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HSBC Mutual FundAugust 2010

Factsheet - August 2010

The Asset

HSBC Global Asset Management


Index

Fund Manager’s Comments - Equity & MIP Pg 2

Fund Manager’s Comments - Debt Pg 4

HSBC Equity Fund Pg 5

HSBC India Opportunities Fund Pg 7

HSBC Midcap Equity Fund Pg 9

HSBC Progressive Themes Fund Pg 11

HSBC Tax Saver Equity Fund Pg 13

HSBC Unique Opportunities Fund Pg 15

HSBC Dynamic Fund Pg 17

HSBC Emerging Markets Fund Pg 19

HSBC Small Cap Fund Pg 20

Fund Managers - Equity Pg 22

HSBC MIP - Savings Plan Pg 24

HSBC MIP - Regular Plan Pg 26

HSBC Income Fund - Investment Plan Pg 28

HSBC Income Fund - Short Term Plan Pg 30

HSBC Floating Rate Fund - Long Term Plan Pg 32

HSBC Floating Rate Fund - Short Term Plan Pg 34

HSBC Cash Fund Pg 36

HSBC Gilt Fund Pg 38

HSBC Ultra Short Term Bond Fund Pg 39

HSBC Flexi Debt Fund Pg 42

Fund Managers - MIP & Debt Pg 44

In this Issue ...

1


Fund Manager’s Comments - Equity & MIP

2

Fund Manager Comments - Equity - August 2010

The markets were range bound in the month of August 2010, after a bounce back in the month of

July 2010. The BSE Sensex was up by 0.6% while the broader market indices BSE 200 and BSE

500 were up by 0.9% and 1.2% respectively. There was however action in the midcap and smallcaps

with return of risk appetite during the month, as well with the BSE Midcap Index up by 2.6% (up by

29% on a 1 year basis) and BSE Smallcap up by 2.1% (up by 36.6% on a 1 year basis). On a trailing

12 month basis, the midcap and smallcap indices have outperformed the largecap (BSE Sensex)

index by 15% and 22%, respectively.

India's performance ranking improved from 21st in July 2010 to 9th in August 2010, amongst the

emerging markets. Year to date, India is the 11th best performing emerging market. MSCI India was

down by 1.6% against MSCI emerging markets Index down by 2.2%.

Within the sectoral indices, the best performing sectors were BSE Consumer Durables (up by 7.1%),

Bankex (up by 5.6%), BSE Auto (up by 4.6%) and the worst performing sectors were BSE Metals

(down by 2.7%), BSE Oil & Gas (down by 2.4%) and BSE Healthcare (down by 0.9%). The sectoral

performance is broadly in line with the July 2010, clearly highlighting a drop in sectoral churn on the

MoM basis.

FIIs remained strong buyers for the third straight month, with net buying of USD 2.4 bn in the cash

market. On a three month trailing basis, FIIs have purchased USD 8.2 bn, the highest ever exceeding

even the previous high of late 2007. Insurance companies continued to be sellers of equities, while

domestic mutual funds remained sellers for the 12th successive month.

Globally, over the last month, there is a reversal of July 2010 gains on the back of weak economic data

in the developed markets. While base metals were a mixed bag, with Aluminium down by 5.4% and Zinc

and Copper up by 2% each, the risk reversion was clearly evident with Gold up by 5.6% and Crude

down sharply by 8.9% to USD 72. The Reuters-Jefferies CRB Index which is a broader measure of

commodity prices was down by 3.7% during the August 2010.

The Central Statistical Organisation (CSO) announced that GDP growth in the quarter ended June

2010 was at 8.8% compared to 8.6% in March 2010 and 6.5% in December 2009, broadly in line with

consensus. Typically, volume growth in summer crop output tends to track the area under cultivation.

As of 26 August 2010, overall crop area under cultivation was up 9.1% YoY. With about 90% of sowing

complete, it is likely that the Kharif crop (which accounts for almost 50% of the agricultural production)

will be normal.

The headline inflation rate (WPI) decelerated to 10% in July 2010 from 10.6% in June 2010 and 11.1%

in May 2010. Food inflation moderated to 9.6% YOY in July 2010, while there was an increase in the

non food inflation, primarily due to increase in global commodity prices and the fuel price hike done

by the government in June 2010. Industrial production (IIP) growth decelerated to 7.1% YoY in June

2010 compared with growth of 11.3% YoY in May 2010. Export growth (in USD terms) decelerated

to 30.4% YoY in June 2010 compared with 35.1% YoY in May 2010. Import growth (in USD terms)

decelerated to 23% YoY in June 2010 compared with 41.6% in the previous month. Monthly trade

deficit widened to USD 10.6 bn (9.2% of GDP annualized) in June 2010 compared with USD 11.3 bn

(10% of GDP annualized) in the previous month.


Review: HSBC Equity Fund

Being overweight Financials and Industrials and underweight Information Technology,Materials and Utilities helped performance while being overweight Energy, Healthcareand underweight Consumer Staples and telecommunications hurt performance.

Review: HSBC India Opportunities Fund

Being underweight Financials, Information Technology, Materials and Utilities helpedperformance while being overweight Consumer Discretionary, Energy, Healthcare,Industrials and underweight Consumer Staples and Telecom hurt performance.

Review: HSBC Midcap Equity Fund

Being overweight Consumer Staples, Information Technology, Utilities and underweightFinancials, Industrials and Telecommunications helped performance while being overweightConsumer Discretionary and underweight Energy and materials hurt performance.

Review: HSBC Progressive Themes Fund

Currently focusing on the following themes, 1. Economic Reforms (40.9%) which includesBanking- 20.4%, Oil & Gas Sector deregulation -13%, opening of FDI/Disinvestment subtheme 7.5% and 2. Infrastructure (45.3%) which includes Power-15.5%, Construction-18.8%and Logistics-11%. Well-diversified exposure across sectors encompassing the above themes.

Review: HSBC Dynamic Fund

The cash levels in the fund are likely to change depending on market conditions and technicalfactors. We are overweight Healthcare and Industrials and underweight Financials,Materials and Utilities.

Review: HSBC MIP Regular and Savings Plans

Our current exposure is 15.17% in HMIP Regular and 21.75%, in HMIP Savings. Duringthe month we had reduced some equity exposure.

Fund Manager’s Comments - Equity & MIP

3

Sectors HSBC HSBC India HSBCEquity Opportunities MidcapFund Fund Equity Fund

Consumer Discretionary = a a

Consumer Staples r r a

Energy a a r

Financials a r r

Healthcare a a =

Industrials a a r

Information Technology r r a

Materials r r r

Telecommunication r r r

Utilities r r a

a Overweight r Underweight = Neutral

�

�

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Outlook

We expect FY2011 GDP to be in the range of 8-8.5%, while with the increasing momentumin corporate earnings and a favorable base; we expect earnings to grow at 20% plus in FY11.

The year of 2010 is likely to be one where specific sectors and company performances maybe much better than broader market indices. The challenge will be to pick these stocks andsectors ahead of the market.

Given that markets valuations have come off the trough seen in early March 2009 with themarkets now trading in line with long term average valuations band of around 16-17X FY2011earnings. Valuations may take support from increasing risk appetite and liquidity hithertositting on the side lines.


Fund Manager’s Comments - Debt

4

Market Assessment

The domestic fixed income markets consolidated post the sell off witnessed, after the announcement ofquarterly credit policy review in end July 2010. Easing in liquidity conditions brought in a welcome respiteas overnight rates cooled off, and the same was reflected in the absorptions of excess liquidity by RBI.

Macro economic data continued to remain strong as the second quarter 2010 GDP rose by 8.80%, in linewith the market expectations. Services growth remained strong at 9.4% whereas agriculture grew at2.8%. Industrial growth moderated marginally to 12.4%. The moderation in industrial growth was anticipatedas the monthly industrial production numbers have been showing a similar trend. The optimism on outlookfor growth for FY 2010 -11 would hinge on monsoons, as the same being close to normal would result inagriculture output carrying significant upside potential.

Global markets continued to remain nervous as signs of economic recovery continued to remain fragile.The swings in US treasuries indicated the extent of volatility amidst mixed data and heavy issuances oftreasuries. Recent statements from the central banks (in the west) tilted towards fending off the possibilityof double dip recession.

Domestic bond markets traded in a range bound zone through the latter half of August 2010. As mentionedearlier, easing of liquidity conditions and fragile outlook on global economies soothed market sentimentspost the quarterly credit policy review. Benchmark ten year gilt remained volatile, as concerns on extentof issuance of the said stock and need for alternative liquid security led to 7.80% GOI 2020 trading as highas 8.07%. Longer end of the curve continued to remain resilient on the back of end investor demand andlimited supply, leading to shrinking of credit spreads at the longer end of the curve.

Corporate bonds remained stable at the longer end due to lack of supply. However, shorter end of the curveflattened substantially on liquidity tightness and the continuing supply from bank and non bank issuers.Five and ten year corporate segment hardly moved and the credit spreads narrowed largely due togovernment securities movement.

Going Forward

Going ahead, we expect liquidity conditions to tighten on the back of seasonal factors; viz, outflows dueto advance tax and onset of the credit season. Markets would watch out for mid quarter review of creditpolicy scheduled on 16 September 2010. We assign an even probability of rate hikes at the mid quartercredit policy meet. RBI would continue to hold its aggressive stance to tackle inflationary expectations.Second half borrowing calendar of Rs. 170,000 Crores along with expected state loan borrowing of overRs. 100,000 Crores, may continue to pressurize the sovereign yields. However, concerns on the globaleconomic growth and easing of inflationary pressure would act as balance. Due to tightening of liquidityand next half borrowing calendar announcement by the end of August 2010, the market is expected to treadcautiously.


An Open Ended Diversified Equity SchemeInvestment Objective: Aims to generate long term capital growth from an actively managedportfolio of equity and equity related securities.

Issuer Market Value % to Net(` in Lacs) Assets

HSBC Equity Fund

5

AutoTata Motors 1,951.56 1.67%BanksHDFC Bank 6,338.72 5.44%State Bank of India 5,726.45 4.91%ICICI Bank 5,103.59 4.38%Punjab National Bank 4,248.90 3.64%CementJaiprakash Associates 1,570.32 1.35%Grasim Industries 1,455.23 1.25%ConstructionDLF 1,902.29 1.63%Construction ProjectsLarsen and Toubro 6,365.91 5.46%Consumer Non DurablesI T C 5,330.11 4.57%Glaxo Smithkline Consumer Healthcare 1,960.42 1.68%FinanceHousing Development Finance Corporation 6,489.45 5.57%Fixed DepositsHSBC Bank** 1,800.00 1.54%HSBC Bank** 1,000.00 0.86%HSBC Bank** 900.00 0.77%HSBC Bank** 600.00 0.51%GasGas Authority of India 1,497.04 1.28%Industrial Capital GoodsBharat Heavy Electricals 6,931.01 5.95%Industrial ProductsJain Irrigation Systems 2,129.21 1.83%Media & EntertainmentSun TV 3,439.44 2.95%Non - Ferrous MetalsHindustan Zinc 1,318.40 1.13%OilOil and Natural Gas Corporation 5,417.28 4.65%Cairn India 2,992.95 2.57%PesticidesUnited Phosphorus 1,659.15 1.42%Petroleum ProductsReliance Industries 6,204.60 5.32%Indian Oil Corporation 2,590.25 2.22%PharmaceuticalsRanbaxy Laboratories 3,753.47 3.22%Cipla 1,965.06 1.69%PowerNTPC 2,116.26 1.82%Reliance Infrastructure 1,262.39 1.08%SoftwareInfosys Technologies 7,327.40 6.29%Telecom - ServicesBharti Airtel 2,651.54 2.27%Trading Companies & DistributorsAdani Enterprises 2,047.82 1.76%


HSBC Equity Fund

Date of Allotment 10-Dec-02Benchmark BSE 200Assets Under `1165.83 croresManagement(as on 31.08.10)NAV (Growth) ̀100.8312per unit(as on 31.08.10)Fund Manager Jitendra SriramSIP AvailableMinimum ` 10,000ApplicationAmountExit Load@ 1% - if redeemed/

switched out$ within1 year from date ofinvestment;otherwise Nil.

Standard Deviation 1.37%R-Squared 0.9565Beta (Slope) 0.7686Sharpe Ratio 0.0055Annualised Expense Ratio from 01 April2010 onwards 1.99%Portfolio Turnover 1.15

Asset Allocation

HEF BSE 2006 Months 12.13 11.161 Year 16.81 19.293 Years 8.23 7.425 Years 18.19 17.86Since Inception 34.85 26.04

* Past performance may or may not be sustainedin the future. Returns less than 1 year areabsolute. Returns equal to or greater than 1year are compounded annualized. ‘Sinceinception’ returns are calculated on ` 10invested at inception. Calculations are basedon Growth NAVs.

Auto 1.67%Banks 18.37%Cement 2.60%Construction 1.63%Construction Projects 5.46%Consumer Non Durables 6.25%Finance 5.57%Fixed Deposits 3.69%Gas 1.28%Industrial Capital Goods 5.95%Industrial Products 1.83%Media & Entertainment 2.95%Non - Ferrous Metals 1.13%Oil 7.21%Pesticides 1.42%Petroleum Products 7.54%Pharmaceuticals 4.91%Power 2.90%Software 6.29%Telecom - Services 2.27%Trading Companies & Distributors 1.76%Other Equity Investments 4.47%Reverse Repos/CBLOs 1.98%Net Current Assets 0.87%

Dividend Declaration


** Fixed deposits are placed as margin Deposit for Futures, Options and Equities.Total outstanding exposure in derivatives as on August 31, 2010 is ` 5,076.92(Notional value in lakhs).

6

Performance* (%) as on 31 August 2010

Record Date/period Dividend (` per unit) Dividend (` per unit) NAV per unitof dividend declared Non-Institutional Institutional (cum dividend)

HSBC Equity Fund - Dividend08-Feb-08 10.00 10.00 40.686911-Dec-09 2.50 2.50 29.407328-May-10 1.50 1.50 26.6911

Statistical ratios disclosed as per daily returns ofthe last 3 years/since inception, whichever islater.@ Including SIP/STP where applicable.$ No load in case of switches between equityschemes of HSBC Mutual Fund.

Other Equity Investments 5,214.37 4.47%CBLOs 391.59 0.34%Reverse Repos 1,914.19 1.64%Net Current Assets 1,016.57 0.87%Total Net Assets as on 31 August 2010 116,582.92 100%


An Open Ended Flexi-Cap Equity SchemeInvestment Objective: Seeks long term capital growth through investments across all marketcapitalisations, including small, mid and large cap stocks. It aims to be predominantly investedin equity & equity related securities. However it could move a significant portion of its assetstowards fixed income securities if the fund manager becomes negative on equity markets.

HSBC India Opportunities Fund


7

AutoEicher Motors 305.14 1.29%Auto AncillariesBosch 1,344.62 5.67%BanksHDFC Bank 1,248.54 5.27%State Bank of India 896.31 3.78%Bank of Baroda 796.90 3.36%ICICI Bank 791.94 3.34%CementShree Cement 252.77 1.07%Construction ProjectsLarsen and Toubro 1,395.60 5.89%Consumer Non DurableI T C 1,086.58 4.58%FinanceHousing Development Finance Corporation 1,128.60 4.76%Fixed DepositsHSBC Bank** 800.00 3.37%HSBC Bank** 500.00 2.11%FertilizersCoromandel International 286.01 1.21%Industrial Capital GoodsBharat Heavy Electricals 1,082.97 4.57%Industrial ProductsJain Irrigation Systems 504.29 2.13%Leisure FacilitiesTalwalkars Better Value Fitness 390.32 1.65%Media & EntertainmentSun TV 644.90 2.72%Entertainment Network (India) 426.60 1.80%Minerals/MiningGujarat Mineral Development Corporation 431.28 1.82%OilOil and Natural Gas Corporation 963.07 4.06%Cairn India 538.73 2.27%PesticidesBayer Cropscience 314.86 1.33%Petroleum ProductsReliance Industries 1,240.92 5.23%Indian Oil Corporation 555.05 2.34%PharmaceuticalsAurobindo Pharma 934.61 3.94%Ranbaxy Laboratories 529.90 2.23%Aventis Pharma 327.61 1.38%SoftwareInfosys Technologies 1,465.48 6.18%Info Edge India 276.36 1.17%Telecom - ServicesBharti Airtel 441.92 1.86%


HSBC India Opportunities Fund



Asset AllocationAuto 1.29%Auto Ancillaries 5.67%Banks 15.75%Cement 1.07%Construction Projects 5.89%Consumer Non Durable 4.58%Finance 4.76%Fixed Deposits 5.48%Fertilizers 1.21%Industrial Capital Goods 4.57%Industrial Products 2.13%Leisure Facilities 1.65%Media & Entertainment 4.52%Minerals/Mining 1.82%Oil 6.33%Pesticides 1.33%Petroleum Products 7.57%Pharmaceuticals 7.56%Software 7.35%Telecom - Services 1.86%Other Equity Investments 1.90%Reverse Repos/CBLOs 2.81%Net Current Assets 2.92%

Date of Allotment 24-Feb-04Benchmark BSE 500Assets Under ` 237.12 croresManagement(as on 31.08.10)NAV (Growth) ` 34.1259per unit(as on 31.08.10)Fund Manager Jitendra Sriram &

Dhimant ShahSIP AvailableMinimum ` 10,000ApplicationAmountExit Load@ 1% - if redeemed/


Standard Deviation 1.36%R-Squared 0.9350Beta (Slope) 0.7743Sharpe Ratio 0.0009Annualised Expense Ratio from 01 April2010 onwards 2.35%Portfolio Turnover 1.75


8

HIOF BSE 5006 Months 12.63 11.831 Year 17.52 20.603 Years 3.64 7.005 Years 15.85 17.36Since Inception 20.71 19.72





HSBC India Opportunities Fund - Dividend05-Oct-07 1.50 1.50 21.095424-Mar-08 1.00 1.00 16.406511-Dec-09 1.00 1.00 16.9013

Other Equity Investments 450.78 1.90%CBLOs 113.36 0.48%Reverse Repos 554.14 2.34%Net Current Assets 692.29 2.92%Total Net Assets as on 31 August 2010 23,712.44 100%


An Open Ended Diversified Equity SchemeInvestment Objective: Seeks to generate long term capital growth from an actively managedportfolio of equity and equity related securities primarily being midcap stocks. However, it couldmove a portion of its assets towards fixed income securities if the fund manager becomesnegative on the Indian equity markets.


HSBC Midcap Equity Fund

9

Auto AncillariesFederal-Mogul Goetze (India) 598.10 3.46%WABCO - TVS (India) 188.73 1.09%Apollo Tyres 178.88 1.03%BanksJammu and Kashmir Bank 784.84 4.53%Bank of Maharashtra 558.97 3.23%Dena Bank 393.21 2.27%ING Vysya Bank 344.70 1.99%State Bank of Bikaner and Jaipur 243.74 1.41%State Bank of Travancore 201.20 1.16%ChemicalsJindal Poly Films 875.75 5.06%ConstructionMaytas Infra 490.33 2.83%Construction ProjectsGammon India 285.63 1.65%Consumer DurablesHitachi Home & Life Solutions (India) 640.30 3.70%Consumer Non DurablesKRBL 655.76 3.79%Shree Renuka Sugars 583.95 3.37%Lakshmi Energy and Foods 177.41 1.02%Electronic Equipment & InstrumentsDiamond Power Infrastructure 826.54 4.77%Ferrous MetalsWelspun Gujarat Stahl Rohren 209.79 1.21%FinanceBajaj Holdings and Investment 182.46 1.05%Fixed DepositsHSBC Bank** 320.00 1.85%HardwareAllied Digital Services 589.83 3.41%Industrial Capital GoodsNumeric Power Systems 316.00 1.83%Kirloskar Pneumatic Company 194.98 1.13%Media & EntertainmentEntertainment Network (India) 259.18 1.50%PharmaceuticalsBilcare 571.26 3.30%Shasun Chemicals & Drugs 514.57 2.97%PowerBF Utilities 614.62 3.55%SoftwareOracle Financial Services Software 305.34 1.76%Telecom Equipment & AccessoriesHCL Infosystems 226.45 1.31%Textile ProductsAlok Industries 182.52 1.05%JBF Industries 477.84 2.76%Textiles - CottonBombay Dyeing & Manufacturing Company 1,113.63 6.43%Vardhman Textiles 327.31 1.89%Trading Companies & DistributorsThe State Trading Corporation of India 563.81 3.26%



HSBC Midcap Equity Fund

Date of Allotment 19-May-05Benchmark BSE MidcapAssets Under ` 173.10 croresManagement(as on 31.08.10)NAV (Growth) ` 23.9155per unit(as on 31.08.10)Fund Manager Dhiraj Sachdev & Dhimant ShahSIP AvailableMinimum ` 10,000ApplicationAmountExit Load@ 1% - if redeemed/


Standard Deviation 1.39%R-Squared 0.9063Beta (Slope) 0.8195Sharpe Ratio -0.0019Annualised Expense Ratio from 01 April2010 onwards 2.32%Portfolio Turnover 2.88

Asset AllocationAuto Ancillaries 5.58%Banks 14.60%Chemicals 5.06%Construction 2.83%Construction Projects 1.65%Consumer Durables 3.70%Consumer Non Durables 8.19%Electronic Equipment & Instruments 4.77%Ferrous Metals 1.21%Finance 1.05%Fixed Deposits 1.85%Hardware 3.41%Industrial Capital Goods 2.95%Media & Entertainment 1.50%Pharmaceuticals 6.27%Power 3.55%Software 1.76%Telecom Equipment & Accessories 1.31%Textile Products 3.81%Textiles - Cotton 8.32%Trading Companies & Distributors 3.26%Transportation 4.04%Other Equity Investments 4.06%Reverse Repos/CBLOs 2.92%Net Current Assets 2.34%


HMEF BSE Midcap6 Months 15.97 18.741 Year 28.56 29.133 Years 2.31 4.755 Years 12.70 13.32Since Inception 17.93 17.44

10





HSBC Midcap Equity Fund - Dividend05-Oct-07 1.50 1.50 19.006624-Mar-08 0.75 0.75 13.379711-Dec-09 1.00 1.00 13.8927


TransportationJet Airways India 483.80 2.79%Spicejet 214.80 1.24%Other Equity Investments 702.48 4.06%CBLOs 85.92 0.50%Reverse Repos 420.00 2.43%Net Current Assets 405.29 2.34%Total Net Assets as on 31 August 2010 17,309.91 100%


An Open Ended Flexi-Theme Equity SchemeInvestment Objective: Seeks to generate long term capital growth from an actively managedportfolio of equity and equity related securities by investing primarily in sectors, areas and themesthat play an important role in, and/or benefit from India’s progress, reform process andeconomic development.


HSBC Progressive Themes Fund

11

BanksState Bank of India 1,618.34 4.73%Jammu and Kashmir Bank 1,600.46 4.68%ICICI Bank 1,300.34 3.80%IDBI Bank 890.26 2.60%Punjab National Bank 566.52 1.66%ConstructionMaytas Infra 1,003.19 2.93%Gammon Infrastructure Projects 626.81 1.83%Kajaria Ceramics 572.82 1.68%Construction ProjectsLarsen and Toubro 1,215.15 3.55%Gammon India 630.29 1.84%Electronic Equipment & InstrumentsDiamond Power Infrastructure 452.90 1.32%Fixed DepositsHSBC Bank** 800.00 2.34%HSBC Bank** 800.00 2.34%Industrial Capital GoodsBharat Earth Movers 1,009.00 2.95%Bharat Heavy Electricals 859.16 2.51%Industrial ProductsSKF India 1,240.58 3.63%Fag Bearings India 816.30 2.39%OilOil and Natural Gas Corporation 1,805.76 5.28%Minerals / MiningHindustan Dorr-Oliver 463.16 1.35%Petroleum ProductsIndian Oil Corporation 1,379.82 4.04%Hindustan Petroleum Corporation 946.53 2.77%Reliance Industries 845.66 2.47%PowerReliance Infrastructure 1,001.90 2.93%Gujarat Industries Power Company 872.87 2.55%KSK Energy Ventures 615.40 1.80%SoftwareTata Consultancy Services 1,054.69 3.08%Telecom - ServicesMahanagar Telephone Nigam 765.00 2.24%Textile ProductsAlok Industries 445.77 1.30%Aditya Birla Nuvo 366.19 1.07%Textiles - CottonBombay Dyeing & Manufacturing Company 937.21 2.74%Trading Companies & DistributorsThe State Trading Corporation India 660.72 1.93%TransportationJet Airways India 930.48 2.72%Spicejet 578.87 1.69%Balmer Lawrie & Company 545.19 1.59%Gateway Distriparks 377.67 1.10%


HSBC Progressive Themes Fund


Date of Allotment 23-Feb-06Benchmark BSE 200Assets Under ` 341.94 croresManagement(as on 31.08.10)NAV (Growth) ` 13.8907per unit(as on 31.08.10)Fund Manager Dhiraj Sachdev &

Jitendra ShriramSIP AvailableMinimum ` 10,000ApplicationAmountExit Load@ 1% - if redeemed/



Asset Allocation

Banks 17.48%Construction 6.44%Construction Projects 5.40%Electronic Equipment & Instruments 1.32%Fixed Deposits 4.68%Industrial Capital Goods 5.46%Industrial Products 6.02%Oil 5.28%Minerals / Mining 1.35%Petroleum Products 9.28%Power 7.28%Software 3.08%Telecom - Services 2.24%Textile Products 2.37%Textiles - Cotton 2.74%Trading Companies & Distributors 1.93%Transportation 7.11%Other Equity Investments 4.66%Reverse Repos/CBLOs 3.13%Net Current Assets 2.73%


12

Other Equity Investments 1,594.87 4.66%

CBLOs 181.59 0.53%

Reverse Repos 887.65 2.60%

Net Current Assets 934.40 2.73%

Total Net Assets as on 31 August 2010 34,193.52 100%


HPTF BSE 2006 Months 12.45 11.161 Year 13.45 19.293 Years -1.16 7.42Since Inception 7.54 13.88





HSBC Progressive Themes Dividend11-May-07 1.00000 1.00000 12.239026-May-08 1.00000 1.00000 13.7160

12


An Open Ended Equity Linked Savings SchemeInvestment Objective: Aims to provide long term capital appreciation by investing in adiversified portfolio of equity & equity related instruments of companies across various sectorsand industries, with no capitalisation bias. The Fund may also invest in fixed income securities.


HSBC Tax Saver Equity Fund

13

AutoMahindra and Mahindra 535.83 1.92%Escorts 464.52 1.66%Tata Motors 390.31 1.40%Auto AncillariesBosch 747.01 2.67%Amara Raja Batteries 686.02 2.46%Motherson Sumi Systems 427.80 1.53%BanksICICI Bank 1,179.27 4.22%State Bank of India 912.91 3.27%Axis Bank 802.30 2.87%Bank of Baroda 727.27 2.60%HDFC Bank 640.28 2.29%Punjab National Bank 424.89 1.52%CementShree Cement 615.80 2.20%ConstructionSadbhav Engineering 619.95 2.22%IVRCL Assets and Holdings 385.09 1.38%Phoenix Mills 358.49 1.28%Construction ProjectsLarsen and Toubro 1,093.63 3.92%Consumer Non DurableGlaxo Smithkline Consumer Healthcare 1,094.57 3.92%Jyothy L Aboratories 414.24 1.48%EngineeringUB Engineering 653.28 2.34%Ferrous MetalsUsha Martin 476.98 1.71%FinanceHousing Development Finance Corporation 721.05 2.58%Power Finance Corporation 576.10 2.06%Bajaj Holdings and Investment 474.72 1.70%GasGas Authority of India 415.85 1.49%Industrial Capital GoodsCrompton Greaves 1,066.80 3.82%Thermax 800.89 2.87%Bharat Heavy Electricals 721.98 2.59%Industrial ProductsSintex Industries 693.03 2.48%Lesiure FacilitiesTalwalkars Better Value Fitness 539.06 1.93%Media & EntertainmentHindustan Media Ventures 379.26 1.36%Non - Ferrous MetalsHindustan Zinc 572.18 2.05%OilOil and Natural Gas Corporation 922.94 3.30%Petroleum ProductsReliance Industries 496.37 1.78%Indian Oil Corporation 310.94 1.11%



HSBC Tax Saver Equity Fund

Date of Allotment 05-Jan-07Benchmark BSE 200Assets Under ` 279.29 croresManagement(as on 31.08.10)NAV (Growth) ` 14.6994per unit(as on 31.08.10)Fund Manager Dhimant Shah &

Aditya KhemaniSIP AvailableMinimum ` 500ApplicationAmountExit Load@ NilStandard Deviation 1.34%R-Squared 0.9186Beta (Slope) 0.7381Sharpe Ratio 0.0104Annualised Expense Ratio from 01 April2010 onwards 2.34%Portfolio Turnover 1.47

Asset AllocationAuto 4.98%Auto Ancillaries 6.66%Banks 16.78%Cement 2.20%Construction 4.88%Construction Projects 3.92%Consumer Non Durable 5.40%Engineering 2.34%Ferrous Metals 1.71%Finance 6.34%Gas 1.49%Industrial Capital Goods 9.27%Industrial Products 2.48%Lesiure Facilities 1.93%Media & Entertainment 1.36%Non - Ferrous Metals 2.05%Oil 3.30%Petroleum Products 2.89%Pharmaceuticals 4.76%Power 1.76%Software 7.42%Other Equity Investments 1.68%Reverse Repos/CBLOs 1.48%Net Current Assets 2.90%

14


HTSF BSE 2006 Months 13.64 11.161 Year 24.61 19.292 Years 21.74 13.643 Years 10.23 7.42Since Inception 11.12 9.31

Statistical ratios disclosed as per daily returns ofthe last 3 years/since inception, whichever islater.@ Including SIP/STP where applicable.


PharmaceuticalsAurobindo Pharma 747.68 2.68%Lupin 581.75 2.08%PowerCESC 490.82 1.76%SoftwareInfosys Technologies 1,465.48 5.25%Tata Consultancy Services 607.50 2.18%Other Equity Investments 470.34 1.68%CBLOs 70.06 0.25%Reverse Repos 342.48 1.23%Net Current Assets 811.29 2.90%Total Net Assets As On 31 August 2010 27,929.00 100%


An Open-Ended Equity Scheme

Investment Objective: To provide long-term capital growth from a diversified portfolio of equityand equity related instruments. The focus would be to invest in stocks of companies facing“out-of-ordinary” conditions.


HSBC Unique Opportunities Fund

15

AutoTata Motors 346.94 2.46%Mahindra and Mahindra 319.62 2.27%Auto AncillariesMotherson Sumi Systems 321.04 2.28%BanksICICI Bank 622.19 4.42%Bank of Baroda 579.56 4.12%Andhra Bank 456.61 3.24%Allahabad Bank 282.15 2.00%Axis Bank 279.44 1.98%Indian Bank 223.61 1.59%HDFC Bank 222.53 1.58%ConstructionMaytas Infra 250.38 1.78%Construction ProjectsLarsen and Toubro 598.50 4.25%Consumer Non DurablesI T C 440.51 3.13%United Spirits 386.76 2.75%EID Parry (India) 282.22 2.00%FinanceShriram Transport Finance Company 430.80 3.06%Rural Electrification Corporation 344.72 2.45%Bajaj Holdings and Investment 202.67 1.44%Fixed DepositsHSBC Bank** 600.00 4.26%HSBC Bank** 200.00 1.42%HSBC Bank** 100.00 0.71%HotelsAsian Hotels (East) 232.05 1.65%Industrial Capital GoodsCrompton Greaves 444.45 3.16%Bharat Heavy Electricals 360.99 2.56%Mcnally Bharat Engineering Company 300.39 2.13%Kirloskar Pneumatic Company 236.27 1.68%Industrial ProductsGreaves Cotton 242.82 1.72%Jain Irrigation Systems 225.20 1.60%Polyplex Corporation 153.60 1.09%Leisure FacilitiesTalwalkars Better Value Fitness 299.69 2.13%Non - Ferrous MetalsHindustan Zinc 378.72 2.69%Petroleum ProductsReliance Industries 275.76 1.96%PharmaceuticalsLupin 801.90 5.69%Bilcare 423.79 3.01%Aurobindo Pharma 373.84 2.65%SoftwareInfosys Technologies 732.74 5.20%


Asset AllocationAuto 4.73%Auto Ancillaries 2.28%Banks 18.93%Construction 1.78%Construction Projects 4.25%Consumer Non Durables 7.88%Finance 6.95%Fixed Deposits 6.39%Hotels 1.65%Industrial Capital Goods 9.53%Industrial Products 4.41%Leisure Facilities 2.13%Non - Ferrous Metals 2.69%Petroleum Products 1.96%Pharmaceuticals 11.36%Software 5.20%Transportation 3.06%Reverse Repos/CBLOs 1.49%Net Current Assets 3.06%Other Equity Investments 0.27%

Date of Allotment 21-Mar-07Benchmark BSE 200Assets Under ` 140.83 croresManagement(as on 31.08.10)NAV (Growth) ` 10.9595per unit(as on 31.08.10)Fund Manager Dhimant Shah &

Jitendra SriramSIP AvailableMinimum ` 10,000ApplicationAmountExit Load@ 1% if redeemed/switched

out$ within 1 year fromdate of investment;otherwise Nil


HUOF BSE 2006 Months 13.51 11.161 Year 21.73 19.293 Years -1.68 7.42Since Inception 2.69 12.39

HSBC Unique Opportunities Fund


16





TransportationSpicejet 430.23 3.06%Other Equity Investments 38.50 0.27%CBLOs 35.70 0.25%Reverse Repos 174.49 1.24%Net Current Assets 431.43 3.06%Total Net Assets as on 31 August 2010 14,082.78 100%


An Open-Ended SchemeInvestment Objective: To provide long term capital appreciation by allocating funds in equity andequity related instruments. It also has the flexibility to move, entirely if required, into debt instrumentsin times that the view on equity markets seems negative.


HSBC Dynamic Fund

17

Auto

Tata Motors 260.21 1.45%

Banks

Bank of Baroda 1,014.24 5.63%

HDFC Bank 960.41 5.33%

ICICI Bank 879.93 4.89%

State Bank of India 871.42 4.84%

Cement

Grasim Industries 363.81 2.02%

Consumer Non Durable

I T C 829.62 4.61%

Fertilizers

Zuari Industries 314.35 1.75%

Fixed Deposits

HSBC Bank** 1,000.00 5.55%

HSBC Bank** 460.00 2.55%

Industrial Capital Goods

Bharat Heavy Electricals 779.74 4.33%

Bharat Electronics 522.99 2.90%

Media & Entertainment

Sun TV 687.89 3.82%

Oil

Oil and Natural Gas Corporation 782.50 4.35%

Cairn India 538.73 2.99%

Petroleum Products

Reliance Industries 992.74 5.51%

Hindustan Petroleum Corporation 425.94 2.37%

Pharmaceuticals

Ranbaxy Laboratories 794.85 4.41%

Lupin 641.52 3.56%

Aurobindo Pharma 560.76 3.11%

Software

Infosys Technologies 1,099.11 6.10%

Oracle Financial Services Software 183.20 1.02%

Telecom - Services

Bharti Airtel 383.00 2.13%

Transportation

Spicejet 386.64 2.15%

Construction Projects

Larsen and Toubro 1,060.99 5.89%


Asset AllocationAuto 1.45%Banks 20.69%Cement 2.02%Consumer Non Durable 4.61%Fertilizers 1.75%Fixed Deposits 8.11%Industrial Capital Goods 7.24%Media & Entertainment 3.82%Oil 7.34%Petroleum Products 7.88%Pharmaceuticals 11.09%Software 7.12%Telecom - Services 2.13%Transportation 2.15%Construction Projects 5.89%Other Equity Investments 0.78%Reverse Repos/CBLOs 2.12%Net Current Assets 3.82%

Date of Allotment 24-Sep-07Benchmark BSE 200Assets Under ` 180.05 croresManagement(as on 31.08.10)NAV (Growth) ` 10.0889per unit(as on 31.08.10)Fund Manager Jitendra Sriram

(for Equity portion)Sanjay Shah(for Debt portion)

SIP AvailableMinimum ` 10,000ApplicationAmountExit Load@ 1% - if redeemed/



HDF BSE 2006 Months 10.91 11.161 Year 17.24 19.29Since Inception 0.30 3.68




HSBC Dynamic Fund

18


Other Equity Investments 140.63 0.78%CBLOs 64.91 0.36%Reverse Repos 317.29 1.76%Net Current Assets 687.81 3.82%Total Net Assets as on 31 August 2010 18,005.21 100%

** Fixed deposits are placed as margin Deposit for Futures, Options and Equities.Total outstanding exposure in derivatives as on August 31, 2010 is ` 908.52\(Notional value in lakhs).


An Open-Ended SchemeInvestment Objective: To provide long term capital appreciation by investing in India and in theemerging markets, in equity and equity related instruments, share classes and units/securitiesissued by overseas mutual funds or unit trusts. The fund may also invest a limited proportion indomestic debt and money market instruments.


HSBC Emerging Markets Fund

19

HSBC GIF Global Emerging Markets Equity 6,438.79 96.54%

CBLOs 62.62 0.94%


Net Current Assets -138.05 -2.07%

Total Net Assets as on 31 August 2010 6,669.46 100%

Asset AllocationOther Equity Investments 96.54%Reverse Repos/CBLOs 5.53%Net Current Assets -2.07%

Date of Allotment 17-Mar-08Benchmark MSCI Emerging

Markets IndexAssets Under ` 66.39 croresManagement(as on 31.08.10)NAV (Grodwth) ` 9.0944per unit(as on 31.08.10)Fund Manager Niren Parekh

(dedicated fund managerfor overseas investments)

SIP AvailableMinimum ` 10,000ApplicationAmountExit Load@ 1% - if redeemed/


Standard Deviation 1.57%R-Squared 0.5882Beta (Slope) 0.9470Sharpe Ratio -0.0402Annualised Expense Ratio from 01 April2010 onwards 0.75%Portfolio Turnover -



HEMF MSCI-EMI6 Months 2.93 3.401 Year 2.14 10.31Since Inception -3.79 -0.91



An Close Ended Equity SchemeInvestment Objective: To provide long term capital appreciation primarily from a diversifiedportfolio of equity and equity related instruments of small cap companies.


HSBC Small Cap Fund

20

Auto

Majestic Auto 117.09 1.99%

Auto Ancillaries

SRF 224.57 3.81%

Amara Raja Batteries 170.09 2.89%

Banco Products (India) 120.50 2.05%

Banks

South Indian Bank 174.84 2.97%

State Bank of Travancore 120.72 2.05%

State Bank of Bikaner and Jaipur 104.46 1.77%

Cement

Orient Paper and Industries 193.43 3.28%

Chemicals

Deepak Nitrite 151.76 2.58%

Jindal Poly Films 131.36 2.23%

Construction

Maytas Infra 208.65 3.54%

Sadbhav Engineering 147.75 2.51%

Consumer Durables

Hitachi Home & Life Solutions (India) 390.58 6.63%

IFB Industries 91.53 1.55%

Consumer Non Durable

KRBL 234.50 3.98%

Lakshmi Energy and Foods 89.60 1.52%

Ferrous Metals

Usha Martin 60.37 1.03%

Fertilizeres

Zuari Industries 174.64 2.97%

Hardware

Allied Digital Services 165.24 2.81%

Industrial Capital Goods

Indo Tech Transformers 254.15 4.32%

TIL 125.23 2.13%

Sanghvi Movers 123.04 2.09%

Industrial Products

Polyplex Corporation 486.40 8.26%

Fag Bearings India 275.34 4.68%

Ador Welding 106.83 1.81%

Pesticide

Excel Crop Care 184.28 3.13%

Rallis India 119.93 2.04%

Software

Kale Consultants 273.39 4.64%

Nucleus Software Exports 187.88 3.19%

Telecom Equipment & Accessories

HCL Infosystems 112.75 1.91%


HSBC Small Cap Fund

21

Asset AllocationAuto 1.99%Auto Ancillaries 8.75%Banks 6.79%Cement 3.28%Chemicals 4.81%Construction 6.05%Consumer Durables 8.19%Consumer Non Durable 5.50%Ferrous Metals 1.03%Fertilizeres 2.97%Hardware 2.81%Industrial Capital Goods 8.53%Industrial Products 14.75%Pesticide 5.17%Software 7.83%Telecom Equipment & Accessories 1.91%Transportation 4.37%Other Equity Investments 3.67%Reverse Repos/CBLOs 3.17%Net Current Assets -1.56%

Date of Allotment 24-Mar-08Benchmark BSE Small Cap IndexAssets Under ` 58.89 croresManagement(as on 31.08.10)NAV (Growth) ` 12.9300per unit(as on 31.08.10)Fund Manager Dhiraj Sachdev &

Dhimant ShahSIP Available (Upon

conversion into openended scheme)

Minimum ` 10,000ApplicationAmountExit Load@ If the investments are

redeemed/switched out $

within: 1 year: 2%;2 years : 1.5%; 3 years :1%; otherwise Nil^; Afterconversion into openended scheme: Nil

Standard Deviation 0.81%R-Squared 0.8604Beta (Slope) 0.7615Sharpe Ratio 0.9820Annualised Expense Ratio from 01 April2010 onwards* 2.46%Portfolio Turnover 1.37

* Periodicity of NAVs used for calculatingstatistical ratios of HSBC Small Cap Fundis 5 days. Statistical ratios disclosed as perreturns of the last 3 years/since inception,whichever is later.@ Including SIP/STP where applicable. $ No load incase of switches between equity schemes of HSBCMutual Fund. ̂The investor will have to bear thebalance proportionate unamortized initial issueexpenses for exiting during the close ended tenor of thescheme.

HSCF BSE Small Cap6 Months 26.31 18.261 Year 47.41 36.35Since Inception 11.11 13.87




TransportationBalmer Lawrie & Company 149.78 2.54%Sical Logistics 107.57 1.83%Other Equity Investments 216.43 3.67%CBLOs 31.66 0.54%Reverse Repos 154.76 2.63%Net Current Assets -91.70 -1.56%Total Net Assets as on 31 August 2010 5,889.38 100%

** Fixed deposits are placed as margin Deposit for Futures, Options and Equities.


Fund Managers - Equity

22

Jitendra SriramVice President & Head of Fund Management - EquitiesB.E. (Elect), Post Graduate Diploma in Business Management

Experience:Over 14 years experience in Equity Research. This involved analysing various sectors and companiesand presenting investment ideas to fund managers in India and abroad.

� HSBC Asset Management (India) Private LimitedHead of Fund Management - Equities from February 2009 to present

� HSBC Asset Management (India) Private LimitedFund Manager from May 2006 to February 2009

� Deutsche Equities India Private LimitedVice President from August 2002 to April 2006

� HSBC Securities and Capital Markets (India) Private LimitedDeputy Head of Research from March 1997 to August 2002

� ITC Classic Share & Stock BrokingAnalyst from June 1995 to March 1997

Dhiraj SachdevSenior Fund ManagerB.Com., ACA, Grad CWA, Diploma in Foreign Trade Management (DFTM)

Experience:Over 13 years of experience in Equity Research & Fund Management.

� HSBC Asset Management (India) Private LimitedSenior Fund Manager from December 2009 to present

� HSBC Asset Management (India) Private LimitedHead of Equity-Portfolio Management Servicesfrom October 2005 to November 2009

� ASK Raymond James Securities India Private LimitedPortfolio Manager from October 2003 to September 2005

� HDFC Bank LimitedSenior Manager Equities from November 1999 to September 2003

� DSQ Software LtdBusiness Analyst from June 1999 to November 1999

� Probity Research & Services Ltd (India Infoline Limited)Research Analyst from November 1998 to May 1999

� Ford Brothers Capital Services (P) LimitedManager Research from July 1996 to Sept 1998

Name of Scheme Fund Manager

HSBC Equity Fund Jitendra Sriram (from 05 July 2006)

HSBC India Opportunities Fund Jitendra Sriram (from 05 July 2006) &Dhimant Shah (from 24 February 2009)

HSBC Midcap Equity Fund Dhiraj Sachdev (from 01 December 2009)Dhimant Shah (from 23 March 2007)

HSBC Progressive Themes Fund Dhiraj Sachdev (from 01 December 2009) &Jitendra Sriram (from 24 February 2009)

HSBC Tax Saver Equity Fund Dhimant Shah (from 14 August 2009) &Aditya Khemani (from 24 February 2009)

HSBC Unique Opportunities Fund Dhimant Shah (from 24 February 2009)& Jitendra Sriram (from 02 February 2007)

HSBC Dynamic Fund For Equity portion: Jitendra Sriram(from 03 August 2007)

For Debt portion: Sanjay Shah(from 14 August 2009)

HSBC Emerging Markets Fund Niren Parekh (from 17 March 2008)

HSBC Small Cap Fund Dhiraj Sachdev (from 01 December 2009) &Dhimant Shah (from 31 March 2008)

Fund Manager’s Experience


Fund Managers - Equity

23

Dhimant ShahVice President & Fund ManagerB.Com., CA

Experience:Over 16 years experience in Equity Research. This involved analysingvarious sectors and companies and presenting investment ideas to fundmanagers in India and abroad.� HSBC Asset Management (India) Private Limited

Fund Manager from Mar 2007 to present� Reliance Asset Management Co. Limited

Vice President/ Portfolio Manager from October 2005 to February 2007� ASK Raymond James Securities Pvt. Limited

Portfolio Manager from September 2003 to September 2005� IL&FS Asset Management Co. Limited

Senior Analyst from April 1997 to August 2003

Niren ParekhAssociate Vice President, Investment Management(Dedicated Fund Manager for overseas investments)Post Graduate Diploma in Business Management, CA

Experience:Over 5 years experience in research.� HSBC Asset Management (India) Private Limited

Assistant Fund Manager from September 2007 to present� Motilal Oswal Securities Limited

Analyst from October 2005 to September 2007� SBI Capital Markets

Management Trainee from May 2005 to September 2005

Aditya KhemaniAssociate Vice President and Assistant Fund Manager, EquitiesB.Com. (Hons.), Post Graduate Diploma in Business Management

Experience:Over 5 years experience in research.� HSBC Asset Management (India) Private Limited

Assistant Fund Manager, Equities from February 2009 to presentAssociate Vice President - Investment Managementfrom October 2007 to February 2009

� SBI Funds Management India Private LimitedSenior Manager - Equity Research from March 2007 to September 2007

� Prudential ICICI Asset Management Company India Private LimitedAssistant Manager - Equity Researchfrom December 2005 to February 2007

� Morgan Stanley Advantage Services India Private LimitedResearch Associate from May 2005 to November 2005


An Open Ended Fund with Regular & Savings Plans.Monthly income is not assured and is subject to availability ofdistributable surplus.Investment Objective: Seeks to generate reasonable returns through investments in Debt andMoney Market Instruments. The secondary objective of the scheme is to invest in equity andequity related instruments to seek capital appreciation.

Issuer Market % to RatingValue Net

(` in Lacs) Assets

HSBC MIP - Savings Plan

24

Money Market InstrumentsCPsL&T Finance 1,491.43 2.93% PR1+ONGC Videsh 399.13 0.79% P1+CDsFixedState Bank of Patiala 2,438.55 4.80% A1+Canara Bank 1,921.31 3.78% P1+Central Bank of India 1,469.56 2.89% PR1+Punjab National Bank 1,097.79 2.16% PR1+Allahabad Bank 997.62 1.96% P1+Indian Bank 996.26 1.96% IND F1+Andhra Bank 984.31 1.94% PR1+State Bank of Hyderabad 975.61 1.92% A1+IDBI Bank 494.33 0.97% A1+HDFC Bank 481.12 0.95% PR1+Bank of India 480.33 0.95% P1+Fixed DepositsHSBC Bank** 100.00 0.20% UnratedSecuritised DebtFixedBHPC Auto Securitisation Trust November 2007 I(Tata Motors Services) PTC 876.39 1.72% AAA(SO)Corporate/PSU DebtFixedPower Grid Corporation of India 1,534.90 3.02% AAANational Bank For Agricultural and Rural Development 1,499.17 2.95% AAAHousing Development Finance Corporation 1,025.99 2.02% AAAPower Grid Corporation of India 304.88 0.60% AAAPower Grid Corporation of India 303.78 0.60% AAAPower Finance Corporation 300.56 0.59% AAAExim Bank 201.53 0.40% LAAAPower Finance Corporation 201.05 0.40% AAARural Electrification Corporation 199.16 0.39% AAAPower Grid Corporation of India 151.15 0.30% AAAGovernment Securities7.80% Government Stock M-03-May-2020 3,567.78 7.02% Sovereign8.13% Government Stock M- 21-Sep-2022 3,494.63 6.88% Sovereign8.26% Government Stock M-02-Aug-2027 1,190.64 2.34% SovereignEquitiesListed EquityTata Motors 596.31 1.17%Shree Cement 559.93 1.10%Aurobindo Pharma 528.36 1.04%Tata Consultancy Services 523.13 1.03%Punjab National Bank 478.00 0.94%Amara Raja Batteries 412.17 0.81%Sintex Industries 391.15 0.77%Bank of Baroda 389.48 0.77%Oil and Natural Gas Corporation 374.53 0.74%Mahindra and Mahindra 372.89 0.73%Crompton Greaves 370.55 0.73%Gas Authority of India 369.64 0.73%Bharti Airtel 353.54 0.70%Hindustan Door-Oliver 352.89 0.69%Hindalco Industries 351.10 0.69%IVR Prime Urban Developers 347.05 0.68%Orient Paper and Industries 342.29 0.67%Allahabad Bank 319.44 0.63%UB Engineering 318.96 0.63%TVS Motor Company 301.57 0.59%Apollo Tyres 286.20 0.56%Spice Jet 229.12 0.45%Glaxosmithkline Consumer Healthcare 226.90 0.45%


HSBC MIP - Savings Plan

25


(` in Lacs) Assets

Gujarat Mineral Development Corporation 209.65 0.41%Engineers India 204.93 0.40%B L Kashyap and Sons 202.35 0.40%Century Textiles and Industries 191.92 0.38%HT Media 180.94 0.36%Sundaram Fasteners 174.73 0.34%Union Bank of India 162.84 0.32%Sunil Hitech Engineers 130.75 0.26%Motherson Sumi Systems 121.40 0.24%Hitachi Home & Life Solutions (India) 120.85 0.24%Hindustan Media Ventures 118.80 0.23%ICICI Bank 117.32 0.23%United Phosphorus 110.61 0.22%RSWM 79.54 0.16%Bharat Forge (Warrant) 67.50 0.13%Sanghvi Movers 65.84 0.13%Cash EquivalentsCBLOs 1,309.80 2.58%Reverse Repos 6,402.63 12.60%Net Current Assets 2,872.58 5.65%Total Net Assets as on 31-August-2010 50,819.12 100%

Money Market Instruments 28.00%Fixed Deposits 0.20%Securitised Debt 1.72%Corporate/ PSU Debt 11.26%Government Securities 16.24%Cash Equivalents 15.18%Net Current Assets 5.65%Other Equity Investments 21.75%

Asset Allocation


HMIP- Crisil MIPSP Blended Index

6 Months 4.97 3.921 Year 9.59 7.403 Years 9.79 7.325 Years 10.89 7.94Since Inception 10.31 7.25

Date of Allotment 24-Feb-04Benchmark Crisil MIP Blended IndexAssets Under ` 508.19 croresManagement(as on 31.08.10)NAV (Growth) ` 18.9616per unit(as on 31.08.10)Average Maturity 36.94 monthsof PortfolioModified Duration 23.83 monthsof PortfolioFund Manager Dhimant Shah &

Aditya Khemani(for Equity portion)Sanjay Shah(for Debt portion)

SIP AvailableMinimum Application AmountGrowth ` 10,000Quarterly Dividend ` 10,000Monthly Dividend ` 25,000Exit Load@ 1% - if redeemed/

switched out within 1 year from date of investment.

Annualised Expense Ratio from 01 April2010 onwards 2.05%

Rating ProfileAAA 40.98%Sovereign 16.24%Unrated 0.20%Other Equity Investments 21.75%Reverse Repos/ CBLOs 15.18%Net Current Assets 5.65%



@ Including SIP/STP where applicable.


HSBC MIP - Savings Plan - Monthly Dividend25-Jun-10 0.10541 0.09824 11.993930-Jul-10 0.11419 0.10643 12.009827-Aug-10 0.12298 0.11462 11.9793HSBC MIP - Savings Plan - Quarterly Dividend11-Dec-09 0.23650 0.22012 12.434012-Mar-10 0.23650 0.22012 12.364111-Jun-10 0.21961 0.20467 12.1560

** Fixed deposits are placed as Margin Deposit for Futures, Options and Equities.Total outstanding exposure in derivatives as on August 31, 2010 is Rs 784.12(Notional value in lakhs).


An Open Ended Fund with Regular & Savings Plans.Monthly income is not assured and is subject to availability ofdistributable surplus.Investment Objective: Seeks to generate reasonable returns through investments in Debt andMoney Market Instruments. The secondary objective of the scheme is to invest in equity andequity related instruments to seek capital appreciation.

HSBC MIP - Regular Plan

26


(` in Lacs) Assets

Money Market InstrumentsCPsL&T Finance 994.29 4.07% PR1+CDsFixedUnion Bank of India 1,921.31 7.87% A1+ICICI Bank 1,495.61 6.13% A1+State Bank of Patiala 1,463.13 6.00% A1+Central Bank of India 996.44 4.08% PR1+State Bank of Hyderabad 487.80 2.00% A1+Canara Bank 480.33 1.97% P1+Canara Bank 479.66 1.97% P1+UCO Bank 399.04 1.64% P1+T-Bills364 Day Tbill M - 11-Mar-2011 474.37 1.94% SovereignFixed DepositsHSBC Bank** 100.00 0.41% UnratedSecuritised DebtFixedBHPC Auto Securitisation Trust November 2007 I(Tata Motors Services) PTC 584.26 2.39% AAA(SO)Corporate/PSU DebtFixedPower Grid Corporation of India 1,081.98 4.43% AAAHousing Development Finance Corporation 513.00 2.10% AAANational Bank For Agricultural and Rural Development 499.72 2.05% AAAPower Finance Corporation 301.57 1.24% AAAPower Finance Corporation 217.65 0.89% AAAPower Grid Corporation of India 203.25 0.83% AAAPower Grid Corporation of India 202.52 0.83% AAAPower Grid Corporation of India 151.15 0.62% AAAGovernment Securities7.80% Government Stock M-03-May-2020 2,378.52 9.75% Sovereign8.13% Government Stock M- 21-Sep-2022 1,548.12 6.34% Sovereign8.26% Government Stock M-02-Aug-2027 793.76 3.25% SovereignEquitiesListed EquityAurobindo Pharma 210.74 0.86%Tata Consultancy Services 202.50 0.83%Shree Cement 199.11 0.82%Punjab National Bank 165.24 0.68%Tata Motors 161.18 0.66%Oil and Natural Gas Corporation 160.51 0.66%Sintex Industries 151.01 0.62%Amara Raja Batteries 150.72 0.62%Hindalco Industries 148.10 0.61%Mahindra and Mahindra 147.27 0.60%IVR Prime Urban Developers 131.91 0.54%Bharti Airtel 130.94 0.54%Hindustan Door-Oliver 130.05 0.53%Orient Paper and Industries 129.41 0.53%Allahabad Bank 123.60 0.51%Crompton Greaves 119.31 0.49%Bank of Baroda 104.96 0.43%Apollo Tyres 103.75 0.43%UB Engineering 102.32 0.42%Gas Authority of India 101.65 0.42%B L Kashyap and Sons 101.17 0.41%Spice Jet 85.92 0.35%TVS Motor Company 76.82 0.31%HT Media 70.55 0.29%Engineers India 65.41 0.27%Century Textiles and Industries 62.37 0.26%Sundaram Fasteners 57.68 0.24%


HSBC MIP - Regular Plan


AAA 51.11%Sovereign 21.29%Unrated 0.41%Other Equity Investments 15.17%Reverse Repos/ CBLOs 7.46%Net Current Assets 4.57%

Rating Profile

Money Market Instruments 35.72%T-Bills 1.94%Fixed Deposits 0.41%Securitised Debt 2.39%Corporate/ PSU Debt 12.99%Government Securities 19.34%Cash Equivalents 7.46%Net Current Assets 4.57%Other Equity Investments 15.17%

Asset Allocation Date of Allotment 24-Feb-04Benchmark Crisil MIP Blended IndexAssets Under ` 244.05 croresManagement(as on 31.08.10)NAV (Growth) ` 16.7059per unit(as on 31.08.10)Average Maturity 41.95 monthsof PortfolioModified Duration 27.20 monthsof PortfolioFund Manager Dhimant Shah &

Aditya Khemani(for Equity portion)Sanjay Shah(for Debt portion)

SIP AvailableMinimum Application AmountGrowth ` 10,000Quarterly Dividend ` 10,000Monthly Dividend ` 25,000Exit Load@ 1% - if redeemed/

switched out within 1 year from date of investment.


HMIP- Crisil MIPRP Blended Index


27





HSBC MIP - Regular Plan - Monthly Dividend25-Jun-10 0.09663 0.09006 11.377830-Jul-10 0.10541 0.09824 11.346027-Aug-10 0.11419 0.10643 11.2926HSBC MIP - Regular Plan - Quarterly Dividend11-Dec-09 0.21899 0.20382 11.973012-Mar-10 0.21899 0.20382 11.857011-Jun-10 0.20204 0.18830 11.6843


(` in Lacs) Assets

Motherson Sumi Systems 48.31 0.20%Hindustan Media Ventures 44.23 0.18%RSWM 43.28 0.18%Hitachi Home & Life Solutions (India) 42.69 0.17%ICICI Bank 39.11 0.16%United Phosphorus 38.71 0.16%Sunil Hitech Engineers 29.26 0.12%Sanghvi Movers 21.95 0.09%Cash EquivalentsCBLOs 309.06 1.27%Reverse Repos 1,510.77 6.19%Net Current Assets 1,116.20 4.57%Total Net Assets as on 31-August-2010 24,405.25 100%

** Fixed deposits are placed as Margin Deposit for Futures, Options and Equities.Total outstanding exposure in derivatives as on August 31, 2010 is Rs 374.46(Notional value in lakhs).


28

HSBC Income Fund - Investment Plan

An Open Ended Income SchemeInvestment Objective: Aims to provide reasonable income through a diversified portfolio offixed income securities. The AMC’s view of interest rate trends and the nature of the Plans willbe reflected in the type and maturities of securities in which the Short Term and InvestmentPlans are invested.Issuer Market % to Rating

Value Net(` in Lacs) Assets

Securitised Debt

Fixed

India MBS 2002 Series I-D (LIC Housing Finance) PTC 57.16 1.97% AAA(SO)

Corporate/PSU Debt

Fixed

Exim Bank 302.29 10.39% LAAA

Rural Electrification Corporation 298.74 10.27% AAA

Power Grid Corporation of India 50.32 1.73% AAA

Government Securities

7.40% Government Stock M 03-May-2012 504.75 17.36% Sovereign

7.80% Government Stock M-03-May-2020 450.93 15.51% Sovereign

8.26% Government Stock M-02-Aug-2027 114.10 3.92% Sovereign

5.59% Government Stock M 04-Jun-2016 0.36 0.01% Sovereign

Cash Equivalents

CBLOs 131.83 4.53%



Total Net Assets as on 31-August-2010 2,908.13 100%


29

HSBC Income Fund - Investment Plan


AAA 24.36%Sovereign 36.80%Reverse Repos/ CBLOs 26.69%Net Current Assets 12.15%

Rating Profile

Securitised Debt 1.97%Corporate / PSU Debt 22.40%Government Securities 36.80%Cash Equivalents 26.69%Net Current Assets 12.15%

Asset Allocation

HIF- Crisil CompositeIP Bond Fund Index


Date of Allotment 10-Dec-02Benchmark Crisil Composite Bond

Fund IndexAssets Under ` 29.08 croresManagement(as on 31.08.10)NAV (Growth) ` 16.2327per unit(as on 31.08.10)Average Maturity 35.77 monthsof PortfolioModified Duration 24.36 monthsof PortfolioFund Manager Suyash Choudhary &

Sanjay ShahSIP AvailableMinimum Application AmountRegular ` 10,000Institutional ` 50,00,000Exit Load@ Regular and Institutional

Options: 0.5% - ifredeemed/ switched outwithin 6 months from thedate of investment.

Annualised Expense Ratio from 01 April2010 onwardsRegular 1.85%Institutional 1.49%





HSBC Income Fund - Investment Plan - Regular Option - Quarterly Dividend11-Dec-09 0.17519 0.16305 11.469712-Mar-10 0.19271 0.17936 11.365411-Jun-10 0.19325 0.18011 11.3082HSBC Income Fund - Investment Plan - Institutional Option - Quarterly Dividend12-Jun-09 0.11387 0.10598 11.029411-Sep-09 0.11387 0.10598 10.996011-Dec-09 0.11387 0.10598 11.0973


HSBC Income Fund - Short Term Plan

An Open Ended Income SchemeInvestment Objective: Aims to provide reasonable income through a diversified portfolio offixed income securities. The AMC’s view of interest rate trends and the nature of the Plans willbe reflected in the type and maturities of securities in which the Short Term and InvestmentPlans are invested.


(` in Lacs) Assets

30

(Rated mfAAA by ICRA)

Money Market Instruments

CDs

Fixed

ICICI Bank 2,402.08 15.21% A1+

IDBI Bank 1,977.30 12.52% A1+

Oriental Bank of Commerce 1,958.94 12.40% P1+

HDFC Bank 1,924.47 12.18% PR1+

Bank of India 1,921.31 12.16% P1+

Canara Bank 1,918.64 12.15% P1+

Corporation Bank 1,448.84 9.17% BWRP1+

Central Bank of India 979.71 6.20% PR1+

Union Bank of India 960.66 6.08% A1+

Cash Equivalents

CBLOs 55.02 0.35%





HSBC Income Fund - Short Term Plan

** Core MTM would mean bonds / instruments whichhave residual maturity greater than 6 months and arevalued as per Crisil Bond Valuer. Core MTM is as on31 August 2010.

Dividend DeclarationRecord Date/period Dividend (` per unit) Dividend (` per unit) NAV per unitof dividend declared Non-Institutional Institutional (cum dividend)

HSBC Income Fund - Short Term Plan - Regular Option - Monthly Dividend25-Jun-10 0.02551 0.02377 10.910230-Jul-10 0.03766 0.03510 10.885027-Aug-10 0.03471 0.03235 10.8800HSBC Income Fund - Short Term Plan - Institutional Option - Monthly Dividend26-Feb-10 0.02388 0.02223 10.569726-Mar-10 0.02693 0.02507 10.573127-Aug-10 0.03277 0.03054 10.0373HSBC Income Fund - Short Term Plan - Institutional Plus Option - Monthly Dividend25-Jun-10 0.01568 0.01461 10.159630-Jul-10 0.00657 0.00612 10.149227-Aug-10 0.03387 0.03156 10.1803

HIF- Crisil Short TermSTP Bond Fund Index


Date of Allotment 10-Dec-02Benchmark Crisil Short Term Bond


Sanjay ShahSIP AvailableMinimum Application AmountRegular ` 1,00,000Institutional ̀100,00,000Institutional Plus ̀500,00,000Exit Load@ NilAnnualised Expense Ratio from 01 April2010 onwardsRegular 1.01%Institutional 0.69%Institutional Plus 0.60%

Core MTM (% to Net Assets)** 85.56Money Market Instruments 98.08%Cash Equivalents 2.05%Net Current Assets -0.13%

Asset Allocation

AAA 98.08%Reverse Repos/ CBLOs 2.05%Net Current Assets -0.13%

Rating Profile

31





32

An Open Ended Income SchemeInvestment Objective: Seeks to generate a reasonable return with commensurate risk throughinvestments in floating rate debt instruments and fixed rate debt instruments swapped forfloating rate returns. The Scheme may also invest in fixed rate money market and debtinstruments.


(` in Lacs) Assets

HSBC Floating Rate Fund - Long Term Plan



CPs

Kotak Mahindra Prime 4,970.67 10.79% P1+

L&T Finance 2,458.11 5.34% PR1+

ICICI Securitires Primary Dealership 981.84 2.13% P1+

CDs

Fixed

State Bank of Mysore 4,998.76 10.86% A1+

Corporation Bank 4,998.73 10.85% PR1+

IDBI Bank 4,986.17 10.83% A1+

Allahabad Bank 4,936.40 10.72% A1+

ICICI Bank 3,489.76 7.58% A1+

Canara Bank 2,472.17 5.37% PR1+

Syndicate Bank 2,470.95 5.37% PR1+

Central Bank of India 2,468.75 5.36% PR1+


Kotak Mahindra Bank 499.84 1.09% IND F1+

Cash Equivalents

CBLOs 818.23 1.78%

Reverse Repos 3,999.71 8.69%




33

HSBC Floating Rate Fund - Long Term Plan

HSBC Floating Rate Fund - Long Term Plan - Regular Option - Monthly Dividend25-Jun-10 0.02450 0.02284 10.027930-Jul-10 0.03499 0.03261 10.039827-Aug-10 0.02933 0.02734 10.0334HSBC Floating Rate Fund - Long Term Plan - Institutional Option - Monthly Dividend25-Jun-10 0.03133 0.02920 10.190030-Jul-10 0.04351 0.04055 10.201627-Aug-10 0.03065 0.02857 10.1915HSBC Floating Rate Fund - Long Term Plan - Institutional Option - Weekly Dividend27-Aug-10 0.01017 0.00948 11.2413

Core MTM (% to Net Assets)** 0.00



AAA 91.64%Reverse Repos / CBLOs 10.46%Net Current Assets -2.10%

Rating Profile

Money Market Instruments 91.64%Cash Equivalents 10.46%Net Current Assets -2.10%

Asset Allocation

HFRF- Crisil LiquidLTP Fund Index

6 Months 2.08 2.331 Year 3.97 3.803 Years 6.65 6.16Since Inception 6.52 6.03

Date of Allotment 16-Nov-04Benchmark Crisil Liquid Fund IndexAssets Under ` 460.50 croresManagement(as on 31.08.10)NAV (Growth) ` 14.4384per unit(as on 31.08.10)Average Maturity 1.23 monthsof PortfolioModified Duration 1.16 monthsof PortfolioFund Manager Sanjay Shah &

Kedar KarnikSIP AvailableMinimum Application AmountRegular ` 10,000Institutional ` 50,00,000Exit Load@ NilAnnualised Expense Ratio from 01 April2010 onwardsRegular 0.96%Institutional 0.27%






An Open Ended Income SchemeInvestment Objective: Seeks to generate a reasonable return with commensurate risk throughinvestments in floating rate debt instruments and fixed rate debt instruments swapped forfloating rate returns. The Scheme may also invest in fixed rate money market and debtinstruments.


(` in Lacs) Assets

HSBC Floating Rate Fund - Short Term Plan

34


Cash Equivalents

CBLOs 597.17 15.12%




Cash Equivalents 89.06%Net Current Assets 10.94%

Asset Allocation

Reverse Repos/ CBLOs 89.06%Net Current Assets 10.94%

Rating Profile

*The MTM % disclosed is the weekly averagefor the week ended 31 August 2010.

MTM (% of Net Assets)* 0.00



HSBC Floating Rate Fund - Short Term Plan

35

HFRF- Crisil LiquidSTP Fund Index

1 Week 3.94 5.582 Weeks 4.32 5.421 Month 4.40 5.563 Months 4.65 5.276 Months 3.77 4.571 Year 3.06 3.803 Years 5.41 6.16Since Inception 5.84 6.03

* Past performance may or may not be sustainedin the future. Returns less than 1 yearare simple annualized. Returns equal to orgreater than 1 year are compoundedannualized. ‘Since inception’ returns arecalculated on ` 10 invested at inception.Calculations are based on Growth NAVs.



HSBC Floating Rate Fund - Short Term Plan - Institutional Option - Monthly Dividend26-Mar-10 0.01567 0.01567 10.149730-Apr-10 0.02177 0.02177 10.157528-May-10 0.01928 0.01928 10.1542HSBC Floating Rate Fund - Short Term Plan - Institutional Plus Option - MonthlyDividend30-Dec-05 0.03967 0.04259 10.054027-Jan-06 0.03825 0.03562 10.048524-Feb-06 0.03660 0.03408 10.0483

Date of Allotment 16-Nov-04Benchmark Crisil Liquid Fund IndexAssets Under ` 39.48 croresManagement(as on 31.08.10)NAV (Growth) ` 13.8955per unit(as on 31.08.10)Average Maturity 0.03 monthsof PortfolioModified Duration 0.00 monthsof PortfolioFund Manager Sanjay Shah &

Kedar KarnikSIP AvailableMinimum Application AmountRegular ` 1,00,000Institutional ` 50,00,000Institutional Plus ` 5,00,00,000Exit Load@ NilAnnualised Expense Ratio from 01 April2010 onwardsRegular 0.50%Institutional 0.43%Institutional Plus 0.35%


Expense Ratios (%) 01 August 2010 to Average for31 August 2010 the month

- Regular 0.50 0.50- Institutional 0.43 0.43- Institutional Plus 0.35 0.35


An Open Ended Liquid SchemeInvestment Objective: Aims to provide reasonable returns, commensurate with low risk whileproviding a high level of liquidity, through a portfolio of money market and debt securities.

HSBC Cash Fund


(` in Lacs) Assets

36

(Rated mfA1+ by ICRA)


CPs

ONGC Videsh 2,095.44 7.41% P1+

L&T Finance 1,494.77 5.28% PR1+

ICICI Securitires Primary Dealership 1,472.76 5.21% P1+

CDs

Fixed

UCO Bank 2,094.95 7.41% P1+

Kotak Mahindra Bank 1,999.35 7.07% IND F1+

ING Vysya Bank 1,995.13 7.05% P1+

Allahabad Bank 1,496.43 5.29% P1+


Indian Bank 1,494.40 5.28% IND F1+

Andhra Bank 1,476.47 5.22% PR1+

Cash Equivalents

CBLOs 1,900.44 6.72%





HSBC Cash Fund

37

HCF Crisil LiquidFund Index

1 Week 4.51 5.582 Weeks 4.67 5.421 Month 4.67 5.563 Months 4.45 5.276 Months 3.84 4.571 Year 3.06 3.803 Years 5.21 6.165 Years 5.77 6.23Since Inception 5.50 5.58


Money Market Instruments 60.49%Cash Equivalents 39.55%Net Current Assets -0.05%

Asset Allocation

AAA 60.49%Reverse Repos/ CBLOs 39.55%Net Current Assets -0.05%

Rating Profile

* Past performance may or may not be sustainedin the future. Returns less than 1 yearare simple annualized. Returns equal to orgreater than 1 year are compoundedannualized. ‘Since inception’ returns arecalculated on ` 10 invested at inception.Calculations are based on Growth NAVs.



HSBC Cash Fund - Institutional Option - Monthly Dividend25-Jun-10 0.02542 0.02542 10.553830-Jul-10 0.03921 0.03921 10.571427-Aug-10 0.03116 0.03116 10.5611HSBC Cash Fund - Institutional Plus Option - Monthly Dividend25-Jun-10 0.02677 0.02677 10.110430-Jul-10 0.04059 0.04059 10.128027-Aug-10 0.03228 0.03228 10.1174

Date of Allotment 04-Dec-02Benchmark Crisil Liquid Fund IndexAssets Under ` 282.91 croresManagement(as on 31.08.10)NAV (Growth) ` 15.1425per unit(as on 31.08.10)Average Maturity 0.57 monthsof PortfolioModified Duration 0.53 monthsof PortfolioFund Manager Sanjay Shah &

Kedar KarnikSIP AvailableMinimum Application AmountRegular ` 1,00,000Institutional ` 50,00,000Institutional Plus ` 5,00,00,000Exit Load@ NilAnnualised Expense Ratio from 01 April2010 onwardsRegular 1.00%Institutional 0.75%Institutional Plus 0.35%


*The MTM % disclosed is the weekly averagefor the week ended 31 August 2010.

MTM (% of Net Assets)* 0.00


- Regular 1.00 1.00- Institutional 0.75 0.75- Institutional Plus 0.35 0.35



38

HGF I-Sec Composite

Index6 Months 3.09 2.931 Year 6.75 6.033 years 1.70 7.985 years 2.67 7.15Since Inception 2.64 5.96

An Open Ended Gilt SchemeInvestment Objective: Aims to generate reasonable returns through investments in GovernmentSecurities of various maturities. The AMC's view of interest rate trends and the nature of the plans willbe reflected in the maturities of securities in which the Plans are invested.


(` in Lacs) Assets

HSBC Gilt Fund

Date of Allotment 05-Dec-03Benchmark I-Sec Composite IndexAssets Under ` 0.94 croresManagement(as on 31.08.10)NAV (Growth) ̀11.9207per unit(as on 31.08.10)Average Maturity 48.68 monthsof PortfolioModified Duration 30.97 monthsof PortfolioFund Manager Suyash Choudhary &

Sanjay ShahSIP AvailableMinimum ` 10,000ApplicationAmountExit Load@ 0.5% if redeemed /

switched out with6 months from date ofinvestment.


T-Bills

364 Day Tbill M - 11-Mar-2011 9.68 10.27% Sovereign


7.80% Government Stock M-03-May-2020 29.73 31.55% Sovereign


Cash Equivalents

CBLOs 6.26 6.65%



Total Net Assets as on 31-August-2010 94.22 100%





HSBC Gilt Fund - Monthly Dividend31-Oct-08 0.06136 0.05711 10.807728-Nov-08 0.04193 0.03903 10.785526-Dec-08 0.03400 0.03164 10.7764

T-Bills 10.27%Government Securities 36.82%Cash Equivalents 39.13%Net Current Assets 13.78%

Asset Allocation

Sovereign 47.09%Reverse Repos/ CBLOs 39.13%Net Current Assets 13.78%

Rating Profile


An Open Ended Debt SchemeInvestment Objective: Seeks to provide liquidity and reasonable returns by investing primarilyin a mix of short term debt and money market instruments

HSBC Ultra Short Term Bond Fund


(` in Lacs) Assets

39

(Rated mfA1 by ICRA)

* This NCD has daily call option


CPs

L&T Finance 2,481.03 7.86% PR1+

Bajaj Auto Finance 2,476.51 7.85% P1+

L&T Finance 996.52 3.16% PR1+

CDs

Fixed

UCO Bank 4,988.39 15.80% P1+

ICICI Bank 2,494.24 7.90% A1+

ING Vysya Bank 2,493.78 7.90% P1+

Oriental Bank of Commerce 2,482.70 7.87% P1+

Punjab National Bank 1,397.19 4.43% PR1+

Securitised Debt

Mibor Linked

BHPC Auto Securitisation Sr A1 (Tata Motors) PTC 199.24 0.63% AAA(SO)

Corporate/PSU Debt

Fixed

Unitech * 236.51 0.75% B-(IND)

INBMK Linked

Housing Development Finance Corporation 4,966.23 15.73% LAAA

Axis Bank 4,487.12 14.22% LAAA

Cash Equivalents

CBLOs 181.07 0.57%






40

Money Market Instruments 62.76%Securitised Debt 0.63%Corporate / PSU Debt 30.70%Cash Equivalents 3.38%Net Current Assets 2.53%

Asset Allocation

Rating ProfileAAA 93.34%Below AA 0.75%Reverse Repos/ CBLOs 3.38%Net Current Assets 2.53%


Core MTM (% to Net Assets)** 29.95

Asset Allocation For% to Net AssetMibor Linked 0.63%INBMK Linked 29.95%



41



HSBC Ultra Short Term Bond Fund - Institutional Option - Monthly Dividend25-Jun-10 0.02940 0.02740 10.172030-Jul-10 0.04528 0.04220 10.190027-Aug-10 0.02599 0.02422 10.1681HSBC Ultra Short Term Bond Fund - Institutional Plus Option - Monthly Dividend25-Jun-10 0.03449 0.03214 10.366430-Jul-10 0.05180 0.04828 10.386127-Aug-10 0.03101 0.02890 10.3624

HUSBF Customised Benchmark

Index**6 Months 4.06 4.601 Year 3.93 3.923 Years 6.07 6.28Since Inception 6.56 6.51


** Composite index of Crisil Liquid Fund Index(90%) and Crisil Short Term Bond Fund Index(10%)

Performance* (%) as on 31 August 2010 Date of Allotment 17-Oct-06Benchmark Customised Benchmark

Index**Assets Under ` 315.65 croresManagement(as on 31.08.10)NAV (Growth) ` 12.7920per unit(as on 31.08.10)Average Maturity 1.86 monthsof PortfolioModified Duration 1.75 monthsof PortfolioFund Manager Sanjay Shah &

Kedar KarnikSIP AvailableMinimum Application AmountRegular ` 10,000Institutional ` 50,00,000Institutional Plus ` 5,00,00,000Exit Load@ NilAnnualised Expense Ratio from 01 April2010 onwardsRegular 1.25%Institutional 1.00%Institutional Plus 0.36%

@ Including SIP/STP where applicable.* * Composite index of Crisil Liquid Fund Index

(90%)and Crisil Short Term Bond Fund Index(10%)


- Regular 1.30 1.30 -Institutional 1.05 1.05- Institutional Plus 0.40 0.40


42

An Open Ended Debt SchemeInvestment Objective: Seeks to deliver returns in the form of interest income and capital gains, alongwith high liquidity, commensurate with the current view on the markets and the interest rate cycle, throughactive investment in debt and money market instruments.


(` in Lacs) Assets

HSBC Flexi Debt Fund(Rated mfAAA by ICRA)


CDs

Fixed

State Bank of Hyderabad 975.61 10.77% A1+

State Bank of Patiala 975.42 10.77% A1+

Corporation Bank 965.89 10.66% BWRP1+

Union Bank of India 960.66 10.60% A1+

Oriental Bank of Commerce 489.74 5.41% P1+

Corporate/PSU Debt

Fixed

National Bank For Agricultural and Rural Developmnet 499.72 5.52% AAA

Power Grid Corporation of India 100.65 1.11% AAA


7.80% Government Stock M-03-May-2020 1,501.44 16.57% Sovereign


Cash Equivalents

CBLOs 192.83 2.13%


Net Current Assets 1,078.24 11.90%



HSBC Flexi Debt Fund

43


AAA 54.83%Sovereign 20.73%Reverse Repos/ CBLOs 12.53%Net Current Assets 11.90%

Rating Profile

Money Market Instruments 48.21%Corporate / PSU Debt 6.63%Government Securities 20.73%Cash Equivalents 12.53%Net Current Assets 11.90%

Asset Allocation


HSBC Flexi Debt Fund - Regular Option - Monthly Dividend30-Apr-10 0.10273 0.09562 10.420128-May-10 0.04403 0.04104 10.352427-Aug-10 0.03892 0.03628 10.3465HSBC Flexi Debt Fund - Institutional Option - Monthly Dividend28-May-10 0.05971 0.05565 10.601130-Jul-10 0.00494 0.00461 10.538527-Aug-10 0.04308 0.04015 10.5819HSBC Flexi Debt Fund - Regular Option - Quarterly Dividend11-Dec-09 0.08759 0.08153 11.248112-Mar-10 0.09635 0.08968 11.205611-Jun-10 0.13176 0.12280 11.2770HSBC Flexi Debt Fund - Institutional Option - Quarterly Dividend11-Dec-09 0.10511 0.09783 11.112312-Mar-10 0.12263 0.11414 11.058711-Jun-10 0.13176 0.12280 11.1070HSBC Flexi Debt Fund - Regular Option - Half Yearly Dividend11-Sep-09 0.08759 0.08153 10.216812-Mar-10 0.10511 0.09783 10.3551

HFDF CrisilCompositeBond Fund

Index6 months 2.30 2.831 Year 4.70 5.73Since Inception 8.61 6.26



Date of Allotment 05-Oct-07Benchmark Crisil Composite Bond


Sanjay ShahSIP AvailableMinimum Application AmountRegular ` 10,000Institutional ` 50,00,000Exit Load@ Regular &

Institutional Option –0.25% - if redeemed/switched out within3 months from the dateof investment.

Annualised Expense Ratio from 01 April2010 onwardsRegular 1.85%Institutional 1.50%



Fund Managers - MIP & Debt

44

Fund Manager’s Experience

Suyash ChoudharyVice President & Head of Fund Management - Fixed IncomeB.A. (Hons) Economics, Post Graduate Diploma in Management

Experience:Over 10 years experience in research and fund management.� HSBC Asset Management (India) Private Limited

Head of Fund Management - Fixed Income from December 2008to presentFund Manager from February 2008 to December 2008

� Standard Chartered AMCFund Manager from November 2002 to January 2008Manager – Pension Funds from November 2001 to October 2002

� DB Consulting Group Asia PacificResearch Associate from May 2000 to October 2001

Name of Scheme Fund Manager

HSBC MIP For Debt portion: Sanjay Shah

- Savings & Regular Plan (from 14 August 2009)

For Equity portion: Dhimant Shah

(from 14 August 2009) & Aditya Khemani

(from 24 February 2009)

HSBC Income Fund Sanjay Shah (from 09 January 2009) &

- Investment Plan Suyash Choudhary (from 10 July 2008)

HSBC Income Fund Suyash Choudhary (from 10 July 2008) &

- Short Term Plan Sanjay Shah (from 09 January 2009)

HSBC Floating Rate Fund Sanjay Shah (from 09 January 2009)

Long Term Plan & Kedar Karnik (from 11 January 2010)

Short Term Plan

HSBC Cash Fund Sanjay Shah (from 09 January 2009) &

Kedar Karnik (from 11 January 2010)

HSBC Gilt Fund Suyash Choudhary (from 11 February 2008)

& Sanjay Shah (from 09 January 2009)

HSBC Ultra Short Term Sanjay Shah (from 09 January 2009) &

Bond Fund Kedar Karnik (from 18 December 2008)

HSBC Flexi Debt Fund Suyash Choudhary (from 11 February 2008)

& Sanjay Shah (from 09 January 2009)


Fund Managers - MIP & Debt

45

Sanjay ShahVice President & Fund Manager - Fixed IncomeB. Com, A.C.A., Post Graduate Diploma in Management

Experience:Over 10 years of experience in Risk.� HSBC Asset Management (India) Private Limited

Vice President & Fund Manager, Fixed Income since December 2008onwards

� FIL Fund Management Private LimitedCredit Analyst from September 2008 to December 2008

� Lehman Brothers Structured Financial Services Private LimitedVice President, Convertible Products from September 2006 toSeptember 2008

� Rabo India Finance Private LimitedSenior Manager – Credit Risk from July 2004 to September 2006

� ICICI Bank LimitedManager, Credit Risk from January 2003 to June 2004

� SBI Funds Management Private LimitedChief Manager, Debt Funds from June 1999 to January 2003

Kedar KarnikAssociate Vice President & Assistant Fund Manager - Fixed IncomeM.M.S. (Finance), B.E.

Experience:Over 5 years experience in research and credit rating.� HSBC Asset Management (India) Private Limited

Associate Vice President & Assistant Fund Manager - Fixed Incomefrom December 2008 to present

� HSBC Asset Management (India) Private LimitedAssociate Vice President & Credit Analyst from July 2008 toDecember 2008

� CRISIL LimitedManager – Financial Sector Ratings from September 2005 to July 2008

� ICICI Bank LimitedManagement Trainee from May 2005 to September 2005


Statutory Details & Disclaimers

All returns have been sourced from MutualFundsIndia Explorer software unless otherwise stated.With regard to equity schemes(including the equity component of MIPs), Fund performance is calculated on a total return basis (i.e. it includes dividends re-invested) while the benchmark is calculated on a price return basis (i.e. it does not consider dividends re-invested).

This document has been prepared by HSBC Asset Management (India) Private Limited (HSBC) for information purposes onlyand should not be construed as an offer or solicitation of an offer for purchase of any of the funds of HSBC Mutual Fund. Allinformation contained in this document (including that sourced from third parties), is obtained from sources HSBC, the third partybelieves to be reliable but which it has not independently verified and HSBC, the third party makes no guarantee, representationor warranty and accepts no responsibility or liability as to the accuracy or completeness of such information. The information andopinions contained within the document are based upon publicly available information and rates of taxation applicable at the timeof publication, which are subject to change from time to time. Expressions of opinion are those of HSBC only and are subjectto change without notice. It does not have regard to specific investment objectives, financial situation and the particular needsof any specific person who may receive this document. Investors should seek financial advice regarding the appropriateness ofinvesting in any securities or investment strategies that may have been discussed or recommended in this report and shouldunderstand that the views regarding future prospects may or may not be realized. Neither this document nor the units of HSBCMutual Fund have been registered in any jurisdiction. The distribution of this document in certain jurisdictions may be restrictedor totally prohibited and accordingly, persons who come into possession of this document are required to inform themselves about,and to observe, any such restrictions. Mutual fund investments are subject to market risks. Please read the offer documentscarefully before investing.

© Copyright. HSBC Asset Management (India) Private Limited 2009, ALL RIGHTS RESERVED.

No part of this publication may be reproduced, stored in a retrieval system, or transmitted, on any form or by any means,electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of HSBC Asset Management(India) Private Limited.

Statutory Details & Risk Factors : Investors may obtain Scheme Information Document / Statement of Additional Informationand Key Information Memorandums along with application forms from the office of HSBC Mutual Fund, 314 D. N. Road, Fort,Mumbai 400 001. Tel: 022-6666 8819.

Statutory Details: HSBC Mutual Fund has been set up as a trust by HSBC Securities and Capital Markets (India) Private Limited(liability restricted to the corpus of ̀ 1 lakh). The Sponsor/associates of the Sponsor/Asset Management Company (AMC) arenot responsible or liable for any loss or shortfall resulting from the operation of the Schemes. The Trustees of HSBC Mutual Fundhave appointed HSBC Asset Management (India) Private Limited as the Investment Manager. Risk Factors: All investmentsin mutual funds and securities are subject to market risks and the Net Asset Value (NAV) of the Scheme(s) may goup or down depending on the factors and forces affecting the securities markets. There can be no assurance thatthe objectives of the Scheme(s) will be achieved. Past performance of the Sponsor, AMC, Mutual Fund or anyassociates of the Sponsor/AMC does not indicate the future performance of the Scheme(s) of the Mutual Fund.HSBC Income Fund (HIF), HSBC Gilt Fund (HGF), HSBC Cash Fund (HCF), HSBC Ultra Short Term Bond Fund(HUSBF), HSBC MIP (HMIP), HSBC Floating Rate Fund (HFRF), HSBC Flexi Debt Fund (HFDF), HSBC Fixed TermPlan Series 30 (HFTS30), HSBC Equity Fund (HEF), HSBC India Opportunities Fund (HIOF), HSBC Midcap EquityFund (HMEF), HSBC Progressive Themes Fund (HPTF), HSBC Tax Saver Equity Fund (HTSF), HSBC UniqueOpportunities Fund (HUOF), HSBC Dynamic Fund (HDF), HSBC Emerging Markets Fund (HEMF) & HSBC Small CapFund (HSCF) are the names of the Schemes and do not in any manner indicate the quality of the Schemes or theirfuture prospects or returns. Scheme Classification and Investment Objective: HEF (an open-ended diversified equityScheme) aims to generate long term capital growth from an actively managed portfolio of equity and equity related securities.HIOF (an open-ended flexi-cap equity Scheme) seeks long term capital growth through investments across all market capitalisations,including small, mid and large cap stocks. It aims to be predominantly invested in equity & equity related securities. However itcould move a significant portion of its assets towards fixed income securities if the fund manager becomes negative on equitymarkets. HMEF (an open-ended diversified equity Scheme) seeks to generate long term capital growth from an actively managedportfolio of equity and equity related securities primarily being midcap stocks. However, it could move a portion of its assetstowards fixed income securities if the fund manager becomes negative on the Indian equity markets. HPTF (an open-endedflexi-theme equity Scheme) seeks to generate long term capital growth from an actively managed portfolio of equity and equityrelated securities by investing primarily in sectors, areas and themes that play an important role in, and/or benefit from India'sprogress, reform process and economic development. HTSF (an open ended Equity Linked Savings Scheme) seeks to providelong term capital appreciation by investing in a diversified portfolio of equity & equity related instruments of companies acrossvarious sectors and industries, with no capitalisation bias. The Fund may also invest in fixed income securities. HUOF (anopen-ended equity scheme) seeks to provide long-term capital growth from a diversified portfolio of equity and equity relatedinstruments. The focus would be to invest in stocks of companies facing "out-of-ordinary" conditions. HDF (an open-endedScheme) seeks to provide long term capital appreciation by allocating funds in equity and equity related instruments. It also hasthe flexibility to move, entirely if required, into debt & money market instruments in times when the view on equity markets seemsnegative. HEMF (an open ended Scheme) seeks to provide long term capital appreciation by investing in India and in the emergingmarkets, in equity and equity related instruments, share classes and units/securities issued by overseas mutual funds or unittrusts. The fund may also invest a limited proportion in debt and money market instruments. HSCF (a 3 year close-ended equityscheme with automatic conversion into open ended equity scheme at the end of three years from the date of allotment of Units)seeks to provide long-term capital appreciation primarily from a diversified portfolio of equity and equity related instruments ofsmall cap companies. HIF (an open-ended income scheme) aims to provide reasonable income through a diversified portfolio offixed income securities. The AMC's view of interest rate trends and the nature of the Plans will be reflected in the type andmaturities of securities in which the Short Term and Investment Plans are invested. HGF (an open-ended gilt scheme) aims togenerate reasonable returns through investments in Government Securities of various maturities. HCF (an open-ended liquidscheme) aims to provide reasonable returns, commensurate with low risk while providing a high level of liquidity, through a portfolioof money market and debt securities. HUSBF (an open-ended debt Scheme) seeks to provide liquidity and reasonable returnsby investing primarily in a mix of short term debt and money market instruments. HMIP (an open-ended Fund with Regular &Savings Plans; monthly income is not assured and is subject to availability of distributable surplus) seeks to generate reasonablereturns through investments in debt and money market instruments with a secondary objective to seek capital appreciation throughinvestments in equity and equity related instruments. HFRF (an open-ended income scheme) seeks to generate a reasonablereturn with commensurate risk through investments in floating rate debt instruments and fixed rate debt instruments swappedfor floating rate returns. The Scheme may also invest in fixed rate money market and debt instruments. HFDF (an open endedDebt Scheme) seeks to deliver returns in the form of interest income and capital gains, along with high liquidity, commensuratewith the current view on the markets and the interest rate cycle, through active investment in debt and money market instruments.HFTS (a close-ended Income Scheme) seeks to generate returns by investing in a portfolio of fixed income instruments normallymaturing in line with the time profile of the respective Plan(s). Terms of Issue: Units of the Scheme(s) are being offered at NAVbased prices, subject to the prevailing loads. The AMC calculates and publishes NAVs and offers for sale, redemption and switchouts, units of the Scheme(s) on all Business Days, at the Applicable NAV for all Schemes (at least once a week, i.e., everyWednesday and daily during the period of redemption in case of HSCF). HSCF will not be open for ongoing subscriptions/ switchins. HSCF would be available for sale on an ongoing basis (after a period of 3 years from the date of allotment). Conversion ofHSCF to an open-ended scheme will be done only after the balance unamortized amount has been fully recovered from theScheme. Units can be redeemed/switched out on every Business Day at NAV based prices, subject to prevailing exit loads. Incase of HSCF, units can be redeemed / switched out on a monthly basis on the stipulated date i.e. last 3 business days of everymonth at NAV based prices, subject to provisions of exit load, if any and recovery of balance proportionate unamortized NFOexpenses. Load Structure (includes SIP/STP, where applicable): HEF, HIOF, HPTF, HMEF, HEMF, HDF & HUOF: Exit:1% - if redeemed/ switched out within 1 year from date of investment; Otherwise Nil. HTSF - Exit - Nil. HSCF - During closeended period - Exit # - If the investments are redeemed/ switched out* within: 1 year - 2%; 2 years - 1.5% and 3 years - 1%.# Balance proportionate unamortized NFO expenses to be recovered in case of exit within close-ended period. Upon conversioninto an open ended scheme - Exit - Nil. HMIP Exit: Regular Plan & Savings Plan - 1% - if redeemed/ switched out* within 1 yearfrom date of investment. HIF - Investment Plan: Exit Regular & Institutional Option - 0.5% - if redeemed/ switched out* within6 months from the date of investment. HIF - Short Term Plan - Regular, Institutional & Institutional Plus Option - Exit: Nil. HFRF- Long Term Plan - Regular & Institutional Option - Exit - Nil. HFDF- Regular & Institutional Option- Exit: 0.25% - if redeemed/switched out* within 3 months from the date of investment. HUSBF - Exit - Nil. HCF: Exit - Nil. HGF: Exit - 0.5% if redeemed/ switched out* with 6 months from date of investment. *No load in case of switches between equity Schemes of HSBC MutualFund. HFTS - Consult the nearest investor service centre for details. The applicable exit loads (if any) at the time of allotmentof the Schemes of HSBC Mutual Fund shall also be charged on investments made by all investors. Bonus units and units issuedon reinvestment of dividends shall not be subject to exit load. The exit load set forth above is subject to change at the discretionof the AMC and such changes shall be implemented prospectively. Mutual Fund investments are subject to market risks.Read the Scheme Information Document and Scheme Additional Information carefully before investing.


HSBC Asset Management (India) Private Limited314 D. N. Road, Fort, Mumbai 400 001Tel.: 022-6614 5000Fax: 022-4002 9600Email: [email protected] : www.assetmanagement.hsbc.com/in

HSBC MUTUAL FUND INVESTOR SERVICE CENTRES

City Telephone No.

Ahmedabad 098983 77319

Andhra Pradesh 098496 77319

Bangalore 080 4118 6519

Bihar 099313 97319

Chandigarh 0172 500 8119

Chennai 044 4200 8719

Coimbatore 098944 77319

Delhi 011 4149 0719

Hyderabad 040 6667 4719

Indore 098934 77319

Jaipur 099280 37319

Karnataka 099809 27319

Kerala 098954 77319

Kochi 098954 77319

Kolkata 033 2213 9919

Lucknow 099367 97319

Maharashtra / Goa 099600 77321

MP / Chattisgarh 098934 77319

Mumbai 022 6666 8819

NCR 099107 97319

Pune 020 2600 1119,020 2613 4283

Punjab 098769 37319

UP 099350 97321

Vadodara 098983 77319

sms INVEST to 56767

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