagion to come.

The prognosis for 2015 begins with crude. Offshore marine stocks in South East Asia have already fallen more than 50% in many cases, and valuation is at multi year lows. Rational behaviour eventually prevailswhen investors accept that many of these stocks are guilty only by association. These include the ones that we own, who will benefit from the cut in exploration capital expenditure and the urgency to pump up the volumes to compensate for lower prices (operating expenditure). For this reason, we have continued to keep faith with our offshore marine theme, and are likely to add to our holdings once the decoupling is evident.

Legg Mason Western Asset Global Bond Trust

*Please refer to HSBC Insurance Global Bond Fund on page 52 for the Investment and Market Review and the Market outlook and Investment Strategy.

^ Source: Western Asset Management Company Pte Ltd.


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A) Fund Performance I Cumulative Total Returns

3-Mth(%)

6-Mth(%)

1-Year(%)

3-Year(%)

5-Year(%)

10-Year(%)

SinceInception

(%) HSBC Insurance Asia Balanced Fund (1.30) (1.37) 4.50 26.14 (0.99) N.A. (14.00) Benchmark* 3.71 4.82 10.19 29.85 22.78 N.A. 7.55

II Average Annual Compounded Returns

3-Year(%)

5-Year(%)

10-Year(%)

SinceInception

(%) HSBC Insurance Asia Balanced Fund 8.05 (0.20) N.A. (2.09) Benchmark* 9.10 4.19 N.A. 1.03

*70% MSCI AC Asia ex Japan + 30% Citigroup World Government Bond ex Japan Index (Hedged to S$)

B) Fund Disclosure I Allocation by Asset Class As at 31 Dec 2014 Asset Class % of NAV MV S$ mil

Legg Mason Western Asset Asian Enterprise Trust 69.55 2.01Legg Mason Western Asset Global Bond Trust 31.14 0.90Other liabilities (0.69) (0.02)

Total 100.00 2.89

II Fund Movement (01 Jul 2014 - 31 Dec 2014) S$

Subscription 438,669 Redemption 219,037

C) Underlying Fund Disclosure (Legg Mason Western Asset Asian Enterprise Trust) I Allocation by Country As at 31 Dec 2014 Country % of NAV MV S$ mil

China 18.40 35.42South Korea 15.68 30.19Taiwan 12.18 23.44Hong Kong 11.30 21.76Singapore 10.06 19.37India 10.00 19.26Philippines 8.79 16.92Malaysia 3.07 5.91Others* 6.34 12.19Cash 4.18 8.05

Total 100.00 192.51 *Includes other countries.

II Allocation by Industry As at 31 Dec 2014 Industry % of NAV MV S$ mil

Consumer 26.52 51.05Information Technology 17.39 33.47Financials 16.31 31.39Industrials 9.39 18.07Real Estate 7.30 14.06Utilities 5.04 9.71Telecommunication 3.82 7.36Energy 3.78 7.28Miscellaneous 3.11 5.98Healthcare 1.76 3.39Construction/Materials 1.40 2.70Cash 4.18 8.05

Total 100.00 192.51


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III Allocation of Debt Securities by Credit Ratings As at 31 Dec 2014N.A.

IV Top Ten Holdings of Underlying Fund As at 31 Dec 2014 % of NAV MV S$ mil

Ezion Holdings Ltd 4.60 8.86Samsung Electronics Co Ltd 4.29 8.26China Life Insurace Co H Shares 3.15 6.07China Citic Bak Corp Ltd H Shares 2.55 4.90Bharat Forge Limited 2.54 4.89Yes Bank Ltd 2.33 4.48Industrial and Commercial Bank of China H Shares 2.33 4.48Beijing Enterprises Water Group Ltd 2.29 4.41Sun Hung Kai Properties Ltd 2.24 4.32Shimao Property Holdings Ltd 2.23 4.30

Top Ten Holdings of Underlying Fund As at 31 Dec 2013 % of NAV MV S$ mil

Ezion Holdings Ltd. 7.06 14.64Samsung Electronics Co. Ltd. 3.09 6.41Sun Hung Kai Properties Ltd. 2.75 5.70China Life Co - H Shares 2.71 5.62Orion Corp Co. 2.40 4.98Hermes Microvision Inc 2.33 4.84Tencent Holdings Ltd. 2.18 4.51Tech Mahindra Ltd. 2.15 4.45Shenzhou International Group 2.15 4.45Mahindra & Mahindra Financial Services Ltd. 2.09 4.34

V Exposure to Derivatives As at 31 Dec 2014 % of NAV -Market value (S$) (98)Realised Gains / Losses (S$) -Unrealised Gains / Losses (S$) (98)

VI Borrowings of Net Asset Value As at 31 Dec 2014 N.A.

*HBSC Insurance Asian Balanced Fund invests 30% into Legg Mason Western Asset Global Bond Trust.Please refer to HSBC Insurance Global Bond Fund on page 53 for the underlying fund disclosure on LeggMason Western Asset Global Bond Trust under Section C.

D) Other Disclosure Items I Expense/Turnover Ratios Expense Ratio Turnover Ratio

As at 31-Dec-14 As at 31-Dec-13 As at 31-Dec-14 As at 31-Dec-13Underlying Fund Level Legg Mason Western Asset Asian Enterprise Trust 1.72% 1.76% 118.70% 150.15%Legg Mason Western Asset Global Bond Trust 0.89% 0.88% 268.67% 256.53%

ILP Sub-Fund Level HSBC Insurance Asia Balanced Fund 1.73% 1.76% 20.53% 22.71%

II Related-Party Transactions N.A.

III Material Information that will adversely impact the valuation of the ILP sub-fund N.A.


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IV Soft Dollar Commission Agreement The Manager currently does not but shall be entitled to receive and enter into soft-dollarcommissions/arrangements in respect of the Fund.

The sub-Manager currently receives and enters into soft-dollar commissions/arrangements in respect ofthe Fund. The Manager and Sub-Manager will comply with applicable regulatory and industry standardson soft-dollars. The soft-dollar commissions which the Sub-Manager receives and which the Managermay receive include specific advice as to the advisability of dealing in, or the value of any investments,research and advisory services, economic and political analyses, portfolio analyses including valuationand performance measurements, market analyses, data and quotation services, computer hardware andsoftware or any other information facilities to the extent that they are used to support the investmentdecision making process, the giving of advice, or the conduct of research or analysis, and custodialservice in relation to the investments managed for clients.

Soft-dollar commissions received shall not include travel, accommodation, entertainment, generaladministrative goods and services, general office equipment or premises, membership fees, employees’salaries or direct money payment.

The Manager and Sub-Manager will not accept or enter into soft dollar cmmissions/arrangements unlesssuch soft-dollar commissions/arrangements would, in the opinion of the Manager or Sub-Manager (as thecase may be), assist it in its management of the Trust, provided that it shall ensure at all times that bestexecution is carried out for the transactions, and that no unnecessary trades are entered into in order toqualify for such soft-dollar commissions/arrangements.

E) Financial Statements Refer to page 101.

For more information, please contact your financial consultant, call our Customer Service Hotline on 6225 6111,

or visit our web site at www.insurance.hsbc.com.sg.

HSBC Insurance (Singapore) Pte. Limited Investment-linked Fund Report: HSBC Insurance Asia Equity Fund

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HSBC Insurance Asia Equity Fund

Fund Objective

HSBC Insurance Asia Equity Fund seeks to achievecapital appreciation in the medium to long-term through investment in equity and equity-related securities issued by companies which are listed onthe stock exchanges of Asia. Fund investments aremade by way of a feeder fund, which invests substantially all or all its assets in the Deutsche Asia Premier Trust.


Asian markets were mixed in the last 6 months withsmaller markets like Thailand, Indonesia and Philippines (TIPs) charging ahead despite a strong

FUND FACTS Underlying Fund Deutsche Asia Premier Trust Fund Manager Deutsche Asset

Management (Asia) Ltd Launch Date 31 Jan 1994 CPFIS/SRS* SRS CPFIS Risk Classification

N.A.


*Note: With effect from 28 Jun 2010, the Fund has been delisted from CPFIS.

US Dollar. China’s faltering economic momentum gave way to improved liquidity and overzealous domestic investors rushed to snap up A-shares. Other policies like “one belt, one road” and state owned enterprise(SOE) reform also gathered pace. Hong Kong rallied along but faltered upon the pro democracydemonstrations. Taiwan took a breather following months of outperformance led by the technology sector as a new smartphone was launched. Korea fared poorly dragged down by the debacle of an automobile groupon concerns that it overpaid for a plot of land in the upmarket area for its new headquarters.


We remain optimistic that first quarter of 2015 may see seasonal strength for markets. The caveat will be astronger than expected US Dollar and continual collapse in oil prices. We continue to favour China’shealthcare, internet and environmental sectors, however, we have positioned in some large caps asvaluations appear attractive. We are underweight in Hong Kong, Malaysia and Singapore on lack ofappealing ideas. We have taken some profits out of Korea’s tourism related names and positioned in beaten down index heavy weights. We remain underweight in Taiwan but see selective opportunities in technologyand export sectors. We are overweight in Philippines as we see potential growth in consumption. Thailandand Indonesia remains underweight but we continue to like the infrastructure related companies in bothcountries.

^ Source: Deutsche Asset Management (Asia) Ltd.


3-Mth(%)

6-Mth(%)

1-Year(%)

3-Year(%)

5-Year(%)

10-Year(%)

Since Inception

(%) HSBC Insurance Asia Equity Fund (1.33) (1.27) 1.73 22.40 8.92 72.57 133.79 Benchmark* 4.16 4.52 8.62 34.70 27.40 103.07 83.24


3-Year(%)

5-Year(%)

10-Year(%)

Since Inception

(%) HSBC Insurance Asia Equity Fund 6.97 1.72 5.61 4.17 Benchmark* 10.44 4.96 7.34 2.95

*MSCI AC Far East ex Japan (TR)


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Deutsche Asia Premier Trust 100.09 82.36 Other assets 0.06 0.05 Other liabilities (0.15) (0.12)

Total 100.00 82.29


Subscription 8,063,524 Redemption 4,593,804

C) Underlying Fund Disclosure (Deutsche Asia Premier Trust) I Allocation by Country As at 31 Dec 2014 Country % of NAV MV S$ mil

South Korea 23.53 23.04 Cayman Islands 17.78 17.41 China 16.45 16.11 Taiwan 11.42 11.18 Hong Kong 6.89 6.75 Singapore 3.48 3.41 Bermuda 3.18 3.11 Malaysia 2.88 2.82 Thailand 2.63 2.58 Others* 11.76 11.51

Total 100.00 97.92 *Includes other countries and net assets.


Electrical/Electronics 11.06 10.83 Banks 6.78 6.64 Semiconductors 5.95 5.83 Retail 5.11 5.00 Real Estate 4.21 4.12 Healthcare 3.71 3.63 Insurance 3.67 3.59 Consumer 3.43 3.36 Internet Services 3.34 3.27 Media 3.16 3.09 Entertainment 3.08 3.02 Others* 46.50 45.54

Total 100.00 97.92 *Includes other industries and net assets.


IV Top Ten Holdings of Underlying Fund As at 31 Dec 2014% of NAV MV S$ mil

Samsung Electronics Corporation Limited 6.46 6.33Taiwan Semiconductor Manufacturing Corporation Limited 4.03 3.95 China Construction Bank H Shares 3.63 3.55 Naver Corporation 3.16 3.09 Consun Pharmaceutical Group 2.91 2.85 Tencent Holdings Limited 2.83 2.77 Yingde Gases Group Company Limited 2.53 2.48 New China Life Insurance Company Limited H Shares 2.06 2.02 Bank of China Limited H Shares 2.02 1.98 Hyundai Motor Corporation Limited 2.01 1.97


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Top Ten Holdings of Underlying Fund As at 31 Dec 2013% of NAV MV S$ mil

Samsung Electronics Co. Ltd. 6.57 6.20 Taiwan Semiconductor Manufacturing Co. Ltd. 4.86 4.58 China Gas Holdings Ltd. 4.00 3.77 Industrial & Commercial Bank of China H Shares 3.96 3.73 Tencent Holdings Ltd. 3.87 3.65 Naver Corporation 3.00 2.83 SJM Holdings Ltd. 2.60 2.45 Geely Automobile Holdings Ltd. 2.57 2.43 Ajisen China Holdings Ltd. 2.35 2.22 China Minsheng Banking Company Ltd. H Shares 2.31 2.17

V Exposure to Derivatives As at 31 Dec 2014% of NAV -Market Value (S$) -Realised gains / (Losses) (S$) (160,683)Unrealied Gains / (Losses) (S$) -

VI Borrowings of Net Asset Value As at 31 Dec 2014N.A.

D) Other Disclosure ItemsI Expense/Turnover Ratios HSBC Insurance Asia Equity Fund Underlying Fund

As at 31-Dec-14 As at 31-Dec-13 As at 31-Dec-14 As at 31-Dec-13 Expense Ratio 1.83% 1.82% 1.54% 1.53% Turnover Ratio 15.05% 14.90% 181.28% 184.27%

II Related-Party TransactionsN.A.

III Material Information that will adversely impact the valuation of the ILP sub-fundN.A.

IV Soft Dollar Commission Arrangement Soft dollar commissions are benefits accorded to Manager by their brokers, usually in the form ofresearch, advisory, analysis and data services, computer hardware or software used for and/or in supportof the investment process.

The Manager’s policy on soft dollar commissions is as follows:

- the goods and services received would assist in the provision of investment services and advices orrelated services to the unit trust; - transactions are executed on the best available terms; and - the Manager does not engage in unnecessary trades in order to qualify for soft dollar commissions.

Soft dollar commissions were received from the Manager’s panel of soft dollar brokers which executed transactions for the unit trust and other funds managed by the Managers.

E) Financial StatementsRefer to page 101.

For more information, please contact your financial consultant,call our Customer Service Hotline on 6225 6111,


HSBC Insurance (Singapore) Pte. Limited Investment-linked Fund Report: HSBC Insurance Asia Focused Income Fund

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HSBC Insurance Asia Focused Income Fund

Fund Objective

HSBC Insurance Asia Focused Income Fund seeks to provide income and moderate capital growth through an active asset allocation in a diversified portfolio of fixed income and equity securities as well as money market and cash instruments. Fund investments are made by way of a feeder fund, which invests substantially all, or all its assets in the HSBC Global Investment Funds - Managed Solutions – Asia Focused Income Fund.


Global stock markets during the second half of the year saw declines with MSCI World Index down 1.9%. The ongoing decline in the price of oil was a

FUND FACTS Underlying Sub-Fund HSBC Global Investment

Fund – Managed Solutions - Asia Focused Income Fund

Fund Manager HSBC Global Asset Management (Singapore) Ltd

Launch Date 28 Jan 2013 CPFIS/SRS SRSCPFIS Risk Classification

N.A.


major feature of markets in the period. From a high of over USD110 per barrel as recently as June, Brent Crude oil had fallen to just over USD55 at the end of the year, a decline which will have significant effects ongrowth and inflation in the months to come. There was another major market movement from China with thePeople's Bank of China cutting interest rates for the first time since 2012, backing up recent liquidityinjections and suggesting a determination to address the recent slowing in the Chinese economy. Bond yields were falling to new lows for the year in November before rising somewhat towards year end.


With quantitative easing still in place at the Bank of Japan, and the European Central Bank likely to increase its asset purchases in the coming months, yields could stay at low levels, but prospective returns ongovernment bonds are still likely to be extremely low. Corporate bonds offer a yield premium overgovernment bonds and are attractive in the scenario where growth is positive but insufficient to stop assetpurchase programs by central banks. On the back of the modest growth scenario, equities are likely to produce the best total returns over the long term.

^ Source : HSBC Global Asset Management (Singapore) Ltd

A) Fund PerformanceI Cumulative Total Returns

3-Mth(%)

6-Mth(%)

1-Year(%)

3-Year(%)

5-Year(%)

10-Year(%)

SinceInception

(%)HSBC Insurance Asia Focused Income Fund (1.47) (1.89) 5.03 N.A. N.A. N.A. 0.66


3-Year(%)

5-Year(%)

10-Year(%)

SinceInception

(%)HSBC Insurance Asia Focused Income Fund N.A. N.A. N.A. 0.35

This fund has no benchmark.

B) Fund DisclosureI Allocation by Asset Class As at 31 Dec 2014

Asset Class % of NAV MV S$ mil HSBC GIF – Managed Solutions - Asia Focused Income Fund 100.00 1.19

Total 100.00 1.19


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C) Underlying Sub-Fund Disclosure (HSBC GIF – Managed Solutions - Asia Focused Income Fund) I Allocation by Country As at 31 Dec 2014 Country % of NAV MV S$ mil

Asia Pacific Ex Hong Kong / Japan 77.00 453.41 Hong Kong 10.87 64.01 North America 3.27 19.26 Emerging - Latin America 1.91 11.25 Emerging - EMEA 1.82 10.72 Cash 5.13 30.21

Total 100.00 588.86


Asian Investment Grade Bond 35.97 211.81 Asian High Dividend 26.84 158.05 Asian HighYield Bond 20.72 122.01 Global Emerging market local debt fund 10.00 58.89 Asian Local Currency Bond 3.33 19.61 Others* 3.14 18.49

Total 100.00 588.86 *Includes other industries.

III Allocation of Debt Securities by Credit Ratings As at 31 Dec 2014 Rating % of NAV MV S$ mil

(For Debt securities portfolio only) AAA 0.64 3.77 AA+ 0.83 4.89 AA- 5.65 33.27 A+ 2.81 16.55 A 2.78 16.37 A- 6.54 38.51 BBB+ 6.71 39.51 BBB 4.64 27.32 BBB- 13.24 77.96 BB+ 1.23 7.24 BB 4.20 24.73 BB- 3.66 21.55 Non Rated 3.57 21.02 Others* 11.53 67.90 Cash 5.13 30.21

Total 73.16 430.80 *Includes lower rated debt securities.

IV Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2014 % of NAV MV S$ mil

HSBC Global Investment Funds - GEM Local Debt - ZD Class (USD) 10.08 59.34 COSL Finance BVI Ltd 3.25% 06/09/22 1.61 9.49 Taiwan Semiconductor Mfg(2330) (RMT) Common NTD 10 (Barra) 1.26 7.44 ICICI Bank Ltd/Dubai 4.7% 21/02/18 (US45112FAC05) 1.20 7.04 China Construction Bank (939) Class 'H' RMB 1.00 (China) 1.10 6.47 China Mobile Ltd (941)(China) Ord HKD 0.10 1.07 6.32 Nan Fung Treasury Ltd 4.5% 20/09/22 1.07 6.29 ONGC Videsh Ltd 3.25% 15/07/19 1.06 6.23 DBS Group Holdings Ltd NPV 1.04 6.14 SSG Resources Ltd 4.25% 04/10/22 (MTM) 1.04 6.12


16

Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2013 % of NAV MV S$ mil

HSBC Global Investment Funds - GEM Local Debt - ZD Class (USD) 10.77 106.22 Korea Treasury Bond 4% 10/03/16 1.36 13.45 Korea Treasury Bond 5.75% 10/09/18 1.02 10.08 Pertamina PT 4.875% 03/05/22 0.94 9.30 Bank Negara Indonesia Lo 4.125% 27/04/17 0.82 8.06 Bestgain Real Estate 2.625% 13/03/18 0.79 7.78 Korea Treasury Bond 3.75% 10/06/22 0.79 7.77 Doosan Infracore Co Ltd 3.25% 05/10/42 0.78 7.73 Bank Rakyat Indonesia 2.95% 28/03/18 0.77 7.56 Malaysian Government 3.492% 31/03/20 0.76 7.54

V Exposure to Derivatives As at 31 Dec 2014 N.A.


D) Other Disclosure ItemsI Expense/Turnover Ratios HSBC Insurance Asia Focused

Income Fund Underlying Sub-Fund


II Related-Party Transactions The HSBC-Insurance Asia Focused Income Fund invests S$1.19 million, equivalent to 100.00% of its netasset value in HSBC GIF – Managed Solutions – Asia Focused Income Fund, which is managed by HSBC Global Asset Management (Singapore) Ltd.

The management fees earned by HSBC Global Asset Management (Singapore) Ltd from 01 Jul 2014 to 31 Dec 2014 amounts to S$4,329.


IV Soft Dollar Commission Arrangement N.A.




HSBC Insurance (Singapore) Pte. Limited Investment-linked Fund Report: HSBC Insurance Asian Bond Fund

17

HSBC Insurance Asian Bond Fund

Fund Objective

HSBC Insurance Asian Bond Fund seeks to maximize returns over the long term by investing mainly in the bond markets of Asia’s developing economies. There is no target industry or sector. Fund investments are by way of a feeder fund, which invests substantially all or all its assets in the Legg Mason Western Asset Asian Bond Trust.


The J.P. Morgan Asia Credit Index (JACI) was down 0.43% month-over-month (MoM), bringing year-to-

FUND FACTS Underlying Fund Legg Mason Western Asset

Asian Bond Trust Fund Manager Western Asset Management

Company Pte Ltd Launch Date 6 Oct 2008 CPFIS/SRS SRS CPFIS Risk Classification

N.A.


date (YTD) returns to 8.32%. The best performing sector was investment-grade sovereigns, which returned 0.10% MoM, while the worst performing sector was non-investment-grade corporates, which saw losses of1.88% MoM.

Emerging Markets (EM) assets have come under pressure on the back of the sharp decline in oil prices, a stronger US dollar and worries that when the Fed embarks on its rate hike cycle, there will be more pain tocome. The underlying concern over EMs is that weak global demand will lead to a slowdown in growth that,coupled with a hawkish Fed, could prompt capital outflows. While a strong US dollar will be negative forAsian assets, Asia stands in a relatively stronger fundamental position compared with other EM economies.While the echoes of 1997 persist, there remain significant changes in debt fundamentals; most Asian sovereign debts are denominated in their respective domestic currencies with reserve to short-term external debt cover at a regional average of 355%.


China will continue to see slower growth as policymakers engineer a shift in its economic structure towardsdomestic consumption as a driver of growth. India and Indonesia look set to benefit from post-election tailwinds of strong, reform-oriented leadership and domestically-oriented economies. Regional growth is expected to be the strongest in terms of global economic blocs at 6.2% in 2015, from 6% in 2014. Lower oilprices are expected to benefit most Asian countries except Malaysia given it is a net oil exporter. Whilevulnerabilities from foreign capital investments remain, it can be mitigated by support from lower oil prices,strong reserves and healthy government finances. Soft oil prices have also allowed India, Malaysia andIndonesia to significantly remove energy subsidies, freeing up funds for fiscal policy. Benign commodity prices will relieve supply-side inflationary pressures and provide central banks with the policy space toaccommodate growth.

We remain comfortable with the USD-denominated Asian credit space, anchored by US dollar strength and expect more benign moves in US Treasury (UST) yields. That said, we would maintain a cautious approach and be watchful over negative technical and idiosyncratic risks. We remain comfortable with sovereigns andsystematically critical sectors such as utilities, banks and other sovereign-linked entities but cautious on property-related, as well as weaker energy-related entities. Issuer-specific fundamentals will be greatly scrutinized and will take into account attendant contagion risks within sectors. We will also take into account liquidity considerations in managing exposures as increased volatility in the year ahead in credit spreads isexpected.

^ Source : Western Asset Management Company Pte Ltd


3-Mth(%)

6-Mth(%)

1-Year(%)

3-Year(%)

5-Year(%)

10-Year(%)

Since Inception

(%) HSBC Insurance Asian Bond Fund (0.14) (0.43) 2.12 12.64 26.79 N.A. 80.75 Benchmark* 0.11 0.18 0.17 1.05 11.90 N.A 58.62


18


3-Year(%)

5-Year(%)

10-Year(%)

Since Inception

(%) HSBC Insurance Asian Bond Fund 4.05 4.86 N.A. 10.06 Benchmark* 0.35 2.27 N.A. 7.75

*US$ 3-month LIBOR (hedged to S$)


Legg Mason Western Asset Asian Bond Trust 100.04 24.05 Other assets 0.21 0.05 Other liabilities (0.25) (0.06)

Total 100.00 24.04



C) Underlying Fund Disclosure (Legg Mason Western Asset Asian Bond Trust) I Allocation by Country As at 31 Dec 2014 Country % of NAV MV S$ mil

Singapore 23.96 10.80 Indonesia 16.10 7.26 China 14.66 6.61 Hong Kong 11.20 5.05 South Korea 10.74 4.84 India 10.18 4.59 Philippines 1.53 0.69 Malaysia 1.00 0.45 Others* 7.70 3.47 Cash 2.93 1.32



Financials 40.33 18.18 Government 17.24 7.77 Real Estate 10.67 4.81 Energy 9.32 4.20 Miscellaneous 8.10 3.65 Utilities 4.88 2.20 Internet Services 2.97 1.34 Shipping 1.66 0.75 Diversified Resources 0.95 0.43 Retail 0.95 0.43 Cash 2.93 1.32

Total 100.00 45.08


19


Aa1 0.02 0.01 AA- 2.33 1.05 Aa3 1.44 0.65 A+ 7.21 3.25 A1 4.48 2.02 A 2.80 1.26 A2 3.26 1.47 A3 1.58 0.71 BBB+ 4.30 1.94 Baa1 0.29 0.13 BBB 6.30 2.84 Baa2 3.08 1.39 NR 15.93 7.18 Others* 44.05 19.86 Cash 2.93 1.32

Total 100.00 45.08 *Includes lower rated debt securities.


Indonesia Government Ser FR69 (Reg) 7.875% 15/04/2019 11.45 5.16 DBS Bank Ltd (Reg S) FRN 15/07/2021 3.48 1.57 Overseas Chinese Banking Corp Ltd (Reg S) 3.15% 11/03/2023 3.26 1.47 SK Broadband Co Ltd Ser (Reg S) 2.875% 29/10/2018 2.97 1.34 Overseas Chinese Banking 4% Perpetual 2.82 1.27 Industrial & Commercial Bank of China Ser EMTN (Reg S) 3.5% 23/09/2016 2.35 1.06 HSBC Singapore EMTN (Reg S) (Br) 2.25% 05/06/2015 2.33 1.05 Standard Chartered Plc (Reg S) 2.625% 31/05/2016 2.33 1.05 Bank of East Asia Ltd Ser EMTN Var 13/09/2022 2.28 1.03 DBS Bank Ltd Ser MTN (Reg S) (Br) Var 14/02/2023 2.24 1.01


Korea Monetary Stab Bond 1408 (Reg) 2.82% 02/08/2014 5.98 3.24 Axiata SPV1 Labuan Ltd Ser EMTN EMTN 3.75% (Reg S) 18/09/2014 4.24 2.30 Right Century Ltd Ser HK 1.85% 03/06/2014 2.68 1.46 DBS Banks Ltd (Reg S) (Reg) FRN 15/07/2021 2.67 1.45 MIE Holdings Corp EMTN EMTN (Reg S) 6.875% 06/02/2018 2.32 1.26 SK Broadband Co Ltd Ser (Reg S) 2.875% 29/10/2018 2.31 1.25 Oversea-Chinese Banking 4% Perp 2.28 1.24 GLL IHT Pte Ltd Set MTN (Reg S) (Br) 4.1% 13/05/2020 2.24 1.22 Sarawak International (Reg) 5.5% 03/08/2015 2.22 1.20 HSBC Singapore EMTN (Reg S) (Br) 2.25% 05/06/2015 1.91 1.04

V Exposure to Derivatives As at 31 Dec 2014 % of NAV (0.94%) Market value (S$) (423,872) Realised Gains / (Losses) (S$) -Unrealised Gains / (Losses) (S$) (423,872)


D) Other Disclosure ItemsI Expense/Turnover Ratios HSBC Insurance Asian Bond

Fund Underlying Fund



20







HSBC Insurance (Singapore) Pte. Limited Investment-linked Fund Report: HSBC Insurance Asian Dividend Equity Fund

21

HSBC Insurance Asian Dividend Equity Fund

Fund Objective

HSBC Insurance Asian Dividend Equity Fund seeks to achieve an above-benchmark dividend yield from a portfolio of Asian stocks with a focus on value and long-term capital appreciation. Fund investments are made by way of a feeder fund, which invests substantially all or all its assets in the Henderson Horizon Fund - Asian Dividend Income Fund.


The period began with a market in bullish mode asreforms across the region promised better prospects

FUND FACTS Underlying Sub-Fund Henderson Horizon Fund –

Asian Dividend Income Fund Fund Manager Henderson Global Investors

(Singapore) Ltd Launch Date 26 May 2008 CPFIS/SRS SRS CPFIS Risk Classification

N.A.


for macroeconomic data and corporate performance. China’s ‘Stock Connect’ market access, State-Owned Enterprises (SOE) Reform agenda and anti-corruption drive were some of the key themes generating interest, alongside new political leaderships in India and Indonesia. Prime Minister Modi promised wide-ranging reform in India following the first single party majority in 30 years. Indonesia’s Presidential elections were less decisive as Joko Widodo faced a constitutional contest on the results from his closest contenderfollowing a close run campaign. Korea initiated stimulus measures and the new Finance Minister outlinedreforms to increase dividend payout at companies holding excess cash. These were significant events in theregion and continued to fuel an optimistic outlook for investors.

The Fund performed well in this environment given its exposure to well-managed businesses with strong operational trends and strong balance sheets, this served to protect capital in a weak market. At a countrylevel, the Fund’s long-held underweight position in Australia and strong stock selection in Korea were key highlights contributing significantly to outperformance in the period under review. China was also a positivecontributor with strong stock performances from Netease, Bank of China and Beijing Capital International Airport, these were the 3 strongest performers in the period. Hong Kong and Taiwan, on the other hand, were the main detractors. By sector, the combination of underweight positons but positive stock selection frompositions held in Information Technology and Materials contributed significantly.


During the period the Fund continued to acquire high dividend yielding names with strong operatingperformance and attractive valuation, for example, Bharti Infratel, Hong Kong Trust, DUET Group and Vanguard International Semiconductor Corporation. The Fund also added some exposure to the China A-share market by acquiring positions in Gree Electric Appliances and Zhengzhou Yutong Bus, both stocks areattractively valued with strong balance sheets and have high dividend growth potential. To fund these,positions names with lower conviction given weaker operating performance and competition concerns weresold, namely Sembcorp Marine and Philippine Long Distance Telephone. In addition, positions in Cairn India, Taiwan Cement and Sinopec Engineering were sold as better opportunities were found in the period. CatcherTechnology was also disposed having performed strongly and reached our internal target price.

Market expectations of higher bond yields in 2014 appeared premature as global volatility led by Europeansovereign debt fears and geo-political risks stoked up investor uncertainty. However this environment shouldbe favourable for income strategies especially given the Fund’s focus on higher quality names with financial strength. Asia remains a compelling investment case, with attractive equity valuations and fundamentaleconomic strength across the region. The portfolio remains focused on the domestic strength of the Asian economies with our focus on dividend growth a key driver for underlying income and capital growth,especially in light of the stretched valuations of traditionally defensive sectors.

^ Source: Henderson Global Investors (Singapore) Ltd.


22


3-Mth(%)

6-Mth(%)

1-Year(%)

3-Year(%)

5-Year(%)

10-Year(%)

Since Inception

(%) HSBC Insurance Asian Dividend Equity Fund 3.63 3.21 6.51 34.12 21.33 N.A. 19.49

Benchmark* 3.18 2.20 8.20 33.91 23.93 N.A. 16.62


3-Year(%)

5-Year(%)

10-Year(%)

Since Inception

(%) HSBC Insurance Asian Dividend Equity Fund 10.28 3.94 N.A. 2.74 Benchmark* 10.22 4.38 N.A. 2.36

*MSCI All Countries Asia Pacific ex Japan Index

B) Fund Disclosure I Allocation by Asset Class As at 31 Dec 2014

Asset Class % of NAV MV S$ mil Henderson Horizon Fund - Asian Dividend Income Fund 100.00 2.27

Total 100.00 2.27



C) Underlying Sub-Fund Disclosure (Henderson Horizon Fund - Asian Dividend Income Fund) I Allocation by Country As at 31 Dec 2014

Country % of NAV MV S$ mil China 22.58 124.81

Australia 17.00 93.99 Taiwan 14.31 79.07 Singapore 10.16 56.17 Hong Kong 9.57 52.92 South Korea 9.13 50.44 India 4.83 26.69 Thailand 3.97 21.96 Others* 7.74 42.74 Cash 0.71 3.94


II Allocation by Industry As at 31 Dec 2014Industry % of NAV MV S$ mil

Financials 34.90 192.87 Telecommunication Services 18.82 104.04 Information Technology 11.69 64.64 Industrials 8.84 48.85 Consumer Discretionary 6.49 35.88 Materials 6.17 34.11 Utilities 5.51 30.43 Energy 5.34 29.50 Consumer Staples 1.53 8.47 Cash 0.71 3.94

Total 100.00 552.73


23

III Allocation of Debt Securities by Credit Ratings As at 31 Dec 2014 N.A.

IV Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2014% of NAV MV S$ mil

Bank of China 3.50 19.35 SK Telecom 3.08 17.00 Taiwan Semiconductor Manufacturing 3.01 16.62

Agricultural Bank of China 2.88 15.91Amcor 2.74 15.17

Vanguard International Semiconductor 2.58 14.24 Coal India 2.55 14.08 Shimao Property 2.52 13.94 HKT Trust & HKT 2.52 13.93 DUET Group 2.46 13.58

Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2013% of NAV MV S$ mil

Bank of China Ltd. 3.10 15.98 SK Telecom 3.01 15.54 Hyundai Motor 2.98 15.37 Taiwan Cement 2.90 14.95 Shanghai Industrial Holdings 2.76 14.22 SJM 2.74 14.13 Grand Korea Leisure 2.65 13.68 Sinopec Engineering Group 2.45 12.65 Charoen Pokphand Foods 2.45 12.64 Taiwan Semiconductor Manufacturing 2.41 12.45

V Exposure to Derivatives As at 31 Dec 2014% of NAV (0.28%)Market value (S$) (1,557,935)Realised Gains / (Losses) (S$) -Unrealised Gains / (Losses) (S$) -


D) Other Disclosure ItemsI Expense/Turnover Ratios HSBC Insurance Asian Dividend

Equity Fund Underlying Sub-Fund

As at 31-Dec-14 As at 31-Dec-13 As at 31-Dec-14 As at 31-Dec-13 Expense Ratio 2.25% 2.26% 1.95% 1.96% Turnover Ratio 14.09% 14.11% 80.40%* 22.53%

*Turnover Ratio calculation is based on Luxembourg GAAP.







HSBC Insurance (Singapore) Pte. Limited Investment-linked Fund Report: HSBC Insurance China Balanced Fund

24

HSBC Insurance China Balanced Fund

Fund Objective

HSBC Insurance China Balanced Fund seeks to achieve capital appreciation in the long-term by investing 70% of its assets into a diversified portfolio of equity and equity-related securities in China including Hong Kong and 30% of its remaining assets into quality investment grade bonds ofSingapore and major bond markets. The Fund invests substantially all or all its assets primarily 70% into the Deutsche China Equity Fund and 30% into the Deutsche Lion Bond Fund.

Deutsche Premier Investment Funds - DeutscheChina Equity Fund

FUND FACTS Underlying Fund 70%: Deutsche Premier

Investment Funds - Deutsche China Equity Fund 30%: Deutsche Lion Bond Fund

Fund Manager Deutsche Asset Management (Asia) Ltd

Launch Date 26 May 2008 CPFIS/SRS SRS CPFIS Risk Classification

N.A.



MSCI China index rallied in second half of 2014, as market sentiment was largely boosted by monetaryeasing measures that Chinese government took in order to support economic growth. Financials surged themost, especially banks, insurance and brokerage. Industrials rallied led by railway equipment andconstruction companies, thanks to Chinese government’s promotion of One Belt One Road strategy. Telecom also did well on strong 4G subscriber numbers. Energy stocks underperformed the most due to theslump in crude oil price. Sectors with defensive growth such as IT and consumer were under selling pressureas investors raise funds to switch into financials. Our underweight in energy and consumer staplescontributed positively while our overweight in consumer discretionary and IT stocks hurt the performanceduring the period.


Although December Purchasing Managers Index (PMI) number indicated relatively weak economic momentum, we believe some recovery is on the way after a series of loosening measures taken bygovernment in the past month, and monetary policy will remain supportive in coming months to maintain a healthy economic growth. We continue to favor stocks which are beneficiaries of credit easing, mainlyfinancials, property, and property related construction materials. At the same time, we focus on companieswhich benefit from government’s industry policies such as railway equipment, nuclear power equipment, andState-Owned Enterprises (SOE) reform plays. We would also add to good-quality growth stocks which were sold off in past few months during beta rally, especially healthcare, alternatively energy, IT stocks that have potential for upside surprise in their earnings.

Deutsche Lion Bond Fund

*Please refer to HSBC Insurance Singapore Bond Fund on page 89 for the Investment and Market Reviewand the Market Outlook and Investment Strategy.



3-Mth(%)

6-Mth(%)

1-Year(%)

3-Year(%)

5-Year(%)

10-Year(%)

SinceInception

(%) HSBC Insurance China Balanced Fund 5.72 8.63 5.10 25.22 2.55 N.A. 13.21 Benchmark* 7.98 11.01 9.64 29.41 9.05 N.A. 19.05


25


3-Year(%)

5-Year(%)

10-Year(%)

SinceInception

(%) HSBC Insurance China Balanced Fund 7.79 0.50 N.A. 1.90 Benchmark* 8.97 1.75 N.A. 2.68

*70% MSCI China Total Return Index, with Gross Dividends reinvested and 30% 6-month SingaporeInter-bank Offer Rate (SIBOR) minus 12.5 basis points.


Asset Class % of NAV MV S$ mil Deutsche Premier Investment Funds – Deutsche China Equity Fund 72.14 1.45 Deutsche Lion Bond Fund 27.86 0.56

Total 100.00 2.01



C) Underlying Fund Disclosure (Deutsche Premier Investment Funds – Deutsche China Equity Fund) I Allocation by Country As at 31 Dec 2014

Country % of NAV MV S$ mil China 55.49 236.60 Cayman Islands 24.15 102.99 Hong Kong 10.85 46.26 Bermuda 7.18 30.63 Jersey 0.40 1.72 Other net assets 1.93 8.22

Total 100.00 426.42


Banks 19.12 81.53 Insurance 8.98 38.29 Internet Service 7.77 33.15 Real Estate 7.36 31.37 Energy 4.30 18.32 Medical - Drugs 3.90 16.61 Cement 3.88 16.53 Oil & Gas 3.57 15.21 Building/Construction Material 3.56 15.20 Pharmaceuticals 2.82 12.01 Healthcare 2.74 11.67 Others* 32.00 136.53




26


Tencent Holdings Limited 6.93 29.53 China Construction Bank H Shares 6.47 27.59 Industrial and Commercial Bank of China H Shares 4.61 19.67 China Life Insurance Company H Shares 4.35 18.56 China Overseas Land & Investment Limited 3.60 15.37 Bank of China Limited H Shares 3.26 13.92 Ping An Insurance (Group) Company of China Limited H Shares 3.06 13.05 BBMG Corporation H Shares 2.97 12.68 Chongqing Rural Commercial Bank Company Limited H Shares 2.87 12.23 Sihuan Pharmaceutical Holdings 2.86 12.21


Tencent Holdings Ltd. 8.76 39.88 China Construction Bank H Shares 5.39 24.57 Industrial and Commercial Bank of China H Shares 4.98 22.66 CSPC Pharmaceutical Group Ltd. 3.68 16.77 Bank of China Limited H Shares 3.37 15.35 China Life Insurance Company H Shares 2.90 13.23 China Petroleum & Chemical Co. Ltd. H Shares 2.67 12.15 China Modern Dairy Holdings 2.66 12.12 Ping An Insurance (Group) Co. of China Ltd. H Shares 2.58 11.74 China State Construction International Holdings Ltd. 2.21 10.06

V Exposure to Derivatives As at 31 Dec 2014% of NAV -Market value (S$) -Realised Gains / Losses (S$) (407,593)Unrealised Gains / Losses (S$) -


*HBSC Insurance China Balanced Fund invests 30% into Deutsche Lion Bond Fund. Please refer toHSBC Insurance Singapore Bond Fund on page 90 for the underlying fund disclosure on Deutsche LionBond Fund under Section C.


As at 31-Dec-14As at 31-Dec-13 As at 31-Dec-14As at 31-Dec-13Underlying Fund Level

Deutsche China Equity Fund 1.72% 1.70% 95.29% 173.37% Deutsche Lion Bond Fund 0.69% 0.67% 46.68% 30.08%

ILP Sub-Fund LevelHSBC Insurance China Balanced Fund 1.61% 1.59% 20.68% 22.99%

II Related-Party Transactions N.A. III Material Information that will adversely impact the valuation of the ILP sub-fund N.A.


27

IV Soft Dollar Commission AgreementSoft dollar commissions are benefits accorded to Manager by their brokers, usually in the form ofresearch, advisory, analysis and data services, computer hardware or software used for and/or in supportof the investment process.

The Manager’s policy on soft dollar commissions is as follows:

- the goods and services received would assist in the provision of investment services and advices orrelated services to the unit trust; - transactions are executed on the best available terms; and - the Manager does not engage in unnecessary trades in order to qualify for soft dollar commissions.

Soft dollar commissions were received from the Manager’s panel of soft dollar brokers which executedtransactions for the unit trust and other funds managed by the Managers.




HSBC Insurance (Singapore) Pte. Limited Investment-linked Fund Report: HSBC Insurance China Equity Fund

28

HSBC Insurance China Equity Fund

Fund Objective

HSBC Insurance China Equity Fund seeks to provide capital growth primarily through investment in equity and equity related securities of companies which are headquartered in and/or listed in or have a substantial business exposure to the People’s Republic of China (“China”). Fund investments are made by way of a feeder fund through the Underlying Sub-Fund, Schroder China Opportunities Fund.


Spurred on by further stimulus measures, Chinese and Hong Kong equity markets posted strong returns in the second half of the year. Market sentiment was buoyed by the Chinese government’s favorable real

FUND FACTS Underlying Sub-Fund Schroder International

Opportunities Portfolio - Schroder China Opportunities Fund

Fund Manager Schroder Investment Management (Singapore) Ltd

Launch Date 13 Nov 2003 CPFIS/SRS OA/SRS CPFIS Risk Classification

Higher Risk - Narrowly Focused – Country – Greater China


estate policy adjustments such as the ease on previous restrictions and constraints on lending for additionalproperty purchase as well as lowering down payments and mortgage rates for second home buyers. Chineseequities surged following the first interest rate cut in two years when the People’s Bank of China (PBoC)lowered its one-year benchmark lending rate to 5.6% and slashed its one-year deposit rate to 2.75%. This triggered expectation of further rate cuts in 2015, and led to the rally of higher beta sectors including brokers and banks albeit with a disregard for longer term fundamentals.

The fund posted a strong positive return and outperformed the benchmark over the review period. Stockselection in industrials was the main contributor, as was the underweight position in the energy sector. Railway related companies were the leading industrial contributors where China’s top trainmakers CNRCorporation and CSR Corporation saw their shares surge as a result of their proposed merger. Also, ouroverweight position in China State Construction Engineering surged following the promotion of the Chinesegovernment’s ‘New Silk Road’ project in which the company looks set to be a key beneficiary. Conversely,underweight in financials, mainly in banks, and negative stock selection in materials sector were the main detractors where for the former, it rose on the surprise interest rate cut.


Chinese GDP growth in 2014 slowed as expected amidst economic rebalancing efforts and the ongoing anti-corruption campaign. Going into 2015, growth can be expected to moderate further against a backdrop ofcontinued reforms and a property market slowdown. A benign liquidity environment with room for interest ratecuts (as we have seen recently) and targeted areas of policy support are also likely as China seeks to steerits massive economy away from the after-effects of its credit excesses but at the same time tries to avoid a financial crisis or destabilization of the economy and broader society in the process. Risks in the shadow banking system have not subsided. Economic growth has slowed in the wake of economic rebalancing andthe anti-corruption campaign, and downward pressures on revenues and margins remain. A pickup in Non-Performing Loans (NPLs) and bankruptcies in 2015 are still therefore potentially likely scenarios, although wedon’t expect this to lead to a widespread systematic risk event.

Reforms and policies will continue to feature significantly in China, and we still expect to find select opportunities at the stock level – through evaluating the impact of policies and developments on specificbusinesses, instead of investing thematically and by sectors without delving into company specific dynamicsand fundamentals. We continue to find opportunities in insurance and consumption, as well as internet andservices, as China tries to shift to a consumption-led economy, and are looking into nuclear energy related companies. Policy and governmental support will also continue to favour healthcare, environmental protection and clean energy related industries.

^ Source: Schroder Investment Management (Singapore) Ltd


29


3-Mth(%)

6-Mth(%)

1-Year(%)

3-Year(%)

5-Year(%)

10-Year(%)

Since Inception

(%) HSBC Insurance China Equity Fund 10.27 16.25 13.18 42.66 2.23 97.10 101.45 Benchmark* 11.36 15.53 13.31 40.36 10.67 176.55 201.97


3-Year(%)

5-Year(%)

10-Year(%)

Since Inception

(%) HSBC Insurance China Equity Fund 12.57 0.44 7.02 6.53 Benchmark* 11.96 2.05 10.71 10.50

*The benchmark was changed from MSCI China Index to MSCI China 10/40 Capped Net Index on 2 February 2009 to take into account the Fund’s investment constraints. With effect from 1 March 2011, the benchmark of the Fund will be changed from MSCI China 10/40 Capped Net Index to MSCI TR China Gross. With effect from 2 April 2013, the benchmark of the Fund will be changed from MSCI TR China Gross to the MSCI TR China Net in order to provide a fairer comparison between the performance of the Fund, which is reported net of expenses (including tax), and the performance of the benchmark, which is reported net of tax. The performance figures are based on the new benchmark MSCI TR China Net.


Schroder International Opportunities Portfolio - Schroder China Opportunities Fund 100.00 85.87

Total 100.00 85.87

II Fund Movement (01 Jul 2014- 31 Dec 2014)S$

Subscription 6,173,189Redemption 6,634,807

C) Underlying Sub-Fund Disclosure (Schroder International Opportunities Portfolio - Schroder China Opportunities Fund) I Allocation by Country As at 31 Dec 2014 Country % of NAV MV S$ mil

Luxembourg* 98.90 95.30Other net assets 1.10 1.06

Total 100.00 96.36*HSBC Insurance China Equity Fund feeds wholly into Schroder China Opportunities Fund (a feeder fundinvesting into a corresponding sub-fund in the Schroder International Selection Fund (ISF), an open-ended investment company corporated in Luxembourg).

II Allocation by Industry As at 31 Dec 2014N.A. (The fund invests wholly into an underlying collective investment scheme).


IV Top Ten Holdings of Underlying Sub-Fund* As at 31 Dec 2014% of NAV MV S$ mil

Schroder International Selection Fund - China Opportunities C Accumulation Share Class 98.90 95.30


30

Top Ten Holdings of Underlying Sub-Fund* As at 31 Dec 2013% of NAV MV S$ mil

Schroder International Selection Fund - China Opportunities C Accumulation Share Class 98.95 86.21

*The rest of the holdings of the underlying sub-fund are cash-in-transits and accruals.

V Exposure to Derivatives As at 31 Dec 2014% of NAV -Market value (S$) -Realised Gains / (Losses) (S$) (8,088)Unrealised Gains / (Losses) (S$) -


D) Other Disclosure Items I Expense/Turnover Ratios HSBC Insurance China Equity

Fund Underlying Sub-Fund




IV Soft Dollar Commission Arrangement The Fund invests substantially into the Schroder International Selection Fund China Opportunities. In themanagement of the underlying fund, the manager may accept soft dollar commissions from, or enter intosoft dollar arrangements with, stockbrokers who execute trades on behalf of the underlying fund and thesoft dollars received are restricted to the following kinds of services:

(i) research, analysis or price information; (ii) performance measurement; (iii) portfolio valuations; and (iv) administration services.

In the management of the Fund, the Manager currently does not receive or enter into any soft dollarcommissions or arrangements.




HSBC Insurance (Singapore) Pte. Limited Investment-linked Fund Report: HSBC Insurance Climate Change Equity Fund

31

HSBC Insurance Climate Change Equity Fund

Fund Objective

HSBC Insurance Climate Change Equity Fundsseeks to provide capital growth primarily throughinvestment in equity securities of worldwide issuerswhich will benefit from efforts to accommodate orlimit the impact of global climate change. Fundinvestments are made by way of a feeder fund,which invests substantially all or all of its assets inthe Schroder International Selection Fund Global Climate Change Equity.



Selection Fund - Global Climate Change Equity


Launch Date 6 Oct 2008 CPFIS/SRS SRS CPFIS Risk Classification

N.A.


H2 2014 saw global equity markets struggle in a period characterised by concerns about global growth,anxiety around the timing of interest rate rises in the US, ongoing geopolitical tension and an unrelenting slide in the oil price. Volatility increased throughout the period, coincident with the end of an extraordinaryperiod of visibility into policymaker decisions. Markets took heart from the ongoing strength in the USeconomy and policy action in Japan, however.

The last 6 months have seen some important climate developments taking place. US president BarackObama indicated his strongest commitment to tackling climate change to date at a United Nations (UN)climate summit in New York, while China reiterated its carbon intensity target and also announced policies and controls which may help the country’s carbon emissions peak in 2030 rather than 2050. Meanwhile, theUS and China announced a landmark agreement to fight climate change by implementing new greenhouse gas emissions targets. The agreement represents a major advancement in their relations, with the twocountries previously clashing and accusing each other of impeding a global agreement.


The global recovery is uneven. Economic fundamentals remain positive in the US but uncertainty lingers inEurope, Japan and most of the emerging economies. Hence, we expect 2015 to be a period where monetarypolicy diverges between the US and the rest of the world. This is likely to lead to higher volatility in many asset classes which should offer plenty of opportunities for stockpicking and we will need to be nimble to takeadvantage of the opportunities that present themselves. Also, with the UN Climate Summit in December2015, we expect climate change issues to gradually rise up politicians’ and investors’ agendas as weprogress through the year.

Authorities globally continue to focus on de-carbonising the global economy and hence, the growth outlookfor climate change themes remains strong. Of these themes, we believe that the returns on energy efficiencyinvestments are particularly compelling in the short-term and around half of the portfolio’s holdings are exposed to this trend. Also, we see fuel efficient technologies as an area with major structural growth potential where countries such as Japan and China are adopting renewable energy practices at a rapid pace,representing another significant investment opportunity. We also believe that gas demand is at an inflection point and expect to see higher gas prices especially in the US as the production of associated gas is likely todecline in line with a reduction in oil-producing activity, to the benefit of our holdings. Investments in environmental resources have been selective given high levels of inventories in most agricultural markets,which has put pressure on the related supply chain and depressed farm incomes.



32


3-Mth(%)

6-Mth(%)

1-Year(%)

3-Year(%)

5-Year(%)

10-Year(%)

Since Inception

(%) HSBC Insurance Climate Change Equity Fund 5.07 0.60 0.27 43.63 21.28 N.A. 73.22

Benchmark* 4.95 5.05 10.13 57.35 53.42 N.A. 89.70


3-Year(%)

5-Year(%)

10-Year(%)

Since Inception

(%) HSBC Insurance Climate Change Equity Fund 12.83 3.93 N.A. 9.28 Benchmark* 16.31 8.94 N.A. 10.90

*MSCI World Net (SGD)


Schroder International Selection Fund - Global Climate Change Equity 100.00 2.30 Total 100.00 2.30

II Fund Movement (01 Jul 2014- 31 Dec 2014)S$

Subscription 310,375Redemption 112,053

C) Underlying Sub-Fund Disclosure (Schroder International Selection Fund - Global Climate Change Equity)I Allocation by Country As at 31 Dec 2014 Country % of NAV MV S$ mil

United States 57.05 167.17 Japan 14.41 42.23 France 5.98 17.52 Germany 4.00 11.72 United Kingdom 2.76 8.09 Sweden 2.66 7.79 Australia 1.88 5.51 Canada 1.85 5.42 Others* 8.44 24.73 Cash 0.97 2.84



Industrials 34.75 101.83 Consumer Discretionary 20.76 60.83 Information Technology 19.02 55.73 Materials 8.27 24.23 Utilities 6.42 18.81 Consumer Staples 3.89 11.40 Financials 3.77 11.05 Energy 2.15 6.30 Cash 0.97 2.84

Total 100.00 293.02



33


eBay 3.82 11.19 Tractor Supply 3.16 9.26 Trimble Navigation 2.85 8.35 Sealed Air 2.80 8.20 Continental 2.74 8.03 Hexagon 2.66 7.79 Muelier Water Products 2.58 7.56 Sekisui House 2.47 7.24 Daikin industries 2.46 7.21 Seven & I Holdings 2.45 7.18


eBay 3.27 9.64 Owens Corning 2.86 8.43 Sealed Air 2.81 8.29 General Electric 2.53 7.46 Quanta Services 2.52 7.43 BG Group 2.45 7.22 Hitachi 2.42 7.14 Trimble Navigation 2.42 7.14 Calpine 2.41 7.11 Osram Licht 2.03 5.99

V Exposure to Derivatives As at 31 Dec 2014% of NAV (0.20%)Market value (S$) (579,163)Realised Gains / (Losses) (S$) 22,003,417Unrealised Gains / (Losses) (S$) (579,163)


D) Other Disclosure Items I Expense/Turnover Ratios HSBC Insurance Climate Change


As at 31-Dec-14 As at 31-Dec-13 As at 31-Dec-14 As at 31-Dec-13 Expense Ratio 1.93% 1.99% 1.93% 1.97% Turnover Ratio 14.44% 15.62% 65.25% 61.56% II Related-Party Transactions

N.A.


IV Soft Dollar Commission Arrangement Each Investment Manager may enter into soft commission arrangements only where there is a direct and identifiable benefit to the clients of the Investment Manager, including the relevant Sub-Fund, and where the Investment Manager is satisfied that the transactions generating the soft commissions are made in good faith, in strict compliance with applicable regulatory requirements and in the best interests of the relevant Sub-Fund. Any such arrangements must be made by the Investment Manager on terms commensurate with best market practice.


For more information, please contact your financial consultant, call our Customer Service Hotline on 6225 6111, or visit our web site at www.insurance.hsbc.com.sg.

HSBC Insurance (Singapore) Pte. Limited Investment-linked Fund Report: HSBC Insurance Emerging Europe Equity Fund

34

HSBC Insurance Emerging Europe Equity Fund

Fund Objective

HSBC Insurance Emerging Europe Equity Fundseeks to provide capital growth and incomeprimarily through investment in equity securities ofCentral and Eastern European companies includingthe markets of the former Soviet Union and theMediterranean emerging markets. The portfoliomay, to a limited extent, seek exposure to themarkets of Northern Africa and the Middle East.Fund investments are made by way of a feederfund, which invests substantially all or all of itsassets in the Schroder International Selection FundEmerging Europe.


Selection Fund - Emerging Europe



N.A.



The fund outperformed, with both country allocation and stock selection supporting gains. From a countryperspective, an off-benchmark allocation to the UAE, an overweight to Turkey towards the end of the period,and an underweight to Russia were the key contributors. In contrast, an underweight to Poland detracted. At a stock level, selection in Russia was a major of relative returns. An off-benchmark allocation to IT name Luxoft was the most additive position. As an exporter, Luxoft is shielded from Russian sanctions since the majority of its earnings are derived from outside Russia, mainly in Europe and the US. Being overweight toindependent oil company Lukoil and gas company Surgunteftegaz were among the largest contributors. Anoverweight to exporter, Norilsck Nickel and an underweight to state controlled oil company Gazprom alsoadded value. Stock selection in Poland was also positive. Holding insurance company PZU overweight wasthe most additive position as the stock performed well in a falling interest rate environment. A zero-weight to miner JSW also augmented returns amid structural concerns for the mining industry in Poland. Stockselection in Greece was positive, primarily an overweight to defensive play Open Trade Equity (OTE), a telecoms company, a zero-weight to Eurobank Ergasias and an overweight to retailer Jumbo. The fundbenefitted from positive Amercian Depository Receipt (ADR) vs local line premium/discount timing effects during the period. These effects are expected to even out over time.


The outlook for Emerging Markets (EM) Europe is supported by attractive valuations and a recovery in growth from key trading partner the eurozone. The Ukraine situation remains a headwind for performance inthe region. We are overweight to Turkey where weaker oil prices should support a considerable easing ofinflation, likely prompting a cut in domestic interest rates to boost growth. We hold a neutral position inGreece. The economy is improving and valuations are reasonable but we remain sceptical towards the medium-term macro outlook and political risk remains. We have off-benchmark positions in Kazakhstan, the UAE, Qatar, Georgia and Romania. We are underweight to Poland and the Czech Republic on earningsconcerns. Due to stock specific reasons we maintain a small underweight position in Hungary. In Russia,valuations are attractive at around 3X forward price-to-earnings, an approximate 70% discount to wider EMs. However, given ongoing deterioration in economic fundamentals and elevated geopolitical, sanctions and corporate governance risks, we are underweight.

We made one change to our positioning in early January, trimming our off-benchmark allocation to the UAE. The economy continues to recover but given a backdrop of falling oil prices, the market is susceptible to further falls. We stay overweight to Turkey; the economy has a structural weakness owing to a high andpoorly funded current account deficit and high levels of external debt, meaning it is sensitive to US monetarypolicy changes. However nearer term pressure has diminished. Meanwhile, weaker oil prices should supporta considerable easing of inflation, which is likely to prompt a cut in domestic interest rates to boost growth.Given this backdrop we believe valuations are attractive at these levels.

^ Source: Schroder Investment Management (Singapore) Ltd.


35


3-Mth(%)

6-Mth(%)

1-Year(%)

3-Year(%)

5-Year(%)

10-Year(%)

SinceInception

(%)HSBC Insurance Emerging Europe Equity Fund (14.19) (21.56) (25.20) (0.10) (17.03) N.A. 37.70

Benchmark* (16.82) (25.35) (26.03) (12.23) (27.75) N.A. 37.69


3-Year(%)

5-Year(%)

10-Year(%)

SinceInception

(%) HSBC Insurance Emerging Europe Equity Fund (0.03) (3.66) N.A. 5.68 Benchmark* (4.26) (6.30) N.A. 5.68

*MSCI EM Europe 10/40 Net (TR)


Schroder International Selection Fund - Emerging Europe 99.87 7.52 Other assets 0.27 0.02 Other liabilities (0.14) (0.01)

Total 100.00 7.53

II Fund Movement (01 Jul 2014- 31 Dec 2014) S$

Subscription 1,515,609Redemption 288,656

C) Underlying Sub-Fund Disclosure (Schroder International Selection Fund – Emerging Europe) I Allocation by Country As at 31 Dec 2014 Country % of NAV MV S$ mil

Russian Federation 38.23 232.21 Turkey 26.75 162.48 Poland 16.66 101.20 Greece 6.93 42.09 Czech Republic 2.42 14.70 United States 2.28 13.85 Hungary 2.04 12.39 Georgia 1.67 10.14 Others* 2.09 12.71 Cash 0.93 5.65

Total 100.00 607.42 *Includes other countries and net assets and liabilities.


Financials 41.21 250.32 Energy 25.04 152.10 Telecommunication services 8.43 51.21 Materials 7.04 42.76 Consumer Staples 4.99 30.31 Consumer Discretionary 4.19 25.45 Industrials 3.83 23.26 Information Technology 2.78 16.89 Utilities 1.57 9.54 Cash 0.93 5.65 Other net assets and liabilities (0.01) (0.07)

Total 100.00 607.42


36



Lukoil 9.89 60.07 MMC Norilsk Nickel 6.54 39.72 Akbank 6.41 38.94 Surgutneftegaz 4.83 29.34 Turkcell Iletisim Hizmetleri 4.53 27.52 Gazprom 4.41 26.79 Powszechny Zaklad Ubezpieczen 4.41 26.79 PKO Bank Polski 4.08 24.78 Magnit 3.73 22.66 Turkiye Is Bankasi 3.42 20.77


Sberbank 9.81 148.25 Lukoil 8.60 129.96 PKO Bank Polski 6.79 102.61 Gazprom 6.04 91.27 Magnit 5.96 90.07 Mobile Telesystems 4.44 67.10 Surgutneftegaz 4.28 64.68 Tatneft 4.09 61.81 Powszechny Zaklad Ubezpieczen 3.80 57.42 NovaTek 3.71 56.06

V Exposure to Derivatives As at 31 Dec 2014% of NAV -Market value (S$) -Realised Gains / (Losses) (S$) 332,646Unrealised Gains / (Losses) (S$) -


D) Other Disclosure Items I Expense/Turnover Ratios HSBC Insurance Emerging Europe


As at 31-Dec-14 As at 31-Dec-13As at 31-Dec-14 As at 31-Dec-13 Expense Ratio 2.02% 2.03% 1.98% 1.99% Turnover Ratio 9.33% 14.55% 83.43% 85.51% II Related-Party Transactions

Cash balances maintained with HSBC Bank as at 31 Dec 2014 amounts to $6,696.


IV Soft Dollar Commission Arrangement Each Investment Manager may enter into soft commission arrangements only where there is a direct and identifiable benefit to the clients of the Investment Manager, including the relevant Sub-Fund, and where the Investment Manager is satisfied that the transactions generating the soft commissions are made ingood faith, in strict compliance with applicable regulatory requirements and in the best interests of the relevant Sub-Fund. Any such arrangements must be made by the Investment Manager on termscommensurate with best market practice.


37




HSBC Insurance (Singapore) Pte. Limited Investment-linked Fund Report: HSBC Insurance Emerging Markets Equity Fund

38

HSBC Insurance Emerging Markets Equity Fund

Fund Objective

HSBC Insurance Emerging Markets Equity Fund seeks to achieve capital growth primarily through investment in equity securities of emerging markets companies. Fund investments are made by way of a feeder fund, which invests substantially all, or all its assets in the Schroder Emerging Markets Fund.


Country allocation was positive. The underweights to Russia and Malaysia, both of which underperformed added value; as did the overweight to China which outperformed. Despite generally weak data releases, the Chinese market was supported by a surprise interest rate cut by the central bank. The move was perceived as a signal of commitment by theauthorities to support the economy which boosted

FUND FACTS Underlying Sub-Fund Schroder International Choice

Portfolio - Schroder Emerging Markets Fund


Launch Date 6 Nov 2006 CPFIS/SRS* SRS CPFIS Risk Classification

N.A


*Note: With effect from 1 Oct 2008, the Fund has ceased to accept new monies under CPFIS.

investor sentiment. The Russian market sharply lost value owing to ongoing deterioration in the economylinked to sanctions and significant weakness in the oil price. The ruble weakened significantly versus the USdollar. Malaysia also underperformed given a combination of slowing economic growth and the headwind oflower energy prices. This was partially offset by the underweight to South Africa which outperformed and theoverweight to Korea which underperformed, both of which detracted value. South Africa performed on an improving growth outlook supported by lower energy prices. South Korea struggled owing to a combination ofsoft global growth, including weak import demand from key trading partner China, and relative Won strengthversus a sharply depreciating Yen which undermined export competitiveness.

Stock selection was negative. It was negative in China (o/w Sinopec), Korea (o/w LG Chemical and HyundaiMotor) and Mexico (o/w Cemex; u/w America Movil). This was somewhat offset by positive selection in India(o/w Axis Bank and Lupin), Russia (o/w domestic stocks and u/w materials), Thailand (o/w Kasikornbank andAIS; u/w PTT Exp. &Prod.) and Qatar (o/w QNB).


Sub-trend global economic activity and the uncertain outlook for emerging exports have resulted in investors becoming increasingly bearish towards Global Emerging Markets (GEMs). This has led the MSCI Emerging Markets (EM) index to underperform the MSCI world index in 2014, the first back-to-back decline in relative performance since 1998, and dedicated GEM funds overall have experienced net outflows. Undoubtedly thechallenges facing GEM should not be underestimated, not least should the trade weighted USD continue tostrengthen significantly, but we believe investors run the risk of becoming excessively pessimistic. The sharp fall in energy prices should be a positive catalyst for global growth and alleviate inflationary pressure whichshould overall be a positive for GEMs. The energy price falls look to be the result of increased supply ratherthan reflecting a global downturn and we do not believe the stimulatory effect of lower energy costs on globalconsumption demand, which is to the benefit of GEMs exporters, has been fully considered by the market.Our outlook for GEMs is therefore cautiously constructive. We are currently positioned with a portfolio beta ofaround 1 and we are fully invested, although have a net underweight exposure to the more cyclical sectors(materials and energy combined). Generally speaking, we have overweight positions in markets which could benefit from potential reformist policy and markets which are beneficiaries of a pick-up in manufacturing and industrial exports and weak energy prices.



39


3-Mth(%)

6-Mth(%)

1-Year(%)

3-Year(%)

5-Year(%)

10-Year(%)

SinceInception

(%) HSBC Insurance Emerging Markets Equity Fund (0.55) (1.84) 0.15 13.97 (3.72) N.A. 7.02

Benchmark* (0.78) (2.04) 2.65 15.10 3.09 N.A. 16.84


3-Year(%)

5-Year(%)

10-Year(%)

SinceInception

(%) HSBC Insurance Emerging Markets Equity Fund 4.45 (0.75) N.A. 0.84 Benchmark* 4.80 0.61 N.A. 1.94

*MSCI Emerging Markets Index


Schroder International Choice Portfolio - Schroder Emerging Markets Fund 100.00 32.16 Total 100.00 32.16



C) Underlying Sub-Fund Disclosure (Schroder International Choice Portfolio - Schroder Emerging Markets Fund)

I Allocation by Country As at 31 Dec 2014 Country % of NAV MV S$ mil


Total 100.00 94.32*HSBC Insurance Emerging Markets Equity Fund feeds wholly into Schroder Emerging Markets Fund (afeeder fund investing into a corresponding sub-fund in the Schroder International Selection Fund (ISF), anopen-ended investment company incorporated in Luxembourg).




Schroder International Selection Fund - Emerging Markets A Accumulation Share Class 98.78 93.17


Schroder International Selection Fund - Emerging Markets A Accumulation Share Class 98.74 93.69



40

V Exposure to Derivatives As at 31 Dec 2014% of NAV -Market value (S$) -Realised Gains / (Losses) (S$) (8,077)Unrealised Gains / (Losses) (S$) -


D) Other Disclosure Items I Expense/Turnover Ratios HSBC Insurance Emerging

Markets Equity Fund Underlying Sub-Fund


N.A.


IV Soft Dollar Commission Arrangement The Fund invests substantially into the Schroder International Selection Fund Emerging Markets. In the management of the underlying fund, the manager may accept soft dollar commissions from, or enter into soft dollar arrangements with, stockbrokers who execute trades on behalf of the underlying fund and the soft dollars received are restricted to the following kinds of services:






HSBC Insurance (Singapore) Pte. Limited Investment-linked Fund Report: HSBC Insurance Ethical Global Equity Fund

41

HSBC Insurance Ethical Global Equity Fund

Fund Objective

HSBC Insurance Ethical Global Equity Fund seeks to generate capital appreciation by way of a feederfund, which invests substantianlly all or all its assets into the Franklin Templeton Shariah Funds –Templeton Shariah Global Equity Fund. The Underlying Sub-Fund invests principally in Shariah-compliant equity and equity-related securities including common stocks of companies located anywhere in the world, including Emerging Markets.


2014 was a challenging year for global equity markets generally, though developed-market equities fared somewhat better than their emerging-market counterparts. Following a period of tentative optimism that corporate fundamentals would resume driving share prices, investor focus shifted back to macroeconomic and political factors in 2014. Themost significant story in 2014, therefore, was the

FUND FACTS Underlying Sub-Fund Franklin Templeton Shariah

Funds - Templeton Shariah Global Equity Fund

Fund Manager Templeton Asset Management Ltd

Launch Date 29 Sep 1995 CPFIS/SRS OA/SRS CPFIS Risk Classification

Higher Risk – Broadly Diversified


Note: With effect from 18 Nov 2013, the underlying sub-fund of HSBC Insurance Ethical Global Equity Fund, HSBC Amanah Funds - HSBC Amanah Global Equity - Z Class was replaced with Franklin Templeton Shariah Funds – Templeton Shariah Global Equity Fund.

deepening divergence between the United States and the rest of the world. In the U.S., economic growth accelerated, the dollar strengthened and stocks made new highs about once a week on average. Elsewhere, across Europe, Japan and many emerging markets, economic growth moderated, currencies weakened and equity returns were muted (especially in U.S. dollar terms). Numerous factors contributed to the changing market conditions. In Europe, disinflationary pressures intensified and political discord resurfaced; in Japan,extraordinary monetary policy failed to prevent a triple-dip recession; and in diverse emerging markets, economic growth generally cooled as commodities and currencies came under pressure. Two majorexogenous events further deepened the divide between U.S. and international markets. The price of oil nearly halved, favoring the consumer-driven U.S. economy at the expense of oil-exporting nations abroad; and Russia invaded Ukraine, marring European business confidence and reminding investors of the riskssometimes associated with investing in emerging markets.


The final quarter of 2014 ended a challenging year in which investors appeared to focus more onmacroeconomic and political issues than company fundamentals. We believe increasing “financial repression” (there were a significant number of easing moves from global central banks in the last twomonths of 2014 alone) has largely suspended the process of value recognition in recent years. Regionally,Europe remains a focus for us. Europe has been hampered by the limitations of its banking system and political structure, but we believe the generally positive results of the system’s comprehensive assessmentand the formation of a pan-European banking union supervised by the European Central Bank (ECB) should go a long way in restoring confidence and improving liquidity in the European financial system. Selectemerging markets have also become more interesting following two years of marked underperformanceversus their developed world peers. We have found selective value in China, though the environment remains challenging given significant economic imbalances and a highly politicized business environment.Elsewhere in Asia, value appears to us to remain relatively scarce in Japan, where many larger companies are conglomerates with secondary positions in industries we find unattractive. Finally, we believe the USappears to be furthest along in its recovery, but this is a deep and diverse market and we are still findingwhat we view as bargains at the stock level. We may not know where the market is going in 2015, but we areconfident in our assessment of bottom-up value opportunities.

^ Source: Templeton Asset Management Ltd.


42


3-Mth(%)

6-Mth(%)

1-Year(%)

3-Year(%)

5-Year(%)

10-Year(%)

SinceInception

(%) HSBC Insurance Ethical Global Equity Fund (2.50) (6.99) (1.57) 22.75 20.88 12.80 21.70

Benchmark* 2.13 1.34 7.86 40.05 40.43 66.95 N.A.**


3-Year(%)

5-Year(%)

10-Year(%)

SinceInception

(%) HSBC Insurance Ethical Global Equity Fund 7.07 3.87 1.21 1.02 Benchmark* 11.88 7.03 5.26 N.A.**

*MSCI AC World Islamic Index. The performance figures are based on the new benchmark MSCI AC World Islamic Index, due to change in the underlying sub-fund. **The new benchmark MSCI AC World Islamic Index is not available when HSBC Insurance Ethical Global Equity Fund was incepted.


Franklin Templeton Shariah Funds - Templeton Shariah Global Equity Fund 100.06 67.59Other assets 0.13 0.09Other liabilities (0.19) (0.13)

Total 100.00 67.55



C) Underlying Sub-Fund Disclosure (Franklin Templeton Shariah Funds - Templeton Shariah Global Equity Fund)


United States 27.60 21.33United Kingdom 8.58 6.63France 8.08 6.24Germany 7.88 6.09Japan 7.22 5.58China 5.82 4.50Norway 5.34 4.13Switzerland 5.24 4.05South Korea 3.99 3.08Others* 20.25 15.64

Total 100.00 77.27*Includes other countries.


43


Health Care 22.88 17.68Energy 20.06 15.50Consumer Discretionary 12.46 9.63Industrials 11.84 9.15Information Technology 11.49 8.88Consumer Staples 8.71 6.73Materials 8.48 6.55Telecommunication Services 4.08 3.15

Total 100.00 77.27



Pfizer Inc. 3.16 2.44 CVS Health Corp. 3.04 2.35 Novartis AG 2.55 1.97 Hewlett-Packard Co 2.30 1.78 Bayer AG 2.26 1.75 Walgreens Boots Alliance Inc. 2.16 1.67 Chevron Corporation 2.11 1.63 Sanofi 1.99 1.54 Merck & Co Inc. 1.99 1.54 Samsung Electronics Co Ltd 1.94 1.50


Vodafone Group PLC 3.27 3.21Pfizer Inc. 3.15 3.09Merck & Co Inc. 2.54 2.49Chevron Corporation 2.50 2.45CVS Caremark Corp. 2.29 2.25Sanofi 2.28 2.24Novartis AG 2.27 2.23BHP Billiton PLC 2.25 2.21Halliburton Co 2.20 2.16Siemens AG 1.92 1.88

V Exposure to Derivatives As at 31 Dec 2014N.A.


D) Other Disclosure Items I Expense/Turnover Ratios HSBC Insurance Ethical Global






44

IV Soft Dollar Commission Arrangement The Management Company and/or the Investment Managers may enter, with brokers/dealers that areentities and not individuals, into soft commission arrangements only where there is a direct andidentifiable benefit to the clients of the Management Company and/or the Investment Managers, including the Company, and where the Management Company and/or the Investment Managers are satisfied thatthe transactions generating the soft commissions are made in good faith, in strict compliance withapplicable regulatory requirements and in the best interest of the Company. Any such arrangement mustbe made by the Management Company and/or the Investment Managers on terms commensurate withbest market practice. The use of soft commissions shall be disclosed in the periodic reports.



HSBC Insurance (Singapore) Pte. Limited Investment-linked Fund Report: HSBC Insurance Ethical Global Sukuk Fund

45

HSBC Insurance Ethical Global Sukuk Fund

Fund Objective

HSBC Insurance Ethical Global Sukuk Fund seeks to maximise, consistent with prudent investment management, total investment return, consisting of a combination of profit income and capital appreciation through the Franklin Templeton Shariah Funds –Franklin Templeton Global Sukuk Fund.


Sukuk indices were relatively unaffected by the turmoil seen in other markets and asset classes globally, with the Dow Jones Global Sukuk Index outperforming the Citigroup World Government Bond Index over the period. The global Sukuk index’s positive absolute and relative performance reflected the Sukuk market’s relatively low-beta characteristics, along with the strengths of GulfCooperation Council (GCC) countries, including low government debt levels, high foreign exchange reserves and strong non-oil related economic growth. Certain important Sukuk issuers, however,got caught up in the emerging-market sell-off, which

FUND FACTS Underlying Sub-Fund Franklin Templeton Shariah

Funds - Franklin Templeton Global Sukuk Fund

Fund Manager Templeton Asset Management Ltd

Launch Date 2 May 2002 CPFIS/SRS* SRS CPFIS Risk Classification

N.A.


Note: With effect from 18 Nov 2013, the underlying sub-fund of HSBC Insurance Ethical Global Sukuk Fund, HSBC Amanah Global Equity Index Fund was replaced with Franklin Templeton Shariah Funds – Franklin Templeton Global Sukuk Fund

*Note: With effect from 18 Nov 2013, the Fund has been delisted from CPFIS.

saw the currencies and bond prices of some countries plummet. The sell-off was particularly evident in Turkey. Furthermore, while still strong, there has been a broad-based slowdown in Malaysian economic growth, contributing to ringgit weakness. In the second half of 2014, the Franklin Templeton Global SukukFund underperformed Dow Jones Sukuk Index, returning -1.29% net of fees for the A(acc)USD share class versus 1.90% for the benchmark. The market’s total returns were relatively subdued in the second half of2014 when compared to the first half of 2014. Although partially offset by non-US dollar profit-rate exposures in the UK, Indonesia, Malaysia and Singapore, the fund’s defensive positioning with regards to USbenchmark rates meant the decline in benchmark US Treasury yields during the Q4 played a role in thisunderperformance. The decline of currencies (Malaysian ringgit, Indonesian rupiah, British pound) versus the US dollar detracted from relative performance over the period, as did a position in an underperformingTurkish participation bank Sukuk.


As 2014 drew to a close, Sukuk markets could look back on another positive year when returns werecompetitive and showed little correlation to fixed-income sectors and traditional asset classes. Going into 2015, we think these attributes will persist with four key drivers likely to influence future performance: the price of oil, interest rates and monetary policy, growth in emerging markets and credit fundamentals.Although the fall in oil prices poses obvious issues for many GCC countries, we retain positive medium-term outlook for GCC countries and their Sukuk markets because of strong non-oil growth and their financial strength. As the risk of rising interest rates in the US increases in 2015, the impact of monetary policynormalization will need to be monitored. While we would not be surprised to see long-term benchmark rates rise if, as expected, the Fed funds rate moves higher, the global liquidity provided through accommodativepolicy measures from the Bank of Japan, the European Central Bank and lately, the People’s Bank of China, may suppress or serve to limit the pace of increases in long-term interest rates over the short-to-intermediate term given the interconnected nature of global financial markets. Emerging markets, we believe, will continueto grow and in our view, should continue to attract financial flows. Finally, the fundamentals for credit inglobal Sukuk markets remain broadly intact, and we expect a significant contribution from a range of sectorsbenefitting from favorable operating environments, healthy margins, suitable liquidity, low default rates and attractive relative pricing.

^ Source: Templeton Asset Management Ltd.


46


3-Mth(%)

6-Mth(%)

1-Year(%)

3-Year(%)

5-Year(%)

10-Year(%)

SinceInception

(%)HSBC Insurance Ethical Global Sukuk Fund 3.89 4.84 8.37 33.86 18.21 13.00 9.43

Benchmark* 5.22 8.31 11.63 17.66 25.38 N.A.** N.A.**


3-Year(%)

5-Year(%)

10-Year(%)

SinceInception

(%) HSBC Insurance Ethical Global Sukuk Fund 10.21 3.40 1.23 0.72 Benchmark* 5.57 4.63 N.A.** N.A.**

*Dow Jones Sukuk Index. The performance figures are based on the new benchmark Dow Jones Sukuk Index, due to change in the underlying sub-fund. **The new benchmark Dow Jones Sukuk Index is not available when HSBC Insurance Ethical Global Sukuk Fund was incepted.


Franklin Templeton Shariah Funds - Franklin Templeton Global Sukuk Fund 99.75 19.66Other assets 0.41 0.08Other liabilities (0.16) (0.03)

Total 100.00 19.71



C) Underlying Sub-Fund Disclosure (Franklin Templeton Shariah Funds - Franklin Templeton Global Sukuk Fund) I Allocation by Country As at 31 Dec 2014 Country % of NAV MV S$ mil

United Arab Emirates 35.60 25.40Saudi Arabia 11.32 8.08Malaysia 11.02 7.86Qatar 9.53 6.80Turkey 9.53 6.80Indonesia 6.77 4.83United States 4.61 3.29UK 3.74 2.67Others* 2.32 1.65Cash and Cash Equivalents 5.56 3.97

Total 100.00 71.35*Includes other countries


Corporate Bonds 55.43 39.54Government-Related Sovereign 20.07 14.32Government-Related Agencies 18.37 13.11Government-Related Supranational 0.57 0.41Cash & Cash Equivalents 5.56 3.97

Total 100.00 71.35


47

III Allocation of Debt Securities by Credit Ratings As at 31 Dec 2014% of NAV MV S$ mil

AAA 3.95 2.82AA 10.48 7.48A 28.83 20.57BBB 29.12 20.77BB 4.58 3.27B 6.59 4.70C 3.95 2.82NR 12.50 8.92

Total 100.00 71.35


Malaysia Government Investment Issue, senior bond, 0813, 4.444%, 5/22/24 5.56 3.97SoQ Sukuk A Q.S.C, Reg S, 3.241%, 1/18/23 4.78 3.41JANY Sukuk Co. Ltd., Reg S, 2.844%, 9/23/19 4.61 3.29Albaraka Turk Katilim Bankasi AS, senior note, Reg S, 6.25%, 6/30/19 4.33 3.09Perusahaan Penerbit SBSN, senior note, 8.75%, 3/05/17 3.99 2.85Asya Sukuk Co. Ltd., 3/20/23 3.73 2.66Dar Al-Arkan Sukuk Co. Ltd., senior note, Reg S, 5.75%, 11/25/16 3.71 2.65Anka A Sukuk Ltd., Reg S, 10.00%, 8/25/16 3.64 2.60DP World Sukuk Ltd., Reg S, 6.25%, 7/02/17 3.53 2.52DIB Tier 1 Sukuk Ltd., sub. note, Reg S, 6.25% to 3/20/19 3.32 2.37


Perusahaan Penerbit SBSN, Reg S, 6.125%, 3/15/19 6.54 3.42SoQ Sukuk A Q.S.C, Reg S, 3.241%, 1/18/23 5.94 3.11DP World Sukuk Ltd., Reg S, 6.25%, 7/02/17 4.10 2.15TF Varlik Kiralama AS, senior note, Reg S, 3.95%, 5/02/18 3.71 1.94ADIB Capital Invest 1 Ltd., junior sub. note, RegS, 6.375% to 10/16/18, 3.69 1.93Sukuk Funding No. 3 Ltd., Reg S, 4.348%, 12/03/18 3.68 1.93Medjool Ltd., senior note, Reg S, 3.875%, 3/19/23 3.64 1.90Dar Al-Arkan Sukuk Co. Ltd., senior note, Reg S, 5.75%, 11/25/16 3.55 1.86Asya Sukuk Co. Ltd., 3/20/23 3.34 1.75GEMS MEA Sukuk Ltd., junior sub. note, Reg S, 12.00% to 11/21/13 3.28 1.72

V Exposure to Derivatives As at 31 Dec 2014N.A.


D) Other Disclosure ItemsI Expense/Turnover Ratios HSBC Insurance Ethical Global

Sukuk Fund Underlying Sub-Fund

As at 31-Dec-14 As 31-Dec-13 As at 31-Dec-14 As 31-Dec-13 Expense Ratio 1.54% 2.00% 1.50% 1.50% Turnover Ratio 1.86% 2.56% 102.33% 260.38%

II Related-Party Transactions Cash balances maintained with HSBC Bank as at 31 Dec 2014 amounts to $50,641.



48

IV Soft Dollar Commission Arrangement The Management Company and/or the Investment Managers may enter, with brokers/dealers that areentities and not individuals, into soft commission arrangements only where there is a direct andidentifiable benefit to the clients of the Management Company and/or the Investment Managers, includingthe Company, and where the Management Company and/or the Investment Managers are satisfied thatthe transactions generating the soft commissions are made in good faith, in strict compliance with applicable regulatory requirements and in the best interest of the Company. Any such arrangement mustbe made by the Management Company and/or the Investment Managers on terms commensurate withbest market practice. The use of soft commissions shall be disclosed in the periodic reports.



HSBC Insurance (Singapore) Pte. Limited Investment-linked Fund Report: HSBC Insurance Europe Equity Fund

49

HSBC Insurance Europe Equity Fund

Fund Objective

HSBC Insurance Europe Equity Fund seeks toachieve capital growth primarily through investmentin equity securities of European companies. Fund investments are made by way of a feeder fund, whichinvests substantially all, or all its assets in theSchroder European Equity Alpha Fund.


European equities delivered a slightly positive returnfor the half year period. Data indicated that theeurozone’s fragile economic recovery remainedlacklustre, with GDP growth of just 0.1% in the thirdquarter. Geopolitical tension between Russia andUkraine also weighed on European equities. TheEuropean Central Bank (ECB) took steps to try and


Portfolio - Schroder European Equity Alpha Fund


Launch Date 14 Oct 2005 CPFIS/SRS* SRS CPFIS Risk Classification

N.A.

As at 31 Dec 2014 Offer Price S$ 1.11171 Bid Price S$ 1.05612 Fund Size S$ 10.57 mil Units in Issue 10.00 mil *Note: With effect from 1 Oct 2008, the Fund has ceased to accept new monies under CPFIS.

boost the economy. However, inflation remained substantially below the ECB’s target, leading to increasedexpectations that sovereign bond purchases could be announced in early 2015. The euro continued todecline against the dollar while the sharp drop in the oil price was another feature of the period, amid worries over reduced global demand. In the UK, economic data was more robust, largely thanks to a strong housingmarket.

The fund underperformed the index over the period. The consumer staples and consumer discretionarysectors were the largest detractors from relative returns. The portfolio’s underweight allocation to energy wasbeneficial for relative performance. At stock level, Tesco was the largest individual detractor. The harddiscounters have continued to win market share in the UK but during the autumn Tesco reduced its half-yearprofit guidance and cut the interim dividend by 75%. This news was compounded by news that it hadoverstated profit in its accounts to the tune of £250m. Our investment case is predicated on the cash generation of the business, something that is unaffected by accounting irregularities. On the positive side, RBS was the main contributor to relative returns. Positive news on the bank’s loan loss provisions helped todrive the shares higher and the lower-than-expected losses mean that it is rebuilding capital faster than previously thought.


Market volatility has been rising and represents an opportunity. When volatility increases, disciplined valueinvestors can take advantage of other investors’ panic to buy equities at attractive prices. The fund looks totake advantage of any such mis-pricings based on a view that, over time, the market will better appraise thefair value of those businesses.

During the period, we sold our holding in Teleperformance. Operationally, it continues to perform very wellbut we feel its valuation is becoming stretched. We also sold Admiral. Our thesis was that fears over reserveswere overdone and when they proved to be unfounded the shares staged a significant recovery. Similarly, we exited the position in flooring firm Forbo as we believe it is now fully valued. Also, we exited the position inHeineken. The share price has tripled since its low in 2009, and it has recently been supported by strong first-half results which showed a 14% increase in net profits.

We initiated positions in interdealer brokers ICAP and Tullett Prebon. Both companies have reasonably lowlevels of risk and very negative structural scenarios already reflected in their share prices. Given theirattractive dividend yields we are being paid to wait for things to come good. We established a position inAdidas. A 40% decline in the share price since January created an attractive entry point in this global sporting goods business. It has a robust balance sheet and significant upside potential.



50


3-Mth (%)

6-Mth (%)

1-Year (%)

3-Year (%)

5-Year (%)

10-Year (%)

SinceInception

(%)HSBC Insurance Europe Equity Fund 1.27 (7.20) (5.61) 50.47 14.57 N.A. 11.17

Benchmark* (0.62) (5.45) (1.53) 43.04 22.06 N.A. 19.70


3-Year (%)

5-Year (%)

10-Year (%)

SinceInception

(%) HSBC Insurance Europe Equity Fund 14.59 2.76 N.A. 1.16 Benchmark* 12.67 4.07 N.A. 1.98

*MSCI Europe Net (TR) Index


Schroder International Choice Portfolio - Schroder European Equity Alpha Fund 100.28 10.60 Other liabilities (0.28) (0.03)

Total 100.00 10.57

II Fund Movement (01 Jul 2014- 31 Dec 2014) S$

Subscription 2,683,079 Redemption 639,855

C) Underlying Sub-Fund Disclosure (Schroder International Choice Portfolio - Schroder European Equity Alpha Fund)



Total 100.00 104.86* HSBC Insurance Europe Equity Fund feeds wholly into Schroder European Equity Alpha Fund (a feederfund investing into a corresponding sub-fund in the Schroder International Selection Fund (ISF), an open-ended investment company incorporated in Luxembourg).



IV Top Ten Holdings of Underlying Sub-Fund* As at 31 Dec 2014 % of NAV MV S$ mil

Schroder International Selection Fund - European Equity Alpha A Accumulation Share Class 99.00 103.81

Top Ten Holdings of Underlying Sub-Fund* As at 31 Dec 2013 % of NAV MV S$ mil

Schroder International Selection Fund - European Equity Alpha A Accumulation Share Class 98.11 73.18



51

V Exposure to Derivatives As at 31 Dec 2014 % of NAV -Market value (S$) -Realised Gains / (Losses) (S$) (172,640) Unrealised Gains / (Losses) (S$) -


D) Other Disclosure Items I Expense/Turnover Ratios HSBC Insurance Europe Equity



N.A.


IV Soft Dollar Commission Arrangement The Fund invests substantially into the Schroder International Selection Fund European Equity Alpha. In the management of the underlying fund, the manager may accept soft dollar commissions from, or enterinto soft dollar arrangements with, stockbrokers who execute trades on behalf of the underlying fund andthe soft dollars received are restricted to the following kinds of services:






HSBC Insurance (Singapore) Pte. Limited Investment-linked Fund Report: HSBC Insurance Global Bond Fund

52

HSBC Insurance Global Bond Fund

Fund Objective

HSBC Insurance Global Bond Fund seeks to maximize total returns in Singapore Dollar terms over the longer term by investing in a portfolio of high quality debt securities of Singapore and major global bond markets such as the G10 countries andAustralia and New Zealand. Fund investments are by way of a feeder fund, which invests substantially all or all its assets in the Legg Mason Western Asset Global Bond Trust.


FUND FACTS Underlying Fund Legg Mason Western Asset

Global Bond Trust Fund Manager Western Asset Management

Company Pte Ltd Launch Date 6 Oct 2008 CPFIS/SRS OA/SA/SRS CPFIS Risk Classification

Low to Medium Risk – Broadly Diversified.


Instead of the traditional quiet end to the year, December was a very volatile month for global bond markets and currencies. The recent downshift in global growth expectations and ongoing geopolitical tensionsresulted in positive returns in all major government bond markets. Heightened uncertainty (particularly overthe situation in Russia/Ukraine), the sharp fall in the oil price to below US$60 per barrel and reduced marketliquidity with dealers reluctant to hold inventory ahead of year-end, resulted in significant stress in many energy-related and higher-yielding securities. Emerging market (EM) assets and commodity-related currencies were also negatively impacted and investment-grade credit spreads widened. Following an effective devaluation of the Russian ruble intra-month, the central bank raised rates by 6.5% to 17%, which alleviated the fall in Russian assets and contributed to a stabilization in other markets.


Western Asset believes that the pace of this global recovery will be slow relative to past economic cycles.Evidence of a protracted slowdown in Europe and Japan, and a managed slowdown in China suggests thatthe balance of global growth risks is skewed to the downside as we enter 2015.

Global inflationary pressures remain very subdued, and the recent sharp decline in commodity prices suggests an even weaker global inflation outcome in 2015. Lower oil prices should be supportive of globalgrowth by increasing real consumer incomes and corporate earnings, expecting to lead to higher spending.Moreover, for oil-importing EM countries, lower inflation may provide more flexibility for policymakers tostimulate growth. Clearly, countries that are heavily dependent on oil revenues will be negatively impactedbut, overall, we expect global growth to improve mildly in 2015 helped by accommodative monetary policies.

Heightened geopolitical risks means the global outlook remains uncertain. A clear “de-synchronization” of the US and European and Japanese economic cycles suggests that we are entering a new phase of this globaleconomic recovery, one in which the world’s major central banks are moving monetary policy in differentdirections. This phase is unlikely to pass without increased volatility, although market dislocations in somesectors may create opportunities for active fixed-income managers. Our focus remains on longer term fundamentals with diversified strategies to manage risk. Global portfolios remain overweight in the spreadproduct sectors taking advantage of attractive valuations while using duration opportunistically to mitigate downside risks.

^ Source: Western Asset Management Company Pte Ltd.


3-Mth(%)

6-Mth(%)

1-Year(%)

3-Year(%)

5-Year(%)

10-Year(%)

SinceInception

(%) HSBC Insurance Global Bond Fund 2.72 4.35 9.32 13.78 12.73 N.A. 17.92 Benchmark* 2.82 4.68 9.59 14.90 13.99 N.A. 19.62


53


3-Year(%)

5-Year(%)

10-Year(%)

SinceInception

(%) HSBC Insurance Global Bond Fund 4.40 2.42 N.A. 2.68 Benchmark* 4.74 2.65 N.A. 2.92

*Citigroup World Government Bond Index ex-Japan (hedged to S$)


Legg Mason Western Asset Global Bond Trust 100.00 10.36 Total 100.00 10.36



C) Underlying Fund Disclosure (Legg Mason Western Asset Global Bond Trust) I Allocation by Country As at 31 Dec 2014 Country % of NAV MV S$ mil

USA 45.56 163.03Italy 15.54 55.62Spain 6.17 22.07France 6.08 21.74Great Britain 5.32 19.02Mexico 4.12 14.73Japan 4.10 14.66Supra-nationhal 2.81 10.06Poland 2.71 9.70Others* 7.59 27.18

Total 100.00 357.81*Includes other countries and net liabilities.


Government 81.56 291.83Miscellaneous 14.87 53.21Financials 6.89 24.66Other net liabilities (3.32) (11.89)

Total 100.00 357.81


Aaa 10.33 36.95AA+ 47.46 169.80Aa1 4.57 16.35AA 5.12 18.32AA- 0.43 1.54Aa3 2.01 7.19A1 4.13 14.79A2 2.71 9.70A3 4.12 14.73Baa1 0.98 3.51Baa2 6.17 22.07BBB- 15.54 55.62NR (0.24) (0.85)Other net liabilities (3.33) (11.91)

Total 100.00 357.81


54


US Treasury Bond 0.625% 31/08/2017 8.98 32.12Bonos Y Oblig Del Estado 3.75% 31/10/2018 5.48 19.60US Treasury Bond 4.5% 15/08/2039 5.35 19.16Fannie Mae Conventional 30 Yr FRN 25/07/2044 5.18 18.52Buoni Poliennali Del Tes 4.5% 01/03/2024 4.35 15.58Japan (Govt of) CPI Linked Ser 16 1.4% 10/06/2018 4.13 14.79FNMA 30Yr Jan FRN 25/08/2043 4.11 14.71US Treasury Bond 1.5% 31/12/2018 3.97 14.21US Treasury Bond 3.625% 15/02/2044 3.83 13.70Buoni Poliennali Del Tes 5% 01/09/2040 3.72 13.31


Bundesrepub Deutschland Ser 06 (Br) 4% 04/07/2016 9.76 31.02Buoni Poliennali Del Tes 5% 01/09/2040 7.07 22.46Buoni Poliennali Del Tes 4.5% 01/03/2024 6.26 19.89US Treasury Note 0.75% 15/12/2013 6.09 19.36Fannie Mae Conventional 30 Yr Frn 25/06/2041 5.29 16.81Japan (Govt of) CPI Linked Ser 16 1.4% 10/06/2018 5.16 16.41Mex Bonds De Desarrollo Ser M 8% 11/06/2020 4.49 14.27US Treasury Bond 4.375% 15/11/2039 3.81 12.12FNMA 30Yr Jan Frn 25/05/2042 3.77 11.97France (Govt of) Oat 3.25% 25/10/2021 3.58 11.38

V Exposure to Derivatives As at 31 Dec 2014 % of NAV (0.50%) Market value (S$) (1,790,293) Realised Gains / (Losses) (S$) -Unrealised Gains / (Losses) (S$) (1,790,293)


D) Other Disclosure Items I Expense/Turnover Ratios HSBC Insurance Global Bond









HSBC Insurance (Singapore) Pte. Limited Investment-linked Fund Report: HSBC Insurance Global Emerging Markets Bond Fund

55

HSBC Insurance Global Emerging Markets Bond Fund

Fund Objective

HSBC Insurance Global Emerging Markets Bond Fund invests for total return primarily in a diversified portfolio of Investment Grade and Non-Investment Grade rated fixed income (e.g. bonds) and othersimilar securities either issued by companies which have their registered office in Emerging Markets around the world, primarily denominated in US dollars, or which are issued or guaranteed by governments, government agencies and supranational bodies of Emerging Markets. Fund investments are made by way of a feeder fund, which invests substantially all, or all its assets in the HSBC Global Investment Funds – Global Emerging Markets Bond.


FUND FACTS Underlying Sub-Fund HSBC GIF – Global Emerging

Markets Bond Fund Manager HSBC Global Asset

Management (Singapore) Ltd Launch Date 28 Jan 2013 CPFIS/SRS SRS CPFIS Risk Classification

N.A.


Emerging market assets suffered in the period, mainly due to significant decline in oil prices andstrengthening of the US dollar. Oil prices declined close to 50% in the period and as a result, the hardcurrency bond prices of commodity exporters suffered. As a result of weakened risk sentiment, sharp declinein oil prices, stronger US dollar and idiosyncratic country risks, returns for emerging market assets were negative in H2 2014. The Fund was defensively positioned over the period given the stretched valuations thatresulted from the strong performance in early 2014. In addition, the fundamentals of many emerging market economies deteriorated which warranted a more cautious view. The fund outperformed in the period due inlarge part to this defensive positioning and underweight to Russia and Ukraine.


In the near-term, we maintain a defensive position across strategies given the current stretched valuationsand the crowded technical positioning in both hard and local currency assets. Going forward, we will be focusing our investment in the external debt sector on countries that meet the following criteria; 1) floating currency exchange rate, 2) high levels of external reserves and 3) proven track record of the Central Bank’smonetary and fiscal policies. We expect that there will be continued volatility and negative headlines around select emerging market countries. The headlines could potentially impact the asset class as a whole leadingto further market correction and in that environment, we will continue to identify opportunities and add exposure.

^ Source: HSBC Global Asset Management (Singapore) Ltd


3-Mth(%)

6-Mth(%)

1-Year(%)

3-Year(%)

5-Year(%)

10-Year(%)

SinceInception

(%)HSBC Insurance Global Emerging Markets Bond Fund (1.20) (3.30) 4.55 N.A. N.A. N.A. (2.65)

Benchmark* 2.19 2.82 10.75 N.A. N.A. N.A. 7.28


56


3-Year(%)

5-Year(%)

10-Year(%)

SinceInception

(%) HSBC Insurance Global Emerging Markets Bond Fund N.A. N.A. N.A. (1.40) Benchmark* N.A. N.A. N.A. 3.77

*J.P. Morgan EMBI Global Index


HSBC GIF – Global Emerging Markets Bond 100.00 0.64 Total 100.00 0.64


Subscription 113,126Redemption 39,495

C) Underlying Sub-Fund Disclosure (HSBC GIF – Global Emerging Markets Bond) I Allocation by Country As at 31 Dec 2014 Country % of NAV MV S$ mil

Mexico 12.59 677.71Indonesia 10.40 559.66Turkey 9.24 497.12Brazil 6.51 350.29Russia 6.29 338.53Venezuela 5.92 318.83United States 5.57 299.64Colombia 5.14 276.47Others* 24.74 1,331.98Cash 13.60 731.93

Total 100.00 5,382.16*Includes other countries.


Sovereign (Hard Ccy) 80.30 4,322.00Quasi (Hard Ccy) 14.05 756.14Local FX 2.85 153.28Corporate (Hard Ccy) 2.80 150.72Local Sovereign Bonds 0.00 0.02

Total 100.00 5,382.16


57

III Allocation of Debt Securities by Credit Ratings As at 31 Dec 2014 Ratings % of NAV MV S$ mil

AAA 0.27 14.45AA- 4.65 250.22A+ 0.29 15.87A- 14.21 764.69BBB+ 4.91 264.26BBB 26.95 1,450.34BBB- 22.98 1,236.71BB+ 3.12 167.81BB 0.29 15.85BB- 1.88 101.23B+ 0.47 25.35B 0.27 14.50CCC+ 5.74 308.80Non Rated 0.37 20.15Cash 13.60 731.93

Total 100.00 5,382.16


Russian Foreign Bond- Eurobond Step Cpn Due 31/03/ 8% 5.69 306.27Indonesia (Rep Of) 4.875% Mtn 05/21 USD'REGS' 5% 3.65 196.21UTD Mexican STS Medium Term NTS Book TBOND 4 DU 4% 3.12 168.17United States Treasury Bills 02-05-2015 United Sta 0% 2.46 132.51Turkey(Rep Of) 7% Mtn 11/03/2019 USD100000 7% 2.30 123.61United States Treasury Bills 0 01-15-2015 0% 2.23 119.76Global Bd 4.375% Due 07-12-2021 Reg 4% 2.13 114.81United Mexican States Tranche # 6.05% 11/01/2040 6% 2.12 113.84Indonesia(Rep Of) 3.75% NTS 25/04/22 USD'REGS 4% 2.01 108.04Turkey(Rep Of) 7.375% BDS 05/02/25 USD1000 7% 1.66 89.39


Russian Foreign Bond – Eurobond Step 31/03/ 8% 8.67 280.40United Mexican States Tranche 6.05% 11/01/2040 6% 4.21 136.01Turkey (Rep of) 7.375% BDS 05/02/25 USD1000 7% 3.17 102.42Indonesia (Rep of) 4.875% MTN 05/21 USD'REGS' 5% 3.14 101.42UTD Mexican STS Medium Term NTS Book TBOND 4 DU 4% 2.48 80.17Turkey (Rep of) 7% MTN 11/03/2019 USD100000 7% 2.16 69.69STH Africa (Rep of) 4.665% BDS 17/01/24 5% 2.12 68.53Turkey (Rep of) 5.625% BDS 30/03/21 USD1000 6% 2.11 68.24Indonesia (Rep of) 3.75% NTS 25/04/22 USD'REGS 4% 1.91 61.85Brazil (Fed Rep of) 7.125% BDS 20/01/37 USD1000 7% 1.62 52.53

V Exposure to Derivatives As at 31 Dec 2014Derivatives are used for hedging purpose


D) Other Disclosure Items

I) Expense/Turnover Ratios HSBC Insurance Global

Emerging Markets Bond Fund Underlying Sub-Fund



58

II Related-Party Transactions The HSBC Insurance Global Emerging Markets Bond Fund invests S$0.64 million, equivalent to 100.00% of its net asset value in HSBC HGIF - Global Emerging Markets Bond Fund, which is managed by HSBC Global Asset Management (Singapore) Ltd.







HSBC Insurance (Singapore) Pte. Limited Investment-linked Fund Report: HSBC Insurance Global Equity Fund

59

HSBC Insurance Global Equity Fund

Fund Objective

HSBC Insurance Global Equity Fund seeks to achieve long-term growth of capital by investing in a portfolio of equity securities. Fund investments are made by way of a feeder fund, which invests substantially all, or all its assets in the AllianceBernstein - Global Equity Blend Portfolio.


The year ended with global equities unsettled. US large-cap stocks led the gains in 2014 as a resilient economic recovery fueled earnings growth.

FUND FACTS Underlying Sub-Fund AllianceBernstein- Global

Equity Blend Portfolio Fund Manager AllianceBernstein

(Luxembourg) S.à r.l. Launch Date 6 Oct 2008 CPFIS/SRS OA/SRS CPFIS Risk Classification

Higher Risk – Broadly Diversified.


Emerging markets trailed the global index. Investors favored defensive stocks, while resources stocks fell asplunging oil prices dragged down shares of energy companies. Global economic growth continued at a slowand uneven pace. In the US, rise in manufacturing indicators and fall in unemployment, bolstered consumerconfidence and increased the chances of a Fed rate hike in 2015. In contrast, the eurozone economy stalled. The European Central Bank is expected to launch a quantitative easing program in early 2015 in an effort toprevent deflation and reignite growth. In emerging markets, cheaper oil will put more disinflationary pressure on China’s economy, which is already coping with a structural slowdown. But tame inflation should supportmore rate cuts in 2015 to help stem the deceleration of growth. Russia has been hit by a perfect storm ofsanctions and lower oil prices, prompting a sharp depreciation in the ruble.

Against this backdrop, the portfolio rose in absolute terms but underperformed its benchmark, the MSCIWorld Index. Overall stock selection and sector exposures contributed to the performance. Stock Selection inthe Energy Sector was the largest detractor from performance due to tumbling crude prices. Consumer-discretionary stocks such as Office Depot were among the largest individual contributors where theirearnings benefited from ongoing cost synergies from its merger with OfficeMax.


Heading into 2015, we continue to believe that the outlook for international equity markets remains positive.The improving economic growth outlook, low inflation and ample global liquidity are significant positives forstocks. Against the backdrop of modestly accelerating global growth, we expect improving companyfundamentals to drive stock performance. We believe that stock valuations, especially outside the US, remainreasonable, and our research indicates that equity markets often continue to rise in line with improvingearnings growth, as long as the macroeconomic environment remains positive.

We continue to find compelling opportunities worth exploiting across geographic borders. Our growth portfolios are tilted toward underappreciated growth opportunities in consumer sectors and emergingmarkets. We prefer market leaders with attractive earnings growth prospects and high Return on Invested Capital (ROIC). Our value portfolios have a modest procyclical tilt and are focused on attractively valued opportunities, which today are widespread across most industry sectors and regions. We prefer companieswith robust cash-flow generation and strong balance sheets, whose stocks are trading at deep-valuation discounts. We believe that our continued focus on companies with strong fundamentals will enable us tonavigate current market conditions and be able to construct portfolios that outperform as macroeconomicconditions improve.

^ Source: AllianceBernstein (Luxembourg) S.à r.l.


3-Mth(%)

6-Mth(%)

1-Year(%)

3-Year(%)

5-Year(%)

10-Year(%)

SinceInception

(%) HSBC Insurance Global Equity Fund 4.60 3.27 8.60 50.18 23.78 N.A. 34.53 Benchmark* 4.95 5.05 10.13 57.35 53.42 N.A. 82.13^


60


3-Year(%)

5-Year(%)

10-Year(%)

SinceInception

(%) HSBC Insurance Global Equity Fund 14.52 4.36 N.A. 4.89 Benchmark* 16.31 8.94 N.A. 10.21^

*MSCI World Net Index (in S$) ^Performance of the benchmark is measured from closest month-end after inception through 31 Dec 2014


AllianceBernstein - Global Equity Blend Portfolio, S1 class 100.09 69.23Other assets 0.07 0.05Other liabilities (0.16) (0.11)

Total 100.00 69.17



C) Underlying Sub-Fund Disclosure (AllianceBernstein- Global Equity Blend Portfolio, S1 class) I Allocation by Country As at 31 Dec 2014 Country % of NAV MV S$ mil

United States 49.55 233.57United Kingdom 8.43 39.76Japan 8.01 37.74France 7.04 33.19Switzerland 6.31 29.73China 2.72 12.80Hong Kong 2.00 9.44Germany 1.85 8.74India 1.71 8.04Others* 12.38 58.36

Total 100.00 471.37*Includes other countries and net assets and liabilities.


Financials 17.86 84.19Consumer Discretionary 16.74 78.93Information Technology 16.23 76.49Health Care 12.20 57.51Industrials 10.96 51.68Consumer Staples 9.12 43.01Energy 7.22 34.04Telecommunication Services 4.17 19.65Materials 2.30 10.82Utilities 0.43 2.01Other Assets less Liabilities 2.77 13.04

Total 100.00 471.37



61


Roche Holding AG 2.05 9.66Visa, Inc. - Class A 1.43 6.72Wells Fargo & Co. 1.35 6.35Safran SA 1.27 5.99Toshiba Corp. 1.26 5.93Hewlett-Packard Co. 1.17 5.52Danaher Corp. 1.16 5.45UniCredit SpA 1.15 5.42Google, Inc. - Class C 1.08 5.08Apple, Inc. 1.02 4.80


Roche Holding AG 2.24 9.84Apple Inc. 1.85 8.12Visa, Inc. - Class A 1.38 6.07Samsung Electronics Co. Ltd. 1.29 5.67Danaher Corp. 1.28 5.61Wells Fargo & Co. 1.23 5.41Boeing Co. (The) 1.23 5.39Tencent Holdings Ltd. 1.21 5.30British American Tobacco PLC 1.20 5.27Anheuser-Busch InBev NV 1.15 5.05

V Exposure to Derivatives As at 31 Dec 2014% of NAV 0.89%Market value (S$) 4,174,954Realised Gains / (Losses) (S$) -Unrealised Gains / (Losses) (S$) 19,877

VI Borrowings of Net Asset Value As at 31 Dec 2014Securities lending / Total Net Asset 4.48%

D) Other Disclosure Items I Expense/Turnover Ratios HSBC Insurance Global Equity


As at 31-Dec-14 As at 31-Dec-13 As at 31-Aug-14* As at 31-Aug-13 Expense Ratio 1.70% 1.71% 0.76% 0.77% Turnover Ratio 9.88% 10.60% 63.13% 55.93%

*Based on audited figures as at 31 Aug 2014 as the expense and turnover ratios for AllianceBernstein -Global Equity Blend Portfolio, S1 class for the financial year ended 31 Dec 2014 are not available.




62

IV Soft Dollar Commission Arrangement During the period ended December 31, 2014, although currently the Management Company does notreceive or enter into soft-dollar commissions/arrangements, the Investment Manager does receive andhas entered into soft-dollar commissions/arrangements with brokers relating to portfolios of theUnderlying Fund that invest in equity securities, in respect of which certain goods and services used tosupport the investment decision making process were received. The soft commission arrangements wereentered into on the basis that the execution of transactions on behalf of the Underlying Fund will beconsistent with best execution standards and brokerage rates will not be in excess of customaryinstitutional full-service brokerage rates. The goods and services received include specialist industry,company and consumer research, portfolio and market analysis and computer software used for thedelivery of such services. The nature of the goods and services received is such that the benefitsprovided under the arrangement must be those which assist in the provision of investment services to theUnderlying Fund and may contribute to an improvement in the Underlying Fund's performance. For theavoidance of doubt, such goods and services do not include travel, accommodations, entertainment,general administrative goods or services, general office equipment or premises, membership fees,employees' salaries or direct money payments. Disclosure of soft commission arrangements will be madein the periodic reports of the Underlying Fund.




HSBC Insurance (Singapore) Pte. Limited Investment-linked Fund Report: HSBC Insurance India Equity Fund

63

HSBC Insurance India Equity Fund

Fund Objective

HSBC Insurance India Equity Fund seeks long-term capital growth through a diversified portfolio ofinvestments in equity and equity-equivalent securities of companies registered in, and/or with an official listing on a major stock exchange or other regulated market of India, as well as those with significant operations in India. Fund investments are made by way of a feeder fund through the HSBC Global Investment Funds - Indian Equity.


The fund declined underperformed the benchmark. Main detractors were stock selection across sectors,

FUND FACTS Underlying Sub-Fund HSBC GIF Indian Equity Fund Fund Manager HSBC Global Asset

Management (Singapore) Ltd Launch Date 19 Apr 2004 CPFIS/SRS* SRS CPFIS Risk Classification

N.A.


*Note: With effect from 1 Mar 2014, the Fund has been delisted from CPFIS.

but in particular within Industrials and Materials. Sector allocation was positive for Financials, Telcomms and Consumer Discretionary, while allocations to Health Care, Consumer Staples and Industrials were maindetractors.


We believe the market movement will be influenced by the following factors:

• The Union Budget and its run-up will be key to economic success and it will be the first full-fledged budget document of the Modi Government. • The coal sector and telecom spectrum auctions in February will have a significant impact on Government finances as well as the individual firms and sectors.

The market valuations are nudging over historical averages, but catalysts led by affirmative governmentaction, could drive earnings growth and a re-rating of sorts. Indian economy is bottoming out in terms of GDP growth after three years of slowdown. Economic growth is unlikely to rebound sharply in the near term. We expect a moderate recovery in economic growth in Financial Year (FY)15 vs FY14, driven by an improvement in the external demand and a gradual pick-up in the private investment and consumption. Earnings for Indian companies for FY15 and FY16 are expected to grow at about 13% and 15% respectively.We continue to favour cyclical sectors over defensive sectors based on higher growth expectations, compression of risk premiums and the valuation gap between cyclical and defensive sectors.

^ Source: HSBC Global Asset Management (Singapore) Ltd.


3-Mth(%)

6-Mth(%)

1-Year(%)

3-Year(%)

5-Year(%)

10-Year(%)

Since Inception

(%) HSBC Insurance India Equity Fund 5.96 1.26 37.30 61.13 (8.64) 87.70 143.61 Benchmark* 6.57 11.48 38.71 60.95 11.77 148.08 236.01


3-Year(%)

5-Year(%)

10-Year(%)

Since Inception

(%) HSBC Insurance India Equity Fund 17.24 (1.79) 6.50 8.73 Benchmark* 17.19 2.25 9.51 12.07

*S&P / IFC Investible India Index


64


HSBC GIF Indian Equity Fund 100.03 58.60 Other assets 0.14 0.08 Other liabilities (0.17) (0.10)

Total 100.00 58.58



C) Underlying Sub-Fund Disclosure (HSBC GIF Indian Equity Fund) I Allocation by Country As at 31 Dec 2014 Country % of NAV MV S$ mil

India 99.10 3,063.09 Cash 0.90 27.87

Total 100.00 3,090.96


Financials 33.43 1,033.20 Technology 14.82 458.15 Industrials 14.31 442.46 Oil & Gas 11.11 343.31 Consumer Goods 9.67 299.01 Basic Materials 6.03 186.35 Utilities 5.47 169.02 Health Care 2.97 91.77 Consumer Services 1.29 39.82 Cash 0.90 27.87

Total 100.00 3,090.96



ICICI Bank Ltd Ordinary INR 2.00 (Scripless) 6.58 203.31 Tata Motors Ltd A Shs Ord INR2 (DVR) INR2 (DVR) (10 A Shs Entitled To 1 Voting Right) 5.73 177.09 Axis Bank Limited 5.65 174.62 Maruti Suzuki India Ltd INR 5.0 (Scripless) (A/G) 5.10 157.62 Oil & Natural Gas Corp INR 5 (Scripless) 4.84 149.63 HCL Technologies Ltd Ordinary INR 2.0 (Scripless) (A/G) 4.82 148.89 Wipro Limited Ordinary INR 2.00 (Scripless) 4.20 129.70 Indiabulls Housing Finance Ltd INR 2.00 (Scripless) 3.97 122.84 Infosys Ltd-SP ADR (1 ADR = 1 Ord Shs) 3.21 99.29 LIC Housing Finance INR 2 (Scripless) 3.00 92.86


65


Oil and Natural Gas Corp INR 5 5.47 172.09 ICICI Bank Ltd Ordinary INR 10 5.37 169.09 Tech Mahindra Ltd Ord INR 10 4.18 131.47 Maruti Suzuki India Ltd INR 5.0 4.01 126.34 HCL Technologies Ltd Ordinary INR 2.0 3.87 121.86 Wipro Limited Ordinary INR 2.00 3.85 121.32 Jindal Steel & Power Ltd INR 1.0 3.82 120.20 Tata Motors Ltd A Shs Ord INR2 3.67 115.57 Reliance Industries INR 10 3.28 103.16 NMDC Ltd Common INR 1 3.11 97.92



D) Other Disclosure Items I Expense/Turnover Ratios HSBC Insurance India Equity



II Related-Party Transactions The HSBC-Insurance Indian Growth Fund invests S$58.60 million, equivalent to 100.03% of its net asset value in HSBC GIF Indian Equity Fund, which is managed by HSBC Global Asset Management (Singapore) Ltd. The management fees earned by HSBC Global Asset Management (Singapore) Ltd from 01 Jul 2014 to 31 Dec 2014 amounts to S$154,924.





HSBC Insurance (Singapore) Pte. Limited Investment-linked Fund Report: HSBC Insurance Japan Equity Fund

66

HSBC Insurance Japan Equity Fund

Fund Objective

HSBC Insurance Japan Equity Fund seeks to achieve capital growth primarily through investment in equity securities of Japanese companies. Fund investments are made by way of a feeder fund, which invests substantially all, or all its assets in the Schroder Japanese Equity Fund.


Japanese equities rose 12.5%, in yen terms, in the second half of 2014, generally helped by the sharp weakening of the yen. Economic data began todeteriorate sharply in July, with industrial production


Portfolio - Schroder Japanese Equity Fund



N.A.


data and retail sales numbers significantly below expectations. Despite a sell-off in September, the upward trajectory of the market continued following the Bank of Japan’s (BoJ) additional easing at the end of October. Cyclical stocks and beneficiaries of the weaker yen led the market, including chemicals and textiles. Airline stocks rose strongly as direct beneficiaries of lower fuel prices. Conversely the oil, mining and real estate sectors declined in absolute terms.

The fund delivered strong positive returns but trailed the benchmark due to mainly negative stock selection in transportation equipment. However, robust stock selection in the information & communication and machinery sectors helped to partially offset this. A Fair Value (FV) adjustment at the end of December contributed to a revised lower month-end NAV price and, as a result, past performance was understated.

The fund’s leading contributor over the period was semiconductor manufacturing equipment producer Hitachi High-Technologies. Its shares gained on the back of strong quarterly results that showed strong growth in the company’s electric devices and science & medical systems divisions while sentiment was also boosted as management upgraded its first half profit guidance. Meanwhile, the fund’s leading detractor was our overweight position in financial services group Orix Corporation. Its stock had climbed in late July on the back of a strong first quarter earnings, but fell back later in the year.


Expectations are building for Mr Abe to deliver not just fiscal stimulus, but also further real long-term economic reforms. The BoJ continues to try to offset deflationary forces with massive liquidity injections. Although its aims are well-founded, this approach is leading to significant distortions in the Japan Government Bond (JGB) market with short-rates already being pushed into negative territory. This raises serious questions about the mechanism for ending the quantitative easing programme but this is a problem which lies well beyond 2015, or probably even beyond 2016. Prime Minister Abe’s decision to postpone the consumption tax increase from October 2015 to April 2017 has given some relief to the weak economy. It should allow higher nominal wages to feed into a consumer spending recovery.

We believe the Japanese market has upside potential, as corporate earnings continue to improve more than expected and the recent weakness in the yen has yet to be fully reflected in forecasts. We expect an increasing number of Japanese companies to raise dividends and mount share buy-backs, prompted by growing pressure from investors, as well as management’s increased willingness to improve capital efficiency. The call for better corporate governance has gathered momentum and will be further enhanced by the governance code for listed companies to be set in the spring by the Tokyo Stock Exchange. In addition, increasing allocation to Japanese equities by the public pension funds could be a turning point for the market as domestic institutions have been consistent net sellers for many years.



67


3-Mth(%)

6-Mth(%)

1-Year(%)

3-Year(%)

5-Year(%)

10-Year(%)

SinceInception

(%) HSBC Insurance Japan Equity Fund (2.25) (2.09) (3.07) 22.97 20.13 N.A. (18.85) Benchmark* 1.02 1.00 1.45 34.95 26.38 N.A. (11.69)


3-Year(%)

5-Year(%)

10-Year(%)

SinceInception

(%) HSBC Insurance Japan Equity Fund 7.14 3.74 N.A. (2.25) Benchmark* 10.51 4.79 N.A. (1.35)

*TSE First Section Index (TOPIX)


Schroder International Choice Portfolio - Schroder Japanese Equity Fund 100.39 2.57Other assets 1.17 0.03Other liabilities (1.56) (0.04)

Total 100.00 2.56



C) Underlying Sub-Fund Disclosure (Schroder International Choice Portfolio - Schroder Japanese Equity Fund)



Total 100.00 13.91* HSBC Insurance Japan Equity Fund feeds wholly into Schroder Japanese Equity Fund (a feeder fundinvesting into a corresponding sub-fund in the Schroder International Selection Fund (ISF), an open-ended investment company incorporated in Luxembourg).




Schroder International Selection Fund - Japanese Equity A Accumulation Share Class 99.57 13.85


Schroder International Selection Fund - Japanese Equity A Accumulation Share Class 98.94 16.54



68

V Exposure to Derivatives As at 31 Dec 2014% of NAV -Market value (S$) -Realised Gains / (Losses) (S$) (590)Unrealised Gains / (Losses) (S$) -


D) Other Disclosure Items I Expense/Turnover Ratios HSBC Insurance Japan Equity


As at 31-Dec-14 As at 31-Dec-13 As at 31-Dec-14 As at 31-Dec-13Expense Ratio 1.98% 1.97% 1.94% 1.93%Turnover Ratio 19.19% 24.14% 14.38% 22.68%



IV Soft Dollar Commission Arrangement The Fund invests substantially into the Schroder International Selection Fund Japanese Equity. In the management of the underlying fund, the manager may accept soft dollar commissions from, or enter into soft dollar arrangements with, stockbrokers who execute trades on behalf of the underlying fund and thesoft dollars received are restricted to the following kinds of services:






HSBC Insurance (Singapore) Pte. Limited Investment-linked Fund Report: HSBC Insurance Pacific Equity Fund

69

HSBC Insurance Pacific Equity Fund

Fund Objective

HSBC Insurance Pacific Equity Fund aims to provide holders with medium to long term capital growth from a diversified portfolio of Asian-Pacific equities excluding Japanese equities. Fund investments are made by way of a feeder fund, which invests substantially all, or all its assets in the Aberdeen Select Portfolio – Aberdeen Pacific Equity Fund.


Asian equities rose in the half year under review. Newly-elected governments and hopes of reforms bolstered sentiment in India and Indonesia, while in

FUND FACTS Underlying Sub-Fund Aberdeen Select Portfolio -

Aberdeen Pacific Equity Fund Fund Manager Aberdeen Asset Management

Asia Limited Launch Date 1 Apr 2010 CPFIS/SRS OA/SRS CPFIS Risk Classification

Higher Risk – Narrowly Focused - Regional - Asia


Thailand, the consolidation of the military’s power after months of stalemate lifted hopes that economicgrowth would improve. Besides politics, markets were also influenced by major central banks’ policydecisions. Despite concerns over slowing growth, China outperformed on the back of the government’s targeted easing measures and the central bank’s interest rate cuts. Looser monetary policy from Japan alsoaided confidence. Conversely, the Federal Reserve’s decision to end asset purchases and expectations ofan imminent hike in US rates strengthened the dollar and pared gains in Asian markets. Towards the period-end, falling oil prices and the rouble’s plunge ignited fears of contagion from emerging markets. Laggardsincluded Malaysia, a net oil exporter, while Korea was hurt by poor economic growth.


A potential US rate hike and a stronger dollar could compel fund outflows from Asia. But the normalisation ofAmerican monetary policy should wean markets off speculative capital. Furthermore, Asia is on a firmerfooting today to withstand short-term outflows than back in late 2013, when it experienced the first tremorsfrom tapering. We are also likely to see greater policy divergence. Unlike the US, some Asian economiesmay cut rates to stimulate demand as inflationary pressures ease. We remain confident in our companies,characterised by regional exposure, established franchises and solid finances. Given the challengingoperating environment, earnings growth could be in the high single digits in 2015. But Asia’s long-term story still holds, buttressed by rising wealth and pent-up demand for consumer goods. Valuations at a price-to-earnings ratio of around 12.5 times do not seem extreme and remain at a discount relative to developed markets.

^ Source: Aberdeen Asset Management Asia Limited.


3-Mth(%)

6-Mth(%)

1-Year(%)

3-Year(%)

5-Year(%)

10-Year(%)

SinceInception

(%) HSBC Insurance Pacific Equity Fund 0.45 1.30 7.12 29.42 N.A. N.A. 25.76 Benchmark* 3.18 2.20 8.20 33.91 N.A. N.A. 18.89


3-Year(%)

5-Year(%)

10-Year(%)

SinceInception

(%) HSBC Insurance Pacific Equity Fund 8.98 N.A. N.A. 4.96 Benchmark* 10.21 N.A. N.A. 3.72

*MSCI AC Asia Pacific ex Japan Index


70


Aberdeen Select Portfolio - Aberdeen Pacific Equity Fund 100.02 82.19 Other assets 0.05 0.04 Other liabilities (0.07) (0.06)

Total 100.00 82.17



C) Underlying Sub-Fund Disclosure (Aberdeen Select Portfolio - Aberdeen Pacific Equity Fund) I Allocation by Country As at 31 Dec 2014 Country % of NAV MV S$ mil

China/Hong Kong 28.32 465.94 Singapore 19.60 322.40 India 13.07 214.95 Australia 10.97 180.52 Korea 5.69 93.65 Taiwan 5.02 82.64 Malaysia 4.43 72.86 Indonesia 4.15 68.31 Others* 7.42 122.04 Cash 1.33 21.81

Total 100.00 1,645.12 *Includes other countries


Financials 42.99 707.35 Industrials 12.85 211.48 Information Technology 11.03 181.39 Materials 9.87 162.37 Consumer Staples 6.50 106.93 Consumer Discretionary 5.74 94.50 Telecommunication Services 4.50 74.03 Healthcare 2.05 33.74 Energy 1.88 30.85 Utilities 1.26 20.67 Cash 1.33 21.81

Total 100.00 1,645.12



Aberdeen Global Indian Equity Fund 10.22 168.13 Aberdeen Select Portfolio Singapore Equity Fund 9.49 156.12 Aberdeen Select China Opportunities Fund 9.44 155.25 Samsung Electronics Co Pfd 4.99 82.05 Aberdeen Select Indonesia Equity Fund 4.15 68.31 Aberdeen Select Thailand Equity Fund 3.89 64.06 Rio Tinto 3.47 57.15 Aberdeen Select Malaysian Equity Fund 3.43 56.43 AIA Group 3.42 56.24 HSBC Holdings 3.37 55.47


71

Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2013 % of NAV MV S$ mil

Aberdeen China Opportunities Fund 9.87 174.90 AG - Indian Equity Fund^ 9.81 173.97 Aberdeen Singapore Equity Fund 8.32 147.41 Samsung Electronics (Pref) 4.79 84.84 Rio Tinto 4.43 78.58 BHP Billiton PLC 4.17 73.95 Aberdeen Thailand Equity Fund 4.07 72.10 Aberdeen Indonesia Equity Fund 4.04 71.68 Aberdeen Malaysian Equity Fund 3.64 64.61 HSBC Holdings 3.32 58.85 ^ The underlying fund is not authorised for public sale in Singapore



D) Other Disclosure Items I Expense/Turnover Ratios HSBC Insurance Pacific Equity


As at 31-Dec-14 As at 31-Dec-13 As at 30-Sep-14* As at 31-Dec-13 Expense Ratio 1.83% 1.71% 1.79% 1.67% Turnover Ratio 21.68% 32.56% 0.85% 5.35%

*Based on the audited figures as at 30 Sep 2014 as the turnover and expense ratios of Aberdeen PacificEquity Fund for the financial year ended 31 Dec 2014 are not available.




E) Financial Statements Refer to page 107


HSBC Insurance (Singapore) Pte. Limited Investment-linked Fund Report: HSBC Insurance Premium Balanced Fund

72

HSBC Insurance Premium Balanced Fund

Fund Objective

HSBC Insurance Premium Balanced Fund seeks to achieve long-term capital growth by investing in a diversified portfolio of securities. Fund investments are made by way of a feeder fund, which invests substantially all or all its assets in the Deutsche Premier Select Trust.


During the second half of 2014, different topics drove financial markets. While data showed that the US

FUND FACTS Underlying Fund Deutsche Premier Select Trust Fund Manager Deutsche Asset Management

(Asia) Ltd Launch Date 2 Jan 2001 CPFIS/SRS OA/SA/SRS CPFIS Risk Classification

Medium to High Risk - Broadly Diversified


economy is improving and the European Central Bank (ECB) took a looser policy stance, Fed tapering fears, a sharp oil price decline and geopolitical risks related to the Middle East and the Ukraine dragged on investors’ sentiment.

The MSCI World was down 1.17% while the MSCI Singapore gained 4.42%. At the same time, USTreasuries returned 1.85%. The Deutsche Premier Select Trust delivered a return of 2.22% in H2 2014. Maincontributor to performance was the overweight in equity positions with the Deutsche Global Equity Focus Fund returning 0.49% and the Deutsche Singapore Equity Fund gaining 1.06%. At the same time, theDeutsche Lion Bond Fund was up by 0.59%.


At the beginning of the new year, the fund’s positioning remains tilted towards equities as continuedeconomic growth should drive corporate earnings and dividends. Valuation, however, has already reachedlevels that justify no fundamental upside in our view.

While the US recovery remains on track and is increasingly self-sustaining, Eurozone growth faces headwinds from internal factors and geopolitical risks. In China, GDP growth should slow down in 2015 dueto weaker housing activity, but monetary policy should be supportive.

However, developed market central bank policies start to diverge more widely. While central banks in the USand UK prepare markets for rate hikes in mid-2015 and Q3 2015, respectively, the ECB and the ECB and Bank of Japan (BoJ) take more accommodative stances and so, unconventional measures should prevail.



3-Mth(%)

6-Mth(%)

1-Year(%)

3-Year(%)

5-Year(%)

10-Year(%)

SinceInception

(%)HSBC Insurance Premium Balanced Fund 1.75 2.11 4.83 25.29 21.15 45.37 55.32

Benchmark* 2.59 3.06 5.85 28.79 26.64 58.32 71.04


3-Year(%)

5-Year(%)

10-Year(%)

SinceInception

(%) HSBC Insurance Premium Balanced Fund 7.81 3.91 3.81 3.22 Benchmark* 8.80 4.84 4.70 3.94

*30% MSCI Singapore + 30% MSCI World+ 40% 3-month SIBOR


73


Asset Class % of NAV MV S$ mil Deutsche Premier Select Trust 100.08 119.97 Other assets 0.10 0.12 Other liabilities (0.18) (0.21)

Total 100.00 119.88



C) Underlying Fund Disclosure (Deutsche Premier Select Trust) I Allocation by Country As at 31 Dec 2014

Country % of NAV MV S$ mil Singapore 66.89 134.74 Luxembourg 25.79 51.96 United States of America 4.86 9.80 Other net assets 2.46 4.95

Total 100.00 201.45


Unit Trusts/Mutual Funds 97.54 196.50 Other net assets 2.46 4.95

Total 100.00 201.45 III Allocation of Debt Securities by Credit Ratings As at 31 Dec 2014 N.A. IV Top Ten Holdings of Underlying Fund^ As at 31 Dec 2014

% of NAV MV S$ mil Deutsche Lion Bond Fund Class M 30.76 61.97 Deutsche Global Equity Focus Fund 25.79 51.96 Deutsche Singapore Equity Fund Class M 22.36 45.04 Deutsche Asian Small/Mid Cap Fund Class A 7.91 15.94

Aberdeen Global Opportunities Fund SGD Class 5.85 11.79 iShares MSCI ACWI Index Fund 4.86 9.80

Top Ten Holdings of Underlying Fund^ As at 31 Dec 2013 % of NAV MV S$ mil

Deutsche Global Equity Focus Fund 30.90 63.15 Deutsche Lion Bond Fund Class M 29.76 60.82 Deutsche Singapore Equity Fund Class M 22.59 46.16

Aberdeen Global Oppurtunities Fund SGD Class 5.50 11.24 Aberdeen Asian Smaller Companies Fund SGD Class 4.05 8.27

Deutsche Asian Small/Mid Cap Fund Class A 2.52 5.15 SPDR Gold Trust 1.11 2.27 iShares MSCI ACWI Index Fund 0.55 1.13

^Less than Ten Holdings in the Underlying Fund.

V Exposure to Derivatives As at 31 Dec 2014 % of NAV - Market Value (S$) - Realised Gains / (Losses) (S$) 2,958 Unrealised Gains / (Losses) (S$) -


74


D) Other Disclosure Items I Expense/Turnover Ratios HSBC Insurance Premium

Balanced Fund Underlying Fund




IV Soft Dollar Commission Arrangement Soft dollar commissions are benefits accorded to Manager by their brokers, usually in the form ofresearch, advisory, analysis and data services, computer hardware or software used for and/or in support of the investment process.

The Manager’s policy on soft dollar commissions is as follows: - the goods and services received would assist in the provision of investment services and advices orrelated services to the unit trust; - transactions are executed on the best available terms; and - the Manager does not engage in unnecessary trades in order to qualify for soft dollar commissions.





HSBC Insurance (Singapore) Pte. Limited Investment-linked Fund Report: HSBC Insurance Premium Property Equity Fund

75

HSBC Insurance Premium Property Equity Fund

Fund Objective

HSBC Insurance Premium Property Equity Fund seeks to achieve long term capital appreciation by investing in the quoted equity securities of companies or Real Estate Investment Trusts (or its equivalents) listed or traded on a regulated market which derives the main part of their revenue from the ownership, management and/or development of real estate, throughout the world. The Fund invests all or substantially all of its assets primarily 50% into the Henderson Horizon Fund - Global Property Equities Fund, 25% into the Henderson Horizon Fund - Pan European Property Equities Fund and 25% into the Henderson Horizon Fund - Asia-Pacific Property Equities Fund.

Global Property Equities Fund, Asia-Pacific Property Equities Fund & Pan European Property Equities Fund

FUND FACTS Underlying Sub-Fund

25%: Henderson Horizon Fund - Pan European Property Equities Fund50% :Henderson Horizon Fund - Global Property Equities Fund 25%: Henderson Horizon Fund - Asia-Pacific Property Equities Fund

Fund Manager Henderson Global Investors (Singapore) Ltd

Launch Date 1 Nov 2007 CPFIS/SRS SRS CPFIS Risk Classification

N.A.



Property equities performed well over the period, benefitting from investor appetite for yield and further evidence of improving real estate values in most markets globally. All regions made gains in local currency, but the weakness of European and Asia-Pacific currencies saw those regions decline in USD terms (3.7% and 3.8% respectively). US Real Estate Investment Trusts (REITs) made further gains (8.8%) capping a strong year, reflective of a buoyant underlying market, rising income streams and attractive and growing dividends. Eurozone equity markets were largely flat over the period. Weak economic data weighed heavily on markets in October, as did on-going geopolitical concerns in Russia and the Ukraine. However, shares and bonds rallied in the last months of the year as low inflation numbers increased investor expectations of a more aggressive policy response from the European Central Bank in early 2015. Listed real estate stocks significantly outperformed the wider equity market, with returns in 2014 driven by a combination of strong asset value growth in markets such as the UK, Sweden and the German residential sector, and re-pricing in Continental markets, where investors expect yields to compress further given lower bond yields and interest rates Asian property equities (4.3%) had a difficult year against this tumultuous backdrop. Although the unexpected expansion of Japan’s economic stimulus programme was positive for equities, much of the gain was negated by a steep 18% depreciation of the JPY against the USD. Market Outlook and Investment Strategy ^

We remain constructive on North America real estate fundamentals and expect REITs to grow cash flow by 7-9% in 2015 and dividends more, given rising pay-out ratios. Within Europe we see further prospects for growth in 2015, most notably in the UK, where recent economic growth bodes well for further rental gains this year. The German residential sector also remains attractive as does the Swedish market. We remain more cautious on the outlook for retail and office rents on the Continent, where the benign growth outlook, low inflation and higher unemployment continue to drag growth potential. However, we selectively added exposure here toward the end of the period as we saw the dividend yields on offer as increasingly attractive with expectations of quantitative easing by the European Central Bank. In Japan, “Abenomics” has continued to push up capital values. The additional stimulus measures recently announced are also likely to give a further boost to the asset reflation cycle. Also, we are beginning to see signs of rental growth in the key Tokyo office market. Japanese-Real Estate Investment Trust (JREITs) should remain well-supported as the Bank of Japan has tripled its JREIT purchase programme to JPY90billion per annum, while dividend yields of 3.3% should appeal to income investors. We believe property as an asset class remains well placed, with investor demand continuing to strengthen as institutions rebuild historically low property allocations. This combined with the attractive income return of property over bonds, should continue to support asset prices, even when bond yields begin to rise. ^ Source: Henderson Global Investors (Singapore) Ltd


76


3-Mth(%)

6-Mth(%)

1-Year(%)

3-Year(%)

5-Year(%)

10-Year(%)

SinceInception

(%)HSBC Insurance Premium Property Equity Fund 9.84 6.31 12.98 52.50 39.20 N.A. (11.05)

Benchmark* 9.26 5.96 15.40 60.72 54.33 N.A. 5.73


3-Year(%)

5-Year(%)

10-Year(%)

SinceInception

(%) HSBC Insurance Premium Property Equity Fund 15.10 6.84 N.A. (1.63) Benchmark* 17.14 9.07 N.A. 0.78

*50% FTSE EPRA/NAREIT Developed Index + 25% FTSE EPRA/NAREIT Pure Asia total return netdividend Index (Capital constrained) + 25% FTSE EPRA/NAREIT Developed Europe Capped Index TRI


Henderson Horizon Equities Fund 99.03 1.02Other assets 0.97 0.01

Total 100.00 1.03



C) Underlying Sub-Fund Disclosure I Henderson Horizon Fund - Asia-Pacific Property Equities Fund Allocation By Country As at 31 Dec 2014 Country % of NAV MV S$ mil

Japan 30.23 125.13Hong Kong 27.56 114.10Australia 17.93 74.23Singapore 8.78 36.33Indonesia 0.90 3.72Others 14.60 60.47


II Henderson Horizon Fund - Asia-Pacific Property Equities Fund Allocation by Industry As at 31 Dec 2014 Industry % of NAV MV S$ mil

Financials 85.39 353.51Others* 14.61 60.47

Total 100.00 413.98*Includes other industries.


77

III Henderson Horizon Fund - Global Property Equities Fund Allocation by Country As at 31 Dec 2014 Country % of NAV MV S$ mil

United States 51.99 640.02Japan 11.60 142.85United Kingdom 9.26 114.02Hong Kong 6.99 86.03Australia 5.52 67.99France 4.41 54.30Canada 3.68 45.26Singapore 2.21 27.23Sweden 1.59 19.54Others* 2.75 33.71

Total 100.00 1,230.95*Includes other countries.

IV Henderson Horizon Fund - Global Property Equities Fund Allocation by Industry As at 31 Dec 2014 Industry % of NAV MV S$ mil

Financials 91.06 1,120.90Consumer Services 1.33 16.34Others* 7.61 93.71

Total 100.00 1,230.95*Includes other industries.

V Henderson Horizon Fund - Pan European Property Equities Fund Allocation by Country As at 31 Dec 2014 Country % of NAV MV S$ mil

United Kingdom 53.81 301.36France 14.72 82.42Sweden 9.25 51.83Germany 8.04 45.05Netherlands 5.51 30.87Luxembourg 4.44 24.86Ireland 1.29 7.20Finland 1.18 6.63Others* 1.76 9.85


VI Henderson Horizon Fund - Pan European Property Equities Fund Allocation by Industry As at 31 Dec 2014 Industry % of NAV MV S$ mil

Financials 97.38 545.42Real estate 0.86 4.81Others* 1.76 9.84

Total 100.00 560.07*Includes other industries.

VII Allocation of Debt Securities by Credit Ratings As at 31 Dec 2014 Rating % of NAV MV S$ mil Henderson Horizon Fund - Asia-Pacific Property Equities Fund N.A. N.A.

Henderson Horizon Fund - Global Property Equities Fund N.A. N.A.

Henderson Horizon Fund - Pan European Property Equities Fund (For Debt securities portfolio only) Unrated 0.86 4.81

Total 0.86 4.81


78

VIII Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2014 Henderson Horizon Fund - Asia-Pacific Property Equities Fund % of NAV MV S$ mil

Sun Hung Kai Properties 9.71 40.19Mitsui Fudosan 8.46 35.04Scentre 7.92 32.79Mitsubishi Estate 6.15 25.46Sumitomo Realty & Development 5.31 21.98Hongkong Land Holdings 4.71 19.50Wharf Holdings 4.60 19.04Link REIT 4.57 18.93Goodman Fielder 4.33 17.93Japan Real Estate REIT 3.98 16.49

Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2013 Henderson Horizon Fund - Asia-Pacific Property Equities Fund % of NAV MV S$ mil

Sumitomo Realty & Development 9.20 45.93Mitsubishi Estate Co. Ltd. 9.18 45.83Mitsui Fudosan Co. Ltd. 8.75 43.68Sun Hung Kai Properties Ltd. 7.78 38.84Wharf Holdings 5.43 27.13Hongkong Land Holdings 4.61 23.02Nippon Building Fund 4.57 22.81Mirvac Group 3.86 19.25Goodman Group 3.62 18.09Japan Real Estate Investment 3.56 17.78

IX Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2014 Henderson Horizon Fund - Global Property Equities Fund % of NAV MV S$ mil

Simon Property 6.45 79.45Ventas 3.60 44.29Mitsui Fudosan 3.23 39.76Camden Property Trust 3.08 37.86Sun Hung Kai Properties 2.89 35.55Unibail-Rodamco 2.83 34.89Mid-America Apartment Communities 2.82 34.70United Dominion Realty Trust 2.81 34.59Boston Properties 2.58 31.79Prologis 2.55 31.39

Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2013 Henderson Horizon Fund - Global Property Equities Fund % of NAV MV S$ mil

Simon Property Group Inc. 6.02 90.66Mitsubishi Estate 5.26 79.20Mitsui Fudosan Co. Ltd. 4.81 72.43Public Storage 3.36 50.63Health Care Real Estate Investment Trust 3.34 50.37Prologis 3.24 48.78Nippon Building Fund 2.93 44.20General Growth Properties 2.43 36.64Land Securities Group 2.37 35.76Sun Hung Kai Properties 2.36 35.54


79

X Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2014 Henderson Horizon Fund - Pan European Property Equities Fund % of NAV MV S$ mil

British Land 9.53 53.35Unibail-Rodamco 8.67 48.55Land Securities REIT 7.44 41.69Great Portland Estates 5.94 33.28Gagfah 4.92 27.55Icade 4.56 25.56Deutsche Annington Immobilien 4.44 24.86Derwent London 4.43 24.83Safestore Holdings 4.10 22.94Hemfosa Fastigheter 4.02 22.49

Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2013 Henderson Horizon Fund - Pan European Property Equities Fund % of NAV MV S$ mil

Land Securities Group PLC 9.82 61.56Unibail Rodamco S.A. 9.77 61.28British Land 8.90 55.80Great Portland Estates 5.69 35.70Derwent London PLC 4.83 30.26Wihlborgs Fastigheter 4.81 30.17Icade S.A. 4.78 29.98GAGFAH 4.49 28.14Fabege 3.52 22.06Grainger 3.40 21.31

XI Exposure to Derivatives As at 31 Dec 2014 Henderson Horizon Fund - Asia-Pacific Property Equities Fund

% of NAV (0.00%)Market value (S$) (526)Realised Gains / (Losses) (S$) -Unrealised Gains / (Losses) (S$) -

Henderson Horizon Fund - Global Property Equities Fund % of NAV (0.17%)Market value (S$) (2,035,119)Realised Gains / (Losses) (S$) -Unrealised Gains / (Losses) (S$) -

Henderson Horizon Fund - Pan European Property Equities Fund% of NAV 0.01%Market value (S$) 53,839 Realised Gains / (Losses) (S$) -Unrealised Gains / (Losses) (S$) -

XII Borrowings of Net Asset Value As at 31 Dec 2014Henderson Horizon Fund - Asia-Pacific Property Equities Fund N.A.Henderson Horizon Fund - Global Property Equities Fund N.A.Henderson Horizon Fund - Pan European Property Equities Fund N.A.


80


As at As at As at As at31-Dec-14 31-Dec-13 31-Dec-14 31-Dec-13

Underlying Sub-Fund Level Henderson Horizon Fund - Asia-Pacific Property Equities Fund 1.92% 1.93% 120.81%* 210.39% Henderson Horizon Fund - Global Property Equities Fund 1.97% 1.92% 123.85%* 144.27% Henderson Horizon Fund - Pan European Property Equities Fund 1.91% 1.91% (121.96%)* 51.24% *Turnover Ratio calculation is based on Luxembourg GAAP.

ILP Sub-Fund Level HSBC Insurance Premium Property Equity Fund 2.24% 2.22% 35.74% 18.83%







HSBC Insurance (Singapore) Pte. Limited Investment-linked Fund Report: HSBC Insurance SGD Reserve Fund

81

HSBC Insurance SGD Reserve Fund

Fund Objective

HSBC Insurance SGD Reserve Fund seeks to achieve a return in line with the one month Singapore Dollar Interbank Bid Rate (SIBID) whilst managing liquidity and risk to preserve capital. Fund investments are made by way of a feeder fund, which invests substantially all, or all its assets in the Schorder S$ Reserve Fund.


In the second half of 2014, the US economic data

FUND FACTS Underlying Fund Schroder S$ Reserve Fund Fund Manager Schroder Investment

Management (Singapore) Ltd Launch Date 14 Oct 2005 CPFIS/SRS SRS CPFIS Risk Classification

N.A.


releases continued to be largely upbeat and investors remained focused on the high levels of policy accommodation which persisted from major central banks, while geopolitical and macroeconomic influences produced bouts of heightened volatility. Risk aversion and volatility continued to drive the markets in December as global assets were hit by the continued freefall in the price of oil along with the equally dramatic decline in the Russian ruble. The latest Federal Open Market Committee (FOMC) rhetoric affirmed the markets’ view that the timing and the pace of Fed “lift-off” will be gradual.

In this environment, Singapore bonds yields decline in line with US Treasury yields while the 1-month and 3-month SIBOR remained stable and ended the year at 0.42% and 0.46% respectively.


2014 started with a distinctly bond bearish sentiment but government bonds turned out to be the best-performing asset class whilst the worst-performing was commodities, largely driven by falls in energy prices. Going into 2015, although the fall in oil prices will add pressure on commodity producers and energy firms but overall the clear implication is that global growth will be stronger and inflation lower as a result.

Singapore inflation numbers fell to -0.3% in November, the weakest and first negative print since December 2009. Core inflation also surprised to the downside, edging down to a 19-month low of 1.5%. Divergence between core and headline will continue into 2015 as cooling property market and lower electricity tariffs will offset higher labour costs and food prices.

The base scenario is still for the US Fed to raise rates in the middle of next year and the latest FOMC meeting held in December did not change this conclusion. Instead, on the basis that oil prices stabilise, the effect on inflation may be temporary. In addition, we expect the US recovery which has been led by stronger domestic demand, will outweigh external concerns and keep the Fed on a normalising path. The fund will continue to focus on capital preservation and maintain high portfolio liquidity while looking for opportunities to diversify into high quality, short-dated corporate issues to further enhance the yield carry.



82


3-Mth(%)

6-Mth(%)

1-Year(%)

3-Year(%)

5-Year(%)

10-Year(%)

Since Inception

(%) HSBC Insurance SGD Reserve Fund (0.16) (0.17) (0.19) (0.15) 0.30 N.A. 10.74 Benchmark* 0.07 0.12 0.24 0.60 0.78 N.A. 7.78


3-Year(%)

5-Year(%)

10-Year(%)

Since Inception

(%) HSBC Insurance SGD Reserve Fund (0.05) 0.06 N.A. 1.12 Benchmark* 0.20 0.16 N.A. 0.82

*1 Month Singapore Dollar Interbank Bid Rate (SIBID)


Schroder S$ Reserve Fund 100.14 7.07Other liabilities (0.14) (0.01)

Total 100.00 7.06



C) Underlying Fund Disclosure (Schroder S$ Reserve Fund) I Allocation by Country As at 31 Dec 2014 Country % of NAV MV S$ mil

Singapore 67.27 24.68China 5.45 2.00Other net assets 27.28 10.01

Total 100.00 36.69


Central Bank 35.13 12.89Sovereign agency 27.34 10.03Bank 5.45 2.00Print/Publish 4.80 1.76Other net assets 27.28 10.01

Total 100.00 36.69


Not Rated 72.72 26.68Other net assets 27.28 10.01

Total 100.00 36.69


83


MAS Bill Series 84 13 Feb 2015 23.68 8.69Land Transport Authority 1.675% 27 May 2015 13.65 5.01Housing & Development Board MTN 3.375% 21 Apr 2015 8.23 3.02Housing & Development Board Series MTN 1.87% 25 Mar 2015 5.45 2.00MAS Bill Series 84 20 Mar 2015 5.45 2.00Bank of China Singapore Series FXCD 1.1% 6 Aug 2015 5.45 2.00Singapore Press Holdings Limited MTN 2.81% 2 Mar 2015 4.80 1.76MAS Bill Series 84 13 Mar 2015 3.54 1.30MAS Bill Series 168 20 Jan 2015 1.91 0.70MAS Bill Series 84 6 Feb 2015 0.55 0.20

Top Ten Holdings of Underlying Fund^ As at 31 Dec 2013% of NAV MV S$ mil

MAS Bill Series 87 03 Feb 2014 6.85 4.00MAS Bill Series 84 21 Feb 2014 6.85 4.00Bank of China Ltd/Hong Kong 0.9% 28 Mar 2014 6.84 3.99Agricultural Bank of China Ltd/Singapore 0.8% 23 Apr 2014 5.14 3.00MAS Bill Series 84 28 Feb 2014 5.14 3.00MAS Bill Series 84 24 Jan 2014 4.97 2.90Kookmin Bank 0.85% 31 Jul 2014 3.41 1.99Export-Import Bank of Korea EMTN 1% 29 Aug 2014 1.72 1.00CMT MTN Private Ltd 2.85% 01 Sep 2014 0.43 0.25

^Less than Ten Holdings in the Underlying Fund.

V Exposure to Derivatives As at 31 Dec 2014% of NAV -Market value (S$) -Realised Gains / (Losses) (S$) 1Unrealised Gains / (Losses) (S$) -


D) Other Disclosure Items I Expense/Turnover Ratios HSBC Insurance SGD Reserve



N.A.



84

IV Soft Dollar Commission Arrangement In the management of the Fund, the Manager may accept soft dollar commissions from, or enter into softdollar arrangements with, stockbrokers who execute trades on behalf of the Fund and the soft dollarsreceived are restricted to the following kinds of services:


The Manager may not receive or enter into soft dollar commissions or arrangements unless (a) such softdollar commissions or arrangements shall reasonably assist the Manager in their management of theFund, (b) best execution is carried out for the transactions, and (c) that no unnecessary trades areentered into in order to qualify for such soft dollar commissions or arrangements. The Manager shall notreceive goods and services such as travel, accommodation and entertainment.




HSBC Insurance (Singapore) Pte. Limited Investment-linked Fund Report: HSBC Insurance Singapore Balanced Fund

85

HSBC Insurance Singapore Balanced Fund

Fund Objective

HSBC Insurance Singapore Balanced Fund seeks to achieve capital appreciation in the long-term by investing 70% of its assets into a diversified portfolio of Singapore equity and equity-related securities and 30% of its remaining assets into quality investment grade bonds of Singapore and major bond markets.The Fund invests substantially all or all its assets primarily 70% into the Deutsche Singapore Equity Fund and 30% into the Deutsche Lion Bond Fund.

Deutsche Premier Investment Funds – Deutsche Singapore Equity Fund


The Singapore equity market trended higher in the

FUND FACTS Underlying Funds 70%: Deutsche Premier

Investment Funds - Deutsche Singapore Equity Fund30%: Deutsche Lion Bond Fund

Fund Manager Deutsche Asset Management (Asia) Ltd

Launch Date 26 May 2008 CPFIS/SRS SRS CPFIS Risk Classification

N.A.


second half of the year, underpinned by buying interest in the local banks. Singapore banks continued to outperform as they delivered earnings ahead of street estimates. One of our holdings, the flag carrier of Singapore, also stood out as the winner on expectations that the Group could enjoy cost savings from the steep fall in jet fuel prices.

In contrast, the offshore & marine sector was sold off sharply on fears of order cancellations and industry headwinds as a result of the sharp fall in crude oil prices. One of our holding, an integrated resorts development specialist, also underperformed amidst earnings disappointment and lingering concerns of higher impairments on receivables.


The weaker than expected advance GDP estimate for the 4th quarter implies a slightly muted starting point for the Singapore economy as we move into 2015. Against this macro-economic backdrop, the scope for corporate earnings upgrade is limited in the near term. The Singapore equity market is likely to grind higher in line with earnings growth expectations of 7-8% in 2015. On sector preference, we are turning slightly more sanguine on property developers where expectations are low and valuations are undemanding. The Fund continues to favor yield plays with strong balance sheets and earnings visibility.

Deutsche Lion Bond Fund

*Please refer to HSBC Insurance Singapore Bond Fund on page 89 for the Investment and Market Review and the Market Outlook and Investment Strategy.



3-Mth(%)

6-Mth(%)

1-Year(%)

3-Year(%)

5-Year(%)

10-Year(%)

SinceInception

(%)HSBC Insurance Singapore Balanced Fund 0.43 0.78 4.38 24.57 19.85 N.A. 25.55

Benchmark* 2.43 3.24 5.82 28.53 21.58 N.A. 28.42


86


3-Year(%)

5-Year(%)

10-Year(%)

SinceInception

(%) HSBC Insurance Singapore Balanced Fund 7.60 3.69 N.A. 3.52 Benchmark* 8.73 3.99 N.A. 3.87

*70% MSCI Singapore Total Return Index, with Gross Dividends reinvested and 30% 6-month Singapore Inter-bank Offer Rate (SIBOR) minus 12.5 basis points


Asset Class % of NAV MV S$ mil Deutsche Premier Investment Funds – Deutsche Singapore Equity Fund 71.77 9.89 Deutsche Lion Bond Fund 28.08 3.87 Other assets 0.22 0.03 Other liabilities (0.07) (0.01)

Total 100.00 13.78



C) Underlying Fund Disclosure (Deutsche Premier Investment Funds – Deutsche Singapore Equity Fund)

I Allocation by Country As at 31 Dec 2014Country % of NAV MV S$ mil

Singapore 91.67 64.79 Bermuda 3.79 2.68 Isle of Man 2.36 1.67 Other net assets 2.18 1.54

Total 100.00 70.68


Banks 34.28 24.23 Telecom Service 13.67 9.66 Real Estate 10.03 7.09 Diversified Resources 7.50 5.30 Transport 5.42 3.83 Real Estate Investment Trust 5.15 3.64

Agriculture 3.64 2.57 Engineering/Machine 3.61 2.55 Healthcare 2.87 2.03 Hotels 2.36 1.67 Transport - Ship 1.77 1.25 Others* 9.70 6.86




87


DBS Group Holdings Limited 13.57 9.59 Singapore Telecommunications Limited 12.69 8.97 United Overseas Bank Limited 10.75 7.60 Oversea-Chinese Banking Corporation Limited 9.96 7.04 Keppel Corporation Limited 5.15 3.64 Capitaland Limited 4.53 3.20 ComfortDelGro Corporation Limited 3.96 2.80 Global Logistic Properties Limited 2.94 2.08 Singapore Technologies Engineering Limited 2.41 1.70 Genting Singapore PLC 2.36 1.67


DBS Group Holdings Ltd. 13.09 9.29 United Overseas Bank Ltd. 11.59 8.22 Singapore Telecommunications Ltd. 10.14 7.19 Oversea-Chinese Banking Corp. Ltd. 9.25 6.57 Keppel Corp. Ltd 7.20 5.11 Genting Singapore PLC 4.60 3.27 Capitaland Ltd. 4.52 3.21 Global Logistic Properties Ltd. 4.27 3.03 Singapore Technologies Engineering Ltd. 3.58 2.54 Wilmar International Ltd. 3.22 2.29

V Exposure to Derivatives As at 31 Dec 2014 % of NAV - Market value (S$) - Realised Gains / Losses (S$) 2,220 Unrealised Gains / Losses (S$) -


*HBSC Insurance Singapore Balanced Fund invests 30% into Deutsche Lion Bond Fund. Please refer to HSBC Insurance Singapore Bond Fund on page 90 for the underlying fund disclosure on Deutsche Lion Bond fund under Section C.

D) Other Disclosure Items I Expense/Turnover

Ratios Expense Ratio Turnover Ratio

As at 31-Dec-14 As at 31-Dec-13 As at 31-Dec-14 As at 31-Dec-13 Underlying Fund Level Deutsche Singapore Equity Fund 1.70% 1.74% 55.75% 135.31% Deutsche Lion Bond Fund 0.69% 0.67% 46.68% 30.08%

ILP Sub-Fund Level HSBC Insurance Singapore Balanced Fund 1.63% 1.66% 13.39% 11.41%




88

IV Soft Dollar Commission AgreementSoft dollar commissions are benefits accorded to Manager by their brokers, usually in the form of research, advisory, analysis and data services, computer hardware or software used for and/or in support of the investment process.

The Manager’s policy on soft dollar commissions is as follows: - the goods and services received would assist in the provision of investment services and advices or related services to the unit trust; - transactions are executed on the best available terms; and - the Manager does not engage in unnecessary trades in order to qualify for soft dollar commissions.





HSBC Insurance (Singapore) Pte. Limited Investment-linked Fund Report: HSBC Insurance Singapore Bond Fund

89

HSBC Insurance Singapore Bond Fund

Fund Objective

HSBC Insurance Singapore Bond Fund seeks to achieve attractive returns by investing in Single A and above quality investment grade bonds of Singapore and major bond markets such as the G7 countries, Australia, New Zealand, Hong Kong and South Korea. Fund investments are made by way of a feeder fund, which invests substantially all or all its assets in the Deutsche Lion Bond Fund.


FUND FACTS Underlying Fund Deutsche Lion Bond Fund Fund Manager Deutsche Asset

Management (Asia) Ltd Launch Date 2 May 2002 CPFIS/SRS OA/SA/SRS CPFIS Risk Classification

Low to Medium Risk - Broadly Diversified


The S&P continued to hit new highs in 2H14 ending the period up 5% ending the year at 2,058, slightly lower from the all-time high in mid-Dec’14. The 10-year USTs continued to defy worries over Quantitative Easing (QE) normalisation, falling 36 basis points to 2.17% by the end of the year. Both moves reflected the expectations of loosening to tackle weak growth in the Eurozone, China and Japan coupled with the disinflationary 48% collapse in oil prices.

The US economy recorded a 5.0% Quarter-on-Quarter (QoQ) annualised GDP growth rate with a similarly strong rise in average monthly Nonfarm Payrolls of 264k and fall in Unemployment to 5.6%. The stronger rebound was preceded by strong Institute of Supply Management (ISM) and U. of Michigan Consumer Confidence indices which maintained similarly strong momentum through 2H14.

Looser monetary policy for Eurozone and Japan via QE to tackle deflation was matched by China’s targeted stimulus acting mostly through People’s Bank of China (PBOC) and the banking sector. Singapore’s restructuring woes continued in spite of US final demand and ample global liquidity. Subsequently -3% GDP growth and negative productivity growth added to gloomy disinflationary trends in asset prices.


10-year Singapore Government Securities underperformed US Treasury (USTs) in yield terms as investors sold off Asian FX in favour of a stronger USD. Short end yields have spiked as local liquidity was squeezed on SGD weakness. This could persist though short duration credit yields have been generally stable.

The Fund maintained a flexible approach to duration as slowing global growth kept rates lower than expected. A gradual increase in duration and small unhedged USD exposure helped performance.



3-Mth(%)

6-Mth(%)

1-Year(%)

3-Year(%)

5-Year(%)

10-Year(%)

Since Inception

(%) HSBC Insurance Singapore Bond Fund 0.30 0.57 1.37 6.00 11.63 27.51 34.02

Benchmark* 0.09 0.18 0.35 0.99 1.98 12.95 15.16


3-Year(%)

5-Year(%)

10-Year(%)

Since Inception

(%) HSBC Insurance Singapore Bond Fund 1.96 2.22 2.46 2.35 Benchmark* 0.33 0.39 1.23 1.13

*6-month Singapore Inter-bank Offer Rate (SIBOR) minus 12.5 basis points


90


Asset Class % of NAV MV S$ mil Deutsche Lion Bond Fund 100.13 37.39 Other assets 0.05 0.02 Other liabilities (0.18) (0.07)

Total 100.00 37.34

II Fund Movement (01 Jul 2014 - 31 Dec 2014)S$


C) Underlying Fund Disclosure (Deutsche Lion Bond Fund) I Allocation by Country As at 31 Dec 2014 Country % of NAV MV S$ mil Singapore 55.25 127.81 Malaysia 6.72 15.55 Cayman Islands 6.21 14.37 New Zealand 6.09 14.08 South Korea 5.51 12.75

Australia 4.06 9.40 China 3.53 8.17 United States of America 3.11 7.19 British Virgin Islands 2.20 5.10 Others* 7.32 16.93

Total 100.00 231.35 *Includes other countries and net assets.

II Allocation by Industry As at 31 Dec 2014 Industry % of NAV MV S$ mil Banks 31.26 72.31 Real Estate 23.20 53.68 Finance 14.92 34.51 Transport 4.86 11.25 City Gas 3.86 8.92 Miscellaneous 3.04 7.04 Printing/Publishing 3.03 7.02 Education 2.62 6.06 Industrials 2.18 5.05 Government 1.73 4.00 Diversified Resources 1.70 3.93 Others* 7.60 17.58



91

III Allocation of Debt Securities by Credit Ratings As at 31 Dec 2014Rating % of NAV MV S$ milAaa 5.52 12.77AA (by S&P) 1.08 2.50Aa2 2.74 6.34Aa3 20.73 47.93A+ (by S&P) 4.18 9.68A1 8.71 20.15A2 14.51 33.58A- (by S&P) 0.56 1.30A3 7.73 17.89

Baa2 3.11 7.19 Unrated 28.77 66.57

Accrued interest receivable on quoted bonds 0.88 2.03 Other net assets 1.48 3.42

Total 100.00 231.35


United Overseas Bank Limited Series EMTN Var 11/07/2022 5.17 11.96 HK Land Treasury SG 3.65% 05/10/2015 5.07 11.74 DBS Bank Limited Singapore Series MTN 21/02/2022 4.18 9.67

ANZ National International Limited Series EMTN 2.95% 27/07/2015 3.92 9.08 United Overseas Land Limited MTN 2.493% 08/05/2015 3.35 7.76 Sun Hung Kai Properties Capital Market Limited MTN 3.25% 20/05/2021 3.30 7.63 Morgan Stanley EMTN 3.8% 29/01/2016 3.11 7.19 Danga Capital Berhad 2.615% 11/08/2015 3.04 7.04 Singapore Press Holdings Limited MTN 2.81% 02/03/2015 3.03 7.02 Singapore Bus Services MTN 1.8% 12/09/2017 3.00 6.94


United Overseas Bank Ltd. Series EMTN Variable 11/07/2022 3.78 11.87 HK Land Treasury SG 3.65% 05/10/2015 3.78 11.86 Singapore Press Holdings Ltd. MTN 2.81% 02/03/2015 3.57 11.21 Danga Capital Berhad 2.615% 11/08/2015 3.23 10.14 United Overseas Land Ltd. MTN 2.493% 08/05/2015 2.48 7.79 Royal Bank of Scotland PLC Series EMTN 2.85% 31/03/2014 2.48 7.77 Lloyds TSB Bank Plc Series EMTN 3.5% 17/09/2014 2.42 7.59 DBS Bank Ltd. Singapore Series MTN 21/02/2022 2.42 7.59 Winmall Ltd. 4.69% 27/04/2014 2.41 7.56 Morgan Stanley EMTN 3.8% 29/01/2016 2.30 7.23

V Exposure to Derivatives As at 31 Dec 2014 % of NAV (0.42%) Market value (S$) (962,666) Realised Gains / (Losses) (S$) (1,280,846) Unrealised Gains / (Losses) (S$) (962,666)


D) Other Disclosure Items I Expense/Turnover Ratios HSBC Insurance Singapore Bond





92


IV Soft Dollar Commission Agreement Soft dollar commissions are benefits accorded to Manager by their brokers, usually in the form of research, advisory, analysis and data services, computer hardware or software used for and/or in support of the investment process.

The Manager’s policy on soft dollar commissions is as follows: - the goods and services received would assist in the provision of investment services and advices or related services to the unit trust; - transactions are executed on the best available terms; and - the Manager does not engage in unnecessary trades in order to qualify for soft dollar commissions.




HSBC Insurance (Singapore) Pte. Limited Investment-linked Fund Report: HSBC Insurance World Selection Funds

93

HSBC Insurance World Selection Funds

Fund Facts HSBC Insurance World Selection 1 Fund

HSBC Insurance World Selection 3 Fund


Launch Date 1 Apr 2010 1 Apr 2010 1 Apr 2010 Fund Manager HSBC Global Asset Management (Singapore) Ltd Underlying Sub-Fund

HSBC Portfolios – World Selection 1

HSBC Portfolios – World Selection 3

HSBC Portfolios - World Selection 5

CPFIS/SRS SRS CPFIS Risk Classification

N.A.

As at 31 Dec 2014 Offer Price S$ 1.14793 S$ 1.18934 S$ 1.22446 Bid Price S$ 1.09053 S$ 1.12987 S$ 1.16324 Fund Size S$ 0.21 mil S$ 0.42 mil S$ 1.34 mil Units in Issue 0.19 mil 0.37 mil 1.15 mil

Fund Objectives

HSBC Insurance World Selection 1 Fund seeks to provide capital growth through investment in a broad range of asset classes across global markets, consistent with a low risk investment strategy.

HSBC Insurance World Selection 3 Fund seeks to provide capital growth through investment in a broad range of asset classes across global markets, consistent with a medium risk investment strategy.

HSBC Insurance World Selection 5 Fund seeks to provide capital growth through investment in a broad range of asset classes across global markets, consistent with a high risk investment strategy.


The direction of US monetary policy increasingly diverged from other developed markets in the second half of 2014. The Federal Reserve brought its asset purchase programme to an end and expectations mounted of a first rate hike as the US economy continued to make strong progress. Conversely, in Europe, both growth and inflation remained weak, putting pressure on the European Central Bank to expand the size and scope of its asset purchase scheme. In Japan, the central bank surprised markets by expanding its stimulus programme. US equities outperformed and the dollar strengthened markedly as a result. Oil prices fell considerably, weakening the outlook for global inflation. Against this backdrop, global equities returned 3.3%. 10 year US Treasury yields declined around 0.4%.


We maintained a reduced allocation to global government bonds throughout the period. Core government bond yields declined, however, as lower oil prices weakened the outlook for inflation globally. As a result, we believe the asset class is even more unattractively valued and maintain our underweight positioning heading into 2015.

We maintained an overweight allocation to global equities over the period and continue to do so at the start of 2015. We believe prospective returns on global equities compare favourably to competing asset classes and haven assets in particular.

The main risks to our outlook are more aggressive tightening of US monetary policy, which could undermine the valuation case for risk assets; faltering growth in China; and policy inaction in Europe where expectations of sovereign bond quantitative easing are now high.

^ Source: HSBC Global Asset Management (Singapore) Ltd


94


3-Mth (%)

6-Mth (%)

1-Year(%)

3-Year(%)

5-Year(%)

10-Year(%)

Since Inception

(%) HSBC Insurance World Selection 1 Fund* 5.63 7.82 9.56 17.30 N.A. N.A. 14.79 HSBC Insurance World Selection 3 Fund* 4.65 5.36 7.93 28.41 N.A. N.A. 18.93 HSBC insurance World Selection 5 Fund* 4.66 4.32 7.34 40.42 N.A. N.A. 22.45


3-Year(%)

5-Year(%)

10-Year(%)

Since Inception

(%) HSBC Insurance World Selection 1 Fund* 5.46 N.A. N.A. 3.02 HSBC Insurance World Selection 3 Fund* 8.69 N.A. N.A. 3.75 HSBC Insurance World Selection 5 Fund* 11.98 N.A. N.A. 4.40

*These Funds do not have a benchmark due to the diverse range of asset classes; some do not have indices that meet the criteria for inclusion in a representative composite benchmark of being both investable and replicable.



HSBC Portfolios - World Selection 1 100.00 0.21 Total 100.00 0.21



C) Underlying Sub-Fund Disclosure (HSBC Portfolios - World Selection 1) I Allocation by Country As at 31 Dec 2014

Not applicable, as the fund is a fund-of-funds.

II Allocation by Industry As at 31 Dec 2014Not applicable, as the fund is a fund-of-funds.



95


HSBC Global Government Bond Strategy 31.61 187.61HSBC Global Corporate Bond Strategy 17.18 101.99HSBC GIF Global Government Bond 12.24 72.62HSBC GIF Global High Yield Bond 5.55 32.91HSBC ESI Worldwide Equity ETF 5.42 32.18HSBC FTSE All-World Index 5.24 31.10HSBC GIF Global Emerging Markets Bond 5.10 30.28HSBC GIF Global Emerging Markets Local Debt 4.99 29.60HSBC American Index 3.88 23.01HSBC ISF MultiAlpha Global High Yield Bond 2.94 17.45


HSBC International Select Funds MultiAlpha Global Aggregate 18.15 109.70Wellington Global Bond Fund 16.43 99.30PIMCO GIS Global Bond-USDINS ACC 10.98 66.40HSBC International Select Funds MultiAlpha Europe Equity 6.69 40.46HSBC International Select Funds MultiAlpha Global High Yield 6.33 38.25US Dollar (Capital) 5.46 33.03Alliance Bernstein Global Plus Fixed Income 4.92 29.73HSBC International Select Funds MultiAlpha Glbl Real Estate Eq 3.98 24.05Stone Harbor-EM MK DBT-IUSDA 3.09 18.68Goldman Sachs Global Fixed Income 2.89 17.47

V Exposure to Derivatives As at 31 Dec 2014% of NAV 2.92%Market value (S$) 17,311,499 Realised Gains / (Losses) (S$) -Unrealised Gains / (Losses) (S$) 153,686


D) Other Disclosure Items I Expense/Turnover Ratios HSBC Insurance

World Selection 1 Fund Underlying Sub-Fund

As at 31-Dec-14 As at 31-Dec-13 As at 31-Dec-14 As at 31-Dec-13 Expense Ratio 1.65% 2.19% 1.30% 1.84% Turnover Ratio 23.92% 11.74% 0.94%** 9.89%

**Based on the audited figures as at 31 Oct 2014 as the turnover ratio of HSBC Portfolios - World Selection 1 for the financial year ended 31 Dec 2014 is not available.

II Related-Party Transactions The HSBC Insurance World Selection 1 Fund invests S$0.21 million, equivalent to 100.00% of its net asset value in HSBC Portfolios - World Selection 1, which is managed by HSBC Global Asset Management (Singapore) Ltd.

The management fees earned by HSBC Global Asset Management (Singapore) Ltd from 01 Jul 2014 to 31 Dec 2014 amounts to S$314.




96




97








II Allocation by Industry As at 31 Dec 2014 Not applicable, as the fund is a fund-of-funds.



HSBC Global Corporate Bond Strategy 24.01 200.88 HSBC FTSE All-World Index 18.42 154.10 HSBC ESI Worldwide Equity ETF 12.61 105.49 HSBC GIF Global High Yield Bond 6.17 51.67 HSBC ISF MultiAlpha Global Real Estate 6.11 51.11 HSBC Worldwide Equity ETF 5.61 46.95 HSBC American Index 5.50 46.05 HSBC GIF Global Emerging Markets Bond 5.05 42.29 HSBC GIF Global Emerging Markets Local Debt 4.94 41.34 HSBC ISF MultiAlpha Global High Yield Bond 3.94 32.96


HSBC International Select Funds MultiAlpha Global Aggregate 17.47 111.92 HSBC International Select Funds MultiAlpha Europe Equity 16.54 105.93 HSBC International Select Funds MultiAlpha Global Emerging Mkts 9.21 58.96 HSBC American Index Fund 7.82 50.08 HSBC International Select Funds MultiAlpha North America Equity 7.60 48.68 HSBC International Select Funds MultiAlpha Global High Yield 6.52 41.77 HSBC International Select Funds MultiAlpha Glbl Real Estate Eq 6.04 38.66 Stone Harbor-EM MK DBT-IUSDA 4.20 26.90 HSBC International Select Funds MultiAlpha Japan 4.16 26.61 HSBC International Select Funds MultiAlpha Asia Pacific Ex Japan 3.84 24.59

V Exposure to Derivatives As at 31 Dec 2014 % of NAV 4.23% Market value (S$) 35,369,230 Realised Gains / (Losses) (S$) -Unrealised Gains / (Losses) (S$) 128,698



98



As at 31-Dec-14 As at 31-Dec-13 As at 31-Dec-14 As at 31-Dec-13 Expense Ratio 1.73% 2.35% 1.48% 2.10% Turnover Ratio 25.15% 10.62% 1.06%** (9.38%)



The management fees earned by HSBC Global Asset Management (Singapore) Ltd from 01 Jul 2014 to 31 Dec 2014 amounts to S$791.






99








II Allocation by Industry As at 31 Dec 2014Not applicable, as the fund is a fund-of-funds.



HSBC ESI Worldwide Equity ETF 19.44 92.31HSBC Worldwide Equity ETF 19.21 91.23HSBC FTSE All-World Index 18.44 87.60HSBC MSCI World ETF 15.83 75.18HSBC American Index 8.55 40.62HSBC ISF MultiAlpha Global Real Estate 6.04 28.68HSBC GIF Global Emerging Markets Local Debt 5.04 23.96FTSE 100 Index Future Mar 15 3.24 15.39Topix Index Future Mar 15 2.07 9.84HSBC MSCI Emerging Markets ETF 1.80 8.53


HSBC International Select Funds MultiAlpha Europe Equity 19.41 87.64HSBC International Select Funds MultiAlpha Global Emerging Mkts 18.82 85.00HSBC American Index Fund 13.79 62.26HSBC International Select Funds MultiAlpha North America Equity 13.68 61.76HSBC International Select Funds MultiAlpha Japan 7.17 32.37HSBC International Select Funds MultiAlpha Glbl Real Estate Eq 5.52 24.91HSBC International Select Funds MultiAlpha Asia Pacific Ex Japan 5.03 22.71Trilogy Emerging Markets Fund 3.90 17.61Wellington Management Portfolios - Emerging Markets Equity 3.54 15.97Rouvier Europe 2.70 12.21

V Exposure to Derivatives As at 31 Dec 2014% of NAV 5.31%Market value (S$) 25,232,312 Realised Gains / (Losses) (S$) -Unrealised Gains / (Losses) (S$) 400,127



100



As at 31-Dec-14 As at 31-Dec-13 As at 31-Dec-14 As at 31-Dec-13 Expense Ratio 1.78% 2.49% 1.53% 2.24% Turnover Ratio 4.55% 10.50% 1.48%** (22.15%)








HSBC Insurance (Singapore) Pte. Limited Investment-linked Fund Report: Financial Statements

101

Financial Statements

HSBC Insurance Asia Balanced

Fund

HSBC Insurance Asia

Equity Fund

HSBC Insurance Asia Focused

Income Fund

S$ S$ S$ Capital and Income Account Period from 1 July 2014 to 31 December 2014

Value of Fund as at 1 July 2014 2,710,793 79,867,015 1,371,276

Amounts received by the Fund for creation of units 438,669 8,063,524 94,430 Amounts paid by the Fund for liquidation of units (219,037) (4,593,804) (251,344) Net cash into/(out of) Fund 219,632 3,469,720 (156,914)

Unrealised appreciation/(diminution) in value of investments (26,256) (1,006,461) (22,987) Gain/(Loss) on sale of investments 18,839 636,977 9,707 Management fees (23,090) (660,666) (8,658) Other expenses (6,361) (14,382) - Increase/(Decrease) in net asset value for the period 182,764 2,425,188 (178,852)

Value of Fund as at 31 December 2014 2,893,558 82,292,203 1,192,424

Statement of Assets and Liabilities As at 31 December 2014

Assets Investments in funds 2,907,252 82,361,868 1,191,237 Other debtors 1,778 50,817 1,188 Total assets 2,909,030 82,412,685 1,192,425

Liabilities Other creditors (15,472) (120,481) (1)


The accompanying notes form an integral part of these financial statements.


102

Financial Statements (Cont)

HSBC Insurance Asian Bond

Fund

HSBC Insurance Asian Dividend

Equity Fund

HSBC Insurance China Balanced

Fund S$ S$ S$ Capital and Income Account Period from 1 July 2014 to 31 December 2014


Amounts received by the Fund for creation of units 3,651,680 404,967 500,236 Amounts paid by the Fund for liquidation of units (2,362,221) (50,545) (201,749)Net cash into/(out of) Fund 1,289,459 354,422 298,487

Unrealised appreciation/(diminution) in value of investments (84,656) 76,789 150,474 Gain/(Loss) on sale of investments 112,420 4,856 11,831 Management fees (126,808) (16,759) (13,962)Other expenses (4,147) - -Increase/(Decrease) in net asset value for the period 1,186,269 419,309 446,830




Liabilities Other creditors (64,048) (3,162) (5,217)




103


HSBC Insurance China Equity

Fund

HSBC Insurance Climate Change

Equity Fund

HSBC Insurance Emerging Europe

Equity Fund S$ S$ S$ Capital and Income Account Period from 1 July 2014 to 31 December 2014


Amounts received by the Fund for creation of units 6,173,189 310,375 1,515,609 Amounts paid by the Fund for liquidation of units (6,634,807) (112,053) (288,656) Net cash into/(out of) Fund (461,618) 198,322 1,226,954

Unrealised appreciation/(diminution) in value of investments 12,210,906 25,976 (1,877,451) Gain/(Loss) on sale of investments 449,278 12,227 1,039 Management fees (647,145) (16,967) (65,482) Other expenses - - (5,530) Increase/(Decrease) in net asset value for the period 11,551,422 219,558 (720,471)



Assets Investments in funds 85,874,096 2,303,125 7,519,434 Cash and bank balances - - 6,696 Other debtors 47,175 1,600 9,558 Total assets 85,921,271 2,304,725 7,535,688





104


HSBC Insurance Emerging Markets

Equity Fund

HSBC Insurance Ethical Global Equity Fund

HSBC Insurance Ethical Global Sukuk Fund



Amounts received by the Fund for creation of units 2,873,821 1,398,220 177,726 Amounts paid by the Fund for liquidation of units (2,140,599) (4,639,668) (746,404)Net cash into/(out of) Fund 733,222 (3,241,448) (568,678)

Unrealised appreciation/(diminution) in value of investments (373,597) (4,810,347) 759,197 Gain/(Loss) on sale of investments 35,542 115,160 36,907 Dividend income - - 251,353 Management fees (262,474) (532,072) (126,626)Other expenses (5,725) - (5,595)Increase/(Decrease) in net asset value for the period 126,968 (8,468,707) 346,558



Assets Investments in funds 32,160,415 67,585,817 19,659,182 Cash and bank balances - - 50,641 Other debtors 152,431 93,062 25,583 Total assets 32,312,846 67,678,879 19,735,406





105


HSBC Insurance Europe Equity

Fund

HSBC Insurance Global Bond

Fund

HSBC Insurance Global Emerging

Markets Bond Fund


Value of Fund as at 1 July 2014 9,191,053 10,143,940 594,435

Amounts received by the Fund for creation of units 2,683,079 629,433 113,126 Amounts paid by the Fund for liquidation of units (639,855) (849,820) (39,495) Net cash into/(out of) Fund 2,043,224 (220,387) 73,631

Unrealised appreciation/(diminution) in value of investments (591,662) 418,708 (28,643) Gain/(Loss) on sale of investments 6,298 63,167 (1,191) Dividend income - - 10,587 Management fees (77,401) (44,450) (4,171) Other expenses (5,473) (4,965) - Increase/(Decrease) in net asset value for the period 1,374,986 212,073 50,213

Value of Fund as at 31 December 2014 10,566,039 10,356,013 644,648


Assets Investments in funds 10,601,731 10,360,402 644,507 Other debtors - 5,939 5,203 Total assets 10,601,731 10,366,341 649,710


Value of Fund as at 31 December 2014 10,566,039 10,356,013 644,648



106


HSBC Insurance Global Equity

Fund

HSBC Insurance India Equity

Fund

HSBC Insurance Japan Equity

Fund S$ S$ S$

Capital and Income Account Period from 1 July 2014 to 31 December 2014


Amounts received by the Fund for creation of units 3,088,777 4,407,252 237,804 Amounts paid by the Fund for liquidation of units (3,366,314) (5,989,594) (282,968) Net cash into/(out of) Fund (277,537) (1,582,342) (45,164)

Unrealised appreciation/ (diminution) in value of investments 2,123,063 (226,848) (2,480) Gain/(Loss) on sale of investments 660,581 773,424 (27,060) Dividend Income - 641,643 - Management fees (576,791) (464,773) (18,071) Other expenses (11,784) - (6,370) Increase/(Decrease) in net asset value for the period 1,917,532 (858,896) (99,145)








107


HSBC Insurance Pacific Equity

Fund

HSBC Insurance Premium Balanced

Fund

HSBC Insurance Premium

Property Equity Fund

S$ S$ S$ Capital and Income Account Period from 1 July 2014 to 31 December 2014 Value of Fund as at 1 July 2014 73,499,405 120,100,253 935,964

Amounts received by the Fund for creation of units 13,767,845 5,455,090 173,057 Amounts paid by the Fund for liquidation of units (6,028,106) (8,170,084) (136,365)Net cash into/(out of) Fund 7,739,739 (2,714,994) 36,692

Unrealised appreciation/ (diminution) in value of investments 1,043,266 1,649,532 58,387 Gain/(Loss) on sale of investments 498,455 1,618,253 7,394 Other income - - (16)Management fees (591,681) (770,839) (6,487)Other expenses (14,772) - (110)Increase/(Decrease) in net asset value for the period 8,675,007 (218,048) 95,860


Statement of Assets and LiabilitiesAs at 31 December 2014

Assets Investments in funds 82,188,659 119,972,306 1,016,865 Cash and bank balances 35,558 - 2,037 Other debtors 6,029 123,025 15,623 Total assets 82,230,246 120,095,331 1,034,525





108


HSBC Insurance SGD Reserve

Fund

HSBC InsuranceSingapore

Balanced Fund

HSBCInsuranceSingapore Bond Fund

S$ S$ S$ Capital and Income Account Period from 1 July 2014 to 31 December 2014 Value of Fund as at 1 July 2014 6,518,861 12,293,576 41,367,640

Amounts received by the Fund for creation of units 1,174,982 2,186,576 1,938,278 Amounts paid by the Fund for liquidation of units (617,479) (805,122) (6,191,296)Net cash into/(out of) Fund 557,503 1,381,454 (4,253,018)

Unrealised appreciation/ (diminution) in value of investments 1,605 152,149 (33,968)Gain/(Loss) on sale of investments 1,426 53,275 371,849 Management fees (9,667) (99,134) (109,289)Other expenses (5,658) (4,866) (6,834)Increase/(Decrease) in net asset value for the period 545,209 1,482,878 (4,031,260)








109


HSBC Insurance World Selection 1

Fund


Fund


Fund S$ S$ S$ Capital and Income Account Period from 1 July 2014 to 31 December 2014

Value of Fund as at 1 July 2014 196,867 376,823 1,115,201

Amounts received by the Fund for creation of units 25,831 90,586 193,447Amounts paid by the Fund for liquidation ofunits (29,402) (74,058) (20,769)Net cash into/(out of) Fund (3,570) 16,528 172,678

Unrealised appreciation/(diminution) in value of investments 15,170 13,792 64,190Gain/(Loss) on sale of investments 859 11,714 1,110Management fees (1,412) (3,184) (10,022)Increase/(Decrease) in net asset value for the period 11,047 38,850 227,956

Value of Fund as at 31 December 2014 207,914 415,673 1,343,157


Assets Investments in funds 206,544 415,773 1,344,272 Other debtors 1,556 40,219 -Total assets 208,100 455,992 1,344,272

Liabilities Other creditors (186) (40,319) (1,115)

Value of Fund as at 31 December 2014 207,914 415,673 1,343,157


HSBC Insurance (Singapore) Pte. Limited Investment-linked Fund Report: Notes to the financial statements

110

Notes to the financial statements

These notes form an integral part of the financial statements.

1. HSBC Insurance (Singapore) Pte. Limited Investment-Linked Funds

1.1 The Investment-Linked Funds of HSBC Insurance (Singapore) Pte. Limited (HSBC Insurance Investment-Linked Funds) comprise:

Funds Units in issue as at 31 December 2014

HSBC Insurance Asia Balanced Fund 3,541,760 HSBC Insurance Asia Equity Fund 37,051,837 HSBC Insurance Asia Focused Income Fund 1,246,902 HSBC Insurance Asian Bond Fund 13,997,638 HSBC Insurance Asian Dividend Equity Fund 1,996,559 HSBC Insurance China Balanced Fund 1,864,599 HSBC Insurance China Equity Fund 44,868,265 HSBC Insurance Climate Change Equity Fund 1,397,853 HSBC Insurance Emerging Europe Equity Fund 5,756,531 HSBC Insurance Emerging Markets Equity Fund 31,630,801 HSBC Insurance Ethical Global Equity Fund 58,426,791 HSBC Insurance Ethical Global Sukuk Fund 18,958,000 HSBC Insurance Europe Equity Fund 10,004,623 HSBC Insurance Global Bond Fund 9,244,641 HSBC Insurance Global Emerging Markets Bond Fund 697,049 HSBC Insurance Global Equity Fund 54,121,827 HSBC Insurance India Equity Fund 25,310,651 HSBC Insurance Japan Equity Fund 3,324,046 HSBC Insurance Pacific Equity Fund 68,780,260 HSBC Insurance Premium Balanced Fund 81,248,422 HSBC Insurance Premium Property Equity Fund 1,221,103 HSBC Insurance SGD Reserve Fund 6,714,824 HSBC Insurance Singapore Balanced Fund 11,550,183 HSBC Insurance Singapore Bond Fund 28,428,377 HSBC Insurance World Selection 1 Fund 190,654 HSBC Insurance World Selection 3 Fund 367,893 HSBC Insurance World Selection 5 Fund 1,154,669

HSBC Insurance (Singapore) Pte. Limited Investment-linked Fund Report: Notes to the financial statements

111

2. Summary of significant accounting policies

2.1 Basis of preparation

The financial statements of the HSBC Insurance Investment-Linked Funds are presented in Singapore dollars. The financial statements have been prepared on the historical cost basis, except for investments and derivatives which are measured at fair value.

2.2 Investments

All purchases of investments, which only comprise of unit trusts are recognised on their trade dates, i.e. the date the commitment exists to purchase the investments. The investments are initially recorded at cost, being fair value of the consideration given. The attributable transaction costs are recognised in the Capital and Income Account when incurred. After initial recognition, the investments are subsequently measured at fair value and the unrealised gains or losses on re-measurement to fair value are taken to the Capital and Income Account. The fair value is determined by using open market valuation at the reporting date. The bid price has been adopted for all investments.

2.3 Derivative financial instruments

Derivative financial instruments are measured at fair value. Changes in fair value are recognised in the Capital and Income Account. Transaction costs incurred in buying and selling derivative instruments are recognised in the Capital and Income Account when incurred.

The fair value of derivative financial instruments is determined based on their listed market price, if available, or broker quotes.

2.4 Amounts received by the funds for creation of units

The amounts received by the funds comprise the gross premiums received by the Company (after deducting charges which include bid-offer spread) and switches by the policyholders from other funds.

2.5 Amounts paid by the funds for liquidation of units

The amounts paid by the funds for liquidation of units comprise of the sale of units in the investment-linked funds for the payment of death claims or surrenders and for switches by the policyholders to the other funds.

2.6 Gains/losses from sale of investments

All sales of investments are recognised on their trade dates, the date the fund commits to sell the investments. The cost of disposal of investments is determined on the weighted-average cost basis. Realised gains/losses from the sale of investments are taken to the Capital and Income Account.

2.7 Income and expenses recognition

Income and expenses are accounted for on an accrual basis. Dividend income is recognised in the Capital and Income Account when the right to receive payment is established. Interest income from investments is recognised on an accrual basis, using the effective interest method.

2.8 Foreign currencies

Transactions in foreign currencies are translated into Singapore dollars at the exchange rate at the date of the transaction. Financial assets and liabilities denominated in foreign currencies at the reporting date are retranslated into Singapore dollars at the exchange rate at the reporting date. Foreign currency differences arising on retranslation are recognised in the Capital and Income Account.

112

About Us

The HSBC Group is one of the largest banking and financial services organisations in the world, with well established businesses in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa. The HSBC Group evolved from The Hongkong and Shanghai Banking Corporation Limited, which was founded in 1865 in Hong Kong with offices in Shanghai and London and an agency in San Francisco.

HSBC Insurance (Singapore) Pte. Limited is a wholly owned subsidiary of HSBC Insurance (Asia Pacific) Holdings Limited, which is ultimately owned by HSBC Holdings plc, the London-based holding company of the HSBC Group. HSBC Insurance (Singapore) provides a wide range of solutions to cater to retirement, protection, legacy planning, education and growing your wealth needs.

Financial Strength

HSBC Insurance (Singapore)’s financial strength currently stands at almost S$3 billion in assets as at 31 December, 2013. Thanks to our continued growth, strength of management and sound financial condition, HSBC Insurance (Singapore) has been awarded with an A+ rating from Standard & Poor’s in 2014. Our Capital Adequacy Ratio (CAR) as at 31 December 2013 was 224%, more than the statutory capital requirement.

113

Important Notes

This report is jointly provided by HSBC Insurance (Singapore) Pte. Limited and the fund managers for general information only. The specific investment objectives, personal situation and particular needs of any person have not been taken into consideration. This document is not and should not be construed as an offer to sell or solicitation of an offer to purchase or subscribe to any investment or services and HSBC Insurance (Singapore) Pte. Limited is not recommending or soliciting any action based on it.

You should read the relevant product and fund documentation, including the relevant product summary, product highlights sheets and fund summaries for details before deciding to invest. Copies of the product and fund documentation can be obtained from our authorized product distributors.

Investment involves risk and past performances of the ILP sub-funds and any other economic or market predictions, projections or forecasts, are not necessarily indicative of future or likely performances of the ILP sub-funds, underlying funds, underlying entities and/or the respective fund managers. The value of the units in the ILP sub-funds and the income accruing to the units, if any, may fall or rise, and the investor may not get back the original sum invested.

Any insurance product information mentioned is intended to provide you with a general summary and the product features are subject to change, without notice given. Information herein is also not a contract of insurance.

You should not rely on this document as investment advice. If you have any concerns about any investment products or are uncertain about the suitability of any investment decision, you should seek such financial, legal or tax advice from your professional advisers as appropriate.

Information contained in this document is obtained from sources believed to be reliable, however HSBC Insurance (Singapore) Pte. Ltd. does not guarantee its completeness or accuracy. Opinions and estimates expressed are subject to change without notice and HSBC Insurance (Singapore) Pte. Limited expressly disclaims any and all liability for representations and warranties, express or implied, contained herein, or for omissions.

HSBC Insurance (Singapore) Pte. Limited’s authorized product distributors, including The Hongkong and Shanghai Banking Corporation Limited (together “the authorized product distributors”) are neither underwriters nor brokers for the customer. To the fullest extent permissible under applicable law, the authorized product distributors make no warranties or representation as to the accuracy, correctness, reliability or otherwise of the content of this document (webpage). Under no circumstances, including, but not limited to negligence, shall the authorized product distributors or any party involved in creating, producing or delivering this document be liable to you for any direct, indirect, incidental, consequential, loss or punitive damages that result from the use of, or reliance upon, the information in this document (webpage), even if the authorized product distributors have been advised of the possibility of such damages.

The insurance products are underwritten by HSBC Insurance (Singapore) Pte. Limited. They are not obligations of deposits in or guaranteed by The Hongkong and Shanghai Banking Corporation.

Issued by HSBC Insurance (Singapore) Pte. Limited

HSBC Insurance (Singapore) Pte. Limited 21 Collyer Quay #02-01 HSBC Building Singapore 049320 Tel: (65) 6225 6111 Fax: (65) 6221 2188 Company Registration Number 195400150N

Web site: www.insurance.hsbc.com.sg

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Issued by HSBC Insurance (Singapore) Pte. Limited.

Investment-linked policies sub fundsSemi-annual unaudited report for the six months ended 31 December 2014.

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