HSBC Emerging Markets Local Debt Fund

Overview of share class details including ticker, CUSIP, and inception date
Inception Date April 07, 2011
Fund Assets (as of 3/31/2014) $29.8 million
Daily Nav (as of 4/17/2014) $8.86
Ticker HBMAX
Cusip 44330V829
Benchmark JP Morgan Government Bond Index - Emerging Markets Global Diversified (GBI-EM Global Diversified)
Fund Description This fund seeks to maximize total return (comprised of capital appreciation and income) by investing principally in debt instruments denominated in local currencies of emerging market countries.
Investment Philosophy The Emerging Markets Debt team aims to capture a variety of trends, inefficiencies and anomalies in the evolving emerging markets marketplace. Our analysis and experience show there can be significant value added from country allocation, security selection, tactical management of cash positions and portfolio betas. This strategy principally invests in securities denominated in local currencies of the emerging markets and may also invest in financial derivative instruments such as futures, forwards (including non-deliverable forwards), swaps, options and credit default swaps. The team uses a top-down analysis to identify relevant global investment themes and market preferences and combines this with fundamental analysis of factors directly affecting locally denominated issues in emerging markets. The team actively manages the bond and currency components in this strategy.
Portfolio Manager Guillermo OssÚs
Managing Director and Head of Emerging Markets Debt Portfolio Management
Gross Expense Ratio 2.11%
Net Expense Ratio2 1.34%
Redemption / Exchange Fee n/a within 30 days
Dividend Frequency Monthly
Maximum Sales Charge 4.75%
Minimum Initial Investment $1,000

International investing involves a greater degree of risk and increased volatility, this is heightened when investing in emerging or frontiers markets.  Foreign securities can be subject to greater risks than U.S. investments, including currency fluctuations, less liquid trading markets, greater price volatility, political and economic instability, less publicly available information, and changes in tax or currency laws or monetary policy.

Cusip database provided by the Standard & Poor’s CUSIP Service Bureau, a division of The McGraw-Hill Companies, Inc. All rights reserved.

The JP Morgan GBI-EM Diversified Index provides a measure of local currency denominated, fixed rate, government debt  issued in emerging markets. Weightings among the countries are more evenly distributed within the diversified index compared to it’s three main composite indices consisting of the GBI-EM, GBI EM Global, and GBI EM Broad indices. The JP Morgan GBI-EM Global Diversified Index is a comprehensive global local emerging markets index, and consists of liquid, fixed rate, domestic currency government bonds.

The JP Morgan ELMI+ tracks total return for local denominated money market instruments in the emerging markets. The Index employs a liquidity sensitive weighting scheme, which uses exports plus imports as a base.

1 This yield is based on a 30-day period and is computed by dividing the net investment income per share earned during the period by the maximum offering price per share on the last day of the period. The SEC 30-day yield reflects a reduction in the Fund’s fees. Without the reduction of those fees, the yield would have been 2.72%.

2 INVESTMENT PERFORMANCE FOR THIS SHARE CLASS REFLECTS CONTRACTUAL FEE WAIVERS IN EFFECT FROM FEBRUARY 28, 2012 THROUGH MARCH 1, 2013. WITHOUT THESE FEE WAIVERS, THE PERFORMANCE WOULD HAVE BEEN LOWER.


Sections 1471 through 1474 of the Internal Revenue Code (commonly known as “FATCA”) generally impose withholding of 30% on certain payments to certain foreign entities (including financial intermediaries) unless various U.S. information reporting, diligence requirements and certain other requirements have been satisfied. Payments subject to withholding generally will include interest (including original issue discount), dividends, rents, annuities, and other fixed or determinable annual or periodical gains, profits or income, if such payments are derived from U.S. sources, as well as gross proceeds from dispositions of securities that could produce U.S. source interest or dividends. FATCA withholding generally applies to these payments made after June 30, 2014, or, in the case of payments of gross proceeds described above, after December 31, 2016.

Generally, to avoid withholding, FATCA requires that (i) in the case of a foreign financial entity, the entity identify and provide information in respect of financial accounts with such entity held (directly or indirectly) by United States persons and United States-owned foreign entities, and (ii) in the case of a non-financial foreign entity, the entity identify and provide information in respect of substantial United States owners of such entity. Various requirements and exceptions are provided under FATCA and additional requirements and exceptions may be provided in subsequent guidance. Further, the United States has entered into (and may enter into more) intergovernmental agreements (“IGAs”) with foreign governments relating to the implementation of, and information sharing under, FATCA and such IGAs or the laws effecting them may alter one or more of the FATCA requirements.

Effective July 1, 2014, each Fund will be required to withhold U.S. tax ( at a 30% rate) on payments of dividends and redemption proceeds made to certain non-U.S. entities that fail to comply with extensive new reporting and withholding requirements designed to inform the U.S. Department of the Treasury of U.S.-owned foreign investment accounts. Shareholders may be requested to provide additional information to the Fund(s), they are invested, to enable the respective Fund(s) to determine whether withholding is required. In addition, the respective Fund(s) may disclose tax related information to any local or foreign regulatory or tax authority.

Risk Considerations:
There is no assurance that a portfolio will achieve its investment objective. In addition, there is no guarantee that any investment strategy will work under all market conditions, and each investor should evaluate their ability to invest for the long-term, especially during periods of downturn in the market. Portfolios are subject to market risk, which is the possibility that the market values of securities owned by the portfolio will decline. Accordingly, an investor can lose money investing. Investments in foreign markets entail special risks such as currency, political, economic, and market risks. The risks of investing in emerging-market countries are greater than the risks generally associated with foreign investments. Frontier market countries generally have smaller economies and even less developed capital markets or legal and political systems than traditional emerging market countries. As a result, the risks of investing in emerging market countries are magnified in frontier market countries. Fixed income securities are subject to credit and interest-rate risk. Investing in RMB-denominated debt instruments that may be issued by issuers located in Hong Kong and China or multi-national issuers with subsidiaries in Hong Kong or China, may involve special risks including but not limited to currency risk, political and economic risk. For complete risk considerations, which should be considered carefully along with the portfolio's investment objectives and fees before investing, please refer to the fund's prospectus.

For more information, please call the HSBC Funds at 1-800-782-8183. For institutional clients or advisors, please call 1-888-936-4722. For clients of HSBC Securities (USA) Inc., please call 1-888-525-5757. You can download the fund prospectus from this site. Investors should carefully consider the investment objectives and risks as well as charges and expenses of the mutual fund before investing. The prospectus contains this and other information about the mutual fund.
Investors should read the prospectus carefully before investing or sending money.

The views, opinions and statements of financial market trends herein are based on current market conditions are those of HSBC Global Asset Management and are subject to change without notice. We believe the information provided here is reliable but should not be assumed to be accurate or complete. The views and strategies described may not be suitable for all investors. These views do not necessarily reflect the opinions of our affiliates and may differ by product or strategy.

HSBC Global Asset Management is the marketing name for the asset management businesses of HSBC Holdings Plc. HSBC Global Asset Management (USA) Inc. serves as the investment adviser to the HSBC Funds. Securities are offered through HSBC Securities (USA) Inc. memberFINRA/NYSE/SIPC. Foreside Distribution Services, L.P., memberFINRA, is the distributor of the U.S. mutual funds and is not affiliated with the Adviser. Affiliates of HSBC Global Asset Management (USA) Inc. receive fees for providing various services to the funds.

Investment products are offered by HSBC Securities (USA) Inc. (HSI), member NYSE/FINRA/SIPC. HSI is an affiliate of HSBC Bank USA, N.A. Investment products: Are not a deposit or other obligation of the bank or any of its affiliates; Not FDIC insured or insured by any federal government agency of the United States; Not guaranteed by the bank or any of its affiliates; and are subject to investment risk, including possible loss of principal invested.

Investment Products:

ARE NOT A BANK DEPOSIT OR
OBLIGATION OF THE BANK OR ANY OF ITS
AFFILIATES 
ARE NOT FDIC
INSURED
ARE NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY ARE NOT GUARANTEED BY THE BANK OR ANY OF ITS AFFILIATES MAY LOSE
VALUE

All decisions regarding the tax implications of each investor's investment(s) should be made in connection with each investor's independent tax advisor.

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