interim management report of fund performance for ... - hsbc...this interim management report of...

HSBC Mutual Funds

Interim Management Report of Fund Performance

for the six months ended June 30, 2013

For more information

You can find more information about HSBC Mutual Fundsin the Fund’s Simplified Prospectus, Annual InformationForm and Fund Facts. You can get a copy of thesedocuments, as well as the Fund’s Financial Statements,at no cost by calling 1-800-830-8888, by contacting yourauthorized dealer or by visiting our website atwww.hsbc.ca/investment-resources.

These documents and other information about the HSBCMutual Funds, such as information circulars and materialcontracts, are also available at www.sedar.com.

Copies of the Annual Report and Semi-Annual Report,Simplified Prospectus, Annual Information Form, Annualand Interim Management Report of Fund Performanceand Fund Facts are available on our website atwww.hsbc.ca/investment-resources.

How to reach us

VancouverHSBC Global Asset Management (Canada) Limited11th Floor, 885 West Georgia StreetVancouver, BC V6C 3E8

Website: www.hsbc.caEmail: [email protected]

Toll-free: 1-800-830-8888Fax: 604-669-2756

TorontoSuite 600 – 70 York StreetToronto, ON M5J 1S9

Calgary10th Floor, 407 – 8th Avenue SWCalgary, AB T2P 1E5

Edmonton9th Floor, 10250 – 101 Street NWEdmonton, AB T5J 3P4

MontrealSuite 300 – 2001 McGill College AvenueMontreal, QC H3A 1G1

Victoria869 Douglas StreetVictoria, BC V8W 2B9

A NOTE ON FORWARD-LOOKING STATEMENTS

This report may contain forward-looking statements about the Fund, including its strategy, expected performance and condition. Forward-lookingstatements include statements that are predictive in nature that depend upon or refer to future events or conditions, or that include words such as“expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates” or negative versions thereof and similar expressions. In addition, any statement thatmay be made concerning future performance, strategies or prospects, and possible future Fund action, is also a forward-looking statement. Forward-lookingstatements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertaintiesand assumptions about the Fund and economic factors.

Forward-looking statements are not guarantees of future performance, and actual events and results could differ materially from those expressed or impliedin any forward-looking statements made by the Fund. Any number of important factors could contribute to these digressions, including, but not limited to,general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets,business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, and catastrophic events.

We stress that the above-mentioned list of important factors is not exhaustive. We encourage you to consider these and other factors carefully beforemaking any investment decisions and we urge you to avoid placing undue reliance on forward-looking statements. Further, you should be aware of the factthat the Fund has no specific intention of updating any forward-looking statements, whether as a result of new information, future events or otherwise.

Issued byHSBC Global Asset Management (Canada) Limited

(201

3-08

)RR

D

HSBC CanadianMoney Market Fund



HSBC Canadian Money Market Fund

Management Discussion of Fund PerformanceIn this document, you and your refer to the unitholder of the Fund;we, us and our refer to HSBC Global Asset Management (Canada)Limited; and the Fund refers to the HSBC Canadian Money MarketFund.

We are the manager, trustee and primary investment advisor ofthe Fund.

IntroductionThis Interim Management Report of Fund Performance containsfinancial highlights but does not contain the complete annual or semi-annual financial statements of the investment fund. You may obtain acopy of the Fund’s annual or semi-annual financial statements at yourrequest, at no cost, by calling 1-800-830-8888, by visiting our websiteat www.hsbc.ca/investment-resources, by visiting the SEDARwebsite at www.sedar.com or by writing to us at:

Corporate SecretaryHSBC Global Asset Management (Canada) Limited11th Floor, 885 West Georgia StreetVancouver, BC V6C 3E8

You may also contact us using one of these methods to request acopy of the Fund’s proxy voting policies and procedures, proxyvoting disclosure record or quarterly statement of investmentportfolio.

Investment Objective and StrategiesThe fundamental investment objective of this Fund is to provide ahigh level of monthly interest income while preserving capital.

To achieve its objectives, the Fund invests primarily in treasurybills, commercial paper, bankers’ acceptances, mortgages andmortgage-backed securities, guaranteed investment certificates,cash and other fixed income securities. All of the Fund’s securitieswill have a term-to-maturity of less than 365 days, with an averageterm-to-maturity of no more than 60 days.

RiskThe risks of investing in this Fund remain as discussed in theSimplified Prospectus. There was no material change to the risklevel of the Fund during the period. The primary risks that affectthe Fund are interest rate risk, credit risk and security risk.

This Fund is suitable for investors who want to earn interestincome and preserve their capital, have a short-term investmenttime horizon and have a low tolerance for risk.

Results of OperationsAs of June 30, 2013, the Fund’s net assets decreased by 7.2% to$234.7 million from $252.9 million at the end of 2012. Of thisdecrease, a $0.4 million gain was attributable to investment

performance, which was offset by a $18.6 million loss due to netredemptions of Fund units .

Investment PerformanceThe HSBC Canadian Money Market Fund (Investor Series) rose0.03% for the six months ending June 30, 2013, while thebenchmark, the DEX 30-Day Treasury Bill Index (50%) and DEX60-Day Treasury Bill Index (50%), rose 0.46% over the sameperiod.

A defensive position to the corporate debt sector was taken overthe first half of 2013 with a focus on high-quality issues wherecredit risk and liquidity risk were minimized, thus protecting theFund’s primary objectives of preserving capital and providingliquidity. The return from the defensive corporate position versusalternative government notes was modest over the six months,but it was generally commensurate with the reduced level of risk.

The managers work within an extensive network of global creditresearch analysts to ensure that a prudent security selectionprocess is in place. The Fund also looks to add value by adjustingthe weighted-average-maturity (or duration) of the portfolioholdings relative to its benchmark. For the first six months of theyear, the Fund’s duration was targeted close to its blended 45-daybenchmark, mitigating any relative interest rate risk.

Recent DevelopmentsThe Bank of Canada held the target for the overnight rateunchanged at 1.00% over the first six months of 2013. Canada’scentral bank continues to suggest that tighter policy will bewarranted alongside their forecast for global and domesticeconomic growth to improve, but are clearly showing no urgencyto increase rates at this time given recent lacklustre domesticeconomic growth performance and the weak price inflationenvironment.

Canada’s economic momentum is expected to improve through2013, but remain around its potential growth trend ofapproximately 2.0% as Canada balances its domestic strengthwith global growth that is still expected to remain soft as thedeleveraging process in advanced economies proceeds. With asmall degree of excess supply likely to persist through most of2013 and soft underlying price pressures to continue, the urgencyfor the Bank of Canada to alter course is reduced and they aresignalling no change in rates for some time.

Related Party TransactionsWe, on behalf of the Fund, or the Fund Manager, may, from timeto time, enter into transactions or arrangements with or involvingother members of the HSBC Group or other people or companiesrelated or connected to us or the Fund. To proceed with thetransactions, the Fund relies on the positive recommendation of

1


the Fund’s Independent Review Committee. A condition of thispositive recommendation is that the transactions are performed inaccordance with our policy on Related Party Transactions. Formore general information on persons related to the Fund and thetypes of potential transactions, see the Fund’s SimplifiedProspectus.

The following is a summary of current transactions andarrangements with entities that are related to us or the Fund.

Manager, Trustee and Investment AdvisorWe are the manager, trustee and primary investment advisor ofthe Fund. As manager, we manage the overall business andoperations of the Fund. As trustee, we hold legal title to theproperty of the Fund on your behalf. As primary investmentadvisor, we provide investment advice and portfolio managementservices to the Fund. We receive a fee from the Fund for theseservices based on assets under management, calculated daily andpaid monthly.

Distribution ServicesThe Fund is distributed through us, HSBC Investment Funds(Canada) Inc. (our wholly owned subsidiary) and through HSBCSecurities (Canada) Inc. (an affiliate) directly or through its division,HSBC InvestDirect. We pay distribution and servicing fees to thembased on the amount of assets held in the investor’s account, andadditionally, in some cases, on the amount of the initial purchase.If you hold units of this Fund and/or other HSBC Mutual Funds in aregistered plan with HSBC Investment Funds (Canada) Inc., theymay charge you an annual fee to cover the annual administrationcosts of the plan. We permit HSBC Investment Funds (Canada)Inc. to collect these fees by redeeming sufficient units of the Fundwith the highest market value in your registered plan.

Financial HighlightsThe following tables show selected key financial information aboutthe Fund and are intended to help you understand the Fund’sfinancial performance for the six-month period ended June 30,2013 and for the years ended December 31, as applicable. In theyear a fund is established, “period” represents the period frominception to December 31 or June 30 of that fiscal year, asapplicable. This information is derived from the Fund’s unauditedsemi-annual financial statements and audited annual financialstatements. The information in the following tables is based onprescribed regulations, and as a result, is not expected to add dueto the increase/decrease in net assets from operations beingbased on average units outstanding during the period and all othernumbers being based on actual units outstanding at the relevantpoint in time.

HSBC Canadian Money Market Fund –Investor SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: January 1989

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008

Net assets per unit,beginning of period (1,7) $10.00 $10.00 $10.00 $10.00 $10.00 $10.00

Increase (decrease) fromoperations:

Total revenue 0.05 0.11 0.11 0.06 0.06 0.34Total expenses (0.05) (0.10) (0.10) (0.06) (0.06) (0.10)Realized gains (losses) – – – – – –Unrealized gains (losses) – – – – – –

Total increase (decrease)from operations (1) $– $0.01 $0.01 $– $– $0.24

Distributions tounitholders:

From income (excludingdividends) –2 (0.01) (0.01) – (0.01) (0.23)From dividends – – – – – –From net realized gainson investments – – – – – –

Total annualdistributions (1,2) $–2 $(0.01) $(0.01) $– $(0.01) $(0.23)

Net assets per unit, end ofperiod (1,7) $10.00 $10.00 $10.00 $10.00 $10.00 $10.00

2 Amount less than 0.005.

Ratios and Supplemental DataJune 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008

NAV (in 000s) (3,7) $151,205 $161,660 $199,156 $255,441 $317,722 $359,146Units outstanding(in 000s) (3) 15,121 16,166 19,916 25,544 31,772 35,915NAV per unit (3) $10.00 $10.00 $10.00 $10.00 $10.00 $10.00Management expense ratio(“MER”) (4) 1.03% 1.02% 1.00% 0.62% 0.60% 0.96%MER before absorbed orwaived fees (4) 1.03% 1.02% 1.00% 1.02% 0.98% 0.96%Portfolio turnover rate (5) n/a n/a n/a n/a n/a n/aTrading expense ratio (6) n/a n/a n/a n/a n/a n/a

2


HSBC Canadian Money Market Fund –Advisor SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2001

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




Total increase (decrease)from operations (1) $– $0.01 $0.01 $– $0.01 $0.24


From income (excludingdividends) –2 (0.01) (0.01) – (0.01) (0.23)From dividends – – – – – –From net realized gains oninvestments – – – – – –

Total annualdistributions (1,2) $– $(0.01) $(0.01) $– $(0.01) $(0.23)




2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008

NAV (in 000s) (3,7) $485 $886 $1,000 $1,180 $1,090 $1,560Units outstanding(in 000s) (3) 48 89 100 118 109 156NAV per unit (3) $10.00 $10.00 $10.00 $10.00 $10.00 $10.00Management expense ratio(“MER”) (4) 1.02% 1.00% 0.97% 0.65% 0.62% 0.96%MER before absorbed orwaived fees (4) 1.04% 1.01% 0.97% 1.01% 0.98% 0.96%Portfolio turnover rate (5) n/a n/a n/a n/a n/a n/aTrading expense ratio (6) n/a n/a n/a n/a n/a n/a

HSBC Canadian Money Market Fund –Premium SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2007*

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




Total increase (decrease)from operations (1) $0.03 $0.06 $0.07 $0.02 $0.03 $0.26


From income (excludingdividends) (0.03) (0.06) (0.07) (0.02) (0.03) (0.27)From dividends – – – – – –From net realized gainson investments – – – – – –

Total annualdistributions (1,2) $(0.03) $(0.06) $(0.07) $(0.02) $(0.03) $(0.27)


* The Premium Series commenced operations on January 14, 2008.


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008


3


HSBC Canadian Money Market Fund –Manager SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2001

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008










2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008

NAV (in 000s) (3,7) $1,483 $1,639 $4,173 $4,121 $7,805 $9,001Units outstanding(in 000s) (3) 148 164 417 412 780 900NAV per unit (3) $10.00 $10.00 $10.00 $10.00 $10.00 $10.00Management expense ratio(“MER”) (4) 0.73% 0.71% 0.69% 0.56% 0.51% 0.70%MER before absorbed orwaived fees (4) 0.73% 0.71% 0.69% 0.74% 0.71% 0.70%Portfolio turnover rate (5) n/a n/a n/a n/a n/a n/aTrading expense ratio (6) n/a n/a n/a n/a n/a n/a

HSBC Canadian Money Market Fund –Institutional SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2001

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008



Total revenue 0.05 0.11 0.11 0.06 0.06 0.32Total expenses – (0.01) (0.01) (0.01) (0.01) (0.01)Realized gains (losses) – – – – – –Unrealized gains (losses) – – – – – –







2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008


(1) Net assets per unit and distributions per unit are based on the actualnumber of units outstanding for the relevant series at the relevanttime. The increase/decrease in net assets from operations per unit isbased on the weighted average number of units outstanding for therelevant series over the fiscal period.

(2) Distributions are automatically reinvested in additional units of theFund, unless the unitholder withdraws from the automaticreinvestment plan by providing written notice to us.

(3) This information is provided as at period-end.

(4) MER includes the total expenses of each Fund, including the Goodsand Services Tax and/or Harmonized Sales Tax thereon, other thanbrokerage commissions on securities transactions and any foreignwithholding taxes on income, as an annualized percentage of averagenet asset value (“NAV”) of the respective series of unit for the period.In the period a series is established, the MER is annualized from thedate of inception to the end of the period. The MER may vary fromone mutual fund to another and from one series of units to another.We may have waived or absorbed certain fees and expensesotherwise payable by the Fund. The amount of expenses absorbed orwaived is at the discretion of and can be terminated at any time by us.

4


(5) The Fund’s portfolio turnover rate indicates how actively the Fund’sportfolio advisor manages its portfolio investments. A portfolio turnoverrate of 100% is equivalent to the Fund buying and selling all of thesecurities in its portfolio once in the course of the period. The higher theFund’s portfolio turnover rate in a period, the greater the trading costspayable by the Fund in the period, and the greater the chance of aninvestor receiving taxable capital gains in the year. There is notnecessarily a relationship between a high turnover rate and theperformance of the Fund. The rate is calculated based on the lesser ofpurchases or sales of securities divided by the average weighted marketvalue of the portfolio securities, excluding short-term securities.

(6) The trading expense ratio represents commissions and other portfoliotransaction costs expressed as an annualized percentage of dailyaverage net assets during the period.

(7) Generally accepted accounting principles require that the calculation ofa Fund’s net asset value for financial reporting purposes (“net assets”)be based upon investments valued using closing bid prices. Aspermitted by securities regulations, the value of investments used todetermine the daily prices of the Fund’s units for purchase andredemption by clients (“NAV”) continues to be based upon the lastsale price or the midpoint between closing bid and asked quotations.

Management FeesFor the six months ended June 30, 2013, the Fund paid usmanagement fees of $740,371. The management fee for eachseries is calculated as a percentage of the daily net asset value forthat series. The fees are reduced, where required, so that thesefees do not duplicate fees payable by mutual funds in which theFund invests for the same service.

The Fund’s management fees were used by us to pay costs formanaging the investment portfolio, providing investment analysisand recommendations, making investment decisions, makingbrokerage arrangements for the purchase and sale of theinvestment portfolio and providing other services. Themanagement fees also funded commission payments and othercompensation to sales representatives and registered dealers andbrokers (collectively “distribution costs”), including HSBC BankCanada, for units of the Fund bought and held by unitholders.Finally, we used management fees to pay for additional marketingand distribution services to the Fund.

For the six months ended June 30, 2013, approximately 46% ofthe total management fees collected from all HSBC Mutual Fundswere used to fund distribution costs. In comparison, for the Fund,such distribution costs represented 44% of the management feescollected. This may vary by series depending on the assetsinvested in each of the series.

Past PerformanceThe performance information shown assumes that all distributionsmade by the Fund in the periods shown were reinvested inadditional securities of the Fund. The performance informationdoes not take into account sales, redemption, distribution, optionalcharges or expenses you may be charged outside of the Fund or

the effect of any income tax you may have to pay as a result ofyour investment in the Fund that would have reduced returns orperformance. The Fund’s past performance does not necessarilyindicate how it will perform in the future.

The following bar charts show the Fund’s performance for thesix-month period ended June 30, 2013, and for each of the previous12-month periods ended December 31. In percentage terms, thebar charts show how much an investment made on January 1would have grown or decreased by the end of the period.

Returns – Investor SeriesFor the 12-month periods ended December 31 and the six-monthperiod ended June 30, 201315%

10%

5%

0%

2.2%1.5% 1.8%

2.9% 3.4%2.3%

0.1% 0.0% 0.0%0.1%

Dec. 312003

Dec. 312004

Dec. 312005

Dec. 312006

Dec. 312007

Dec. 312008

Dec. 312009

Dec. 312010

June 302013

0.1%

Dec. 312012

Dec. 312011

Returns – Advisor SeriesFor the 12-month periods ended December 31 and the six-monthperiod ended June 30, 201315%

10%

5%

0%

2.3%1.5% 1.8%

2.9% 3.4%2.3%

0.1% 0.0% 0.0%0.1%

Dec. 312003

Dec. 312004

Dec. 312005

Dec. 312006

Dec. 312007

Dec. 312008

Dec. 312009

Dec. 312010

June 302013

0.1%

Dec. 312012

Dec. 312011

Returns – Premium SeriesFor the 12-month periods ended December 31 and the six-monthperiod ended June 30, 201315%

10%

5%

0%0.3% 0.3%0.2% 0.7% 0.6%

Dec. 312009

Dec. 312010

Dec. 312011

Dec. 312012

June 302013

5


Returns – Manager SeriesFor the 12-month periods ended December 31 and the six-monthperiod ended June 30, 201315%

10%

5%

0%

2.5%1.7% 1.9%

3.1% 3.7%2.6%

0.2% 0.2%0.1% 0.4%

Dec. 312003

Dec. 312004

Dec. 312005

Dec. 312006

Dec. 312007

Dec. 312008

Dec. 312009

Dec. 312010

June 302013

0.4%

Dec. 312012

Dec. 312011

Returns – Institutional SeriesFor the 12-month periods ended December 31 and the six-monthperiod ended June 30, 201315%

10%

5%

0%

2.4% 2.7%3.8% 4.3%

3.2%

0.6% 0.5%0.6% 1.0%

Dec. 312004

Dec. 312005

Dec. 312006

Dec. 312007

Dec. 312008

Dec. 312009

Dec. 312010

Dec. 312011

June 302013

1.0%

Dec. 312012

Summary of Investment PortfolioAs at June 30, 2013

Asset MixPercentage

of NAV

Corporate 60.94%Government 38.38%Cash & Equivalents 0.68%Total 100.00%

Top 25 HoldingsPercentage

of NAV

OMERS Finance Trust, 1.13% 07/22/13 7.01%Bank of Montreal, 0.95% 07/02/13 3.62%Bank of Nova Scotia, 1.21% 07/02/13 3.62%National Bank Financial, 0.95% 07/02/13 3.62%Province of Manitoba, 1.02% 07/31/13 3.61%Deutsche Bank, 1.13% 09/06/13 3.40%Government of Canada, 1.15% 08/01/13 3.37%Government of Canada, 1.12% 06/05/14 2.95%OMERS Finance Trust, 1.13% 08/12/13 2.55%Hydro-Quebec, 1.83% 02/20/14 2.52%Alberta Capital Finance Authority, 1.39% 10/01/13 2.51%Financement-Quebec, 1.27% 09/16/13 2.51%Government of Canada, 0.98% 07/18/13 2.13%Province of British Columbia, 1.06% 07/12/13 2.12%Province of New Brunswick, 1.04% 08/08/13 2.12%Province of Newfoundland and Labrador, 1.05% 08/29/13 2.12%Province of Nova Scotia, 1.05% 08/28/13 2.12%Government of Canada, 1.06% 03/13/14 2.11%Province of Ontario, 1.08% 11/06/13 1.99%Imperial Oil Ltd., 1.11% 07/25/13 1.92%CAFO Inc., 1.24% 09/25/13 1.91%City of Edmonton, 1.15% 09/24/13 1.91%JPMorgan Chase & Co., 1.13% 07/11/13 1.91%Nestle Capital, 1.04% 07/12/13 1.91%Sumitomo Mitsui Banking Corp., 1.15% 09/19/13 1.91%Total of Top 25 Holdings 67.47%

The Summary of Investment Portfolio may change due to ongoing portfolio transactions of the Fund, and is available quarterly.

6





How to reach us



Toll-free: 1-800-830-8888Fax: 604-669-2756











(201

3-08

)RR

D

HSBC U.S. DollarMoney Market Fund



HSBC U.S. Dollar Money Market Fund

Management Discussion of Fund PerformanceIn this document, you and your refer to the unitholder of the Fund;we, us and our refer to HSBC Global Asset Management (Canada)Limited; and the Fund refers to the HSBC U.S. Dollar MoneyMarket Fund.


IntroductionThis Interim Management Report of Fund Performance containsfinancial highlights but does not contain the complete annual orsemi-annual financial statements of the investment fund. You mayobtain a copy of the Fund’s annual or semi-annual financialstatements at your request, at no cost, by calling 1-800-830-8888,by visiting our website at www.hsbc.ca/investment-resources, byvisiting the SEDAR website at www.sedar.com or by writing to usat:



Investment Objective and StrategiesThe fundamental investment objective of this Fund is to earn ahigh level of monthly interest income while preserving capital.

To achieve its objectives, the Fund invests primarily in US-dollar-denominated treasury bills and other short-term fixed incomesecurities. All of the Fund’s securities will have a term-to-maturityof less than 365 days, with an average term-to-maturity of nomore than 60 days.

RiskThe risks of investing in the Fund remain as discussed in theSimplified Prospectus. There was no material change to the risklevel of the Fund during the period. The primary risks that affectthe Fund are interest rate risk, credit risk and security risk.

This Fund is suitable for investors who want to earn interestincome and preserve their capital, have a short-term investmenttime horizon and have a low tolerance for risk in their returns.

Results of OperationsAs of June 30, 2013, the Fund’s net assets decreased by 7.6% to$62.2 million from $67.3 million at the end of 2012. Of thisdecrease, a $5.1 million loss was attributable to net redemptionsof Fund units.

Investment PerformanceThe HSBC U.S. Dollar Money Market Fund (Investor Series)returned 0.00% for the six months ending June 30, 2013, whilethe benchmark, the Citigroup 1-Month Treasury Bill Index (75%)and Citigroup 3-Month Treasury Bill Index (25%), rose 0.02% overthe same period.

A defensive position to the corporate debt sector was taken overthe first half of 2013 with a focus on high-quality issues wherecredit risk and liquidity risk were minimized, thus protecting theFund’s primary objectives of preserving capital and providingliquidity. The return from the defensive corporate position abovealternative government notes was modest over the six months,but it was generally commensurate with the reduced level of risk.

The managers work within an extensive network of global creditresearch analysts to ensure that a prudent security selectionprocess is in place. The Fund also looks to add value by adjustingthe weighted-average-maturity (or duration) of the portfolioholdings relative to its benchmark. For the first six months of2013, the Fund’s duration was targeted to its blended 45-daybenchmark, mitigating any relative interest rate risk.

Recent DevelopmentsThe unemployment rate held near 7.6% over the second quarterof 2013, an improvement from the 8.2% one year ago, but otherlabour market measures continue to show significant employmentslack. The Federal Open Market Committee (FOMC) recentlyannounced their concern that a sustained improvement in labourmarket conditions may not occur without the support of furthermonetary stimulus and decided to provide open-ended monetarysupport for the US economy through additional securitypurchases, and will continue this purchase program “until theoutlook for the labour market has improved substantially in acontext of price stability.”

US Federal Reserve Chairman Ben Bernanke recently suggestedthat their outlook for the US economic recovery and labour marketconditions would imply reducing the pace of purchases later in2013 and end by mid-2014; however, the FOMC will closelymonitor incoming information and are prepared to increase anddecrease its purchases as this outlook changes. Furthermore, “theCommittee (FOMC) expects that a highly accommodative stanceof monetary policy will remain appropriate for a considerable timeafter the asset purchase program ends and the economic recoverystrengthens.” They anticipate exceptionally low levels for thefederal funds rate “will be appropriate at least as long as theunemployment rate remains above 6.5%, (projected inflation) is nomore than 0.5% above the Committee’s 2% longer-run goal, andlonger-term inflation expectations continue to be well anchored.”Based on the US Federal Reserve’s Summary of EconomicProjections, these new threshold targets are largely

1


consistent with their earlier calendar guidance for exceptionallylow rates at least through mid-2015.

Related Party TransactionsWe, on behalf of the Fund, or the Fund Manager, may, from timeto time, enter into transactions or arrangements with or involvingother members of the HSBC Group or other people or companiesrelated or connected to us or the Fund. To proceed with thetransactions, the Fund relies on the positive recommendation ofthe Fund’s Independent Review Committee. A condition of thispositive recommendation is that the transactions are performed inaccordance with our policy on Related Party Transactions. Formore general information on persons related to the Fund and thetypes of potential transactions, see the Fund’s SimplifiedProspectus.




Financial HighlightsThe following tables show selected key financial information aboutthe Fund and are intended to help you understand the Fund’sfinancial performance for the six-month period ended June 30,2013 and for the years ended December 31, as applicable. In theyear a fund is established, “period” represents the period frominception to December 31 or June 30 of that fiscal year, asapplicable. This information is derived from the Fund’s unaudited

semi-annual financial statements and audited annual financialstatements. The information in the following tables is based onprescribed regulations, and as a result, is not expected to add dueto the increase/decrease in net assets from operations beingbased on average units outstanding during the period and all othernumbers being based on actual units outstanding at the relevantpoint in time.

All figures are stated in US dollars.

HSBC U.S. Dollar Money Market Fund –Investor SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: January 1998

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008

Net assets per unit,

beginning of period (1,7) $10.00 $10.00 $10.00 $10.00 $10.00 $10.00

Increase (decrease) from

operations:


Total increase (decrease)

from operations (1) $– $0.01 $0.01 $0.01 $(0.01) $0.18

Distributions to

unitholders:

From income (excludingdividends) –2 (0.01) – – (0.01) (0.16)From dividends – – – – – –From net realized gainson investments – – – – – –

Total annual

distributions (1,2) $–2 $(0.01) $– $– $(0.01) $(0.16)

Net assets per unit, end of

period (1,7) $10.00 $10.00 $10.00 $10.00 $10.00 $10.00



2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008


2


HSBC U.S. Dollar Money Market Fund –Advisor SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2001

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:



from operations (1) $– $0.01 $0.01 $0.01 $– $0.18

Distributions to

unitholders:


Total annual

distributions (1,2) $–2 $(0.01) $– $– $(0.01) $(0.16)


period (1,7) $10.00 $10.00 $10.00 $10.00 $10.00 $10.00



2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008

NAV (in 000s) (3,7) $223 $292 $320 $443 $259 $389Units outstanding(in 000s) (3) 22 29 32 44 26 39NAV per unit (3) $10.00 $10.00 $10.00 $10.00 $10.00 $10.00Management expense ratio(“MER”) (4) 0.12% 0.15% 0.14% 0.23% 0.44% 1.13%MER before absorbed orwaived fees (4) 1.23% 1.23% 1.22% 1.17% 1.16% 1.14%Portfolio turnover rate (5) n/a n/a n/a n/a n/a n/aTrading expense ratio (6) n/a n/a n/a n/a n/a n/a

HSBC U.S. Dollar Money Market Fund –Premium SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2007

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:



from operations (1) $– $0.01 $0.01 $0.01 $0.01 $0.21

Distributions to

unitholders:


Total annual

distributions (1,2) $–2 $(0.01) $– $– $(0.02) $(0.21)


period (1,7) $10.00 $10.00 $10.00 $10.00 $10.00 $10.00



2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008


3


HSBC U.S. Dollar Money Market Fund –Manager SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2001

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:



from operations (1) $– $0.01 $0.01 $0.01 $(0.01) $0.17

Distributions to

unitholders:


Total annual

distributions (1,2) $–2 $(0.01) $– $– $(0.01) $(0.19)


period (1,7) $10.00 $10.00 $10.00 $10.00 $10.00 $10.00



2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008

NAV (in 000s) (3,7) $1,433 $4,327 $4,465 $9,479 $7,335 $345Units outstanding(in 000s) (3) 143 433 446 948 734 35NAV per unit (3) $10.00 $10.00 $10.00 $10.00 $10.00 $10.00Management expense ratio(“MER”) (4) 0.12% 0.15% 0.15% 0.22% 0.29% 0.87%MER before absorbed orwaived fees (4) 0.91% 0.94% 0.92% 0.88% 0.90% 0.88%Portfolio turnover rate (5) n/a n/a n/a n/a n/a n/aTrading expense ratio (6) n/a n/a n/a n/a n/a n/a

HSBC U.S. Dollar Money Market Fund –Institutional SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2001

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:

Total revenue 0.01 0.02 0.02 0.03 0.03 0.28Total expenses – – – – (0.01) (0.01)Realized gains (losses) – – – – – –Unrealized gains (losses) – – – – – –


from operations (1) $0.01 $0.02 $0.02 $0.03 $0.02 $0.27

Distributions to

unitholders:


Total annual

distributions (1,2) $(0.01) $(0.02) $(0.02) $(0.02) $(0.04) $(0.27)


period (1,7) $10.00 $10.00 $10.00 $10.00 $10.00 $10.00


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008

NAV (in 000s) (3,7) $6,387 $8,563 $8,569 $5,867 $17,507 $11,267Units outstanding(in 000s) (3) 639 856 857 587 1,751 1,127NAV per unit (3) $10.00 $10.00 $10.00 $10.00 $10.00 $10.00Management expense ratio(“MER”) (4) (0.02%) (0.01%) (0.06%) 0.02% 0.08% 0.07%MER before absorbed orwaived fees (4) 0.12% 0.15% 0.14% 0.11% 0.11% 0.08%Portfolio turnover rate (5) n/a n/a n/a n/a n/a n/aTrading expense ratio (6) n/a n/a n/a n/a n/a n/a




(4) MER includes the total expenses of each Fund, including the Goodsand Services Tax and/or Harmonized Sales Tax thereon, other thanbrokerage commissions on securities transactions and any foreignwithholding taxes on income, as an annualized percentage of averagenet asset value (“NAV”) of the respective series of unit for the period.In the period a series is established, the MER is annualized from thedate of inception to the end of the period. The MER may vary fromone mutual fund to another and from one series of units to another.

4


We may have waived or absorbed certain fees and expensesotherwise payable by the Fund. The amount of expenses absorbed orwaived is at the discretion of and can be terminated at any time by us.

(5) The Fund’s portfolio turnover rate indicates how actively the Fund’sportfolio advisor manages its portfolio investments. A portfolioturnover rate of 100% is equivalent to the Fund buying and selling allof the securities in its portfolio once in the course of the period. Thehigher the Fund’s portfolio turnover rate in a period, the greater thetrading costs payable by the Fund in the period, and the greater thechance of an investor receiving taxable capital gains in the year. Thereis not necessarily a relationship between a high turnover rate and theperformance of the Fund. The rate is calculated based on the lesser ofpurchases or sales of securities divided by the average weightedmarket value of the portfolio securities, excluding short-termsecurities.


(7) Generally accepted accounting principles require that the calculation ofa Fund’s net asset value for financial reporting purposes (”net assets”)be based upon investments valued using closing bid prices. Aspermitted by securities regulations, the value of investments used todetermine the daily prices of the Fund’s units for purchase andredemption by clients (”NAV”) continues to be based upon the lastsale price or the midpoint between closing bid and asked quotations.




Past PerformanceThe performance information shown assumes that all distributionsmade by the Fund in the periods shown were reinvested inadditional securities of the Fund. The performance informationdoes not take into account sales, redemption, distribution, optionalcharges or expenses you may be charged outside of the Fund orthe effect of any income tax you may have to pay as a result ofyour investment in the Fund that would have reduced returns orperformance. The Fund’s past performance does not necessarilyindicate how it will perform in the future.

The following bar charts show the Fund’s performance for thesix-month period ended June 30, 2013, and for each of theprevious 12-month periods ended December 31. In percentageterms, the bar charts show how much an investment made onJanuary 1 would have grown or decreased by the end of theperiod.


10%

5%

0%Dec. 31

2003Dec. 31

2004Dec. 31

2005Dec. 31

2006Dec. 31

2007Dec. 31

2008Dec. 31

2009Dec. 31

2010June 30

2013Dec. 31

2011

0.0%

Dec. 312012

0.0%0.2% 0.3%

2.1%3.8% 4.1%

1.6%0.1% 0.0% 0.0%


10%

5%

0%

4.1%

1.6%0.1% 0.0%

Dec. 312006

Dec. 312007

Dec. 312008

Dec. 312009

Dec. 312010

Dec. 312011

0.0% 0.0% 0.0%

Dec. 312012

4.1%

June 302013

5



10%

5%

0%0.2% 0.0% 0.0% 0.0% 0.0%

Dec. 312009

Dec. 312010

Dec. 312011

Dec. 312012

June 302013


10%

5%

0%

4.0% 4.4%

1.9%

0.1% 0.0% 0.0% 0.0% 0.0%

Dec. 312006

Dec. 312007

Dec. 312008

Dec. 312009

Dec. 312010

Dec. 312011

Dec. 312012

June 302013

Returns – Institutional SeriesFor the 12-month periods ended December 31 and the six-monthperiod ended June 30, 2013

15%

10%

5%

0%

3.2%4.9% 5.2%

2.7%

0.4% 0.2% 0.2%

Dec. 312005

Dec. 312006

Dec. 312007

Dec. 312008

Dec. 312009

Dec. 312010

Dec. 312011

June 302013

0.2% 0.1%

Dec. 312012



Asset MixPercentage

of NAV

Corporate 80.25%Government 20.41%Cash & Equivalents (0.66%)Total 100.00%


of NAV

Export Development Corp., 0.09% 10/01/13 7.23%KfW, 0.19% 07/19/13 4.02%Government of United States, 0.17% 10/17/13 4.01%Bank of Montreal, 0.01% 07/02/13 3.54%Bank of Nova Scotia, 0.01% 07/02/13 3.54%National Bank Financial, 0.05% 07/02/13 3.54%Government of Canada, 0.16% 10/18/13 3.21%KfW, 0.20% 07/09/13 3.21%Province of British Columbia, 0.14% 10/24/13 3.21%Toronto-Dominion Bank, 0.14% 07/16/13 3.21%NRW.BANK, 0.18% 08/27/13 2.89%Province of British Columbia, 0.14% 12/02/13 2.73%Caisse des Depots et Consignations, 0.24% 10/25/13 2.41%Royal Bank of Canada, 0.03% 07/02/13 2.14%American Honda Finance Corp., 0.10% 08/22/13 1.93%BPCE, 0.23% 09/06/13 1.93%Caisse Centrale Desjardins du Quebec, 0.15% 07/17/13 1.93%KfW, 0.18% 07/15/13 1.93%MetLife Short Term Funding LLC, 0.15% 08/05/13 1.93%Nestle Finance International Ltd., 0.09% 09/05/13 1.93%Procter & Gamble Co., 0.07% 07/31/13 1.93%Province of Quebec, 0.08% 07/26/13 1.93%Societe Generale North America, 0.25% 09/03/13 1.93%Sumitomo Mitsui Banking Corp., 0.18% 08/02/13 1.93%Swedbank AB, 0.21% 08/07/13 1.93%Total of Top 25 Holdings 70.12%

6





How to reach us



Toll-free: 1-800-830-8888Fax: 604-669-2756











(201

3-08

)RR

D50

8E

HSBC Mortgage Fund



HSBC Mortgage Fund

Management Discussion of Fund PerformanceIn this document, you and your refer to the unitholder of the Fund;we, us and our refer to HSBC Global Asset Management (Canada)Limited; and the Fund refers to the HSBC Mortgage Fund.





Investment Objective and StrategiesThe fundamental investment objective of this Fund is to earn ashigh a level of income as possible while protecting investedcapital.

To achieve its objectives, the Fund invests primarily in uninsuredCanadian-dollar-denominated mortgages. This Fund intends topurchase mortgages from HSBC Bank Canada (the “Bank”) or itssubsidiaries. If any mortgage purchased from the Bank or itssubsidiaries is in default for 90 days or more, the Bank willrepurchase those mortgages from the Fund.

RiskThe risks of investing in the Fund remain as discussed in theSimplified Prospectus. During the period, there was no materialchange to the risk level of the Fund or to the Fund’s sensitivity tointerest rate changes, changes to the shape of the yield curve,credit risk, market risk or currency risk. The magnitude of theFund’s active strategy positions remains consistent with its long-term risk profile.

This Fund is suitable for investors who want to earn interestincome and protect their capital. Investors in this Fund shouldhave a short-term investment time horizon and a low tolerance forrisk in their returns.

Results of OperationsAs of June 30, 2013, the Fund’s net assets decreased by 5.2% to$2,280.8 million from $2,405.1 million at the end of 2012. Of thisdecrease, a $31.3 million gain was attributable to investmentperformance, which was offset by a $155.6 million loss due to netredemptions of Fund units.

Investment PerformanceThe HSBC Mortgage Fund (Investor Series) rose 0.82% for the sixmonths ending June 30, 2013, while the benchmark rose 1.15%over the same period. The benchmark is a weighted compositeconsisting of the DEX Residential Mortgage 1-Year Index (50%),the DEX Residential Mortgage 3-Year Index (25%), the DEXResidential Mortgage 5-Year Index (15%) and the DEX 91-DayT-Bill Index (10%), discounted by an appropriate amount to reflectactual prevailing mortgage rates over the same period.

2013 started on a positive note for riskier assets as the USreached an agreement on mandatory tax hikes that marked thefirst step to avoiding the “fiscal cliff.” Equity markets and creditenjoyed a strong first quarter, buoyed by better than expectedearnings and the continued search for yield by investors. Fixedincome markets were well supported to start the second quarteras concerns surrounding global growth and renewed problems inEurope kept a bid in safer assets, such as government bonds. Theresumption of better economic data, however, particularly in theUS, started to put upward pressure on bond yields in May.

This set the stage for US Federal Reserve Chairman Bernanke’scomments in June on the expected evolution of US monetarystimulus, which really “knocked the stuffing” out of the fixedincome market at the end of the quarter. The US Federal Reservesaid it plans to scale back its monthly quantitative easing assetpurchases later this year and would continue to reduce the pace,in measured steps, to end purchases around mid-2014, if itseconomic projections prove broadly correct.

Developed and emerging markets sold off on the news, asinvestors anticipated a lower provision of central bank liquidity tosupport asset prices. Market expectations surrounding the Bank ofCanada’s course of action for 2013 have changed over the courseof the first half of 2013. It is now thought that the Bank of Canadawill leave rates unchanged in 2013, but will be more aggressive inraising rates in 2014.

Since the end of 2012, the overall yield for the DEX Short-TermBond Index rose from 1.60% to 1.83%. It generated a positivetotal return of 0.30% over the first six months of 2013. Sectorreturns were again quite varied. Federal government, provincialgovernment and corporate bonds returned 0.15%, 0.20% and0.61%, respectively.

Broad mortgage rates, while having moved higher, have risen lessthan government bond yields. Thus mortgages outperformed the

1

HSBC Mortgage Fund

broader short-term bond market in the first half of 2013. The yieldon the DEX Residential Mortgage Index rose by 5 bps to 3.75%.The yield differential between 5-year fixed mortgage rates and the5-year Government of Canada bond narrowed from 365 bps to 320bps. It would appear that the banks took a somewhat lessdefensive position with respect to their mortgage lending andpricing. Asset quality in the Canadian residential mortgage marketremains very strong. The current average delinquency rate acrossthe country is ~0.40%, little changed year-to-date and close to themiddle of its long-term range.

The Fund’s high running yield had a positive impact on relativeperformance. Duration, which was shorter than the benchmark,had a small positive impact on relative performance year-to-date.

Recent DevelopmentsOur central scenario continues to be that fundamentals, whileweak, are not dire and that the global economy will continue tomove forward at a moderate pace aided by reasonable growth inemerging economies and accommodative monetary policy in thedeveloped world. Despite market concerns surrounding the USFederal Reserve “tapering” the size of their quantitative easing,we fully expect them to take a gradual, measured approach tounwinding monetary stimulus. We feel that the corporate sectorremains fundamentally sound with continuing strong profit growthand defensively positioned balance sheets. The major headwindcontinues to be the lack of fiscal stimulus. For the Canadianeconomy, with growth in the US expected to improve in comingquarters, the headwinds from trade may subside somewhat overthe next year.

In this environment we expect the Bank of Canada to remain onthe sidelines for the next few quarters, but that they will graduallymove away from emergency-type interest rates in mid-2014. Atthis point, with long-term yields expected to rise modestly overthe next year, the objective will be to maintain the Fund’s interestrate exposure below the benchmark in the near term. Valuations inthe Canadian residential mortgage market continue to lookattractive, and we will continue to reinvest cash into mortgages.



Manager, Trustee and Investment AdvisorWe are the manager, trustee and primary investment advisor of theFund. As manager, we manage the overall business and operationsof the Fund. As trustee, we hold legal title to the property of theFund on your behalf. As primary investment advisor, we provideinvestment advice and portfolio management services to the Fund.We receive a fee from the Fund for these services based on assetsunder management, calculated daily and paid monthly.

Mortgage Repurchase AgreementThe HSBC Mortgage Fund purchases its mortgages from HSBCBank Canada (the “Bank”) (of which we are a wholly ownedsubsidiary) and its subsidiary, HSBC Mortgage Corporation (Canada)(“Mortgage Corp.”), at an amount that will produce a yield to theHSBC Mortgage Fund of not more than 1/4 of 1% less than theinterest rate at which the Bank or Mortgage Corp. is making asimilar commitment at the time of purchase. The lesser yield of 1/4of 1% is in consideration of the agreement by the Bank torepurchase the mortgages under certain circumstances. This feeamounted to $2,311,327.92 on June 30, 2013 (December 2012,$4,139,051).

To proceed with the transactions, the Fund relied on the approvalof the Fund’s Independent Review Committee by way of StandingInstruction. A condition of this approval was that the transactionswere performed in accordance with National Policy No. 29 and inaccordance with all requirements of various relief orders that havebeen granted to us by the regulators in relation to these kinds oftransactions.


2

HSBC Mortgage Fund


HSBC Mortgage Fund – Investor SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 1992

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:

Total revenue 0.16 0.33 0.36 0.41 0.49 0.59Total expenses (0.09) (0.18) (0.18) (0.18) (0.17) (0.17)Realized gains (losses) 0.01 0.01 0.01 0.05 0.06 (0.01)Unrealized gains (losses) 0.02 (0.01) (0.01) (0.04) 0.12 0.28


from operations (1) $0.10 $0.15 $0.18 $0.24 $0.50 $0.69

Distributions to

unitholders:


Total annual

distributions (1,2) $(0.08) $(0.15) $(0.18) $(0.23) $(0.34) $(0.55)


period (1,7) $11.61 $11.60 $11.60 $11.59 $11.58 $11.39


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008

NAV (in 000s) (3,7) $360,399 $394,955 $295,010 $262,101 $216,742 $100,323Units outstanding(in 000s) (3) 31,041 34,053 25,437 22,616 18,719 8,814NAV per unit (3) $11.61 $11.60 $11.60 $11.59 $11.58 $11.38Management expense ratio(“MER”) (4) 1.54% 1.55% 1.56% 1.54% 1.48% 1.50%MER before absorbed orwaived fees (4) 1.54% 1.55% 1.56% 1.54% 1.48% 1.50%Portfolio turnover rate (5) 17.32% 39.80% 29.49% 49.20% 46.22% 29.12%Trading expense ratio (6) n/a n/a n/a n/a n/a n/a

HSBC Mortgage Fund – Advisor SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2001

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:

Total revenue 0.14 0.29 0.32 0.35 0.42 0.52Total expenses (0.08) (0.16) (0.16) (0.16) (0.15) (0.15)Realized gains (losses) – 0.01 0.01 0.05 0.05 –2

Unrealized gains (losses) 0.01 (0.01) (0.01) (0.02) 0.11 0.22


from operations (1) $0.07 $0.13 $0.16 $0.22 $0.43 $0.59

Distributions to

unitholders:


Total annual

distributions (1,2) $(0.07) $(0.13) $(0.16) $(0.20) $(0.28) $(0.48)


period (1,7) $10.21 $10.20 $10.20 $10.19 $10.18 $10.01



2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008

NAV (in 000s) (3,7) $9,369 $8,461 $10,331 $11,881 $4,293 $103Units outstanding(in 000s) (3) 918 830 1,013 1,166 422 10NAV per unit (3) $10.21 $10.20 $10.20 $10.19 $10.18 $10.01Management expense ratio(“MER”) (4) 1.54% 1.56% 1.56% 1.56% 1.47% 1.50%MER before absorbed orwaived fees (4) 1.54% 1.56% 1.56% 1.56% 1.47% 1.50%Portfolio turnover rate (5) 17.32% 39.80% 29.49% 49.20% 46.22% 29.12%Trading expense ratio (6) n/a n/a n/a n/a n/a n/a

3

HSBC Mortgage Fund

HSBC Mortgage Fund – Premium SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: April 2008

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:




from operations (1) $0.10 $0.19 $0.22 $0.27 $0.47 $0.47

Distributions to

unitholders:


Total annual

distributions (1,2) $(0.10) $(0.20) $(0.22) $(0.26) $(0.34) $(0.34)


period (1,7) $10.29 $10.28 $10.28 $10.28 $10.27 $10.08



2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008


HSBC Mortgage Fund – Manager SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2001*

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:




from operations (1) $0.10 $0.20 $0.23 $0.29 $0.47 $0.60

Distributions to

unitholders:


Total annual

distributions (1,2) $(0.10) $(0.20) $(0.22) $(0.26) $(0.36) $(0.49)


period (1,7) $10.34 $10.33 $10.34 $10.34 $10.32 $10.14

* All units were redeemed in February 2006. The Series was reinstated ata price of $10.00 per unit in January 2008.



2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008

NAV (in 000s) (3,7) $3,744 $4,293 $6,166 $6,387 $3,580 $20Units outstanding(in 000s) (3) 362 415 596 618 347 2NAV per unit (3) $10.34 $10.33 $10.34 $10.34 $10.32 $10.13Management expense ratio(“MER”) (4) 1.00% 1.00% 1.01% 1.00% 0.95% 0.95%MER before absorbed orwaived fees (4) 1.00% 1.00% 1.01% 1.00% 0.95% 0.95%Portfolio turnover rate (5) 17.32% 39.80% 29.49% 49.20% 46.22% 29.12%Trading expense ratio (6) n/a n/a n/a n/a n/a n/a

4

HSBC Mortgage Fund

HSBC Mortgage Fund – Institutional SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2001

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:

Total revenue 0.15 0.31 0.34 0.37 0.46 0.54Total expenses – (0.01) (0.01) (0.01) (0.01) (0.01)Realized gains (losses) – 0.01 0.01 0.05 0.05 –2

Unrealized gains (losses) 0.02 (0.01) – (0.03) 0.15 0.23

Total increase (decrease) from

operations (1) $0.17 $0.30 $0.34 $0.38 $0.65 $0.76

Distributions to unitholders:

From income (excludingdividends) (0.15) (0.29) (0.32) (0.37) (0.44) (0.50)From dividends – – – – – –From net realized gains oninvestments – – – – – –

Total annual distributions (1,2) $(0.15) $(0.29) $(0.32) $(0.37) $(0.44) $(0.50)


period (1,7) $10.70 $10.69 $10.68 $10.67 $10.66 $10.47



2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008

NAV (in 000s) (3,7) $1,234,130 $1,229,804 $1,046,747 $813,239 $616,962 $494,737Units outstanding(in 000s) (3) 115,358 115,058 97,995 76,184 57,860 47,290NAV per unit (3) $10.70 $10.69 $10.68 $10.67 $10.66 $10.46Management expenseratio (“MER”) (4) 0.06% 0.05% 0.06% 0.08% 0.06% 0.08%MER before absorbed orwaived fees (4) 0.06% 0.05% 0.06% 0.08% 0.06% 0.08%Portfolio turnover rate (5) 17.32% 39.80% 29.49% 49.20% 46.22% 29.12%Trading expense ratio (6) n/a n/a n/a n/a n/a n/a








Management FeesFor the six months ended June 30, 2013, the Fund paid usmanagement fees of $5,559,373. The management fee for eachseries is calculated as a percentage of the daily net asset value forthat series. The fees are reduced, where required, so that thesefees do not duplicate fees payable by mutual funds in which theFund invests for the same service.



Past PerformanceThe performance information shown assumes that all distributionsmade by the Fund in the periods shown were reinvested inadditional securities of the Fund. The performance informationdoes not take into account sales, redemption, distribution, optional

5

HSBC Mortgage Fund

charges or expenses you may be charged outside of the Fund orthe effect of any income tax you may have to pay as a result ofyour investment in the Fund that would have reduced returns orperformance. The Fund’s past performance does not necessarilyindicate how it will perform in the future.



10%

5%

0%

3.4% 3.6%2.0%

3.1%2.1%

6.1%4.8%

2.1%

Dec. 312003

Dec. 312004

Dec. 312005

Dec. 312006

Dec. 312007

Dec. 312008

Dec. 312009

Dec. 312010

Dec. 312012

1.6% 1.3% 0.8%

June 302013

Dec. 312011


10%

5%

0%

3.4% 3.6%2.0%

3.1%2.1%

6.3%4.8%

2.1% 1.6% 1.3% 0.8%

Dec. 312003

Dec. 312004

Dec. 312005

Dec. 312006

Dec. 312007

Dec. 312008

Dec. 312009

Dec. 312010

Dec. 312011

Dec. 312012

June 302013


10%

5%

0%

5.3%

2.7% 2.2%

Dec. 312009

Dec. 312010

Dec. 312011

June 302013

1.9%1.1%

Dec. 312012


10%

5%

0%

5.3%

2.7% 2.2%

Dec. 312009

Dec. 312010

Dec. 312011

June 302013

1.9%1.1%

Dec. 312012


10%

5%

0%

4.9% 5.1%3.5%

4.6%3.5%

7.7%6.3%

3.6% 3.2% 2.9%1.6%

Dec. 312003

Dec. 312004

Dec. 312005

Dec. 312006

Dec. 312007

Dec. 312008

Dec. 312009

Dec. 312010

Dec. 312011

Dec. 312012

June 302013


Asset MixPercentage

of NAV

Residential Mortgages 85.67%Bonds 7.10%Cash & Equivalents 7.23%Total 100.00%

6

HSBC Mortgage Fund


of NAV

Residential Mortgages 85.67%Canada Housing Trust No. 1, FRN, 09/15/15 1.74%Royal Bank of Canada, 0.95% 07/02/13 1.54%Financement-Quebec, FRN, 06/02/16 0.66%Ford Credit Canada Ltd., 7.50% 08/18/15 0.49%Gloucester Credit Card Trust, FRN, 1.27% 11/15/13 0.48%Brookfield Asset Management, 1.40% 07/16/13 0.44%Canadian National Railway Co., 1.14% 07/22/13 0.44%Honda Canada Finance Inc., 1.13% 07/24/13 0.44%TransCanada Pipelines, 1.17% 09/17/13 0.44%Vancouver City Savings, 1.22% 07/22/13 0.44%Bank of America Corp., 5.45% 09/17/14 0.31%Toyota Credit Canada, 1.04% 08/13/13 0.26%Sumitomo Mitsui Banking Corp., 1.15% 09/18/13 0.24%Citigroup Finance Canada Inc., 6.75% 09/22/14 0.23%Bank of Montreal, FRN, 1.62% 03/23/15 0.22%Commonwealth Bank of Australia, 3.63% 10/14/14 0.22%Enbridge Inc., FRN, 11/25/13 0.22%Enbridge Income Fund Holdings Inc., FRN 2.30% 11/28/14 0.22%GE Capital Canada Funding Co., FRN, 06/11/14 0.22%Imperial Oil, 1.11% 07/11/13 0.22%National Bank of Canada, FRN, 10/10/13 0.22%National Bank of Canada, FRN, 1.42% 02/25/14 0.22%Scotiabank Capital Trust, 6.28% 02/28/49 0.22%Sumitomo Mitsui Banking Corp., 1.12% 07/08/13 0.22%Total of Top 25 Holdings 96.02%


7





How to reach us



Toll-free: 1-800-830-8888Fax: 604-669-2756











(201

3-08

)RR

D

HSBC Canadian Bond Fund




Management Discussion of Fund PerformanceIn this document, you and your refer to the unitholder of the Fund;we, us and our refer to HSBC Global Asset Management (Canada)Limited; and the Fund refers to the HSBC Canadian Bond Fund.




You may also contact us using one of these methods to request acopy of the Fund’s proxy voting policies and procedures, proxy votingdisclosure record or quarterly statement of investment portfolio.

Investment Objective and StrategiesThe fundamental investment objective of this Fund is to provideregular income and long-term capital growth.

To achieve its objectives, the Fund invests primarily in investment-grade bonds, debentures, commercial and residential mortgage-backed securities, asset-backed securities and other fixed incomesecurities either issued or guaranteed by the Government ofCanada, a province or municipality of Canada, Canadiancorporations or Canadian master trusts.

RiskThe risks of investing in the Fund remain as discussed in theSimplified Prospectus. During the period, there was no materialchange to the risk level of the Fund or to the Fund’s sensitivity tointerest rate changes, changes to the shape of the yield curve,credit risk, market risk or currency risk. The magnitude of theFund’s active strategy positions remains consistent with its long-term risk profile.

This Fund is suitable for investors who want to earn interestincome and grow their capital, have a medium-term investmenttime horizon and a low to medium tolerance for risk in theirreturns.

Results of OperationsAs of June 30, 2013, the Fund’s net assets decreased by 7.4% to$1,199.1 million from $1,295.6 million at the end of 2012. Of thisdecrease, a $20.9 million loss was attributable to investmentperformance and $75.6 million was attributable to net redemptionsof Fund units.

Investment PerformanceThe HSBC Canadian Bond Fund (Investor Series) declined 1.84%for the six months ending June 30, 2013, while the benchmark,the DEX Universe Bond Index, declined 1.68% over the sameperiod.


This set the stage for US Federal Reserve Chairman Bernanke’scomments in June on the expected evolution of US monetarystimulus, which really “knocked the stuffing” out of fixed incomemarket at the end of the quarter. The US central bank said it plansto scale back its monthly quantitative easing asset purchases laterthis year and would continue to reduce the pace, in measuredsteps, to end purchases around mid-2014, if its economicprojections prove broadly correct.


Since the end of 2012, the overall yield for the benchmark rosefrom 2.30% to 2.66%. The benchmark generated a total return of�1.68% over the first six months of 2013. Sector returns wereagain quite varied. Federal government, provincial government andcorporate bonds returned �1.66%, �2.86% and �0.42%,respectively.

The yield curve steepened over the course of the second quarter,with the difference between 2-year and 30-year Government ofCanada yields rising from 150 bps to 168 bps, as the longer end ofthe market underperformed.

The Fund’s overweight position in corporate bonds had a positiveimpact on relative performance, as did the overweight position in

1


residential mortgages. Duration, which was shorter than thebenchmark, had a small positive impact on relative performanceyear-to-date. The Fund’s small exposure to emerging markets debtwas negative for relative returns.


In this environment we expect the Bank of Canada to remain onthe sidelines for the next few quarters, but that they will graduallymove away from emergency-type interest rates in mid-2014. Atthis point, with long-term yields expected to rise modestly overthe next year, the objective will be to maintain the Fund’s interestrate exposure below the benchmark in the near term. The durationunderweight in the Fund was decreased slightly during the quarteras the rise in bond yields brought them closer to our near-termtargets. Valuations in credit markets continue to look attractive,and we continue to prefer provincial and corporate bonds overGovernment of Canada bonds and will look to remain overweightin these sectors. The Fund added slightly to its corporate exposureduring the quarter.

Related Party TransactionsWe, on behalf of the Fund, or the Fund Manager, may, from time totime, enter into transactions or arrangements with or involving othermembers of the HSBC Group or other people or companies relatedor connected to us or the Fund. To proceed with the transactions,the Fund relies on the positive recommendation of the Fund’sIndependent Review Committee. A condition of this positiverecommendation is that the transactions are performed inaccordance with our policy on Related Party Transactions. For moregeneral information on persons related to the Fund and the types ofpotential transactions, see the Fund’s Simplified Prospectus.



Distribution ServicesThe Fund is distributed through us, HSBC Investment Funds(Canada) Inc. (our wholly owned subsidiary) and throughHSBC Securities (Canada) Inc. (an affiliate) directly or through itsdivision, HSBC InvestDirect. We pay distribution and servicingfees to them based on the amount of assets held in the investor’saccount, and additionally, in some cases, on the amount of theinitial purchase. If you hold units of this Fund and/or other HSBCMutual Funds in a registered plan with HSBC Investment Funds(Canada) Inc., they may charge you an annual fee to cover theannual administration costs of the plan. We permit HSBCInvestment Funds (Canada) Inc. to collect these fees byredeeming sufficient units of the Fund with the highest marketvalue in your registered plan.

Fund on Fund InvestingDuring the period, the Fund invested in units of other HSBC MutualFunds, which are also managed by us. To proceed with thetransactions, the Fund relied on the positive recommendation of theFund’s Independent Review Committee by way of StandingInstruction. A condition of this positive recommendation was thatthe transactions were performed in accordance with our policy onFund on Fund Investing.

Purchases of Securities Underwritten by a Related PartyDuring the period, the Fund invested in certain securities thatwere underwritten, in whole or in part, by entities that are arelated party to us. To proceed with the transactions, the Fundrelied on the approval of the Fund’s Independent ReviewCommittee by way of Standing Instruction. A condition of thisapproval was that the transactions were performed in accordancewith our policy on Purchases of Securities Underwritten by aRelated Party.

2



HSBC Canadian Bond Fund – Investor SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: January 1995

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:

Total revenue 0.22 0.45 0.42 0.55 0.64 0.66Total expenses (0.08) (0.16) (0.15) (0.15) (0.14) (0.14)Realized gains (losses) 0.03 0.10 0.04 0.10 0.13 0.04Unrealized gains (losses) (0.42) 0.13 0.64 0.21 0.12 (0.17)


from operations (1) $(0.25) $0.52 $0.95 $0.71 $0.75 $0.39

Distributions to

unitholders:

From income (excludingdividends) (0.15) (0.28) (0.35) (0.40) (0.50) (0.57)From dividends – – (0.03) – – –From net realized gainson investments – – – (0.05) – –

Total annual

distributions (1,2) $(0.15) $(0.28) $(0.38) $(0.45) $(0.50) $(0.57)


period (1,7) $13.24 $13.65 $13.40 $12.84 $12.52 $12.26


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008


HSBC Canadian Bond Fund – Advisor SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2001

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:



from operations (1) $(0.11) $0.41 $0.77 $0.65 $0.51 $0.34

Distributions to

unitholders:

From income (excludingdividends) (0.13) (0.23) (0.28) (0.32) (0.40) (0.46)From dividends – – (0.03) – – –From net realized gainson investments – – – (0.04) – –

Total annual

distributions (1,2) $(0.13) $(0.23) $(0.31) $(0.36) $(0.40) $(0.46)


period (1,7) $10.71 $11.02 $10.82 $10.37 $10.11 $9.90


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008

NAV (in 000s) (3,7) $301 $450 $267 $264 $329 $94Units outstanding(in 000s) (3) 28 41 25 25 33 9NAV per unit (3) $10.73 $11.03 $10.83 $10.38 $10.13 $9.91Management expense ratio(“MER”) (4) 1.17% 1.18% 1.20% 1.14% 1.15% 1.16%MER before absorbed orwaived fees (4) 1.17% 1.18% 1.20% 1.14% 1.15% 1.16%Portfolio turnover rate (5) 17.27% 36.69% 38.01% 61.30% 61.90% 81.95%Trading expense ratio (6) n/a n/a n/a n/a n/a n/a

3


HSBC Canadian Bond Fund – Premium SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: April 2008

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:



from operations (1) $(0.18) $0.46 $0.77 $0.48 $0.57 $0.13


From income (excludingdividends) (0.14) (0.25) (0.31) (0.35) (0.42) (0.30)From dividends – – (0.03) – – –From net realized gains oninvestments – – – (0.04) – –

Total annual

distributions (1,2) $(0.14) $(0.25) $(0.34) $(0.39) $(0.42) $(0.30)


period (1,7) $10.79 $11.12 $10.91 $10.46 $10.19 $9.97


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008

NAV (in 000s) (3,7) $544,984 $640,068 $236,962 $163,797 $46,614 $9,199Units outstanding(in 000s) (3) 50,412 57,466 21,682 15,642 4,566 921NAV per unit (3) $10.81 $11.14 $10.93 $10.47 $10.21 $9.98Management expense ratio(“MER”) (4) 0.89% 0.89% 0.93% 0.88% 0.89% 0.91%MER before absorbed orwaived fees (4) 0.89% 0.89% 0.93% 0.88% 0.89% 0.91%Portfolio turnover rate (5) 17.27% 36.69% 38.01% 61.30% 61.90% 81.95%Trading expense ratio (6) n/a n/a n/a n/a n/a n/a

HSBC Canadian Bond Fund – Manager SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2001

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:



from operations (1) $(0.17) $0.44 $0.78 $0.56 $0.58 $0.38


From income (excludingdividends) (0.15) (0.27) (0.32) (0.35) (0.42) (0.43)From dividends – – (0.03) – – –From net realized gains oninvestments – – – (0.04) – –

Total annual

distributions (1,2) $(0.15) $(0.27) $(0.35) $(0.39) $(0.42) $(0.43)


period (1,7) $10.03 $10.34 $10.15 $9.73 $9.49 $9.28


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008

NAV (in 000s) (3,7) $360 $426 $325 $341 $184 $119Units outstanding (in 000s) (3) 36 41 32 35 19 13NAV per unit (3) $10.04 $10.35 $10.17 $9.75 $9.50 $9.29Management expense ratio(“MER”) (4) 0.61% 0.60% 0.62% 0.60% 0.63% 0.64%MER before absorbed or waivedfees (4) 0.61% 0.60% 0.62% 0.60% 0.63% 0.64%Portfolio turnover rate (5) 17.27% 36.69% 38.01% 61.30% 61.90% 81.95%Trading expense ratio (6) n/a n/a n/a n/a n/a n/a

4


HSBC Canadian Bond Fund – Institutional SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2001

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008

Net assets per unit, beginning of

period (1,7) $11.61 $11.39 $10.91 $10.64 $10.41 $10.43

Increase (decrease) from operations:

Total revenue 0.19 0.38 0.36 0.47 0.55 0.55Total expenses – (0.01) (0.01) (0.01) (0.01) (0.01)Realized gains (losses) 0.02 0.09 0.03 0.08 0.11 0.04Unrealized gains (losses) (0.38) 0.12 0.53 0.23 0.10 (0.16)


operations (1) $(0.17) $0.58 $0.91 $0.77 $0.75 $0.42


From income (excluding dividends) (0.20) (0.36) (0.40) (0.45) (0.52) (0.48)From dividends – – (0.04) – – –From net realized gains oninvestments – – – (0.05) – –



period (1,7) $11.26 $11.61 $11.39 $10.91 $10.64 $10.41


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008

NAV (in 000s) (3,7) $180,289 $148,831 $122,521 $142,661 $93,616 $70,479Units outstanding (in 000s) (3) 15,981 12,803 10,739 13,054 8,783 6,764NAV per unit (3) $11.28 $11.63 $11.41 $10.93 $10.66 $10.42Management expense ratio(“MER”) (4) 0.07% 0.06% 0.08% 0.06% 0.10% 0.11%MER before absorbed orwaived fees (4) 0.07% 0.06% 0.08% 0.06% 0.10% 0.11%Portfolio turnover rate (5) 17.27% 36.69% 38.01% 61.30% 61.90% 81.95%Trading expense ratio (6) n/a n/a n/a n/a n/a n/a





(5) The Fund’s portfolio turnover rate indicates how actively the Fund’sportfolio advisor manages its portfolio investments. A portfolio turnoverrate of 100% is equivalent to the Fund buying and selling all of the

securities in its portfolio once in the course of the period. The higher theFund’s portfolio turnover rate in a period, the greater the trading costspayable by the Fund in the period, and the greater the chance of aninvestor receiving taxable capital gains in the year. There is notnecessarily a relationship between a high turnover rate and theperformance of the Fund. The rate is calculated based on the lesser ofpurchases or sales of securities divided by the average weighted marketvalue of the portfolio securities, excluding short-term securities.







5




10%

5%

0%

5.9% 5.4% 4.7%3.4%

2.4%3.4%

6.4% 6.2%7.5%

4.0%

-1.8%

Dec. 312004

Dec. 312005

Dec. 312006

Dec. 312007

Dec. 312008

Dec. 312009

Dec. 312010

Dec. 312011

Dec. 312012

June 302013

-5%Dec. 31

2003


10%

5%

-5%

5.9% 5.4% 4.7%3.4%

2.4%3.4%

6.4% 6.1%7.5%

Dec. 312003

Dec. 312004

Dec. 312005

Dec. 312006

Dec. 312007

Dec. 312008

Dec. 312009

Dec. 312010

Dec. 312011

June 302013

4.0%

-1.6%

Dec. 312012

0%


10%

5%

-5%Dec. 31

2009Dec. 31

2010Dec. 31

2011

0%

June 302013

6.7% 6.4%7.7%

4.3%

-1.7%

Dec. 312012


10%

5%

-5%

5.9% 5.2%4.0%

3.0%4.0%

6.9% 6.7%8.1%

4.6%

-1.6%

Dec. 312004

Dec. 312005

Dec. 312006

Dec. 312007

Dec. 312008

Dec. 312009

Dec. 312010

Dec. 312011

Dec. 312012

June 302013

0%


10%

5%

-5%Dec. 31

2005Dec. 31

2006Dec. 31

2007Dec. 31

2008Dec. 31

2009Dec. 31

2010Dec. 31

2011June 30

2013

5.8%4.5%

3.5%4.5%

7.5% 7.3%8.6%

5.2%

-1.3%

Dec. 312012

0%


Asset MixPercentage

of NAV

Corporate 55.77%Government 34.80%Mutual Funds 8.51%Cash & Equivalents 0.92%Total 100.00%

6



of NAV

Province of Ontario, 4.00% 06/02/21 9.87%Province of Ontario, 5.60% 06/02/35 8.61%Government of Canada, 5.75% 06/01/33 5.75%HSBC Mortgage Fund – Institutional Series 5.55%Canada Housing Trust No 1, 1.75% 06/15/18 4.21%CDP Financial Inc., 4.60% 07/15/20 2.86%Canada Housing Trust No. 1, 2.40% 12/15/22 2.31%Province of British Columbia, 4.70% 06/18/37 2.22%Toronto-Dominion Bank, 4.97% 10/30/04 2.11%TELUS Corp., 5.05% 07/23/20 1.89%Government of Canada, 4.00% 06/01/41 1.88%Commonwealth Bank of Australia, 5.15% 04/09/20 1.81%Canadian Imperial Bank of Commerce, FRN, 04/30/20 1.72%SPDR Lehman High Yield Bond ETF 1.70%Intact Financial Corp., 5.41% 09/03/19 1.54%Merrill Lynch & Co., Inc., 5.29% 05/30/22 1.52%Sydney Airport Finance Co. Pty Ltd., 4.60% 07/27/18 1.52%Cameco Corp., 5.67% 09/02/19 1.46%Viterra Inc., 6.41% 02/16/21 1.44%BP Capital Markets PLC, 2.74% 02/24/17 1.43%Great-West Lifeco Inc., 5.69% 06/21/67 1.31%HSBC Emerging Markets Debt Fund – Institutional Series 1.26%Empire Life Insurance, 6.73% 05/20/19 1.24%National Australia Bank Ltd., 4.19% 07/20/15 1.24%Brookfield Asset Management Inc., 5.30% 03/01/21 1.22%Total of Top 25 Holdings 67.67%


7





How to reach us



Toll-free: 1-800-830-8888Fax: 604-669-2756











(201

3-08

)RR

D

HSBC Emerging Markets Debt Fund




Management Discussion of Fund PerformanceIn this document, you and your refer to the unitholder of the Fund;we, us and our refer to HSBC Global Asset Management (Canada)Limited; and the Fund refers to the HSBC Emerging Markets DebtFund.

We are the manager, trustee and primary investment advisor ofthe Fund. We have hired HSBC Global Asset Management (USA)Inc. as the sub-advisor to provide portfolio management andinvestment advisory services to the Fund. For an explanation ofthe relationship between us and the sub-advisor, see thesection Selection of Sub-Advisors in the Fund’s SimplifiedProspectus.




Investment Objective and StrategiesThe fundamental investment objective of this Fund is to provideincome and long-term capital growth.

To achieve its objectives, the Fund, directly or indirectly, investsprimarily in a diversified portfolio of investment-grade and non-investment-grade debt instruments issued by governments inemerging market countries and corporations or other issuerseither based in or that have a significant business or investmentlink with emerging market countries. Such debt instruments maybe denominated in US dollars or other foreign currencies, includingthe local currency of emerging market countries. The Fund mayalso use derivatives to gain or reduce its exposure to fixed incomesecurities or emerging market currencies or for hedging purposes.

RiskThe risks of investing in this Fund remain as discussed in theSimplified Prospectus. This Fund is suitable for investors whowant to earn interest income and achieve modest long-term

capital growth. Investors in this Fund should have a long-terminvestment time horizon and a low to medium tolerance for risk.

Results of OperationsAs of June 30, 2013, the Fund’s net assets increased by 58.4% to$281.9 million from $178.0 million at the end of 2012. Of thisincrease, a $114.7 million gain was attributable to netcontributions to the Fund, which was offset by a $10.8 million lossto investment performance.

Investment PerformanceThe HSBC Emerging Markets Debt Fund (Investor Series) declined3.56% for the six months ending June 30, 2013 compared to thebenchmark, which declined 3.85% over the same period. Thebenchmark is a weighted composite consisting of 50% JP MorganEmerging Markets Bond Index-Global (in US dollars), 25% JPMorgan Global Bond Index-Emerging Markets Global DiversifiedUnhedged (in Canadian dollars), and 25% JP Morgan EmergingLocal Markets Index Plus (in Canadian dollars).

Up until the end of April, returns for emerging markets had been inpositive territory. Emerging markets assets had rallied in Aprilfollowing stimulus announcements by the Bank of Japan at thestart of the month for a new phase of bond buyback programs andquantitative easing. The additional liquidity expected by the Bankof Japan sparked a rally in US rates and fixed income assets(including emerging markets) as managers scrambled to addduration and buy long-dated bonds.

On the heels of this rally, the market was taken by surprise in Maywith strong US employment figures and the US Federal Reservebegan to hint at tapering quantitative easing. The 10-year USTreasury yields surged from 1.67% to 2.13% for the month ofMay 2013, and continued to climb higher in June on hawkish USFederal Reserve comments and heightening tapering concerns,closing last month at 2.49%. This sharp rise in US Treasury yields(+82 bps) over a two-month period re-priced fixed income assetsglobally.

The strong six-month performance relative to the benchmark wasdriven largely by our external debt positioning, in particular theallocation to Brazil, Russia and Mexico. On the local debt andcurrency side, the positioning in Brazil local bonds detracted fromperformance.

Recent DevelopmentsWe expect US Treasury yields to go lower over the next fewmonths. The market reaction to tapering concerns appears to beoverdone as we think that economic data coming out of the USover the next few months could disappoint expectations andalleviate near-term concerns of tapering coming sooner rather thanlater.

1


Improved valuations and effective positioning in our asset classfollowing this recent sell-off, coupled with the potential for lowerUS Treasury yields going forward, are positive catalysts foremerging market debt. We also expect the higher yield onemerging market debt to attract additional inflows to the assetclass, paving the way for reduced spreads and positive returns.



Manager, Trustee and Investment AdvisorWe are the manager, trustee and primary investment advisor ofthe Fund. As manager, we manage the overall business andoperations of the Fund. As trustee, we hold legal title to theproperty of the Fund on your behalf. As primary investmentadvisor, we provide investment advice and portfolio managementservices to the Fund. We receive a fee from the Fund for theseservices based on assets under management, calculated daily andpaid monthly. We have entered into a sub-advisory agreementwith HSBC Global Asset Management (USA) Inc. (an affiliate),under which HSBC Global Asset Management (USA) Inc. providesinvestment advice and portfolio management services to theFund. We pay HSBC Global Asset Management (USA) Inc. a feefrom the fund based on assets under management, calculateddaily and paid quarterly. For more information on our ability to hiresub-advisors, see the section Organization and Management ofthe HSBC Mutual Funds in the Fund’s Simplified Prospectus.

Distribution ServicesThe Fund is distributed through us, HSBC Investment Funds(Canada) Inc. (our wholly owned subsidiary) and through HSBCSecurities (Canada) Inc. (an affiliate) directly or through its division,HSBC InvestDirect. We pay distribution and servicing fees to thembased on the amount of assets held in the investor’s account, andadditionally, in some cases, on the amount of the initial purchase.If you hold units of this Fund and/or other HSBC Mutual Funds in aregistered plan with HSBC Investment Funds (Canada) Inc., theymay charge you an annual fee to cover the annual administrationcosts of the plan. We permit HSBC Investment Funds (Canada)

Inc. to collect these fees by redeeming sufficient units of the Fundwith the highest market value in your registered plan.

Financial HighlightsThe following tables show selected key financial information aboutthe Fund and are intended to help you understand the Fund’sfinancial performance for the six-month period ended June 30, 2013and for the years ended December 31, as applicable. In the year afund is established, “period” represents the period from inceptionto December 31 or June 30 of that fiscal year, as applicable. Thisinformation is derived from the Fund’s unaudited semi-annualfinancial statements and audited annual financial statements. Theinformation in the following tables is based on prescribedregulations, and as a result, is not expected to add due to theincrease/decrease in net assets from operations being based onaverage units outstanding during the period and all other numbersbeing based on actual units outstanding at the relevant point in time.

HSBC Emerging Markets Debt Fund –Investor SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: September 2011

June 30

2013

Dec. 31

2012

Dec. 31

2011

Net assets per unit, beginning of period (1,7) $10.73 $9.84 $10.00


Total revenue 0.18 0.42 0.09Total expenses (0.09) (0.20) (0.04)Realized gains (losses) (0.01) 0.26 –Unrealized gains (losses) (0.58) 0.57 (0.24)

Total increase (decrease) from operations (1) $(0.50) $1.05 $(0.19)


From income (excluding dividends) (0.09) (0.24) –From dividends – – (0.07)From net realized gains on investments – (0.12) (0.03)

Total annual distributions (1,2) $(0.09) $(0.36) $(0.10)

Net assets per unit, end of period (1,7) $10.26 $10.73 $9.84


2013

Dec. 31

2012

Dec. 31

2011

NAV (in 000s) (3,7) $54,499 $25,564 $509Units outstanding (in 000s) (3) 5,301 2,378 52NAV per unit (3) $10.28 $10.75 $9.87Management expense ratio (“MER”) (4) 1.74% 1.88% 2.13%MER before absorbed or waived fees (4) 1.74% 1.88% 2.13%Portfolio turnover rate (5) 44.27% 73.65% 21.15%Trading expense ratio (6) n/a n/a n/a

2


HSBC Emerging Markets Debt Fund –Advisor SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: September 2011

June 30

2013

Dec. 31

2012

Dec. 31

2011










2013

Dec. 31

2012

Dec. 31

2011

NAV (in 000s) (3,7) $89 $76 $10Units outstanding (in 000s) (3) 9 7 1NAV per unit (3) $10.23 $10.71 $9.80Management expense ratio (“MER”) (4) 1.76% 1.85% 2.11%MER before absorbed or waived fees (4) 1.76% 1.85% 2.11%Portfolio turnover rate (5) 44.27% 73.65% 21.15%Trading expense ratio (6) n/a n/a n/a

HSBC Emerging Markets Debt Fund –Premium SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: September 2011

June 30

2013

Dec. 31

2012

Dec. 31

2011










2013

Dec. 31

2012

Dec. 31

2011

NAV (in 000s) (3,7) $58,175 $28,699 $305Units outstanding (in 000s) (3) 5,687 2,683 31NAV per unit (3) $10.23 $10.70 $9.81Management expense ratio (“MER”) (4) 1.39% 1.55% 1.84%MER before absorbed or waived fees (4) 1.39% 1.55% 1.84%Portfolio turnover rate (5) 44.27% 73.65% 21.15%Trading expense ratio (6) n/a n/a n/a

HSBC Emerging Markets Debt Fund –Manager SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: September 2011

June 30

2013

Dec. 31

2012

Dec. 31

2011










2013

Dec. 31

2012

Dec. 31

2011

NAV (in 000s) (3,7) $3 $3 $ –1

Units outstanding (in 000s) (3) –1 –1 –1

NAV per unit (3) $10.27 $10.74 $9.82Management expense ratio (“MER”) (4) 1.11% 1.29% 0.57%MER before absorbed or waived fees (4) 1.11% 1.29% 0.57%Portfolio turnover rate (5) 44.27% 73.65% 21.15%Trading expense ratio (6) n/a n/a n/a

1 Amount less than one thousand.

3


HSBC Emerging Markets Debt Fund –Institutional SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: September 2011

June 30

2013

Dec. 31

2012

Dec. 31

2011



Total revenue 0.18 0.41 0.17Total expenses (0.01) (0.02) (0.01)Realized gains (losses) (0.02) 0.24 0.01Unrealized gains (losses) (0.60) 0.74 (0.24)







2013

Dec. 31

2012

Dec. 31

2011

NAV (in 000s) (3,7) $169,731 $124,018 $86,465Units outstanding (in 000s) (3) 16,450 11,499 8,721NAV per unit (3) $10.32 $10.78 $9.91Management expense ratio (“MER”) (4) 0.10% 0.17% 0.40%MER before absorbed or waived fees (4) 0.10% 0.17% 0.40%Portfolio turnover rate (5) 44.27% 73.65% 21.15%Trading expense ratio (6) n/a n/a n/a





(5) The Fund’s portfolio turnover rate indicates how actively the Fund’sportfolio advisor manages its portfolio investments. A portfolioturnover rate of 100% is equivalent to the Fund buying and selling allof the securities in its portfolio once in the course of the period. Thehigher the Fund’s portfolio turnover rate in a period, the greater thetrading costs payable by the Fund in the period, and the greater thechance of an investor receiving taxable capital gains in the year. There

is not necessarily a relationship between a high turnover rate and theperformance of the Fund. The rate is calculated based on the lesser ofpurchases or sales of securities divided by the average weightedmarket value of the portfolio securities, excluding short-termsecurities.







4


The following bar charts show the Fund’s performance for thesix-month period ended June 30, 2013, and for the previous 12-month period ended December 31. In percentage terms, the barcharts show how much an investment made on January 1 wouldhave grown or decreased by the end of the period.

Returns – Investor SeriesFor the 12-month period ended December 31 and the six-monthperiod ended June 30, 201315%

10%

5%

-10%Dec. 31

2012June 30

2013

-5%

0%

12.7%

-3.6%

Returns – Advisor SeriesFor the 12-month period ended December 31 and the six-monthperiod ended June 30, 201315%

10%

5%

-10%Dec. 31

2012June 30

2013

-5%

0%

12.7%

-3.6%

Returns – Premium SeriesFor the 12-month period ended December 31 and the six-monthperiod ended June 30, 201320%

10%

5%

-10%

15%

0%

-5%

Dec. 312012

June 302013

13.2%

-3.4%

Returns – Manager SeriesFor the 12-month period ended December 31 and the six-monthperiod ended June 30, 201320%

10%

5%

-10%

15%

0%

-5%

Dec. 312012

June 302013

14.0%

-3.3%

Returns – Institutional SeriesFor the 12-month period ended December 31 and the six-monthperiod ended June 30, 2013

14.7%

20%

10%

5%

-5%

15%

0%

Dec. 312012

June 302013

-2.8%


Sector MixPercentage

of NAV

Government Bonds 68.27%Energy 7.54%Financials 5.41%Industrials 0.89%Materials 0.77%Utilities 0.54%Telecommunication Services 0.40%Consumer Staples 0.07%Cash & Equivalents 16.11%Total 100.00%

5


Geographic MixPercentage

of NAV

Brazil 12.81%Mexico 11.55%Russia 10.41%Turkey 7.85%Indonesia 6.35%Poland 4.31%Venezuela 4.02%South Africa 3.98%Colombia 3.56%Malaysia 2.38%Peru 1.86%Thailand 1.72%Philippines 1.47%United States of America 1.16%Croatia 1.04%Uruguay 0.97%Panama 0.93%Lithuania 0.88%Kazakhstan 0.86%Chile 0.72%China 0.72%Serbia 0.64%Slovakia 0.48%Hungary 0.47%Romania 0.37%Ireland 0.35%Ukraine 0.30%El Salvador 0.28%Slovenia 0.23%Dominican Republic 0.21%Lebanon 0.21%Iraq 0.20%Namibia 0.13%Sri Lanka 0.12%United Kingdom 0.08%Vietnam 0.08%Costa Rica 0.07%Paraguay 0.07%Cyprus 0.05%Cash & Equivalents 16.11%Total 100.00%


of NAV

Brazil Notas do Tesouro Nacional Serie F, 10.00% 01/01/17 4.28%Russia Government International Bond, 7.50% 03/31/30 3.52%Nota do Tesouro Nacional, 10.00% 01/01/14 2.18%Russian Federal Bond, 7.40% 06/14/17 2.04%Indonesia Government International Bond, 5.88% 03/13/20 2.01%Mexican Fixed Rate Bond, 8.00% 12/07/23 1.74%Venezuela Government International Bond, 7.75% 10/13/19 1.59%Turkey Government Bond, 6.30% 02/14/18 1.35%Turkey Government International Bond, 5.63% 03/30/21 1.33%United Mexican States Bond, 5.13% 01/15/20 1.19%Mexico Government International Bond, 6.05% 01/11/40 1.17%South Africa Government International Bond, 5.50% 03/09/21 1.16%Colombia Government International Bond, 7.38% 01/27/17 1.09%Brazil Government International Bond, 6.00% 01/17/17 1.05%Mexico Government International Bond, 6.05% 01/11/40 0.91%Mexican Bonos, 8.00% 12/17/15 0.90%Thailand Government Bond, 3.65% 12/17/21 0.87%Sberbank of Russia Via SB Capital SA, 5.50% 07/07/15 0.85%United States Treasury Bond, 3.13% 02/15/43 0.85%Gazprom OAO Via Gaz Capital SA, 9.25% 04/23/19 0.80%Thailand Government Bond, 3.25% 06/16/17 0.78%Philippines Government International Bond, 4.00% 01/15/21 0.77%Republic of Indonesia, 4.88% 05/05/21 0.77%Brazil Government International Bond, 2.63% 01/05/23 0.76%Brazil Government International Bond, 2.63% 01/05/23 0.76%Total of Top 25 Holdings 34.72%


6





How to reach us



Toll-free: 1-800-830-8888Fax: 604-669-2756











(201

3-08

)RR

D

HSBC Monthly Income Fund




Management Discussion of Fund PerformanceIn this document, you and your refer to the unitholder of the Fund;we, us and our refer to HSBC Global Asset Management (Canada)Limited; and the Fund refers to the HSBC Monthly Income Fund.





Investment Objective and StrategiesThe fundamental investment objective of this Fund is to provide areasonably consistent level of monthly income while aiming topreserve capital over the medium to long term.

To achieve its objectives, the Fund invests primarily in a diversifiedportfolio of debt and equity instruments. The investment strategyis to position the Fund to maximize income and protect capitalwhile providing potential for long-term capital appreciation.

RiskThe risks of investing in the Fund remain as discussed in theSimplified Prospectus. During the period, there was no materialchange to the risk level of the Fund or to the Fund’s sensitivity tointerest rate changes, changes to the shape of the yield curve,credit risk, equity market risk or currency risk. The magnitude ofthe Fund’s active strategy positions remains consistent with itslong-term risk profile.

This Fund is suitable for investors who want to earn reasonablelevels of monthly income and who are seeking higher returnswhile preserving the value of their capital over the medium to longterm. Investors in this Fund should have a medium investmenttime horizon and a low to medium tolerance for risk in theirreturns.

Results of OperationsAs of June 30, 2013, the Fund’s net assets increased by 8.8% to$886.1 million from $814.7 million at the end of 2012. Of thisincrease, a $11.7 million gain was attributable to investmentperformance and $59.7 million was attributable to netcontributions to the Fund.

Investment PerformanceThe HSBC Monthly Income Fund (Investor Series) rose 1.30% forthe six months ending June 30, 2013, while its benchmarkdeclined 0.62% over the same period. The benchmark is aweighted composite consisting of the BMO Preferred 50 Index(10%), the S&P/TSX Composite Index (30%), the DEX Mid-TermBond Index (30%) and the DEX Short-Term Bond Index (30%).


This set the stage for US Federal Reserve Chairman Bernanke’scomments in June on the expected evolution of US monetarystimulus, which really “knocked the stuffing” out of the fixedincome market at the end of the quarter. The US central bank saidit plans to scale back its monthly quantitative easing assetpurchases later this year and would continue to reduce the pace,in measured steps, to end purchases around mid-2014, if itseconomic projections prove broadly correct.


The S&P/TSX Composite Index fell 0.88% in the first half of 2013,while preferred shares fell 0.76%. Canadian corporate bondsreturned �0.42% year-to-date, outperforming government bonds(�1.66%). Residential mortgages returned 1.56%. These mixedmarket returns resulted in a gain year-to-date for the Fund.

The Fund’s overweight position in common equities hurtperformance, while its overweight position in mortgages andsecurity selection within equities helped relative performanceduring the first half of the year.

1



In this environment we expect the Bank of Canada to remain onthe sidelines for the next few quarters, but that they will graduallymove away from emergency-type interest rates in mid-2014. TheFund has a neutral position in equities relative to fixed income.Valuations in equity markets are reasonably attractive compared tohistory and are supported by continued strong earnings growth.Equity investments will focus on high-dividend-paying preferredshares and common equities. Within fixed income, the Fundremains overweight the corporate bond sector and residentialmortgages. While credit has outperformed recently, valuationscontinue to look attractive by historical standards. However, weare cognizant that with economic momentum fragile andheightened risk aversion, sentiment can overshadowfundamentals and push markets in the opposite direction. In thisenvironment, the interest rate risk of the Fund will be maintainednear current levels.



Manager, Trustee and Investment AdvisorWe are the manager, trustee and primary investment advisor ofthe Fund. As manager, we manage the overall business and

operations of the Fund. As trustee, we hold legal title to theproperty of the Fund on your behalf. As primary investmentadvisor, we provide investment advice and portfolio managementservices to the Fund. We receive a fee from the Fund for theseservices based on assets under management, calculated daily andpaid monthly.


Fund on Fund InvestingDuring the period, the Fund invested in units of other HSBCMutual Funds, which are also managed by us. To proceed with thetransactions, the Fund relied on the positive recommendation ofthe Fund’s Independent Review Committee by way of StandingInstruction. A condition of this positive recommendation was thatthe transactions were performed in accordance with our policy onFund on Fund Investing.


Financial HighlightsThe following tables show selected key financial information aboutthe Fund and are intended to help you understand the Fund’sfinancial performance for the six-month period ended June 30,2013 and for the years ended December 31, as applicable. In theyear a fund is established, “period” represents the period frominception to December 31 or June 30 of that fiscal year, asapplicable. This information is derived from the Fund’s unauditedsemi-annual financial statements and audited annual financialstatements. The information in the following tables is based onprescribed regulations, and as a result, is not expected to add due

2


to the increase/decrease in net assets from operations beingbased on average units outstanding during the period and all othernumbers being based on actual units outstanding at the relevantpoint in time.

HSBC Monthly Income Fund – Investor SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2004

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:

Total revenue 0.16 0.33 0.33 0.38 0.51 0.61Total expenses (0.07) (0.14) (0.14) (0.13) (0.13) (0.14)Realized gains (losses) (0.04) (0.06) 0.01 0.07 (0.15) (0.28)Unrealized gains (losses) 0.06 0.40 (0.44) 0.45 1.01 (1.08)


from operations (1) $0.11 $0.53 $(0.24) $0.77 $1.24 $(0.89)

Distributions to

unitholders:

From income (excludingdividends) (0.12) (0.05) (0.10) (0.21) (0.21) (0.39)From dividends – (0.15) (0.10) (0.14) (0.10) (0.12)From net realized gainson investments – – – – – –From return of capital – (0.04) (0.14) (0.11) – –

Total annual

distributions (1,2) $(0.12) $(0.24) $(0.34) $(0.46) $(0.31) $(0.51)


period (1,7) $9.53 $9.53 $9.22 $9.70 $9.32 $8.31


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008

NAV (in 000s) (3,7) $386,426 $354,261 $324,219 $177,352 $82,544 $43,820Units outstanding(in 000s) (3) 40,500 37,149 35,128 18,272 8,840 5,255NAV per unit (3) $9.54 $9.54 $9.23 $9.72 $9.34 $8.34Management expense ratio(“MER”) (4) 1.47% 1.47% 1.49% 1.42% 1.46% 1.49%MER before absorbed orwaived fees (4) 1.47% 1.47% 1.49% 1.42% 1.46% 1.49%Portfolio turnover rate (5) 10.08% 18.29% 15.47% 10.59% 23.44% 21.09%Trading expense ratio (6) 0.01% 0.02% 0.04% 0.05% 0.09% 0.04%

HSBC Monthly Income Fund – Advisor SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2004

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:



from operations (1) $0.14 $0.55 $(0.25) $0.77 $0.51 $(0.94)

Distributions to

unitholders:

From income (excludingdividends) (0.12) (0.05) (0.10) (0.21) (0.21) (0.38)From dividends – (0.15) – (0.14) (0.10) (0.12)From net realized gainson investments – – (0.10) – – –From return of capital – (0.04) (0.14) (0.11) – –

Total annual

distributions (1,2) $(0.12) $(0.24) $(0.34) $(0.46) $(0.31) $(0.50)


period (1,7) $9.45 $9.44 $9.14 $9.62 $9.22 $8.23


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008

NAV (in 000s) (3,7) $253 $286 $280 $157 $145 $231Units outstanding(in 000s) (3) 27 30 31 16 16 28NAV per unit (3) $9.46 $9.45 $9.15 $9.64 $9.24 $8.25Management expense ratio(“MER”) (4) 1.47% 1.46% 1.48% 1.40% 1.47% 1.49%MER before absorbed orwaived fees (4) 1.47% 1.46% 1.48% 1.40% 1.47% 1.49%Portfolio turnover rate (5) 10.08% 18.29% 15.47% 10.59% 23.44% 21.09%Trading expense ratio (6) 0.01% 0.02% 0.04% 0.05% 0.09% 0.04%

3


HSBC Monthly Income Fund – Premium SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: April 2008

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:



from operations (1) $0.15 $0.61 $(0.22) $0.87 $1.06 $(1.03)

Distributions to

unitholders:


Total annual

distributions (1,2) $(0.15) $(0.30) $(0.40) $(0.53) $(0.37) $(0.47)


period (1,7) $9.84 $9.83 $9.51 $10.00 $9.61 $8.57


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008

NAV (in 000s) (3,7) $499,837 $460,952 $444,328 $231,992 $64,840 $1,361Units outstanding(in 000s) (3) 50,749 46,829 46,652 23,149 6,735 158NAV per unit (3) $9.85 $9.84 $9.52 $10.02 $9.63 $8.60Management expense ratio(“MER”) (4) 0.91% 0.91% 0.94% 0.88% 0.90% 0.98%MER before absorbed orwaived fees (4) 0.91% 0.91% 0.94% 0.88% 0.90% 0.98%Portfolio turnover rate (5) 10.08% 18.29% 15.47% 10.59% 23.44% 21.09%Trading expense ratio (6) 0.01% 0.02% 0.04% 0.05% 0.09% 0.04%

HSBC Monthly Income Fund – Manager SeriesPeriod ended June 30, 2013 (unaudited)and year ended December 31 Inception: September 2012

June 30

2013

Dec. 31

2012

Net assets per unit, beginning of period (1,7) $10.05 $10.00


Total revenue 0.18 0.10Total expenses (0.05) (0.02)Realized gains (losses) (0.03) 0.02Unrealized gains (losses) 0.02 0.05

Total increase (decrease) from operations (1) $0.12 $0.15


From income (excluding dividends) (0.15) (0.02)From dividends – (0.06)From net realized gains on investments – –From return of capital – (0.02)

Total annual distributions (1,2) $(0.15) $(0.10)

Net assets per unit, end of period (1,7) $10.06 $10.05


2013

Dec. 31

2012

NAV (in 000s) (3,7) $114 $83Units outstanding (in 000s) (3) 11 8NAV per unit (3) $10.06 $10.06Management expense ratio (“MER”) (4) 0.93% 0.89%MER before absorbed or waived fees (4) 0.93% 0.89%Portfolio turnover rate (5) 10.08% 18.29%Trading expense ratio (6) 0.01% 0.02%

HSBC Monthly Income Fund – Institutional SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2004

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:

Total revenue 0.15 0.30 0.30 0.36 0.32 0.55Total expenses – – (0.01) (0.01) (0.01) (0.01)Realized gains (losses) (0.02) (0.05) 0.01 0.06 (0.09) (0.27)Unrealized gains (losses) (0.41) 0.36 (0.28) 0.35 0.85 (1.02)


from operations (1) $(0.28) $0.61 $0.02 $0.76 $1.07 $(0.75)

Distributions to

unitholders:


Total annual

distributions (1,2) $(0.17) $(0.33) $(0.41) $(0.58) $(0.43) $(0.60)


period (1,7) $8.53 $8.52 $8.24 $8.66 $8.33 $7.50

4



2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008

NAV (in 000s) (3,7) $311 $8 $8 $5 $4 $4Units outstanding(in 000s) (3) 36 1 1 1 1 –1

NAV per unit (3) $8.53 $8.53 $8.25 $8.67 $8.35 $7.52Management expense ratio(“MER”) (4) 0.09% 0.02% 0.07% 0.01% 0.10% 0.09%MER before absorbed orwaived fees (4) 0.09% 0.02% 0.07% 0.01% 0.10% 0.09%Portfolio turnover rate (5) 10.08% 18.29% 15.47% 10.59% 23.44% 21.09%Trading expense ratio (6) 0.01% 0.02% 0.04% 0.05% 0.09% 0.04%






The Fund may invest in units of other mutual funds and pooled funds.You should note that in addition to the fees and expenses paid by theFund, these other funds have their own operating expenses to pay.The Fund will effectively bear the operating expenses of the otherfunds in proportion to its holdings in the other funds. However, theFund will not invest in units of other funds if the Fund would berequired to pay any management fees in respect of suchinvestments. In addition, the Fund will not make investments in otherfunds if the Fund would be required to pay any sales or redemptionfees in respect of such investments that duplicate a fee payable byunitholders of the Fund. Further, the Fund will not invest in units ofother funds if any sales or redemption fees are payable in respect ofsuch investments.



(7) Generally accepted accounting principles require that the calculation ofa Fund’s net asset value for financial reporting purposes (“net assets”)be based upon investments valued using closing bid prices. Aspermitted by securities regulations, the value of investments used todetermine the daily prices of the Fund’s units for purchase andredemption by clients (”NAV”) continues to be based upon the lastsale price or the midpoint between closing bid and asked quotations.





The following bar charts show the Fund’s performance for thesix month period ended June 30, 2013, and for each of the previous12-month periods ended December 31. In percentage terms, the

5


bar charts show how much an investment made on January 1would have grown or decreased by the end of the period.


15%

10%

5%

0%

-5%

-10%

-15%

6.6%4.3%

-1.4%

-9.8%

16.1%

7.9%6.0%

1.3%

-1.6%

Dec. 312005

Dec. 312006

Dec. 312007

Dec. 312008

Dec. 312009

Dec. 312010

Dec. 312011

June 302013

Dec. 312012


15%

10%

5%

0%

-5%

-10%

-15%

4.3%

-1.4%

-9.6%

16.2%

8.1%

-1.5%

Dec. 312006

Dec. 312007

Dec. 312008

Dec. 312009

Dec. 312010

Dec. 312011

June 302013

Dec. 312012

6.0%

1.3%


15%

10%

5%

0%

-5%

16.7%

8.5%6.6%

1.6%

-1.0%

Dec. 312009

Dec. 312010

Dec. 312011

June 302013

Dec. 312012

Returns – Manager SeriesFor the six-month period ended June 30, 201310%

0%

5%

June 302013

1.6%


20%

15%

10%

5%

0%

-5%

-10%

-15%

7.3% 5.7%

-0.1%

-8.6%

17.4%

9.4%7.5%

2.0%

-0.2%

Dec. 312005

Dec. 312006

Dec. 312007

Dec. 312008

Dec. 312009

Dec. 312010

Dec. 312011

June 302013

Dec. 312012


Asset MixPercentage

of NAV

Canadian Equities 34.68%Mutual Funds 31.73%Bonds 29.04%Cash & Equivalents 4.55%Total 100.00%

6



of NAV

Mutual Funds 31.73%Financials 30.62%Government Bonds 7.93%Energy 7.46%Industrials 3.84%Consumer Discretionary 3.46%Materials 3.43%Consumer Staples 2.23%Telecommunication Services 2.02%Asset Backed 1.34%Utilities 0.82%Information Technology 0.57%Cash & Equivalents 4.55%Total 100.00%


of NAV

HSBC Mortgage Fund – Institutional Series 28.31%Canada Housing Trust No 1, 1.75% 06/15/18 2.77%SPDR Lehman High Yield Bond ETF 2.64%Government of Canada, 5.75% 06/01/33 2.43%Toronto-Dominion Bank 2.09%Royal Bank of Canada 1.72%Government of Canada, 1.02% 09/26/13 1.69%Bank of Nova Scotia 1.64%TELUS Corp. 1.20%Government of Canada, 0.98% 07/18/13 1.19%Canadian National Railway Co. 1.18%Canada Housing Trust No. 1, 2.40% 12/15/22 1.09%Enbridge Inc. 1.08%Canadian Imperial Bank of Commerce 1.04%Viterra Inc., 6.41% 02/16/21 0.97%Cameco Corp., 5.67% 09/02/19 0.94%Bank of Montreal 0.91%Citigroup Finance Canada Inc., 6.75% 09/22/14 0.90%Intact Financial Corp., 5.41% 09/03/19 0.89%Empire Life Insurance, 6.73% 05/20/19 0.88%National Australia Bank Ltd., 4.19% 07/20/15 0.88%Commonwealth Bank of Australia, 5.15% 04/09/20 0.86%TransCanada Corp. 0.85%Toronto-Dominion Bank, 4.97% 10/30/04 0.84%BCE Inc. 0.82%Total of Top 25 Holdings 59.81%


7





How to reach us



Toll-free: 1-800-830-8888Fax: 604-669-2756











(201

3-08

)RR

D

HSBC U.S. DollarMonthly Income Fund



HSBC U.S. Dollar Monthly Income Fund

Management Discussion of Fund PerformanceIn this document, you and your refer to the unitholder of the Fund;we, us and our refer to HSBC Global Asset Management (Canada)Limited; and the Fund refers to the HSBC U.S. Dollar MonthlyIncome Fund.

We are the manager, trustee and primary investment advisor ofthe Fund. We have hired HSBC Global Asset Management (USA)Inc. and Federated Investment Counseling Inc. as the sub-advisorsto provide portfolio management and investment advisory servicesto the Fund. For an explanation of the relationship between us andthe sub-advisors, see the section Selection of Sub-Advisors in theFund’s Simplified Prospectus.




Investment Objective and StrategiesThe fundamental investment objective of this Fund is to provide areasonably consistent level of monthly income while aiming topreserve capital over the medium to long term.

To achieve its objectives, the Fund invests primarily in governmentand corporate bonds, mortgages, high-dividend-paying commonand preferred shares, income trust units and other high-yieldingsecurities denominated in US dollars. When investing in fixedincome securities, the Fund will invest primarily in investment-grade securities, and when investing in common shares the Fundwill invest primarily in high quality, stable companies with theability to grow dividends or distributable income over time andwhose securities generally have a higher yield than the overallmarket.

RiskThe risks of investing in the Fund remain as discussed in theProspectus. This Fund is suitable for investors seeking reasonablyconsistent levels of monthly income and higher returns while

wanting to preserve the value of their capital over the medium tolong term. Investors in this Fund should have a mediuminvestment time horizon and a low to medium tolerance for risk intheir returns.


Investment PerformanceThe HSBC U.S. Dollar Monthly Income Fund (Investor Series) rose1.54% for the six months ending June 30, 2013, while itsbenchmark rose 2.66% over the same period. The benchmark is acomposite consisting of 70% Merrill Lynch US Corporate, ARated, 1-10 Years (in US dollars) and 30% Dow Jones SelectDividend Index (in US dollars).

After a period of low volatility in 2012 and through the first quarterof 2013, fixed income market volatility rose dramatically in thesecond quarter of 2013. The 10-year US Treasury ended thequarter with a yield of 2.49% after hitting a low of 1.63% onMay 2nd. This was the result of increased market concern andsubsequent re-pricing around the potential for the Federal Reserve“tapering” its extraordinary quantitative easing policy, perhaps asearly as September. This was the main driver for negative returnson the fixed income portion of the Fund.

A rising yield environment is typically supportive of credit spreadstightening and riskier fixed income assets outperformingTreasuries. However, given the magnitude and short time frame inwhich rates moved higher, spreads actually moved wider andunderperformed during the aforementioned period of rising rates.For the semiannual period ending June 30th, corporate bondsbroadly managed to outperform US Treasury bonds. However, thisrelative outperformance was driven by financials that providedpositive excess returns in contrast to industrials that generallyunderperformed. The Fund produced positive returns across allsectors, with the highest returns in consumer staples(+19.0%) and healthcare (+18.4%).

Recent DevelopmentsEntering the second half of 2013, there are several issues that willmost likely continue to spur volatility in the markets. Globally, theInternational Monetary Fund has forecasted slower global growthfor 2013 and 2014 due to new risks emerging such as a slowdownin developing country economies, with the severity of China’sslowdown looming as a worry, and the ongoing concerns in theeurozone that may be worse than expected.

1


Domestically, equity markets continue to vacillate betweengenerally improving economic data and the US Federal Reservesending somewhat mixed messages about when it will tightenpolicy. Recent statements by Chairman Ben Bernanke havecaused a sizeable sell-off in US Treasuries on expectations that theFederal Reserve’s monthly purchase of $85 billion of Treasuriesand agency mortgage-backed securities purchases will be comingto an end over the next year or so. While the Federal Reservecontinues to firm its language around an organized dismantling ofquantitative easing, high quality, defensive dividend investmentsmay experience some near-term volatility as investors weigh thetapering of economic stimulus, and the inevitable rise in interestrates.

In this environment corporate bonds should perform relatively welland their spreads should be reasonably well supported. Corporatefundamentals remain healthy with balance sheets generally wellmanaged and default rates at well below historical averages.

The Fund’s risk profile remains generally stable. The Fundmaintains overweight in US financials, technology companies andthe auto sector relative to the benchmark. In particular, theportfolio maintains a significant underweight in consumer non-cyclical issuers. Duration remains close to that of the benchmark.The portfolio will continue to use periods of volatility in 2013 andweakness to opportunistically and incrementally add attractivelypriced issues to the portfolio.



Manager, Trustee and Investment AdvisorWe are the manager, trustee and primary investment advisor ofthe Fund. As manager, we manage the overall business andoperations of the Fund. As trustee, we hold legal title to theproperty of the Fund on your behalf. As primary investmentadvisor, we provide investment advice and portfolio managementservices to the Fund. We receive a fee from the Fund for theseservices based on assets under management, calculated daily andpaid monthly. We have entered into a sub-advisory agreement

with HSBC Global Asset Management (USA) Inc. (an affiliate),under which HSBC Global Asset Management (USA) Inc. providesinvestment advice and portfolio management services to theFund. We pay HSBC Global Asset Management (USA) Inc. a feefrom the Fund based on assets under management, calculateddaily and paid quarterly. For more information on our ability to hiresub-advisors, see the section Organization and Management ofthe HSBC Mutual Funds in the Fund’s Simplified Prospectus.




2


All figures are stated in US dollars.

HSBC U.S. Dollar Monthly Income Fund –Investor SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2010

June 30

2013

Dec. 31

2012

Dec. 31

2011*



Total revenue 0.17 0.36 0.36Total expenses (0.10) (0.19) (0.18)Realized gains (losses) 0.10 0.12 0.12Unrealized gains (losses) (0.02) 0.38 0.22

Total increase (decrease) from operations (1) $0.15 $0.67 $0.52


From income (excluding dividends) (0.09) – (0.16)From dividends – (0.18) –From net realized gains on investments – (0.04) (0.02)From return of capital – – (0.01)



* The Investor Series commenced operations on January 6, 2011.


2013

Dec. 31

2012

Dec. 31

2011*

NAV (in 000s) (3,7) $224,967 $207,829 $128,384Units outstanding (in 000s) (3) 20,639 19,195 12,408NAV per unit (3) $10.90 $10.83 $10.35Management expense ratio (“MER”) (4) 1.77% 1.79% 1.81%MER before absorbed or waived fees (4) 1.77% 1.79% 1.81%Portfolio turnover rate (5) 32.80% 64.56% 103.95%Trading expense ratio (6) 0.04% 0.06% 0.11%

* The Fund commenced operations on January 5, 2011.

HSBC U.S. Dollar Monthly Income Fund –Advisor SeriesPeriod ended June 30, 2013 (unaudited)and year ended December 31 Inception: December 2010

June 30

2013

Dec. 31

2012*



Total revenue 0.16 0.31Total expenses (0.09) (0.16)Realized gains (losses) 0.10 0.11Unrealized gains (losses) (0.12) 0.27



From income (excluding dividends) (0.09) –From dividends – (0.16)From net realized gains on investments – (0.03)



* The Advisor Series commenced operations on February 10, 2012.


2013

Dec. 31

2012


HSBC U.S. Dollar Monthly Income Fund –Premium SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2010

June 30

2013

Dec. 31

2012

Dec. 31

2011*



Total revenue 0.17 0.36 0.35Total expenses (0.08) (0.16) (0.15)Realized gains (losses) 0.10 0.13 0.12Unrealized gains (losses) (0.03) 0.36 0.19






* The Premium Series commenced operations on January 5, 2011.


2013

Dec. 31

2012

Dec. 31

2011

NAV (in 000s) (3,7) $678,624 $605,344 $300,692Units outstanding (in 000s) (3) 62,180 55,852 29,040NAV per unit (3) $10.91 $10.84 $10.35Management expense ratio (“MER”) (4) 1.43% 1.45% 1.48%MER before absorbed or waived fees (4) 1.43% 1.45% 1.48%Portfolio turnover rate (5) 32.80% 64.56% 103.95%Trading expense ratio (6) 0.04% 0.06% 0.11%

3


HSBC U.S. Dollar Monthly Income Fund –Manager SeriesPeriod ended June 30, 2013 (unaudited)and year ended December 31 Inception: December 2010

June 30

2013

Dec. 31

2012*



Total revenue 0.16 0.28Total expenses (0.06) (0.11)Realized gains (losses) 0.09 0.11Unrealized gains (losses) – 0.23



From income (excluding dividends) (0.11) –From dividends – (0.18)From net realized gains on investments – (0.05)



* The Manager Series commenced operations on March 1, 2012.


2013

Dec. 31

2012


HSBC U.S. Dollar Monthly Income Fund –Institutional SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2010

June 30

2013

Dec. 31

2012

Dec. 31

2011*



Total revenue 0.17 0.36 0.22Total expenses – (0.01) (0.01)Realized gains (losses) 0.10 0.11 0.07Unrealized gains (losses) (0.04) 0.37 0.38






* The Institutional Series commenced operations on February 7, 2011.


2013

Dec. 31

2012

Dec. 31

2011

NAV (in 000s) (3,7) $6,154 $7,500 $3,875Units outstanding (in 000s) (3) 556 683 371NAV per unit (3) $11.06 $10.98 $10.44Management expense ratio (“MER”) (4) 0.06% 0.07% 0.10%MER before absorbed or waived fees (4) 0.06% 0.07% 0.10%Portfolio turnover rate (5) 32.80% 64.56% 103.95%Trading expense ratio (6) 0.04% 0.06% 0.11%





The Fund may invest in units of other mutual funds and pooled funds.You should note that in addition to the fees and expenses paid by theFund, these other funds have their own operating expenses to pay.The Fund will effectively bear the operating expenses of the otherfunds in proportion to its holdings in the other funds. However, theFund will not invest in units of other funds if the Fund would berequired to pay any management fees in respect of such investments.In addition, the Fund will not make investments in other funds if theFund would be required to pay any sales or redemption fees in respectof such investments that duplicate a fee payable by unitholders of theFund. Further, the Fund will not invest in units of other funds if anysales or redemption fees are payable in respect of such investments.



4







The following bar charts show the Fund’s performance for thesix-month period ended June 30, 2013, and for the previous 12-month period ended December 31. In percentage terms, the barcharts show how much an investment made on January 1 wouldhave grown or decreased by the end of the period.

Returns – Investor SeriesFor the 12-month period ended December 31 and the six-monthperiod ended June 30, 201315%

10%

0%

5%

2012Dec. 31

2013June 30

6.8%

1.5%

Returns – Advisor SeriesFor the six-month period ended June 30, 201310%

0%

5%

June 302013

1.5%

Returns – Premium SeriesFor the 12-month period ended December 31 and the six-monthperiod ended June 30, 201315%

10%

0%

5%

Dec. 312012

June 302013

7.2%

1.7%

5


Returns – Manager SeriesFor the six-month period ended June 30, 201310%

0%

5%

June 302013

1.8%

Returns – Institutional SeriesFor the 12-month period ended December 31 and the six-monthperiod ended June 30, 201315%

10%

0%

5%

Dec. 312012

June 302013

8.7%

2.4%


Asset MixPercentage

of NAV

Bonds 65.52%US Equities 22.82%International Equities 9.56%Mutual Funds 1.08%Cash & Equivalents 1.02%Total 100.00%


of NAV

Financials 40.21%Consumer Staples 10.22%Utilities 9.80%Energy 8.87%Telecommunication Services 7.91%Healthcare 7.14%Consumer Discretionary 5.09%Industrials 2.77%Information Technology 2.07%Government Bonds 1.98%Materials 1.84%Mutual Funds 1.08%Cash & Equivalents 1.02%Total 100.00%


of NAV

AT&T Inc. 1.55%ConocoPhillips 1.50%Kraft Foods Group Inc. 1.45%Verizon Communications Inc. 1.38%Vodafone Group PLC 1.36%Altria Group Inc. 1.33%GlaxoSmithKline PLC 1.32%AstraZeneca PLC 1.31%Royal Dutch Shell PLC, Class B 1.31%Duke Energy Corp. 1.27%Reynolds American Inc. 1.26%National Grid PLC 1.22%Merck & Co., Ltd. 1.20%Johnson & Johnson 1.17%PPL Corp. 1.09%Scottish & Southern Energy PLC 1.09%Rio Tinto Finance USA PLC, 1.63% 08/21/17 1.08%SPDR Lehman High Yield Bond ETF 1.08%McDonald’s Corp. 1.03%Bank of America Corp., 2.00% 01/11/18 1.01%Southern Co. 1.00%Abbvie Inc. 0.98%Goldman Sachs Group Inc., 3.63% 02/07/16 0.92%Total SA 0.86%Morgan Stanley, 2.13% 04/25/18 0.84%Total of Top 25 Holdings 29.61%


6





How to reach us



Toll-free: 1-800-830-8888Fax: 604-669-2756











(201

3-08

)RR

D

HSBC Canadian Balanced Fund




Management Discussion of Fund PerformanceIn this document, you and your refer to the unitholder of the Fund;we, us and our refer to HSBC Global Asset Management (Canada)Limited; and the Fund refers to the HSBC Canadian BalancedFund.

We are the manager, trustee and primary investment advisor ofthe Fund. We have entered into a sub-advisory agreement withHSBC Global Asset Management (France), under which HSBCGlobal Asset Management (France) provides investment adviceand portfolio management services to the foreign equity portion ofthe Fund. For an explanation of the relationship between us andthe sub-advisor, see the section Selection of Sub-Advisors in theFund’s Simplified Prospectus.




Investment Objective and StrategiesThe fundamental investment objective of this Fund is to provide abalance between income and long-term capital growth.

To achieve its objectives, the Fund invests primarily in Canadianequities, bonds, mortgage-backed securities and money marketsecurities. A portion of the Fund may also be invested in non-Canadian equities and fixed income securities of issuers. Wheninvesting in fixed income securities, the Fund will invest primarilyin investment-grade securities, and when investing in Canadianequities the Fund will invest primarily in companies listed on theToronto Stock Exchange.

RiskThe risks of investing in the Fund remain as discussed in theSimplified Prospectus. This Fund is suitable for investors whowant to earn income and grow their capital. Investors in this Fundshould have a medium-term investment time horizon and a low tomedium tolerance for risk.

Results of OperationsAs of June 30, 2013, the Fund’s net assets increased by 4.8% to$440.0 million from $420.0 million at the end of 2012. Of thisincrease, a $15.6 million gain was attributable to investmentperformance and $4.4 million was attributable to net contributionsto the Fund.

Investment PerformanceThe HSBC Canadian Balanced Fund (Investor Series) rose 3.50%for the six months ending June 30, 2013 compared to thebenchmark, which rose 2.71% over the same period. Thebenchmark is a weighted composite consisting of the S&P/TSXComposite Index (35%), the DEX Universe Bond Index (35%), theMSCI World Index (in Canadian dollars) (25%) and the DEX 91-DayT-Bill Index (5%).

During the first half of 2013, the MSCI World Index (in Canadiandollars) rose 14.9%. The US market continued to lead the pushhigher with gains of 20.3% year-to-date. The Canadian marketcontinues to lag with a decline of �0.9% year-to-date as reducedexpectations for growth in emerging economies, particularlyChina, continue to weigh on commodity prices. The best-performing sectors in the first half of 2013 were healthcare(+36%), consumer discretionary (+21%), and informationtechnology (+20%), while materials declined significantly (�32%).

The Fund provided a positive return and exceeded its benchmark inthe first half of 2013. The Fund benefited from the underweight tomaterials as well as the overweight to the information technologyand industrials sectors. The underweight to the healthcare sectorhurt relative performance. In terms of security selection, consumerand materials names added positively to results while selectionwithin the financials and industrials sectors were modestly negative.The portfolio remains well diversified across cyclical and defensivesectors. Equity market valuations remain very reasonable byhistorical standards and compared to bond markets.

Recent DevelopmentsThe first half of 2013 was broadly positive for equity markets asthe global economy continued to slowly expand. Equity marketgains were substantially tempered in the latter part of the secondquarter following comments from US Federal Reserve ChairmanBen Bernanke that the ongoing pace of bond purchases maymoderate should economic conditions in the world’s largesteconomy continue to improve. The market reaction was overdone,in our opinion, as we expect the eventual slowdown andunwinding of monetary stimulus to be gradual and consistent withprevailing economic conditions. Thus far in the third quarter, themarket seems to be more in line with this view and markets havestabilized. Global growth continues to be positive, but it is modestand consensus expectations are moving lower as the year unfolds.The Canadian economy advanced by 2.5% in the first quarter, ledby a strong gain in exports despite a disappointing contribution

1


from domestic consumption. This gain in growth followed twoquarters of growth below 1%. We expect the domestic economyto expand by approximately 1.6% in 2013, while globally weexpect growth of 2.0%. The Bank of Canada rate has held steadyat 1% since the fall of 2010 and will likely remain there for at leastfour more quarters.

S&P/TSX earnings growth averaged approximately 16% in 2010and 2011. 2012 earnings growth declined primarily due toweakness in commodity prices. In 2013 we expect a resumptionof positive earnings growth in the 5-10% range that would besupportive of the market.



Manager, Trustee and Investment AdvisorWe are the manager, trustee and primary investment advisor of theFund. As manager, we manage the overall business and operationsof the Fund. As trustee, we hold legal title to the property of theFund on your behalf. As primary investment advisor, we provideinvestment advice and portfolio management services to the Fund.We receive a fee from the Fund for these services based on assetsunder management, calculated daily and paid monthly. We haveentered into a sub-advisory agreement with HSBC Global AssetManagement (France) (an affiliate), under which HSBC Global AssetManagement (France) provides investment advice and portfoliomanagement services for the foreign equity portion of the Fund. Wepay HSBC Global Asset Management (France) a fee from the Fundbased on assets under management, calculated daily and paidquarterly. For more information on our ability to hire sub-advisors,see the section Organization and Management of the HSBC MutualFunds in the Fund’s Simplified Prospectus.

Distribution ServicesThe Fund is distributed through us, HSBC Investment Funds(Canada) Inc. (our wholly owned subsidiary) and through HSBCSecurities (Canada) Inc. (an affiliate) directly or through its division,HSBC InvestDirect. We pay distribution and servicing fees to thembased on the amount of assets held in the investor’s account, and

additionally, in some cases, on the amount of the initial purchase.If you hold units of this Fund and/or other HSBC Mutual Funds in aregistered plan with HSBC Investment Funds (Canada) Inc., theymay charge you an annual fee to cover the annual administrationcosts of the plan. We permit HSBC Investment Funds (Canada)Inc. to collect these fees by redeeming sufficient units of the Fundwith the highest market value in your registered plan.




2


HSBC Canadian Balanced Fund – Investor SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: January 1989

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:

Total revenue 0.27 0.62 0.40 0.70 0.78 0.81Total expenses (0.22) (0.43) (0.43) (0.41) (0.37) (0.41)Realized gains (losses) 0.84 0.35 0.25 0.64 0.01 (0.55)Unrealized gains (losses) (0.11) 0.85 (0.99) 0.53 1.88 (3.32)


from operations (1) $0.78 $1.39 $(0.77) $1.46 $2.30 $(3.47)


From income (excludingdividends) – – (0.03) (0.20) (0.25) (0.36)From dividends (0.09) (0.27) (0.18) (0.15) (0.16) (0.16)From net realized gains oninvestments – – – – – –

Total annual

distributions (1,2) $(0.09) $(0.27) $(0.21) $(0.35) $(0.41) $(0.52)


period (1,7) $22.43 $21.75 $20.62 $21.60 $20.48 $18.58


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008


HSBC Canadian Balanced Fund – Advisor SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2001

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:

Total revenue 0.14 0.33 0.21 0.36 0.37 0.43Total expenses (0.11) (0.22) (0.22) (0.21) (0.18) (0.22)Realized gains (losses) 0.43 0.33 0.13 0.33 – (0.17)Unrealized gains (losses) (0.06) (0.19) (0.14) 0.47 0.94 (2.37)


from operations (1) $0.40 $0.25 $(0.02) $0.95 $1.13 $(2.33)



Total annual

distributions (1,2) $(0.05) $(0.14) $(0.11) $(0.19) $(0.15) $(0.28)


period (1,7) $11.64 $11.29 $10.69 $11.20 $10.64 $10.05


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




3


HSBC Canadian Balanced Fund – Premium SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2009

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Net assets per unit, beginning of period (1,7) $10.82 $10.25 $10.72 $10.00


Total revenue 0.14 0.31 0.20 0.20Total expenses (0.08) (0.16) (0.16) (0.09)Realized gains (losses) 0.37 0.18 0.12 0.19Unrealized gains (losses) (0.15) (0.40) (0.68) 0.68

Total increase (decrease) from operations (1) $0.28 $0.73 $(0.52) $0.98


From income (excluding dividends) – – (0.02) (0.08)From dividends (0.07) (0.19) (0.12) (0.06)From net realized gains on investments – – – –

Total annual distributions (1,2) $(0.07) $(0.19) $(0.14) $(0.14)

Net assets per unit, end of period (1,7) $11.16 $10.82 $10.25 $10.72


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

NAV (in 000s) (3,7) $20,667 $10,209 $8,141 $3,124Units outstanding (in 000s) (3) 1,851 942 793 291NAV per unit (3) $11.17 $10.83 $10.27 $10.74Management expense ratio (“MER”) (4) 1.49% 1.49% 1.48% 1.51%MER before absorbed or waived fees (4) 1.49% 1.49% 1.48% 1.51%Portfolio turnover rate (5) 51.28% 55.41% 56.26% 74.65%Trading expense ratio (6) 0.14% 0.07% 0.06% 0.06%

HSBC Canadian Balanced Fund – Manager SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2001

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008

Net assets per unit, beginning

of period (1,7) $11.95 $11.33 $11.85 $11.23 $10.19 $12.24


operations:



operations (1) $0.50 $0.90 $(0.20) $1.13 $1.53 $(1.91)





period (1,7) $12.33 $11.95 $11.33 $11.85 $11.23 $10.19


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008


HSBC Canadian Balanced Fund – Institutional SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2001

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:



from operations (1) $0.54 $1.01 $(0.20) $1.04 $1.48 $(1.70)



Total annual

distributions (1,2) $(0.17) $(0.38) $(0.32) $(0.40) $(0.43) $(0.28)


period (1,7) $12.41 $12.04 $11.41 $11.93 $11.30 $10.26


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




4












Returns – Investor SeriesFor the 12-month periods ended December 31 and the six-monthperiod ended June 30, 2013

40%

30%

20%

10%

0%

-10%

-20%

-30%Dec. 31

2003Dec. 31

2004Dec. 31

2005Dec. 31

2006Dec. 31

2007Dec. 31

2008Dec. 31

2009Dec. 31

2010Dec. 31

2011

9.1%5.8%

11.9% 11.3%

1.0%

-15.5%

12.5%7.2% 6.8%

3.5%

-3.6%

June 302013

Dec. 312012

Returns – Advisor SeriesFor the 12-month periods ended December 31 and the six-monthperiod ended June 30, 2013

40%

30%

20%

10%

0%

-10%

-20%

-30%Dec. 31

2003Dec. 31

2004Dec. 31

2005Dec. 31

2006Dec. 31

2007Dec. 31

2008Dec. 312009*

Dec. 312010

Dec. 312011

June 302013

Dec. 312012

9.0% 5.8%11.9% 11.2%

1.0%

-15.6%

0.0%7.2% 6.9%

3.5%

-3.6%

* There were no unitholders from May to July 3, 2009.

5


Returns – Premium SeriesFor the 12-month periods ended December 31 and the six-monthperiod ended June 30, 2013

40%

30%

20%

10%

0%

-10%

-20%

-30%Dec. 31

2011

-3.1%

2012

7.4%3.8%

Dec. 312013

June 30

Returns – Manager SeriesFor the 12-month periods ended December 31 and the six-monthperiod ended June 30, 2013

40%

30%

20%

10%

0%

-10%

-30%

-40%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2013

-20%

10.2% 6.9%13.1% 12.4%

2.0%

-14.6%

13.7%8.4% 8.1%

4.1%

-2.5%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 June 302012

Dec. 31


40%

30%

20%

10%

0%

-10%

-30%

-40%

2005 2006 2007 2008 2009 2010 2011 2013

-20%

14.0% 13.3%

2.9%

-14.0%

14.6%9.3% 8.9%

4.5%

-1.7%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 June 302012

Dec. 31



Asset MixPercentage

of NAV

Canadian Equities 34.31%Mutual Funds 31.13%Bonds 30.54%Cash & Equivalents 4.02%Total 100.00%


of NAV

HSBC Global Equity Fund – Institutional Series 27.08%Government of Canada, 0.99% 08/29/13 2.76%Toronto-Dominion Bank 2.68%Royal Bank of Canada 2.49%HSBC Small Cap Growth Fund – Institutional Series 2.34%Bank of Nova Scotia 2.06%Government of Canada, 5.75% 06/01/33 2.06%Canada Housing Trust No 1, 1.75% 06/15/18 1.63%Suncor Energy Inc. 1.62%Canadian National Railway Co. 1.56%Province of British Columbia, 5.70% 06/18/29 1.50%Province of Ontario Generic Coupon Strip, 12/02/22 1.46%Magna International Inc. 1.34%Potash Corp. of Saskatchewan Inc. 1.32%CGI Group Inc. 1.19%Province of Ontario Generic Coupon Strip, 12/02/20 1.19%Canadian Natural Resources Ltd. 1.18%Enbridge Inc. 1.18%Province of Ontario, 5.60% 06/02/35 1.14%TELUS Corp. 1.14%Business Development Bank of Canada, 4.75% 07/26/21 1.10%Canadian Imperial Bank of Commerce 1.08%Toronto-Dominion Bank, 4.97% 10/30/04 1.01%HSBC Emerging Markets Fund – Institutional Series 0.92%TransCanada Corp. 0.90%Total of Top 25 Holdings 63.93%

6





How to reach us



Toll-free: 1-800-830-8888Fax: 604-669-2756











(201

3-08

)RR

D

HSBC Dividend Fund(Formerly the HSBC Dividend Income Fund)



HSBC Dividend Fund (formerly the HSBC Dividend Income Fund)

Management Discussion of Fund PerformanceIn this document, you and your refer to the unitholder of the Fund;we, us and our refer to HSBC Global Asset Management (Canada)Limited; and the Fund refers to the HSBC Dividend Fund, formerlythe HSBC Dividend Income Fund.





Investment Objective and StrategiesThe fundamental investment objective of this Fund is to providedividend income and medium- to long-term capital growth.

To achieve its objectives, the Fund invests primarily in a diversifiedportfolio of Canadian common equities, preferred equities, incometrust units and fixed income securities. When investing in fixedincome securities, the Fund will invest primarily in investment-grade securities, and when investing in common shares the Fundwill invest primarily in high-dividend-paying companies listed onthe Toronto Stock Exchange.

RiskThe risks of investing in this Fund remain as discussed in theSimplified Prospectus. This Fund is suitable for investors whowant to earn income in the form of dividends and grow theircapital. Investors in this Fund should have a medium-terminvestment time horizon and a medium tolerance for risk in theirreturns.

Results of OperationsAs of June 30, 2013, the Fund’s net assets increased 3.6% to$575.2 million from $555.0 million at the end of 2012. Of thisincrease, a $20.0 million gain was attributable to investmentperformance and $0.2 million was attributable to net contributionsto the Fund.

Investment PerformanceThe HSBC Dividend Fund (Investor Series) rose 3.51% for the sixmonths ending June 30, 2013 compared to the benchmark, theS&P/TSX Composite Index, which declined 0.88% over the sameperiod.

During the first half of 2013, the MSCI World Index (in Canadiandollars) rose 14.9%. The US market continued to lead the pushhigher with gains of 20.3% year-to-date. The Canadian marketcontinues to lag with a decline of �0.9% year-to-date as reducedexpectations for growth in emerging economies, particularlyChina, continue to weigh on commodity prices. The best-performing sectors in the first half of 2013 were healthcare(+36%), consumer discretionary (+21%), and informationtechnology (+20%), while materials declined significantly (�32%).

The Fund provided a positive return and exceeded its benchmarkin the first half of 2013. The Fund benefited from the underweightto materials as well as the overweight to the informationtechnology and industrials sectors. The underweight to thehealthcare sector hurt relative performance. In terms of securityselection, consumer and materials names added positively toresults while selection within the financials and industrials sectorswas modestly negative. The portfolio remains well diversifiedacross cyclical and defensive sectors. Equity market valuationsremain very reasonable by historical standards and compared tobond markets.

Recent DevelopmentsThe first half of 2013 was broadly positive for equity markets asthe global economy continued to slowly expand. Equity marketgains were substantially tempered in the latter part of the secondquarter following comments from US Federal Reserve ChairmanBen Bernanke that the ongoing pace of bond purchases maymoderate should economic conditions in the world’s largesteconomy continue to improve. The market reaction was overdone,in our opinion, as we expect the eventual slowdown andunwinding of monetary stimulus to be gradual and consistent withprevailing economic conditions. Thus far in the third quarter, themarket seems to be more in line with this view and markets havestabilized. Global growth continues to be positive, but it is modestand consensus expectations are moving lower as the year unfolds.The Canadian economy advanced by 2.5% in the first quarter, ledby a strong gain in exports despite a disappointing contributionfrom domestic consumption. This gain in growth followed twoquarters of growth below 1%. We expect the domestic economyto expand by approximately 1.6% in 2013, while globally weexpect growth of 2.0%. The Bank of Canada rate has held steadyat 1% since the fall of 2010 and will likely remain there for at leastfour more quarters.

S&P/TSX earnings growth averaged approximately 16% in 2010and 2011. 2012 earnings growth declined primarily due to

1


weakness in commodity prices. In 2013 we expect a resumptionof positive earnings growth in the 5-10% range that would besupportive of the market.







HSBC Dividend Fund – Investor SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: January 1995

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008


of period (1,7) $28.06 $25.94 $28.09 $25.55 $20.07 $30.27


operations:

Total revenue 0.48 0.83 0.79 0.82 0.86 0.98Total expenses (0.29) (0.55) (0.55) (0.51) (0.43) (0.52)Realized gains (losses) (0.03) 0.05 0.34 0.87 (1.20) 0.96Unrealized gains (losses) 0.84 1.85 (2.77) 1.43 6.38 (10.45)


operations (1) $1.00 $2.18 $(2.19) $2.61 $5.61 $(9.03)


From income (excludingdividends) – – – – – –From dividends (0.16) (0.08) – (0.06) (0.15) (0.13)From net realized gains oninvestments – – (0.07) – – (0.95)



period (1,7) $28.89 $28.06 $25.94 $28.09 $25.55 $20.07


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008

NAV (in 000s) (3,7) $482,258 $479,653 $477,621 $511,862 $448,944 $342,353Units outstanding (in 000s) (3) 16,682 17,079 18,394 18,195 17,529 16,999NAV per unit (3) $28.91 $28.08 $25.97 $28.13 $25.61 $20.14Management expense ratio(“MER”) (4) 2.00% 2.02% 2.01% 1.95% 1.91% 1.91%MER before absorbed or waivedfees (4) 2.00% 2.02% 2.01% 1.95% 1.91% 1.91%Portfolio turnover rate (5) 6.02% 18.23% 12.99% 23.98% 32.48% 26.00%Trading expense ratio (6) 0.03% 0.04% 0.04% 0.06% 0.10% 0.05%

2


HSBC Dividend Fund – Advisor SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2001

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:

Total revenue 0.24 0.42 0.39 0.41 0.43 0.49Total expenses (0.14) (0.27) (0.27) 0.25 (0.22) (0.26)Realized gains (losses) (0.02) 0.01 0.17 0.44 (0.60) 0.55Unrealized gains (losses) 0.44 1.15 (1.30) 0.70 2.90 (5.22)


from operations (1) $0.52 $1.31 $(1.01) $1.30 $2.51 $(4.44)

Distributions to

unitholders:

From income (excludingdividends) – – – – – –From dividends (0.08) (0.05) – 0.06 (0.08) (0.07)From net realized gainson investments – – (0.04) – – (0.52)

Total annual

distributions (1,2) $(0.08) $(0.05) $(0.04) $(0.06) $(0.08) $(0.59)


period (1,7) $14.41 $14.00 $12.94 $14.01 $12.77 $10.04


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008


HSBC Dividend Fund – Premium SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2009

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010



Total revenue 0.19 0.33 0.31 0.19Total expenses (0.08) (0.16) (0.16) (0.09)Realized gains (losses) – 0.02 0.13 0.21Unrealized gains (losses) 0.28 0.71 (1.48) 1.11



From income (excluding dividends) – – – –From dividends (0.10) (0.09) – (0.06)From net realized gains on investments – – (0.06) –

Total annual distributions (1,2) $(0.10) $(0.09) $(0.06) $(0.06)



2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

NAV (in 000s) (3,7) $53,393 $46,851 $48,595 $16,240Units outstanding (in 000s) (3) 4,628 4,180 4,689 1,450NAV per unit (3) $11.54 $11.21 $10.36 $11.20Management expense ratio (“MER”) (4) 1.44% 1.46% 1.46% 1.43%MER before absorbed or waived fees (4) 1.44% 1.46% 1.46% 1.43%Portfolio turnover rate (5) 6.02% 18.23% 12.99% 23.98%Trading expense ratio (6) 0.03% 0.04% 0.04% 0.06%

HSBC Dividend Fund – Manager SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2001

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:

Total revenue 0.25 0.44 0.41 0.42 0.44 0.51Total expenses (0.07) (0.13) (0.13) (0.12) (0.10) (0.12)Realized gains (losses) (0.04) 0.03 0.18 0.45 (0.62) 0.49Unrealized gains (losses) 0.67 1.03 (1.14) 0.78 3.53 (5.25)


from operations (1) $0.81 $1.37 $(0.68) $1.53 $3.25 $(4.37)

Distributions to

unitholders:

From income (excludingdividends) – – – – – –From dividends (0.17) (0.20) – (0.06) (0.20) (0.07)From net realized gainson investments – – (0.11) – – (0.49)

Total annual

distributions (1,2) $(0.17) $(0.20) $(0.11) $(0.06) $(0.20) $(0.56)


period (1,7) $15.13 $14.70 $13.59 $14.64 $13.20 $10.37

3



2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008


HSBC Dividend Fund – Institutional SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2001

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008


of period (1,7) $11.29 $10.44 $11.20 $10.03 $7.88 $11.66


operations:

Total revenue 0.20 0.34 0.32 0.32 0.34 0.38Total expenses – (0.01) (0.01) 0.01 (0.01) (0.01)Realized gains (losses) – 0.03 0.13 0.35 (0.47) 0.31Unrealized gains (losses) 0.23 0.72 (1.16) 0.70 2.55 (3.97)


operations (1) $0.43 $1.08 $(0.72) $1.36 $2.41 $(3.29)


From income (excludingdividends) – – – – – –From dividends (0.17) (0.25) – 0.06 (0.23) (0.05)From net realized gains oninvestments – – (0.13) – – (0.37)

Total annual

distributions (1,2) $(0.17) $(0.25) $(0.13) $(0.06) $(0.23) $(0.42)


period (1,7) $11.63 $11.29 $10.44 $11.20 $10.03 $7.88


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008

NAV (in 000s) (3,7) $39,335 $28,395 $22,274 $18,148 $8,408 $6,389Units outstanding (in 000s) (3) 3,380 2,512 2,131 1,618 836 808NAV per unit (3) $11.64 $11.30 $10.45 $11.22 $10.05 $7.91Management expense ratio(“MER”) (4) 0.07% 0.07% 0.06% 0.06% 0.07% 0.07%MER before absorbed or waivedfees (4) 0.07% 0.07% 0.06% 0.06% 0.07% 0.07%Portfolio turnover rate (5) 6.02% 18.23% 12.99% 23.98% 32.48% 26.00%Trading expense ratio (6) 0.03% 0.04% 0.04% 0.06% 0.10% 0.05%








Management FeesFor the six months ended June 30, 2013, the Fund paid usmanagement fees of $4,550,409. The management fee for eachseries is calculated as a percentage of the daily net asset valuefor that series. The fees are reduced, where required, so thatthese fees do not duplicate fees payable by mutual funds inwhich the Fund invests for the same service.


4






40%

30%

20%

10%

0%

-10%

-20%

-40%Dec. 31

2003Dec. 31

2004Dec. 31

2005Dec. 31

2006Dec. 31

2007Dec. 31

2008Dec. 31

2009Dec. 31

2010June 30

2013Dec. 31

2011

-30%

17.3%12.8%

17.2%10.4%

1.4%

-29.9%

28.1%

10.1% 8.5%3.5%

-7.5%

Dec. 312012


40%

30%

20%

10%

0%

-10%

-20%

-40%

-30%

17.3%12.8%

17.2%10.4%

1.4%

-29.9%

28.1%

10.1%

2003Dec. 31

-7.4%

2004Dec. 31

2005Dec. 31

2006Dec. 31

2007Dec. 31

2008Dec. 31

2009Dec. 31

2010Dec. 31

2011Dec. 31

2013June 30

2012Dec. 31

8.5%3.5%

Returns – Premium SeriesFor the 12-month periods ended December 31 and the six-monthperiod ended June 30, 2013

40%

30%

20%

10%

0%

-10%

-20%

-40%Dec. 31

2011

-30%

-6.9%

9.1%3.8%

Dec. 312012

June 302013

Returns – Manager SeriesFor the 12-month periods ended December 31 and the six-monthperiod ended June 30, 2013

40%

30%

20%

10%

0%

-10%

-20%

-40%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2013

-30%

18.6%14.0%

18.4%11.6%

2.5%

-29.1%

29.4%

9.7%4.1%

11.3%

-6.4%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 June 302012

Dec. 31


40%

30%

20%

10%

0%

-10%

-20%

-40%

2006 2007 2008 2009 2010 2011 2013

-30%

12.4%3.3%

-28.6%

30.4%

12.2% 10.6%4.5%

-5.7%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 June 302012

Dec. 31

5



Asset MixPercentage

of NAV

Canadian Equities 92.06%Mutual Funds 3.05%Cash & Equivalents 4.89%Total 100.00%


of NAV

Financials 38.89%Energy 18.62%Industrials 10.11%Consumer Discretionary 8.42%Telecommunication Services 5.90%Materials 5.54%Mutual Funds 3.05%Consumer Staples 2.85%Information Technology 1.65%Utilities 0.08%Cash & Equivalents 4.89%Total 100.00%


of NAV

Toronto-Dominion Bank 7.23%Royal Bank of Canada 6.83%Bank of Nova Scotia 5.70%Canadian National Railway Co. 4.52%Magna International Inc. 3.69%Suncor Energy Inc. 3.64%Enbridge Inc. 3.42%TELUS Corp. 3.21%Canadian Imperial Bank of Commerce 3.18%Canadian Natural Resources Ltd. 3.05%HSBC Mortgage Fund – Institutional Series 2.97%Bank of Montreal 2.87%BCE Inc. 2.68%TransCanada Corp. 2.64%Manulife Financial Corp. 2.26%Government of Canada, 1.02% 09/26/13 2.06%Dollarama Inc. 1.99%Bombardier Inc. 1.86%SNC-Lavalin Group Inc. 1.85%Finning International Inc. 1.77%Alimentation Couche-Tard Inc., Class B 1.72%Cenovus Energy Inc. 1.65%CGI Group Inc. 1.65%Potash Corp. of Saskatchewan Inc. 1.50%Intact Financial Corp. 1.44%Total of Top 25 Holdings 75.38%


6


You can find more information about HSBC Mutual Fundsin the Fund’s Simplified Prospectus, Annual InformationForm and Fund Facts. You can get a copy of thesedocuments, as well as the Fund’s Financial Statements,at no cost by calling 1-800-830-8888, by contacting yourauthorized dealer or by visiting our website atwww.hsbc.ca./investment-resources.



How to reach us



Toll-free: 1-800-830-8888Fax: 604-669-2756











(201

3-08

)RR

D

HSBC Equity Fund



HSBC Equity Fund

Management Discussion of Fund PerformanceIn this document, you and your refer to the unitholder of the Fund;we, us and our refer to HSBC Global Asset Management (Canada)Limited; and the Fund refers to the HSBC Equity Fund.





Investment Objective and StrategiesThe fundamental investment objective of this Fund is to achievelong-term capital growth.

To achieve its objectives, the Fund invests primarily in publiclytraded common shares, preferred shares, rights, special warrantsand convertible securities. A portion of the Fund may be in theform of cash or cash equivalents. When investing in commonshares the Fund will invest primarily in large cap companies listedon the Toronto Stock Exchange.

RiskThe risks of investing in the Fund remain as discussed in theSimplified Prospectus. This Fund is suitable for investors whowant to achieve long-term capital growth and have a long-terminvestment time horizon. Investors should have a mediumtolerance for risk in their returns.

Results of OperationsAs of June 30, 2013, the Fund’s net assets increased by 1.1% to$245.2 million from $242.6 million at the end of 2012. Of thisincrease, a $4.7 million gain was attributable to investmentperformance, which was offset by a $2.1 million loss due to netredemptions of Fund units.

Investment PerformanceThe HSBC Equity Fund (Investor Series) rose 1.66% for the sixmonths ending June 30, 2013 compared to the benchmark, theS&P/TSX Composite Index, which declined 0.88% over the sameperiod.

During the first half of 2013, the MSCI World Index (in Canadiandollars) rose 14.9%. The US market continued to lead the pushhigher with gains of 20.3% year-to-date. The Canadian marketcontinues to lag with a decline of �0.9% year-to-date as reducedexpectations for growth in emerging economies, particularly China,continue to weigh on commodity prices. The best-performingsectors in the first half of 2013 were healthcare (+36%), consumerdiscretionary (+21%), and information technology (+20%), whilematerials declined significantly (�32%).

The Fund provided a positive return and exceeded its benchmark inthe first half of 2013. The Fund benefited from the underweight tomaterials as well as the overweight to the information technologyand industrials sectors. The underweight to the healthcare sectorhurt relative performance. In terms of security selection, consumerand materials names added positively to results while selectionwithin the financials and industrials sectors were modestly negative.The portfolio remains well diversified across cyclical and defensivesectors. Equity market valuations remain very reasonable byhistorical standards and compared to bond markets.

Recent DevelopmentsThe first half of 2013 was broadly positive for equity markets as theglobal economy continued to slowly expand. Equity market gainswere substantially tempered in the latter part of the second quarterfollowing comments from US Federal Reserve Chairman BenBernanke that the ongoing pace of bond purchases may moderateshould economic conditions in the world’s largest economycontinue to improve. The market reaction was overdone, in ouropinion, as we expect the eventual slowdown and unwinding ofmonetary stimulus to be gradual and consistent with prevailingeconomic conditions. Thus far in the third quarter, the marketseems to be more in line with this view and markets have stabilized.Global growth continues to be positive, but it is modest andconsensus expectations are moving lower as the year unfolds. TheCanadian economy advanced by 2.5% in the first quarter led, by astrong gain in exports despite a disappointing contribution fromdomestic consumption. This gain in growth followed two quarters ofgrowth below 1%. We expect the domestic economy to expand byapproximately 1.6% in 2013, while globally we expect growth of2.0%. The Bank of Canada rate has held steady at 1% since the fallof 2010 and will likely remain there for at least four more quarters.

S&P/TSX earnings growth averaged approximately 16% in 2010and 2011. 2012 earnings growth declined primarily due toweakness in commodity prices. In 2013 we expect a resumptionof positive earnings growth in the 5-10% range that would besupportive of the market.

1

HSBC Equity Fund






HSBC Equity Fund – Investor SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: January 1989

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008


of period (1,7) $35.19 $32.80 $37.51 $33.68 $26.70 $40.02


operations:

Total revenue 0.54 0.91 0.84 0.80 0.83 0.92Total expenses (0.36) (0.69) (0.73) (0.67) (0.57) (0.70)Realized gains (losses) 0.25 (0.05) 1.51 2.39 (0.81) 2.28Unrealized gains (losses) 0.22 2.22 (5.91) 1.25 7.53 (14.33)


operations (1) $0.65 $2.39 $(4.29) $3.77 $6.98 $(11.83)


From income (excludingdividends) – – – – – –From dividends – –2 – – – –From net realized gains oninvestments – – (0.43) – – (1.30)

Total annual

distributions (1,2) $– $–2 $(0.43) $– $– $(1.30)


period (1,7) $35.79 $35.19 $32.80 $37.51 $33.68 $26.70



2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008


2

HSBC Equity Fund

HSBC Equity Fund – Advisor SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2001

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008


of period (1,7) $14.14 $13.17 $15.06 $13.52 $10.72 $16.06


operations:



operations (1) $0.25 $0.94 $(1.34) $1.28 $3.01 $(4.85)


From income (excludingdividends) – – – – – –From dividends – –2 – – – –From net realized gains oninvestments – – (0.17) – – (0.52)

Total annual

distributions (1,2) $– $–2 $(0.17) $– $– $(0.52)


period (1,7) $14.38 $14.14 $13.17 $15.06 $13.52 $10.72



2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008

NAV (in 000s) (3,7) $102 $101 $103 $125 $243 $122Units outstanding (in 000s) (3) 7 7 8 8 18 11NAV per unit (3) $14.39 $14.15 $13.19 $15.08 $13.55 $10.74Management expense ratio(“MER”) (4) 1.95% 1.97% 1.97% 1.94% 1.93% 1.93%MER before absorbed or waivedfees (4) 1.95% 1.97% 1.97% 1.94% 1.93% 1.93%Portfolio turnover rate (5) 6.03% 16.29% 14.64% 21.64% 22.17% 20.05%Trading expense ratio (6) 0.03% 0.04% 0.04% 0.06% 0.10% 0.05%

HSBC Equity Fund – Premium SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2009

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010



Total revenue 0.17 0.28 0.25 0.14Total expenses (0.08) (0.15) (0.16) (0.09)Realized gains (losses) 0.07 (0.02) 0.46 0.42Unrealized gains (losses) 0.03 0.62 (2.16) 1.29



From income (excluding dividends) – – – –From dividends (0.01) (0.03) – –From net realized gains on investments – – (0.16) –

Total annual distributions (1,2) $(0.01) $(0.03) $(0.16) $–



2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

NAV (in 000s) (3,7) $7,972 $7,017 $4,554 $2,031Units outstanding (in 000s) (3) 734 658 459 180NAV per unit (3) $10.86 $10.67 $9.91 $11.30Management expense ratio (“MER”) (4) 1.45% 1.47% 1.46% 1.48%MER before absorbed or waived fees (4) 1.45% 1.47% 1.46% 1.48%Portfolio turnover rate (5) 6.03% 16.29% 14.64% 21.64%Trading expense ratio (6) 0.03% 0.04% 0.04% 0.06%

HSBC Equity Fund – Manager SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2001

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:



from operations (1) $0.36 $1.25 $(1.73) $1.85 $3.21 $(4.97)

Distributions to

unitholders:

From income (excludingdividends) – – – – – –From dividends (0.07) (0.08) – – – –From net realized gainson investments – – (0.23) – – (0.56)

Total annual

distributions (1,2) $(0.07) $(0.08) $(0.23) $– $– $(0.56)


period (1,7) $16.07 $15.78 $14.62 $16.57 $14.71 $11.55


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008


3

HSBC Equity Fund

HSBC Equity Fund – Institutional SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2001

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008

Net assets per unit, beginningof period (1,7) $15.92 $14.69 $16.55 $14.58 $11.35 $16.69


Total revenue 0.25 0.41 0.37 0.35 0.36 0.39Total expenses (0.01) (0.01) (0.01) (0.01) (0.01) (0.01)Realized gains (losses) 0.11 (0.02) 0.67 1.04 (0.35) 0.86Unrealized gains (losses) – 0.98 (2.69) 0.54 3.32 (5.87)


operations (1) $0.35 $1.36 $(1.66) $1.92 $3.32 $(4.63)

Distributions to unitholders:From income (excludingdividends) – – – – – –From dividends (0.13) (0.15) – – – –From net realized gains oninvestments – – (0.26) – – (0.54)

Total annual distributions (1,2) $(0.13) $(0.15) $(0.26) $– $– $(0.54)


period (1,7) $16.22 $15.92 $14.69 $16.55 $14.58 $11.35


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008






(5) The Fund’s portfolio turnover rate indicates how actively the Fund’sportfolio advisor manages its portfolio investments. A portfolio turnover

rate of 100% is equivalent to the Fund buying and selling all of thesecurities in its portfolio once in the course of the period. The higher theFund’s portfolio turnover rate in a period, the greater the trading costspayable by the Fund in the period, and the greater the chance of aninvestor receiving taxable capital gains in the year. There is notnecessarily a relationship between a high turnover rate and theperformance of the Fund. The rate is calculated based on the lesser ofpurchases or sales of securities divided by the average weighted marketvalue of the portfolio securities, excluding short-term securities.






Past PerformanceThe performance information shown assumes that all distributionsmade by the Fund in the periods shown were reinvested inadditional securities of the Fund. The performance informationdoes not take into account sales, redemption, distribution, optionalcharges or expenses you may be charged outside of the Fund orthe effect of any income tax you may have to pay as a result of

4

HSBC Equity Fund

your investment in the Fund that would have reduced returns orperformance. The Fund’s past performance does not necessarilyindicate how it will perform in the future.


Returns – Investor SeriesFor the 12-month periods ended December 31 and the six-monthperiod ended June 30, 201350%40%

20%10%0%

-10%-20%

-40%Dec. 31

2003Dec. 31

2004Dec. 31

2005Dec. 31

2006Dec. 31

2007Dec. 31

2008Dec. 31

2009Dec. 31

2010June 30

2013Dec. 31

2012Dec. 31

2011

-30%

30%16.2%

8.5%

20.8%15.1%

5.7%

-29.8%

26.2%

11.3%

-11.4%

7.3%1.7%

Returns – Advisor SeriesFor the 12-month periods ended December 31 and the six-monthperiod ended June 30, 201350%40%

20%10%0%

-10%-20%

-50%Dec. 31

2003Dec. 31

2004Dec. 31

2005Dec. 31

2006Dec. 31

2007Dec. 31

2008Dec. 31

2009Dec. 31

2010Dec. 31

2011

-30%-40%

30%15.7%

8.5%

20.7%15.1%

5.7%

-29.8%

26.2%

11.3% 7.3%

-11.4%

June 302013

Dec. 312012

1.7%


20%

10%

0%

-10%

-20%

-40%Dec. 31

2011

-30%

30%

-10.9%

7.9%1.9%

Dec. 312012

June 302013

Returns – Manager SeriesFor the 12-month periods ended December 31 and the six-monthperiod ended June 30, 201350%40%

20%10%0%

-10%-20%

-50%Dec. 31

2003Dec. 31

2004Dec. 31

2005Dec. 31

2006Dec. 31

2007Dec. 31

2008Dec. 31

2009Dec. 31

2010Dec. 31

2011June 30

2013Dec. 31

2012

-30%-40%

30%16.3%

9.7%

21.8%16.4%

6.8%

-29.1%

27.5%

12.5% 8.5%

-10.4%

2.2%

Returns – Institutional SeriesFor the 12-month periods ended December 31 and the six-monthperiod ended June 30, 201350%40%

20%10%0%

-10%-20%

-50%Dec. 31

2005Dec. 31

2006Dec. 31

2007Dec. 31

2008Dec. 31

2009Dec. 31

2010Dec. 31

2011

-30%-40%

30% 23.0%17.3%

7.7%

-28.5%

28.5%

13.4% 9.4%

-9.7%

June 302013

Dec. 312012

2.6%



of NAV

Financials 32.36%Energy 20.62%Materials 12.29%Industrials 10.20%Consumer Discretionary 8.88%Information Technology 5.62%Telecommunication Services 4.57%Consumer Staples 3.04%Healthcare 0.03%Utilities 0.01%Cash & Equivalents 2.38%Total 100.00%

5

HSBC Equity Fund


of NAV

Toronto-Dominion Bank 7.39%Royal Bank of Canada 7.01%Bank of Nova Scotia 5.86%Suncor Energy Inc. 4.63%Canadian National Railway Co. 4.46%Magna International Inc. 3.84%Potash Corp. of Saskatchewan Inc. 3.79%Canadian Natural Resources Ltd. 3.38%CGI Group Inc. 3.38%Enbridge Inc. 3.34%TELUS Corp. 3.27%Canadian Imperial Bank of Commerce 3.06%TransCanada Corp. 2.55%Bank of Montreal 2.41%Manulife Financial Corp. 2.23%Open Text Corp. 2.19%Dollarama Inc. 2.14%Cenovus Energy Inc. 1.99%Goldcorp Inc. 1.99%SNC-Lavalin Group Inc. 1.97%Bombardier Inc. 1.93%Alimentation Couche-Tard Inc., Class B 1.87%Cameco Corp. 1.81%Finning International Inc. 1.80%Talisman Energy Inc. 1.73%Total of Top 25 Holdings 80.02%


6





How to reach us



Toll-free: 1-800-830-8888Fax: 604-669-2756











(201

3-08

)RR

D

HSBC Small Cap Growth Fund




Management Discussion of Fund PerformanceIn this document, you and your refer to the unitholder of the Fund;we, us and our refer to HSBC Global Asset Management (Canada)Limited; and the Fund refers to the HSBC Small Cap Growth Fund.

We are the manager, trustee and primary investment advisor ofthe Fund. We have entered into a sub-advisory agreement withMawer Investment Management Limited, under which MawerInvestment Management Limited provides portfolio managementand investment advisory services to the Fund. For an explanationof the relationship between us and the sub-advisor, see thesection Selection of Sub-Advisors in the Fund’s SimplifiedProspectus.





To achieve its objectives, the Fund invests primarily in publiclytraded common shares, preferred shares, rights, special warrantsand convertible securities. A portion of the Fund’s holdings may bein the form of cash or cash equivalents. When investing incommon shares the Fund will invest primarily in a broad range ofsmaller Canadian companies.

RiskThe risks of investing in the Fund remain as discussed in theSimplified Prospectus. This Fund is suitable for investors seekinglong-term, above-average growth who can tolerate significantvolatility. Although measures are taken to mitigate and managerisk, this Fund should be considered a higher risk due to its focuson a higher-risk asset class.

Investors in this Fund should have a long-term investment timehorizon and a medium to high tolerance for risk in their returns.


Investment PerformanceThe HSBC Small Cap Growth Fund (Investor Series) rose 13.00%for the six months ending June 30, 2013, while the benchmark,the BMO Blended Small Cap Weighted Index, declined 6.49%over the same period.

Over the first six months of 2013, the Fund’s gross return wassignificantly ahead of that of the benchmark. The sector weightallocations of the Fund accounted for about half of this relativeoutperformance. The Fund’s large underweight in the worst-performing sector (the materials sector, which fell 31.1%) and itslarge overweight positions in three of the outperforming sectors(industrials, information technology and financials) contributed themost to this value creation. This was offset somewhat by theFund’s underweights in the outperforming consumer discretionaryand energy sectors. Overall, the Fund’s sector weight positioningadded value in seven of the nine market sectors represented inthe benchmark.

Security selection contributed about half of the Fund’s overallrelative outperformance. The portfolio manager’s selections in thematerials sector accounted for a significant portion of this valuecreation, although the manager’s selections in the energy sectoralso contributed strongly. Overall, value was added via securityselection in six of the eight sectors to which the Fund hadexposure.

Recent DevelopmentsWe have always believed that what is in our portfolio is of theutmost importance, but in this six-month period, what was not inthe portfolio was also of great importance to the relativeperformance of the Fund, as the gold and precious metals sub-group of the benchmark plummeted 42.9%. Not having anyexposure to this sub-group (and very little in the materials sector)was helpful to the downside protection of our portfolio. In the firsthalf of 2013, we avoided the downturn in the materials sector andour security selection added considerable value. We have a lot ofvery good companies in the Fund, companies that are wealth-creating, that are going from strength to strength, and that aretrading at reasonable valuations.

1


In recent quarters, our outlook for our portfolio has been formodest returns due to the tug-of-war we see playing out betweenthe negative impact of slow economic growth and the offsettingpositive influence of low interest rates. In the second quarter, itbecame evident to the market that the abnormally low interestrate environment would not last forever. At the same time, therewere signs that the US economy was starting to gain sometraction. While changes to these key drivers will most likely lead toincreased volatility in the small cap market, our outlook for ourportfolio remains unchanged: we are still expecting modestpositive returns. Most of the companies in our portfolio haveshown remarkable resiliency in a down market and many haveshown an ability to grow and create more wealth for theirshareholders. Given the current economic and interest rateenvironment, we believe these companies remain attractivelyvalued.

At the end of the period, the Fund’s largest-weighted sectorswere the financials, industrials and energy sectors, respectively. Inthe benchmark, the materials, energy and financials sectorscarried the largest weights. Overall, the Fund had exposure toeight of the nine market sectors represented in the benchmark.Relative to the benchmark, the Fund was overweight theindustrials, healthcare, financials and information technologysectors and underweight each of the other market sectors.






HSBC Small Cap Growth Fund – Investor SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: January 1995

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008



Total revenue 0.41 0.77 0.76 0.78 0.83 0.75Total expenses (0.39) (0.71) (0.67) (0.56) (0.41) (0.50)Realized gains (losses) (0.91) 0.61 2.14 1.20 0.54 (4.57)Unrealized gains (losses) 5.05 3.49 (2.74) 4.26 6.78 (5.53)

Total increase (decrease)from operations (1) $4.16 $4.16 $(0.51) $5.68 $7.74 $(9.85)


From income (excludingdividends) – – – – (0.22) –From dividends – – – (0.15) (0.20) (0.30)From net realized gainson investments – – – – – –

Total annualdistributions (1,2) $– $– $– $(0.15) $(0.42) $(0.30)


2



2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008


HSBC Small Cap Growth Fund – Advisor SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2001

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:



from operations (1) $1.70 $1.80 $(0.15) $2.37 $3.83 $(2.21)

Distributions to

unitholders:

From income (excludingdividends) – – – – (0.09) –From dividends – – – (0.06) (0.08) (0.12)From net realized gainson investments – – – – – –

Total annual

distributions (1,2) $– $– $– $(0.06) $(0.17) $(0.12)


period (1,7) $14.47 $12.78 $11.07 $11.23 $8.98 $6.06


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




HSBC Small Cap Growth Fund – Premium SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2009

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010



Total revenue 0.19 0.35 0.33 0.18Total expenses (0.13) (0.24) (0.22) (0.11)Realized gains (losses) (0.38) 0.21 0.93 0.27Unrealized gains (losses) 2.15 1.55 (1.79) 2.18



From income (excluding dividends) – – – –From dividends – – – (0.11)From net realized gains on investments – – – –

Total annual distributions (1,2) $– $– $– $(0.11)



2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

NAV (in 000s) (3,7) $10,221 $4,572 $1,717 $758Units outstanding (in 000s) (3) 641 325 141 62NAV per unit (3) $15.95 $14.08 $12.14 $12.17Management expense ratio (“MER”) (4) 1.72% 1.84% 1.83% 1.84%MER before absorbed or waived fees (4) 1.72% 1.84% 1.83% 1.84%Portfolio turnover rate (5) 7.10% 16.78% 19.79% 19.69%Trading expense ratio (6) 0.06% 0.06% 0.07% 0.08%

HSBC Small Cap Growth Fund – Manager SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2001

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:

Total revenue 0.19 0.36 0.35 0.36 41.95 –Total expenses (0.09) (0.18) (0.16) (0.14) (1.97) –Realized gains (losses) (0.43) 0.22 0.97 0.55 27.25 –Unrealized gains (losses) 2.37 1.69 (1.77) 2.57 (66.72) –


from operations (1) $2.04 $2.09 $(0.61) $3.34 $0.51 $–

Distributions to

unitholders:

From income (excludingdividends) – – – – (0.16) –From dividends – – – (0.21) (0.14) –From net realized gainson investments – – – – – –

Total annual

distributions (1,2) $– $– $– $(0.21) $(0.30) $–


period (1,7) $16.92 $14.85 $12.73 $12.77 $10.21 $–

3



2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008*

NAV (in 000s) (3,7) $833 $645 $361 $105 $11 $–Units outstanding(in 000s) (3) 49 43 28 8 1 –NAV per unit (3) $16.98 $14.94 $12.82 $12.78 $10.30 $–Management expense ratio(“MER”) (4) 1.17% 1.27% 1.28% 1.25% 1.22% n/aMER before absorbed orwaived fees (4) 1.17% 1.27% 1.28% 1.25% 1.22% n/aPortfolio turnover rate (5) 7.10% 16.78% 19.79% 19.69% 24.55% n/aTrading expense ratio (6) 0.06% 0.06% 0.07% 0.08% 0.21% n/a

* All units were redeemed in May 2008.

HSBC Small Cap Growth Fund –Institutional SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2001

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:



from operations (1) $2.04 $2.15 $0.10 $2.74 $3.51 $(4.00)

Distributions to

unitholders:

From income (excludingdividends) – – – – (0.20) –From dividends – – (0.02) (0.33) (0.18) (0.13)From net realized gainson investments – – – – – –

Total annual

distributions (1,2) $– $– $(0.02) $(0.33) $(0.38) $(0.13)


period (1,7) $16.25 $14.19 $12.03 $11.95 $9.56 $6.45


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008


(1) Net assets per unit and distributions per unit are based on the actualnumber of units outstanding for the relevant series at the relevanttime. The increase/decrease in net assets from operations per unit is

based on the weighted average number of units outstanding for therelevant series over the fiscal period.








The Fund’s management fees were used by us to pay costs formanaging the investment portfolio, providing investment analysisand recommendations, making investment decisions, makingbrokerage arrangements for the purchase and sale of theinvestment portfolio and providing other services. Themanagement fees also funded commission payments and othercompensation to sales representatives and registered dealers andbrokers (collectively “distribution costs”), including HSBC Bank

4


Canada, for units of the Fund bought and held by unitholders.Finally, we used management fees to pay for additional marketingand distribution services to the Fund.





60%

40%

20%

0%

-20%

-40%

-60%

31.2%17.8%

27.5%

6.5%

-1.1%

-38.7%

50.7%

24.7%15.4%

-0.8%

Dec. 312003

Dec. 312004

Dec. 312005

Dec. 312006

Dec. 312007

Dec. 312008

Dec. 312009

Dec. 312010

June 302013

Dec. 312012

Dec. 312011

13.0%


60%

40%

20%

0%

-20%

-40%

-60%

6.5%

-1.0%

-38.0%

50.7%

24.6%15.3%

-0.8%

Dec. 312006

Dec. 312007

Dec. 312008

Dec. 312009

Dec. 312010

Dec. 312011

June 302013

Dec. 312012

13.0%


5%

0%

-5%

-10%

-0.2%

16.0%

Dec. 312011

Dec. 312012

June 302013

25%

20%

15%

10%

13.3%


30%

20%

10%

0%

26.0%

0.3%

Dec. 312010

Dec. 312011

June 302013

16.6%

Dec. 312012

13.6%

5



60%

40%

20%

0%

-20%

-40%

-60%

8.8%1.0%

-37.4%

53.8%

27.4%17.9% 14.2%

1.4%

Dec. 312006

Dec. 312007

Dec. 312008

Dec. 312009

Dec. 312010

Dec. 312011

June 302013

Dec. 312012



of NAV

Industrials 23.67%Financials 22.50%Energy 17.39%Information Technology 11.75%Materials 10.59%Healthcare 5.09%Consumer Staples 4.80%Consumer Discretionary 1.11%Utilities 0.03%Cash & Equivalents 3.07%Total 100.00%


of NAV

Stella-Jones Inc. 5.75%Constellation Software Inc. 5.70%Canadian Energy Services & Technology Corp. 5.56%Stantec Inc. 5.26%Home Capital Group Inc. 5.21%Paladin Labs Inc. 4.39%AltaGas Ltd. 3.84%Winpak Ltd. 3.61%New Flyer Industries Inc. 3.48%Equitable Group Inc. 3.47%Descartes Systems Group Inc. 3.43%Canadian Western Bank 3.26%Newalta Corp. 2.83%Richelieu Hardware Ltd. 2.78%FirstService Corp. 2.53%High Liner Foods Inc. 2.51%MTY Food Group Inc. 2.20%Paramount Resources Ltd. 1.97%Secure Energy Services Inc. 1.82%Contrans Group Inc. 1.80%DirectCash Payments Inc. 1.68%Alaris Royalty Corp. 1.59%Enghouse Systems Ltd. 1.58%Government of Canada, 1.02% 09/26/13 1.49%Bird Construction Inc. 1.46%Total of Top 25 Holdings 79.20%


6





How to reach us



Toll-free: 1-800-830-8888Fax: 604-669-2756











(201

3-08

)RR

D

HSBC Global Equity Fund




Management Discussion of Fund PerformanceIn this document, you and your refer to the unitholder of the Fund;we, us and our refer to HSBC Global Asset Management (Canada)Limited; and the Fund refers to the HSBC Global Equity Fund.

We are the manager, trustee and primary investment advisor of theFund. We have entered into a sub-advisory agreement with HSBCGlobal Asset Management (France), under which HSBC Global AssetManagement (France) provides investment advice and portfoliomanagement services to the Fund. For an explanation of therelationship between us and the sub-advisor, see thesection Selection of Sub-Advisors in the Fund’s Simplified Prospectus.




Investment Objective and StrategiesThe fundamental investment objective of this Fund is to providelong-term capital growth.

To achieve its objectives, the Fund invests primarily in equities andequity-related securities issued by large, established companies fromaround the world. To maintain a diversified portfolio of holdings, theFund will invest in companies from a broad range of industries. Aportion of the Fund may be in the form of cash or cash equivalents.

RiskThe risks of investing in this Fund remain as discussed in theSimplified Prospectus. This Fund is suitable for investors seeking long-term capital growth from equity securities issued in markets aroundthe world. Investors in this Fund should have a long-term investmenttime horizon and a medium tolerance for risk in their returns.

Results of OperationsAs of June 30, 2013, the Fund’s net assets increased by 171.3%to $211.1 million from $77.8 million at the end of 2012. Of thisincrease, a $18.3 million gain was attributable to investmentperformance and $115.0 million was attributable to netcontributions to the Fund.

Investment PerformanceThe HSBC Global Equity Fund (Investor Series) rose 13.21% forthe six months ending June 30, 2013, while the benchmark, theMSCI World Index (in Canadian dollars), rose 14.94% over thesame period.

Equity markets rallied massively over the first six months of 2013.The situation in Europe did not ease, and macro data in the US andChina came in slightly below expectations, but it still confirmedthat the global economy is strengthening. However, the upwardtrend was mostly driven by stimulus prospects in the US andJapan. The very end of the spring was more variable. Investorswere disappointed that the US Federal Open Market Committeestatement mentioned a possible decrease or tapering of assetpurchases if conditions continue to improve. Lower-than-expectedmanufacturing data in China added salt to the wound and volatilityspiked. In spite of this, the period ended on a more positive note.

Exposure management had no significant impact as the averageexposure of the Fund remained close to 100%. The countryallocation impact contribution was positive over the period. TheFund benefited from its underweight in Australia and Spain andfrom its overweight in Japan. The stock selection strategy wasnegative. The stock selection added value in Europe and Japan,but it was negative in the US.

Recent DevelopmentsThe Fund’s investment strategy remains unchanged. It seeks tocapitalize on opportunities while diversifying risk through dynamiccountry allocation, a stock selection strategy based upon theanticipated risk/return profile, and continuous monitoring of theoverall equity exposure.

Overall, equity markets remain attractive in the context of very lowinterest rates, and analysts expect 12% earnings growth for worldcompanies over the next twelve months. The Fund continues tofavour North America over Europe.



1


Manager, Trustee and Investment AdvisorWe are the manager, trustee and primary investment advisor of theFund. As manager, we manage the overall business and operationsof the Fund. As trustee, we hold legal title to the property of theFund on your behalf. As primary investment advisor, we provideinvestment advice and portfolio management services to the Fund.We receive a fee from the Fund for these services based on assetsunder management, calculated daily and paid monthly. We haveentered into a sub-advisory agreement with HSBC Global AssetManagement (France) (an affiliate), under which HSBC Global AssetManagement (France) provides investment advice and portfoliomanagement services to the Fund. We pay HSBC Global AssetManagement (France) a fee from the Fund based on assets undermanagement, calculated daily and paid quarterly. For moreinformation on our ability to hire sub-advisors, see the sectionOrganization and Management of the HSBC Mutual Funds in theFund’s Simplified Prospectus.


Investments in Securities of Related PartiesIn accordance with Canadian securities legislation and policies setout by our Independent Review Committee, the Fund may invest itsassets in the securities of companies related to the Fund’sinvestment advisor or sub-advisor. During the period, the Fund held,purchased or sold shares in HSBC Holdings PLC (our ultimate parentcompany) and Hang Seng Bank Ltd., which represented 0.00% and0.51%, respectively, of the Fund’s assets as at June 30, 2013.

Financial HighlightsThe following tables show selected key financial information aboutthe Fund and are intended to help you understand the Fund’sfinancial performance for the six-month period ended June 30,2013 and for the years ended December 31, as applicable. In theyear a fund is established, “period” represents the period frominception to December 31 or June 30 of that fiscal year, asapplicable. This information is derived from the Fund’s unauditedsemi-annual financial statements and audited annual financialstatements. The information in the following tables is based on

prescribed regulations, and as a result, is not expected to add dueto the increase/decrease in net assets from operations beingbased on average units outstanding during the period and all othernumbers being based on actual units outstanding at the relevantpoint in time.

HSBC Global Equity Fund – Investor SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: January 1998

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008



Total revenue 0.13 0.19 0.18 0.17 0.27 0.20Total expenses (0.12) (0.22) (0.22) (0.21) (0.19) (0.24)Realized gains (losses) 0.66 0.34 0.08 0.23 0.01 (2.04)Unrealized gains (losses) 0.46 0.47 (0.58) (0.18) 0.43 (1.12)



From income (excludingdividends) – – – – (0.04) –From dividends – (0.03) – – – (0.15)From net realized gainson investments – – – – – –

Total annual

distributions (1,2) $– $(0.03) $– $– $(0.04) $(0.15)


period (1,7) $9.65 $8.52 $7.79 $8.34 $8.29 $7.81


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008


2


HSBC Global Equity Fund – Advisor SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2001

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:



from operations (1) $1.10 $0.76 $(0.48) $0.06 $0.49 $(3.14)

Distributions to

unitholders:

From income (excludingdividends) – – – – (0.04) –From dividends – (0.04) – – – (0.14)From net realized gainson investments – – – – – –

Total annual

distributions (1,2) $– $(0.04) $– $– $(0.04) $(0.14)


period (1,7) $9.25 $8.17 $7.47 $7.99 $7.94 $7.47


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008


HSBC Global Equity Fund – Premium SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2009

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010



Total revenue 0.20 0.25 0.23 0.09Total expenses (0.12) (0.23) (0.23) (0.10)Realized gains (losses) 0.80 0.43 0.11 0.13Unrealized gains (losses) 0.37 0.60 (0.76) 0.61



From income (excluding dividends) – – – (0.05)From dividends – (0.10) – –From net realized gains on investments – – – –

Total annual distributions (1,2) $– $(0.10) $– $(0.05)



2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

NAV (in 000s) (3,7) $772 $273 $248 $264Units outstanding (in 000s) (3) 62 25 25 25NAV per unit (3) $12.46 $10.98 $10.03 $10.68Management expense ratio (“MER”) (4) 2.06% 2.16% 2.19% 2.26%MER before absorbed or waived fees (4) 2.06% 2.16% 2.19% 2.26%Portfolio turnover rate (5) 115.18% 140.07% 163.01% 160.69%Trading expense ratio (6) 0.34% 0.21% 0.14% 0.12%

HSBC Global Equity Fund – Manager SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2001

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:



from operations (1) $1.24 $0.91 $(0.47) $0.14 $0.64 $(3.20)

Distributions to

unitholders:

From income (excludingdividends) – – – (0.09) (0.14) –From dividends – (0.14) (0.04) – (0.01) (0.15)From net realized gainson investments – – – – – –

Total annual

distributions (1,2) $– $(0.14) $(0.04) $(0.09) $(0.15) $(0.15)


period (1,7) $10.19 $8.96 $8.18 $8.70 $8.64 $8.14


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008


3


HSBC Global Equity Fund – Institutional SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2001

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008



Total revenue 0.19 0.23 0.22 0.20 0.33 0.24Total expenses – (0.02) (0.02) (0.02) (0.02) (0.02)Realized gains (losses) 0.72 0.41 0.10 0.28 0.01 (2.55)Unrealized gains (losses) 0.33 0.58 (0.59) (0.09) 0.71 (1.15)



From income (excludingdividends) – – – (0.39) (0.29) –From dividends – (0.30) (0.17) (0.02) (0.01) (0.18)From net realized gainson investments – – – – – –

Total annualdistributions (1,2) $– $(0.30) $(0.17) $(0.41) $(0.30) $(0.18)



2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008






(5) The Fund’s portfolio turnover rate indicates how actively the Fund’sportfolio advisor manages its portfolio investments. A portfolio turnover

rate of 100% is equivalent to the Fund buying and selling all of thesecurities in its portfolio once in the course of the period. The higher theFund’s portfolio turnover rate in a period, the greater the trading costspayable by the Fund in the period, and the greater the chance of aninvestor receiving taxable capital gains in the year. There is notnecessarily a relationship between a high turnover rate and theperformance of the Fund. The rate is calculated based on the lesser ofpurchases or sales of securities divided by the average weighted marketvalue of the portfolio securities, excluding short-term securities.






Past PerformanceThe performance information shown assumes that all distributionsmade by the Fund in the periods shown were reinvested inadditional securities of the Fund. The performance informationdoes not take into account sales, redemption, distribution, optionalcharges or expenses you may be charged outside of the Fund or

4


the effect of any income tax you may have to pay as a result ofyour investment in the Fund that would have reduced returns orperformance. The Fund’s past performance does not necessarilyindicate how it will perform in the future.



40%

20%

0%

-20%

-40%

4.4% 0.6%8.9% 9.8%

17.5%

-6.2%

-28.7%

6.7%0.6%

-6.6%

Dec. 312003

Dec. 312004

Dec. 312005

Dec. 312006

Dec. 312007

Dec. 312008

Dec. 312009

Dec. 312010

Dec. 312011

June 302013

Dec. 312012

13.2%


40%

20%

0%

-20%

-40%

-6.2%

-28.6%

6.7% 9.9%0.6%

-6.5%

Dec. 312007

Dec. 312008

Dec. 312009

Dec. 312010

Dec. 312011

Dec. 312012

June 302013

13.2%


20%

0%

-20%

-40%

-6.1%

10.4%

Dec. 312011

Dec. 312012

June 302013

13.5%


40%

20%

0%

-20%

-40%

18.7%

-5.2%

-27.9%

7.8% 11.1%1.7%

-5.5%

Dec. 312006

Dec. 312007

Dec. 312008

Dec. 312009

Dec. 312010

Dec. 312011

Dec. 312012

June 302013

13.9%


40%

20%

0%

-20%

-40%

11.5% 12.6%20.3%

-3.9%

-27.0%

9.2%3.0%

-4.2%

Dec. 312005

Dec. 312006

Dec. 312007

Dec. 312008

Dec. 312009

Dec. 312010

Dec. 312011

Dec. 312012

June 302013

14.6%



of NAV

Financials 16.51%Industrials 11.44%Consumer Discretionary 11.20%Information Technology 11.06%Healthcare 10.69%Consumer Staples 10.30%Energy 9.42%Materials 5.23%Telecommunication Services 2.94%Utilities 2.87%Cash & Equivalents 8.34%Total 100.00%

5



of NAV

United States of America 48.29%United Kingdom 8.74%Japan 8.56%Switzerland 3.94%Canada 3.87%France 3.48%Germany 3.02%Australia 2.89%Sweden 1.48%Hong Kong 1.45%Ireland 1.31%Italy 0.98%Netherlands 0.98%Spain 0.93%Denmark 0.62%Norway 0.44%Singapore 0.42%Finland 0.26%Cash & Equivalents 8.34%Total 100.00%


of NAV

Exxon Mobil Corp. 2.68%Roche Holding AG 2.07%Apple Inc. 2.01%JPMorgan Chase & Co. 1.74%Amgen Inc. 1.61%Chevron Corp. 1.57%PACCAR Inc. 1.32%Comcast Corp. 1.29%MasterCard Inc., Class A 1.24%Macy’s Inc. 1.19%Cisco Systems Inc. 1.16%Microsoft Corp. 1.10%BMC Software Inc. 1.07%Westpac Banking Corp. 1.07%Baxter International Inc. 1.06%Japan Tobacco Inc. 1.06%Simon Property Group Inc. 1.05%BNP Paribas SA 0.99%Toyota Motor Corp. 0.98%Home Depot Inc. 0.94%J Sainsbury PLC 0.93%BP PLC 0.92%Caterpillar Inc. 0.91%Wal-Mart Stores Inc. 0.91%Kraft Foods Group Inc. 0.90%Total of Top 25 Holdings 31.77%


6





How to reach us



Toll-free: 1-800-830-8888Fax: 604-669-2756











(201

3-08

)RR

D

HSBC U.S. Equity Fund




Management Discussion of Fund PerformanceIn this document, you and your refer to the unitholder of the Fund;we, us and our refer to HSBC Global Asset Management (Canada)Limited; and the Fund refers to the HSBC U.S. Equity Fund.

We are the manager, trustee and primary investment advisor ofthe Fund. We have entered into a sub-advisory agreement withLos Angeles Capital Management and Equity Research, Inc., underwhich Los Angeles Capital Management and Equity Research, Inc.provides investment advice and portfolio management services tothe Fund. For an explanation of the relationship between us andthe sub-advisor, see the section Selection of Sub-Advisors in theFund’s Simplified Prospectus.





To achieve its objectives, the Fund invests primarily in well-established US companies diversified across industry sectors. TheFund also invests in companies based outside of the US if theirsecurities are listed on a US exchange (including depositaryreceipts or other equity-linked securities) and they are owned orcontrolled by US interests, or where a significant portion of theearnings, production facilities, turnover, assets or investments ofsuch companies are based in or derived from the US. A portion ofthe Fund may be in the form of cash or cash equivalents.

RiskThe risks of investing in the Fund remain as discussed in theSimplified Prospectus. This Fund is suitable for investors whowant to achieve long-term capital growth and have a long-terminvestment time horizon with a medium tolerance for risk in theirreturns.


Investment PerformanceThe HSBC U.S. Equity Fund (Investor Series) rose 21.93% for thesix months ending June 30, 2013, while the benchmark, theRussell 1000 Index (in Canadian dollars), rose 20.35% over thesame period.

Despite recent uncertainty following the US Federal Reserve’scomments about tapering its quantitative easing, risk has generallybeen rewarded in the first half of 2013 and the portfolios havebenefited from their more bullish posture. For the period, bothfundamental factors and industry tilts added value, withfundamental factors being the most dominant.

Specifically, tilts towards distress and leverage were among thetop contributors to return as investors favoured risk over quality.Additionally, a slight tilt towards growth securities versus thebenchmark added value as both book-to-price and yields werepenalized by investors. Conversely, market momentum from threemonths of rallies during the period and the portfolio’s tilt awayfrom these short-term winners both detracted from overall return.Within the industries sector, a tilt towards media securities wasthe top contributor year-to-date in all portfolios.

Recent DevelopmentsDuring the first half of 2013 the Fund shifted into economicallysensitive sectors such as capital goods and transportation, andalso moved into the more growth-oriented healthcare sector. Forfundamental factors, the portfolios embraced a more bullishposture, moving into securities with volatility, distress, leverageand pension risk. Additionally, they moved out of stocks withstrong profit margins and once again began to embrace riskier,smaller market cap companies, further highlighting the temperingof the quality bet.

While the portfolios exhibit a more bullish, risk-on posture there isstill a great deal of uncertainty in the market. As we enter thesecond half of the year, investors will closely watch the behaviourof the US Federal Reserve and other central banks.

Active risk has generally increased in the portfolios since the endof 2012 as there has been more persistence in factor prices,allowing the portfolios to have more stable positioning. As theportfolios narrowed their quality bet in the latter half of 2012 activerisk decreased, but then began to increase in 2013 once the morebullish posture started to evolve.

1






Financial HighlightsThe following tables show selected key financial information aboutthe Fund and are intended to help you understand the Fund’sfinancial performance for the six-month period ended June 30,2013 and for the years ended December 31, as applicable. In theyear a fund is established, “period” represents the period frominception to December 31 or June 30 of that fiscal year, asapplicable. This information is derived from the Fund’s unauditedsemi-annual financial statements and audited annual financialstatements. The information in the following tables is based onprescribed regulations, and as a result, is not expected to add dueto the increase/decrease in net assets from operations being

based on average units outstanding during the period and all othernumbers being based on actual units outstanding at the relevantpoint in time.

HSBC U.S. Equity Fund – Investor SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: November 1994

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008



Total revenue 0.14 0.31 0.18 0.16 0.17 0.24Total expenses (0.19) (0.36) (0.34) (0.30) (0.28) (0.33)Realized gains (losses) 1.03 0.56 0.67 0.63 (3.13) (1.77)Unrealized gains (losses) 2.16 0.42 (0.84) 0.59 4.34 (3.18)



From income (excludingdividends) – – – – – –From dividends – (0.02) – – – –From net realized gainson investments – – – – – –

Total annualdistributions (1,2) $– $(0.02) $– $– $– $–



2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008


2


HSBC U.S. Equity Fund – Advisor SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2001

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008










2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008


HSBC U.S. Equity Fund – Premium SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2009

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010



Total revenue 0.11 0.26 0.14 0.03Total expenses (0.11) (0.22) (0.21) (0.05)Realized gains (losses) 0.82 0.46 0.53 0.14Unrealized gains (losses) 1.73 0.21 (0.64) 0.81



From income (excluding dividends) – – – –From dividends – (0.03) – –From net realized gains on investments – – – –

Total annual distributions (1,2) $– $(0.03) $– $–



2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010


HSBC U.S. Equity Fund – Manager SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2001

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




Total increase (decrease)from operations (1) $2.06 $0.73 $0.03 $0.82 $0.74 $(2.93)






2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008


3


HSBC U.S. Equity Fund – Institutional Series*Period ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2001

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008

Net assets per unit,beginning of period (1,7) $– $– $– $8.21 $7.36 $10.29


Total revenue – – – 0.10 0.11 0.15Total expenses – – – (0.02) (0.02) (0.02)Realized gains (losses) – – – 0.39 (2.01) (1.13)Unrealized gains (losses) – – – 0.44 2.81 (1.88)

Total increase (decrease)from operations (1) $– $– $– $0.91 $0.89 $(2.88)


From income (excludingdividends) – – – – – –From dividends – – – – – –From net realized gainson investments – – – – – –

Total annualdistributions (1,2) $– $– $– $– $– $–

Net assets per unit, end ofperiod (1,7) $– $– $– $– $8.21 $7.36

* The Institutional Series was fully redeemed during 2010; however, itremains in operation at period-end.


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008

NAV (in 000s) (3,7) $– $– $– $– $10,875 $8,779Units outstanding(in 000s) (3) – – – – 1,325 1,192NAV per unit (3) $– $– $– $– $8.21 $7.37Management expense ratio(“MER”) (4) – – – 0.23% 0.27% 0.21%MER before absorbed orwaived fees (4) – – – 0.23% 0.27% 0.21%Portfolio turnover rate (5) – – – 87.77% 222.12% 65.68%Trading expense ratio (6) – – – 0.13% 0.08% 0.09%











4





40%

20%

0%

-20%

-40%

-60%

2.1%

-1.7%

0.9%11.0%

-11.5%

-30.0%

9.1% 8.7%

-1.7%

Dec. 312003

Dec. 312004

Dec. 312005

Dec. 312006

Dec. 312007

Dec. 312008

Dec. 312009

Dec. 312010

Dec. 312012

June 302013

Dec. 312011

7.1%

21.9%


40%

20%

0%

-20%

-40%

-60%

2.2%

-1.7%

1.0%11.0%

-11.5%

-30.0%

9.1% 8.7%

-1.7%

Dec. 312003

Dec. 312004

Dec. 312005

Dec. 312006

Dec. 312007

Dec. 312008

Dec. 312009

Dec. 312010

Dec. 312012

Dec. 312011

7.1%

21.9%

June 302013


10%

0%

-10%

-30%

-1.2%

Dec. 312011

Dec. 312012

20%

-20%

7.7%

22.3%

June 302013


40%

20%

0%

-20%

-40%

-60%

12.2% 8.4%

22.6%

-10.6%

-29.3%

10.3% 9.9%

-0.6%

Dec. 312006

Dec. 312007

Dec. 312008

Dec. 312009

Dec. 312010

Dec. 312011

Dec. 312012

June 302013


40%

20%

0%

-20%

-40%

-60%

13.4%

-9.6%

-28.5%

11.4%

Dec. 312006

Dec. 312007

Dec. 312008

Dec. 312009

Dec. 312010*

Dec. 312011

Dec. 312012

June 302013

0.0% 0.0% 0.0% 0.0%

* The Institutional Series was fully redeemed during 2010; however,it remains in operation at period-end.

5




of NAV

Financials 19.41%Consumer Discretionary 17.32%Industrials 15.74%Healthcare 13.59%Information Technology 9.78%Consumer Staples 9.22%Telecommunication Services 4.72%Energy 4.47%Materials 4.40%Utilities 0.36%Cash & Equivalents 0.99%Total 100.00%


of NAV

Exxon Mobil Corp. 2.31%General Electric Co. 1.95%Apple Inc. 1.62%Time Warner Cable Inc. 1.43%Johnson & Johnson 1.34%Wells Fargo & Co. 1.28%AT&T Inc. 1.25%Microsoft Corp. 1.22%DIRECTV 1.21%Pfizer Inc. 1.19%FedEx Corp. 1.16%Berkshire Hathaway Inc., Class B 1.12%International Business Machines Corp. 1.11%JPMorgan Chase & Co. 1.11%Chevron Corp. 1.07%Procter & Gamble Co. 1.07%Sprint Nextel Corp. 0.99%Comcast Corp. 0.98%Delta Air Lines Inc. 0.97%Verizon Communications Inc. 0.95%Merck & Co., Ltd. 0.94%EchoStar Communications Corp., Class A 0.91%Protective Life Corp. 0.90%ConAgra Foods Inc. 0.88%The Coca-Cola Co. 0.88%Total of Top 25 Holdings 29.84%


6





How to reach us



Toll-free: 1-800-830-8888Fax: 604-669-2756











(201

3-08

)RR

D

HSBC European Fund



HSBC European Fund

Management Discussion of Fund PerformanceIn this document, you and your refer to the unitholder of the Fund;we, us and our refer to HSBC Global Asset Management (Canada)Limited; and the Fund refers to the HSBC European Fund.

We are the manager, trustee and primary investment advisor ofthe Fund. We have entered into a sub-advisory agreement withHSBC Global Asset Management (UK) Limited, under which HSBCGlobal Asset Management (UK) Limited provides investmentadvice and portfolio management services to the Fund. For anexplanation of the relationship between us and the sub-advisor,see the section Selection of Sub-Advisors in the Fund’s SimplifiedProspectus.





To achieve its objectives, the Fund invests primarily in equities andequity-related securities issued by large, established companiesdomiciled in Europe. These companies are primarily from theUnited Kingdom, France, Germany, Italy and other European Unionmember nations. The Fund is broadly diversified across industriesand countries in the region. To maintain a diversified portfolio ofholdings, the Fund will invest in companies from a broad range ofindustries through common shares, preferred shares, rights,special warrants, American depositary receipts and globaldepositary receipts. The Fund may also invest in large, establishedcompanies domiciled in emerging market countries in Europe. Aportion of the Fund may be in the form of cash or cashequivalents.

RiskThe risks of investing in this Fund remain as discussed in theSimplified Prospectus. This Fund is suitable for long-term investors

who want to add the growth potential of European companies totheir portfolios and are willing to accept a high level of risk.Investors in this Fund should have a long-term investment timehorizon and a medium tolerance for risk in their returns.

Results of OperationsAs of June 30, 2013, the Fund’s net assets increased by 4.5% to$35.0 million from $33.5 million at the end of 2012. Of thisincrease, a $3.5 million gain was attributable to investmentperformance, which was offset by a $2.0 million loss due to netredemptions of Fund units.

Investment PerformanceThe HSBC European Fund (Investor Series) rose 10.45% for thesix months ending June 30, 2013, while its benchmark, the MSCIEurope Index (in Canadian dollars), rose 8.50% over the sameperiod.

The first half of 2013 has been divided into two distinct phases.Until US Federal Reserve Chairman Bernanke’s commentsflagging the potential need to taper quantitative easing, theEuropean equity market continued its upward trajectory that hadbegun after European Central Bank (ECB) President Draghi’scomments last summer that the ECB would “do whatever ittakes” including “outright monetary transactions.” Despiteearnings forecasts being cut, the equity risk premium wassubstantial and thus its erosion drove significant performance overthe subsequent months.

The second phase began following Bernanke’s Federal OpenMarket Committee testimony in May. Markets took fright despitethe underlying logic that tapering would only be initiated if thefundamentals of the economy were improving. The equity marketreturned to the short-term mindset that “bad” news on theeconomy meant tapering was pushed out and that would be“good” for a continued liquidity-driven market. In the first phaseinvestors appeared to be favouring perceived safe haven sectors,such as consumer staples and healthcare. However, we haverecently observed positive performance of companies acrossdifferent sectors, implying that investors increasingly pay attentionto company valuations and stock specific fundamentals.

Recent DevelopmentsWe are mindful of the broader macroeconomic environment andcontinue to monitor it closely. Periods when investors are focusedon macroeconomic headlines rather than companies’fundamentals are not advantageous to our stock-pickingphilosophy. Fundamentals are at the core of our investmentphilosophy, and thus we will continue to invest in companies withattractive profitability and valuations. Recent signs areencouraging.

1

HSBC European Fund



Manager, Trustee and Investment AdvisorWe are the manager, trustee and primary investment advisor ofthe Fund. As manager, we manage the overall business andoperations of the Fund. As trustee, we hold legal title to theproperty of the Fund on your behalf. As primary investmentadvisor, we provide investment advice and portfolio managementservices to the Fund. We receive a fee from the Fund for theseservices based on assets under management, calculated daily andpaid monthly. We have entered into a sub-advisory agreementwith HSBC Global Asset Management (UK) Limited (an affiliate),under which HSBC Global Asset Management (UK) Limitedprovides investment advice and portfolio management services tothe Fund. We pay HSBC Global Asset Management (UK) Limitedan investment advisory fee from the Fund based on assets undermanagement, calculated daily and paid quarterly. For moreinformation on our ability to hire sub-advisors, see the sectionOrganization and Management of the HSBC Mutual Funds in theFund’s Simplified Prospectus.


Investments in Securities of Related PartiesIn accordance with Canadian securities legislation and policies setout by our Independent Review Committee, the Fund may invest

its assets in the securities of companies related to the Fund’sinvestment advisor or sub-advisor. During the period, the Fundheld, purchased or sold shares in HSBC Holdings PLC (ourultimate parent company), which represented 3.05% of the Fund’sassets as at June 30, 2013.


HSBC European Fund – Investor SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: November 1994

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




Total revenue 0.37 0.52 0.56 0.53 0.64 0.83Total expenses (0.24) (0.43) (0.45) (0.44) (0.44) (0.54)Realized gains (losses) 0.92 (0.53) (0.22) (1.29) (2.65) (4.23)Unrealized gains (losses) 0.91 3.15 (2.21) 0.28 5.11 (6.57)


from operations (1) $1.96 $2.71 $(2.32) $(0.92) $2.66 $(10.51)

Distributions to

unitholders:

From income (excludingdividends) – – – (0.18) (0.48) –From dividends – (0.10) (0.37) – – (0.31)From net realized gainson investments – – – – – –

Total annual

distributions (1,2) $– $(0.10) $(0.37) $(0.18) $(0.48) $(0.31)


period (1,7) $20.68 $18.72 $16.09 $18.94 $19.86 $17.61

2

HSBC European Fund


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008


HSBC European Fund – Advisor SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2001

June 302013

Dec. 312012

Dec. 312011

Dec. 312010

Dec. 312009

Dec. 312008




operations:

Total revenue 0.19 0.27 0.28 0.26 0.32 0.40Total expenses (0.12) (0.21) (0.22) (0.22) (0.22) (0.27)Realized gains (losses) 0.47 (0.26) (0.11) (0.64) (1.32) (2.10)Unrealized gains (losses) 0.44 1.40 (1.13) 0.16 2.12 (3.49)


from operations (1) $0.98 $1.20 $(1.18) $(0.44) $0.90 $(5.46)

Distributions to

unitholders:


Total annual

distributions (1,2) $– $(0.05) $(0.20) $(0.09) $(0.24) $(0.15)


period (1,7) $10.29 $9.31 $8.00 $9.44 $9.90 $8.78


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008


HSBC European Fund – Premium SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2009

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010



Total revenue 0.25 0.13 0.33 0.17Total expenses (0.11) (0.19) (0.20) (0.11)Realized gains (losses) 0.59 (0.26) (0.13) (0.42)Unrealized gains (losses) 0.50 1.67 (1.41) 1.76



From income (excluding dividends) – – – (0.18)From dividends – (0.12) (0.27) –From net realized gains on investments – – – –

Total annual distributions (1,2) $– $(0.12) $(0.27) $(0.18)



2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010


HSBC European Fund – Manager Series*Period ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2001

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008

Net assets per unit,beginning of period (1,7) $– $8.51 $10.02 $10.53 $9.34 $14.93


Total revenue – 0.17 0.30 0.27 0.34 0.51Total expenses – (0.05) (0.12) (0.13) (0.13) (0.16)Realized gains (losses) – (0.15) (0.12) (0.67) (1.40) (2.15)Unrealized gains (losses) – 0.03 (1.27) (0.97) 0.80 (2.91)

Total increase (decrease)from operations (1) $– $– $(1.21) $(1.50) $(0.39) $(4.71)

Distributions to unitholders:From income (excludingdividends) – – – (0.22) (0.37) –From dividends – – (0.30) – – (0.16)From net realized gains oninvestments – – – – – –

Total annualdistributions (1,2) $– $– $(0.30) $(0.22) $(0.37) $(0.16)

Net assets per unit, end ofperiod (1,7) $– $– $8.51 $10.02 $10.53 $9.34

* The Manager Series was fully redeemed during 2012; however, itremains in operation at period-end.

3

HSBC European Fund


2013Dec. 31

2012Dec. 31

2011Dec. 31

2010Dec. 31

2009Dec. 31

2008

NAV (in 000s) (3,7) $– $– $6 $7 $31 $104Units outstanding (in 000s) (3) – – 1 1 3 11NAV per unit (3) $– $– $8.52 $10.02 $10.54 $9.36Management expense ratio(“MER”) (4) – 1.30% 1.21% 1.32% 1.35% 1.25%MER before absorbed orwaived fees (4) – 1.30% 1.21% 1.32% 1.35% 1.25%Portfolio turnover rate (5) – 24.33% 39.14% 27.68% 44.59% 67.60%Trading expense ratio (6) – 0.13% 0.20% 0.14% 0.38% 0.41%

HSBC European Fund – Institutional Series*Period ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2001

June 302013

Dec. 312012

Dec. 312011

Dec. 312010

Dec. 312009

Dec. 312008

Net assets per unit,beginning of period (1,7) $– $– $– $9.28 $8.23 $13.02


Total revenue – – – 0.24 0.30 0.38Total expenses – – – (0.02) (0.03) (0.02)Realized gains (losses) – – – (0.58) (1.25) (1.97)Unrealized gains (losses) – – – 0.34 2.53 (2.84)

Total increase (decrease)from operations (1) $– $– $– $(0.02) $1.55 $(4.45)

Distributions to unitholders:From income (excludingdividends) – – – – (0.43) –From dividends – – – – – (0.14)From net realized gains oninvestments – – – – – –

Total annualdistributions (1,2) $– $– $– $– $(0.43) $(0.14)

Net assets per unit, end ofperiod (1,7) $– $– $– $– $9.28 $8.23



2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008

NAV (in 000s) (3,7) $– $– $– $– $6,042 $4,627Units outstanding(in 000s) (3) – – – – 651 561NAV per unit (3) $– $– $– $– $9.29 $8.25Management expense ratio(“MER”) (4) – – – 0.26% 0.33% 0.21%MER before absorbed orwaived fees (4) – – – 0.26% 0.33% 0.21%Portfolio turnover rate (5) – – – 27.68% 44.59% 67.60%Trading expense ratio (6) – – – 0.14% 0.38% 0.41%






(6) The trading expense ratio represents commissions and other portfoliotransaction costs expressed as an annualized percentage of dailyaverage net assets during the period, and is provided from 2008onwards.




4

HSBC European Fund





0%

-60%Dec. 31

2003Dec. 31

2004Dec. 31

2005Dec. 31

2006Dec. 31

2007Dec. 31

2008Dec. 31

2009Dec. 31

2010Dec. 31

2012Dec. 31

2011

-20%

-40%

40%

20% 13.2% 9.0% 5.8%

32.9%

-7.0%

-37.0%

15.3% 16.9%10.4%

-3.8%-13.0%

June 302013


0%

-60%Dec. 31

2003Dec. 31

2004Dec. 31

2005Dec. 31

2006Dec. 31

2007Dec. 31

2008Dec. 31

2009Dec. 31

2010Dec. 31

2012Dec. 31

2011

-20%

-40%

40%

20% 13.3% 9.3% 5.8%

32.9%

-7.2%

-37.1%

15.3% 16.9%10.5%

-3.8%-13.0%

June 302013


20%

-20%

-40%

0%

Dec. 312011

Dec. 312012

10%

-10%

30%

-30%

-12.4%

18.0%10.8%

June 302013


0%

-60%Dec. 31

2003Dec. 31

2004Dec. 31

2005Dec. 31

2006Dec. 31

2007Dec. 31

2008Dec. 31

2009Dec. 31

2010Dec. 312012*

Dec. 312011

-20%

-40%

40%

20% 14.4% 10.4% 7.0%

34.3%

-6.0%

-36.3%

16.5%

-2.8%-12.0%

June 302013

0.0% 0.0%

* The Manager Series was fully redeemed during 2012; however, itremains in operation at period-end.


20%

-60%

0%

Dec. 312008

Dec. 312009

Dec. 312010*

Dec. 312011

Dec. 312012

Dec. 312006

Dec. 312007

-20%

-40%

40% 35.7%

-5.0%

-35.6%

17.8%

0.0% 0.0% 0.0% 0.0%

June 302013

* The Institutional Series was fully redeemed during 2010; however,it remains in operation at period-end.

5

HSBC European Fund



of NAV

Financials 19.73%Consumer Discretionary 17.77%Industrials 16.65%Healthcare 10.94%Energy 10.27%Materials 8.84%Information Technology 5.35%Utilities 3.29%Consumer Staples 3.20%Telecommunication Services 3.03%Cash & Equivalents 0.93%Total 100.00%


of NAV

United Kingdom 38.62%France 24.65%Germany 12.62%Switzerland 6.89%Spain 6.66%Netherlands 3.37%Jersey 3.18%Ireland 3.08%Cash & Equivalents 0.93%Total 100.00%


of NAV

Resolution Ltd. 3.61%Amadeus IT Holding SA, Class A 3.58%Publicis Groupe SA 3.56%Roche Holding AG 3.48%Sanofi-Aventis SA 3.47%Julius Baer Group Ltd. 3.40%ING Groep NV 3.37%Kingfisher PLC 3.33%Centrica PLC 3.29%Legrand SA 3.22%Unilever PLC 3.20%Prudential PLC 3.18%BNP Paribas SA 3.11%Ryanair Holdings PLC, ADR 3.08%HSBC Holdings PLC 3.05%BT Group PLC 3.03%Compass Group PLC 3.03%Repsol YPF SA 3.01%Safran SA 2.99%BP PLC 2.97%Brenntag AG 2.94%BASF SE 2.93%Volkswagen AG, Preferred 2.92%BHP Billiton PLC 2.78%Signet Jewelers Ltd. 2.70%Total of Top 25 Holdings 79.23%


6





How to reach us



Toll-free: 1-800-830-8888Fax: 604-669-2756











(201

3-08

)RR

D

HSBC AsiaPacific Fund




Management Discussion of Fund PerformanceIn this document, you and your refer to the unitholder of the Fund;we, us and our refer to HSBC Global Asset Management (Canada)Limited; and the Fund refers to the HSBC AsiaPacific Fund.

We are the manager, trustee and primary investment advisor ofthe Fund. We have entered into a sub-advisory agreement withHSBC Global Asset Management (Hong Kong) Limited, underwhich HSBC Global Asset Management (Hong Kong) Limitedprovides investment advice and portfolio management services tothe Fund. For an explanation of the relationship between us andthe sub-advisor, see the section Selection of Sub-Advisors in theFund’s Simplified Prospectus.





To achieve its objectives, the Fund invests primarily in equities andequity-related securities issued by large, established companiesdomiciled in Asia and the Pacific Rim, but excluding Japan. Tomaintain a diversified portfolio of holdings, the Fund invests incompanies from a broad range of industries through commonshares, preferred shares, rights, special warrants, Americandepositary receipts and global depositary receipts. A portion of theFund may be in the form of cash or cash equivalents.

RiskThe risks of investing in this Fund remain as discussed in theSimplified Prospectus. This Fund is suitable for investors seekinglong-term capital appreciation from equity securities issued in non-North American markets. Investors in this Fund should have along-term investment time horizon and a medium to high tolerancefor risk in their returns.

Results of OperationsAs of June 30, 2013, the Fund’s net assets decreased by 6.1% to$41.5 million from $44.2 million at the end of 2012. Of thisdecrease, a $1.1 million loss was attributable to investmentperformance and $1.6 million was attributable to net redemptionsof Fund units.

Investment PerformanceThe HSBC AsiaPacific Fund (Investor Series) declined 2.78% forthe six months ending June 30, 2013, while the benchmark, theMSCI AC Asia Pacific ex-Japan Index (in Canadian dollars),declined 0.35% over the same period.

Asia Pacific ex-Japan equities enjoyed a strong start to 2013 onresurgent regional economic growth and improved investorsentiment. However, the markets gave up these gains in thesecond quarter to end the period almost flat. Disappointment withthe pace of Chinese economic growth and speculation that the USmay end ultra-loose monetary policy caused this reversal.

The portfolio lost ground over the first half of 2013, with theposition in Chinese materials dragging on performance,outweighing the solid positive contribution from Australian banks.It outperformed the benchmark in the first quarter, butunderperformed in the second quarter. Sector allocation detracteddue to the overweight in the energy sector and the underweight inthe consumer staples sector. Stock selection was also negative,particularly within the industrials and materials sectors.

Recent DevelopmentsThere is a possibility of further short-term volatility in Asianequities, given ongoing speculation that US monetary policy maytighten and see liquidity withdrawn from the market. In addition,regional economic growth remains muted and aggregate earningsexpectations for 2013 continue to drift lower. However,incremental improvement in the US economy is expected tosupport Asian exports in the second half of 2013. At the sametime, further clarity on China’s structural reforms, expected later inthe year, could provide some market support.

The portfolio continues to be concentrated in those areas thatoffer long-term, sustainable profitability at attractive valuations.This continues to be in the more cyclical sectors such as energy,technology and financials. Defensive sectors continue to be athistorically extreme valuations compared to the broader market.By country, the Fund carries its largest overweight in India andChina.

Related Party TransactionsWe, on behalf of the Fund, or the Fund Manager, may, from timeto time, enter into transactions or arrangements with or involvingother members of the HSBC Group or other people or companies

1


related or connected to us or the Fund. To proceed with thetransactions, the Fund relies on the positive recommendation ofthe Fund’s Independent Review Committee. A condition of thispositive recommendation is that the transactions are performed inaccordance with our policy on Related Party Transactions. For moregeneral information on persons related to the Fund and the typesof potential transactions, see the Fund’s Simplified Prospectus.


Manager, Trustee and Investment AdvisorWe are the manager, trustee and primary investment advisor ofthe Fund. As manager, we manage the overall business andoperations of the Fund. As trustee, we hold legal title to theproperty of the Fund on your behalf. As primary investmentadvisor, we provide investment advice and portfolio managementservices to the Fund. We receive a fee from the Fund for theseservices based on assets under management, calculated daily andpaid monthly. We have entered into a sub-advisory agreementwith HSBC Global Asset Management (Hong Kong) Limited (anaffiliate), under which HSBC Global Asset Management (HongKong) Limited provides investment advice and portfoliomanagement services to the Fund. We pay HSBC Global AssetManagement (Hong Kong) Limited a fee from the Fund based onassets under management, calculated daily and paid quarterly. Formore information on our ability to hire sub-advisors, see thesection Organization and Management of the HSBC Mutual Fundsin the Fund’s Simplified Prospectus.


Financial HighlightsThe following tables show selected key financial information aboutthe Fund and are intended to help you understand the Fund’sfinancial performance for the six-month period ended June 30,2013 and for the years ended December 31, as applicable. In theyear a fund is established, “period” represents the period frominception to December 31 or June 30 of that fiscal year, as

applicable. This information is derived from the Fund’s unauditedsemi-annual financial statements and audited annual financialstatements. The information in the following tables is based onprescribed regulations, and as a result, is not expected to add dueto the increase/decrease in net assets from operations beingbased on average units outstanding during the period and all othernumbers being based on actual units outstanding at the relevantpoint in time.

HSBC AsiaPacific Fund – Investor SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: November 1993

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:

Total revenue 0.25 0.40 0.38 0.31 0.28 0.44Total expenses (0.14) (0.29) (0.30) (0.30) (0.24) (0.27)Realized gains (losses) 0.26 (0.69) (0.14) 1.21 0.61 (1.47)Unrealized gains (losses) (0.65) 1.85 (2.62) 0.06 2.99 (4.40)


from operations (1) $(0.28) $1.27 $(2.68) $1.28 $3.64 $(5.70)

Distributions to

unitholders:

From income (excludingdividends) – – – – – –From dividends – (0.17) (0.07) – – (0.09)From net realized gainson investments – – – – – –

Total annual

distributions (1,2) $– $(0.17) $(0.07) $– $– $(0.09)


period (1,7) $11.42 $11.72 $10.65 $13.44 $12.16 $8.53


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008


2


HSBC AsiaPacific Fund – Advisor SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2001

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008



Total revenue 0.31 0.58 0.48 0.39 0.36 0.57Total expenses (0.19) (0.37) (0.37) (0.37) (0.31) (0.35)Realized gains (losses) 0.32 (0.87) (0.18) 1.54 0.78 (1.75)Unrealized gains (losses) (0.64) 2.74 (2.50) (0.23) 3.41 (6.02)

Total increase (decrease)from operations (1) $(0.20) $2.08 $(2.57) $1.33 $4.24 $(7.55)


From income (excludingdividends) – – – (0.01) – –From dividends – (0.25) (0.08) – – (0.12)From net realized gainson investments – – – – – –

Total annualdistributions (1,2) $– $(0.25) $(0.08) $(0.01) $– $(0.12)



2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008


HSBC AsiaPacific Fund – Premium SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2009

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010



Total revenue 0.23 0.34 0.33 0.14Total expenses (0.10) (0.20) (0.19) (0.11)Realized gains (losses) 0.17 (0.61) (0.12) 0.57Unrealized gains (losses) (0.72) 1.55 (2.29) 0.83

Total increase (decrease) from operations (1) $(0.42) $1.08 $(2.27) $1.43


From income (excluding dividends) – – – (0.07)From dividends – (0.19) (0.11) –From net realized gains on investments – – – –




2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

NAV (in 000s) (3,7) $1,689 $1,380 $1,347 $715Units outstanding (in 000s) (3) 168 134 144 61NAV per unit (3) $10.07 $10.33 $9.35 $11.72Management expense ratio (“MER”) (4) 1.86% 2.03% 1.77% 2.03%MER before absorbed or waived fees (4) 1.86% 2.03% 1.77% 2.03%Portfolio turnover rate (5) 32.59% 59.92% 65.16% 89.40%Trading expense ratio (6) 0.24% 0.25% 0.31% 0.44%

HSBC AsiaPacific Fund – Manager SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2001

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:



from operations (1) $(0.45) $2.36 $(4.13) $1.81 $5.64 $(8.98)

Distributions to

unitholders:

From income (excludingdividends) – – – (0.20) – –From dividends – (0.47) (0.29) – – (0.14)From net realized gainson investments – – – – – –

Total annual

distributions (1,2) $– $(0.47) $(0.29) $(0.20) $– $(0.14)


period (1,7) $17.62 $17.99 $16.35 $20.63 $18.62 $12.92


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008


3


HSBC AsiaPacific Fund – Institutional SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2001

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:



from operations (1) $(0.39) $2.22 $(3.62) $2.03 $5.72 $(7.35)

Distributions to

unitholders:


Total annual

distributions (1,2) $– $(0.64) $(0.44) $(1.12) $(0.12) $(0.13)


period (1,7) $16.16 $16.41 $14.93 $18.85 $17.69 $12.24


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008

NAV (in 000s) (3,7) $1,980 $1,751 $1,792 $2,418 $6,077 $3,886Units outstanding(in 000s) (3) 122 106 120 128 343 316NAV per unit (3) $16.19 $16.48 $14.96 $18.89 $17.72 $12.29Management expense ratio(“MER”) (4) 0.22% 0.36% 0.21% 0.28% 0.31% 0.27%MER before absorbed orwaived fees (4) 0.22% 0.36% 0.21% 0.28% 0.31% 0.27%Portfolio turnover rate (5) 32.59% 59.92% 65.16% 89.40% 167.95% 100.42%Trading expense ratio (6) 0.24% 0.25% 0.31% 0.44% 0.18% 0.52%




(4) MER includes the total expenses of each Fund, including the Goodsand Services Tax and/or Harmonized Sales Tax thereon, other thanbrokerage commissions on securities transactions and any foreignwithholding taxes on income, as an annualized percentage of averagenet asset value (“NAV”) of the respective series of unit for the period.In the period a series is established, the MER is annualized from thedate of inception to the end of the period. The MER may vary fromone mutual fund to another and from one series of units to another.We may have waived or absorbed certain fees and expenses

otherwise payable by the Fund. The amount of expenses absorbed orwaived is at the discretion of and can be terminated at any time by us.







4





0%

-60%

-20%

-40%

40%

20%20.6%

8.1%17.1%

29.9%

13.5%

-39.7%

42.3%

10.5%

-20.2%

2003Dec. 31

2004Dec. 31

2005Dec. 31

2006Dec. 31

2007Dec. 31

2008Dec. 31

2009Dec. 31

2010Dec. 31

2011Dec. 31

2013June 30

2012Dec. 31

11.9%

-2.8%


0%

-60%

20%

40%

-40%

-20%

17.1%29.9%

13.5%

-39.7%

42.2%

10.5% 11.9%

-19.4%

2005Dec. 31

2006Dec. 31

2007Dec. 31

2008Dec. 31

2009Dec. 31

2010Dec. 31

2011Dec. 31

2013June 30

2012Dec. 31

-2.8%


20%

-20%

-40%

0%

Dec. 312011

10%

-10%

30%

-30%-19.3%

12.5%

-2.5%

2012Dec. 31 June 30

2013


0%

-60%

-20%

-40%

40%

20%22.1%

9.2%18.3%

31.2%

14.5%

-39.0%

43.7%

11.9%

-19.4%

2003Dec. 31

2004Dec. 31

2005Dec. 31

2006Dec. 31

2007Dec. 31

2008Dec. 31

2009Dec. 31

2010Dec. 31

2011Dec. 31

2013June 30

2012Dec. 31

13.2%

-2.2%


0%

-60%

-20%

-40%

40%

20% 10.4%19.6%

32.6%

16.0%

-38.4%

45.2%

12.9%

-18.5%

2004Dec. 31

2005Dec. 31

2006Dec. 31

2007Dec. 31

2008Dec. 31

2009Dec. 31

2010Dec. 31

2011Dec. 31

2012Dec. 31

2013June 30

14.4%

-1.7%

5




of NAV

Financials 41.15%Information Technology 13.59%Industrials 10.45%Consumer Discretionary 9.31%Materials 8.43%Energy 7.79%Telecommunication Services 5.99%Utilities 0.95%Consumer Staples 0.76%Healthcare 0.46%Cash & Equivalents 1.12%Total 100.00%


of NAV

Australia 25.87%South Korea 16.63%Hong Kong 13.44%India 10.42%China 10.25%Taiwan 7.98%Thailand 6.29%Singapore 3.28%Indonesia 3.20%Malaysia 1.52%Cash & Equivalents 1.12%Total 100.00%


of NAV

Samsung Electronics Co., Ltd. 4.46%Commonwealth Bank of Australia 3.79%BHP Billiton Ltd. 3.44%Taiwan Semiconductor Manufacturing Co., Ltd., ADR 3.28%Australia & New Zealand Banking Group Ltd. 2.94%National Australia Bank Ltd. 2.69%China Mobile (Hong Kong) Ltd. 2.62%China Construction Bank Corp. 2.39%Industrial & Commercial Bank of China Ltd. 2.09%Westpac Banking Corp. 1.78%Hyundai Motor Co. 1.69%Bank of China Ltd. 1.60%Wesfarmers Ltd. 1.54%AIA Group Ltd. 1.50%Telstra Corp. Ltd. 1.50%Kasikorn Bank PCL 1.43%Woolworths Ltd. 1.35%Hon Hai Precision Industry Co., Ltd., GDR 1.34%Rio Tinto Ltd. 1.34%Bank Rakyat Indonesia 1.22%Cheung Kong (Holdings) Ltd. 1.20%China Petroleum & Chemical Corp. 1.20%The Wharf (Holdings) Ltd. 1.18%CNOOC Ltd. 1.17%Goodman Group 1.11%Total of Top 25 Holdings 49.85%


6





How to reach us



Toll-free: 1-800-830-8888Fax: 604-669-2756











(201

3-08

)RR

D

HSBC Chinese Equity Fund




Management Discussion of Fund PerformanceIn this document, you and your refer to the unitholder of the Fund;we, us and our refer to HSBC Global Asset Management (Canada)Limited; and the Fund refers to the HSBC Chinese Equity Fund.

We are the manager, trustee and primary investment advisor ofthe Fund. We have entered into a sub-advisory agreement withHSBC Global Asset Management (Hong Kong) Limited, underwhich HSBC Global Asset Management (Hong Kong) Limitedprovides investment advice and portfolio management services tothe Fund. For an explanation of the relationship between us andthe sub-advisor, see the section Selection of Sub-Advisors in theFund’s Simplified Prospectus.





To achieve its objectives, the Fund invests primarily in equity andequity-related securities of publicly traded companies registered, orwith an official listing, on a stock exchange in the People’s Republicof China (“China”) as well as investing in securities of publiccompanies that have a significant business or investment link withChina. To maintain a diversified portfolio of holdings, the Fundinvests in companies from a broad range of industries throughcommon shares, preferred shares, rights, special warrants,American depositary receipts and global depositary receipts. Aportion of the Fund may be in the form of cash or cash equivalents.

RiskThe risks of investing in this Fund remain as discussed in theSimplified Prospectus. This Fund is suitable for investors seekinglong-term capital growth and who have a long-term investmenttime horizon. Investors in this Fund should have a high tolerancefor risk in their returns.

There was no significant change in the Fund’s risk profile over thecourse of the year.

Results of OperationsAs of June 30, 2013, the Fund’s net assets decreased by 8.7% to$189.0 million from $207 million at the end of 2012. Of thisdecrease, a $8.7 million loss was attributable to investmentperformance and $9.3 million was attributable to net redemptionsof Fund units.

Investment PerformanceThe HSBC Chinese Equity Fund (Investor Series) declined 4.34%for the six months ending June 30, 2013, and the benchmark, theMSCI China 10/40 Net Index (in Canadian dollars), declined 5.94%over the same period.

Chinese equities lost ground over the first half of 2013. Themarket enjoyed a strong start to the year as the economy showedsigns of rejuvenation in response to policy loosening in 2013.However, the pace of growth has subsequently slowed,disappointing the market. At the same time, stress has emergedin areas such as inter-bank liquidity, as the government seeks toaddress areas of imbalance within the economy. Investorsentiment also faltered in response to indications that the US maystart to tighten its monetary policy in response to economicimprovement.

The portfolio outperformed its benchmark over the period due tostrong stock selection. This was particularly so within theconsumer discretionary sector, where exposure to automobilesmade a strong positive contribution. We prefer companies with anedge in niche markets such as sports utility vehicles, wheredemand remains strong. The positions in “clean energy” stockswere also beneficial. Sector allocation detracted fromperformance, given the underweights in defensive sectors such astelecommunications and consumer staples.

Recent DevelopmentsGoing forward, we expect that market sentiment will remaincautious given concerns over tighter US monetary policy and theChinese government’s indication that it will tolerate short-termeconomic pain in order to achieve structural reform. However, alot of the bad news has been discounted into the share price.Valuation remains cheap relative to its own history and to the restof the region, with the benchmark currently trading on a 2013price-to-book ratio of 1.2x.

We continue to like companies that will continue to deliver stablegrowth with the ability to increase their margins, such as the sportutility vehicle segment within the automobile sector. We also likethe wind and solar alternative energy sectors given thegovernment support for continued development.

1




Manager, Trustee and Investment AdvisorWe are the manager, trustee and primary investment advisor ofthe Fund. As manager, we manage the overall business andoperations of the Fund. As trustee, we hold legal title to theproperty of the Fund on your behalf. As primary investmentadvisor, we provide investment advice and portfolio managementservices to the Fund. We receive a fee from the Fund for theseservices based on assets under management, calculated daily andpaid monthly. We have entered into a sub-advisory agreementwith HSBC Global Asset Management (Hong Kong) Limited(an affiliate), under which HSBC Global Asset Management (HongKong) Limited provides investment advice and portfoliomanagement services to the Fund. We pay HSBC Global AssetManagement (Hong Kong) Limited a fee from the Fund based onassets under management, calculated daily and paid quarterly. Formore information on our ability to hire sub-advisors, see thesection Organization and Management of the HSBC Mutual Fundsin the Fund’s Simplified Prospectus.



HSBC Chinese Equity Fund – Investor SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2003

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:



from operations (1) $(0.78) $2.58 $(3.61) $(1.15) $5.63 $(11.34)

Distributions to

unitholders:


Total annual

distributions (1,2) $– $– $– $– $– $–


period (1,7) $17.45 $18.27 $15.68 $19.42 $20.73 $15.14


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008


2


HSBC Chinese Equity Fund – Advisor SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2003

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:



from operations (1) $(0.72) $3.12 $(3.21) $(1.50) $5.43 $(12.74)

Distributions to

unitholders:


Total annual

distributions (1,2) $– $– $– $– $– $–


period (1,7) $17.66 $18.49 $15.86 $19.62 $20.94 $15.31


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008


HSBC Chinese Equity Fund – Premium SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2009

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010



Total revenue 0.22 0.26 0.26 0.17Total expenses (0.11) (0.20) (0.21) (0.14)Realized gains (losses) 0.46 (0.19) (0.60) 0.19Unrealized gains (losses) (1.09) 1.67 (1.50) 0.25



From income (excluding dividends) – – – –From dividends – – – –From net realized gains on investments – – – –

Total annual distributions (1,2) $– $– $– $–



2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

NAV (in 000s) (3,7) $13,673 $13,375 $8,589 $6,914Units outstanding (in 000s) (3) 1,381 1,295 974 636NAV per unit (3) $9.90 $10.33 $8.81 $10.87Management expense ratio (“MER”) (4) 2.08% 2.09% 2.13% 2.12%MER before absorbed or waived fees (4) 2.08% 2.09% 2.13% 2.12%Portfolio turnover rate (5) 52.47% 91.56% 126.19% 162.70%Trading expense ratio (6) 0.47% 0.41% 0.63% 0.74%

HSBC Chinese Equity Fund – Manager SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2003

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:



from operations (1) $(0.79) $2.94 $(3.38) $(1.40) $6.12 $(12.69)

Distributions to

unitholders:


Total annual

distributions (1,2) $– $– $– $– $– $–


period (1,7) $19.16 $19.96 $16.94 $20.75 $21.91 $15.85


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008

NAV (in 000s) (3,7) $408 $472 $445 $1,012 $1,725 $1,462Units outstanding(in 000s) (3) 21 24 26 49 79 92NAV per unit (3) $19.21 $19.98 $16.97 $20.80 $21.94 $15.87Management expense ratio(“MER”) (4) 1.56% 1.54% 1.55% 1.51% 1.50% 1.51%MER before absorbed orwaived fees (4) 1.56% 1.54% 1.55% 1.51% 1.50% 1.51%Portfolio turnover rate (5) 52.47% 91.56% 126.19% 162.70% 167.85% 97.52%Trading expense ratio (6) 0.47% 0.41% 0.63% 0.74% 0.24% 0.56%

3


HSBC Chinese Equity Fund – Institutional SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2003

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:



from operations (1) $(0.73) $3.53 $(3.69) $(0.93) $6.89 $(11.85)

Distributions to

unitholders:


Total annual

distributions (1,2) $– $– $– $– $– $–


period (1,7) $20.98 $21.70 $18.16 $21.94 $22.86 $16.32


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008












4





0%

-60%Dec. 31

2005Dec. 31

2006Dec. 31

2007Dec. 31

2008Dec. 31

2009Dec. 31

2010Dec. 31

2011June 30

2013Dec. 31

2012

20%

40%

-40%

-20%

60%

80%

7.2%

80.3%

35.0%

-43.4%

36.9%

-6.2%-19.3%

16.5%

-4.3%


0%

-60%Dec. 31

2005Dec. 31

2006Dec. 31

2007Dec. 31

2008Dec. 31

2009Dec. 31

2010Dec. 31

2011June 30

2013Dec. 31

2012

20%

40%

-40%

-20%

60%

80%

7.3%

80.6%

35.0%

-43.5%

36.8%

16.5%

-4.3%-6.2%-19.3%


20%

-20%

-30%

0%

Dec. 312011

Dec. 312012

June 302013

10%

-10%

-18.9%

17.1%

-4.1%


0%

-60%Dec. 31

2005Dec. 31

2006Dec. 31

2007Dec. 31

2008Dec. 31

2009Dec. 31

2010Dec. 31

2011June 30

2013Dec. 31

2012

20%

40%

-40%

-20%

60%

80%

8.4%

82.1%

36.4%

-42.8%

38.2%

17.8%

-5.2%-18.4%

-3.8%


0%

-60%Dec. 31

2005Dec. 31

2006Dec. 31

2007Dec. 31

2008Dec. 31

2009Dec. 31

2010Dec. 31

2011June 30

2013Dec. 31

2012

20%

40%

-40%

-20%

60%

80%

9.8%19.4%

84.6%

38.2%

-42.0%

40.0%

-3.9%-17.3%

-3.2%

5




of NAV

Financials 35.58%Energy 13.86%Consumer Discretionary 10.89%Telecommunication Services 9.91%Industrials 9.58%Information Technology 7.72%Utilities 6.04%Materials 1.53%Cash & Equivalents 4.89%Total 100.00%


of NAV

China Mobile (Hong Kong) Ltd. 9.91%China Construction Bank Corp. 9.28%Industrial & Commercial Bank of China Ltd. 6.60%Tencent Holdings Ltd. 6.31%Bank of China Ltd. 5.49%CNOOC Ltd. 4.57%AIA Group Ltd. 4.31%China Oilfield Services Ltd., Class H 3.14%China Petroleum & Chemical Corp. 2.83%Chongqing Changan Automobile Co., Ltd. 2.45%China Communications Construction Co. Ltd. 2.36%Great Wall Automobile Holding Co. Ltd. 2.23%China Railway Construction Corp. Ltd. 2.12%China State Construction International Holdings Ltd. 1.99%Sunac China Holdings Ltd. 1.94%Huaneng Power International Inc., Class H 1.69%Shimao Property Holdings Ltd. 1.60%New World Development Co., Ltd. 1.55%China Railway Group Ltd. 1.51%Gemdale Properties and Investment Corp., Ltd. 1.50%Yuexiu Property Co., Ltd. 1.50%PetroChina Co., Ltd. 1.46%Dongfeng Motor Group Co. Ltd. 1.45%Melco International Development Ltd. 1.45%Agricultural Bank of China 1.40%Total of Top 25 Holdings 80.64%


6





How to reach us



Toll-free: 1-800-830-8888Fax: 604-669-2756











(201

3-08

)RR

D

HSBC Indian Equity Fund




Management Discussion of Fund PerformanceIn this document, you and your refer to the unitholder of the Fund;we, us and our refer to HSBC Global Asset Management (Canada)Limited; and the Fund refers to the HSBC Indian Equity Fund.

We are the manager, trustee and primary investment advisor ofthe Fund. We have entered into a sub-advisory agreement withHSBC Global Asset Management (Singapore) Limited, underwhich HSBC Global Asset Management (Singapore) Limitedprovides investment advice and portfolio management services tothe Fund. For an explanation of the relationship between us andthe sub-advisor, see the section Selection of Sub-Advisors in theFund’s Simplified Prospectus.





To achieve its objectives, the Fund will invest primarily in equityand equity-related securities of publicly traded companiesregistered, or with an official listing, on a stock exchange in India,as well as securities of public companies that have a significantbusiness or investment link with India. To maintain a diversifiedportfolio of holdings, the Fund invests in companies from a broadrange of industries through common shares, preferred shares,rights, special warrants, American depositary receipts, globaldepositary receipts and participation notes. A portion of the Fundmay be in the form of cash or cash equivalents.

RiskThe risks of investing in the Fund remain as discussed in theSimplified Prospectus. This Fund is suitable for investors whowant exposure to equity and equity-related securities of

companies located in India and who have a long-term investmenttime horizon and a high tolerance for risk in their returns.

Results of OperationsAs of June 30, 2013, the Fund’s net assets decreased by 19.2%to $27.4 million from $33.9 million at the end of 2012. Of thisdecrease, a $4.9 million loss was attributable to investmentperformance and $1.6 million was attributable to net redemptionsof Fund units.

Investment PerformanceThe HSBC Indian Equity Fund (Investor Series) declined 15.57%for the six months ending June 30, 2013, while its benchmark, theS&P/IFC Emerging Markets India Index (in Canadian dollars),declined 4.62% over the same period.

Around 70% of the underperformance was attributed to stockselection effect, with the balance due to sector selection. Sectorselection in the underweighted information technology and utilitiessectors helped performance, while the overweight in materialsand underweight in consumer staples hurt performance.

Stock selection in the energy and information technology sectorsmade positive contributions to performance, while negativecontributors came from the materials, healthcare and financialsectors.

The portfolio sought reasonably valued profitable companies thatwould benefit from recent government reform in such sectors asoil & gas and power. The government’s focus on reducing thefiscal deficit and current account deficit should help the centralbank continue reducing the key lending interest rate.

The uncertain global macroeconomic situation and slow domesticeconomic growth have helped expensive defensive stocksoutperform.

Recent DevelopmentsThe Indian market had a volatile first half of 2013, with three10-12% moves (down twice and up once). Both domestic andglobal events contributed to the market’s performance so far thisyear. The government continued its measures to revive theinvestment cycle by approving a projected USD27 billion inprojects. It also liberalized Foreign Direct Investments in sectorssuch as airlines and multi-brand retail. Its commitment to tacklethe subsidy issue by de-regulating petrol prices and increasingdiesel prices by a small amount every month has been verypositive.

With inflation moderating (+4.7% year-over-year for May 2013)and slower GDP growth (4.8% for January-March 2013), theReserve Bank of India delivered a 75 bps cut in policy rates in thefirst half of 2013. The Indian rupee lost nearly 8% against the USdollar during the same period due to the high, but improving,current account deficit.

1




Manager, Trustee and Investment AdvisorWe are the manager, trustee and primary investment advisor ofthe Fund. As manager, we manage the overall business andoperations of the Fund. As trustee, we hold legal title to theproperty of the Fund on your behalf. As primary investmentadvisor, we provide investment advice and portfolio managementservices to the Fund. We receive a fee from the Fund for theseservices based on assets under management, calculated daily andpaid monthly. We have entered into a sub-advisory agreementwith HSBC Global Asset Management (Singapore) Limited (anaffiliate), under which HSBC Global Asset Management(Singapore) Limited provides investment advice and portfoliomanagement services to the Fund. We pay HSBC Global AssetManagement (Singapore) Limited a fee from the Fund based onassets under management, calculated daily and paid quarterly. Formore information on our ability to hire sub-advisors, see thesection Organization and Management of the HSBC Mutual Fundsin the Fund’s Simplified Prospectus.



HSBC Indian Equity Fund – Investor SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2008

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009


period (1,7) $7.78 $5.86 $11.17 $10.27 $10.00


Total revenue 0.11 0.43 0.11 0.20 –Total expenses (0.11) (0.22) (0.26) (0.30) (0.04)Realized gains (losses) (0.32) (1.22) (0.59) 0.72 0.03Unrealized gains (losses) (0.87) 2.92 (4.44) 0.58 0.60


operations (1) $(1.19) $1.91 $(5.18) $1.20 $0.59


From income (excluding dividends) – – – – –From dividends – (0.09) – – –From net realized gains oninvestments – – – 0.26 (0.05)

Total annual distributions (1,2) $– $(0.09) $– $(0.26) $(0.05)


period (1,7) $6.57 $7.78 $5.86 $11.17 $10.27


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

NAV (in 000s) (3,7) $24,939 $30,424 $22,156 $32,787 $7,524Units outstanding (in 000s) (3) 3,790 3,903 3,776 2,931 733NAV per unit (3) $6.58 $7.79 $5.87 $11.19 $10.27Management expense ratio(“MER”) (4) 2.82% 3.13% 3.06% 2.72% 2.88%MER before absorbed or waivedfees (4) 3.02% 3.38% 3.20% 2.91% 6.36%Portfolio turnover rate (5) 40.86% 72.86% 61.50% 138.27% 124.30%Trading expense ratio (6) 1.48% 0.32% 0.35% 0.47% 0.22%

2


HSBC Indian Equity Fund – Advisor SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2008

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009


period (1,7) $8.16 $6.15 $11.71 $10.77 $10.00




operations (1) $(1.25) $1.82 $(5.61) $0.83 $0.53


From income (excluding dividends) – – – – –From dividends – (0.09) – – –From net realized gains oninvestments – – – 0.27 (0.05)



period (1,7) $6.89 $8.16 $6.15 $11.71 $10.77


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

NAV (in 000s) (3,7) $950 $1,184 $657 $1,365 $490Units outstanding (in 000s) (3) 138 145 107 116 46NAV per unit (3) $6.90 $8.17 $6.15 $11.72 $10.77Management expense ratio(“MER”) (4) 2.83% 3.09% 2.95% 2.70% 3.02%MER before absorbed or waivedfees (4) 3.03% 3.36% 3.12% 2.90% 7.19%Portfolio turnover rate (5) 40.86% 72.86% 61.50% 138.27% 124.30%Trading expense ratio (6) 1.48% 0.32% 0.35% 0.47% 0.22%

HSBC Indian Equity Fund – Premium SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2009

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010



Total revenue 0.11 0.35 0.10 0.07Total expenses (0.08) (0.17) (0.20) 0.11Realized gains (losses) (0.23) (1.10) (0.55) 0.26Unrealized gains (losses) (0.61) 3.03 (3.94) 0.36

Total increase (decrease) from operations (1) $(0.81) $2.11 $(4.59) $(0.14)


From income (excluding dividends) – – – –From dividends – (0.12) – –From net realized gains on investments – – – 0.29

Total annual distributions (1,2) $– $(0.12) $– $(0.29)



2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010


HSBC Indian Equity Fund – Manager SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2008

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009


period (1,7) $8.03 $6.05 $11.41 $10.49 $10.00




operations (1) $(1.23) $2.37 $(6.53) $1.19 $0.77


From income (excluding dividends) – – – – –From dividends – (0.18) – – –From net realized gains oninvestments – – – (0.39) (0.06)



period (1,7) $6.82 $8.03 $6.05 $11.41 $10.49


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

NAV (in 000s) (3,7) $37 $45 $50 $214 $145Units outstanding (in 000s) (3) 5 6 8 19 14NAV per unit (3) $6.83 $8.04 $6.06 $11.42 $10.49Management expense ratio(“MER”) (4) 1.75% 2.01% 1.74% 1.64% 2.06%MER before absorbed or waivedfees (4) 1.95% 2.25% 2.05% 1.81% 6.33%Portfolio turnover rate (5) 40.86% 72.86% 61.50% 138.27% 124.30%Trading expense ratio (6) 1.48% 0.32% 0.35% 0.47% 0.22%

3


HSBC Indian Equity Fund – Institutional SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2008

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009


period (1,7) $7.99 $6.03 $11.20 $10.30 $10.00


Total revenue 0.12 0.49 0.11 0.19 0.05Total expenses (0.01) (0.05) (0.05) (0.03) (0.28)Realized gains (losses) (0.36) (1.31) (0.60) 0.69 4.48Unrealized gains (losses) (0.91) 3.21 (4.49) 1.32 (4.18)


operations (1) $(1.16) $2.34 $(5.03) $2.17 $0.07


From income (excluding dividends) – – – – –From dividends – (0.30) – – –From net realized gains oninvestments – – – (0.53) (0.06)



period (1,7) $6.83 $7.99 $6.03 $11.20 $10.30


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

NAV (in 000s) (3,7) $49 $325 $336 $886 $36Units outstanding (in 000s) (3) 7 41 56 79 4NAV per unit (3) $6.84 $8.00 $6.03 $11.22 $10.30Management expense ratio(“MER”) (4) 0.35% 0.62% 0.43% 0.24% 0.03%MER before absorbed or waivedfees (4) 0.54% 0.87% 0.59% 0.40% 0.12%Portfolio turnover rate (5) 40.86% 72.86% 61.50% 138.27% 124.30%Trading expense ratio (6) 1.48% 0.32% 0.35% 0.47% 0.22%





(5) The Fund’s portfolio turnover rate indicates how actively the Fund’sportfolio advisor manages its portfolio investments. A portfolio turnoverrate of 100% is equivalent to the Fund buying and selling all of the

securities in its portfolio once in the course of the period. The higher theFund’s portfolio turnover rate in a period, the greater the trading costspayable by the Fund in the period, and the greater the chance of aninvestor receiving taxable capital gains in the year. There is notnecessarily a relationship between a high turnover rate and theperformance of the Fund. The rate is calculated based on the lesser ofpurchases or sales of securities divided by the average weighted marketvalue of the portfolio securities, excluding short-term securities.






Past PerformanceThe performance information shown assumes that all distributionsmade by the Fund in the periods shown were reinvested inadditional securities of the Fund. The performance informationdoes not take into account sales, redemption, distribution, optionalcharges or expenses you may be charged outside of the Fund orthe effect of any income tax you may have to pay as a result ofyour investment in the Fund that would have reduced returns orperformance. The Fund’s past performance does not necessarily

4


indicate how it will perform in the future. Rates of return are notreported for series in existence for less than one year due topolicies issued by the Canadian Securities Administrators.



20%

-20%

-60%

0%

Dec. 312010

Dec. 312011

-40%

40%

11.4%

-47.5%Dec. 31

2012June 30

2013

34.3%

-15.6%


20%

-20%

-60%

0%

Dec. 312010

Dec. 312011

-40%

40%

11.4%

-47.5%Dec. 31

2012

34.4%

-15.5%

June 302013


40%

20%

-20%

-60%

0%

Dec. 312011

-40%

Dec. 312012

June 302013

-47.3%

35.0%

-15.0%


20%

-20%

-60%

0%

Dec. 312010

Dec. 312011

-40%

40%

Dec. 312012

12.6%

-47.0%

35.8%

-15.1%

June 302013


20%

-20%

-60%

0%

Dec. 312010

Dec. 312011

-40%

40%

Dec. 312012

14.1%

-46.2%

37.7%

-14.5%

June 302013



of NAV

Financials 31.05%Information Technology 12.79%Energy 11.65%Industrials 11.36%Materials 11.13%Consumer Discretionary 6.54%Healthcare 5.54%Utilities 4.48%Consumer Staples 0.40%Cash & Equivalents 5.06%Total 100.00%

5



of NAV

ICICI Bank Ltd. 5.94%Oil and Natural Gas Corp., Ltd. 5.56%Maruti Suzuki India Ltd. 5.08%Sterlite Industries (India) Ltd. 4.23%State Bank of India 4.13%Infosys Technologies Ltd., ADR 4.04%Indiabulls Financial Services Ltd. 3.94%Reliance Industries Ltd. 3.86%Jindal Steel & Power Ltd. 3.84%Wipro Ltd. 3.28%Glenmark Pharmaceuticals Ltd. 3.26%Tata Motors Ltd.-A-DVR 3.13%Infrastructure Development Finance Co., Ltd. 2.61%Tech Mahindra Ltd. 2.49%Jaiprakash Associates Ltd. 2.35%HCL Technologies Ltd. 2.31%NMDC Ltd. 2.28%Housing Development Finance Corp. Ltd. 2.23%Oil India Ltd. 2.23%National Thermal Power Corp. 2.10%Axis Bank Ltd. 1.99%LIC Housing Finance Ltd. 1.99%Rural Electrification Corp., Ltd. 1.94%Canara Bank Ltd. 1.64%Aditya Birla Nuvo Ltd. 1.50%Total of Top 25 Holdings 77.95%


6





How to reach us



Toll-free: 1-800-830-8888Fax: 604-669-2756











(201

3-08

)RR

D

HSBC Emerging Markets Fund




Management Discussion of Fund PerformanceIn this document, you and your refer to the unitholder of the Fund;we, us and our refer to HSBC Global Asset Management (Canada)Limited; and the Fund refers to the HSBC Emerging MarketsFund.

We are the manager, trustee and primary investment advisor ofthe Fund. We have entered into a sub-advisory agreement withHSBC Global Asset Management (UK) Limited, under which HSBCGlobal Asset Management (UK) Limited provides investmentadvice and portfolio management services to the Fund. For anexplanation of the relationship between us and the sub-advisor,see the section Selection of Sub-Advisors in the Fund’s SimplifiedProspectus.





To achieve its objectives, the Fund invests primarily in equities andequity-related securities of well-established, publicly tradedcompanies whose main operations are located in emergingmarkets. This includes securities of companies domiciled or listedon stock exchanges in developed countries but which have asignificant business or investment link with an emerging country.To maintain a diversified portfolio of holdings, the Fund invests incompanies from a broad range of industries through commonshares, preferred shares, rights, special warrants, Americandepositary receipts and global depositary receipts. A portion of theFund may be in the form of cash or cash equivalents.

RiskThe risks of investing in the Fund remain as discussed in theSimplified Prospectus. This Fund is suitable for investors seekinglong-term capital appreciation from equity securities issued in

emerging markets. Investors in this Fund should have a long-terminvestment time horizon and a high tolerance for risk in theirreturns.

Results of OperationsAs of June 30, 2013, the Fund’s net assets decreased by 8.6% to$28.6 million from $31.3 million at the end of 2012. Of thisdecrease, $4.0 million was attributable to investmentperformance, which was offset by a $1.3 million gain due to netcontributions to the Fund.

Investment PerformanceThe HSBC Emerging Markets Fund (Investor Series) declined12.76% for the six months ending June 30, 2013 compared to thebenchmark, the MSCI Emerging Markets Index (in Canadiandollars), which declined 4.27% over the same period.

Following a strong start to 2013, where performance was drivenby fundamentals, there was a reversal as macro risks flared up inEurope and China. Concerns over Chinese growth and anti-government unrest in Turkey, combined with the threat of earlier-than-expected tapering of quantitative easing by the US FederalReserve Bank, were significant headwinds to performance. Inparticular, emerging market equities and currencies suffered asharp sell-off in June as investors anticipated lower central bankliquidity and foreign investors withdrew from these markets.

Both stock selection and asset allocation detracted value. Thestrategy was negatively impacted by a sharp sell-off in a broadrange of holdings, notably in China, India, South Africa, Taiwan andBrazil, with more cyclical sectors being among the weakest.

At a country level, the underweight in Malaysia and Taiwandetracted from performance given their positive returns in thesecond quarter. The overweight in Turkey also detracted slightlyfrom performance as the political uncertainty rose sharply in June.Mitigating the underperformance, stock selection was positive inTurkey and Korea. Asset allocation in Mexico, India and Brazil alsocontributed positively to relative performance.

At the end of June, the Fund was overweight Russia, India, Koreaand China. Relative to the benchmark, the Fund is overweight inthe Consumer Discretionary, Energy and Financials sectors.

Recent DevelopmentsEconomic indicators were mixed in May and June with industrialproduction and exports growing at a single digit level; however,inflation continued to be benign except in Indonesia, where fuelsubsidies were cut, causing a temporary spike in inflation. China’sindustrial production remained below 10% year-over-year in May. InIndia, the economy did not recover from the first quarter lowsdespite the Reserve Bank of India’s rate cut in early May. Wholesaleinflation tended to decelerate, but the rupee’s depreciation deterredthe Reserve Bank of India from cutting rates further in June.

1


Fears over the US Federal Reserve Bank’s quantitative easingtapering could be overdone. They are likely to proceed cautiouslyin removing this monetary stimulus, and providing liquidity at areduced pace (i.e., tapering asset purchases) is not the same astightening policy. Actual monetary tightening such as raising policyrates is still a long way off, probably many quarters if not yearsaway in our view.

Markets may remain volatile in the near term. However, weexpect companies to become increasingly upbeat about theirprospects as the growth outlook for the region improves throughthe second half of 2013.



Manager, Trustee and Investment AdvisorWe are the manager, trustee and primary investment advisor of theFund. As manager, we manage the overall business and operationsof the Fund. As trustee, we hold legal title to the property of theFund on your behalf. As primary investment advisor, we provideinvestment advice and portfolio management services to the Fund.We receive a fee from the Fund for these services based on assetsunder management, calculated daily and paid monthly. We haveentered into a sub-advisory agreement with HSBC Global AssetManagement (UK) Limited (an affiliate), under which HSBC GlobalAsset Management (UK) Limited provides investment advice andportfolio management services to the Fund. We pay HSBC GlobalAsset Management (UK) Limited an investment advisory fee fromthe Fund based on assets under management, calculated daily andpaid quarterly. For more information on our ability to hire sub-advisors, see the section Organization and Management of theHSBC Mutual Funds in the Fund’s Simplified Prospectus.

Distribution ServicesThe Fund is distributed through us, HSBC Investment Funds(Canada) Inc. (our wholly owned subsidiary) and through HSBCSecurities (Canada) Inc. (an affiliate) directly or through its division,HSBC InvestDirect. We pay distribution and servicing fees to thembased on the amount of assets held in the investor’s account, andadditionally, in some cases, on the amount of the initial purchase.

If you hold units of this Fund and/or other HSBC Mutual Funds in aregistered plan with HSBC Investment Funds (Canada) Inc., theymay charge you an annual fee to cover the annual administrationcosts of the plan. We permit HSBC Investment Funds (Canada)Inc. to collect these fees by redeeming sufficient units of the Fundwith the highest market value in your registered plan.

Investments in Securities of Related PartiesIn accordance with Canadian securities legislation and policies setout by our Independent Review Committee, the Fund may investits assets in the securities of companies related to the Fund’sinvestment advisor or sub-advisor. During the period, the Fundheld, purchased or sold shares in Bank of Communications, whichrepresented 1.16% of the Fund’s assets as at June 30, 2013.


HSBC Emerging Markets Fund – Investor SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: November 1994

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008



Total revenue 0.13 0.27 0.24 0.22 0.17 0.34Total expenses (0.11) (0.23) (0.25) (0.26) (0.21) (0.27)Realized gains (losses) (0.08) (0.57) (0.28) 0.98 (0.94) (2.32)Unrealized gains (losses) (0.98) 1.57 (2.29) (0.36) 3.74 (3.91)

Total increase (decrease)from operations (1) $(1.04) $1.04 $(2.58) $0.58 $2.76 $(6.16)


From income (excludingdividends) – – – – – –From dividends – –2 – – – (0.08)From net realized gainson investments – – – – – –

Total annualdistributions (1,2) $– $–2 $– $– $– $(0.08)



2



2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008


HSBC Emerging Markets Fund – Advisor SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2001

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:



from operations (1) $(1.69) $1.73 $(4.19) $1.18 $4.73 $(10.75)

Distributions to

unitholders:

From income (excludingdividends) – – – – – –From dividends – (0.01) – – – (0.14)From net realized gainson investments – – – – – –

Total annual

distributions (1,2) $– $(0.01) $– $– $– $(0.14)


period (1,7) $11.86 $13.56 $11.72 $15.97 $15.05 $10.43


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008


HSBC Emerging Markets Fund – Premium SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2009

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010



Total revenue 0.15 0.32 0.25 0.04Total expenses (0.09) (0.19) (0.21) (0.05)Realized gains (losses) (0.08) (0.66) (0.29) 0.19Unrealized gains (losses) (1.18) 1.40 (2.58) (0.08)



From income (excluding dividends) – – – –From dividends – (0.05) (0.01) –From net realized gains on investments – – – –

Total annual distributions (1,2) $– $(0.05) $(0.01) $–



2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

NAV (in 000s) (3,7) $1,625 $1,066 $266 $247Units outstanding (in 000s) (3) 214 123 36 24NAV per unit (3) $7.61 $8.67 $7.46 $10.15Management expense ratio (“MER”) (4) 2.21% 2.39% 2.34% 2.37%MER before absorbed or waived fees (4) 2.21% 2.39% 2.44% 2.99%Portfolio turnover rate (5) 30.75% 82.40% 118.65% 161.64%Trading expense ratio (6) 0.30% 0.37% 0.76% 1.08%

HSBC Emerging Markets Fund – Manager SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2001

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:



from operations (1) $(0.81) $1.95 $(2.29) $(0.04) $2.27 $(4.85)

Distributions to

unitholders:


Total annual

distributions (1,2) $– $(0.09) $(0.05) $– $– $(0.14)


period (1,7) $6.27 $7.13 $6.16 $8.35 $7.79 $5.34

3



2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008

NAV (in 000s) (3,7) $20 $27 $53 $61 $129 $30Units outstanding (in000s) (3) 3 4 9 7 17 6NAV per unit (3) $6.29 $7.17 $6.18 $8.39 $7.81 $5.37Management expense ratio(“MER”) (4) 1.60% 1.70% 1.66% 1.86% 1.62% 1.58%MER before absorbed orwaived fees (4) 1.60% 1.70% 1.78% 1.92% 1.96% 1.84%Portfolio turnover rate (5) 30.75% 82.40% 118.65% 161.64% 170.65% 168.79%Trading expense ratio (6) 0.30% 0.37% 0.76% 1.08% 0.28% 1.07%

HSBC Emerging Markets Fund – Institutional SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2001

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:



from operations (1) $(1.83) $2.54 $(4.69) $1.11 $5.12 $(10.29)

Distributions to

unitholders:


Total annual

distributions (1,2) $– $(0.40) $(0.30) $– $– $(0.15)


period (1,7) $13.73 $15.51 $13.41 $18.20 $16.74 $11.33


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008

NAV (in 000s) (3,7) $16,795 $18,913 $18,444 $18,085 $8,296 $6,379Units outstanding(in 000s) (3) 1,220 1,213 1,373 990 494 560NAV per unit (3) $13.76 $15.59 $13.44 $18.26 $16.79 $11.40Management expense ratio(“MER”) (4) 0.30% 0.42% 0.37% 0.53% 0.42% 0.31%MER before absorbed orwaived fees (4) 0.30% 0.42% 0.49% 0.71% 0.66% 0.46%Portfolio turnover rate (5) 30.75% 82.40% 118.65% 161.64% 170.65% 168.79%Trading expense ratio (6) 0.30% 0.37% 0.76% 1.08% 0.28% 1.07%










4



Past PerformanceThe performance information shown assumes that all distributionsmade by the Fund in the periods shown were reinvested inadditional securities of the Fund. The performance informationdoes not take into account sales, redemption, distribution, optionalcharges or expenses you may be charged outside of the Fund orthe effect of any income tax you may have to pay as a result ofyour investment in the Fund that would have reduced returns orperformance. The Fund’s past performance does not necessarilyindicate how it will perform in the future. Rates of return are notreported for series in existence for less than one year due topolicies issued by the Canadian Securities Administrators.



0%

-60%

-80%Dec. 31

2003Dec. 31

2004Dec. 31

2005Dec. 31

2006Dec. 31

2007Dec. 31

2008Dec. 31

2009Dec. 31

2010Dec. 31

2012June 30

2013Dec. 31

2011

-20%

-40%

60%

40%

20%26.5%

7.8%26.2% 27.3%

18.5%

-48.8%

43.8%

16.1%6.2%

-26.7%-12.8%


60%

0%

-80%Dec. 31

2005Dec. 31

2006Dec. 31

2007Dec. 31

2008Dec. 31

2009Dec. 31

2010Dec. 31

2011

20%

40%

-60%

-40%

-20%

26.3% 27.4%18.1%

-48.8%

43.8%

16.1%6.2%

-26.7%

June 302013

Dec. 312012

-12.8%


20%

-20%

-40%

0%

Dec. 312011

Dec. 312012

-26.3%

-12.2%

16.8%

June 302013


25%

-75%

0%

Dec. 312010

Dec. 312011

Dec. 312008

Dec. 312009

-25%

-50%

50%

-48.3%

45.4%

17.5%7.4%

-25.7%-12.3%

June 302013

Dec. 312012


60%

0%

-80%Dec. 31

2005Dec. 31

2006Dec. 31

2007Dec. 31

2008Dec. 31

2009Dec. 31

2010Dec. 31

2011

20%

40%

-60%

-40%

-20%

27.3% 30.4%21.4%

-47.6%

47.3%

19.1%8.8%

-24.8%-11.7%

Dec. 312012

June 302013

5




of NAV

Financials 32.60%Energy 19.52%Industrials 13.20%Materials 11.23%Consumer Discretionary 10.23%Information Technology 9.83%Cash & Equivalents 3.39%Total 100.00%


of NAV

South Korea 19.61%China 17.48%India 12.38%Russia 11.37%Brazil 10.15%Taiwan 6.97%South Africa 6.62%Hong Kong 5.25%Thailand 2.60%Turkey 2.13%Indonesia 1.15%Poland 0.90%Cash & Equivalents 3.39%Total 100.00%


of NAV

Samsung Electronics Co., Ltd. 5.15%China Construction Bank Corp. 2.62%Industrial & Commercial Bank of China Ltd. 2.40%Banco Itau Holding Financeira SA, Preferred 2.27%Hyundai Motor Co. 2.16%OAO Lukoil, ADR (LSE) 2.04%Bank of China Ltd. 2.00%Sberbank CLS 1.95%CNOOC Ltd. 1.91%Hon Hai Precision Industry Co., Ltd. 1.88%Sasol Ltd. 1.88%OAO Gazprom, ADR 1.82%Cia Vale do Rio Doce, Preferred, ADR 1.69%Hyundai Mobis 1.66%China Petroleum & Chemical Corp. 1.50%Kia Motors Corp. 1.50%Hynix Semiconductor Inc. 1.45%PTT Public Co., Ltd. 1.38%Agricultural Bank of China 1.31%Great Wall Automobile Holding Co. Ltd. 1.31%Oil & Natural Gas Corp. Ltd., Warrants 02/28/14 1.28%Sistema JSFC, GDR 1.27%Tata Motors Ltd. 1.25%Steinhoff International Holdings Ltd. 1.23%Axis Bank Ltd., Warrants 08/17/17 1.22%Total of Top 25 Holdings 46.13%


6





How to reach us



Toll-free: 1-800-830-8888Fax: 604-669-2756











(201

3-08

)RR

D

HSBC BRIC Equity Fund




Management Discussion of Fund PerformanceIn this document, you and your refer to the unitholder of the Fund;we, us and our refer to HSBC Global Asset Management (Canada)Limited; and the Fund refers to the HSBC BRIC Equity Fund.

We are the manager, trustee and primary investment advisor ofthe Fund. We have entered into a sub-advisory agreement withHSBC Global Asset Management (France), under which HSBCGlobal Asset Management (France) provides investment adviceand portfolio management services to the Fund. For anexplanation of the relationship between us and the sub-advisor,see the section Selection of Sub-Advisors in the Fund’s SimplifiedProspectus.





To achieve its objectives, the Fund invests primarily in equity andequity-related securities issued by large, actively traded companieslocated in BRIC (“Emerging Giant”) countries. The list of EmergingGiant countries may change from time to time; the Fund’sinvestment advisor currently considers Brazil, Russia, India andChina to be Emerging Giant countries. The Fund invests directly insecurities listed on major stock exchanges or other registeredmarkets in the Emerging Giant countries that have been establishedand approved by applicable regulatory authorities. The Fund mayalso invest in securities of companies listed on stock exchangesoutside of Emerging Giant countries but which have a significantbusiness or investment link with Emerging Giant countries. Tomaintain a diversified portfolio of holdings, the Fund invests incompanies from a broad range of industries through commonshares, preferred shares, rights, special warrants, American

depositary receipts and global depositary receipts. A portion of theFund may be in the form of cash or cash equivalents.

RiskThe risks of investing in this Fund remain as discussed in theSimplified Prospectus. This Fund is suitable for investors whowant to achieve long-term capital appreciation from equitysecurities issued in non-North American markets. Investors shouldhave a long-term investment time horizon and a high tolerance forrisk in their returns.

Results of OperationsAs of June 30, 2013, the Fund’s net assets decreased by 14.1%to $79.1 million from $92.1 million at the end of 2012. Of thisdecrease, a $8.1 million loss was attributable to investmentperformance and $4.9 million was attributable to net redemptionsof Fund units.

Investment PerformanceThe HSBC BRIC Equity Fund (Investor) declined 9.37% for the sixmonths ending June 30, 2013, while the benchmark, the MSCIBRIC Index (in Canadian dollars), declined 7.47% over the sameperiod.

Emerging markets were hit hard by the US Federal Reservecommentary about tapering quantitative easing, and China’sinterbank credit crunch. A stronger dollar, higher US Treasuryyields, weaker commodity prices and wider Emerging MarketsBond Index spreads were big headwinds. Investors weredisappointed that the US Federal Open Market Committeestatement mentioned a possible decrease in the pace of assetpurchases if conditions continue to improve. Lower-than-expectedmanufacturing data in China added salt to the wound and volatilityspiked.

Exposure management had no significant impact as the averageexposure of the Fund remained close to 100%. The countryallocation impact contribution was positive over the period. TheFund benefited from its underweight in Brazil. The stock selectionstrategy was negative. Stock selection added value in Brazil andIndia, but was negative in China.

Recent DevelopmentsThe Fund’s investment strategy remains unchanged. It seeks tocapitalize on opportunities while diversifying risk through dynamiccountry allocation, a stock selection strategy based upon theanticipated risk/return profile, and continuous monitoring of theoverall equity exposure.

Overall, equity markets remain attractive in the context of very lowinterest rates. Analysts expect 9% earnings growth for worldcompanies over the next twelve months. The Fund continues tofavour Asia over Brazil.

1




Manager, Trustee and Investment AdvisorWe are the manager, trustee and primary investment advisor ofthe Fund. As manager, we manage the overall business andoperations of the Fund. As trustee, we hold legal title to theproperty of the Fund on your behalf. As primary investmentadvisor, we provide investment advice and portfolio managementservices to the Fund. We receive a fee from the Fund for theseservices based on assets under management, calculated daily andpaid monthly. We have entered into a sub-advisory agreementwith HSBC Global Asset Management (France) (an affiliate), underwhich HSBC Global Asset Management (France) providesinvestment advice and portfolio management services to theFund. We pay HSBC Global Asset Management (France) a feefrom the Fund based on assets under management, calculateddaily and paid quarterly. For more information on our ability to hiresub-advisors, see the section Organization and Management ofthe HSBC Mutual Funds in the Fund’s Simplified Prospectus.


Investments in Securities of Related PartiesIn accordance with Canadian securities legislation and policies setout by our Independent Review Committee, the Fund may investits assets in the securities of companies related to the Fund’s

investment advisor or sub-advisor. During the period, the Fundheld, purchased or sold shares in Bank of Communications, whichrepresented 0.00% of the Fund’s assets as at June 30, 2013.


HSBC BRIC Equity Fund – Investor SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2006

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:

Total revenue 0.16 0.26 0.23 0.20 0.40 0.37Total expenses (0.12) (0.25) (0.26) (0.27) (0.23) (0.27)Realized gains (losses) 0.02 (0.60) (0.56) (0.20) (0.11) (1.34)Unrealized gains (losses) (0.86) 1.32 (1.69) 0.31 3.75 (5.15)


from operations (1) $(0.80) $0.73 $(2.28) $0.04 $3.81 $(6.39)

Distributions to

unitholders:

From income (excludingdividends) – – – – (0.07) –From dividends – – – – – –From net realized gainson investments – – – – – –

Total annual

distributions (1,2) $– $– $– $– $(0.07) $–


period (1,7) $7.94 $8.77 $8.01 $10.31 $10.31 $6.52

2



2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008

NAV (in 000s) (3,7) $56,817 $67,896 $69,201 $96,026 $88,876 $47,545Units outstanding (in000s) (3) 7,144 7,737 8,627 9,300 8,605 7,265NAV per unit (3) $7.95 $8.78 $8.02 $10.33 $10.33 $6.54Management expense ratio(“MER”) (4) 2.83% 2.93% 2.82% 2.77% 2.71% 2.75%MER before absorbed orwaived fees (4) 2.83% 2.93% 2.82% 2.77% 2.71% 2.75%Portfolio turnover rate (5) 23.49% 36.00% 36.58% 33.59% 1.69% 39.12%Trading expense ratio (6) 0.17% 0.10% 0.18% 0.27% 0.14% 0.09%

HSBC BRIC Equity Fund – Advisor SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2006

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:



from operations (1) $(0.74) $0.78 $(2.29) $(0.09) $3.79 $(6.35)

Distributions to

unitholders:


Total annual

distributions (1,2) $– $– $– $– $(0.07) $–


period (1,7) $8.00 $8.83 $8.06 $10.37 $10.37 $6.55


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008

NAV (in 000s) (3,7) $2,813 $3,786 $4,953 $7,610 $8,923 $5,094Units outstanding (in000s) (3) 351 428 613 733 860 774NAV per unit (3) $8.01 $8.84 $8.08 $10.38 $10.38 $6.58Management expense ratio(“MER”) (4) 2.81% 2.83% 2.72% 2.71% 2.71% 2.74%MER before absorbed orwaived fees (4) 2.81% 2.83% 2.72% 2.71% 2.71% 2.74%Portfolio turnover rate (5) 23.49% 36.00% 36.58% 33.59% 1.69% 39.12%Trading expense ratio (6) 0.17% 0.10% 0.18% 0.27% 0.14% 0.09%

HSBC BRIC Equity Fund – Premium SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2009

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010



Total revenue 0.16 0.29 0.26 0.12Total expenses (0.11) (0.22) (0.23) (0.14)Realized gains (losses) 0.04 (0.67) (0.61) (0.12)Unrealized gains (losses) (0.91) 1.45 (1.98) 1.04







2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010


HSBC BRIC Equity Fund – Manager SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2006

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:



from operations (1) $(0.74) $1.98 $(2.08) $0.03 $4.00 $(6.94)

Distributions to

unitholders:


Total annual

distributions (1,2) $– $– $– $– $(0.19) $–


period (1,7) $8.29 $9.10 $8.22 $10.46 $10.35 $6.55

3



2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008

NAV (in 000s) (3,7) $215 $275 $557 $938 $1,141 $819Units outstanding(in 000s) (3) 26 30 68 90 110 125NAV per unit (3) $8.30 $9.11 $8.23 $10.48 $10.36 $6.57Management expense ratio(“MER”) (4) 1.73% 1.75% 1.65% 1.65% 1.66% 1.69%MER before absorbed orwaived fees (4) 1.73% 1.75% 1.65% 1.65% 1.66% 1.69%Portfolio turnover rate (5) 23.49% 36.00% 36.58% 33.59% 1.69% 39.12%Trading expense ratio (6) 0.17% 0.10% 0.18% 0.27% 0.14% 0.09%

HSBC BRIC Equity Fund – Institutional SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2006*

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:



from operations (1) $(0.86) $1.06 $(2.32) $0.31 $4.28 $(6.34)

Distributions to

unitholders:


Total annual

distributions (1,2) $– $– $– $– $(0.34) $–


period (1,7) $9.04 $9.86 $8.78 $11.03 $10.76 $6.82

* The Institutional Series commenced operations in April 2007.


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008

NAV (in 000s) (3,7) $17,964 $18,356 $16,465 $18,931 $10,871 $6,084Units outstanding(in 000s) (3) 1,984 1,860 1,872 1,714 1,008 889NAV per unit (3) $9.05 $9.87 $8.80 $11.04 $10.78 $6.84Management expense ratio(“MER”) (4) 0.35% 0.42% 0.33% 0.36% 0.35% 0.36%MER before absorbed orwaived fees (4) 0.35% 0.42% 0.33% 0.36% 0.35% 0.36%Portfolio turnover rate (5) 23.49% 36.00% 36.58% 33.59% 1.69% 39.12%Trading expense ratio (6) 0.17% 0.10% 0.18% 0.27% 0.14% 0.09%

(1) Net assets per unit and distributions per unit are based on the actualnumber of units outstanding for the relevant series at the relevanttime. The increase /decrease in net assets from operations per unit isbased on the weighted average number of units outstanding for therelevant series over the fiscal period.









4



Past Performance

The performance information shown assumes that all distributionsmade by the Fund in the periods shown were reinvested inadditional securities of the Fund. The performance informationdoes not take into account sales, redemption, distribution, optionalcharges or expenses you may be charged outside of the Fund orthe effect of any income tax you may have to pay as a result ofyour investment in the Fund that would have reduced returns orperformance. The Fund’s past performance does not necessarilyindicate how it will perform in the future.



40%

20%

-20%

-80%

0%

Dec. 312010

Dec. 312011

June 302013

Dec. 312012

Dec. 312008

Dec. 312009

-40%

-60%

60%

-48.6%

59.0%

9.4%

-9.4%

0.0%

-22.3%


40%

20%

-20%

-80%

0%

Dec. 31 Dec. 312010 2011

June 302013

Dec. 312012

Dec. 312009

-40%

-60%

60%

Dec. 312008

-48.6%

58.9%

9.5%

-9.4%-22.2%

0.0%


40%

20%

-20%

-80%

0%

Dec. 312011

Dec. 312012

June 302013

-40%

-60%

60%

-21.8%-9.1%

10.0%


40%

20%

-20%

-80%

0%

Dec. 312010

Dec. 31 Dec. 312011 2012

June 302013

Dec. 312008

Dec. 312009

-40%

-60%

60%

-48.0%

60.6%

10.7%1.1%

-21.4%-8.9%


40%

20%

-20%

-80%

0%

Dec. 312010

Dec. 31 Dec. 312011

Dec. 312008

Dec. 312009

-40%

-60%

60%

-47.4%

62.7%

12.2%2.4%

-20.3%-8.3%

2012June 30

2013

5




of NAV

Financials 27.80%Energy 19.61%Consumer Staples 8.66%Telecommunication Services 6.92%Materials 6.86%Industrials 6.63%Information Technology 6.61%Consumer Discretionary 4.14%Healthcare 1.88%Utilities 1.82%Cash & Equivalents 9.07%Total 100.00%


of NAV

Brazil 25.58%China 18.12%Hong Kong 18.09%Russia 15.16%India 13.98%Cash & Equivalents 9.07%Total 100.00%


of NAV

China Mobile (Hong Kong) Ltd. 4.61%Industrial & Commercial Bank of China Ltd. 2.78%CNOOC Ltd. 2.61%OAO Gazprom 2.58%China Construction Bank Corp. 2.57%Banco Itau Holding Financeira SA, Preferred 2.53%Petroleo Brasileiro SA 2.46%Sberbank of Russia 2.30%Bank of China Ltd. 2.19%Cia Vale do Rio Doce, Preferred 2.09%Tencent Holdings Ltd. 1.87%Cia de Bebidas das Americas, Preferred 1.80%China Petroleum & Chemical Corp. 1.74%Banco Bradesco SA, Preferred 1.71%OAO Lukoil 1.57%ITC Ltd. 1.38%Housing Development Finance Corp. Ltd. 1.37%Ping An Insurance Group Co. of China Ltd. 1.27%Lenovo Group Ltd. 1.24%Cielo SA 1.18%Novatek OAO, GDR 1.18%Companhia Vale do Rio Doce 1.02%OAO Rosneft Oil Co. 1.02%Natura Cosmeticos SA 0.99%Banco do Brasil SA 0.98%Total of Top 25 Holdings 47.04%


6





How to reach us

Vancouver

HSBC Global Asset Management (Canada) Limited11th Floor, 885 West Georgia StreetVancouver, BC V6C 3E8


Toll-free: 1-800-830-8888Fax: 604-669-2756

Toronto

Suite 600 – 70 York StreetToronto, ON M5J 1S9

Calgary

10th Floor, 407 – 8th Avenue SWCalgary, AB T2P 1E5

Edmonton

9th Floor, 10250 – 101 Street NWEdmonton, AB T5J 3P4

Montreal

Suite 300 – 2001 McGill College AvenueMontreal, QC H3A 1G1

Victoria

869 Douglas StreetVictoria, BC V8W 2B9


This report may contain forward-looking statements about the Fund, including its strategy, expected performance and condition. Forward-lookingstatements include statements that are predictive in nature that depend upon or refer to future events or conditions, or that include words such as“expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates” or negative versions thereof and similar expressions. In addition, any statementthat may be made concerning future performance, strategies or prospects, and possible future Fund action, is also a forward-looking statement.Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things,risks, uncertainties and assumptions about the Fund and economic factors.

Forward-looking statements are not guarantees of future performance, and actual events and results could differ materially from those expressed orimplied in any forward-looking statements made by the Fund. Any number of important factors could contribute to these digressions, including, but notlimited to, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity andcapital markets, business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, andcatastrophic events.

We stress that the above-mentioned list of important factors is not exhaustive. We encourage you to consider these and other factors carefully before makingany investment decisions and we urge you to avoid placing undue reliance on forward-looking statements. Further, you should be aware of the fact that theFund has no specific intention of updating any forward-looking statements, whether as a result of new information, future events or otherwise.


(201

3-08

)RR

D

HSBC World SelectionDiversified Conservative Fund



HSBC World Selection Diversified Conservative Fund

Management Discussion of Fund PerformanceIn this document, you and your refer to the unitholder of the Fund;we, us and our refer to HSBC Global Asset Management (Canada)Limited; and the Fund refers to the HSBC World SelectionDiversified Conservative Fund.


IntroductionThis Interim Management Report of Fund Performance containsfinancial highlights but does not contain the complete annualor semi-annual financial statements of the investment fund. Youmay obtain a copy of the Fund’s annual or semi-annual financialstatements at your request, at no cost, by calling 1-800-830-8888,by visiting our website at www.hsbc.ca/investment-resources, byvisiting the SEDAR website at www.sedar.com or by writing to usat:



Investment Objective and StrategiesThe primary investment objective of this Fund is to provide investorswith primarily capital preservation and interest income with somepotential for low to moderate long-term capital growth through adiversified portfolio of investments across several asset classes.

To achieve its investment objectives, the Fund invests in othermutual funds and uses strategic asset allocation as the principalinvestment strategy. The Fund has an established policy assetmix, based on its stated objectives. In addition to adjusting theFund’s asset mix depending on economic conditions and therelative value of securities in the Fund, the Fund may also usetactical asset allocation to take advantage of current and expectedfuture market conditions.

RiskThe overall risk level of the Fund has not changed materially. Therisks of investing in the Fund remain as discussed in the SimplifiedProspectus. This Fund is suitable for investors who want to earn abalance of interest income with some potential for low tomoderate long-term growth of their capital. Investors in this Fundshould have a medium-term investment time horizon and a low tomedium tolerance for investment risk.

Results of OperationsAs of June 30, 2013, the Fund’s net assets increased by 51.3% to$88.2 million from $58.3 million at the end of 2012. Of this increase,a $0.1 million gain was attributable to investment performance and$29.8 million was attributable to net contributions to the Fund.

Investment PerformanceThe HSBC World Selection Diversified Conservative Fund (InvestorSeries) rose 0.53% for the six months ending June 30, 2013, whileits benchmark rose 0.04% over the same period. Its benchmark is acomposite of 75% DEX Universe Bond Index, 15% S&P/TSXComposite Index and 10% MSCI World Index (in Canadian dollars).

During the first half of 2013, the MSCI World Index (in Canadiandollars) rose 14.9%. The US market continued to lead the pushhigher with gains of 20.3% year-to-date. The Canadian marketcontinues to lag with a decline of 0.9% year-to-date as reducedexpectations for growth in emerging economies, particularlyChina, continue to weigh on commodity prices. In the bond marketthere was a decline of 1.7%, with government bonds falling morethan corporate debt.

The Fund maintained a preference for equities and corporatebonds relative to government bonds during the period. Theoverweight to global equities and Canadian corporate bonds wasbeneficial to relative performance, but the overweight to Canadianequities was negative to performance.

Recent DevelopmentsThe first half of 2013 was broadly positive for equity markets as theglobal economy continued to slowly expand. Equity market gainswere substantially tempered in the latter part of the second quarterfollowing comments from US Federal Reserve Chairman BenBernanke that the ongoing pace of bond purchases may moderateshould economic conditions in the world’s largest economycontinue to improve. The market reaction was overdone, in ouropinion, as we expect the eventual slowdown and unwinding ofmonetary stimulus to be gradual and consistent with prevailingeconomic conditions.

Thus far in the third quarter of 2013, the market seems to be morein line with this view and markets have stabilized. Global growthcontinues to be positive but modest and consensus expectationsare moving lower as the year unfolds. The Canadian economyadvanced by 2.5% in the first quarter, led by a strong gain in exportsdespite a disappointing contribution from domestic consumption.This gain in growth followed two quarters of growth below 1%. Weexpect the domestic economy to expand by approximately 1.6% in2013, while globally we expect growth of 2.0%. The Bank ofCanada rate has been steady at 1% since the fall of 2010 and willlikely remain there for at least four more quarters.

S&P/TSX earnings growth averaged approximately 16% in 2010 and2011. The 2012 earnings growth declined primarily due to weakness

1


in commodity prices. However, in 2013 we expect a resumption ofpositive earnings growth in the 5-10% range, which would besupportive of the Canadian equity market. The Bank of Canada hasbeen on hold for almost three years and we expect no change forthe balance of 2013.

We expect modest, positive global growth in 2013 aided bycontinued accommodative monetary policy. There is a risk thatgrowth could be slower due to restrictive government fiscal policyand/or muted willingness for consumer spending and businessinvestment. Equity markets continue to have more attractivevaluations than debt markets, but there is a risk that if earningsgrowth does not resume in 2013 markets may be disappointed.Renewed concerns regarding reduced monetary stimulus, eurozonestability or the Chinese economy could also impact markets.




Custodial ServicesHSBC Bank Canada (the “Bank”) (of which we are a wholly ownedsubsidiary) is the custodian of the Fund. All fees for these serviceswere waived by the Bank.

Distribution ServicesThe Fund is distributed through us, HSBC Investment Funds(Canada) Inc. (our wholly owned subsidiary) and through HSBCSecurities (Canada) Inc. (an affiliate) directly or through its division,HSBC InvestDirect. We pay distribution and servicing fees to thembased on the amount of assets held in the investor’s account, andadditionally, in some cases, on the amount of the initial purchase.If you hold units of this Fund and/or other HSBC Mutual Funds in aregistered plan with HSBC Investment Funds (Canada) Inc., theymay charge you an annual fee to cover the annual administration

costs of the plan. We permit HSBC Investment Funds (Canada)Inc. to collect these fees by redeeming sufficient units of the Fundwith the highest market value in your registered plan.


Financial HighlightsThe following tables show selected key financial information aboutthe Fund and are intended to help you understand the Fund’s financialperformance for the six-month period ended June 30, 2013 and forthe years ended December 31, as applicable. In the year a fund isestablished, “period” represents the period from inception toDecember 31 or June 30 of that fiscal year, as applicable. Thisinformation is derived from the Fund’s unaudited semi-annual financialstatements and audited annual financial statements. The informationin the following tables is based on prescribed regulations, and as aresult, is not expected to add due to the increase/decrease in netassets from operations being based on average units outstandingduring the period and all other numbers being based on actual unitsoutstanding at the relevant point in time.

HSBC World Selection Diversified ConservativeFund – Investor SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2004

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:

Total revenue 0.16 0.33 0.35 0.35 0.40 0.44Total expenses (0.10) (0.20) (0.21) (0.21) (0.20) (0.20)Realized gains (losses) 0.04 0.01 0.06 0.05 (0.09) (0.07)Unrealized gains (losses) (0.09) 0.42 (0.07) 0.35 0.70 (0.77)


from operations (1) $0.01 $0.56 $0.13 $0.54 $0.81 $(0.60)

Distributions to

unitholders:

From income (excludingdividends) – – (0.06) (0.09) (0.12) (0.16)From dividends – (0.09) (0.05) – (0.02) –From net realized gainson investments – – (0.06) – – (0.06)

Total annual

distributions (1,2) $– $(0.09) $(0.17) $(0.09) $(0.14) $(0.22)


period (1,7) $11.30 $11.24 $10.77 $10.79 $10.39 $9.72

2



2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008

NAV (in 000s) (3,7) $88,042 $58,130 $31,642 $16,953 $9,836 $6,750Units outstanding(in 000s) (3) 7,790 5,171 2,939 1,572 947 694NAV per unit (3) $11.30 $11.24 $10.77 $10.79 $10.39 $9.72Management expense ratio(“MER”) (4) 1.75% 1.93% 1.94% 2.02% 2.12% 2.09%MER before absorbed orwaived fees (4) 1.75% 1.93% 1.94% 2.05% 2.54% 2.46%Portfolio turnover rate (5) 6.35% 6.65% 24.74% 36.32% 26.45% 32.05%Trading expense ratio (6) 0.01% 0.01% n/a 0.01% 0.01% 0.03%

HSBC World Selection Diversified ConservativeFund – Advisor SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2005

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:

Total revenue 0.15 0.29 0.36 0.35 0.38 0.37Total expenses (0.09) (0.19) (0.19) (0.20) (0.19) (0.20)Realized gains (losses) 0.03 0.01 0.06 0.05 (0.09) –Unrealized gains (losses) (0.03) 0.43 (0.06) 0.26 0.66 (0.84)


from operations (1) $0.06 $0.54 $0.17 $0.46 $0.76 $(0.67)

Distributions to

unitholders:

From income (excludingdividends) – – (0.06) (0.09) (0.05) (0.12)From dividends – (0.10) (0.05) – (0.01) –From net realized gainson investments – – (0.06) – – (0.05)

Total annual

distributions (1,2) $– $(0.10) $(0.17) $(0.09) $(0.06) $(0.17)


period (1,7) $10.80 $10.74 $10.29 $10.30 $9.92 $9.17


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008

NAV (in 000s) (3,7) $197 $208 $251 $340 $238 $116Units outstanding (in 000s) (3) 18 19 24 33 24 13NAV per unit (3) $10.80 $10.74 $10.29 $10.30 $9.92 $9.17Management expense ratio(“MER”) (4) 1.81% 1.85% 1.88% 1.98% 2.08% 2.16%MER before absorbed orwaived fees (4) 1.81% 1.85% 1.88% 2.02% 2.57% 2.44%Portfolio turnover rate (5) 6.35% 6.65% 24.74% 36.32% 26.45% 32.05%Trading expense ratio (6) 0.01% 0.01% n/a 0.01% 0.01% 0.03%

(1) Net assets per unit and distributions per unit are based on the actualnumber of units outstanding for the relevant series at the relevant time.

The increase/decrease in net assets from operations per unit is based onthe weighted average number of units outstanding for the relevant seriesover the fiscal period.



(4) MER includes the total expenses of each Fund, including the Goods andServices Tax and/or Harmonized Sales Tax thereon, other thanbrokerage commissions on securities transactions and any foreignwithholding taxes on income, as an annualized percentage of averagenet asset value (“NAV”) of the respective series of unit for the period. Inthe period a series is established, the MER is annualized from the dateof inception to the end of the period. The MER may vary from onemutual fund to another and from one series of units to another. We mayhave waived or absorbed certain fees and expenses otherwise payableby the Fund. The amount of expenses absorbed or waived is at thediscretion of and can be terminated at any time by us.

The Fund may invest in units of other mutual funds and pooled funds.You should note that in addition to the fees and expenses paid by theFund, these other funds have their own operating expenses to pay. TheFund will effectively bear the operating expenses of the other funds inproportion to its holdings in the other funds. However, the Fund will notinvest in units of other funds if the Fund would be required to pay anymanagement fees in respect of such investments. In addition, the Fundwill not make investments in other funds if the Fund would be requiredto pay any sales or redemption fees in respect of such investments thatduplicate a fee payable by unitholders of the Fund.



(7) Generally accepted accounting principles require that the calculation of aFund’s net asset value for financial reporting purposes (“net assets”) bebased upon investments valued using closing bid prices. As permittedby securities regulations, the value of investments used to determinethe daily prices of the Fund’s units for purchase and redemption byclients (“NAV”) continues to be based upon the last sale price or themidpoint between closing bid and asked quotations.


3







15%

10%

0%

-15%

5%

Dec. 312006

Dec. 312007

Dec. 312008

Dec. 312009

Dec. 312010

Dec. 312011

-5%

-10%

5.3%

0.9%

-5.5%

8.3%5.3%

0.5%

4.8%1.4%

Dec. 312012

June 302013


15%

10%

5%

-5%

-15%

0%

Dec. 312010

Dec. 312011

Dec. 312008

Dec. 312009

-10%-6.0%

8.8%5.4%

0.5%

4.8%1.5%

Dec. 312012

June 302013


Asset MixPercentage

of NAV

Bonds 71.03%Canadian Equities 17.27%International Equities 11.18%Cash & Equivalents 0.52%Total 100.00%

Top 25 Holdings*Percentage

of NAV

HSBC Canadian Bond Fund – Institutional Series 47.33%HSBC Mortgage Fund – Institutional Series 17.86%HSBC Dividend Fund – Institutional Series 11.58%Capital International Global Equity Fund – Class I 6.38%HSBC Equity Fund – Institutional Series 5.69%HSBC Emerging Markets Debt Fund – Institutional Series 5.00%HSBC Global Equity Fund – Institutional Series 3.42%HSBC Emerging Markets Fund – Institutional Series 0.91%HSBC Canadian Money Market Fund – Institutional Series 0.84%HSBC BRIC Equity Fund – Institutional Series 0.47%Total of Top 25 Holdings 99.48%

* The Fund had less than 25 holdings as at June 30, 2013.


4





How to reach us

Vancouver



Toll-free: 1-800-830-8888Fax: 604-669-2756




Montreal

Suite 300 – 2001 McGill College AvenueMontreal, QC H3A 1G1







(201

3-08

)RR

D

HSBC World Selection DiversifiedModerate Conservative Fund



HSBC World Selection Diversified Moderate Conservative Fund

Management Discussion of Fund PerformanceIn this document, you and your refer to the unitholder of the Fund;we, us and our refer to HSBC Global Asset Management (Canada)Limited; and the Fund refers to the HSBC World SelectionDiversified Moderate Conservative Fund.





Investment Objective and StrategiesThe primary investment objective of this Fund is to provideinvestors with moderate capital preservation and interest incomewith some potential moderate long-term capital growth through adiversified portfolio of investments across several asset classes.


RiskThe overall risk level of the Fund has not changed materially. Therisks of investing in the Fund remain as discussed in the SimplifiedProspectus. This Fund is suitable for investors who want to earn abalance of interest income with some potential for moderate long-term growth of their capital. Investors in this Fund should have amedium-term investment time horizon and a low to mediumtolerance for investment risk.


Investment PerformanceThe HSBC World Selection Diversified Moderate Conservative Fund(Investor Series) rose 1.45% for the six months ending June 30,2013, while its benchmark rose 0.87% over the same period. Itsbenchmark is a composite of 65% DEX Universe Bond Index, 20%S&P/TSX Composite Index and 15% MSCI World Index (in Canadiandollars).

During the first half of 2013, the MSCI World Index (in Canadiandollars) rose 14.9%. The US market continued to lead the push higherwith gains of 20.3% year-to-date. The Canadian market continues tolag with a decline of 0.9% year-to-date as reduced expectations forgrowth in emerging economies, particularly China, continue to weighon commodity prices. In the bond market there was a decline of1.7%, with government bonds falling more than corporate debt.

The Fund maintained a preference for equities and corporate bondsrelative to government bonds during the period. The overweight toglobal equities and Canadian corporate bonds was beneficial torelative performance, but the overweight to Canadian equities wasnegative to performance.

Recent DevelopmentsThe first half of 2013 was broadly positive for equity markets as theglobal economy continued to slowly expand. Equity market gainswere substantially tempered in the latter part of the second quarterfollowing comments from US Federal Reserve Chairman BenBernanke that the ongoing pace of bond purchases may moderateshould economic conditions in the world’s largest economycontinue to improve. The market reaction was overdone, in ouropinion, as we expect the eventual slowdown and unwinding ofmonetary stimulus to be gradual and consistent with prevailingeconomic conditions.

Thus far in the third quarter of 2013, the market seems to be more inline with this view and markets have stabilized. Global growthcontinues to be positive but modest and consensus expectations aremoving lower as the year unfolds. The Canadian economy advancedby 2.5% in the first quarter, led by a strong gain in exports despite adisappointing contribution from domestic consumption. This gain ingrowth followed two quarters of growth below 1%. We expect thedomestic economy to expand by approximately 1.6% in 2013, whileglobally we expect growth of 2.0%. The Bank of Canada rate hasbeen steady at 1% since the fall of 2010 and will likely remain therefor at least four more quarters.

S&P/TSX earnings growth averaged approximately 16% in 2010 and2011. The 2012 earnings growth declined primarily due to weakness

1


in commodity prices. However, in 2013 we expect a resumption ofpositive earnings growth in the 5-10% range, which would besupportive of the Canadian equity market. The Bank of Canada hasbeen on hold for almost three years and we expect no change forthe balance of 2013.

We expect modest, positive global growth in 2013 aided bycontinued accommodative monetary policy. There is a risk thatgrowth could be slower due to restrictive government fiscal policyand/or muted willingness for consumer spending and businessinvestment. Equity markets continue to have more attractivevaluations than debt markets, but there is a risk that if earningsgrowth does not resume in 2013 markets may be disappointed.Renewed concerns regarding reduced monetary stimulus, eurozonestability or the Chinese economy could also impact markets.





Distribution ServicesThe Fund is distributed through us, HSBC Investment Funds(Canada) Inc. (our wholly owned subsidiary) and through HSBCSecurities (Canada) Inc. (an affiliate) directly or through its division,HSBC InvestDirect. We pay distribution and servicing fees to thembased on the amount of assets held in the investor’s account, andadditionally, in some cases, on the amount of the initial purchase.If you hold units of this Fund and/or other HSBC Mutual Funds in aregistered plan with HSBC Investment Funds (Canada) Inc., they

may charge you an annual fee to cover the annual administrationcosts of the plan. We permit HSBC Investment Funds (Canada)Inc. to collect these fees by redeeming sufficient units of the Fundwith the highest market value in your registered plan.



HSBC World Selection Diversified ModerateConservative Fund – Investor SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2004

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:



from operations (1) $0.10 $0.64 $– $0.57 $0.91 $(0.97)

Distributions to

unitholders:

From income (excludingdividends) – – (0.04) (0.07) (0.12) (0.15)From dividends – (0.07) (0.05) (0.01) (0.03) –From net realized gainson investments – – (0.11) (0.01) – (0.10)

Total annual

distributions (1,2) $– $(0.07) $(0.20) $(0.09) $(0.15) $(0.25)


period (1,7) $11.43 $11.26 $10.69 $10.86 $10.42 $9.66

2



2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008

NAV (in 000s) (3,7) $101,208 $68,889 $45,865 $33,856 $23,020 $17,812Units outstanding(in 000s) (3) 8,856 6,115 4,292 3,117 2,209 1,845NAV per unit (3) $11.43 $11.26 $10.69 $10.86 $10.42 $9.66Management expense ratio(“MER”) (4) 1.78% 1.89% 1.89% 1.90% 2.08% 2.01%MER before absorbed orwaived fees (4) 1.78% 1.89% 1.89% 1.90% 2.08% 2.03%Portfolio turnover rate (5) 4.27% 7.01% 24.46% 43.73% 14.76% 26.10%Trading expense ratio (6) 0.03% 0.03% n/a 0.04% 0.04% 0.07%

HSBC World Selection Diversified ModerateConservative Fund – Advisor Series*Period ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2005

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010



Total revenue – 0.26 0.29 0.01Total expenses – (0.18) (0.19) (0.01)Realized gains (losses) – 0.01 0.07 –Unrealized gains (losses) 0.03 0.51 (0.15) 0.10

Total increase (decrease) from operations (1) $0.03 $0.60 $0.02 $0.10


From income (excluding dividends) – – (0.03) (0.07)From dividends – (0.08) (0.05) –From net realized gains on investments – – (0.10) (0.01)


Net assets per unit, end of period (1,7) $– $10.40 $9.86 $10.03

* The Advisor Series was fully redeemed during 2013; however, it remainsin operation at period-end.


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

NAV (in 000s) (3,7) $– $47 $45 $44Units outstanding (in 000s) (3) – 5 5 4NAV per unit (3) $– $10.40 $9.86 $10.03Management expense ratio (“MER”) (4) 1.57% 1.80% 1.90% 1.99%MER before absorbed or waived fees (4) 1.57% 1.80% 1.90% 1.99%Portfolio turnover rate (5) 4.27% 7.01% 24.46% 43.73%Trading expense ratio (6) 0.03% 0.03% n/a 0.04%




(4) MER includes the total expenses of each Fund, including the Goodsand Services Tax and/or Harmonized Sales Tax thereon, other than

brokerage commissions on securities transactions and any foreignwithholding taxes on income, as an annualized percentage of averagenet asset value (“NAV”) of the respective series of unit for the period.In the period a series is established, the MER is annualized from thedate of inception to the end of the period. The MER may vary fromone mutual fund to another and from one series of units to another.We may have waived or absorbed certain fees and expensesotherwise payable by the Fund. The amount of expenses absorbed orwaived is at the discretion of and can be terminated at any time by us.

The Fund may invest in units of other mutual funds and pooled funds.You should note that in addition to the fees and expenses paid by theFund, these other funds have their own operating expenses to pay.The Fund will effectively bear the operating expenses of the otherfunds in proportion to its holdings in the other funds. However, theFund will not invest in units of other funds if the Fund would berequired to pay any management fees in respect of suchinvestments. In addition, the Fund will not make investments in otherfunds if the Fund would be required to pay any sales or redemptionfees in respect of such investments that duplicate a fee payable byunitholders of the Fund.





The Fund’s management fees were used by us to pay costs formanaging the investment portfolio, providing investment analysisand recommendations, making investment decisions, makingbrokerage arrangements for the purchase and sale of theinvestment portfolio and providing other services. Themanagement fees also funded commission payments and othercompensation to sales representatives and registered dealers and

3



brokers (collectively “distribution costs”), including HSBC BankCanada, for units of the Fund bought and held by unitholders.Finally, we used management fees to pay for additional marketingand distribution services to the Fund.





10%

0%

-15%

5%

Dec. 312006

Dec. 312007

Dec. 312008

Dec. 312009

Dec. 312010

Dec. 312011

-5%

-10%

6.9%

0.9%

-8.7%

9.5%

5.1% 6.1%

1.5%

Dec. 312012

June 302013

0.2%


5%

-5%

0%

Dec. 312011

0.2%

6.2%

Dec. 312012

June 30*2013

0.0%



Asset MixPercentage

of NAV



of NAV

HSBC Canadian Bond Fund – Institutional Series 40.49%HSBC Mortgage Fund – Institutional Series 14.24%Capital International Global Equity Fund – Class I 9.25%HSBC Dividend Fund – Institutional Series 8.88%CI Synergy Canadian Corporate Class – Series I 6.91%HSBC Emerging Markets Debt Fund – Institutional Series 4.95%Sionna Canadian Equity Fund – Class I 4.52%HSBC Equity Fund – Institutional Series 4.38%HSBC Global Equity Fund – Institutional Series 3.43%HSBC BRIC Equity Fund – Institutional Series 0.93%HSBC Emerging Markets Fund – Institutional Series 0.93%HSBC Canadian Money Market Fund – Institutional Series 0.78%Total of Top 25 Holdings 99.69%


4





How to reach us

Vancouver



Toll-free: 1-800-830-8888Fax: 604-669-2756


Calgary

10th Floor, 407 – 8th Avenue SWCalgary, AB T2P 1E5









(201

3-08

)RR

D

HSBC World SelectionDiversified Balanced Fund



HSBC World Selection Diversified Balanced Fund

Management Discussion of Fund PerformanceIn this document, you and your refer to the unitholder of the Fund;we, us and our refer to HSBC Global Asset Management (Canada)Limited; and the Fund refers to the HSBC World SelectionDiversified Balanced Fund.





Investment Objective and StrategiesThe primary investment objective of this Fund is to provideinvestors with a balance of income and potential long-term capitalgrowth through a diversified portfolio of investments acrossseveral asset classes.


RiskThe risks of investing in the Fund remain as discussed in theSimplified Prospectus. This Fund is suitable for investors whowant to earn a balance of interest income with some potential forlow to moderate long-term growth of their capital. Investors in thisFund should have a medium-term investment time horizon and alow to medium tolerance for investment risk.


Investment PerformanceThe HSBC World Selection Diversified Balanced Fund (InvestorSeries) rose 3.22% for the six months ending June 30, 2013,while its benchmark rose 2.94% over the same period. Itsbenchmark is a composite of 45% DEX Universe Bond Index,27.5% S&P/TSX Composite Index and 27.5% MSCI World Index(in Canadian dollars).

During the first half of 2013, the MSCI World Index (in Canadiandollars) rose 14.9%. The US market continued to lead the pushhigher with gains of 20.3% year-to-date. The Canadian marketcontinues to lag with a decline of 0.9% year-to-date as reducedexpectations for growth in emerging economies, particularlyChina, continue to weigh on commodity prices. In the bond marketthere was a decline of 1.7%, with government bonds falling morethan corporate debt.


Recent DevelopmentsThe first half of 2013 was broadly positive for equity markets asthe global economy continued to slowly expand. Equity marketgains were substantially tempered in the latter part of the secondquarter following comments from US Federal Reserve ChairmanBen Bernanke that the ongoing pace of bond purchases maymoderate should economic conditions in the world’s largesteconomy continue to improve. The market reaction was overdone,in our opinion, as we expect the eventual slowdown andunwinding of monetary stimulus to be gradual and consistent withprevailing economic conditions.

Thus far in the third quarter of 2013, the market seems to be morein line with this view and markets have stabilized. Global growthcontinues to be positive, but modest and consensus expectationsare moving lower as the year unfolds. The Canadian economyadvanced by 2.5% in the first quarter, led by a strong gain inexports despite a disappointing contribution from domesticconsumption. This gain in growth followed two quarters of growthbelow 1%. We expect the domestic economy to expand byapproximately 1.6% in 2013, while globally we expect growth of2.0%.

We expect modest, positive global growth in 2013 aided bycontinued accommodative monetary policy. There is a risk that

1


growth could be slower due to restrictive government fiscal policyand/or muted willingness for consumer spending and businessinvestment. Equity markets continue to have more attractivevaluations than debt markets, but there is a risk that if earningsgrowth does not resume in 2013 markets may be disappointed.Renewed concerns regarding reduced monetary stimulus, eurozonestability or the Chinese economy could also impact markets.








HSBC World Selection Diversified BalancedFund – Investor SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2004

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:

Total revenue 0.10 0.26 0.28 0.29 0.33 0.39Total expenses (0.12) (0.23) (0.22) (0.21) (0.20) (0.21)Realized gains (losses) 0.04 0.03 0.07 (0.07) (0.09) (0.04)Unrealized gains (losses) 0.31 0.76 (0.44) 0.67 1.14 (1.92)


from operations (1) $0.33 $0.82 $(0.31) $0.68 $1.18 $(1.78)

Distributions to

unitholders:

From income (excludingdividends) – – – (0.03) (0.11) (0.06)From dividends – (0.03) (0.02) (0.01) (0.02) (0.01)From net realized gainson investments – – (0.05) (0.02) – (0.12)

Total annual

distributions (1,2) $– $(0.03) $(0.07) $(0.06) $(0.13) $(0.19)


period (1,7) $11.94 $11.56 $10.76 $11.12 $10.56 $9.52

2



2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008


HSBC World Selection Diversified BalancedFund – Advisor SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2005

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010



Total revenue 0.09 0.21 0.25 0.05Total expenses (0.11) (0.20) (0.19) (0.05)Realized gains (losses) 0.04 0.02 0.07 (0.01)Unrealized gains (losses) 0.35 0.81 (0.32) 0.44



From income (excluding dividends) – – – (0.03)From dividends – (0.03) (0.02) (0.01)From net realized gains on investments – – (0.05) (0.02)




2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010






The Fund may invest in units of other mutual funds and pooled funds.You should note that in addition to the fees and expenses paid by theFund, these other funds have their own operating expenses to pay.The Fund will effectively bear the operating expenses of the otherfunds in proportion to its holdings in the other funds. However, theFund will not invest in units of other funds if the Fund would berequired to pay any management fees in respect of such investments.In addition, the Fund will not make investments in other funds if theFund would be required to pay any sales or redemption fees in respectof such investments that duplicate a fee payable by unitholders of theFund.





The Fund’s management fees were used by us to pay costs formanaging the investment portfolio, providing investment analysisand recommendations, making investment decisions, makingbrokerage arrangements for the purchase and sale of the

3


investment portfolio and providing other services. Themanagement fees also funded commission payments and othercompensation to sales representatives and registered dealers andbrokers (collectively “distribution costs”), including HSBC BankCanada, for units of the Fund bought and held by unitholders.Finally, we used management fees to pay for additional marketingand distribution services to the Fund.





15%

10%

0%

-20%

5%

Dec. 312006

Dec. 312007

Dec. 312008

Dec. 312009

Dec. 312010

Dec. 312011

-5%

-10%

-15%

9.8%

0.2%

-15.4%

12.3%

5.9%7.8%

3.2%

-2.5%

Dec. 312012

June 302013



10%

-10%

-20%

0%

Dec. 312011

-2.4%

7.8%3.2%

Dec. 312012

June 302013


Asset MixPercentage

of NAV



of NAV

HSBC Canadian Bond Fund – Institutional Series 29.03%CI Synergy Canadian Corporate Class – Series I 8.80%HSBC Equity Fund – Institutional Series 8.62%Capital International Global Equity Fund – Class I 7.78%HSBC Dividend Fund – Institutional Series 6.49%Sionna Canadian Equity Fund – Class I 6.45%Mac Universal Global Growth Fund – Series O 5.63%Brandes Global Equity Fund – Class I 5.59%HSBC Mortgage Fund – Institutional Series 5.46%HSBC Emerging Markets Debt Fund – Institutional Series 4.90%HSBC Global Equity Fund – Institutional Series 3.91%HSBC Small Cap Growth Fund – Institutional Series 2.86%HSBC Emerging Markets Fund – Institutional Series 1.96%HSBC BRIC Equity Fund – Institutional Series 1.76%HSBC Canadian Money Market Fund – Institutional Series 0.60%Total of Top 25 Holdings 99.84%


4





How to reach us



Toll-free: 1-800-830-8888Fax: 604-669-2756










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HSBC World SelectionDiversified Growth Fund



HSBC World Selection Diversified Growth Fund

Management Discussion of Fund PerformanceIn this document, you and your refer to the unitholder of the Fund;we, us and our refer to HSBC Global Asset Management (Canada)Limited; and the Fund refers to the HSBC World SelectionDiversified Growth Fund.





Investment Objective and StrategiesThe primary investment objective of this Fund is to provideinvestors with potential long-term capital growth and low tomoderate income through a diversified portfolio of investmentsacross several asset classes.


RiskThe risks of investing in the Fund remain as discussed in theSimplified Prospectus. This Fund is suitable for investors whowant to maximize the long-term potential growth of their capitaland earn low to moderate interest income. Investors in this Fundshould have a long-term investment time horizon and a mediumtolerance for investment risk.


Investment PerformanceThe HSBC World Selection Diversified Growth Fund (InvestorSeries) rose 4.82% for the six months ending June 30, 2013,while its benchmark rose 5.04% over the same period. Itsbenchmark is a composite of 40% MSCI World Index (in Canadiandollars), 35% S&P/TSX Composite Index and 25% DEX UniverseBond Index.

During the first half of 2013, the MSCI World Index (in Canadiandollars) rose 14.9%. The US market continued to lead the pushhigher with gains of 20.3% year-to-date. The Canadian marketcontinues to lag with a decline of 0.9% year-to-date as reducedexpectations for growth in emerging economies, particularlyChina, continue to weigh on commodity prices. The emergingmarkets performed poorly and suffered a loss of 4.3% in the firsthalf of the year. In the Canadian bond market there was a declineof 1.7%, with government bonds falling more than corporate debt.



Thus far in the third quarter of 2013, the market seems to be morein line with this view and markets have stabilized. Global growthcontinues to be positive but modest and consensus expectationsare moving lower as the year unfolds. The Canadian economyadvanced by 2.5% in the first quarter, led by a strong gain inexports despite a disappointing contribution from domesticconsumption. This gain in growth followed two quarters of growthbelow 1%. We expect the domestic economy to expand byapproximately 1.6% in 2013, while globally we expect growth of

1


2.0%. The Bank of Canada rate has been steady at 1% since thefall of 2010 and will likely remain there for at least four morequarters.

S&P/TSX earnings growth averaged approximately 16% in 2010and 2011. The 2012 earnings growth declined primarily due toweakness in commodity prices. However, in 2013 we expect aresumption of positive earnings growth in the 5-10% range, whichwould be supportive of the Canadian equity market. The Bank ofCanada has been on hold for almost three years and we expect nochange for the balance of 2013.

We expect modest, positive global growth in 2013 aided bycontinued accommodative monetary policy. There is a risk thatgrowth could be slower due to restrictive government fiscal policyand/or muted willingness for consumer spending and businessinvestment. Equity markets continue to have more attractivevaluations than debt markets, but there is a risk that if earningsgrowth does not resume in 2013 markets may be disappointed.Renewed concerns regarding reduced monetary stimulus,eurozone stability or the Chinese economy could also impactmarkets.


The following is summary of current transactions andarrangements with entities that are related to us or the Fund.






2


HSBC World Selection Diversified GrowthFund – Investor SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2004

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:



from operations (1) $0.55 $0.95 $(0.64) $0.81 $1.56 $(2.81)

Distributions to

unitholders:


Total annual

distributions (1,2) $– $– $– $– $– $–


period (1,7) $12.30 $11.74 $10.77 $11.39 $10.64 $9.12


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008


HSBC World Selection Diversified GrowthFund – Advisor SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2005

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:



from operations (1) $0.51 $0.89 $(0.57) $1.91 $1.29 $(2.47)

Distributions to

unitholders:


Total annual

distributions (1,2) $– $– $– $– $– $–


period (1,7) $10.40 $9.93 $9.11 $9.64 $9.01 $7.72


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008

NAV (in 000s) (3,7) $547 $626 $739 $1,018 $18 $15Units outstanding(in 000s) (3) 53 63 81 106 2 2NAV per unit (3) $10.40 $9.93 $9.11 $9.64 $9.01 $7.72Management expense ratio(“MER”) (4) 2.38% 2.42% 2.34% 2.32% 2.39% 2.36%MER before absorbed orwaived fees (4) 2.38% 2.42% 2.34% 2.32% 2.39% 2.37%Portfolio turnover rate (5) 3.39% 8.85% 15.45% 53.61% 10.67% 13.77%Trading expense ratio (6) 0.10% 0.08% 0.04% 0.07% 0.06% 0.17%

3


HSBC World Selection Diversified GrowthFund – Manager SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2005

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009


period (1,7) $15.37 $13.96 $14.60 $13.49 $10.00


Total revenue 0.08 0.29 0.28 0.34 0.24Total expenses (0.09) (0.17) (0.17) (0.16) (0.12)Realized gains (losses) 0.05 0.01 0.07 0.02 (0.08)Unrealized gains (losses) 0.78 1.27 (0.83) 0.91 3.45


operations (1) $0.82 $1.40 $(0.65) $1.11 $3.49


From income (excluding dividends) – – – – –From dividends – – – – –From net realized gains oninvestments – – – – –

Total annual distributions (1,2) $– $– $– $– $–


period (1,7) $16.19 $15.37 $13.96 $14.60 $13.49


2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

NAV (in 000s) (3,7) $4 $4 $3 $4 $3Units outstanding (in 000s) (3) –1 –1 –1 –1 –1

NAV per unit (3) $16.19 $15.37 $13.96 $14.60 $13.49Management expense ratio (“MER”) (4) 1.23% 1.23% 1.15% 1.11% 1.24%MER before absorbed or waivedfees (4) 1.23% 1.23% 1.15% 1.11% 1.25%Portfolio turnover rate (5) 3.39% 8.85% 15.45% 53.61% 10.67%Trading expense ratio (6) 0.10% 0.08% 0.04% 0.07% 0.06%






The Fund may invest in units of other mutual funds and pooled funds.You should note that in addition to the fees and expenses paid by the

Fund, these other funds have their own operating expenses to pay.The Fund will effectively bear the operating expenses of the otherfunds in proportion to its holdings in the other funds. However, theFund will not invest in units of other funds if the Fund would berequired to pay any management fees in respect of suchinvestments. In addition, the Fund will not make investments in otherfunds if the Fund would be required to pay any sales or redemptionfees in respect of such investments that duplicate a fee payable byunitholders of the Fund.






For the six months ended June 30, 2013, approximately 46% ofthe total management fees collected from all HSBC Mutual Fundswere used to fund distribution costs. In comparison, for the Fund,such distribution costs represented 41% of the management fees

4


collected. This may vary by series depending on the assetsinvested in each of the series.




20%

10%

-10%

-30%

0%

2010 2011 20122008 20092006 2007

-20%

12.9%

0.0%

-23.4%

16.7%

7.1% 9.0%

-5.5%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 312013

June 30

4.8%


20%

10%

-10%

-30%

0%

2010 2011 20122008 2009

-20%

-23.4%

16.7%

7.0% 8.9%

-5.5%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 312013

June 30

4.8%


20%

10%

-10%

-30%

0%

Dec. 312010

Dec. 31 Dec. 312011 2012

June 302013

-20%

8.2% 10.2%

-4.4%

5.3%


Asset MixPercentage

of NAV

Canadian Equities 41.12%International Equities 37.34%Bonds 21.58%Cash & Equivalents (0.04%)Total 100.00%


of NAV

HSBC Canadian Bond Fund – Institutional Series 16.74%HSBC Equity Fund – Institutional Series 11.80%CI Synergy Canadian Corporate Class – Series I 11.48%HSBC Global Equity Fund – Institutional Series 9.61%Sionna Canadian Equity Fund – Class I 9.15%Capital International Global Equity Fund – Class I 9.04%Brandes Global Equity Fund – Class I 6.81%Mac Universal Global Growth Fund – Series O 6.63%HSBC Small Cap Growth Fund – Institutional Series 5.66%HSBC Emerging Markets Debt Fund – Institutional Series 4.84%HSBC Dividend Fund – Institutional Series 3.03%HSBC Emerging Markets Fund – Institutional Series 2.68%HSBC BRIC Equity Fund – Institutional Series 2.57%Total of Top 25 Holdings 100.04%



5





How to reach us



Toll-free: 1-800-830-8888Fax: 604-669-2756











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3-08

)RR

D

HSBC World Selection DiversifiedAggressive Growth Fund



HSBC World Selection Diversified Aggressive Growth Fund

Management Discussion of Fund PerformanceIn this document, you and your refer to the unitholder of the Fund;we, us and our refer to HSBC Global Asset Management (Canada)Limited; and the Fund refers to the HSBC World SelectionDiversified Aggressive Growth Fund.





Investment Objective and StrategiesThe primary investment objective of this Fund is to provideinvestors with potential long-term capital growth through adiversified portfolio of investments across several asset classes.


RiskThe risks of investing in the Fund remain as discussed in theSimplified Prospectus. This Fund is suitable for investors whowant to maximize the long-term potential growth of their capitaland earn low to moderate interest income. Investors in this Fundshould have a long-term investment time horizon and a mediumtolerance for investment risk.


Investment PerformanceThe HSBC World Selection Diversified Aggressive Growth Fund(Investor Series) rose 7.37% for the six months ending June 30,2013, while its benchmark rose 8.35% for the same period. Itsbenchmark is a composite of 60% MSCI World Index (in Canadiandollars), 35% S&P/TSX Composite Index and 5% DEX UniverseBond Index.

During the first half of 2013, the MSCI World Index (in Canadiandollars) rose 14.9%. The US market continued to lead the pushhigher with gains of 20.3% year-to-date. The Canadian marketcontinues to lag with a decline of 0.9% year-to-date as reducedexpectations for growth in emerging economies, particularly China,continue to weigh on commodity prices. The emerging marketsperformed poorly and suffered a loss of 4.3% in the first half of theyear. In the Canadian bond market there was a decline of 1.7%,with government bonds falling more than corporate debt.

The Fund maintained a preference for equities and corporatebonds relative to government bonds during the period. Theoverweight to global equities and Canadian corporate bonds wasbeneficial to relative performance, but the overweight to Canadianequities and the allocation to emerging markets were negative toperformance.


Thus far in the third quarter of 2013, the market seems to be morein line with this view and markets have stabilized. Global growthcontinues to be positive but modest and consensus expectationsare moving lower as the year unfolds. The Canadian economyadvanced by 2.5% in the first quarter, led by a strong gain in exportsdespite a disappointing contribution from domestic consumption.This gain in growth followed two quarters of growth below 1%. Weexpect the domestic economy to expand by approximately 1.6% in2013, while globally we expect growth of 2.0%.

1


We expect modest, positive global growth in 2013 aided bycontinued accommodative monetary policy. There is a risk thatgrowth could be slower due to restrictive government fiscal policyand/or muted willingness for consumer spending and businessinvestment. Equity markets continue to have more attractivevaluations than debt markets, but there is a risk that if earningsgrowth does not resume in 2013 markets may be disappointed.Renewed concerns regarding reduced monetary stimulus,eurozone stability or the Chinese economy could also impactmarkets.





Distribution ServicesThe Fund is distributed through us, HSBC Investment Funds(Canada) Inc. (our wholly owned subsidiary) and through HSBCSecurities (Canada) Inc. (an affiliate) directly or through its division,HSBC InvestDirect. We pay distribution and servicing fees to thembased on the amount of assets held in the investor’s account, andadditionally, in some cases, on the amount of the initial purchase.If you hold units of this Fund and/or other HSBC Mutual Funds in aregistered plan with HSBC Investment Funds (Canada) Inc., theymay charge you an annual fee to cover the annual administration

costs of the plan. We permit HSBC Investment Funds (Canada)Inc. to collect these fees by redeeming sufficient units of the Fundwith the highest market value in your registered plan.



HSBC World Selection Diversified AggressiveGrowth Fund – Investor SeriesPeriod ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2004

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008




operations:

Total revenue 0.02 0.18 0.15 0.29 0.20 0.21Total expenses (0.13) (0.26) (0.26) (0.25) (0.23) (0.26)Realized gains (losses) 0.06 (0.01) – (0.10) (0.26) (0.14)Unrealized gains (losses) 0.83 1.05 (0.83) 0.85 1.92 (3.46)


from operations (1) $0.78 $0.96 $(0.94) $0.79 $1.63 $(3.65)

Distributions to

unitholders:


Total annual

distributions (1,2) $– $– $– $– $– $–


period (1,7) $11.58 $10.79 $9.80 $10.69 $10.01 $8.43

2



2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010

Dec. 31

2009

Dec. 31

2008


HSBC World Selection Diversified AggressiveGrowth Fund – Advisor Series*Period ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2005

June 30

2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010



Total revenue 0.02 0.14 0.21 0.01Total expenses (0.13) (0.23) (0.27) (0.01)Realized gains (losses) 0.06 (0.01) – –Unrealized gains (losses) 0.80 1.30 (0.67) 0.13








2013

Dec. 31

2012

Dec. 31

2011

Dec. 31

2010


HSBC World Selection Diversified AggressiveGrowth Fund – Institutional Series*Period ended June 30, 2013 (unaudited)and years ended December 31 Inception: December 2005

June 30

2013

Dec. 31

2012

Dec. 31

2011



Total revenue – 0.19 0.04Total expenses – (0.03) (0.01)Realized gains (losses) 0.03 (0.01) –Unrealized gains (losses) 0.72 1.12 0.16



From income (excluding dividends) – – –From dividends – – –From net realized gains on investments – – –

Total annual distributions (1,2) $– $– $–

Net assets per unit, end of period (1,7) $– $11.47 $10.19



2013

Dec. 31

2012

Dec. 31

2011

NAV (in 000s) (3,7) $– $13 $12Units outstanding (in 000s) (3) – 1 1NAV per unit (3) $– $11.47 $10.19Management expense ratio (“MER”) (4) 0.18% 0.42% 0.52%MER before absorbed or waived fees (4) 0.18% 0.42% 0.52%Portfolio turnover rate (5) 6.27% 12.73% 11.83%Trading expense ratio (6) 0.16% 0.13% 0.09%





The Fund may invest in units of other mutual funds and pooled funds.You should note that in addition to the fees and expenses paid by theFund, these other funds have their own operating expenses to pay.The Fund will effectively bear the operating expenses of the otherfunds in proportion to its holdings in the other funds. However, theFund will not invest in units of other funds if the Fund would berequired to pay any management fees in respect of such investments.

3


In addition, the Fund will not make investments in other funds if theFund would be required to pay any sales or redemption fees in respectof such investments that duplicate a fee payable by unitholders of theFund.










20%

10%

-10%

-40%

0%

2006 2007 2008 2009 2010 2011 2012

-20%

-30%

15.6%

-2.1%

-30.3%

18.7%

6.8%10.1%

-8.3%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 312013

June 30

7.4%


10%

-10%

-20%

0%

2011 2012

-8.4%

10.2%

Dec. 31 Dec. 312013

June 30

7.4%

4



10%

-10%

-20%

0%

2013June 30*

12.5%

2012Dec. 31

0.0%



Asset MixPercentage

of NAV

International Equities 55.21%Canadian Equities 40.70%Bonds 4.04%Cash & Equivalents 0.05%Total 100.00%


of NAV

HSBC Global Equity Fund – Institutional Series 26.26%HSBC Equity Fund – Institutional Series 12.17%CI Synergy Canadian Corporate Class – Series I 11.14%Sionna Canadian Equity Fund – Class I 8.86%Capital International Global Equity Fund – Class I 8.71%HSBC Small Cap Growth Fund – Institutional Series 8.53%Brandes Global Equity Fund – Class I 6.52%Mac Universal Global Growth Fund – Series O 6.31%HSBC Canadian Bond Fund – Institutional Series 4.04%HSBC Emerging Markets Fund – Institutional Series 3.73%HSBC BRIC Equity Fund – Institutional Series 3.68%Total of Top 25 Holdings 99.95%



5

For more informationYou can find more information about HSBC Mutual Fundsin the Fund’s Simplified Prospectus, Annual InformationForm and Fund Facts. You can get a copy of thesedocuments, as well as the Fund’s Financial Statements,at no cost by calling 1-800-830-8888, by contacting yourauthorized dealer or by visiting our website atwww.hsbc.ca/investment-resources.



How to reach us



Toll-free: 1-800-830-8888Fax: 604-669-2756











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3-08

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