u hsbcamanah.comFor professional advisers only

THE HSBC AMANAH ASIA PACIFIC EX JAPAN EQUITY

THE HSBC AMANAH ASIA PACIFIC EX JAPAN EQUITY

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HSBC Amanah is the Islamic financial services division of the HSBC Group and is well-placed to understand,

structure, and deliver financial solutions that are compatible with the requirements of Shariah. HSBC Amanah

is one of the leading global players in the Islamic Finance industry.

u Sinopia Asset Management is the Investment Adviser for the HSBC Amanah Asia Pacific ex Japan Equity, which is a

sub-fund of the HSBC Amanah Funds SICAV

u Sinopia Asset Management is the quantitative specialist of the HSBC Group, aiming to provide robust quantitative

investment solutions in a controlled risk environment for all types of investors

u There are four sources of alpha: active stock selection, dynamic country and sector allocation and continuous market

exposure management

u Assets of Islamic financial institutions have grown by an average of 15-20% per annum* over the past five years

u Over the last decade, the Asia Pacific region has been one of the world’s strongest growth stories. The Asia Pacific

region is driven by robust economic growth, coupled with strong demographic and infrastructure themes across the

region. The region accounts for more than half of the world’s population and a quarter of the economic wealth created

every year

*Source: HSBC Amanah, October 2008 and www.zawya.com

The HSBC Amanah Asia Pacific ex Japan Equity

HSBC Amanah

HSBC Amanah is the Islamic financial services division of

the HSBC Group. With experienced personnel working from

regional offices, its mission is to ensure that HSBC is one

of the leading providers of value-added Shariah compliant

financial products and services to its clients.

The HSBC Amanah Funds SICAV is an investment company

(Société d’Investissement à Capital Variable) constituted

in the Grand Duchy of Luxembourg and qualifies as an

Undertaking for Collective Investment in Transferable

Securities (a ‘UCITS’) and is recognised for sale in the UK by

the Financial Services Authority. The Company is organised

as an umbrella structure with the ability to issue shares

of different classes corresponding to different sub-funds.

HSBC Amanah SICAV is specifically designed for investors

who wish to invest in equity markets in compliance with

Shariah (Islamic law).

HSBC Amanah is guided and supervised by the HSBC

Amanah Central Shariah Committee, an independent

committee of Islamic scholars. The Committee oversees

the development and operations of all HSBC Amanah

products and transactions to ensure that they meet the

requirements of Shariah.

Central Shariah Committee

Three scholars of international repute, well versed in

both Islamic law and modern finance, serve on the HSBC

Amanah Shariah Committee. The Central Committee not

only provides initial approvals on investment objectives

and investment strategies of all funds, but also reviews

the investments periodically to ensure the continuous

compliance to Islamic principles. Moreover, the committee

conducts annual audits of all funds to ensure adherence to

their rulings during the year.

Sheikh Nizam Yaquby

Sheikh Nizam is a graduate in Economics and Comparative

Religion from McGill University and is an internationally

acclaimed scholar in the Islamic banking industry. He has

been a teacher of Tafsir since 1976. He advises a number of

banks and financial institutions including Abu Dhabi Islamic

Bank, BNP Paribas, Dow Jones†† Lloyds TSB and Standard

Chartered on Islamic banking and finance.

Sheikh Dr Mohamed Elgari

Sheikh Mohamed holds a PhD in Economics from the

University of California. He is an expert at the Islamic

Jurisprudence Academy (OIC), Jeddah. Dr Elgari is the

editor of the Review of Islamic Economics. He is also an

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The HSBC Amanah Asia Pacific ex Japan Equity

The Company seeks to provide a comprehensive range of

sub-funds combined with professional management for

the purpose of spreading investment risk and to satisfy

the requirements of investors seeking income, capital

conversion and growth. All investments will meet Shariah

principles as interpreted and laid down by the Shariah

Committee and provided to the Board of Directors. The

investment process ensures adherence to Shariah principles

which HSBC Amanah’s Central Shariah Committee closely

monitor. Sectoral screens, financial ratio and transaction

screening takes place before any trade is entered into.

The HSBC Amanah Asia Pacific ex Japan Equity sub-fund

seeks long term capital growth through the implementation

of an active management strategy. The investments will

consist of a diversified portfolio of Asia Pacific ex Japan

equity securities that comply with Islamic investment

principles. This sub-fund is designed for investors who

want exposure to Asia Pacific equities consistent with the

principles of Shariah law and who are seeking portfolio

diversification with potentially strong returns over a 5 to

10 year period and a fairly high level of volatility. The sub-

fund is managed by Sinopia, the specialist quantitative

management arm of the HSBC Group.

adviser to several Islamic financial institutions worldwide

and the author of many books on Islamic banking.

Dr Mohamed Imran Ashraf Usmani

Dr Usmani holds a PhD in Islamic Finance. He also

obtained degrees of Alimiyyah and Takhassus (specialisation

in Islamic Jurisprudence) from Jamia Darul Uloom, Karachi.

His area of expertise is Islamic Finance in which he has

carried out extensive research. Dr. Usmani is a faculty

member/teacher of Jamia Darul Uloom, Karachi and

Institute of Business Administration (IBA), Karachi. He is

the author of various books on Shariah (Islamic law).

All Shariah compliant investments must be certified by

experts in Shariah, generally through a panel or board

comprised of respected Shariah scholars who are qualified

to issue ‘Fatwas’ (religious rulings) on financial transactions.

This panel of Shariah experts ensure full compliance of

all Shariah compliant investment funds. For illustration,

the Central Shariah Committee of HSBC Amanah has

determined that investment funds investing in equities as

an asset class will not invest in companies whose primary

business activity is as shown in Figure 1 (sectoral screens),

or in companies which exhibit characteristics as shown in

Figure 2 (financial screens)*:

Figure 1: Sectors Figure 2: Financial

Alcohol Weapons All the following should be less than 33%

Tobacco Pork Total Debt/12 month trailing market capitalisation

Financial services Gambling Cash & Interest bearing securities/12 month trailing market capitalisation

Pornography Leisure/media Accounts Receivable/12 month trailing market capitalisation

*The above screens apply only to funds managed using the Dow Jones†† Islamic Market indices. For funds using the MSCI†, different financial screenings will

be used.

Why an Islamic Asia Pacific ex Japan Equity fund?

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Total assets of Islamic financial institutions have grown by an average of 15-20% per annum over the past five years1, suggesting strong demand for Islamic investing. It is expected Islamic finance will continue to grow at this rate for the next few years and that total assets in Islamic finance will reach $1 trillion by 2012. The growth in Islamic finance has also been mirrored in the growth of Shariah compliant investment funds. It is estimated that currently, there are more than US$30 billion under management in Shariah compliant investment funds2.

While Islamic finance was developed for the Muslim community, there is a genuine socio-economic component that renders it equally attractive to investors of all faiths. Ethical investment and Islamic investment products share common ground and the recent surge in demand for ethical products could provide a lift for Shariah investments.

Over the last decade, the Asia Pacific region has been one of the world’s strongest growth stories. Impressive broad-based gains mean that equity investors who have remained invested in the region have enjoyed some healthy returns, with starting valuations lower than many mature stock markets.

Since its tipping point in 1997, Asia Pacific has completely reinvented itself. Economies and currencies have become more stable, stock markets are better regulated and the region is now home to some of the world’s most dynamic and enterprising companies. Equity markets in the Asia Pacific region offer powerful growth prospects and a diverse array of enterprising, well-managed companies. Because Asia Pacific is a high-growth region undergoing significant structural change, we believe it offers attractive valuations and some significant opportunities. Moreover, the Asia Pacific region is driven by robust economic growth, coupled

with strong demographic and infrastructure themes across the region. The region accounts for more than half of the world’s population and a quarter of the economic wealth created every year.

1 Source: HSBC Amanah, October 2008 and www.zawya.com.

2 Source: www.zawya.com, 3Source: CIA World Factbook

Why HSBC Amanah Asia Pacific ex Japan Equity fund?

HSBC Amanah is well-placed to understand, structure, and deliver financial solutions that are compatible with the requirements of Shariah. It is headquartered in Dubai, and with regional representatives in New York, Riyadh, Dubai, London, Jakarta and Kuala Lumpur, HSBC Amanah is one of the leading global players in the Islamic Finance industry.

Sinopia Asset Management is the specialist for quantitative asset management of the HSBC Group, aiming to provide robust quantitative investment solutions in a controlled risk environment for all types of investors. The highly innovative product offering, the disciplined investment strategies and the specialised staff have made Sinopia a key player in the quantitative asset management community.

HSBC Amanah Asia Pacific ex Japan Equity features four key sources to drive fund performance with active risk management: active stock selection, dynamic country and sector allocation and continuous market exposure management.

As you can see below, the MSCI† AC Asia Pacific ex Japan Islamic Index outperformed the MSCI† AC Asia Pacific ex Japan Index between the end of December 2003 and the end of December 2008.

24.43%

11.48%-20%

0%20%40%60%80%

100%120%140%160%180%200%

Dec-03 Jun-04 Dec-04 Jun-05 Dec-05 Jun-06 Dec-06 Jun-07 Dec-07 Jun-08 Dec-08

MSCI† AC Asia Pacific ex Japan Islamic Index MSCI† AC Asia Pacific ex Japan Index

Source : Bloomberg Data as at end of December 2003. Both indices are on a US $ price return basis and rebased to 100. Past performance is not a guide to future performance.

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Using quantitative valuation methods, Sinopia selects the most promising stocks within the investment universe and builds a portfolio that takes into consideration stock/sector/country and market interaction. In addition to dynamic country and sector allocation, the fund also achieves its performance by constantly monitoring and adjusting its overall equity exposure (between 90% and 100%). The strategy complies with Islamic investment principles.

The fund aims to outperform the MSCI† AC Asia Pacific ex-Japan Islamic index over the long-term, with a tracking error between 4% and 6%.

Key features

u Active quantitative management style

u Four sources of alpha: active stock selection, dynamic country and sector allocation and continuous market exposure management

u Daily risk control

u Shariah compliant investment solution

u UCITS qualified fund

u Daily liquidity for subscriptions and redemptions

Four combined sources of performance with active risk management

HSBC Amanah Asia Pacific ex Japan Equity features four key sources to drive fund performance:

u Continuous exposure management: overall equity exposure is constantly monitored with adjustments made based on Sinopia’s expected returns for the Asian Pacific ex Japan equity market

u Dynamic country allocation: according to its valuation signals, the fund manager takes lower or higher exposure relative to the index on the different countries of the investment universe

u Dynamic sector allocation: the fund manager adjusts the sector weights compared to the index based on identified market opportunities

u Active stock selection: using quantitative valuation, the fund manager selects the stocks which offer the best performance potential within each country

The weight of these sources of performance is broken down as follows: equity market exposure 10%, country allocation 40%, sector allocation 20% and stock selection 30%.

Risk is also actively managed. The risk budget of the strategy is optimised in building an efficient portfolio, using Sinopia’s forecasts on returns and risks.

Investment process

In order to manage this strategy, Sinopia developed a structured investment process, which uses three steps to generate performance: quantitative valuation for the market as a whole, countries and sectors as well as stock level, portfolio optimisation and disciplined implementation.

Quantitative stock valuation

In order to value a stock, Sinopia uses its own forecast for future company earnings and long-term interest rates. To determine future earnings, Sinopia reviews and analyses economic forecasts using proprietary quantitative tools and processes the information to take into consideration optimism bias, inertia of the consensus, and dispersion effects. Momentum criteria and valuation criteria are used to select the best stock within each country/sector.

Portfolio construction

This step allows Sinopia to convert the expected returns into target portfolios while taking into account the risk levels associated within the portfolio’s assets. For HSBC Amanah Asia Pacific ex Japan Equity, the average relative risk level is between 4% and 6%. During portfolio construction, Sinopia’s unique approach takes into consideration stock/sector interaction and concentration in order to optimise performance and minimise risk. In practice, a stock’s weighting will be determined based on its expected returns, its country and sector, its risk and transaction costs linked to the investment.

Sinopia uses a proprietary and robust risk/return optimisation model in order to help determine the optimal sector allocation. The fund will under/overweight countries and sectors +/-5% compared to the index, depending on

earnings forecasts and respective volatilities.

Finally, the fund’s exposure level will be adjusted between

90% and 100% depending on forecasts.

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Implementation

In order to optimise performance, Sinopia controls costs during implementation. The implementation of the allocations derived from the above steps is under the supervision and responsibility of the fund manager with the assistance of specialised traders. The instrument selection is made according to the liquidity and the relative costs of the instruments available to build the allocation. There is no use of derivatives, according to the Islamic investment principles.

Throughout Sinopia’s investment process, risk management plays a vital role. Risk management is a core component of

Sinopia’s investment philosophy and process. Therefore, all teams contribute to risk assessment: from asset allocation analysis and decision (Research and Asset Management) to implementation (Asset Management and Trading) and controls (Asset Management, Middle Office and Risk Controls). Portfolios are explicitly built taking into account the trade-off between expected return and risk levels. On an ongoing basis, Sinopia’s investment process incorporates the systematic monitoring of portfolio exposures, absolute or relative risk levels, as well as a strict control of operational risk.

((YY/YY): Number of years at Sinopia / Number of years experience - as at 31/10/08)

Jean Francois Schmitt (8/15), Global Head of Equity - Sinopia Asset Management

10 portfolio managers

Paris Francois Dossou, Deputy Head (10/10) Jeanne Follet (1/9)

Patrick Gautier (7/9) Nadia Ben Djemiaa (4/4)

Laurence Jobert (1/9) Malika Oueznadji (7/7)

London Nils Jungbacke (7/11) Sunny Wu (4/6)

Harvey Sidhu (8/10)

Hong Kong Benedicte Mougeot, Deputy Head (13/13)

3 assistant managers

Paris Abderrahman Belcad (3/3)

Sylvain Treilles (1/1)

Jeremy Pierre (1/1)

Celine Boe-Deschamps (9/9), Head of UK Trading

6 equity traders

Paris Jerome Allouch, Deputy Head (1/8)

Julien Tourchon (1/6)

Ekaterina Diatchenko (2/4)

Elena Ripca (1/1)

Gabriel Taboul (1/1)

Hong Kong Elie El Khoueiri (3/3)

The investment team

Fund characteristics

Fund name: HSBC Amanah Asia Pacific ex Japan Equity

Portfolio manager: Benedict Mougeot

Management company: HSBC Investment Funds (Luxembourg) SA

Legal form: Sub-fund of the Luxembourg based HSBC Amanah Funds SICAV

Investment adviser: Sinopia Asset Management (Asia Pacific) Ltd

Management style: Active quantitative

Index: MSCI† AC Asia Pacific ex Japan Islamic Index

Restrictions: Shariah principles

Universe: Australia, China, Hong Kong, India, Indonesia, Malaysia, New Zealand, Pakistan, Philippines, Singapore, South Korea, Taiwan and Thailand equities which meet Islamic principles

Fund tracking error: Expected to be between 4% and 6%

Number of stocks: Normally between 100 and 150

Management fees: 1.50%

Subscription fees: Up to 5.54% of the net asset value per shares

Redemption fees: None

Dealing: Daily

Valuation: Daily

Settlement: T+4

This document is intended for investment professionals only and should not be distributed to retail clients. HSBC Amanah Funds SICAV is a Luxembourg domiciled SICAV

and is regulated by the CSSF. HSBC Amanah Funds SICAV cannot be sold by anyone in any jurisdiction in which such offer or solicitation is not lawful or in which the person

making such an offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make such offer or solicitation. All applications are made on the basis of the

current HSBC Amanah Funds SICAV Prospectus, simplified prospectus and most recent annual and semi-annual reports. These can be obtained on request and free of charge

from HSBC Global Asset Management (UK) Limited or the local distributors. The securities representing interests in HSBC Amanah Funds SICAV have not been and will not

be registered under the US Securities Act of 1933 and will not be offered for sale or sold in the United States of America, its territories or possessions and all areas subject to

its jurisdiction, or United States person, except in a transaction which does not violate the Securities Law of the United States of America. The value of investments may go

down as well as up and you may not get back the full amount you invested. Where overseas investments are held the rate of exchange may cause the value of investments

to go down as well as up. Markets in some countries can be described as ‘emerging markets’. Some of these may involve a higher risk than where an investment is within a

more established market. Where a sub-fund invests predominately in one geographical area, any decline in economic conditions may affect prices and the value of underlying

investments. HSBC Global Asset Management (UK) Limited provides information to professional advisers and their clients on the investment products and services of

members of the HSBC Group. The material contained in this document is for information only and does not constitute investment advice or a recommendation to any reader

of this material to buy or sell investments. The funds mentioned in this document may not be registered for sale or available in all jurisdictions. For available funds please

contact your local HSBC office. It is possible that the restrictions placed on investment such as the prohibition on the use of interest bearing investments, the donations to

approved Charities and the limited universe of stocks available to the Investment Adviser may result in the funds performing less well than funds with similar investment

objectives which are not subject to Shariah restrictions.

This document is issued by HSBC Global Asset Management (UK) Limited, 8 Canada Square, Canary Wharf, London, E14 5HQ, UK. Authorised and regulated by the Financial

Services Authority and registered as number 122335. © Copyright. HSBC Global Asset Management 2009. All Rights Reserved.

This product is marketed in a sub-distributing capacity on a principal – to – principal basis by the HSBC Global Asset Management MENA, a unit that is part of HSBC Bank

Middle East Limited, PO Box 66, Dubai, UAE, which is incorporated and regulated by the Jersey Financial Services Commission. Services are subject to the Bank’s terms

and conditions. HSBC Bank Middle East Limited is a member of the HSBC Group.

The information provided has not been prepared taking into account the particular investment objectives, financial situation and needs of any particular investor. As a result,

investors using this information should assess whether it is appropriate in the light of their own individual circumstances before acting on it. The information in this document

is derived from sources believed to be reliable, but which have not been independently verified. However, HSBC Bank Middle East Limited makes no guarantee of its

accuracy and completeness and is not responsible for errors of transmission of factual or analytical data, nor shall HSBC Bank Middle East Limited be liable for damages

arising out of any person’s reliance upon this information. All charts and graphs are from publicly available sources or proprietary data. The opinions in this document

constitute the present judgment of the issuer, which is subject to change without notice.

This document is neither an offer to sell, purchase or subscribe for any investment nor a solicitation of such an offer. This document is intended for the use of institutional

and professional customers and is not intended for the use of private customers. This document is intended to be distributed in its entirety. No consideration has been

given to the particular investment objectives, financial situation or particular needs of any recipient. Any transaction will be subject to HSBC Bank’s Terms of Business.

16547/ME/0409 FP09-0364.

†Source: MSCI. The MSCI information may only be used for your internal use, may not be reproduced or redisseminated in any form and may not be used to create any

financial instruments or products or any indices. The MSCI information is provided on an ‘as is’ basis and the user of this information assumes the entire risk of any use it

may make or permit to be made of this information. Neither MSCI, any of its affiliates or any other person involved in or related to compiling, computing or creating the MSCI

information (collectively, the ‘MSCI Parties’) makes any express or implied warranties or representations with respect to such information or the results to be obtained by

the use thereof, and the MSCI Parties hereby expressly disclaim all warranties (including, without limitation, all warranties of originality, accuracy, completeness, timeliness,

non-infringement, merchantability and fitness for a particular purpose) with respect to this information. Without limiting any of the foregoing, in no event shall any MSCI Party

have any liability for any direct, indirect, special, incidental, punitive, consequential or any other damages (including, without limitation, lost profits) even if notified of, or if it

might otherwise have anticipated, the possibility of such damages.

††Source: Dow Jones and Dow Jones Islamic Market Titans Index SM are service marks of Dow Jones & Company, Inc. and will be licensed for use by HSBC Investment

Funds (Luxembourg) S.A. The HSBC Amanah Global Equity Index Fund is not sponsored, endorsed, sold or promoted by Dow Jones and Dow Jones makes no representation

regarding the advisability of investing in the Fund.