investment-linked policies sub-funds...global asset management (singapore) limited to hsbc global...

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Investment-linked policies sub-fundsSemi-annual unaudited report for the six months ended 31 December 2013.

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

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Contents

Fund Updates 2

Fund Performance Summary 7

Notes to the fund disclosures 9

HSBC Insurance Asia Balanced Fund 10

HSBC Insurance Asia Equity Fund 14

HSBC Insurance Asia Focused Income Fund 17

HSBC Insurance Asian Bond Fund 20

HSBC Insurance Asian Dividend Equity Fund 23

HSBC Insurance China Balanced Fund 26

HSBC Insurance China Equity Fund 29

HSBC Insurance Climate Change Equity Fund 32

HSBC Insurance Emerging Europe Equity Fund 35

HSBC Insurance Emerging Markets Equity Fund 38

HSBC Insurance Ethical Global Equity Fund 41

HSBC Insurance Ethical Global Sukuk Fund 44

HSBC Insurance Europe Equity Fund 47

HSBC Insurance Global Bond Fund 50

HSBC Insurance Global Emerging Markets Bond Fund 53

HSBC Insurance Global Equity Fund 56

HSBC Insurance India Equity Fund 59

HSBC Insurance Japan Equity Fund 62

HSBC Insurance Pacific Equity Fund 65

HSBC Insurance Premium Balanced Fund 68

HSBC Insurance Premium Property Equity Fund 71

HSBC Insurance SGD Reserve Fund 76

HSBC Insurance Singapore Balanced Fund 79

HSBC Insurance Singapore Bond Fund 83

HSBC Insurance World Selection Funds 87

Financial Statements 94

Notes to the financial statements 103

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

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Fund Updates 1. Changes to HSBC Insurance Global Emerging Markets Bond Fund (Change in Investment

Objective for HSBC Global Investment Funds – Global Emerging Markets Bond) The investment objective of HSBC Global Investment Funds – Global Emerging Markets Bond (the “Underlying Sub-Fund”), which HSBC Insurance Global Emerging Markets Bond Fund invests all, or substantially all of its assets into, has been changed from 16 September 2013. The amendments to the investment objective of the fund are intended to clarify the potential concentration of investments in non-investment grade securities of a single sovereign issuer and Amendments are highlighted in bold as shown in the table below:

Prior to 16 September 2013

From 16 September 2013

The objective of the Underlying Sub-Fund is to invest for total return primarily in a diversified portfolio of Investment Grade and Non-Investment Grade rated fixed income (e.g. bonds) and other similar securities either issued by companies which have their registered office in Emerging Markets around the world, primarily or guaranteed by governments, government agencies and supranational bodies of Emerging Markets. The Underlying Sub-Fund may also invest in financial derivative instruments such as futures, forward (including non-deliverable forwards), swaps, options, credit default swaps, as well as other structured products. The Underlying Sub-Fund intends to use such financial derivative instruments for, inter alia, return enhancement, hedging, tax advantage access to instruments and whenever the Investment Adviser believes the investments in financial derivative instruments will assist the Underlying Sub-Fund in achieving its investment objective.

The objective of the Underlying Sub-Fund is to invest for total return primarily in a diversified portfolio of Investment Grade and Non-Investment Grade rated fixed income (e.g. bonds) and other similar securities either issued by companies which have their registered office in Emerging Markets around the world, primarily denominated in US dollars, or which are issued or guaranteed by governments, government agencies and supranational bodies of Emerging Markets. The Underlying Sub-Fund may invest more than 10% and up to 30% of its net assets in securities issued by and/or guaranteed by a single sovereign issuer with a Non-Investment Grade credit rating. This is due to the fact that the Underlying Sub-Fund’s reference benchmark, the JP Morgan Emerging Market Bond Index, may contain sovereign issuers that may decide to invest in a specific non-investment grade sovereign issuer and/or to overweight (in relation to the reference benchmark) a particular Non-Investment Grade sovereign issuer. The Non-Investment Grade sovereign issuers that the Underlying Sub-Fund may invest up to 30% of its net assets in include, but are not limited to, Venezuela, Turkey and the Philippines. However, this list may change at any time as a result of: changes in credit ratings, changes in the Underlying Sub-Fund’s benchmark weights, the Investment Adviser’s decision to allocate a higher or lower proportion of the Underlying Sub-Fund’s net assets to a particular benchmark constituent and/or market movements.


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The Underlying Sub-Fund may also invest in financial derivative instruments such as futures, forwards (including non-deliverable forwards), swaps, options, credit defaults swaps, as well as other structured products. The Underlying Sub-Fund intends to use such financial derivative instruments for, inter alia, return enhancement, hedging, tax-efficient access to instruments and whenever the Investment Adviser believes the investment in financial derivative instruments will assist the Underlying Sub-Fund in achieving its investment objectives.

2. Changes in the Underlying Sub-Funds of HSBC Insurance India Equity, HSBC Insurance Global Emerging Markets Bond, HSBC Insurance Asia Focused Income Fund, HSBC Insurance World Selection 1, HSBC Insurance World Selection 3, HSBC Insurance World Selection 5 HSBC Asset Management (Singapore) Limited has informed us of the changes for the following Underlying Sub-Funds:

Underlying Sub-Fund Changes i) HSBC Global Investment Funds – Indian

Equity ii) HSBC Global Investment Funds – Global

Emerging Markets Bonds iii) HSBC Global Investment Funds – Asia

Focused Income

HSBC Securities Services (Luxembourg) S.A. has been appointed to provide some of the delegated services for HSBC Global Investment Funds and the transfer will take place as follows: Administration Agent from 26 August

2013 Depository Bank from 25 November

2013 Registrar from January 2014 Transfer Agent with effect from 24

March 2014

i) HSBC Portfolios – World Selection 1 ii) HSBC Portfolios – World Selection 3 iii) HSBC Portfolios – World Selection 5

Transfer Agency services will be transferred from RBC Investor Services Bank S.A to HSBC Securities Services (Luxembourg) S.A. with effect from 24 March 2014

i) HSBC Amanah Funds – HSBC Amanah

Global Equity*

HSBC Securities Services (Luxembourg) S.A has been appointed to undertake central administration services commencing from 16 September 2013. HSBC Securities Services (Luxembourg) S.A will also undertake depository and custody services commencing 25 November 2013 and undertake central transfer agency and shareholder services from a date to be determined by the Board of Directors of HSBC Amanah Funds.

*HSBC Amanah Funds – HSBC Amanah Global Equity is no longer available from 18 November 2013.


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3. Changes to HSBC Insurance India Equity Fund (Change of Investment Adviser for HSBC Global Investment Funds – Indian Equity) The Investment Adviser for HSBC Global Investment Funds – Indian Equity which HSBC Insurance India Equity Fund invests all, or substantially all of its assets into, has been changed from HSBC Global Asset Management (Singapore) Limited to HSBC Global Asset Management (Hong Kong) Limited with effect from 16 September 2013.

4. Change in ILP Sub-Fund Names With effect from 18 November 2013, the following ILP Sub-Funds have been renamed to help customers easily identify ILP Sub-Funds:

ILP Sub-Fund name New ILP Sub-Fund name (effective from 18

Nov 2013)

1 HSBC-Link Asia Balanced Fund HSBC Insurance Asia Balanced Fund 2 HSBC-Link Asia Equity Fund HSBC Insurance Asia Equity Fund 3 HSBC-Link Asia Focused Income Fund HSBC Insurance Asia Focused Income Fund 4 HSBC-Link Asian Bond Fund HSBC Insurance Asian Bond Fund 5 HSBC-Link Asian Dividend Equity Fund HSBC Insurance Asian Dividend Equity

Fund 6 HSBC-Link China Balanced Fund HSBC Insurance China Balanced Fund 7 HSBC-Link China Equity Fund HSBC Insurance China Equity Fund 8 HSBC-Link Climate Change Equity

Fund HSBC Insurance Climate Change Equity Fund

9 HSBC-Link Ethical Global Equity Fund HSBC Insurance Ethical Global Equity Fund 10 HSBC-Link Ethical Managed Fund HSBC Insurance Ethical Global Sukuk Fund 11 HSBC-Link Emerging Europe Equity

Fund HSBC Insurance Emerging Europe Equity Fund

12 HSBC-Link Emerging Markets Equity Fund

HSBC Insurance Emerging Markets Equity Fund

13 HSBC-Link Europe Equity Fund HSBC Insurance Europe Equity Fund 14 HSBC-Link Global Bond Fund HSBC Insurance Global Bond Fund 15 HSBC-Link Global Emerging Markets

Bond Fund HSBC Insurance Global Emerging Markets Bond Fund

16 HSBC-Link Global Equity Fund HSBC Insurance Global Equity Fund 17 HSBC-Link India Equity Fund HSBC Insurance India Equity Fund 18 HSBC-Link Japan Equity Fund HSBC Insurance Japan Equity Fund 19 HSBC-Link Pacific Equity Fund HSBC Insurance Pacific Equity Fund 20 HSBC-Link Premium Balanced Fund HSBC Insurance Premium Balanced Fund 21 HSBC-Link Premium Property Equity

Fund HSBC Insurance Premium Property Equity Fund

22 HSBC-Link SGD Reserve Fund HSBC Insurance SGD Reserve Fund 23 HSBC-Link Singapore Balanced Fund HSBC Insurance Singapore Balanced Fund 24 HSBC-Link Singapore Bond Fund HSBC Insurance Singapore Bond Fund 25 HSBC-Link World Selection 1 Fund HSBC Insurance World Selection 1 Fund 26 HSBC-Link World Selection 3 Fund HSBC Insurance World Selection 3 Fund 27 HSBC-Link World Selection 5 Fund HSBC Insurance World Selection 5 Fund


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5. Changes to HSBC Insurance Ethical Global Equity Fund, HSBC Insurance Ethical Global Sukuk Fund and HSBC Insurance Ethical Asia Equity Fund. The changes to HSBC Insurance Shariah Compliant Funds are summarised as follows:

Prior to 18 November 2013 From 18 November 2013 HSBC-Link Ethical Global Equity Fund

Underlying Sub-Fund: HSBC Amanah Funds - HSBC Amanah Global Equity

Management Fee: 1.6% per annum Included under CPF Investment Scheme: Yes, under Ordinary Account.

HSBC Insurance Ethical Global Equity Fund

Underlying Sub-Fund: Franklin Templeton Shariah Funds - Templeton Shariah Global Equity Fund

Management Fee: 1.5% per annum Included under CPF Investment Scheme: Yes, under Ordinary Account.

HSBC-Link Ethical Managed Fund

Underlying Sub-Fund: Not applicable. Managed as a discretionary investment vehicle

Management Fee: 1.5% per annum Included under CPF Investment Scheme: Yes, but no new subscriptions.

HSBC Insurance Ethical Global Sukuk Fund

Underlying Sub-Fund: Franklin Templeton Shariah Funds -Franklin Templeton Global Sukuk Fund

Management Fee: 1.3% per annum Delisted from CPF Investment Scheme

HSBC-Link Ethical Asia Equity Fund No longer available from 18 November 2013.

6. Change in name of Sub-Manager for DWS Premier Select Trust

The Sub-Manager of the Underlying Fund of HSBC Insurance Premium Balanced Fund, DWS Investment GmbH has been renamed to Deutsche Asset & Wealth Management Investment GmbH with effect from 1 September 2013.

7. Update in the Central Provident Fund Investment Scheme (“CPFIS”) status of HSBC Insurance India Equity Fund HSBC Insurance India Equity Fund will be delisted from the CPFIS with effect from 1 March 2014, as a result of the Underlying Sub-Fund, HSBC Global Investment Funds – Indian Equity being delisted from CPFIS at the same time. In view of this change, HSBC Insurance India Equity Fund will no longer be able to accept new CPF monies from 1 March 2014 onwards and will no longer comply with CPF Investment Guidelines.

8. Update of Benchmark Performance for HSBC Insurance China Equity Fund HSBC Insurance (Singapore) Pte. Limited has revised the benchmark performance of "Since Inception" figure for HSBC Insurance China Equity Fund. This revision is to correct the inaccurate benchmark performance previously presented. Please be assured that the performance and Net Asset Value (NAV) of this ILP sub-fund have not been affected by this revision. The revised benchmark performance is now reflected in this latest version of semi-annual unaudited report ended 31 December 2013.


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9. Update on Turnover Ratio

HSBC Insurance (Singapore) Pte. Limited has revised the turnover ratios for all ILP sub funds, to reflect the turnover ratios based on the lower of purchases or sales for the 12 months preceding the reporting date as a percentage of the daily average Net Asset Value in the semi-annual unaudited report. This revision is to correct the turnover ratios for all ILP sub-funds previously reflected in all our semi-annual unaudited reports. The turnover ratios of all ILP sub-funds were computed using a period of 6 months although it was stated in the semi-annual unaudited report that these ratios were computed using a period of 12 months. Please be assured that the performance and Net Asset Value (NAV) of the ILP sub-funds have not been affected by this revision. The revised turnover ratios for ILP sub-funds are now reflected in this latest version of semi-annual unaudited report ended 31 December 2013.

10. Update on Benchmark Performance of HSBC Insurance Premium Property Equity Fund

The fund manager of HSBC Insurance Premium Property Equity Fund, Henderson Global Investors (Singapore) Limited has informed HSBC Insurance (Singapore) Pte Limited of a revision to benchmark data. This revision is to correct the benchmark performance presented previously. The performance and Net Asset Value (NAV) of the ILP sub-funds have not been affected by this revision. Revised benchmark performance data is now reflected in all disclosure documents and Henderson Global Investors (Singapore) Limited has put in place enhanced controls to prevent a similar occurrence.

Any queries on the revised benchmark performance, please contact HSBC Insurance Customer Service Hotline at 6225 6111.

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

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Fund Performance Summary 3-Mth (%) 6-Mth (%) 1-Year (%) 3-Year (%)HSBC Insurance Asia Balanced Fund 2.94 6.17 9.36 (4.34)Benchmark * 2.84 6.38 4.56 7.27 HSBC Insurance Asia Equity Fund 4.86 6.14 3.74 0.13Benchmark * 3.49 9.46 7.55 7.31 HSBC Insurance Asia Focused Income Fund 0.72 1.47 - -The Fund has no benchmark HSBC Insurance Asian Bond Fund 1.37 3.35 0.88 12.93Benchmark * 0.33 0.29 0.43 1.29 HSBC Insurance Asian Dividend Equity Fund 2.10 4.89 7.68 10.43Benchmark * 2.94 9.40 7.14 6.00 HSBC Insurance China Balanced Fund 7.45 15.24 10.44 2.18Benchmark * 3.14 11.25 5.31 2.50 HSBC Insurance China Equity Fund 5.91 16.16 10.53 (1.97)Benchmark * 4.46 15.92 7.13 2.57 HSBC Insurance Climate Change Equity Fund 9.76 19.10 35.62 26.97Benchmark * 8.67 16.30 30.94 36.60 HSBC Insurance Emerging Europe Equity Fund 2.45 12.23 (9.12) 3.61Benchmark * (0.78) 6.82 (1.14) (9.27) HSBC Insurance Emerging Markets Equity Fund 2.23 8.11 1.06 (5.25)Benchmark * 2.47 7.22 0.68 (7.42) HSBC Insurance Ethical Global Equity Fund 3.62 9.75 18.25 18.48Benchmark * 7.61 14.56 23.62 24.97 HSBC Insurance Ethical Global Sukuk Fund 5.09 9.83 20.28 15.13Benchmark * 1.76 1.77 3.60 12.51 HSBC Insurance Europe Equity Fund 9.90 26.90 36.23 31.56Benchmark * 8.55 22.01 29.45 30.78 HSBC Insurance Global Bond Fund (0.13) 0.09 (2.06) 11.44Benchmark * 0.03 0.49 (0.75) 13.72 HSBC Insurance Global Emerging Markets Bond Fund 0.27 0.58 - -Benchmark * 1.55 1.33 - - HSBC Insurance Global Equity Fund 8.30 16.53 29.71 18.14Benchmark * 8.66 17.21 31.12 23.24 HSBC Insurance India Equity Fund 17.06 6.46 (10.68) (35.59)Benchmark * 12.56 5.10 (1.49) (26.32)

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

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)%( raeY-3)%( raeY-1)%( htM-6)%( htM-3

HSBC Insurance Japan Equity Fund 3.09 7.99 27.74 16.99Benchmark * 2.59 8.97 31.30 17.80 HSBC Insurance Pacific Equity Fund (0.02) 0.11 0.76 6.51Benchmark * 2.94 9.41 7.14 6.01 HSBC Insurance Premium Balanced Fund 2.67 5.35 10.05 10.00Benchmark * 2.81 6.42 10.62 14.34 HSBC Insurance Premium Property Equity Fund 1.01 4.40 9.90 15.72Benchmark * 1.17 5.80 11.18 25.33 HSBC Insurance SGD Reserve Fund 0.01 0.00 (0.02) 0.14Benchmark * 0.06 0.12 0.25 0.44 HSBC Insurance Singapore Balanced Fund 0.30 0.99 2.73 5.42Benchmark * 0.97 3.50 3.70 5.78 HSBC Insurance Singapore Bond Fund 0.45 1.14 1.56 6.46Benchmark * 0.08 0.16 0.31 1.06 HSBC Insurance World Selection 1 Fund 1.98 2.51 5.07 8.74The Fund has no benchmark

HSBC Insurance World Selection 3 Fund 3.82 7.07 13.00 13.18The Fund has no benchmark

HSBC Insurance World Selection 5 Fund (5.65) (0.06) 8.44 1.39The Fund has no benchmark * Refer to the respective funds for the benchmark used.

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

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Notes to the fund disclosures 1. Performance figures

Performance figures are calculated using bid-to-bid prices, with any income or dividends reinvested and in Singapore dollars. The performance figures are calculated on a cumulative basis, and not on an average annual compounded basis.

2. Expense ratio

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

3. Turnover ratio

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

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

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

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HSBC Insurance Asia Balanced Fund Fund Objective HSBC Insurance Asia Balanced Fund seeks to achieve capital growth over the medium to longer term by investing primarily 70% of the portfolio asset value in Asian equities and 30% in high quality debt securities of major bond market. The Fund invests substantially all or all its assets primarily 70% into the Legg Mason Western Asset Asian Enterprise Trust and 30% into the Legg Mason Western Asset Global Bond Trust. Legg Mason Western Asset Asian Enterprise Trust Investment and Market Review ^ Most markets in the Asia Pacific region ended the year on a modestly positive note. However,

FUND FACTS Underlying Funds 70%: Legg Mason Western

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

Fund Manager Western Asset Management Singapore Pte Ltd

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

N.A.

As at 31 Dec 2013 Offer Price S$ 0.82293 Bid Price S$ 0.78178 Fund Size S$ 2.50 mil Units in Issue 3.20 mil

the bulk of the gains were negated by currency losses in US$ terms with the benchmark MSCI Asia-Pacific ex-Japan Index closing the year flat. The sequential downward revision to earnings estimates through the year, principally on the back of China’s uncertain economic growth trajectory, was the main drag to regional market performance. Korea bore the brunt of the sharp depreciation of the Japanese Yen. The exports dependent market traded largely sideways through the year with the Korean government struggling to implement any meaningful measures to revitalize domestic consumption. Over in Taiwan, the breath of winners was narrow although the market ended on a firm note. With the Japanese government firmly set on depreciating the yen further into the new year, the prognosis will continue to look challenging for the two tech-centric markets. We are likely to remain underweight in both markets.

Market Outlook and Investment Strategy ^ The Asia-Pacific ex-Japan markets are now trading at valuation points that historically suggest strong potential for favorable absolute returns. The combination of PE multiple expansion coupled with good double digits earnings growth are healthy ingredients that can potentially engender strong market performance in 2014. The favorable global backdrop also looks conducive for robust performance among small to mid-cap stocks. Any sharp rise in long term rates can potentially create temporary setbacks for the markets but the long term underpinnings for the regional markets appear firmly buttressed. Legg Mason Western Asset Global Bond Trust *Please refer to HSBC Insurance Global Bond Fund on page 50 for the Investment and Market Review and the Market outlook and Investment Strategy. ^ Source: Western Asset Management Singapore Pte Ltd.

A) Fund Performance

3-Mth

(%)6-Mth

(%)1-Year

(%)3-Year

(%)5-Year

(%)10-Year

(%)

SinceInception

(%) HSBC Insurance Asia Balanced Fund 2.94 6.17 9.36 (4.34) 49.08 - (17.71) Benchmark* 2.84 6.38 4.56 7.27 60.28 - (2.75) *70% MSCI AC Asia ex Japan + 30% Citigroup World Government Bond ex Japan Index


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B) Fund Disclosure I Allocation by Asset Class As at 31 Dec 2013 Asset Class % of NAV MV S$ mil Legg Mason Asian Enterprise Trust 68.72 1.56 Legg Mason Global Bond Trust 31.72 0.72 Other assets 0.44 0.01 Other liabilities (0.88) (0.02) Total 100.00 2.27 II Fund Movement (01 Jul 2013 - 31 Dec 2013) S$ Subscription 372,461 Redemption 290,927 C) Underlying Fund Disclosure (Legg Mason Western Asset Asian Enterprise Trust) I Allocation by Country As at 31 Dec 2013 Country % of NAV MV S$ mil China 18.17 37.65 South Korea 16.44 34.08 Singapore 15.73 32.60 Hong Kong 15.66 32.46 Taiwan 9.57 19.84 India 8.82 18.29 Philippines 5.87 12.16 Indonesia 3.10 6.43 Malaysia 1.55 3.21 Thailand 0.88 1.81 Cash 4.21 8.72 Total 100.00 207.25 II Allocation by Industry As at 31 Dec 2013 Industry % of NAV MV S$ mil Consumer 29.08 60.27 IT 20.40 42.29 Industrials 16.23 33.63 Financials 14.03 29.08 Energy 5.73 11.87 Real Estate 5.52 11.44 Construction/Materials 2.34 4.84 Healthcare 1.96 4.07 Telecommunication 0.50 1.04 Cash 4.21 8.72 Total 100.00 207.25 III Allocation of Debt Securities by Credit Ratings As at 31 Dec 2013 N.A. IV Top Ten Holdings of Underlying Fund As at 31 Dec 2013 % of NAV S$ mil Ezion Holdings Ltd. 7.06 14.64 Samsung Electronics Co. Ltd. 3.09 6.41 Sun Hung Kai Properties Ltd. 2.75 5.70 China Life Co - H Shares 2.71 5.62 Orion Corp Co. 2.40 4.98 Hermes Microvision Inc 2.33 4.84 Tencent Holdings Ltd. 2.18 4.51 Tech Mahindra Ltd. 2.15 4.45 Shenzhou International Group 2.15 4.45 Mahindra & Mahindra Financial Services Ltd. 2.09 4.34


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Top Ten Holdings of Underlying Fund As at 31 Dec 2012 % of NAV S$ mil Samsung Electronics Co. Ltd. 5.32 9.97 Ezion Holdings Ltd. 5.31 9.95 China Construction Bank H Shares 3.63 6.80 Galaxy Entertainment Group Ltd. 3.58 6.72 Modern International 3.08 5.78 OSIM International Ltd. 2.88 5.40 Hermes Microvision Inc 2.67 5.01 S M Entertainment Co. 2.60 4.88 Chailease Holding Co. Ltd. 2.42 4.54 Fubon Financial Holding Co. 2.29 4.30 V Exposure to Derivatives As at 31 Dec 2013 N.A. VI Borrowings of Net Asset Value As at 31 Dec 2013 N.A.

*HBSC Insurance Asian Balanced Fund invests 30% into Legg Mason Global Bond Trust. Please refer to HSBC Insurance Global Bond Fund on page 50 for the underlying fund disclosure on Legg Mason Global Bond Trust under Section C.

D) Other Disclosure Items I Expense/Turnover Ratio Expense Ratio Turnover Ratio As at 31-Dec-13 As at 31-Dec-12 As at 31-Dec-13 As at 31-Dec-12 Underlying Fund Level

Legg Mason Western Asset Asian Enterprise Trust 1.76% 1.75% 150.15%

202.48%

Legg Mason Western Asset Global Bond Trust 0.88% 0.88% 256.53%

215.25%

ILP Sub-Fund Level

HSBC Insurance Asia Balanced Fund 1.76% 1.73% 22.71%

20.81%

II Related-Party Transactions N.A. III Material Information N.A.


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IV Soft Dollar Commission Agreement

The Manager currently does not but shall be entitled to receive and enter into soft-dollar commissions/arrangements in respect of the Underlying Fund. The sub-Manager currently receives and enters into soft-dollar commissions/arrangements in respect ofthe Fund. The Manager and Sub-Manager will comply with applicable regulatory and industry standardson soft-dollars. The soft-dollar commissions which the Sub-Manager receives and which the Managermay receive include include specific advice as to the advisability of dealing in, or the value of anyinvestments, research and advisory services, economic and political analyses, portfolio analyses including valuation and performance measurements, market analyses, data and quotation services,computer hardware and software or any other information facilities to the extent that they are used tosupport the investment decision making process, the giving of advice, or the conduct of research oranalysis, and custodial service in relation to the investments managed for clients. Soft-dollar commissions received shall not include travel, accommodation, entertainment, general administrative goods and services, general office equipment or premises, membership fees, employees’salaries or direct money payment. The Manager and Sub-Manager will not accept or enter into soft dollar cmmissions/arrangements unlesssuch soft-dollar commissions/arrangements would, in the opinion of the Manager or Sub-Manager (as the case may be), assist it in its management of the Trust, provided that it shall ensure at all times that bestexecution is carried out for the transactions, and that no unnecessary trades are entered into in order toqualify for such soft-dollar commissions/arrangements.

E) Financial Statements Refer to page 94. For more information, please contact your financial consultant, call our Customer Service Hotline on 6225 6111, or visit our web site at www.insurance.hsbc.com.sg.

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

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HSBC Insurance Asia Equity Fund Fund Objective HSBC Insurance Asia Equity Fund seeks to achieve capital appreciation in the medium to long-term through investment in equity and equity-related securities issued by companies which are listed on the stock exchanges of Asia. Fund investments are made by way of a feeder fund, which invests substantially all or all its assets in the DWS Asia Premier Trust. Investment and Market Review ^ The review period saw investors flee ASEAN in preference for North Asia on concerns of QE

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

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

Higher Risk - Narrowly Focused

As at 31 Dec 2013 Offer Price S$ 2.29809 Bid Price S$ 2.18319 Fund Size S$ 77.32 mil Units in Issue 35.42 mil *Note: With effect from 28 June 2010, the Fund has been delisted from CPFIS.

tapering and the current account deficit in Indonesia. North Asian markets were boosted by better than expected economic data from China. For ASEAN, an earlier calm brought about stabilizing bond yields and currency did not sail through for the TIPs market (Thailand, Indonesia and Philippines) as investors sought to sell down these markets on fears of QE tapering. The sell-down was compounded further in Thailand, the worst performing market on political uncertainties yet again. For the Philippines, devastating Typhoon Haiyan will hurt GDP growth. Market Outlook and Investment Strategy ^ In Asia, investors remain focused on the reform hopes coming out from China’s Third Plenary. We have lesser reasons to be cautious on equities as we have less external shocks to worry of. Fears of QE tapering we believe have now being largely priced in. We continue to overweight Hong Kong/China as our bottom-up ideas look appealing particularly on what we see as the new economic drivers of China being healthcare, environment and Internet sectors. We continue to narrow our underweight in Korea as signs of improving domestic consumption should bode well for the market with the support of attractive valuation. For ASEAN, the Philippines remains an overweight as we still believe in the strength of its economy. Also, we are cautiously optimistic that the political debacle in Thailand will eventually be resolved. ^ Source: Deutsche Asset Management (Asia) Ltd.

A) Fund Performance

3-Mth

(%)6-Mth

(%)1-Year

(%)3-Year

(%)5-Year

(%)10-Year

(%)

SinceInception

(%) HSBC Insurance Asia Equity Fund 4.86 6.14 3.74 0.13 74.64 86.60 129.81 Benchmark* 3.49 9.46 7.55 7.31 93.61 111.33 68.87 *MSCI AC Far East ex Japan (SGD)

B) Fund Disclosure I Allocation by Asset Class As at 31 Dec 2013 Asset Class % of NAV MV S$ mil DWS Asia Premier Trust 100.18 77.63 Other assets 0.71 0.55 Other liabilities (0.89) (0.69) Total 100.00 77.49 II Fund Movement (01 Jul 2013 - 31 Dec 2013) Subscription 8,712,187 Redemption 4,991,338


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C) Underlying Fund Disclosure (DWS Asia Premier Trust) I Allocation by Country As at 31 Dec 2013 Country % of NAV MV S$ mil Cayman Islands 23.93 22.56 South Korea 18.90 17.81 China 12.45 11.74 Hong Kong 10.63 10.02 Bermuda 7.19 6.78 Taiwan 6.66 6.28 Malaysia 5.25 4.95 Singapore 3.25 3.06 Thailand 2.29 2.16 Indonesia 2.26 2.13 Others* 7.19 6.77 Total 100.00 94.26 *Includes other countries and net assets and liabilities. II Allocation by Industry As at 31 Dec 2013 Industry % of NAV MV S$ mil Electric Equipment 6.57 6.20 Retail 6.30 5.94 Banks 6.26 5.90 Internet Services 5.21 4.91 Semiconductors 4.86 4.58 Entertainment 4.56 4.30 Oil & Gas 4.41 4.16 Automobile 4.15 3.92 City Gas 4.00 3.77 Finance 3.67 3.46 Diversified Resources 3.51 3.31 Food & Beverage 3.28 3.09 Autos & Trucks 3.13 2.95 Real Estate 3.12 2.94 Others* 36.97 34.83 Total 100.00 94.26 *Includes other industries and net assets and liabilities. III Allocation of Debt Securities by Credit Ratings As at 31 Dec 2013 N.A. IV Top Ten Holdings of Underlying Fund As at 31 Dec 2013 % of NAV MV S$ mil Samsung Electronics Co. Ltd. 6.57 6.20 Taiwan Semiconductor Manufacturing Co. Ltd. 4.86 4.58 China Gas Holdings Ltd. 4.00 3.77 Industrial & Commercial Bank of China H Shares 3.96 3.73 Tencent Holdings Ltd. 3.87 3.65 Naver Corporation 3.00 2.83 SJM Holdings Ltd. 2.60 2.45 Geely Automobile Holdings Ltd. 2.57 2.43 Ajisen China Holdings Ltd. 2.35 2.22 China Minsheng Banking Company Ltd. H Shares 2.31 2.17


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Top Ten Holdings of Underlying Fund As at 31 Dec 2012 % of NAV MV S$ mil Samsung Electronics Co. Ltd. 7.25 6.26 Fraser & Neave Ltd. 4.91 4.24 Taiwan Semiconductor Manufacturing Co. Ltd. 3.93 3.40 Industrial & Commercial Bank of China H Shares 3.77 3.26 Hyundai Motor Co. 3.50 3.03 Capitaland Ltd. 3.38 2.92 Jardine Matheson Holdings Ltd. 3.01 2.61 HTC Co. 2.91 2.52 Wharf Holdings Ltd. 2.51 2.17 Luk Fook Holdings International Ltd. 2.38 2.06 V Exposure to Derivatives As at 31 Dec 2013 % of NAV - Market Value (S$) - Realised Gains / (Losses) (S$) (154,808) Unrealied Gains / (Losses) (S$) - VI Borrowings of Net Asset Value As at 31 Dec 2013 N.A.

D) Other Disclosure Items I Expense/Turnover Ratios (%) HSBC Insurance Asia Equity

Fund Underlying Fund

As at 31-Dec-13 As at 31-Dec-12 As at 31-Dec-13 As at 31-Dec-12 Expense Ratio 1.82% 1.82% 1.53% 1.53% Turnover Ratio 14.90% 10.90% 184.27% 182.04% II Related-Party Transactions N.A. III Material Information N.A. IV Soft Dollar Commission Arrangement

Soft dollar commissions are benefits accorded to Manager by their brokers, usually in the form of research,advisory, analysis and data services, computer hardware or software used for and/or in support of theinvestment process. The Manager’s policy on soft dollar commissions is as follows: - the goods and services received would assist in the provision of investment services and advices orrelated services to the unit trust; - transactions are executed on the best available terms; and - the Manager does not engage in unnecessary trades in order to qualify for soft dollar commissions. Soft dollar commissions were received from the Manager’s panel of soft dollar brokers which executed transactions for the unit trust and other funds managed by the Managers.

E) Financial Statements Refer to page 94.

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

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

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

17

HSBC Insurance Asia Focused Income Fund Fund Objective HSBC Insurance Asia Focused Income Fund seeks to provide income and moderate capital growth throughan active asset allocation in a diversified portfolio offixed income and equity securities as well as moneymarket and cash instruments. Fund investments are made by way of a feeder fund, which investssubstantially all, or all its assets in the HSBC Global Investment Funds - Managed Solutions – Asia Focused Income Fund. Investment and Market Review ^ US monetary policy was a focus for markets duringH2. Federal Reserve produced a surprise by not tapering in September, only to announce in Decemberthat they would reduce purchases from USD85bn per

FUND FACTS Underlying Sub-Fund HSBC Global Investment

Fund – Managed Solutions - Asia Focused Income Fund

Fund Manager HSBC Global Asset Management (Singapore) Ltd

Launch Date 28 Jan 2013 CPFIS/SRS SRS CPFIS Risk Classification

N.A.


month to USD75bn per month starting in January 2014. The result of this process was mainly felt in the bondmarkets where yields rose significantly, producing generally negative returns for the year as a whole acrossfixed income asset classes. Market Outlook and Investment Strategy ^ Even after the strong performance of 2013 equities continue to look set to produce the best total returns overthe long term. And with the global economy performing steadily and investors likely to continue to invest inequities in the face of low cash and bond returns, there is no reason at present to expect the short term todiffer from the long term profile and see weakness in equities. ^ Source : HSBC Global Asset Management (Singapore) Ltd

A) Fund Performance

3-Mth

(%)6-Mth

(%)1-Year

(%)3-Year

(%)5-Year

(%)10-Year

(%)

Since Inception

(%)

HSBC Insurance Asia Focused Income Fund 0.72 1.47 - - - -

(4.16)

This fund has no benchmark.

B) Fund Disclosure I Allocation by Asset Class As at 31 Dec 2013 Asset Class % of NAV MV S$ mil HSBC GIF – Managed Solutions - Asia Focused Income Fund 101.34 1.51 Other liabilities (1.34) (0.02) Total 100.00 1.49 II Fund Movement (1 Jul 2013 – 31 Dec 2013) S$ Subscription 251,490 Redemption 147,674


18

C) Underlying Sub-Fund Disclosure (HSBC GIF – Managed Solutions - Asia Focused Income) I Allocation by Country As at 31 Dec 2013 Country % of NAV MV S$ mil China 19.03 187.63 Hong Kong 13.86 136.71 South Korea 11.68 115.17 Global 10.77 106.22 Indonesia 8.58 84.60 India 6.38 62.90 Australia 5.62 55.42 Singapore 5.01 49.35 Others* 17.70 174.46 Cash 1.37 13.53 Total 100.00 985.99 *Includes other countries and net assets and liabilities. II Allocation by Industry As at 31 Dec 2013 Industry % of NAV MV S$ mil Asian investment grade bond 37.51 369.80 Asian high dividend equities 22.75 224.27 Asian high yield bond 15.81 155.87 Asian local currency 11.51 113.52 Global emerging market local debt 8.75 86.30 Cash and others* 3.67 36.23 Total 100.00 985.99 *Includes other industries and net assets and liabilities. III Allocation of Debt Securities by Credit Ratings As at 31 Dec 2013 Rating % of NAV MV S$ mil (For Asian fixed income portfolio only*) AAA 2.98 29.39 AA 3.66 36.04 A 14.30 141.03 BBB 28.81 284.09 BB 6.46 63.68 B 8.18 80.62 CCC 0.27 2.64 Non Rated 0.45 4.45 Total 65.11 641.94

*The Asian fixed income portfolio includes Asian investment grade bonds, Asian high yield bonds and Asia local currency bonds.

IV Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2013 % of NAV S$ mil HSBC Global Investment Funds - GEM Local Debt - ZD Class (USD) 10.77 106.22 Korea Treasury Bond 4% 10/03/16 1.36 13.45 Korea Treasury Bond 5.75% 10/09/18 1.02 10.08 Pertamina PT 4.875% 03/05/22 0.94 9.30 Bank Negara Indonesia Lo 4.125% 27/04/17 0.82 8.06 Bestgain Real Estate 2.625% 13/03/18 0.79 7.78 Korea Treasury Bond 3.75% 10/06/22 0.79 7.77 Doosan Infracore Co Ltd 3.25% 05/10/42 0.78 7.73 Bank Rakyat Indonesia 2.95% 28/03/18 0.77 7.56 Malaysian Government 3.492% 31/03/20 0.76 7.54 V Exposure to Derivatives As at 31 Dec 2013 N.A. VI Borrowings of Net Asset Value As at 31 Dec 2013 N.A.


19

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

Income Fund Underlying Sub-Fund

As at 31 Dec 2013 As at 31 Dec 2013 Expense Ratio 1.61% 1.61% Turnover Ratio 14.98% 87.07%

Note: This ILP fund was launched on 28 January 2013. Thus, the top ten holdings, expense ratio and turnover ratio for the underlying sub-fund as at 31 Dec 2012 is not available.

II Related-Party Transactions The HSBC Insurance Asia Focused Income Fund invests S$1.51 million, equivalent to 101.34% of its net

asset value in HSBC GIF – Managed Solutions - Asia Focused Income Fund, which is managed by HSBCGlobal Asset Management (Singapore) Ltd. The management fees earned by HSBC Global Asset Management (Singapore) Ltd from 01 July 2013 to31 December 2013 amounts to S$5,074.

III Material Information N.A. IV Soft Dollar Commission Arrangement N.A. E) Financial Statements Refer to page 94.



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

20

HSBC Insurance Asian Bond Fund Fund Objective HSBC Insurance Asian Bond Fund seeks to maximize returns over the long term by investingmainly in the bond markets of Asia’s developingeconomies. There is no target industry or sector.Fund investments are by way of a feeder fund, whichinvests substantially all or all its assets in the Legg Mason Asian Bond Trust. Investment and Market Review ^ Growth in Asia has largely been in line with marketexpectations. Inflationary pressures have been

FUND FACTS Underlying Fund Legg Mason Western Asset

Asian Bond Trust Fund Manager Western Asset Management

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

N.A.

As at 31 Dec 2013 Offer Price S$ 1.76996 Bid Price S$ 1.68146 Fund Size S$ 21.34 Mil Units in Issue 12.69 Mil

mostly contained with a few exceptions. Unemployment remains benign across Asia. PMI prints havesuggested that production remains in demand with data figures largely in expansionary territory. Domesticdemand has been a key driver for growth in South Asia and will be a crucial component for growth going forward. Market Outlook and Investment Strategy ^ Market reactions over the past months are a result of heavy positioning and an adjustment to a “post taper”world, though with increasing differentiation as investors recognize the fundamental strength in Asianeconomies with current account surpluses, strong domestic growth drivers and prudent fiscal policies.However, market reactions have also highlighted the risks building up in economies perceived as vulnerableto a sharp reversal of confidence. While excessive adjustments of currencies and outflows will causerevaluations of assets, Asia stands in a better position to ride out such shocks. Our long-term strategy has not changed MoM as strong fundamentals continue to fuel our convictions within the region. Inflationary pressures are well within or below mandated boundaries and the overall strength ofbalance sheets will provide support for Asian government yields going forward. Short-term technicals continue to point toward higher rates in the near term. But once the market absorbs the shift, solidfundamentals will again take hold, enabling us to ride out short bouts of volatility. We maintain our overweightin Asia, but maintain a nimble approach in the event that quick shifts require a timely response. ^ Source : Legg Mason Asset Management Singapore Pte Ltd

A) Fund Performance

3-Mth

(%)6-Mth

(%)1-Year

(%)3-Year

(%)5-Year

(%)10-Year

(%)

Since Inception

(%) HSBC Insurance Asian Bond Fund 1.37 3.35 0.88 12.93 55.70 - 77.00 Benchmark* 0.23 0.29 0.43 1.29 40.38 - 37.53 *US$ 3-month LIBOR (hedged to S$)

B) Fund Disclosure I Allocation by Asset Class As at 31 Dec 2013 Asset Class % of NAV MV S$ mil Legg Mason Western Asset Asian Bond Trust 100.00 21.34 Total 100.00 21.34 II Fund Movement (01 Jul 2013 - 31 Dec 2013) S$ Subscription 4,935,869 Redemption 2,928,758


21

C) Underlying Fund Disclosure (Legg Mason Asian Bond Trust) I Allocation by Country As at 31 Dec 2013 Country % of NAV MV S$ mil Singapore 20.43 11.08 South Korea 19.43 10.54 Hong Kong 14.66 7.95 China 13.08 7.10 Malaysia 7.04 3.82 India 6.90 3.75 Indonesia 3.24 1.76 Philippines 2.48 1.34 Others* 10.36 5.63 Cash 2.38 1.29 Total 100.00 54.26 *Includes other countries and net assets and liabilities. II Allocation by Industry As at 31 Dec 2013 Industry % of NAV MV S$ mil Financials 46.43 25.20 Real Estate 13.35 7.24 Miscellaneous 10.59 5.75 Energy 6.09 3.31 Consumer 5.53 3.00 Telecommunication 5.31 2.88 Diversified Resources 3.49 1.90 Government 2.56 1.39 Utilities 1.44 0.78 Electrical & Electronic 1.43 0.77 Shipping 1.40 0.75 Cash 2.38 1.29 Total 100.00 54.26 III Allocation of Debt Securities by Credit Ratings As at 31 Dec 2013 Rating % of NAV MV S$ mil Aa1 0.56 0.30 Aa3 9.29 5.04 AA- 1.91 1.04 A 4.35 2.36 A+ 9.20 4.99 A- 3.47 1.88 A2 6.03 3.27 A3 4.14 2.24 Baa1 4.39 2.38 Baa2 5.01 2.72 Baa3 5.75 3.12 Others* 45.90 24.92 Total 100.00 54.26 *Includes cash holdings and net assets and liabilities IV Top Ten Holdings of Underlying Fund As at 31 Dec 2013 % of NAV S$ mil Korea Monetary Stab Bond 1408 (Reg) 2.82% 02/08/2014 5.98 3.24 Axiata SPV1 Labuan Ltd Ser EMTN EMTN 3.75% (Reg S) 18/09/2014 4.24 2.30 Right Century Ltd Ser HK 1.85% 03/06/2014 2.68 1.46 DBS Banks Ltd (Reg S) (Reg) FRN 15/07/2021 2.67 1.45 MIE Holdings Corp EMTN EMTN (Reg S) 6.875% 06/02/2018 2.32 1.26 SK Broadband Co Ltd Ser (Reg S) 2.875% 29/10/2018 2.31 1.25 Oversea-Chinese Banking 4% Perp 2.28 1.24 GLL IHT Pte Ltd Set MTN (Reg S) (Br) 4.1% 13/05/2020 2.24 1.22 Sarawak International (Reg) 5.5% 03/08/2015 2.22 1.20 HSBC Singapore EMTN (Reg S) (Br) 2.25% 05/06/2015 1.91 1.04


22

Top Ten Holdings of Underlying Fund As at 31 Dec 2012 % of NAV S$ mil Legg Mason Western Asset China Bond Fund 7.83 4.01 Korea Monetary Stab Bond 1408 (Reg) 2.82% 02/08/2014 6.03 3.09 Sumitomo Mitsui Banking 4.85% 01/03/2022 2.59 1.33 Overseas-Chinese Banking 4% Perp 2.46 1.26 Malaysia T-Bill Ser 181 31/01/2013 2.33 1.20 Sarawak International 5.5% 03/08/2015 2.33 1.19 Petronas Capital Ltd 5.25% 12/08/2019 2.28 1.17 Bank of East Asia Ltd Ser EMTN 13/09/2022 2.03 1.04 DBS Bank Ltd Ser MTN 14/02/2023 1.98 1.01 Stats Chippac Ltd 7.5% 12/08/2015 1.86 0.95 V Exposure to Derivatives As at 31 Dec 2013 % of NAV (0.86%) Market value (S$) (468,860) Realised Gains / (Losses) (S$) - Unrealised Gains / (Losses) (S$) (468,860) VI Borrowings of Net Asset Value As at 31 Dec 2013 N.A.

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


As at 31-Dec-13 As at 31-Dec-12 As at 31-Dec-13 As at 31-Dec-12 Expense Ratio 1.29% 1.28% 1.25% 1.26% Turnover Ratio 28.61% 19.11% 55.29% 73.90% II Related-Party Transactions N.A. III Material Information N.A. IV Soft Dollar Commission Arrangement N.A. E) Financial Statements Refer to page 95.



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

23

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

FUND FACTS Underlying Sub-Fund Henderson Horizon Fund –

Asian Dividend Income Fund Fund Manager Henderson Global Investors

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

N.A.


Asian markets performed well in the six months to 31 December 2013 rising 9.9% in US dollar total return terms. The markets recovered very sharply in the period under review following a sharp sell-off in May and June’13 when investors shifted away from perceived riskier assets in anticipation of “tapering” of the Quantitative easing programme in the US. The weakening currencies in India and Indonesia were driven by a worsening growth outlook which was compounded by trade and current account deficits. China and Hong Kong were two of the best performing markets in the period supported by a positive economic reform agenda announced in November following the Third Plenum in China. This aimed at improving medium term growth prospects by addressing sustainability of growth through supply side reforms. The areas highlighted for key reforms were market deregulation and financial reform alongside SOE reform and anti-corruption initiatives. Market Outlook and Investment Strategy ^ During the period we continued to find attractive opportunities in China, adding companies which offer unique business models with compelling valuations and yield and are set to benefit from the increase in Chinese disposable income. We also initiated a position in Japan for the first time in a number of years following some very strong results from the banking sector. Overall our positive view on Asia is unchanged in the medium to long term as we continue to see attractive company valuations and improving macroeconomic trends in key markets such as China. However external factors have the potential to unsettle Asian markets in the short term. We continue to focus on attractive names with strong capital upside and growing yield characteristics and use short term volatility to add to our preferred names. ^ Source : Henderson Global Investors (Singapore) Ltd.

A) Fund Performance

3-Mth

(%)6-Mth

(%)1-Year

(%)3-Year

(%)5-Year

(%)10-Year

(%)

SinceInception

(%)

HSBC Insurance Asian Dividend Equity Fund

2.10 4.89 7.68 10.43 71.16 - 12.19

Benchmark* 2.94 9.40 7.14 6.00 93.83 - 8.96 *MSCI All Countries Asia Pacific ex Japan Index

B) Fund Disclosure I Allocation by Asset Class As at 31 Dec 2013 Asset Class % of NAV MV S$ mil Henderson Horizon Fund - Asian Dividend Income Fund 100.00 1.64 Total 100.00 1.64


24

II Fund Movement (01 Jul 2013- 31 Dec 2013) S$ Subscription 391,635 Redemption 106,211 C) Underlying Sub-Fund Disclosure (Henderson Horizon Fund - Asian Dividend Income Fund) I Allocation by Country As at 31 Dec 2013 Country % of NAV MV S$ mil China 20.70 106.70 Australia 16.96 87.50 South Korea 12.22 63.03 Taiwan 12.14 62.64 Singapore 11.33 58.46 Hong Kong 9.83 50.73 Thailand 6.87 35.43 Japan 2.40 12.40 India 2.29 11.82 Others* 5.26 27.15 Total 100.00 515.86 *Includes other countries and net assets and liabilities. II Allocation by Industry As at 31 Dec 2013 Industry % of NAV MV S$ mil Financials 34.28 176.84 Industrials 16.76 86.45 Consumer Discretionary 15.37 79.31 Telecommunication Services 13.69 70.61 Information Technology 7.93 40.89 Materials 5.23 27.00 Energy 4.29 22.12 Consumer Staples 2.45 12.64 Total 100.00 515.86 III Allocation of Debt Securities by Credit Ratings As at 31 Dec 2013 N.A. IV Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2013 % of NAV MV S$ mil Bank of China Ltd. 3.10 15.98 SK Telecom 3.01 15.54 Hyundai Motor 2.98 15.37 Taiwan Cement 2.90 14.95 Shanghai Industrial Holdings 2.76 14.22 SJM 2.74 14.13 Grand Korea Leisure 2.65 13.68 Sinopec Engineering Group 2.45 12.65 Charoen Pokphand Foods 2.45 12.64 Taiwan Semiconductor Manufacturing 2.41 12.45 Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2012 % of NAV MV S$ mil Bank of China Ltd. 2.95 7.15 Krung Thai Bank 2.93 7.11 Digital China Holdings Ltd. 2.90 7.04 Charoen Pokphand Foods 2.88 6.98 Shanghai Industrial Holdings 2.66 6.45 Telecom New Zealand 2.53 6.14 SK Telecom 2.48 6.02 NWS Holdings 2.40 5.82 Suncorp 2.39 5.79 Kangwon Land Inc. 2.35 5.69


25

V Exposure to Derivatives As at 31 Dec 2013 N.A. VI Borrowings of Net Asset Value As at 31 Dec 2013 N.A.

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

Equity Fund Underlying Sub-Fund




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

26

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

FUND FACTS Underlying Fund 70%: DWS China Equity Fund

30%: DWS Lion Bond Fund Fund Manager Deutsche Asset Management

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

N.A.


DWS China Equity Fund Investment and Market Review ^ Chinese shares started to rebound in July after the PBOC injected liquidity into the interbank market to bring down the rates. In November, the market rallied further with positive response to the better-than-expected reform plans announced by the government after the Third Plenum. IT sector outperformed the most, led by the strong rally of Internet stocks, together with 4G-related plays especially smart-phone producers. Healthcare stocks were under pressure in the third quarter after the government decided to crack down bribery activities in the industry, but rebounded strongly in the fourth quarter with robust growth outlook intact despite the anti-bribery campaign. Utility stocks also performed strongly, led by environmental-protection stocks as the government was more determined to tackle the pollution issue in China. Market Outlook and Investment Strategy ^ Looking ahead, we expect GDP growth to ease from around 7.6% yoy in 2013 to around 7.5% yoy in 2014, with slower investment growth, relatively solid consumption growth and some moderate upturn in the export sector supported by the global economic recovery. We expect monetary policy to remain relatively accommodative in 2014 with inflation well contained. The government’s policy emphasis in 2014 will be maintaining steady economic growth while implementing structural reforms (especially administrative, financial and fiscal reforms) which are essential for China to achieve long-term sustainable economic growth. We will focus on investment themes that benefit from reforms (e.g. second-child policy, financial market liberalization, SOE reform), as well as high-growth sectors such as healthcare, auto, environmental protection, IT, and infrastructure-related. DWS Lion Bond Fund *Please refer to HSBC Insurance Singapore Bond Fund on page 83 for the Investment and Market Review and the Market Outlook and Investment Strategy. ^ Source: Deutsche Asset Management (Asia) Ltd.

A) Fund Performance

3-Mth

(%)6-Mth

(%)1-Year

(%)3-Year

(%)5-Year

(%)10-Year

(%)

SinceInception

(%) HSBC Insurance China Balanced Fund 7.45 15.24 10.44 2.18 40.98 - 7.72 Benchmark* 3.14 11.25 5.31 2.50 40.15 - (1.23)

*70% MSCI China Index and 30% 6-month Singapore Inter-bank Offer Rate (SIBOR) minus 12.5 basispoints.


27

B) Fund Disclosure I Allocation by Asset Class As at 31 Dec 2013 Asset Class % of NAV MV S$ mil DWS China Equity Fund 70.00 0.98 DWS Lion Bond Fund 30.00 0.42 Total 100.00 1.40 II Fund Movement (01 Jul 2013- 31 Dec 2013) S$ Subscription 369,865 Redemption 241,129 C) Underlying Fund Disclosure (DWS China Equity Fund) I Allocation by Country As at 31 Dec 2013 Country % of NAV MV S$ mil China 43.14 196.46 Cayman Islands 35.04 159.59 Hong Kong 11.61 52.89 Bermuda 6.44 29.34 British Virgin Islands 0.33 1.51 Others* 3.44 15.64 Total 100.00 455.43 *Includes other countries and net assets and liabilities. II Allocation by Industry As at 31 Dec 2013 Industry % of NAV MV S$ mil Banks 16.60 75.61 Real Estate 11.84 53.93 Medical - Drugs 6.96 31.69 Insurance 6.47 29.47 Finance 3.94 17.95 Oil & Gas 3.75 17.07 Food & Beverage 3.29 15.00 Industrials 3.12 14.23 Telecom Service 2.90 13.21 Cement 2.66 11.97 Others* 38.47 175.30 Total 100.00 455.43 *Includes other industries and net assets and liabilities. III Allocation of Debt Securities by Credit Ratings As at 31 Dec 2013 N.A. IV Top Ten Holdings of Underlying Fund As at 31 Dec 2013 % of NAV MV S$ mil Tencent Holdings Ltd. 8.76 39.88 China Construction Bank H Shares 5.39 24.57 Industrial and Commercial Bank of China H Shares 4.98 22.66 CSPC Pharmaceutical Group Ltd. 3.68 16.77 Bank of China Limited H Shares 3.37 15.35 China Life Insurance Company H Shares 2.90 13.23 China Petroleum & Chemical Co. Ltd. H Shares 2.67 12.15 China Modern Dairy Holdings 2.66 12.12 Ping An Insurance (Group) Co. of China Ltd. H Shares 2.58 11.74 China State Construction International Holdings Ltd. 2.21 10.06


28

Top Ten Holdings of Underlying Fund As at 31 Dec 2012 % of NAV MV S$ mil China Construction Bank H Shares 7.96 35.40 China Mobile Ltd. 7.50 33.36 China Life Insurance Co. H Shares 7.28 32.39 Industrial and Commercial Bank of China H Shares 6.56 29.18 CNOOC Ltd. 6.39 28.41 Agricultural Bank of China H Shares 4.37 19.43 Petrochina Co Ltd. H Shares 4.34 19.31 Harvest MSCI China A Index ETF 2.93 13.02 Ping An Insurance (Group) Co. of China Ltd. 2.86 12.74 China Petroleum & Chemical Co. H Shares 2.73 12.16 V Exposure to Derivatives As at 31 Dec 2013 % of NAV - Market value (S$) - Realised Gains / Losses (S$) (449,347) Unrealised Gains / Losses (S$) - VI Borrowings of Net Asset Value As at 31 Dec 2013 N.A.

*HBSC Insurance China Balanced Fund invests into DWS Lion Bond Fund. Please refer to HSBC Insurance Singapore Bond Fund on page 83 for the relevant information under Section C.

D) Other Disclosure Items I Expense/Turnover Ratio Expense Ratio Turnover Ratio As at 31-Dec-13 As at 31-Dec-12 As at 31-Dec-13 As at 31-Dec-12 Underlying Fund Level DWS China Equity Fund 1.70% 1.60% 173.37% 161.56% DWS Lion Bond Fund 0.67% 0.66% 30.08% 42.00% ILP Sub Fund

HSBC Insurance China Balanced Fund 1.59% 1.52% 22.99% 21.47%

II Related-Party Transactions N.A. III Material Information N.A. IV Soft Dollar Commission Agreement

Soft dollar commissions are benefits accorded to Manager by their brokers, usually in the form ofresearch, advisory, analysis and data services, computer hardware or software used for and/or in supportof the investment process. The Manager’s policy on soft dollar commissions is as follows: - the goods and services received would assist in the provision of investment services and advices orrelated services to the unit trust; - transactions are executed on the best available terms; and - the Manager does not engage in unnecessary trades in order to qualify for soft dollar commissions. Soft dollar commissions were received from the Manager’s panel of soft dollar brokers which executedtransactions for the unit trust and other funds managed by the Managers.


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

29

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

FUND FACTS Underlying Sub-Fund Schroder China

Opportunities Fund Fund Manager Schroder Investment

Management (Singapore) Ltd Launch Date 13 Nov 2003 CPFIS/SRS OA/SRS CPFIS Risk Classification

Higher Risk - Narrowly Focused – Country – Greater China


Investment and Market Review ^ The fund outperformed the benchmark mainly due to good asset allocation. The fund’s overweight position in Information Technology was the key contributor. Conversely, our stock selection detracted the relative performance, particularly our holdings in Energy and Financials. Chinese equities were up strongly over the review period as a stronger global outlook boosted sentiment. Announced reforms, from easing the one-child policy to pledging to give markets a ‘decisive role’ in resource allocation, boosted investor sentiment in the market over the period. There were also improving data for the world’s second-largest economy as November’s official PMI reading came in at an 18-month high and better-than-expected exports over the period also pointed towards a global recovery that is gathering momentum. Market Outlook and Investment Strategy ^ Following on from China’s landmark Third Plenum in November, and subsequent planned reforms, investors should remain conscious that economic rebalancing and reforms are long, drawn-out processes. Developments will require careful monitoring in 2014 and beyond, including China’s commitment to staying on course with their reform roadmap and plans, particularly in the face of growth and unemployment headwinds. For long-term investors, even as the country’s growth rate slows near term, the transition from an investment-driven to consumer-led growth model offers a promising structural backdrop for a variety of industries. The investment case for domestic consumption and services sectors remains very much intact as urbanisation continues apace, supported further by new tax policies. Opportunities in insurance, internet and technology are also driven by the increasing demand for goods and services, while clean energy-related industries, education and healthcare will receive government support. ^Source: Schroder Investment Management (Singapore) Ltd

A) Fund Performance

3-Mth

(%)6-Mth

(%) 1-Year

(%)3-Year

(%)5-Year

(%)10-Year

(%)

SinceInception

(%) HSBC Insurance China Equity Fund 5.91 16.16 10.53 (1.97) 38.47 76.14 77.99 Benchmark* 4.46 15.92 7.13 2.57 54.34 141.66 146.80 *MSCI China NR USD


30

B) Fund Disclosure I Allocation by Asset Class As at 31 Dec 2013 Asset Class % of NAV MV S$ mil Schroder China Opportunities Fund 100.06 79.97 Other assets 0.33 0.26 Other liabilities -0.39 (0.31) Total 100.00 79.92 II Fund Movement (01 Jul 2013- 31 Dec 2013) S$ Subscription 6,916,435 Redemption 7,356,082 C) Underlying Sub-Fund Disclosure (Schroder China Opportunities Fund) I Allocation by Country As at 31 Dec 2013 Country % of NAV MV S$ mil Luxembourg* 98.95 86.21 Other net assets** 1.05 0.92 Total 100.00 87.13

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

**Includes other countries and net assets and liabilities II Allocation by Industry As at 31 Dec 2013 Industry % of NAV MV S$ mil N.A. (The fund invests wholly into an underlying collective investment scheme.) III Allocation of Debt Securities by Credit Ratings As at 31 Dec 2013 N.A. IV Top Ten Holdings of Underlying Sub-Fund* As at 31 Dec 2013 % of NAV S$ mil Schroder International Selection Fund - China Opportunities C Acc 98.95 86.21 Top Ten Holdings of Underlying Sub-Fund* As at 31 Dec 2012 % of NAV S$ mil Schroder International Selection Fund - China Opportunities C Acc 98.82 73.75 *The rest of the holdings of the underlying sub-fund are cash-in-transits and accruals. V Exposure to Derivatives As at 31 Dec 2013 % of NAV - Market value (S$) - Realised Gains / (Losses) (S$) (3,132) Unrealised Gains / (Losses) (S$) - VI Borrowings of Net Asset Value As at 31 Dec 2013 N.A. D) Other Disclosure Items I Expense/Turnover Ratio HSBC Insurance China Equity

Fund Underlying Sub-Fund

As at 31-Dec-13 As at 31-Dec-12 As at 31-Dec-13 As at 31-Dec-12 Expense Ratio 1.88% 1.85% 1.88% 1.85% Turnover Ratio 16.46% 14.10% 2.97% 0.00%


31

II Related-Party Transactions N.A. III Material Information N.A. IV Soft Dollar Commission Arrangement

Soft dollar commissions and arrangements may be undertaken in respect of the Schroder InternationalSelection Fund - China Opportunities. In the management of the underlying sub-fund, the manager may accept soft dollar commissions from, orenter into soft dollar arrangements with, stockbrokers who execute trades on behalf of the underlying sub-fund and the soft dollars received are restricted to the following kinds of services: (a) research, analysis or price information; (b) performance measurement; (c) portfolio valuations; and (b) administration services. The manager shall not enter into unnecessary trades in order to qualify for such soft dollar commissionsor arrangements and shall not receive goods and services such as travel, accommodation andentertainment, and best execution is carried out for the transactions.




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

32

HSBC Insurance Climate Change Equity Fund Fund Objective HSBC Insurance Climate Change Equity Funds seeks to provide capital growth primarily through investment in equity securities of worldwide issuers which will benefit from efforts to accommodate or limit the impact of global climate change. Fund investments are made by way of a feeder fund, which invests substantially all or all of its assets in the Schroder International Selection Fund Global Climate Change Equity. Investment and Market Review ^

FUND FACTS Underlying Sub-Fund Schroder International

Selection Fund Global Climate Change Equity

Fund Manager Schroder Investment Management (Singapore) Ltd

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

N.A.


In climate developments, the China State Council released a plan to grow the environmental protection and energy saving sector by 15% per annum, boosting the market by $734bn by 2015. Meanwhile, data signalled that global carbon dioxide emissions are growing at a slower pace, despite a pick-up in economic growth. However, a UN report highlighted that global pledges to reduce emissions still fall far short of what is needed to avoid dangerous climate change. Stock selection was strong across most sectors but especially industrials, utilities and materials. Most sectors where the climate change strategy focuses performed well in general, so our overweights in industrials, materials and IT were beneficial, as was our underweight in consumer staples. Our overweight exposure in utilities was, however, a slight negative. Performance was strong across all regions. Market Outlook and Investment Strategy ^ 2014 has scope to be a reasonable year for equities. Equities offer good value, in particular relative to bonds. With increasing signs that the eurozone is finally tackling its structural problems, and a US economy gradually recovering from the imbalances of the last decade, there are encouraging signs for the more cyclical areas of the market where the climate change strategy focuses. Ultimately we believe that the structural growth trends created by climate change will remain a powerful underlying driver to performance in global equities, with the hugely compelling returns on energy efficiency investments making this the most powerful theme in the short term. Consequently around half of holdings in the portfolio are exposed to this heterogeneous trend, with lighting, materials, housing and industrial efficiency technologies all well represented. ^ Source: Schroder Investment Management (Singapore) Ltd

A) Fund Performance

3-Mth

(%)6-Mth

(%)1-Year

(%)3-Year

(%)5-Year

(%)10-Year

(%)

Since Inception

(%)

HSBC Insurance Climate Change Equity Fund

9.76 19.10 35.62 26.97 65.04 - 72.76

Benchmark* 8.67 16.30 30.94 36.60 76.45 - 71.50 *MSCI World Net (SGD)

B) Fund Disclosure I Allocation by Asset Class As at 31 Dec 2013 Asset Class % of NAV MV S$ mil Schroder International Selection Fund Global Climate Change Equity 98.44 1.89 Other assets 1.56 0.03 Total 100.00 1.92


33

II Fund Movement (01 Jul 2013- 31 Dec 2013) S$ Subscription 530,825 Redemption 162,588

C) Underlying Sub-Fund Disclosure (Schroder International Selection Fund Global Climate Change Equity)

I Allocation by Country As at 31 Dec 2013 Country % of NAV MV S$ mil United States 48.15 141.97 Japan 13.22 38.98 United Kingdom 11.53 34.00 France 5.89 17.37 Switzerland 3.99 11.76 Germany 2.03 5.99 Netherlands 1.98 5.84 Sweden 1.92 5.66 South Korea 1.80 5.31 Denmark 1.13 3.33 Others* 4.98 14.68 Cash 3.38 9.97 Total 100.00 294.86 *Includes other countries and net assets and liabilities. II Allocation by Industry As at 31 Dec 2013 Industry % of NAV MV S$ mil Industrials 34.31 101.16 Information Technology 20.67 60.95 Consumer Discretionary 13.59 40.07 Materials 8.83 26.04 Utilities 6.24 18.40 Energy 5.14 15.16 Consumer Staples 4.58 13.50 Financials 3.26 9.61 Cash 3.38 9.97 Total 100.00 294.86 III Allocation of Debt Securities by Credit Ratings As at 31 Dec 2013 N.A. IV Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2013 % of NAV S$ mil eBay 3.27 9.64 Owens Corning 2.86 8.43 Sealed Air 2.81 8.29 General Electric 2.53 7.46 Quanta Services 2.52 7.43 BG Group 2.45 7.22 Hitachi 2.42 7.14 Trimble Navigation 2.42 7.14 Calpine 2.41 7.11 Osram Licht 2.03 5.99


34

Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2012 % of NAV S$ mil BG Group 2.67 5.76 Owens Corning 2.51 5.42 Trimble Navigation 2.49 5.37 Quanta Services 0.11 5.29 General Electric Capital 2.35 5.07 Ecolab 2.25 4.86 Lowes Companies 2.16 4.66 Dominion Resources 2.16 4.66 Syngenta 2.12 4.58 Polycom 1.99 4.29 V Exposure to Derivatives As at 31 Dec 2013 % of NAV 0.01% Market value (S$) 33,174 Realised Gains / (Losses) (S$) 1,256,420 Unrealised Gains / (Losses) (S$) 33,174 VI Borrowings of Net Asset Value As at 31 Dec 2013 N.A.

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

Equity Fund Underlying Sub-Fund As at 31-Dec-13 As at 31-Dec-12 As at 31-Dec-13 As at 31-Dec-12 Expense Ratio 1.99% 2.00% 1.97% 2.00% Turnover Ratio 15.62% 15.48% 61.56% 65.94% II Related-Party Transactions N.A. III Material Information N.A. IV Soft Dollar Commission Arrangement

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




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

35

HSBC Insurance Emerging Europe Equity Fund Fund Objective HSBC Insurance Emerging Europe Equity Fund seeks to provide capital growth and income primarily through investment in equity securities of Central and Eastern European companies including the markets of the former Soviet Union and the Mediterranean emerging markets. The portfolio may, to a limited extend, seek exposure to the markets of Northern Africa and the Middle East. Fund investments are made by way of a feeder fund, which invests substantially all or all of its assets in the Schroder International Selection Fund Emerging Europe.

FUND FACTS Underlying Sub-Fund Schroder International

Selection Fund Emerging Europe

Fund Manager Schroder Investment Management (Singapore) Ltd


N.A.


Investment and Market Review ^ The fund outperformed strongly compared to the benchmark over the period. Both country allocation and stock selection were positive, with stock selection notably so. In terms of country allocation, the overweight to Russia which outperformed and off-benchmark positions in Georgia, Kazakhstan and the UAE all added to returns, as did the underweight position to Poland. This was slightly offset by the overweight to Hungary which underperformed. Stock selection was particularly strong in Russia. It was also positive in Hungary and Poland. Poland was the best performing EMEA market, aided by improving domestic and eurozone economic data releases. The Czech Republic performed better than the index too, buoyed by the country’s exit from recession in the second quarter. Russia also outperformed the European index, supported by the energy sector which benefited from oil price strength during the period. The Greek market also outperformed, particularly in the run-up to its inclusion in emerging indices which occurred at the end of November.

Market Outlook and Investment Strategy ^ Global equities posted positive returns over the period and were significantly stronger than emerging markets, including emerging Europe (as measured by the MSCI Emerging Europe 10/40 index). Investor sentiment over the period was largely focused on when and how the US Federal Reserve Bank (Fed) would begin to taper its quantitative easing programme which caused widespread volatility amongst emerging markets. Elsewhere, developed European equities performed well, supported by accommodative monetary policy from the European Central Bank and better economic activity in the eurozone. ^ Source: Schroder Investment Management (Singapore) Ltd.

A) Fund Performance

3-Mth

(%)6-Mth

(%)1-Year

(%)3-Year

(%)5-Year

(%)10-Year

(%)

SinceInception

(%)

HSBC Insurance Emerging Europe Equity Fund

2.45 12.23 9.12 3.61 84.09 - 84.09

Benchmark* (0.78) 6.82 (1.14) (9.27) 80.90 - 83.77 *MSCI EM Europe 10/40 Net (TR)


36

B) Fund Disclosure I Allocation by Asset Class As at 31 Dec 2013 Asset Class % of NAV MV S$ mil Schroder International Selection Fund Emerging Europe 100.14 7.02 Other assets 0.14 0.01 Other liabilities (0.29) (0.02) Total 100.00 7.01 II Fund Movement (01 Jul 2013- 31 Dec 2013) S$ Subscription 1,369,622 Redemption 546,029 C) Underlying Sub-Fund Disclosure (Schroder International Selection Fund Emerging Europe) I Allocation by Country As at 31 Dec 2013 Country % of NAV MV S$ mil Russian Federation 56.27 850.33 Turkey 14.56 220.03 Poland 13.12 198.26 Hungary 5.67 85.68 Kazakhstan 2.74 41.41 United Arab Emirates 1.79 27.05 Cyprus 1.36 20.55 Others* 3.90 58.94 Cash 0.59 8.92 Total 100.00 1,511.17 *Includes other countries and net assets and liabilities. II Allocation by Industry As at 31 Dec 2013 Industry % of NAV MV S$ mil Financials 39.82 601.75 Energy 30.34 458.49 Telecommunication services 10.27 155.20 Consumer Staples 8.11 122.56 Information Technology 4.38 66.19 Health Care 3.07 46.39 Industrials 2.03 30.68 Consumer Discretionary 1.39 20.99 Cash 0.59 8.92 Total 100.00 1,511.17 III Allocation of Debt Securities by Credit Ratings As at 31 Dec 2013 N.A. IV Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2013 % of NAV S$ mil Sberbank 9.81 148.25 Lukoil 8.60 129.96 PKO Bank Polski 6.79 102.61 Gazprom 6.04 91.27 Magnit 5.96 90.07 Mobile Telesystems 4.44 67.10 Surgutneftegaz 4.28 64.68 Tatneft 4.09 61.81 Powszechny Zaklad Ubezpieczen 3.80 57.42 NovaTek 3.71 56.06


37

Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2012 % of NAV S$ mil Lukoil 10.03 95.94 Sberbank 9.85 94.22 Gazprom 7.92 75.75 Mobile Telesystems 4.86 46.49 Turkiye Haik Bankasi 4.43 42.37 Powszechny Zaklad Ubezpieczen 4.36 41.70 Turkiye Garanti Bankasi 3.92 37.49 Surgutneftegaz 3.59 34.34 KGHM Polska Miedz 3.29 31.47 Magnit 3.27 31.28 V Exposure to Derivatives As at 31 Dec 2013 % of NAV Less than 0.01% Market value (S$) 1,804 Realised Gains / (Losses) (S$) 316,068 Unrealised Gains / (Losses) (S$) 1,804 VI Borrowings of Net Asset Value As at 31 Dec 2013 N.A.

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

Equity Fund Underlying Sub-Fund

As at 31-Dec-13 As at 31-Dec-12As at 31-Dec-13 As at 31-Dec-12 Expense Ratio 2.03% 2.03% 1.99% 2.01% Turnover Ratio 14.55% 14.51% 85.51% 81.32% II Related-Party Transactions Cash balances maintained with HSBC Bank as at 31 December 2013 amounts to $6,696. III Material Information N.A. IV Soft Dollar Commission Arrangement

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




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

38

HSBC Insurance Emerging Markets Equity Fund Fund Objective HSBC Insurance Emerging Markets Equity Fund seeks to achieve capital growth primarily through investment in equity securities of emerging markets companies. Fund investments are made by way of a feeder fund, which invests substantially all, or all its assets in the Schroder Emerging Markets Fund. Investment and Market Review ^ Emerging Markets delivered positive returns during the quarter. The zero weights to Indonesia and Chile added value. This was partially offset by the overweight to Thailand which underperformed, and the underweight to Mexico which outperformed. Indonesia performed poorly amid concerns over a reduction in global liquidity which led to local currency weakness.

FUND FACTS Underlying Sub-Fund Schroder Emerging

Markets Fund Fund Manager Schroder Investment

Management (Singapore) Ltd Launch Date 6 Nov 2006 CPFIS/SRS SRS CPFIS Risk Classification

N.A


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

Chile also underperformed on local currency weakness together with equity issuance overhang. Politicalinstability weighed on the Thai market while Mexico benefitted from a recovery in growth in the US, together with positive market sentiment around energy sector reform. Stock selection was positive in countries suchas Taiwan, Russia, China and Hungary. This was somewhat offset by negative selection in Thailand. Market Outlook and Investment Strategy ^ Emerging Asia was the strongest region over the period, led by gains in the Indian stockmarket. Taiwan andKorea also outperformed the EM index, largely due to their perceived status as beneficiaries of improvedglobal growth. China posted better returns than the index too, aided by the government’s announcement of aseries of reform measures in November. The Philippines underperformed amid concerns about the effect ofQE tapering and worries about the economic impact of Typhoon Haiyan, which hit the country in November. Thailand was the biggest regional laggard as widespread anti-government protests, which resulted in thedissolution of parliament, weighed on the market and the local currency. Turkey was the main reason behindthe region’s underperformance owing to concerns about the country’s poorly funded current account deficit inlight of the Fed’s tapering decision. Political uncertainty also dampened sentiment as a corruption scandalsaw three cabinet ministers resign in December. ^ Source: Schroder Investment Management (Singapore) Ltd

A) Fund Performance

3-Mth

(%)6-Mth

(%)1-Year

(%)3 –Year

(%)5-Year

(%)10-Year

(%)Since

Inception

HSBC Insurance Emerging Markets Equity Fund

2.23 8.11 1.06 (5.25) 61.74 - 6.86

Benchmark* 2.47 7.22 0.68 (7.42) 74.68 - 12.80 *MSCI Emerging Markets Index B) Fund Disclosure I Allocation by Asset Class As at 31 Dec 2013 Asset Class % of NAV MV S$ mil Schroder Emerging Markets Fund 100.13 30.88 Other assets 0.36 0.11 Other liabilities (0.49) (0.15) Total 100.00 30.84


39

II Fund Movement (01 Jul 2013 - 31 Dec 2013) S$ Subscription 3,255,864 Redemption 2,646,297 C) Underlying Sub-Fund Disclosure (Schroder Emerging Markets Fund) I Allocation by Country As at 31 Dec 2013 Country % of NAV MV S$ mil Luxembourg* 98.74 93.69 Others** 1.26 1.20 Total 100.00 94.89

*HSBC Insurance Emerging Markets Equity Fund feeds wholly into Schroder Emerging Markets Fund (afeeder fund investing into a corresponding Sub-Fund in the Schroder International Selection Fund (ISF),an open-ended investment company incorporated in Luxembourg).

**Includes other countries and net assets and liabilities II Allocation by Industry As at 31 Dec 2013 N.A. (The fund invests wholly into an underlying collective investment scheme.) III Allocation of Debt Securities by Credit Ratings As at 31 Dec 2013 N.A. IV Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2013 % of NAV S$ mil Schroder International Selection Fund - Emerging Markets A Acc 98.74 93.69 Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2012 % of NAV S$ mil Schroder International Selection Fund - Emerging Markets Class A Shares 98.83 99.32 *The rest of the holdings of the underlying fund are cash-in-transits and accruals. V Exposure to Derivatives As at 31 Dec 2013 % of NAV - Market value (S$) - Realised Gains / (Losses) (S$) (5,143) Unrealised Gains / (Losses) (S$) - VI Borrowings of Net Asset Value As at 31 Dec 2013 N.A.

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

Markets Equity Fund Underlying Sub-Fund As at 31-Dec-13 As at 31-Dec-12 As at 31-Dec-13 As at 31-Dec-12 Expense Ratio 2.13% 2.17% 2.09% 2.13% Turnover Ratio 16.18% 12.56% 0.85% 0.00% II Related-Party Transactions N.A. III Material Information N.A.


40

IV Soft Dollar Commission Arrangement

Soft dollar commissions and arrangements may be undertaken in respect of the Schroder International Selection Fund - Emerging Markets. In the management of the underlying sub-fund, the manager may accept soft dollar commissions from, or enter into soft dollar arrangements with, stockbrokers who execute trades on behalf of the underlying sub- fund and the soft dollars received are restricted to the following kinds of services: (a) research, analysis or price information; (b) performance measurement; (c) portfolio valuations; and (b) administration services. The manager shall not enter into unnecessary trades in order to qualify for such soft dollar commissions or arrangements and shall not receive goods and services such as travel, accommodation and entertainment, and best execution is carried out for the transactions.


For more information, please contact your financial consultant,

call our Customer Service Hotline on 6225 6111, or visit our web site at www.insurance.hsbc.com.sg.

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

41

HSBC Insurance Ethical Global Equity Fund Fund Objective HSBC Insurance Ethical Global Equity Fund seeks to generate capital appreciation by way of a feeder fund, which invests substantianlly all or all its assets into the Franklin Templeton Shariah Funds – Templeton Shariah Global Equity Fund. The Underlying Sub-Fund invests principally in Shariah-compliant equity and equity-related securities including common stocks of companies located anywhere in the world, including Emerging Markets. Investment and Market Review ^ Global stock markets generally advanced in the fourth quarter of 2013 as developed-market equities delivered strong gains and outperformed emerging-market stocks, which also produced positive results. Stock selection and an underweighting in the materials sector significantly benefited the fund’s relative results in 2013’s fourth quarter. Stock selection in the

FUND FACTS Underlying Sub-Fund Templeton Shariah Global

Equity Fund Fund Manager Franklin Templeton Asset

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

Higher Risk - Broadly Diversified

As at 31 Dec 2013 Offer Price S$ 1.23643 Bid Price S$ 1.17461 Fund Size S$ 76.78 mil Units in Issue 65.37 mil Note: With effect from 18 Nov 2013, the underlying sub-fund of HSBC Insurance Ethical Global Equity Fund, HSBC Amanah Funds - HSBC Amanah Global Equity - Z Class was replaced with Franklin Templeton Ethical Global Equity Fund.

consumer staples sector also helped performance. We have been cautious in these sectors due to what we saw as expensive stocks with dubious fundamentals (in the case of materials) and intense margin pressures (in the case of consumer staples), and both sectors trailed broader market gains. Market Outlook and Investment Strategy ^ Though considerable risks and imbalances remain, conditions for the potential continuation of global growth and recovery appear favorable, in our view, with muted inflation creating scope for continued monetary policy support and moderately improving economic growth providing the cover needed for ongoing fiscal repair. Investor sentiment has improved markedly, and for the first time in six years, investment funds have begun to flow decisively into equities. Ultimately, we do not know what the market will do in 2014 or beyond. In our opinion, the valuation landscape suggests that we are somewhere between skepticism and optimism. While many of the most extreme valuation anomalies created by the global financial crisis have disappeared, stocks overall do not appear too expensive, in our opinion. We believe this more neutral valuation environment is likely to favor discerning investors capable of uncovering individual values at the bottom-up level. Our investment strategy remains to construct a portfolio from the most attractive individual investment opportunities available to the account, according to our research metrics. ^ Source: Franklin Templeton Asset Management

A) Fund Performance

3-Mth

(%)6-Mth

(%)1-Year

(%)3-Year

(%)5-Year

(%)10-Year

(%)

SinceInception

(%)


3.62 9.75 18.25 18.48 65.72 18.77 10.81

Benchmark*^ 7.61 14.56 23.62 24.97 72.22 68.76 3.74 *MSCI AC World Islamic Index.

^The performance figures are based on the new benchmark MSCI AC World Islamic Index, due to change in the underlying sub-fund.


42

B) Fund Disclosure I Allocation by Asset Class As at 31 Dec 2013 Asset Class % of NAV MV S$ mil Templeton Shariah Global Equity Fund 100.12 76.52 Other assets 0.21 0.16 Other liabilities (0.33) (0.25) Total 100.00 76.43 II Fund Movement (01 Jul 2013- 31 Dec 2013) S$ Subscription 14,258,871 Redemption 5,096,520 C) Underlying Sub-Fund Disclosure (Templeton Shariah Global Equity Fund) I Allocation by Country As at 31 Dec 2013 Country % of NAV MV S$ mil United States 31.67 31.12 United Kingdom 12.34 12.12 France 8.91 8.75 Germany 8.79 8.64 China 7.11 6.99 Japan 5.51 5.41 Canada 3.25 3.19 Switzerland 2.92 2.87 Netherlands 2.68 2.64 Others* 16.82 16.52 Total 100.00 98.25 *Includes other countries and net assets and liabilities. II Allocation by Industry As at 31 Dec 2013 Industry % of NAV MV S$ mil Energy 24.64 24.21 Health Care 22.12 21.73 Industrials 13.03 12.80 Consumer Discretionary 10.60 10.42 Information Technology 8.31 8.16 Materials 8.05 7.91 Consumer Staples 6.71 6.59 Telecommunication Services 5.54 5.44 Financials 1.00 0.99 Total 100.00 98.25 III Allocation of Debt Securities by Credit Ratings As at 31 Dec 2013 N.A. IV Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2013 % of NAV MV S$ mil Vodafone Group PLC 3.27 3.21 Pfizer Inc. 3.15 3.09 Merck & Co Inc. 2.54 2.49 Chevron Corporation 2.50 2.45 CVS Caremark Corp. 2.29 2.25 Sanofi 2.28 2.24 Novartis AG 2.27 2.23 BHP Billiton PLC 2.25 2.21 Halliburton Co 2.20 2.16 Siemens AG 1.92 1.88


43

Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2012** % of NAV MV S$ mil Apple Inc. 3.87 3.06 Microsoft Corp. 2.29 1.81 Johnson & Johnson 2.24 1.77 Google Inc. ClA 1.86 1.47 Exxon Mobil Corp. 1.79 1.42 Oracle Corp. 1.65 1.31 Schlumberger Ltd. 1.58 1.25 Rio Tinto PLC 1.54 1.22 Samsung Electronics Co. Ltd 1.54 1.22 Roche Holding AG 1.52 1.20 V Exposure to Derivatives As at 31 Dec 2013 N.A. VI Borrowings of Net Asset Value As at 31 Dec 2013 N.A.

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

Equity Fund Underlying Sub-Fund As at 31-Dec-13 As at 31-Dec-12 As at 31-Dec-13 As at 31-Dec-12** Expense Ratio 1.90% 1.77% 1.90% 0.39% Turnover Ratio 13.80% 4.45% 65.52% 103.21%

**The top ten holdings, expense ratio and turnover ratio of the underlying sub-fund as at 31 Dec 2012 refer to that of the HSBC Amanah Funds - HSBC Amanah Global Equity - Z Class.


The Management Company and/or the Investment Managers may enter, with brokers/dealers that are entities and not individuals, into soft commission arrangements only where there is a direct and identifiable benefit to the clients of the Management Company and/or the Investment Managers, including theCompany, and where the Management Company and/or the Investment Managers are satisfied that thetransactions generating the soft commissions are made in good faith, in strict compliance with applicableregulatory requirements and in the best interest of the Company. Any such arrangement must be made by the Management Company and/or the Investment Managers on terms commensurate with best marketpractice. The use of soft commissions shall be disclosed in the periodic reports.




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

44

HSBC Insurance Ethical Global Sukuk Fund Fund Objective HSBC Insurance Ethical Global Sukuk Fund seeks to maximise, consistent with prudent investment management, total investment return, consisting of a combination of profit income and capital appreciation through the Templeton Shariah Funds – Franklin Templeton Global Sukuk Fund. Investment and Market Review ^ The Sukuk market fared considerably better than global bonds in the fourth quarter. Data and news from GCC countries was upbeat during the quarter, none more so than from the UAE. Dubai, in particular, had a stellar year thanks to the continued expansion of the real-estate sector a considerable rise in the number of travellers of travelers visiting Dubai or using its

FUND FACTS Underlying Sub-Fund Franklin Templeton Global

Sukuk Fund Fund Manager Franklin Templeton Asset

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

Higher Risk - Broadly Diversified

As at 31 Dec 2013 Offer Price S$ 1.23643 Bid Price S$ 1.17461 Fund Size S$ 76.78 mil Units in Issue 65.37 mil Note: With effect from 18 Nov 2013, the underlying sub-fund of HSBC Insurance Ethical Global Sukuk Fund, HSBC Amanah Global Equity Index Fund was replaced with Franklin Templeton Ethical Global Sukuk Fund.

international airport hub, and the decision to award Expo2020 to Dubai. The Saudi Arabian government also presented a 2014 budget that showed a continued focus on investment in infrastructure, education, health care, and social and economic development projects. Market Outlook and Investment Strategy ^ Franklin Templeton Global Sukuk Fund outperformed the benchmark Dow Jones Sukuk Index during the fourth quarter. While benchmark rates rose during the period, the impact of yield-curve movements on relative performance was positive, adding 6 bps to the fund’s relative returns. After a strong start to the quarter, the fund started to realize some gains in November and to adopt a neutral to slightly defensive posture ahead of the Fed’s December meeting and the habitual reduction in liquidity seen as the fiscal year comes to a close. There was a rise in rates and some renewed emerging-market currency weakness during December as the Fed ultimately decided to begin tapering. In light of these developments, we will look to maintain our holdings in GCC issuers, our view of which remains constructive, and to increase our allocations to emerging-market credits and currencies that we think offered attractive long-term opportunities. ^ Source: Franklin Templeton Asset Management.

A) Fund Performance

3-Mth

(%)6-Mth

(%)1-Year

(%)3-Year

(%)5-Year

(%)10-Year

(%)

SinceInception

(%)


5.09 9.83 20.28 15.13 24.78 - 0.98

Benchmark*^ 1.76 1.77 3.60 12.51 39.14 - 1.62 *Dow Jones Sukuk Index

^The performance figures are based on the new benchmark Dow Jones Sukuk Index, due to change in the underlying sub-fund.

B) Fund Disclosure I Allocation by Asset Class As at 31 Dec 2013 Asset Class % of NAV MV S$ mil Franklin Templeton Global Sukuk Fund 100.00 19.33 Total 100.00 19.33


45

II Fund Movement (01 Jul 2013 - 31 Dec 2013) S$ Subscription 348,690 Redemption 1,098,766 C) Underlying Sub-Fund Disclosure (Franklin Templeton Global Sukuk Fund) I Allocation by Country As at 31 Dec 2013 Country % of NAV MV S$ mil United Arab Emirates 40.91 21.40 Qatar 13.19 6.90 Turkey 11.25 5.89 Indonesia 10.66 5.58 Saudi Arabia 9.72 5.09 Malaysia 8.37 4.38 United Kingdom 0.75 0.40 Supranational 0.74 0.39 United States 0.62 0.33 Cash 3.79 1.99 Total 100.00 52.35 II Allocation by Industry As at 31 Dec 2013 Industry % of NAV MV S$ mil Corporate Bonds 54.27 28.41 Government-Related Agencies 23.95 12.54 Government-Related Sovereign 17.00 8.90 Government-Related Supranational 4.04 2.11 Cash & Cash Equivalents 0.74 0.39 Total 100.00 52.35 III Allocation of Debt Securities by Credit Ratings As at 31 Dec 2013 % of NAV S$ mil AAA 0.77 0.40 AA 11.03 5.77 A 25.98 13.60 BBB 38.45 20.13 BB 7.30 3.82 B 5.25 2.75 NR 11.22 5.88 Total 100.00 52.35 IV Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2013 % of NAV S$ mil Perusahaan Penerbit SBSN, Reg S, 6.125%, 3/15/19 6.54 3.42 SoQ Sukuk A Q.S.C, Reg S, 3.241%, 1/18/23 5.94 3.11 DP World Sukuk Ltd., Reg S, 6.25%, 7/02/17 4.10 2.15 TF Varlik Kiralama AS, senior note, Reg S, 3.95%, 5/02/18 3.71 1.94 ADIB Capital Invest 1 Ltd., junior sub. note, RegS, 6.375% to 10/16/18, 3.69 1.93 Sukuk Funding No. 3 Ltd., Reg S, 4.348%, 12/03/18 3.68 1.93 Medjool Ltd., senior note, Reg S, 3.875%, 3/19/23 3.64 1.90 Dar Al-Arkan Sukuk Co. Ltd., senior note, Reg S, 5.75%, 11/25/16 3.55 1.86 Asya Sukuk Co. Ltd., 3/20/23 3.34 1.75 GEMS MEA Sukuk Ltd., junior sub. note, Reg S, 12.00% to 11/21/13 3.28 1.72


46

Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2012** % of NAV S$ mil Apple Inc. 6.51 10.46 Exxon Mobil Corp. 5.40 8.69 Chevron Corp. 2.90 4.66 International Business Machines Corp. 2.79 4.49 Microsoft Corp. 2.77 4.45 Johnson & Johnson 2.66 4.28 Google Inc. Cl A 2.58 4.14 Procter & Gamble Co. 2.54 4.08 Pfizer Inc. 2.53 4.07 Novartis AG 2.33 3.75 V Exposure to Derivatives As at 31 Dec 2013 N.A. VI Borrowings of Net Asset Value As at 31 Dec 2013 N.A.

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

Sukuk Fund Underlying Sub-Fund As at 31-Dec-13 As at 31-Dec-12 As at 31-Dec-13As at 31-Dec-12** Expense Ratio 2.00% 1.89% 1.50% 0.35% Turnover Ratio 2.56% 2.18% 260.38% 17.61%

**The top ten holdings, expense ratio and turnover ratio of the underlying sub-fund as at 31 Dec 2012 refers to that of the HSBC Amanah Global Equity Index Fund.

II Related-Party Transactions Deposits and cash balances maintained with HSBC Bank as at 31 December 2013 amounts to $152,992. III Material Information N.A. IV Soft Dollar Commission Arrangement

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




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

47

HSBC Insurance Europe Equity Fund Fund Objective HSBC Insurance Europe Equity Fund seeks to achieve capital growth primarily through investment in equity securities of European companies. Fund investments are made by way of a feeder fund, which invests substantially all, or all its assets in the Schroder European Equity Alpha Fund. Investment and Market Review ^ European equities delivered positive returns for the period, helped by accommodative monetary policy from the European Central Bank (ECB) and improvements in macroeconomic data. The ECB cut interest rates in November to 0.25% from 0.5%. Data showed the eurozone

FUND FACTS Underlying Sub-Fund Schroder European Equity

Alpha Fund Fund Manager Schroder Investment

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

Higher Risk - Narrowly Focused

As at 31 Dec 2013 Offer Price S$ 1.17781 Bid Price S$ 1.11892 Fund Size S$ 6.58 mil Units in Issue 5.88 mil *Note: With effect from 1 October 2008, the Fund has ceased to accept new monies under CPFIS.

emerged from recession in the second quarter with growth of 0.3%, although this slowed to 0.1% growth in the third quarter. Leading indicators such as PMIs improved. The fund and the index both registered positive returns over the period, with the fund outperforming the index. The consumer discretionary sector was the leading contributor to relative returns, followed by industrials and consumer staples. Health care was the main detractor. Market Outlook and Investment Strategy ^ European equities remain more attractively valued than bonds or US equities, but nonetheless we believe some caution is warranted at these levels. Risk is still building in the financial system as people become less fearful. We would emphasise the need to tread carefully as risk-taking behaviour in the market becomes more widespread. Over the past two years, share prices have rallied ahead of underlying earnings growth leaving valuations at more elevated levels. It is now much more difficult to find investments which meet our demanding criteria than in the recent past. That said, the formation of the Global Value Team here at Schroders is intended to increase our productivity further and we have been successful in adding new ideas to the fund in the second half of 2013. At current valuations, investors should not expect future returns commensurate with those enjoyed over the past two years. We proceed cautiously forward. ^ Source: Schroder Investment Management (Singapore) Ltd.

A) Fund Performance

3-Mth

(%)6-Mth

(%)1-Year

(%)3-Year

(%)5-Year

(%)10-Year

(%)

SinceInception

(%)

HSBC Insurance Europe Equity Fund

9.90 26.90 36.23 31.56 65.60 - 17.78

Benchmark* 8.55 22.01 29.45 30.78 64.07 - 21.42 *MSCI Europe Net (TR) Index

B) Fund Disclosure I Allocation by Asset Class As at 31 Dec 2013 Asset Class % of NAV MV S$ mil Schroder European Equity Alpha Fund 99.70 6.54 Other assets 0.61 0.04 Other liabilities (0.31) (0.02) Total 100.00 6.56


48

II Fund Movement (01 Jul 2013- 31 Dec 2013) S$ Subscription 874,647 Redemption 626,100 C) Underlying Sub-Fund Disclosure (Schroder European Equity Alpha Fund) I Allocation by Country As at 31 Dec 2013 Country % of NAV MV S$ mil Luxembourg* 98.11 73.18 Others** 1.89 1.41 Total 100.00 74.59 * HSBC Insurance Europe Equity Fund feeds wholly into Schroder European Equity Alpha Fund (a feeder

fund investing into a corresponding Sub-Fund in the Schroder International Selection Fund (ISF), anopen-ended investment company incorporated in Luxembourg).

** Includes other countries and net assets and liabilities. II Allocation by Industry As at 31 Dec 2013 N.A. (The fund invests wholly into an underlying collective investment scheme.) III Allocation of Debt Securities by Credit Ratings As at 31 Dec 2013 N.A. IV Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2013 % of NAV S$ mil Schroder International Selection Fund - European Equity Alpha Class A Shares 98.11 73.18 Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2012 % of NAV S$ mil Schroder International Selection Fund - European Equity Alpha Class A Shares 99.02 35.55 *The rest of the holdings of the underlying sub-fund are cash-in-transits and accruals. V Exposure to Derivatives As at 31 Dec 2013 % of NAV (0.05%) Market value (S$) (37,473) Realised Gains / (Losses) (S$) 16,098 Unrealised Gains / (Losses) (S$) (37,473) VI Borrowings of Net Asset Value As at 31 Dec 2013 N.A.

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


As at 31-Dec-13 As at 31-Dec-12 As at 31-Dec-13 As at 31-Dec-12 Expense Ratio 2.16% 2.16% 2.09% 2.14% Turnover Ratio 18.27% 13.37% 9.21% 0.00% II Related-Party Transactions N.A. III Material Information N.A.


49

IV Soft Dollar Commission Arrangement

Soft dollar commissions and arrangements may be undertaken in respect of the Schroder InternationalSelection Fund - European Equity Alpha. In the management of the Underlying sub-fund, the manager may accept soft dollar commissions from, orenter into soft dollar arrangements with, stockbrokers who execute trades on behalf of the underlying sub-fund and the soft dollars received are restricted to the following kinds of services: (a) research, analysis or price information; (b) performance measurement; (c) portfolio valuations; and (b) administration services. The manager shall not enter into unnecessary trades in order to qualify for such soft dollar commissionsor arrangements and shall not receive goods and services such as travel, accommodation andentertainment, and best execution is carried out for the transactions.




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

50

HSBC Insurance Global Bond Fund Fund Objective HSBC Insurance Global Bond Fund seeks to maximize total returns in Singapore Dollar terms over the longer term by investing in a portfolio of high quality debt securities of Singapore and major global bond markets such as the G10 countries and Australia and New Zealand. Fund investments are by way of a feeder fund, which invests substantially all or all its assets in the Legg Mason Western Asset Global Bond Trust. Investment and Market Review ^ December was another mixed month for global bond market returns. Core government bonds

FUND FACTS Underlying Fund Legg Mason Western Asset

Global Bond Trust Fund Manager Western Asset Management

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

Low to Medium Risk – Broadly Diversified.


in the US and Europe declined on firmer economic data and the announcement by the Federal Reserve (Fed) that it will begin tapering in January. The European Central Bank (ECB) dampened hopes for imminently easier monetary policy and the Bank of England (BoE) adhered to its forward guidance while acknowledging the UK economy’s recovery. Europe’s peripheral markets welcomed improving economic prospects with bonds posting modest gains in both Italy and Spain. Among major currencies, the Japanese yen and the Australian dollar weakened further versus the US dollar, but the euro and the British pound appreciated.

Market Outlook and Investment Strategy ^ We continue to believe that the global economy will expand at a moderate pace in 2014. Inflation, meanwhile, is expected to remain benign given weak credit extension to the private sector in most economies, soft commodity prices, and ample spare industrial and labor market capacity. Consequently, we expect core bond yields to remain within recent trading ranges and to be anchored by very low official borrowing rates. Despite the decision by the Fed to begin reducing its quantitative easing (QE), we believe that US monetary policy will stay highly accommodative throughout 2014 and that other major central banks’ determination to support growth and financial markets should continue to support the global economy. Our currency strategy continues to be driven by our outlook for growth, interest rate differentials and relative central bank policy. Our conviction for weaker European and Japanese currencies versus the US dollar is partially based on the contrasting policy stances of the Fed versus the BoJ and ECB as well as the stronger relative growth momentum of the US. ^ Source: Western Asset Management Singapore Pte Ltd.

A) Fund Performance

3-Mth

(%)6-Mth

(%)1-Year

(%)3-Year

(%)5-Year

(%)10-Year

(%)

SinceInception

(%) HSBC Insurance Global Bond Fund (0.13) 0.09 (2.06) 11.44 3.17 - 7.87 Benchmark* 0.03 0.49 (0.75) 13.72 5.96 - 8.55 *Citigroup World Government Bond Index ex-Japan (SGD)

B) Fund Disclosure I Allocation by Asset Class As at 31 Dec 2013 Asset Class % of NAV MV S$ mil Legg Mason Global Bond Trust 100.19 10.75 Other assets 0.93 0.10 Other liabilities -1.12 (0.12) Total 100.00 10.73


51

II Fund Movement (01 Jul 2013 - 31 Dec 2013) S$ Subscription 1,389,327 Redemption 1,988,418 C) Underlying Fund Disclosure (Legg Mason Global Bond Trust) I Allocation by Country As at 31 Dec 2013 Country % of NAV MV S$ mil USA 31.47 100.00 Italy 16.51 52.46 Germany 13.52 42.95 France 7.74 24.61 Belgium 6.03 19.17 Great Britain 5.25 16.69 Others* 19.48 61.87 Total 100.00 317.75 *Includes other countries and net assets and liabilities. II Allocation by Industry As at 31 Dec 2013 Industry % of NAV MV S$ mil Government 85.96 273.13 Miscellaneous 13.70 43.54 Financials 7.92 25.18 Other net liabilities* (7.58) (24.10) Total 100.00 317.75 *Includes other industries and net assets and liabilities. III Allocation of Debt Securities by Credit Ratings As at 31 Dec 2013 Rating % of NAV MV S$ mil Aaa 22.74 72.25 Aa1 4.38 13.92 Aa3 11.20 35.57 AA+ 33.28 105.75 AA 6.56 20.86 AA- 0.48 1.53 A2 3.34 10.62 Baa1 5.92 18.81 Others* 12.10 38.44 Total 100.00 317.75 *Includes cash holdings and net assets and liabilities IV Top Ten Holdings of Underlying Fund As at 31 Dec 2013 % of NAV S$ mil Bundesrepub Deutschland Ser 06 (Br) 4% 04/07/2016 9.76 31.02 Buoni Poliennali Del Tes 5% 01/09/2040 7.07 22.46 Buoni Poliennali Del Tes 4.5% 01/03/2024 6.26 19.89 US Treasury Note 0.75% 15/12/2013 6.09 19.36 Fannie Mae Conventional 30 Yr Frn 25/06/2041 5.29 16.81 Japan (Govt of) CPI Linked Ser 16 1.4% 10/06/2018 5.16 16.41 Mex Bonds De Desarrollo Ser M 8% 11/06/2020 4.49 14.27 US Treasury Bond 4.375% 15/11/2039 3.81 12.12 FNMA 30Yr Jan Frn 25/05/2042 3.77 11.97 France (Govt of) Oat 3.25% 25/10/2021 3.58 11.38


52

Top Ten Holdings of Underlying Fund As at 31 Dec 2012 % of NAV S$ mil Bundesrepub Deutschland (BR) 4.25% 04/07/2017 9.77 33.79 Bundesrepub Deutschland Ser 06 (BR) 4% 04/07/2016 8.44 29.19 Buoni Poliennali Del Tes 4.5% 01/02/2020 7.49 25.90 Bundesrepub Deutschland Ser 09 3.25% 04/01/2020 4.35 15.03 FNMA 30Yr Conv FRN 25/10/2042 4.11 14.21 US Treasury Bond 4.375% 15/11/2039 4.06 14.05 UK Treasury 4.25% 07/12/2040 3.99 13.79 Bundesrepub Deutschland Ser 05 (BR) 3.5% 04/01/2016 3.80 13.13 Buoni Poliennali Del Tes 5% 01/09/2040 3.70 12.79 France Government Bond 3.25% 25/10/2021 3.57 12.33 V Exposure to Derivatives As at 31 Dec 2013 % of NAV (2.76%) Market value (S$) (8,769,453) Realised Gains / (Losses) (S$) - Unrealised Gains / (Losses) (S$) (8,769,453) VI Borrowings of Net Asset Value As at 31 Dec 2013 N.A.

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





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

53

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

FUND FACTS Underlying Sub-Fund HSBC GIF – Global Emerging

Markets Bond Fund Manager HSBC Global Asset

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

N.A.

As at 31 Dec 2013 Offer Price S$ 0.93111 Bid Price S$ 0.88455 Fund Size S$ 0.45 Units in Issue 0.51 mil

We maintained the strategy’s overweight risk position in the second half of 2013. As a result, specifically the overweight to investment grade sovereigns, performance suffered in July and August relative to the benchmark, due to concerns over potential Fed tapering. The loss experienced in July and August was slightly offset in September as emerging market hard currency debt rallied. As a result of the Fed’s initial signaling and eventually announcing the decision to delay tapering, US 10-year Treasury yields rose. Due to their lower sensitivity to US Treasuries, the high yield sector outperformed the investment grade sector which resulted in the strategy’s underweight to high yield countries detracting from relative performance over the period, most significantly in the fourth quarter. Market Outlook and Investment Strategy ^ We continue to favor investment grade hard currency sovereign with strong balance sheets and whose spreads widened disproportionately during the May to August 2013 period. We believe that the bulk of this correction in investment grade assets was driven by technical factors rather than a deterioration in fundamentals. The simultaneous increase in US Treasuries and credit spreads pushed the yield for the investment grade component above 5%. We maintain a cautious view on a number of high yield countries that face a probability of default over the next three years. Finally, we are positive on selective emerging market currencies that depreciated substantially though May to August 2013 and offer attractive valuations with improving terms of trade and current account balances. ^ Source: HSBC Global Asset Management (Singapore) Ltd

A) Fund Performance

3-Mth

(%)6-Mth

(%)1-Year

(%)3-Year

(%)5-Year

(%)10-Year

(%)

SinceInception

(%)

HSBC Insurance Global Emerging Markets Bond Fund 0.27 0.58 - - - - (6.89)

Benchmark* 1.55 1.33 - - - - (3.14) *JP Morgan EMBI Global

B) Fund Disclosure I Allocation by Asset Class As at 31 Dec 2013 Asset Class % of NAV MV S$ mil HSBC GIF – Global Emerging Markets Bond 102.27 0.45 Other liabilities (2.27) (0.01) Total 100.00 0.44


54

II Fund Movement (1 Jul 2013 – 31 Dec 2013) S$ Subscription 114,770 Redemption 126,854 C) Underlying Sub-Fund Disclosure (HSBC GIF – Global Emerging Markets Bond) I Allocation by Country As at 31 Dec 2013 Country % of NAV MV S$ mil Russia 13.26 428.73 Turkey 12.00 388.01 Mexico 11.72 378.92 Indonesia 10.05 324.96 Brazil 7.59 245.33 Colombia 4.99 161.29 South Africa 4.84 156.41 United States 4.35 140.62 Venezuela 3.86 124.70 Panama 2.81 90.79 Others* 22.77 736.83 Cash 1.75 56.71 Total 100.00 3233.30 *Includes other countries and net assets and liabilities. II Allocation by Industry As at 31 Dec 2013 Industry % of NAV MV S$ mil Sovereign (Hard Ccy) 76.79 2,482.70 Quasi (Hard Ccy) 15.78 510.37 Corporate (Hard Ccy) 5.47 176.81 Local FX 1.96 63.41 Local Sovereign Bonds 0.00 0.01 Total 100.00 3,233.30 III Allocation of Debt Securities by Credit Ratings As at 31 Dec 2013 Ratings % of NAV % of NAV AAA 3.27 105.60 AA 0.02 0.70 AA- 4.03 130.46 A+ 0.12 3.78 A 1.25 40.47 A- 7.37 238.17 BBB+ 30.70 992.46 BBB 16.42 530.78 BBB- 25.05 810.08 Others* 11.77 380.80 Total 100.00 3,233.30 *Includes cash holdings and net assets and liabilities IV Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2013 % of NAV % of NAV Russian Foreign Bond – Eurobond Step 31/03/ 8% 8.67 280.40 United Mexican States Tranche 6.05% 11/01/2040 6% 4.21 136.01 Turkey (Rep of) 7.375% BDS 05/02/25 USD1000 7% 3.17 102.42 Indonesia (Rep of) 4.875% MTN 05/21 USD'REGS' 5% 3.14 101.42 UTD Mexican STS Medium Term NTS Book TBOND 4 DU 4% 2.48 80.17 Turkey (Rep of) 7% MTN 11/03/2019 USD100000 7% 2.16 69.69 STH Africa (Rep of) 4.665% BDS 17/01/24 5% 2.12 68.53 Turkey (Rep of) 5.625% BDS 30/03/21 USD1000 6% 2.11 68.24 Indonesia (Rep of) 3.75% NTS 25/04/22 USD'REGS 4% 1.91 61.85 Brazil (Fed Rep of) 7.125% BDS 20/01/37 USD1000 7% 1.62 52.53


55

V Exposure to Derivatives As at 31 Dec 2013 N.A. VI Borrowings of Net Asset Value As at 31 Dec 2013 N.A. D) Other Disclosure Items

I) Expense/Turnover Ratio HSBC Insurance Global Emerging

Markets Bond Fund Underlying Sub-Fund

As at 31-Dec-13 As at 31-Dec-13 Expense Ratio 1.66% 1.66% Turnover Ratio 41.07% 52.01% The ILP fund was launched on 28 January 2013. Thus, the top ten holdings, expsense ratio and turnover ratio for the underlying sub-fund as at 31 Dec 2012 is not available. II Related-Party Transactions

The HSBC Insurance Global Emerging Market Bond Fund invests S$0.45 million, equivalent to 100.00% of its net asset value in HSBC GIF – Global Emerging Markets Bond Fund, which is managed by HSBC Global Asset Management (Singapore) Ltd. The management fees earned by HSBC Global Asset Management (Singapore) Ltd from 01 July 2013 to 31 December 2013 amounts to S$1,560.

III Material Information N.A. IV Soft Dollar Commission Arrangement N.A. E) Financial Statements Refer to page 98. For more information, please contact your financial consultant, call our Customer Service Hotline on 6225 6111, or visit our web site at www.insurance.hsbc.com.sg.

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

56

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

Investment and Market Review ^ Global equities rallied during the second half of 2013, driven by macroeconomic improvements

FUND FACTS Underlying Sub-Fund AllianceBernstein – Global

Equity Blend Portfolio Fund Manager AllianceBernstein

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

Higher Risk – Broadly Diversified.


in key developed countries and the accomodative monetary policies of major central banks. Stocks surged in Japan as Prime Minister Shinzo Abe’s economic program gained traction, while US equities also did well. Emerging markets underperformed. Financial and cyclical stocks led the gains. Resources stocks lagged amid concern that demand for raw materials may be hurt by slowing growth in emerging markets. And in Europe, December manufacturing output in the eurozone reached its highest level in 31 months. The Portfolio’s top contributors included shares of Tencent. Shares outperformed on a steady stream of new product introductions as well as news that the Chinese government may soon issue mobile virtual network operator (MVNO) licenses to a handful of companies, likely including Tencent, to compete against the three incumbent telecommunications providers. Market Outlook and Investment Strategy ^ Heading into 2014, we remain bullish on developed-market equities, though regional and sector performance will vary significantly. Our growth portfolios are tilted towards underappreciated growth opportunities in areas such as technology and emerging markets. We prefer market leaders with attractive earnings growth prospects and expected high returns on invested capital. In addition, companies with robust cash-flow generation and strong balance sheets, whose stocks are trading at deep valuation discounts, are also much preferred. We are confident that our continued focus on companies with strong fundamentals will enable us to navigate current market conditions and, importantly, construct portfolios that have the potential to outperform substantially when conditions improve. ^ Source: AllianceBernstein (Luxembourg) S.A

A) Fund Performance

3-Mth

(%)6-Mth

(%)1-Year

(%)3-Year

(%)5-Year

(%)10-Year

(%)

SinceInception

(%) HSBC Insurance Global Equity Fund 8.30 16.53 29.71 18.14 45.82 - 23.88 Benchmark* 8.66 17.21 31.12 23.24 55.17 - 25.49 *MSCI World Net Index (SGD)

B) Fund Disclosure I Allocation by Asset Class As at 31 Dec 2013 Asset Class % of NAV MV S$ mil AllianceBernstein - Global Equity Blend Portfolio, S1 class 100.09 64.73 Other assets 0.17 0.11 Other liabilities (0.26) (0.17) Total 100.00 64.67


57

II Fund Movement (01 Jul 2013 - 31 Dec 2013) S$ Subscription 3,705,884 Redemption 3,863,914 C) Underlying Sub-Fund Disclosure (AllianceBernstein - Global Equity Blend Portfolio, S1 class) I Allocation by Country As at 31 Dec 2013 Country % of NAV MV S$ mil United States 47.06 206.57 Europe (excluding UK) 20.23 88.74 United Kingdom 10.83 47.53 Asia Pacific (excluding Japan) 8.46 37.12 Japan 8.39 36.82 Singapore 0.37 1.61 Others* 4.66 20.51 Total 100.00 438.90 *Includes other countries and net assets and liabilities. II Allocation by Industry As at 31 Dec 2013 Industry % of NAV MV S$ mil Financials 18.93 83.08 Consumer Discretionary 16.60 72.86 Information Technology 15.87 69.67 Health Care 11.50 50.49 Industrials 9.47 41.59 Energy 9.45 41.46 Consumer Staples 9.25 40.58 Others* 8.93 39.17 Total 100.00 438.90 *Includes other industries and net assets and liabilities. III Allocation of Debt Securities by Credit Ratings As at 31 Dec 2013 N.A. IV Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2013 % of NAV S$ mil Roche Holding AG 2.24 9.84 Apple Inc. 1.85 8.12 Visa, Inc. - Class A 1.38 6.07 Samsung Electronics Co. Ltd. 1.29 5.67 Danaher Corp. 1.28 5.61 Wells Fargo & Co. 1.23 5.41 Boeing Co. (The) 1.23 5.39 Tencent Holdings Ltd. 1.21 5.30 British American Tobacco PLC 1.20 5.27 Anheuser-Busch InBev NV 1.15 5.05 Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2012 % of NAV S$ mil Apple Inc. 2.05 9.62 BP PLC 1.65 7.76 British American Tobacco PLC 1.37 6.45 Wells Fargo & Co. 1.32 6.18 Danaher Corp. 1.21 5.69 Anheuser-Busch InBev NV 1.14 5.34 Partners Group Holding AG 1.11 5.19 AstraZeneca PLC 1.11 5.19 Nestle SA 1.03 4.85 Visa, Inc. - Class A 1.03 4.85


58

V Exposure to Derivatives As at 31 Dec 2013 % of NAV 0.19% Market value (S$) 845,572 Realised Gains / (Losses) (S$) 61,784 Unrealised Gains / (Losses) (S$) 845,572 VI Borrowings of Net Asset Value As at 31 Dec 2013 N.A.

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


As at 31-Dec-13As at 31-Dec-12 As at 31-Aug-13* As at 31-Aug-12

Expense Ratio 1.71% 1.70% 0.77% 0.76%

Turnover Ratio 10.60% 10.08% 55.93% 57.27% *Based on unaudited figures as at 31 Aug 2013 as the expense and turnover ratio for AllianceBernstein -

Global Equity Blend Portfolio, S1 class for the financial year ended 31 Dec 2013 is not available. II Related-Party Transactions N.A.

III Material Information

N.A. IV Soft Dollar Commission Arrangement

During the year ended August 31, 2013 the Investment Manager received and entered into soft-dollar commissions/ arrangements with brokers relating to Portfolios of the Underlying Sub-Fund that invest in equity securities, in respect of which certain goods and services used to support the investment decisionmaking process were received. The soft commission arrangements were entered into on the basis that theexecution of transactions on behalf of the Fund will be consistent with best execution standards andbrokerage rates will not be in excess of customary institutional full-service brokerage rates. The goods and services received include specialist industry, company and consumer research, portfolio and marketanalysis and computer software used for the delivery of such services. The nature of the goods andservices received is such that the benefits provided under the arrangement must be those which assist inthe provision of investment services to the Fund and may contribute to an improvement in the Fund’sperformance. For the avoidance of doubt, such goods and services do not include travel, accommodations,entertainment, general administrative goods or services, general office equipment or premises,membership fees, employees’ salaries or direct money payments.

E) Financial Statements

Refer to page 99.



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

59

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

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

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

Higher Risk – Narrowly Focused


The fund rose 7.72% while the benchmark index S&P IFCI India rose 5.57%, thereby outperforming the benchmark by 215 bps. Sector allocation detracted 69 bps while stock selection added alpha to the tune of 284 bps. Sector allocation in Materials, Consumer Staples and Industrials helped performance while in Financials and Telecommunication hurt performance. Stock selection in Materials, Information Technology and Consumer Discretionary added to performance while in Healthcare, Energy and Financial detracted performance. Market Outlook and Investment Strategy ^ As we enter 2014, there is a growing expectation that the economy is close to bottoming out (Q2 FY14 GDP showed a modest uptick relative to Q1FY14 numbers) and probably the worst of current account deficit numbers are behind us. But the key is economic recovery, which in all probability will get pushed into 2H CY14. We believe the Inflationary outlook (and hence the direction of the monetary policy), revival of the capex cycle (driven more by a movement/clearances related to stalled projects), National Elections and quantitative easing tapering /pace of it will influence the market movement. We expect easing cycle to have been pushed out by six months, though easing current account deficit and inflation will open up the window in 2HCY2014 for rate cuts, which along with reform measures of the government would help the real economy get back on its growth path over the next 2-3 years. ^ Source: HSBC Global Asset Management (Singapore) Ltd.

A) Fund Performance

3-Mth

(%)6-Mth

(%)1-Year

(%)3-Year

(%)5-Year

(%)10-Year

(%)

SinceInception

(%) HSBC Insurance India Equity Fund 17.06 6.46 (10.68) (35.59) 50.28 - 77.43 Benchmark* 12.56 5.10 (1.49) (26.32) 53.16 - 105.14 *S&P / IFC Investible India Index (SGD)

B) Fund Disclosure I Allocation by Asset Class As at 31 Dec 2013 Asset Class % of NAV MV S$ mil HSBC GIF Indian Equity Fund 100.06 51.77 Other assets 0.29 0.15 Other liabilities -0.35 (0.18) Total 100.00 51.74 II Fund Movement (01 Jul 2013 – 31 Dec 2013) S$ Subscription 12,868,208 Redemption 6,148,722


60

C) Underlying Sub-Fund Disclosure (HSBC GIF Indian Equity Fund) I Allocation by Country As at 31 Dec 2013 Country % of NAV MV S$ mil India 99.20 3,123.18 Cash 0.80 25.22 Total 100.00 3148.40 II Allocation by Industry As at 31 Dec 2013 Industry % of NAV MV S$ mil Financials 25.85 813.87 Technology 17.62 554.66 Oil & Gas 14.62 460.19 Industrials 11.76 370.26 Basic Materials 11.61 365.57 Consumer Goods 7.71 242.67 Utilities 5.90 185.67 Health Care 4.13 130.29 Cash 0.80 25.22 Total 100.00 3,148.40 III Allocation of Debt Securities by Credit Ratings As at 31 Dec 2013 N.A. IV Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2013 % of NAV S$ mil Oil and Natural Gas Corp INR 5 5.47 172.09 ICICI Bank Ltd Ordinary INR 10 5.37 169.09 Tech Mahindra Ltd Ord INR 10 4.18 131.47 Maruti Suzuki India Ltd INR 5.0 4.01 126.34 HCL Technologies Ltd Ordinary INR 2.0 3.87 121.86 Wipro Limited Ordinary INR 2.00 3.85 121.32 Jindal Steel & Power Ltd INR 1.0 3.82 120.20 Tata Motors Ltd A Shs Ord INR2 3.67 115.57 Reliance Industries INR 10 3.28 103.16 NMDC Ltd Common INR 1 3.11 97.92 Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2012 % of NAV S$ mil Maruti Suzuki India Ltd. 5.15 238.06 State Bank of India 4.55 210.05 Jindal Steel & Power Ltd. 4.38 202.64 ICICI Bank Ltd. 4.38 202.63 HCL Technologies Ltd. 4.34 200.46 Glenmark Pharmaceuticals Ltd. 3.63 167.92 Cairn Energy Plc 3.37 155.64 United Spirits Ltd. 3.05 140.76 ICICI Bank Ltd. 2.86 132.07 Rural Electrification 2.82 130.24 V Exposure to Derivatives As at 31 Dec 2013 N.A. VI Borrowings of Net Asset Value As at 31 Dec 2013 N.A.


61

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


As at 31-Dec-13 As at 31-Dec-12 As at 31-Dec-13 As at 31-Dec-12 Expense Ratio 1.89% 1.94% 1.89% 1.94% Turnover Ratio 19.18% 16.93% 51.22% 42.33% II Related-Party Transactions The HSBC Isnurance Indian Growth Fund invests S$51.77 million, equivalent to 100.06% of its net asset

value in HSBC GIF Indian Equity Fund, which is managed by HSBC Global Asset Management (Singapore) Ltd.

The management fees earned by HSBC Global Asset Management (Singapore) Ltd from 01 July 2013 to

31 December 2013 amounts to $119,215. III Material Information N.A. IV Soft Dollar Commission Arrangement N.A. E) Financial Statements Refer to page 99.



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

62

HSBC Insurance Japan Equity Fund Fund Objective HSBC Insurance Japan Equity Fund seeks to achieve capital growth primarily through investment in equity securities of Japanese companies. Fund investments are made by way of a feeder fund, which invests substantially all, or all its assets in the Schroder Japanese Equity Fund. Investment and Market Review ^ Economic data continued its improving trend over the period, especially in better-than-expected GDP, inflation and labour market figures. One of the most widely followed events

FUND FACTS Underlying Sub-Fund Schroder Japanese Equity

Fund Fund Manager Schroder Investment

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

N.A.


during the period was the decision by the US Federal Reserve to begin its exit from quantitative easing. Given the likelihood that Japanese monetary policy remains extremely accommodating for the foreseeable future, this move is positive for Japan and reinforces current trends. On the sector front, electric appliances and transportation equipment were the two best-performing sectors while electric power & gas lagged broader market gains. The fund posted strong positive gains over the period but marginally underperformed the benchmark, mainly on account of negative stock selection in chemicals. This was partially offset by our strong stock selection in electric appliances, which outperformed market gains. Market Outlook and Investment Strategy ^ We continue to focus on earnings beyond normalisation which will have run its course by the end of Fiscal 2013 or March 2014. The recent improvement in conditions among small companies is particularly encouraging as these employ a higher percentage of the workforce than large listed companies. As a result, the likelihood is increasing that aggregate wage growth will ultimately follow from the tighter labour market conditions. Our view remains positive, given the tightening labour market, increasing capex and steady economic recovery on the back of renewed inflation. Positive global growth should also bode well for an increase in exports helped in turn by an increase in regional export volume. The currencies of the Korean won and Japanese yen should indicate a global competitiveness improvement. ^ Source: Schroder Investment Management (Singapore) Ltd.

A) Fund Performance

3-Mth

(%)6-Mth

(%)1-Year

(%)3-Year

(%)5-Year

(%)10-Year

(%)

Since Inception

(%) HSBC Insurance Japan Equity Fund 3.09 7.99 27.74 16.99 34.92 - (16.29) Benchmark* 2.59 8.97 31.30 17.80 27.21 - (12.67) *TSE First Selection Index (TOPIX)

B) Fund Disclosure I Allocation by Asset Class As at 31 Dec 2013 Asset Class % of NAV MV S$ mil Schroder Japanese Equity Fund 100.00 2.53 Total 100.00 2.53


63

II Fund Movement (01 Jul 2013 - 31 Dec 2013) S$ Subscription 276,123 Redemption 354,146 C) Underlying Sub-Fund Disclosure (Schroder Japanese Equity Fund) I Allocation by Country As at 31 Dec 2013 Country % of NAV MV S$ mil Luxembourg* 98.94 16.54 Others** 1.06 0.18 Total 100.00 16.72

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

** Includes other countries and net assets and liabilities II Allocation by Industry As at 31 Dec 2013 N.A. (The fund invests wholly into an underlying collective investment scheme.) III Allocation of Debt Securities by Credit Ratings As at 31 Dec 2013 N.A. IV Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2013 % of NAV S$ mil Schroder International Selection Fund - Japanese Equity Class A Shares 98.94 16.54 Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2012 % of NAV S$ mil Schroder International Selection Fund - Japanese Equity Class A Shares 99.24 11.73 *The rest of the holdings of the underlying sub-fund are cash-in-transits and accruals. V Exposure to Derivatives As at 31 Dec 2013 N.A. VI Borrowings of Net Asset Value As at 31 Dec 2013 % of NAV (0.01%) Market value (S$) (2,433) Realised Gains / (Losses) (S$) (17,140) Unrealised Gains / (Losses) (S$) (2,433) D) Other Disclosure Items I Expense/Turnover Ratio HSBC Insurance Japan Equity


As at 31-Dec-13 As at 31-Dec-12 As at 31-Dec-13As at 31-Dec-12 Expense Ratio 1.97% 2.04% 1.93% 2.02% Turnover Ratio 24.14% 12.65% 22.68% 0.00% II Related-Party Transactions N.A. III Material Information N.A.


64

IV Soft Dollar Commission Arrangement Soft dollar commissions and arrangements may be undertaken in respect of the Schroder International

Selection Fund - Japanese Equity. In the management of the underlying sub-fund, the manager may accept soft dollar commissions from, orenter into soft dollar arrangements with, stockbrokers who execute trades on behalf of the underlying sub-fund and the soft dollars received are restricted to the following kinds of services: (a) research, analysis or price information; (b) performance measurement; (c) portfolio valuations; and (b) administration services. The manager shall not enter into unnecessary trades in order to qualify for such soft dollar commissions or arrangements and shall not receive goods and services such as travel, accommodation andentertainment, and best execution is carried out for the transactions.




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

65

HSBC Insurance Pacific Equity Fund Fund Objective HSBC Insurance Pacific Equity Fund aims to provide holders with medium to long term capital growth from a diversified portfolio of Asian-Pacific equities excluding Japanese equities. Investment and Market Review ^ Asian equities rose over the half year despite persistent uncertainty over when the US Federal Reserve would pare its asset purchases. Sentiment was also hurt by worries

FUND FACTS Underlying Sub-Fund Aberdeen Pacific Equity Fund Fund Manager Aberdeen Asset Management

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

Higher Risk – Narrowly Focused - Regional - Asia


over possible US military intervention in Syria over the use of chemical weapons. In the latter half, global risk appetite improved after Washington agreed to suspend its debt ceiling and end the partial government shutdown. Confidence was further lifted by the new Chinese government’s plans to reform its economy through greater private-sector participation. Towards the period-end, markets applauded the Fed’s long-awaited decision to gradually reduce its asset purchases from January 2014 but gains were pared by concerns of political unrest in Thailand. Market Outlook and Investment Strategy ^ Volatility is expected to persist as the Fed’s tapering decision may trigger capital flight. As well, Asian economies continue to face domestic headwinds. India and Indonesia, encumbered by large deficits, could face further currency volatility should fund outflows accelerate. Additional risks include mid-year elections in both countries. In Thailand, prolonged political uncertainty would undermine investor confidence. Against this backdrop, muted earnings growth for Asian companies are envisaged. But the Fund's holdings, with their well tested management and solid balance sheets, will be able to weather the lean periods and emerge fitter to tap the region’s growing middle class and rising discretionary spending over the long term. ^ Source: Aberdeen Asset Management Asia Ltd.

A) Fund Performance

3-Mth

(%)6-Mth

(%)1-Year

(%)3-Year

(%)5-Year

(%)10-Year

(%)

SinceInception

(%) HSBC Insurance Pacific Equity Fund (0.02) 0.11 0.76 6.51 - - 17.41 Benchmark* 2.94 9.41 7.14 6.01 - - 9.88 *MSCI AC Asia Pacific ex Japan TR USD (in SGD)

B) Fund Disclosure I Allocation by Asset Class As at 31 Dec 2013 Asset Class % of NAV MV S$ mil Aberdeen Pacific Equity Fund 100.03 66.23 Other assets 0.62 0.41 Other Liabilities -0.65 -0.43 Total 100.00 66.21 II Fund Movement (01 Jul 2013 - 31 Dec 2013) S$ Subscription 17,800,124 Redemption 7,009,146


66

C) Underlying Sub-Fund Disclosure (Aberdeen Pacific Equity Fund) I Allocation by Country As at 31 Dec 2013 Country % of NAV MV S$ mil China / Hong Kong 28.92 512.67 Singapore 18.02 319.48 Australia 13.41 237.79 India 12.89 228.41 Korea 5.64 99.95 Malaysia 5.08 90.04 Taiwan 4.68 83.04 Thailand 4.07 72.10 Indonesia 4.04 71.68 Philippines 2.52 44.73 Sri Lanka 0.42 7.22 Cash 0.31 5.58 Total 100.00 1,772.69 II Allocation by Industry As at 31 Dec 2013 Industry % of NAV MV S$ mil Financials 40.82 723.61 Information Technology 12.75 226.02 Industrials 12.14 215.20 Materials 12.12 214.85 Consumer Staples 6.97 123.56 Consumer Discretionary 6.18 109.55 Telecommunication Services 4.04 71.61 Energy 2.17 38.47 Healthcare 1.42 25.25 Utilities 1.08 18.99 Cash 0.31 5.58 Total 100.00 1,772.69 III Allocation of Debt Securities by Credit Ratings As at 31 Dec 2013 N.A. IV Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2013 % of NAV S$ mil Aberdeen China Opportunities Fund 9.87 174.90 AG - Indian Equity Fund^ 9.81 173.97 Aberdeen Singapore Equity Fund 8.32 147.41 Samsung Electronics (Pref) 4.79 84.84 Rio Tinto 4.43 78.58 BHP Billiton PLC 4.17 73.95 Aberdeen Thailand Equity Fund 4.07 72.10 Aberdeen Indonesia Equity Fund 4.04 71.68 Aberdeen Malaysian Equity Fund 3.64 64.61 HSBC Holdings 3.32 58.85 ^The underlying fund is not authorised for public sale in Singapore. Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2012 % of NAV S$ mil Aberdeen Singapore Equity Fund 9.56 114.70 Aberdeen China Opportunities Fund 9.55 114.62 AG - Indian Equity Fund 8.70 104.39 Aberdeen Thailand Equity Fund 6.79 81.48 Aberdeen Indonesia Equity Fund 6.72 80.64 Aberdeen Malaysian Equity Fund 5.54 66.52 Samsung Electronics (Pref) 4.74 56.87 TSMC 3.64 43.72 Rio Tinto 3.52 42.19 QBE Insurance 3.12 37.45


67


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





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

68

HSBC Insurance Premium Balanced Fund Fund Objective HSBC Insurance Premium Balanced Fund seeks to achieve long-term capital growth by investing in global equity and fixed income markets, with a Singapore bias. Fund investments are made by way of a feeder fund, which invests substantially all or all its assets in the DWS Premier Select Trust. Investment and Market Review ^ After the US Fed announced to postpone tapering, the second half of 2013 proved to be a

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

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

Medium to High Risk - Broadly Diversified


very strong year for DM equities although other asset classes were more mixed. The spectacular rally last year helped key indices (MSCI World, S&P 500, Stoxx600) close 2013 at or near record territory. While further turmoil was avoided, fixed income performance was relatively subdued. The DWS Premier Select Trust delivered a return of 5.44% in H2 2013. Main contributors to performance were the equity positions with the DWS Global Equity Focus Fund returning +15.25%. At the same time, the DWS Lion Bond Fund was nearly flat with +1.16%. Market Outlook and Investment Strategy ^ The fund started the year with a tilt towards equities as global growth should rebound to trend-level this year with most developed economies cutting fiscal deficits slowly in 2013. The US GDP is poised to accelerate into 2014 as the severe fiscal tightening of 2013 is significantly relaxed. However, on balance emerging economies are still tightening less than developed markets. Therefore, emerging markets will grow faster in 2014 but remain vulnerable to the path of global interest rates, commodity prices, and political instability. We expect investors to place a premium on countries that reform to raise growth potential. Last but not least, main central banks can continue to stimulate because inflation remains weak and outright deflation is unlikely. Summing up, we prefer developed market equities over emerging market equities. ^ Source: Deutsche Asset Management (Asia) Ltd.

A) Fund Performance

3-Mth

(%)6-Mth

(%)1-Year

(%)3-Year

(%)5-Year

(%)10-Year

(%)

SinceInception

(%)

HSBC Insurance Premium Balanced Fund

2.67 5.35 10.05 10.00 44.43 50.70 48.16

Benchmark* 2.81 6.42 10.62 14.34 52.61 62.67 56.54 *40% 3-Mth SIBOR + 30% MSCI Singapore Index + 30% MSCI World Index

B) Fund Disclosure I Allocation by Asset Class As at 31 Dec 2013 Asset Class % of NAV MV S$ mil DWS Premier Select Trust 100.11 124.17 Other assets 0.16 0.20 Other liabilities (0.27) (0.34) Total 100.00 124.03


69

II Fund Movement (01 Jul 2013 - 31 Dec 2013) S$ Subscription 9,340,347 Redemption 8,720,895 C) Underlying Fund Disclosure (DWS Premier Select Trust) I Allocation by Country As at 31 Dec 2013 Country % of NAV MV S$ mil Singapore 64.43 131.64 Luxembourg 30.91 63.15 United States of America 1.66 3.41 Others* 3.00 6.14 Total 100.00 204.34 *Includes other countries and net assets and liabilities. II Allocation by Industry As at 31 Dec 2013 Industry % of NAV MV S$ mil Unit Trusts/Mutual Funds 97.00 198.20 Others* 3.00 6.14 Total 100.00 204.34 *Includes other industries and net assets and liabilities. III Allocation of Debt Securities by Credit Ratings As at 31 Dec 2013 N.A. IV Top Ten Holdings of Underlying Fund As at 31 Dec 2013 % of NAV MV S$ mil DWS Global Equity Focus Fund 30.90 63.15 DWS Lion Bond Fund Class M 29.76 60.82 DWS Singapore Equity Fund Class M 22.59 46.16 Aberdeen Global Oppurtunities Fund SGD Class 5.50 11.24 Aberdeen Asian Smaller Companies Fund SGD Class 4.05 8.27 DWS Asian Small/Mid Cap Fund Class A 2.52 5.15 SPDR Gold Trust 1.11 2.27 iShares MSCI ACWI Index Fund 0.55 1.13 Top Ten Holdings of Underlying Fund As at 31 Dec 2012 % of NAV MV S$ mil DWS Lion Bond Fund Class M 29.14 56.47 DWS Singapore Equity Fund Class M 28.89 55.99 DWS Global Equity Focus Fund 27.40 53.10 SPDR Gold Trust 5.63 10.92 Aberdeen Global Opportunities Fund SGD Class 4.11 7.97 Aberdeen Asian Smaller Company Fund SGD Class 3.15 6.10 Other net assets 1.68 3.26 V Exposure to Derivatives As at 31 Dec 2013 % of NAV - Market value (S$) - Realised Gains / (Losses) (S$) (3035) Unrealised Gains / (Losses) (S$) - VI Borrowings of Net Asset Value As at 31 Dec 2013 N.A. D) Other Disclosure Items I Expense/Turnover Ratios HSBC Insurance Premium

Balanced Fund Underlying Fund

As at 31-Dec-13 As at 31-Dec-12 As at 31-Dec-13 As at 31-Dec-12 Expense Ratio 1.74% 1.55% 1.54% 1.32% Turnover Ratio 12.87% 9.94% 27.63% 15.05%


70


Soft dollar commissions are benefits accorded to Manager by their brokers, usually in the form of research, advisory, analysis and data services, computer hardware or software used for and/or in support of theinvestment process. The Manager’s policy on soft dollar commissions is as follows: - the goods and services received would assist in the provision of investment services and advices orrelated services to the unit trust; - transactions are executed on the best available terms; and - the Manager does not engage in unnecessary trades in order to qualify for soft dollar commissions. Soft dollar commissions were received from the Manager’s panel of soft dollar brokers which executedtransactions for the unit trust and other funds managed by the Managers.




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

71

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

FUND FACTS Underlying Sub-Fund

Henderson Horizon Fund 25%: Pan European Property Equities Fund 50%: Global Property Equities Fund 25%: Asia-Pacific Property Equities Fund

Fund Manager Henderson Global Investors (Singapore) Ltd

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

N.A.


Global Property Equities Fund, Asia-Pacific Property Equities Fund & Pan European Property Equities Fund Investment and Market Review ^ Equity markets capitulated in August due to the intensification of geopolitical uncertainty in the Middle East and the prospect of the Federal Reserve tapering its bond purchases. However, a combination of positive global macroeconomic data and the Federal Reserve’s guidance that interest rates would remain low even as it scaled back its quantitative easing programme, pushed equity prices up in the second half of the year. US property stocks significantly underperformed equity markets over the period, with US REITs the weakest performers. Here, concerns over the impact of rising bond yields on real estate cap rates saw investors shun the sector. Asian property equities had a mixed time over the period. Japan once again outperformed in the region, benefiting from bets that the Bank of Japan may crank up its monetary stimulus sooner rather than later. However, in Singapore and Hong Kong, negative sentiment continued as the residential market showed more signs of slowing, with house prices falling after the introduction of government cooling measures. In Europe, listed property stocks benefitted from improving confidence in the macroeconomic situation and greater risk appetite from investors. A surprise ECB rate cut in the last quarter added an additional tailwind for property stocks. Market Outlook and Investment Strategy ^ While it is difficult to gauge the attitude of investors to REITs and property companies given the uncertainty over rising bond yields and interest rates, the balances of supply and demand in occupational and physical property investment markets give us confidence in the underlying returns that listed property companies will generate for the next year or two. Recovering economies will lead to greater demand from tenants, benefitting the landlords in which we invest. The pricing of shares in the sector currently strikes us as fair in light of expected growth, even if bond yields and interest rates start to rise. The big unknown is how the whole process of QE unravels and how governments and central banks go about reducing support without putting the brakes on growth. However, our expectation that short-term rates stay low for some time yet, should remain supportive for the sector. ^ Source: Henderson Global Investors (Singapore) Ltd


72

A) Fund Performance

3-Mth

(%)6-Mth

(%)1-Year

(%)3-Year

(%)5-Year

(%)10-Year

(%)

SinceInception

(%)

HSBC Insurance Premium Property Equity Fund

1.01 4.40 9.90 15.72 73.26 - (21.27)

)38.8(-85.9425.3311.185.801.17 *kramhcneB

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

B) Fund Disclosure

3102 ceD 13 ta sA ssalC tessA yb noitacollA Ilim $S VMVAN fo % ssalC tessA

10.100.101 dnuF seitiuqE noziroH nosredneH )10.0()00.1( seitilibail rehtO Total 100.00 1.00

3102 ceD 13 -3102 luJ 10( tnemevoM dnuF II S$ Subscription 180,775 Redemption 164,048 C) Underlying Sub-Fund Disclosure

3102 ceD 13 ta sA yrtnuoC yB noitacollA I (Henderson Horizon Fund - Asia-Pacific Property Equities Fund)

lim $S VMVAN fo % yrtnuoC Japan 49.12 245.25 Hong Kong 25.07 125.15 Australia 13.53 67.55 Singapore 8.33 41.60 China 3.50 17.46 Indonesia 0.32 1.58 India 0.13 0.67 Total 100.00 499.26

3102 ceD 13 ta sA yrtsudnI yb noitacollA II (Henderson Horizon Fund - Asia-Pacific Property Equities Fund)

lim $S VMVAN fo % yrtsudnI Financials 100.00 499.26 Total 100.00 499.26

3102 ceD 13 ta sA yrtnuoC yb noitacollA III

(Henderson Horizon Fund - Global Property Equities Fund) Country % of NAV MV S$ mil 53.29706.25 setatS detinU Japan 16.06 241.92 75.91149.7 modgniK detinU Hong Kong 5.24 78.87 Australia 4.64 69.84 Singapore 3.97 59.83 Netherlands 2.76 41.62 Germany 2.19 33.01 Sweden 2.10 31.57 Canada 1.33 20.05 Others* 1.17 17.69 Total 100.00 1,506.32 *Includes other countries and net assets and liabilities.


73

IV Allocation by Industry As at 31 Dec 2013 (Henderson Horizon Fund - Global Property Equities Fund) Industry % of NAV MV S$ mil Financials 97.16 1,463.60 Others* 2.84 42.72 Total 100.00 1,506.32 *Includes other industries and net assets and liabilities. V Allocation by Country As at 31 Dec 2013 (Henderson Horizon Fund - Pan European Property Equities Fund) Country % of NAV MV S$ mil United Kingdom 52.96 332.09 Sweden 14.30 89.67 Germany 12.31 77.19 Netherlands 12.28 76.99 France 5.76 36.13 Finland 1.98 12.42 Bermuda 0.41 2.61 Total 100.00 627.10 VI Allocation by Industry As at 31 Dec 2013 (Henderson Horizon Fund - Pan European Property Equities Fund) Industry % of NAV MV S$ mil Financials 97.36 610.53 Others* 2.64 16.57 Total 100.00 627.10 *Includes other industries and net assets and liabilities. VII Allocation of Debt Securities by Credit Ratings As at 31 Dec 2013 N.A. VIII Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2013 Henderson Horizon Fund - Asia-Pacific Property Equities Fund % of NAV S$ mil Sumitomo Realty & Development 9.20 45.93 Mitsubishi Estate Co. Ltd. 9.18 45.83 Mitsui Fudosan Co. Ltd. 8.75 43.68 Sun Hung Kai Properties Ltd. 7.78 38.84 Wharf Holdings 5.43 27.13 Hongkong Land Holdings 4.61 23.02 Nippon Building Fund 4.57 22.81 Mirvac Group 3.86 19.25 Goodman Group 3.62 18.09 Japan Real Estate Investment 3.56 17.78 Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2012 Henderson Horizon Fund - Asia-Pacific Property Equities Fund % of NAV S$ mil Mitsubishi Estate Co. Ltd. 9.71 44.59 Sun Hung Kai Properties Ltd. 9.53 43.76 Mitsui Fudosan Co. Ltd. 9.32 42.79 Hongkong Land Holdings 5.62 25.83 Wharf Holdings 4.70 21.60 CapitaLand 4.65 21.37 Hang Lung Properties Ltd. 4.62 21.22 New World Development 4.47 20.55 Dexus Property 4.41 20.25 Goodman Group 4.26 19.58


74

IX Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2013 Henderson Horizon Fund - Global Property Equities Fund % of NAV S$ mil Simon Property Group Inc. 6.02 90.66 Mitsubishi Estate 5.26 79.20 Mitsui Fudosan Co. Ltd. 4.81 72.43 Public Storage 3.36 50.63 Health Care Real Estate Investment Trust 3.34 50.37 Prologis 3.24 48.78 Nippon Building Fund 2.93 44.20 General Growth Properties 2.43 36.64 Land Securities Group 2.37 35.76 Sun Hung Kai Properties 2.36 35.54 Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2012 Henderson Horizon Fund - Global Property Equities Fund % of NAV S$ mil Simon Property Group Inc. 5.69 72.24 Sun Hung Kai Properties Ltd. 4.56 57.89 Mitsubishi Estate 4.30 54.61 Health Care Real Estate Investment Trust 4.18 53.07 Westfield Group Australia 4.14 52.60 Mitsui Fudosan Co. Ltd. 3.75 47.67 SL Green Realty Corp. 2.79 35.44 Hongkong Land Holdings 2.75 34.89 Dundee Real Estate Investment Trust 2.51 31.89 Boston Properties 2.38 30.20 X Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2013 Henderson Horizon Fund - Pan European Property Equities Fund % of NAV S$ mil Land Securities Group PLC 9.82 61.56 Unibail Rodamco S.A. 9.77 61.28 British Land 8.90 55.80 Great Portland Estates 5.69 35.70 Derwent London PLC 4.83 30.26 Wihlborgs Fastigheter 4.81 30.17 Icade S.A. 4.78 29.98 GAGFAH 4.49 28.14 Fabege 3.52 22.06 Grainger 3.40 21.31 Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2012 Henderson Horizon Fund - Pan European Property Equities Fund % of NAV S$ mil Land Securities Group PLC 9.87 48.39 Unibail Rodamco S.A. 9.02 44.22 British Land 8.52 41.76 Great Portland Estates PLC 6.37 31.24 Hammerson PLC 5.88 28.86 Icade S.A. 4.76 23.35 Derwent London PLC 4.59 22.49 Eurocommercial Properties 4.37 21.41 Fabege 4.29 21.02 PSP Swiss Property 4.24 20.79 XI Exposure to Derivatives As at 31 Dec 2013 N.A. XII Borrowings of Net Asset Value As at 31 Dec 2013 N.A.


75

D) Other Disclosure Items I Expense/Turnover Ratio Expense Ratio Turnover Ratio As at As at As at As at 31-Dec-13 31-Dec-12 31-Dec-13 31-Dec-12 Underlying Sub-Fund Level

Henderson Horizon Fund - Asia-Pacific Property Equities Fund 1.93% 1.96% 210.39 337.42%

Henderson Horizon Fund - Global Property Equities Fund 1.92% 1.96% 144.27 128.88%

Henderson Horizon Fund - Pan European Property Equities Fund 1.91% 1.98% 51.24 17.07%

ILP Sub-Fund Level

HSBC Insurance Premium Property Equity Fund 2.22% 2.30% 18.83% 22.14%

II Related-Party Transactions Deposits and cash balances maintained with HSBC Bank as at 31 December 2013 amounts to $2,574. III Material Information N.A. IV Soft Dollar Commission Arrangement N.A. E) Financial Statements Refer to page 100.



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

76

HSBC Insurance SGD Reserve Fund Fund Objective HSBC Insurance SGD Reserve Fund seeks to achieve a return in line with the one month Singapore Dollar Interbank Bid Rate (SIBID) whilst managing liquidity and risk to preserve capital. It will invest primarily in Singapore Dollar denominated money market instruments and debt securities, including bank certificates of deposit, fixed deposits, money market securities, Singapore government and statutory board securities and corporate bonds. Fund investments are made by way of a feeder fund, which invests substantially all, or all its assets in the Schroder S$ Reserve Fund. The fund provides ILP policy-holders

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

Management (Singapore) Ltd


N.A.


access to a suitable parking fund with relatively low volatility for switching their existing investments during volatile markets at no additional bid-offer spread. Investment and Market Review ^ The actions and announcements of the US Federal Reserve were the primary drivers of broad fixed income markets in 2013. In September, the US Fed surprised the market by maintaining the pace of purchases, citing concerns about rising US mortgage rates and their impact on the housing market. However, going into year end, US macro data continued to surprise on the upside with strong readings from purchasing managers’ indices, and further declines in the unemployment rate. In the end, the Fed announced at its December FOMC meeting that it would start QE tapering, by trimming its purchases of Treasuries and mortgages by US$10 billion to US$75 billion per month. More importantly, the Fed extended its commitment to keep short term interest rates near zero until 2015. Singapore bonds yields also rose - led by the belly of the SGS yield curve, which is typically more influenced by US yield movements. Market Outlook and Investment Strategy ^ Looking into 2014, Singapore’s economy is likely to expand faster than in 2013 on the back of a better global growth, led by the developed economies. Global manufacturing confidence is now at its highest level since April 2011. However, Singapore’s growth sensitivity to the developed economies is constrained by tight capacity, with unemployment largely frictional. Nevertheless, given the economy’s sound fundamentals, flexible exchange rate, and ample policy room to act, Singapore has sufficient room to weather any downside risks to growth. The fund will continue to focus on capital preservation and on maintaining high portfolio liquidity while looking for opportunities to diversify into high quality, short-dated corporate issues to enhance yield carry. ^ Source: Schroder Investment Management (Singapore) Ltd.

A) Fund Performance

3-Mth

(%)6-Mth

(%)1-Year

(%)3-Year

(%)5-Year

(%)10-Year

(%)

SinceInception

(%) HSBC Insurance SGD Reserve Fund 0.01 0.00 (0.02) 0.14 1.11 - 10.95 Benchmark* 0.06 0.12 0.25 0.44 0.68 - 7.68 *1 Mth Singapore Dollar Interbank Bid Rate (SIBID)


77

B) Fund Disclosure I Allocation by Asset Class As at 31 Dec 2013 Asset Class % of NAV MV S$ mil Schroder S$ Reserve Fund 100.15 6.55 Other assets 1.22 0.08 Other liabilities (1.38) (0.09) Total 100.00 6.54 II Fund Movement (01 Jul 2013 - 31 Dec 2013) S$ Subscription 1,364,400 Redemption 992,602 C) Underlying Fund Disclosure (Schroder S$ Reserve Fund) I Allocation by Country As at 31 Dec 2013 Country % of NAV MV S$ mil Singapore 24.23 14.14 China 11.98 7.00 South Korea 5.13 3.00 Others* 58.66 34.24 Total 100.00 58.38 *Includes other countries and net assets and liabilities. II Allocation by Industry As at 31 Dec 2013 Industry % of NAV MV S$ mil Central Bank 23.80 13.90 Bank 17.11 9.99 Finance 0.43 0.25 Others* 58.66 34.24 Total 100.00 58.38 *Includes other industries and net assets and liabilities. III Allocation of Debt Securities by Credit Ratings As at 31 Dec 2013 Rating % of NAV MV S$ mil AA- 1.72 1.00 A1 3.41 1.99 A2 0.43 0.25 Not Rated 35.78 20.89 Others* 58.66 34.25 Total 100.00 58.38 *Includes cash holdings and net assets and liabilities. IV Top Ten Holdings of Underlying Fund As at 31 Dec 2013 % of NAV S$ mil MAS Bill Series 87 03 Feb 2014 6.85 4.00 MAS Bill Series 84 21 Feb 2014 6.85 4.00 Bank of China Ltd/Hong Kong 0.9% 28 Mar 2014 6.84 3.99 Agricultural Bank of China Ltd/Singapore 0.8% 23 Apr 2014 5.14 3.00 MAS Bill Series 84 28 Feb 2014 5.14 3.00 MAS Bill Series 84 24 Jan 2014 4.97 2.90 Kookmin Bank 0.85% 31 Jul 2014 3.41 1.99 Export-Import Bank of Korea EMTN 1% 29 Aug 2014 1.72 1.00 CMT MTN Private Ltd 2.85% 01 Sep 2014 0.43 0.25


78

Top Ten Holdings of Underlying Fund As at 31 Dec 2012 % of NAV S$ mil MAS Bill 01 Feb 2013 6.81 12.00 Singapore Treasury Bill Series 91 07 Mar 2013 5.95 10.50 Singapore Treasury Bill Series 91 21 Feb 2013 5.67 10.00 Singapore Treasury Bill Series 91 14 Mar 2013 4.54 8.00 MAS Bill 15 Mar 2013 4.54 8.00 Singapore Treasury Bill Series 91 28 Mar 2013 4.54 8.00 Singapore Treasury Bill Series 91 10 Jan 2013 2.84 5.00 Bank of China Ltd / Singapore 0.97% 29 Nov 2013 2.84 5.00 Agricultural Bank of China / Singapore 1.20% 21 May 2013 2.27 4.01 Singapore Treasury Bill Series 91 24 Jan 2013 2.27 4.00 V Exposure to Derivatives As at 31 Dec 2013 % of NAV - Market value (S$) - Realised Gains / (Losses) (S$) (2) Unrealised Gains / (Losses) (S$) - VI Borrowings of Net Asset Value As at 31 Dec 2013 N.A.

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


As at 31-Dec-13 As at 31-Dec-12 As at 31-Dec-13As at 31-Dec-12 Expense Ratio 0.38% 0.38% 0.36% 0.36% Turnover Ratio 29.79% 34.81% 207.12% 216.17% II Related-Party Transactions N.A. III Material Information N.A. IV Soft Dollar Commission Arrangement In the management of the Underlying Fund, the Manager may accept soft dollar commissions from, or

enter into soft dollar arrangements with, stockbrokers who execute trades on behalf of the Underlying Fund and the soft dollars received are restricted to the following kinds of services: (a) research, analysis or price information; (b) performance measurement; (c) portfolio valuations; and (d) administration services. The Manager may not receive or enter into soft dollar commissions or arrangements unless (a) such softdollar commissions or arrangements shall reasonably assist the Manager in their management of theFund, (b) best execution is carried out for the transactions, and (c) that no unnecessary trades are enteredinto in order to qualify for such soft dollar commissions or arrangements. The Manager shall not receivegoods and services such as travel, accommodation and entertainment.




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

79

HSBC Insurance Singapore Balanced Fund Fund Objective HSBC Insurance Singapore Balanced Fund seeks to achieve capital appreciation in the long-term by investing 70% of its assets into a diversified portfolio of Singapore equity and equity-related securities and 30% of its remaining assets into quality investment grade bonds of Singapore and major bond markets. The Fund invests substantially all or all its assets primarily 70% into the DWS Singapore Equity Fund and 30% into the DWS Lion Bond Fund. Investment and Market Review ^ In the second half of 2012, the market rose on

FUND FACTS Underlying Funds 70%: DWS Singapore Equity

Fund 30%: DWS Lion Bond Fund

Fund Manager Deutsche Asset Management (Asia) Ltd

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

N.A.


further quantitative easing in the US and improved developments in Europe. The market had a strong start in 2013 as the US economy showed signs of a more sustained recovery but gave back most of its gains in the second quarter on fears of higher long term US interest rates. Banks and Telecommunication stocks performed well on attractive valuations and better than expected earnings while cyclicals such as the offshore and marine sector and commodity related stocks performed poorly as earnings continued to disappoint. Top contributors included the holdings in Ezion Holdings and OSIM International which registered strong gains on higher than expected earnings and attractive valuations. Detractors included zero holdings in ST Engineering (STE) and United Overseas Land (UOL). STE performed well on strong earnings and order book but valuations are rich suggesting that this has been priced in. Although UOL rose on robust property sales and attractive valuations, the portfolio preferred mid-size Real Estate Investment Trusts such as Frasers Centrepoint Trust and Cache Logistics which offered both good growth and attractive dividend yields and have also performed well. Market Outlook and Investment Strategy ^ The potential scaling down of monetary stimulus in the US could result in greater volatility in the financial markets. Despite the sell-down, fundamentals of REITs and dividend stocks remain intact. The portfolio will stay weighted in banks as they benefit from a stepper yield curve. We continue to favour the consumer sector which offer attractive long term prospects. DWS Lion Bond Fund *Please refer to HSBC Insurance Singapore Bond Fund on page 83 for the Investment and Market Review and the Market Outlook and Investment Strategy. ^ Source: Deutsche Asset Management (Asia) Ltd.

A) Fund Performance

3-Mth

(%)6-Mth

(%)1-Year

(%)3-Year

(%)5-Year

(%)10-Year

(%)

SinceInception

(%)

HSBC Insurance Singapore Balanced Fund

0.30 0.99 2.73 5.42 72.82 - 20.28

Benchmark* 0.97 3.50 3.70 5.78 73.36 - 14.44

*70% MSCI Singapore Index and 30% 6 month Singapore Inter bank Offer Rate (SIBOR) minus 12.5 basis points


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B) Fund Disclosure I Allocation by Asset Class As at 31 Dec 2013 Asset Class % of NAV MV S$ mil DWS Singapore Equity Fund 70.07 7.31 DWS Lion Bond Fund 30.03 3.13 Other liabilities 0.10 0.01 Other assets (0.19) (0.02) Total 100.00 10.43 II Fund Movement (01 Jul 2013 - 31 Dec 2013) S$ Subscription 2,590,778 Redemption 650,987 C) Underlying Fund Disclosure (DWS Singapore Equity Fund) I Allocation by Country As at 31 Dec 2013 Country % of NAV MV S$ mil Singapore 89.90 63.79 Isle of Man 4.60 3.27 Bermuda 3.76 2.67 Others* 1.74 1.23 Total 100.00 70.96 *Includes other countries and net assets and liabilities. II Allocation by Industry As at 31 Dec 2013 Industry % of NAV MV S$ mil Banks 33.93 24.07 Telecom Service 13.59 9.65 Real Estate 10.17 7.22 Diversified Resources 9.85 6.99 Real Estate Investment Trust 4.86 3.45 Hotels 4.60 3.27 Engineering/Machine 4.37 3.10 Shipbuilding 3.36 2.39 Agriculture 3.22 2.29 Healthcare 3.16 2.25 Others* 8.89 6.28 Total 100.00 70.96 *Includes other industries and net assets and liabilities. III Allocation of Debt Securities by Credit Ratings As at 31 Dec 2013 N.A. IV Top Ten Holdings of Underlying Fund As at 31 Dec 2013 % of NAV MV S$ mil DBS Group Holdings Ltd. 13.09 9.29 United Overseas Bank Ltd. 11.59 8.22 Singapore Telecommunications Ltd. 10.14 7.19 Oversea-Chinese Banking Corp. Ltd. 9.25 6.57 Keppel Corp. Ltd. 7.20 5.11 Genting Singapore PLC 4.60 3.27 Capitaland Ltd. 4.52 3.21 Global Logistic Properties Ltd. 4.27 3.03 Singapore Technologies Engineering Ltd. 3.58 2.54 Wilmar International Ltd. 3.22 2.29


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Top Ten Holdings of Underlying Fund As at 31 Dec 2012 % of NAV MV S$ mil United Overseas Bank Ltd. 9.04 7.29 DBS Group Holdings Ltd. 7.97 6.43 Oversea-Chinese Banking Corp. Ltd. 7.70 6.21 Singapore Telecommunications Ltd. 7.62 6.15 Keppel Corp. Ltd. 7.11 5.73 Capitaland Ltd. 5.08 4.09 Sembcorp Industries 3.98 3.21 Fraser & Neave Ltd. 2.89 2.33 CapitaMalls Asia Ltd. 2.89 2.33 Wilmar International Ltd. 2.86 2.31 V Exposure to Derivatives As at 31-Dec-13 % of NAV - Market value (S$) - Realised Gains / Losses (S$) (8,999) Unrealised Gains / Losses (S$) - VI Borrowings of Net Asset Value As at 31-Dec-13 N.A.

*HBSC Insurance Singapore Balanced Fund invests into DWS Lion Bond Fund. Please refer to HSBC Insurance Singapore Bond Fund on page 83 for the relevant information under Section C.

D) Other Disclosure Items I Expense/Turnover

Ratio Expense Ratio Turnover Ratio

As at 31-Dec-13 As at 31-Dec-12 As at 31-Dec-13 As at 31-Dec-12 Underlying Fund Level

DWS Singapore Equity Fund 1.74% 1.36% 135.31% 107.95%

DWS Lion Bond Fund 0.67% 0.66% 30.08% 42.00% ILP Sub-Fund

HSBC Insurance Singapore Balanced Fund 1.66% 1.37% 11.41% 15.20%

II Related-Party Transactions N.A. III Material Information N.A. IV Soft Dollar Commission Agreement

Soft dollar commissions are benefits accorded to Manager by their brokers, usually in the form of research,advisory, analysis and data services, computer hardware or software used for and/or in support of theinvestment process. The Manager’s policy on soft dollar commissions is as follows: - the goods and services received would assist in the provision of investment services and advices orrelated services to the unit trust; - transactions are executed on the best available terms; and - the Manager does not engage in unnecessary trades in order to qualify for soft dollar commissions. Soft dollar commissions were received from the Manager’s panel of soft dollar brokers which executedtransactions for the unit trust and other funds managed by the Managers.


82




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

83

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

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

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

Low to Medium Risk - Broadly Diversified


The US PMI Manufacturing Index implied expansion and Industrial Production rose during the review period. This fed into an improving jobs market as Unemployment fell to a 7.0% low with Average Earnings rising 2% YoY. The recovery also benefited from consistently rising retail sales and housing prices. Even the Eurozone improved as political hurdles were overcome, boosting confidence; spending and investments responded positively. China’s leadership transition clarified its growth strategy whilst containing dangerous credit-driven growth. Meanwhile, capital outflows drove emerging Asian economies to address credit and trade imbalances. Singapore’s GDP growth was moderately strong, rebounding from the mid-year slowdown up to +4% YoY after sustained growth in Services and Construction, aided by a mild recovery in Manufacturing. Market Outlook and Investment Strategy ^ Relative growth momentum has shifted decisively to developed economies. The Singapore economy must rebalance growth from investments to exports which may be tricky in the context of the ongoing structural reforms. Interest rates globally have risen sharply from the May’13 lows and will likely rise further when the “QE taper” starts. Although liquidity will fall, SGD assets should remain in demand as a high quality alternative within Asia. Companies could see better operating environments on better external demand, resulting in subdued credit risk. ^ Source: Deutsche Asset Management (Asia) Ltd.

A) Fund Performance

3-Mth

(%)6-Mth

(%)1-Year

(%)3-Year

(%)5-Year

(%)10-Year

(%)

SinceInception

(%)

HSBC Insurance Singapore Bond Fund

0.45 1.14 1.56 6.46 15.27 28.28 32.21

Benchmark* 0.08 0.16 0.31 1.06 2.41 13.47 14.96 *6-Mth Singapore Inter-bank Offer Rate (SIBOR) minus 12.5 basis points

B) Fund Disclosure I Allocation by Asset Class As at 31 Dec 2013 Asset Class % of NAV MV S$ mil DWS Lion Bond Fund 100.41 56.15 Other assets 0.38 0.21 Other liabilities (0.79) (0.44) Total 100.00 55.92


84

II Fund Movement (01 Jul 2013 – 31 Dec 2013) S$ Subscription 8,257,870 Redemption 14,539,397 C) Underlying Fund Disclosure (DWS Lion Bond Fund) I Allocation by Country As at 31 Dec 2013 Country % of NAV MV S$ mil Singapore 48.04 150.78 South Korea 11.67 36.63 Great Britain 6.14 19.28 Australia 5.14 16.13 Malaysia 4.83 15.16 United States of America 3.90 12.25 New Zealand 3.90 12.24 China 3.01 9.46 Others* 13.37 41.92 Total 100.00 313.85 *Includes other countries and net assets and liabilities. II Allocation by Industry As at 31 Dec 2013 Industry % of NAV MV S$ mil Banks 30.83 96.76 Real Estate 16.20 50.83 Finance 16.11 50.57 Other net assets 8.53 26.77 Government 5.28 16.56 Transport 4.12 12.93 Miscellaneous 3.87 12.14 Printing/Publishing 3.57 11.21 Oil & Gas 2.49 7.83 Industrials 1.63 5.13 Other net assets* 7.37 23.12 Total 100.00 313.85 *Includes other industries and net assets and liabilities. III Allocation of Debt Securities by Credit Ratings As at 31 Dec 2013 Rating % of NAV MV S$ mil Aaa 3.45 10.84 AA (by S&P) 2.41 7.57 Aa3 13.90 43.62 Aa2 2.00 6.28 A3 7.57 23.75 A2 14.35 45.03 A1 11.15 35.00 A (by S&P) 0.40 1.24 Baa2 3.90 12.25 Other net assets* 40.87 128.27 Total 100.00 313.85 *Includes cash holdings and net assets and liabilities


85

IV Top Ten Holdings of Underlying Fund As at 31 Dec 2013 % of NAV S$ mil United Overseas Bank Ltd. Series EMTN Variable 11/07/2022 3.78 11.87 HK Land Treasury SG 3.65% 05/10/2015 3.78 11.86 Singapore Press Holdings Ltd. MTN 2.81% 02/03/2015 3.57 11.21 Danga Capital Berhad 2.615% 11/08/2015 3.23 10.14 United Overseas Land Ltd. MTN 2.493% 08/05/2015 2.48 7.79 Royal Bank of Scotland PLC Series EMTN 2.85% 31/03/2014 2.48 7.77 Lloyds TSB Bank Plc Series EMTN 3.5% 17/09/2014 2.42 7.59 DBS Bank Ltd. Singapore Series MTN 21/02/2022 2.42 7.59 Winmall Ltd. 4.69% 27/04/2014 2.41 7.56 Morgan Stanley EMTN 3.8% 29/01/2016 2.30 7.23 Top Ten Holdings of Underlying Fund As at 31 Dec 2012 % of NAV S$ mil United Overseas Bank Ltd. Series EMTN Variable 11/07/2022 4.17 12.07 Singapore Press Holdings Ltd. MTN 2.81% 02/03/2015 3.93 11.37 Danga Capital Berhad 2.615% 11/08/2015 3.54 10.23 Winmall Limited 4.69% 27/04/2014 2.70 7.82 Lloyds TSB Bank Plc Series EMTN 3.5% 17/09/2014 2.62 7.58 HK Land Treasury SG 3.65% 05/10/2015 2.52 7.28 ANZ National International Ltd. Series EMTN 2.95% 27/07/2015 2.51 7.27 Morgan Stanley EMTN 3.8% 29/01/2016 2.49 7.19 Overseas Union Enterprise Ltd. MTN 3.95% 29/09/2015 2.49 7.19 CMT MTN Pte Ltd. MTN 2.85% 01/09/2014 2.47 7.15 V Exposure to Derivatives As at 31 Dec 2013 % of NAV - Market value (S$) (367,755) Realised Gains / (Losses) (S$) (948,118) Unrealised Gains / (Losses) (S$) (367,755) VI Borrowings of Net Asset Value As at 31 Dec 2013 N.A.

D) Other Disclosure iterms

I Expense/Turnover Ratios HSBC Insurance Singapore Bond


As at 31 Dec 13 As at 31 Dec 12 As at 31 Dec 13 As at 31 Dec 13 Expense Ratio 0.71% 0.70% 0.67% 0.66% Turnover Ratio 30.70% 22.71% 30.08% 42.00% II Related-Party Transactions N.A. III Material Information N.A.


86

IV Soft Dollar Commission Agreement

Soft dollar commissions are benefits accorded to Manager by their brokers, usually in the form of research, advisory, analysis and data services, computer hardware or software used for and/or in support of the investment process. The Manager’s policy on soft dollar commissions is as follows: - the goods and services received would assist in the provision of investment services and advices or related services to the unit trust; - transactions are executed on the best available terms; and - the Manager does not engage in unnecessary trades in order to qualify for soft dollar commissions. Soft dollar commissions were received from the Manager’s panel of soft dollar brokers which executed transactions for the unit trust and other funds managed by the Managers.


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

87

HSBC Insurance World Selection Funds Fund Facts HSBC Insurance

World Selection 1 Fund

HSBC Insurance World Selection 3 Fund


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

HSBC Portfolios - World Selection 1



CPFIS/SRS SRS CPFIS Risk Classification

N.A.

As at 31 Dec 2013 Offer Price S$ 1.04774 S$ 1.10198 S$ 1.14076 Bid Price S$ 0.99535 S$ 1.04688 S$ 1.08372 Fund Size S$ 0.08 mil S$ 0.30 mil S$ 0.91 mil Units in Issue 0.08 mil 0.28 mil 0.84 mil

Fund Objectives HSBC Insurance World Selection 1 Fund seeks to provide capital growth through investment in a broad range of asset classes across global markets, consistent with a low risk investment strategy. HSBC Insurance World Selection 3 Fund seeks to provide capital growth through investment in a broad range of asset classes across global markets, consistent with a medium risk investment strategy. HSBC Insurance World Selection 5 Fund seeks to provide capital growth through investment in a broad range of asset classes across global markets, consistent with a high risk investment strategy. All the Underlying Sub-Fund will invest predominantly in other Collective Investment Schemes, but may also invest directly in derivative contracts and other securities compliant with the Luxembourg regulations. The majority of the Underlying Sub-Fund’s exposure will be to equity and fixed income markets. Within the limits of the Luxembourg regulations, it may also gain exposure to hedge fund strategies, private equity, real estate and commodities provided that the contracts are cash settled if financial derivative instruments are used. The Underlying Sub-Fund will be substantially hedged into USD through the use of financial derivative instruments (such as, but not limited to, currency forwards). Investment and Market Review ^ Equity markets registered strong performance in the second half 2013, core government bond yields rose. Market sentiment was dominated for large periods by whether the US Federal Reserve (Fed) would announce a reduction in its monthly asset purchase programme with economic growth in the developed world gathering momentum. Market expected that an announcement would come at the Fed’s September meeting hampered risk appetite at the start of the reporting period, with emerging markets particularly vulnerable to the prospect of decreasing global liquidity. However, the Fed confounded expectations by declining to ‘taper’ its asset purchases at the September meeting, causing equity markets to rally and core government bond yields, which had been rising steadily, to fall. The Fed finally decided to ‘taper’ its asset purchases at its December meeting. Importantly, the news broke in the wake of strengthening economic newsflow, and markets reacted calmly. Market Outlook and Investment Strategy ^ An overweight allocation to risk assets was maintained. This was expressed through increased exposure to developed market equities. At the start of the period, overweight positions were held in both US and European equities. However, the US equity position was incrementally decreased in favour of going further overweight Europe. The overweight position in developed equities was a function of strengthening developed market growth and still attractive valuation levels, particularly relative to core government bonds. Global aggregate bond exposure was decreased further in favour of global high yield debt. In


88

alternatives, exposure to private equity was reduced. ^ Source: HSBC Global Asset Management (Singapore) Ltd

A) Fund Performance

3-Mth

(%)6-Mth

(%)1-Year

(%)3-Year

(%)5-Year

(%)10-Year

(%)

SinceInception

(%)


1.98 2.51 5.07 8.74 - - 4.77


3.82 7.07 13.00 13.18 - - 10.20

HSBC insurance World Selection 5 Fund

(5.65) (0.06) 8.44 1.39 - - 1.81

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

HSBC Insurance World Selection 1 Fund B) Fund Disclosure I Allocation by Asset Class As at 31 Dec 2013 Asset Class % of NAV MV S$ mil HSBC Portfolios - World Selection 1 100.00 0.08 Total 100.00 0.08 II Fund Movement (01 Jul 2013 - 31 Dec 2013) S$ Subscription 29,165 Redemption 2,549 C) Underlying Sub-Fund Disclosure (HSBC Portfolios - World Selection 1) I Allocation by Country As at 31 Dec 2013 Country % of NAV MV S$ mil European 6.69 40.46 United States 5.11 30.90 Asia Pacific (excluding Japan Equity) 1.99 12.03 Japan 1.42 8.56 Others* 78.96 477.34 Cash 5.83 35.27 Total 100.00 604.56 *Includes other countries and net assets and liabilities. II Allocation by Industry As at 31 Dec 2013 Industry % of NAV MV S$ mil Unit Trust 94.17 569.29 Cash 5.83 35.27 Total 100.00 604.56 III Allocation of Debt Securities by Credit Ratings As at 31 Dec 2013 N.A.


89

IV Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2013 % of NAV S$ mil HSBC International Select Funds MultiAlpha Global Aggregate 18.15 109.70 Wellington Global Bond Fund 16.43 99.30 PIMCO GIS Global Bond-USDINS ACC 10.98 66.40 HSBC International Select Funds MultiAlpha Europe Equity 6.69 40.46 HSBC International Select Funds MultiAlpha Global High Yield 6.33 38.25 US Dollar (Capital) 5.46 33.03 Alliance Bernstein Global Plus Fixed Income 4.92 29.73 HSBC International Select Funds MultiAlpha Glbl Real Estate Eq 3.98 24.05 Stone Harbor-EM MK DBT-IUSDA 3.09 18.68 Goldman Sachs Global Fixed Income 2.89 17.47 Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2012 % of NAV S$ mil HSBC International Select Funds MultiAlpha Global Aggregate 13.40 72.04 Wellington Global Bond Fund 12.99 69.86 Alliance Bernstein Global Bond 9.00 48.36 PIMCO GIS Global Bond 5.59 30.03 HSBC International Select Funds MultiAlpha Global High Yield 4.96 26.68 HSBC International Select Funds MultiAlpha Europe Equity 4.29 23.04 HSBC Int Select Funds MultiAlpha North America Equity 3.80 20.42 Goldman Sachs Global Fixed Income 2.76 14.86 Stone Harbour - EMD Hard Currency 78.40 421.47 Cash 3.80 16.32 V Exposure to Derivatives As at 31 Dec 2013 N.A. VI Borrowings of Net Asset Value As at 31 Dec 2013 N.A.

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

World Selection 1 Fund Underlying Sub-Fund

As at 31-Dec-13 As at 31-Dec-12 As at 31-Dec-13 As at 31-Dec-12 Expense Ratio 2.19% 2.18% 1.84% 1.83 Turnover Ratio 11.74% 44.61% 9.89% 29.85 II Related-Party Transactions The HSBC Insurance World Selection 1 Fund invests S$0.08 million, equivalent to 100.00% of its net

asset value in HSBC Portfolios - World Selection 1, which is managed by HSBC Global Asset Management (Singapore) Ltd.


31 December 2013 amounts to S$109. III Material Information N.A. IV Soft Dollar Commission Arrangement N.A. E) Financial Statements Refer to page 102.




90


B) Fund Disclosure I Allocation by Asset Class As at 31 Dec 2013 Asset Class % of NAV MV S$ mil HSBC Portfolios - World Selection 3 100.00 0.29 Total 100.00 0.29 II Fund Movement (01 Jul 2013 - 31 Dec 2013) S$ Subscription 49,892 Redemption 22,430 C) Underlying Sub-Fund Disclosure (HSBC Portfolios - World Selection 3) I Allocation by Country As at 31 Dec 2013 Country % of NAV MV S$ mil European 16.54 105.93 United States 15.42 98.76 Japan 4.16 26.61 Asia Pacific (excluding Japan Equity) 3.84 24.59 Others* 57.58 368.83 Cash 2.46 15.74 Total 100.00 640.46 *Includes other countries and net assets and liabilities. II Allocation by Industry As at 31 Dec 2013 Industry % of NAV MV S$ mil Unit Trust 97.54 624.72 Cash 2.46 15.74 Total 100.00 640.46 III Allocation of Debt Securities by Credit Ratings As at 31 Dec 2013 N.A. IV Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2013 % of NAV S$ mil HSBC International Select Funds MultiAlpha Global Aggregate 17.47 111.92 HSBC International Select Funds MultiAlpha Europe Equity 16.54 105.93 HSBC International Select Funds MultiAlpha Global Emerging Mkts 9.21 58.96 HSBC American Index Fund 7.82 50.08 HSBC International Select Funds MultiAlpha North America Equity 7.60 48.68 HSBC International Select Funds MultiAlpha Global High Yield 6.52 41.77 HSBC International Select Funds MultiAlpha Glbl Real Estate Eq 6.04 38.66 Stone Harbor-EM MK DBT-IUSDA 4.20 26.90 HSBC International Select Funds MultiAlpha Japan 4.16 26.61 HSBC International Select Funds MultiAlpha Asia Pacific Ex Japan 3.84 24.59 Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2012 % of NAV S$ mil HSBC International Select Funds MultiAlpha Global Aggregate 17.51 66.25 HSBC International Select Funds MultiAlpha Europe Equity 13.15 49.75 HSBC International Select Funds MultiAlpha North America Equity 12.13 45.90 HSBC International Select Funds MultiAlpha Global Emerging Mkts 8.57 32.41 HSBC International Select Funds MultiAlpha Japan 7.98 30.18 HSBC International Select Funds MultiAlpha Global High Yield 7.09 26.81 HSBC American Index Fund 5.32 20.13 HSBC International Select Funds MultiAlpha Glbl Real Estate Eq 4.39 16.60 Stone Harbour EMD Hard Currency Fund 3.82 14.43 Schroder AS Commodity Fund 3.57 13.49


91




As at 31-Dec-13 As at 31-Dec-12 As at 31-Dec-13 As at 31-Dec-12 Expense Ratio 2.35% 2.37% 2.10% 2.12% Turnover Ratio 10.62% 15.19% (9.38%) 39.31% II Related-Party Transactions The HSBC Insurance World Selection 3 Fund invests S$0.29 million, equivalent to 100.00% of its net

asset value in HSBC Portfolios - World Selection 3, which is managed by HSBC Global AssetManagement (Singapore) Ltd.


31 December 2013 amounts to S$535. III Material Information N.A. IV Soft Dollar Commission Arrangement N.A. E) Financial Statements Refer to page 102.




92


B) Fund Disclosure I Allocation by Asset Class As at 31 Dec 2013 Asset Class % of NAV MV S$ mil HSBC Portfolios - World Selection 5 100.00 0.90 Total 100.00 0.90 II Fund Movement (01 Jul 2013 – 31 Dec 2013) S$ Subscription 165,480 Redemption 76,776 C) Underlying Sub-Fund Disclosure (HSBC Portfolios - World Selection 5) I Allocation by Country As at 31 Dec 2013 Country % of NAV MV S$ mil United States 27.47 124.03 European 24.81 112.02 Japan 7.17 32.37 Asia Pacific (excluding Japan Equity) 5.03 22.71 Others* 34.70 156.71 Cash 0.82 3.72 Total 100.00 451.56 *Includes other countries and net assets and liabilities. II Allocation by Industry As at 31 Dec 2013 Industry % of NAV MV S$ mil Unit Trust 99.18 447.84 Cash 0.82 3.72 Total 100.00 451.56 III Allocation of Debt Securities by Credit Ratings As at 31 Dec 2013 N.A. IV Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2013 % of NAV S$ mil HSBC International Select Funds MultiAlpha Europe Equity 19.41 87.64 HSBC International Select Funds MultiAlpha Global Emerging Mkts 18.82 85.00 HSBC American Index Fund 13.79 62.26 HSBC International Select Funds MultiAlpha North America Equity 13.68 61.76 HSBC International Select Funds MultiAlpha Japan 7.17 32.37 HSBC International Select Funds MultiAlpha Glbl Real Estate Eq 5.52 24.91 HSBC International Select Funds MultiAlpha Asia Pacific Ex Japan 5.03 22.71 Trilogy Emerging Markets Fund 3.90 17.61 Wellington Management Portfolios - Emerging Markets Equity 3.54 15.97 Rouvier Europe 2.70 12.21 Top Ten Holdings of Underlying Sub-Fund As at 31 Dec 2012 % of NAV S$ mil HSBC International Select Funds MultiAlpha Europe Equity 19.53 44.65 HSBC International Select Funds MultiAlpha Global Emerging Mkts 19.20 43.89 HSBC International Select Funds MultiAlpha North America Equity 14.65 33.48 HSBC Investment Funds (UK) HSBC American Index Fund 8.70 19.89 HSBC International Select Funds MultiAlpha Japan 7.27 16.61 HSBC International Select Funds MultiAlpha Asia Pacific Ex Japan 5.16 11.79 HSBC International Select Funds MultiAlpha Glbl Real Estate Eq 4.12 9.42 Trilogy Emerging Markets Fund 3.19 7.29 Wellington EM Equity Fund 3.18 7.26 JPMorgan US Equity Income Fund 2.86 6.53


93




As at 31-Dec-13 As at 31-Dec-12 As at 31-Dec-13 As at 31-Dec-12 Expense Ratio 2.49% 2.52% 2.24% 2.27% Turnover Ratio 10.50% 21.86% (22.15%) 49.34% II Related-Party Transactions The HSBC Insurance World Selection 5 Fund invests S$0.90 million, equivalent to 100.00% of its net

asset value in HSBC Portfolios - World Selection 5, which is managed by HSBC Global AssetManagement (Singapore) Ltd.


31 December 2013 amounts to S$1,708. III Material Information N.A. IV Soft Dollar Commission Arrangement N.A. E) Financial Statements Refer to page 102.



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

94

Financial Statements

HSBC Insurance Asia Balanced

Fund

HSBC Insurance Asia

Equity Fund

HSBC Insurance Asia-Focused

Income Fund*

S$ S$ S$ Capital and Income Account Period from 1 July 2013 to 31 December 2013 Value of Fund as at 1 July 2013 2,279,129 69,141,219 1,370,769 Amounts received by the Fund for creation of units 372,461 8,712,187 251,490Amounts paid by the Fund for liquidation of units (290,927) (4,991,338) (147,674)Net cash into/(out of) Fund 81,534 3,720,849 103,816 Unrealised appreciation/(diminution) in value of investments 161,872 4,793,346 38,302Gain/(Loss) on sale of investments 7,783 441,258 (3,812)Other income - - -Management fees (20,130) (594,917) (10,148)Other expenses (6,410) (13,061) -Increase/(Decrease) in net asset value for the period 224,649 8,347,475 128,158 Value of Fund as at 31 December 2013 2,503,778 77,488,694 1,498,927 Statement of Assets and Liabilities As at 31 December 2013 Assets Investments in funds 2,510,926 77,626,166 1,514,679Cash and bank balances - -Other debtors 12,002 551,252 2Total assets 2,522,928 78,177,418 1,514,681 Liabilities Other creditors (19,150) (688,724) (15,754) Value of Fund as at 31 December 2013 2,503,778 77,488,694 1,498,927

*HSBC Insurance Asia-Focused Income Fund was launched on 28 Jan 2013.

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


95

Financial Statements (Cont)

HSBC Insurance Asian Bond

Fund

HSBC Insurance Asian Dividend

Equity Fund

HSBC Insurance China Balanced

Fund S$ S$ S$ Capital and Income Account Period from 1 July 2013 to 31 December 2013 Value of Fund as at 1 July 2013 18,677,139 1,285,499 1,090,085 Amounts received by the Fund for creation of units 4,935,869 391,635 369,865Amounts paid by the Fund for liquidation of units (2,928,758) (106,211) (241,129)Net cash into/(out of) Fund 2,007,111 285,424 128,736 Unrealised appreciation/(diminution) in value of investments 682,213 70,327 185,246Gain/(Loss) on sale of investments 84,310 9,502 5,352Management fees (108,868) (11,781) (9,499)Other expenses (3,673) - -Increase/(Decrease) in net asset value for the period 2,661,093 353,472 309,835 Value of Fund as at 31 December 2013 21,338,232 1,638,971 1,399,920 Statement of Assets and Liabilities As at 31 December 2013 Assets Investments in funds 21,338,991 1,640,073 1,402,003Other debtors 78,811 3 -Total assets 21,417,802 1,640,076 1,402,003 Liabilities Other creditors (79,570) (1,105) (2,083) Value of Fund as at 31 December 2013 21,338,232 1,638,971 1,399,920



96


HSBC Insurance China Equity

Fund

HSBC Insurance Climate Change

Equity Fund

HSBC Insurance Emerging Europe

Equity Fund S$ S$ S$ Capital and Income Account Period from 1 July 2013 to 31 December 2013 Value of Fund as at 1 July 2013 68,765,784 1,282,404 5,489,737 Amounts received by the Fund for creation of units 6,916,435 530,825 1,369,622Amounts paid by the Fund for liquidation of units (7,356,082) (162,588) (546,029)Net cash into/(out of) Fund (439,647) 368,237 823,593 Unrealised appreciation/(diminution) in value of investments 12,181,939 268,929 727,526Gain/(Loss) on sale of investments 28,029 18,099 23,385Management fees (614,208) (12,771) (52,436)Other expenses - - (5,878)Increase/(Decrease) in net asset value for the period 11,156,113 642,494 1,516,190 Value of Fund as at 31 December 2013 79,921,897 1,924,898 7,005,927 Statement of Assets and Liabilities As at 31 December 2013 Assets Investments in funds 79,974,950 1,893,926 7,019,251Cash and bank balances - - 6,696Other debtors 255,004 33,266 59Total assets 80,229,954 1,927,192 7,026,006 Liabilities Other creditors (308,057) (2,294) (20,079) Value of Fund as at 31 December 2013 79,921,897 1,924,898 7,005,927



97


HSBC Insurance Emerging Markets

Equity Fund



S$ S$ S$ Capital and Income Account Period from 1 July 2013 to 31 December 2013 Value of Fund as at 1 July 2013 27,962,093 61,313,938 18,423,465 Amounts received by the Fund for creation of units 3,255,864 14,258,871 348,690Amounts paid by the Fund for liquidation of units (2,646,297) (5,096,520) (1,098,766)Net cash into/(out of) Fund 609,567 9,162,351 (750,076) Unrealised appreciation/(diminution) in value of investments 2,576,735 7,991,304 (2,018,720)Gain/(Loss) on sale of investments (55,965) (1,463,692) 3,832,744Dividend income - - 33,978Other income - - 80Management fees (241,187) (574,004) (179,345)Other expenses (5,324) - (10,822)Increase/(Decrease) in net asset value for the period 2,883,826 15,115,959 907,839 Value of Fund as at 31 December 2013 30,845,919 76,429,897 19,331,304 Statement of Assets and Liabilities As at 31 December 2013 Assets Investments in funds 30,879,751 76,524,617 19,325,838Cash and bank balances - - 152,992Other debtors 112,355 156,669 17,583Total assets 30,992,106 76,681,286 19,496,413 Liabilities Other creditors (146,187) (251,389) (165,109) Value of Fund as at 31 December 2013 30,845,919 76,429,897 19,331,304



98


HSBC Insurance Europe Equity

Fund

HSBC Insurance Global Bond

Fund

HSBC Insurance Global Emerging

Markets Bond Fund*

S$ S$ S$ Capital and Income Account Period from 1 July 2013 to 31 December 2013 Value of Fund as at 1 July 2013 4,992,933 11,334,293 456,279 Amounts received by the Fund for creation of units 874,647 1,389,327 114,770Amounts paid by the Fund for liquidation of units (626,100) (1,988,418) (126,854)Net cash into/(out of) Fund 248,547 (599,091) (12,084) Unrealised appreciation/(diminution) in value of investments 1,358,676 (11,235) 1,874Gain/(Loss) on sale of investments 7,893 59,357 (9,787)Dividend income - - 11,725Management fees (47,231) (49,292) (3,120)Other expenses (5,951) (4,862) -Increase/(Decrease) in net asset value for the period 1,561,934 (605,123) (11,393) Value of Fund as at 31 December 2013 6,554,867 10,729,170 444,886 Statement of Assets and Liabilities As at 31 December 2013 Assets Investments in funds 6,540,452 10,748,282 451,139Other debtors 35,690 103,516 1Total assets 6,576,142 10,851,798 451,140 Liabilities Other creditors (21,275) (122,628) (6,254) Value of Fund as at 31 December 2013 6,554,867 10,729,170 444,886 *HSBC Insurance Global Emerging Markets Bond Fund was launched on 28 Jan 2013.



99

Financial Statements (Cont) HSBC Insurance

Global Equity Fund

HSBC Insurance India Equity

Fund

HSBC Insurance Japan Equity

Fund S$ S$ S$ Capital and Income Account Period from 1 July 2013 to 31 December 2013 Value of Fund as at 1 July 2013 55,563,337 41,052,750 2,435,869 Amounts received by the Fund for creation of units 3,705,884 12,868,208 276,123Amounts paid by the Fund for liquidation of units (3,863,914) (6,148,722) (354,146)Net cash into/(out of) Fund (158,030) 6,719,486 (78,023) Unrealised appreciation/ (diminution) in value of investments 9,201,607 4,865,675 244,192Gain/(Loss) on sale of investments 358,177 (550,323) (41,293)Management fees (296,379) (357,645) (17,200)Other expenses (10,753) - (6,427)Increase/(Decrease) in net asset value for the period 9,094,622 10,677,193 101,249 Value of Fund as at 31 December 2013 64,657,959 51,729,943 2,537,118 Statement of Assets and Liabilities As at 31 December 2013 Assets Investments in funds 64,729,886 51,767,415 2,531,179Other debtors 107,236 151,487 12,574Total assets 64,837,122 51,918,902 2,543,753 Liabilities Other creditors (179,163) (188,959) (6,635) Value of Fund as at 31 December 2013 64,657,959 51,729,943 2,537,118



100


HSBC Insurance Pacific Equity

Fund

HSBC Insurance Premium Balanced

Fund

HSBC Insurance Premium

Property Equity Fund

S$ S$ S$ Capital and Income Account Period from 1 July 2013 to 31 December 2013 Value of Fund as at 1 July 2013 55,468,421 117,143,394 958,388 Amounts received by the Fund for creation of units 17,800,124 9,340,347 180,775Amounts paid by the Fund for liquidation of units (7,009,146) (8,720,895) (164,048)Net cash into/(out of) Fund 10,790,978 619,452 16,727 Unrealised appreciation/ (diminution) in value of investments 204,974 6,135,280 46,644Gain/(Loss) on sale of investments 273,309 936,945 3,414Other income - - 2Management fees (512,456) (792,990) (7,935)Other expenses (12,080) (21,761) (181)Increase/(Decrease) in net asset value for the period 10,744,725 6,876,926 58,671 Value of Fund as at 31 December 2013 66,213,146 124,020,320 1,017,059 Statement of Assets and Liabilities As at 31 December 2013 Assets Investments in funds 66,232,842 124,168,845 1,020,128Cash and bank balances 37,509 - 2,574Other debtors 375,259 195,354 -Total assets 66,645,610 124,364,199 1,022,702 Liabilities Other creditors (432,464) (343,879) (5,643) Value of Fund as at 31 December 2013 66,213,146 124,020,320 1,017,059



101


HSBC Insurance SGD Reserve

Fund

HSBC Insurance Singapore

Balanced Fund

HSBC Insurance Singapore Bond Fund

S$ S$ S$ Capital and Income Account Period from 1 July 2013 to 31 December 2013 Value of Fund as at 1 July 2013 6,169,012 8,384,351 61,525,543 Amounts received by the Fund for creation of units 1,364,400 2,590,778 8,257,870Amounts paid by the Fund for liquidation of units (992,602) (650,987) (14,539,397)Net cash (out of)/into Fund 371,798 1,939,791 (6,281,527) Unrealised appreciation/ (diminution) in value of investments 11,379 156,337 316,735Gain/(Loss) on sale of investments 2,591 30,028 536,636Other Income - - -Management fees (8,893) (73,007) (168,029)Other expenses (5,767) (5,465) (10,570)Increase/(Decrease) in net asset value for the period 371,108 2,047,684 (5,606,755) Value of Fund as at 31 December 2013 6,540,120 10,432,035 55,918,788 Statement of Assets and Liabilities As at 31 December 2013 Assets Investments in funds 6,548,455 10,439,533 56,152,386Other debtors 82,774 11,150 208,699Total assets 6,631,229 10,450,683 56,361,085 Liabilities Other creditors (91,109) (18,648) (442,297) Value of Fund as at 31 December 2013 6,540,120 10,432,035 55,918,788



102


HSBC Insurance World Selection 1

Fund


Fund


Fund S$ S$ S$ Capital and Income Account Period from 1 July 2013 to 31 December 2013 Value of Fund as at 1 July 2013 53,035 250,105 725,305 Amounts received by the Fund for creation of units 29,165 49,892 165,480 Amounts paid by the Fund for liquidation of units (2,549) (22,430) (76,776) Net cash into/(out of) Fund 26,616 27,462 88,704 Unrealised appreciation/(diminution) in value of investments 1,695 18,465 88,307 Gain/(Loss) on sale of investments 131 1,547 7,437 Management fees (490) (2,154) (6,788) Other expenses - - - Increase/(Decrease) in net asset value for the period 27,952 45,320 177,660 Value of Fund as at 31 December 2013 80,987 295,425 902,965

As at 31 December 2013 Assets Investments in funds 81,027 293,939 903,423 Other debtors - 1,686 - Total assets 81,027 295,625 903,423 Liabilities Other creditors (40) (200) (458) Value of Fund as at 31 December 2013 80,987 295,425 902,965


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

103

Notes to the financial statements These notes form an integral part of the financial statements. 1. HSBC Insurance (Singapore) Pte. Limited Investment-Linked Funds

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

Investment-Linked Funds) comprise:

Funds Units in issue as at 31 December 2013 HSBC Insurance Asia Balanced Fund 3,203,432 HSBC Insurance Asia Equity Fund 35,417,790 HSBC Insurance Asia Focused Income Fund* 1,644,961 HSBC Insurance Asian Bond Fund 12,689,550 HSBC Insurance Asian Dividend Equity Fund 1,537,125 HSBC Insurance China Balanced Fund 1,364,055 HSBC Insurance China Equity Fund 47,063,044 HSBC Insurance Climate Change Equity Fund 1,155,139 HSBC Insurance Emerging Europe Equity Fund 4,016,708 HSBC Insurance Emerging Markets Equity Fund 30,437,346 HSBC Insurance Ethical Global Equity Fund 65,367,306 HSBC Insurance Ethical Global Sukuk Fund 20,313,237 HSBC Insurance Europe Equity Fund 5,879,533 HSBC Insurance Global Bond Fund 10,500,688 HSBC Insurance Global Emerging Markets Bond Fund* 505,322 HSBC Insurance Global Equity Fund 54,904,872 HSBC Insurance India Equity Fund 30,721,252 HSBC Insurance Japan Equity Fund 3,189,411 HSBC Insurance Pacific Equity Fund 59,417,968 HSBC Insurance Premium Balanced Fund 88,215,072 HSBC Insurance Premium Property Equity Fund 1,364,484 HSBC Insurance SGD Reserve Fund 6,206,733 HSBC Insurance Singapore Balanced Fund 9,105,967 HSBC Insurance Singapore Bond Fund 43,232,907 HSBC Insurance World Selection 1 Fund 81,659 HSBC Insurance World Selection 3 Fund 283,209 HSBC Insurance World Selection 5 Fund 835,575

* The HSBC Insurance Asia Focused Income Fund and HSBC Insurance Global Emerging Markets Bond Fund were launched on 28 January 2013. 1.2 The HSBC-Link Ethical Asia Equity Fund have been terminated from 18 November 2013, and has

been excluded from the financial statements of HSBC Insurance (Singapore) Pte. Limited Investment-Linked Funds.

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

104

2. Summary of significant accounting policies 2.1 Basis of preparation

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

2.2 Investments All purchases of investments, which include unit trusts, quoted equities and bonds are recognised on

their trade dates, i.e. the date the commitment exists to purchase the investments. The investments are initially recorded at cost, being fair value of the consideration given. The attributable transaction costs are recognised in the Capital and Income Account when incurred. After initial recognition, the investments are recorded at fair value and the unrealised gains or losses on re-measurement to fair value are taken to the Capital and Income Account. The fair value is determined by using open market valuation at the year-end date. The bid price has been adopted for all investments except for quoted equity investments. For quoted equity investments traded on exchanges, the fair value is based on the last known transacted price at 31 December 2013.

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

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

2.4 Amounts received by the funds for creation of units

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

2.5 Amounts paid by the funds for liquidation of units

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

2.6 Gains/losses from sale of investments

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

2.7 Income and expenses recognition

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

2.8 Foreign currencies

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

About HSBC Insurance

HSBC Insurance (Singapore) Pte. Limited is a wholly owned subsidiary of HSBC Insurance (Asia Pacific) Holdings Ltd, which is owned by the London-based HSBC Holding plc, of the HSBC Group. HSBC has around 9,500 offices in 85 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa. HSBC’s global insurance activities include 12,000 dedicated staff, providing insurance products and services to individuals and corporate customers. This includes all aspects of insurance life, property and casualty, marine, medical and retirement benefits. Insurance products are underwritten by HSBC Insurance (Singapore) Pte. Limited.

105

106

Important Notes

This report is jointly provided by HSBC Insurance (Singapore) Pte. Limited and the fund managers for general information only. The specific investment objectives, personal situation and particular needs of any person have not been taken into consideration. This document is not and should not be construed as an offer to sell or solicitation of an offer to purchase or subscribe to any investment or services and HSBC Insurance (Singapore) Pte. Limited is not recommending or soliciting any action based on it. You should read the relevant product and fund documentation, including the relevant product summary, product highlights sheets and fund summaries for details before deciding to invest. Copies of the product and fund documentation can be obtained from our authorized product distributors. Investment involves risk and past performances of the ILP sub-funds and any other economic or market predictions, projections or forecasts, are not necessarily indicative of future or likely performances of the ILP sub-funds, underlying funds, underlying entities and/or the respective fund managers. The value of the units in the ILP sub-funds and the income accruing to the units, if any, may fall or rise, and the investor may not get back the original sum invested. Any insurance product information mentioned is intended to provide you with a general summary and the product features are subject to change, without notice given. Information herein is also not a contract of insurance. You should not rely on this document as investment advice. If you have any concerns about any investment products or are uncertain about the suitability of any investment decision, you should seek such financial, legal or tax advice from your professional advisers as appropriate. Information contained in this document is obtained from sources believed to be reliable, however HSBC Insurance (Singapore) Pte. Ltd. does not guarantee its completeness or accuracy. Opinions and estimates expressed are subject to change without notice and HSBC Insurance (Singapore) Pte. Limited expressly disclaims any and all liability for representations and warranties, express or implied, contained herein, or for omissions. HSBC Insurance (Singapore) Pte. Limited’s authorized product distributors, including The Hongkong and Shanghai Banking Corporation Limited (together “the authorized product distributors”) are neither underwriters nor brokers for the customer. To the fullest extent permissible under applicable law, the authorized product distributors make no warranties or representation as to the accuracy, correctness, reliability or otherwise of the content of this document (webpage). Under no circumstances, including, but not limited to negligence, shall the authorized product distributors or any party involved in creating, producing or delivering this document be liable to you for any direct, indirect, incidental, consequential, loss or punitive damages that result from the use of, or reliance upon, the information in this document (webpage), even if the authorized product distributors have been advised of the possibility of such damages. The insurance products are underwritten by HSBC Insurance (Singapore) Pte. Limited. They are not obligations of deposits in or guaranteed by The Hongkong and Shanghai Banking Corporation. Issued by HSBC Insurance (Singapore) Pte. Limited HSBC Insurance (Singapore) Pte. Limited 21 Collyer Quay #02-01 HSBC Building Singapore 049320 Tel: (65) 6225 6111 Fax: (65) 6221 2188 Company Registration Number 195400150N Web site: www.insurance.hsbc.com.sg Printed by Medialink Printing Services Pte Ltd

Issued by HSBC Insurance (Singapore) Pte. Limited.Printed on environmentally friendly paper.

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