HSBC Universal Investment Funds Interim Report and Accounts

28 February 2021 2

Company Information

Company Directors The Authorised Corporate Director (the "ACD") is HSBC Global Asset HSBC Universal Investment Funds Management (UK) Limited, which is the sole director. Registered in England with Company Number IC000467 HSBC Global Asset Management (UK) Limited is authorised and regulated by the Financial Conduct Authority (FCA) and is a member of The Investment Registered Office Association (IA).

8 Canada Square E14 5HQ HSBC Global Asset Management (UK) Limited - Directors R.E.W. Apenbrink P.G.P. Dew M.G. McDonald T.J. Palmer J.R. Paterson S. White 3

Contents

Market Review 4

HSBC Universal Investment Funds

Japan Multi-Factor Equity Fund 7

UK Multi-Factor Equity Fund 18

US Multi-Factor Equity Fund 30

General Information 44

Important Notes 47

Important Changes to the Company and/or Fund Documentation 48

Other Information 49

Corporate Shareholders 49

Risk and Reward Profile 50

Directory 51

Quick Reference Guide 52 4

Market Review

Welcome to the Interim Report for the HSBC Universal Investment Funds Open-Ended Investment Company (OEIC). The report covers the period 1 September 2020 to 28 February 2021. Please do take the time to look through the report and if you have any questions, contact our Customer Services on 0800 358 3011*. To help us continually improve our service, and in the interests of security, we may monitor and/or record your communications with us. *Lines are open 9am to 5pm Monday to Friday (excluding public holidays). If you also have shares in another HSBC OEIC, you will receive a separate statement and report when it is due.

Economic and Market Overview The six-month period to the end of February 2021 was positive for global equity investors, as markets continued to rise in aggregate. The successful development and rollout of several Covid-19 vaccines was the key factor driving markets higher. These vaccines were quickly approved and gradually administered in many countries, bringing renewed hope that the disruption caused by the coronavirus could be soon overcome, and that pre-pandemic business and social normality could be restored. Joe Biden’s election as US president, although (initially) legally challenged by Donald Trump, and the last-minute agreement between the UK and the EU on a post-Brexit trade deal were further factors that lifted investors’ moods. The period had begun with concerns over a renewed rise in Covid-19 cases, primarily in the US and then, increasingly, in Europe. Restrictions that had been eased through the summer months were re-imposed and gradually tightened. Many countries went into a full lockdown late in 2020 and early 2021, including the UK. Global central banks continued to provide ample liquidity and ultra-loose conditions. Meanwhile, national governments remained active in providing large fiscal spending to support their economies. The US government introduced a $900 billion package of measures late in the year and, following Joe Biden’s victory in the US presidential election, subsequently proposed an even larger coronavirus relief bill amounting to $1.9 trillion. Economic data generally showed steady improvement. US GDP grew by 33.4% in the third quarter of 2020, after a record fall of 31.4% in the previous quarter. The UK’s GDP climbed by 16.1% in the third quarter, following a 19.0% drop in the second quarter, and then by 1.0% in the fourth quarter. The UK was also impacted by the uncertainties surrounding the state of its future relationship with the EU. However, against the odds, the UK and EU agreed a trade deal just a few days before the end of the transition period, at the turn of the year. Mainland China’s economy was one of the very few to recover to pre-pandemic levels by the end of the year. Growth was at 2.3% over 2020, the weakest rate since 1976, as the economy recovered after the decline in the first half of the year. Unemployment levels dropped in some countries. US unemployment, having peaked at 14.8% in April, fell back to 6.3% in January. In the eurozone, it fell to 8.1% in January from a peak of 8.7% in August. In the UK, unemployment rose but only very gradually, owing to the UK chancellor’s furlough scheme, which, at least temporarily, staved off steeply rising job losses. Unemployment was up to 5.1% in the three months to December, the highest level in over four years. Equities fell in the final days of the period as worries about rising long-term inflation, resulting from recovering economic growth and the impact of record levels of fiscal stimulus, drove bond yields to levels not seen, in some cases, for 12 months or more. The 10-year US Treasury yield climbed to 1.6%, having begun the year at 0.9%. Bond markets weakened over the period. 5

UK Equities Having been a notable laggard through most of 2020, the UK market recovered over the period, outperforming other world markets in aggregate. UK equities rallied strongly in the final two months of the year, recovering some of the ground lost to global equity markets over 2020. This rally continued into the first two weeks of 2021, despite the renewed rise in coronavirus cases and deaths, and the re-imposition of a nationwide lockdown in early January. Towards the end of 2020, the announcement of three new vaccines in quick succession – including the Oxford/AstraZeneca vaccine, which was manufactured in the UK – boosted investor sentiment. The UK became the first country to administer a Covid-19 vaccine in December. Further good news came with the announcement just before Christmas of a UK/EU trade deal, which removed a large amount of the uncertainty that had hindered the UK market. In economic terms, the UK enjoyed a decent rebound of 16.1% in the third quarter of 2020, followed by a flattening in the fourth quarter, with just 1.0% growth achieved. For 2020 as a whole, GDP fell 9.9%, the worst figure ever recorded. The economic impact of Covid-19 on the UK appeared to be worse than that of any other major industrialised nation. Regarding unemployment, expectations of a large rise grew, as the scope of the chancellor’s furlough scheme was reduced in the autumn. By December, unemployment had risen to 5.1%. UK inflation remained subdued, although it recovered from a recent a low of 0.2% in August to 0.7% in January. The Bank of England (BoE) maintained its easy monetary stance. In November, the BoE announced that it was raising the monthly budget for its bond-purchasing programme by £150 billion, to £895 billion. The central bank also continued to gather feedback from commercial banks and other financial institutions about the impact of a potential move to negative interest rates. However, by the end of the period, this move appeared less likely as long-term inflation expectations rose, along with UK government bond yields.

US Equities US equities rose over the period, with the S&P 500 and Dow Jones Industrial Average breaking into blue sky territory in late 2020, and again in early 2021. Growing optimism regarding the economic outlook, as the vaccine programme expanded and more people received their jabs, drove the market higher. US equities rallied strongly in November and December on the back of the announcement of Covid-19 vaccines and Joe Biden’s victory over Donald Trump in the US presidential election. The announcement of a further $900 billion of fiscal stimulus at the end of the year was an additional positive factor. By the end of the period, Congress was close to approving a further $1.9 trillion in aid, in the form of a relief bill, to further support the US economy. This rally followed a weak period in the first two months of the year that reflected increasing worries about a rise in new cases of Covid-19 across the US, fuelling concern that another lockdown could be required. In economic news, GDP recovered to grow by 33.4% in the second quarter, a record quarterly growth rate, following the record drop of 31.4% in the second quarter. The economy then grew by 4.1% in the final quarter of the year, leaving it down 3.5% over the whole of 2020, the worst performance since 1946. The unemployment rate fell steadily from the recent peak of 14.8% in April to 6.3% in January, while consumer price inflation remained relatively subdued in range of 1.2 – 1.4%. US Federal Reserve (Fed) governor Jerome Powell frequently reassured markets that the Fed would permit consumer inflation to rise above its target rate of 2% before it contemplated any increase in interest rates. However, inflation fears abounded late in the period owing to expectations of a substantial economic recovery later in 2021 and in 2022. The 10-year US Treasury yield rose to 1.6% in late February, the highest level since early 2020 and up from 0.9% at the beginning of 2021. 6

Japanese Equities Japanese equities performed strongly over the period, outperforming global markets. The Japanese market was underpinned by the positive news on Covid-19 vaccines and the growing expectations of economic recovery and a return to normality. The market rallied strongly in the final months of the year on the vaccine news, confirmation of Joe Biden’s US presidential election victory, and the further fiscal stimulus introduced in the US. The benchmark Nikkei Index rose to a 30-year high in February. However, Japan had to contend with an unexpected and sudden rise in coronavirus cases in Tokyo and neighbouring districts, which led to a month-long lockdown. Despite a tightening of restrictions in the Tokyo region in early 2021, the market continued to climb. While there were signs of recovery in economic statistics, some indicators remained bleak. GDP recovered in the third quarter, rising 5.3% over the quarter, bringing to a close three consecutive quarters of decline. It then grew by 2.8% in the final quarter of the year. The much-followed Bank of Japan (BoJ) Tankan survey – a quarterly indicator of economic sentiment across the economy – recovered during the period. Having fallen to an 11-year low of -34 in the second quarter, the headline large manufacturing diffusion index rose to -10 in the fourth quarter. The BoJ maintained its loose monetary policy, targeting -0.1% short-term interest rates, while stating that the long-term inflation target of 2.0% was unlikely to be met in the near future. Annual inflation began to drop into deflation in October, falling to -1.2% in December, before recovering a little to -0.6% in January. Yoshihide Suga was elected prime minister in mid-September after his predecessor, Shinzo Abe, had announced his resignation due to ill-health in late August, in the very week that he became Japan’s longest-serving prime minister. Suga settled investors’ nerves when he confirmed that he would continue Abe’s policy of fighting deflation and trying to stimulate growth, widely known as ‘Abenomics’. The market finished on a weak note, however, as global bond yields rose and long-term inflation expectations continued to climb.

Outlook The successful development of three Covid-related vaccines means that the outlook for the global economy, certainly in the latter half of 2021, is much improved. Vaccination will take time and there are challenging logistical challenges, not least in third-world countries. While investor sentiment has rightly been boosted by the rollout of vaccines and the expectations of a gradual return to normality, markets are already trading at relatively extended levels, on nearly all criteria. While we do expect markets to make headway as economic statistics and earnings growth improve, we recognise that a lot of good news is already reflected in prevailing valuations. A key signpost this year will be long-term inflation expectations, which are rising. Recent volatility in both equity and bond markets is a reminder that higher inflation could be a significant headwind to markets in the medium to long term. The extreme fiscal and monetary expansion seen last year, on top of pretty generous levels in the preceding several years, dating back to the global financial crisis, cannot go on forever. There will need to be some consolidation and gradual withdrawal of this support.

Please note that the above information refers to the past and that past performance is not a reliable indication of future returns. Information provided by HSBC Global Asset Management (UK) Limited 28 February 2021. JAPAN MULTI-FACTOR EQUITY FUND 7

Japan Multi-Factor Equity Fund

Investment Objective The Fund aims to provide growth in the long term, which is a period of five years or more.

Investment Policy and Strategy* To achieve its objective the Fund will invest at least 80% of its value in shares (equities) of Japan companies. Japan companies are those that are based in Japan, or earn at least 80% of their revenue from Japan. The Fund may invest up to 20% of its value in other assets, such as shares of non-Japan companies, assets equivalent to shares of companies and cash. The Fund may also invest up to 10% of its value in other funds, which may be managed by the HSBC Group. The Fund may invest in different types of derivatives for efficient portfolio management purposes, including hedging. The Fund does not currently use derivatives to reduce the risk of movements in the rate of exchange between sterling and other currencies in which the Fund’s assets may be held. The Fund does not intend to use derivatives extensively and their use will be consistent with the risk profile of the Fund. The investment manager identifies potential shares of companies from the FTSE Japan Index and ranks them from the least attractive to most attractive based upon certain factors, such as value, quality and size. The manager’s investment approach then aims to maximise exposure to the highest ranked shares whilst maintaining a portfolio diversified by companies and sectors to manage risk. The Fund is managed with reference to the FTSE Japan Index. The sector and stock constraints, relative to the FTSE Japan Index, within the investment strategy mean the Fund returns are more likely to be closer to the returns of the FTSE Japan Index than if there were no limits on the level of risk the Fund may take. The FTSE Japan Index is also considered as part of our investment risk monitoring process, to check that the overall level of risk taken by the fund manager is not inconsistent with the Japan equities market. The performance of the Fund is therefore shown against the performance of the FTSE Japan Index. *For details of the full Investment Policy and Strategy please refer to the HSBC Universal Investment Funds prospectus. We have also published a Glossary of key terms used which you may wish to refer to. Both documents can be found at https://www.assetmanagement.hsbc.co.uk/en/individual-investor/fund-centre.

Portfolio Activity Over the review period, the Fund underperformed its market cap weighted index. Our overall exposure to alpha styles (including industries) weighed on relative performance. From a factor perspective, our exposure to Industry Momentum factor contributed to performance, while our allocations to Size and Low Risk were the main detractors of performance. At sector level, an overweight allocation to Information Technology coupled with our underweight exposures to Consumer Staples, Healthcare and Utilities contributed to performance. Conversely, our underweight allocations to Financials, Industrials and Consumer Discretionary weighed on performance. At stock level, our overweight allocations to GS Yuasa, Showa Denko KK and USS contributed to performance. Conversely, our underweight exposures to Mizuho Financial Group, Fast Retailing and Nidec weighed on performance. The Fund is managed using a systematic, model driven process, giving the portfolio exposure to factors like Value, Quality, Momentum, Size and Low Risk. It aims to provide investors with consistent performance against traditional market capitalisation weighted index. Purchases during the period included: Honda Motor, NEC System, Nexon, Isuzu Motors and Square Enix. Sales included: NTT DoCoMo, Seven & I Holdings, Softbank, KDDI and Chugai Pharmaceuticals. 8 JAPAN MULTI-FACTOR EQUITY FUND

Investment Performance During the period under review, the value of the shares in the Fund increased by 9.07% whilst the value of the FTSE Japan Index rose by 11.90%. (Source: Morningstar Direct, GBP, UK net of tax, for the Institutional A Accumulation share class. Returns based on the NAV, which is a single price.) Please note that the above information refers to the past and that past performance is not a reliable indication of future returns.

Fund Particulars as at 1 March 2021 (unaudited)

Institutional Institutional Institutional A Accumulation Income Accumulation

Price 187.4p 156.5p 187.1p

Current net estimated yield 0.03% 1.99% 1.73%

Annual ACD charge 0.00% 0.00% 0.25% JAPAN MULTI-FACTOR EQUITY FUND 9

Portfolio Statement as at 28 February 2021 (unaudited)

Security Holding Bid Total value net £’000 assets % JAPAN - 99.31% (97.72%) Oil & Gas - 0.00% (0.13%)

Basic Materials - 6.99% (4.42%) Air Water 2,200 26 0.17 Daicel Corporation 4,115 22 0.14 Lintec 5,571 87 0.57 Maruichi Steel Tube 1,593 26 0.17 Mitsubishi Chemical Holdings 3,455 17 0.11 Mitsubishi Gas Chemical 1,887 31 0.20 Nippon Kayaku 11,627 80 0.53 Nippon Shokubai 425 16 0.11 Shin-Etsu Chemical 2,230 260 1.71 Showa Denko KK 5,600 97 0.64 Teijin 3,240 40 0.26 Tokai Carbon 9,500 92 0.60 Tokuyama 5,249 94 0.62 Tosoh 3,730 49 0.32 Ube Industries 6,890 99 0.65 Yamato Kogyo 1,604 29 0.19 Total Basic Materials 1,065 6.99

Industrials - 30.60% (25.09%) Aica Kogyo 3,450 85 0.56 Alps Electric 3,201 30 0.20 Amano 5,200 83 0.54 Asahi Glass 3,750 98 0.64 Askul 3,100 73 0.48 Azbil 1,700 52 0.34 Benefit One 3,477 63 0.41 Daifuku 820 56 0.37 Daikin Industries 1,360 189 1.24 Disco Corporation 289 65 0.43 DMG Mori Company 2,638 28 0.18 Fanuc 469 83 0.54 Fuji Electric 600 18 0.12 Fuji Seal 1,700 25 0.16 Furukawa Electric 4,700 88 0.58 Glory 5,700 89 0.58 Hamamatsu Photonics 1,261 53 0.35 Haseko 10,455 92 0.60 Hirogin Holdings 5,500 23 0.15 Hirose Electric 392 41 0.27 Hitachi 2,771 91 0.60 Horiba 2,106 90 0.59 Hoya 2,099 170 1.12 10 JAPAN MULTI-FACTOR EQUITY FUND

Portfolio Statement as at 28 February 2021 (unaudited)

Security Holding Bid Total value net £’000 assets % Isuzu Motors 12,800 96 0.63 Itochu Corporation 4,274 91 0.60 Japan Aviation Electronic 6,832 77 0.50 Kamigumi 1,340 18 0.12 Kandenko 12,603 74 0.49 Keyence 824 280 1.84 Komatsu 4,462 95 0.62 Kubota 4,428 71 0.47 Kyocera 1,461 67 0.44 Kyudenko 966 23 0.15 Mabuchi Motor 2,724 86 0.56 Minebea 1,030 18 0.12 Mitsubishi Corporation 1,144 23 0.15 Mitsubishi Electric 7,632 80 0.52 Mitsubishi Heavy Industries 5,381 111 0.73 Mitsui & Company 1,526 23 0.15 Murata Manufacturing 2,989 182 1.20 Nabtesco 1,382 42 0.28 NGK Insulators 2,797 35 0.23 Nidec 1,280 116 0.76 Nippon Electric Glass 4,181 68 0.45 Obayashi 5,196 32 0.21 Okuma Corporation 768 30 0.20 Omron 1,359 78 0.51 OSG 2,005 26 0.17 Recruit Holdings 4,678 166 1.09 Rengo 15,200 88 0.58 Sanwa Holdings 10,600 93 0.61 Seino Holdings 3,087 31 0.20 SG Holdings 4,600 76 0.50 SMC 283 119 0.78 SMS 3,300 77 0.51 Sojitz Holdings 17,400 33 0.22 Sumitomo Heavy Industries 4,898 96 0.63 Sumitomo Osaka Cement 1,037 24 0.16 Taiheiyo Cement 1,822 32 0.21 Taiyo Yuden 1,628 57 0.37 TDK 772 79 0.52 Technopro 1,300 68 0.45 Ulvac 2,978 95 0.62 Total Industrials 4,661 30.60 JAPAN MULTI-FACTOR EQUITY FUND 11

Portfolio Statement as at 28 February 2021 (unaudited)

Security Holding Bid Total value net £’000 assets % Consumer Goods - 21.85% (21.42%) ABC-Mart 1,970 80 0.53 Aisin Seiki 2,700 66 0.43 Bridgestone 2,769 77 0.51 Daiichikosho 1,028 29 0.19 Daiwa House Industry 5,990 121 0.79 Denso 200 9 0.06 Ezaki Glico 850 25 0.16 GS Yuasa 3,000 63 0.41 Honda Motor 12,741 249 1.63 IIDA Group Holdings 1,300 21 0.14 Itoham Yonekyu Holdings 5,100 24 0.16 Kao 765 37 0.24 Konami 1,166 53 0.35 Lion 676 9 0.06 Makita Corporation 1,519 46 0.30 Megmilk Snow Brand 5,469 78 0.51 Meiji Holdings 982 44 0.30 Mitsubishi Shokuhin 2,480 48 0.32 Morinaga 861 22 0.14 Morinaga Milk Industry 900 29 0.19 Nintendo 448 195 1.28 Paltac Corporation 588 23 0.15 Panasonic Corporation 13,508 124 0.81 Sekisui Chemical 1,656 21 0.15 Sekisui House 8,355 112 0.74 Shiseido 352 19 0.12 Sony 6,574 491 3.22 Sumitomo Electric Industries 9,235 96 0.63 Sumitomo Forestry 2,866 37 0.24 Sumitomo Rubber Industries 13,100 104 0.68 Tokai Rika 6,780 79 0.52 Toyota Boshoku 6,600 73 0.48 Toyo Suisan Kaisha 985 30 0.20 Toyota Industries 1,395 85 0.56 Toyota Motor 10,376 548 3.60 TS Tech 1,253 25 0.16 Yamaha Motor 3,000 47 0.31 Yokohama Rubber 7,100 88 0.58 Total Consumer Goods 3,327 21.85 12 JAPAN MULTI-FACTOR EQUITY FUND

Portfolio Statement as at 28 February 2021 (unaudited)

Security Holding Bid Total value net £’000 assets % Healthcare - 6.43% (10.24%) Alfresa Holdings 5,200 72 0.47 Asahi Intecc 1,940 40 0.26 Astellas Pharma 3,714 42 0.28 Chugai Pharmaceuticals 1,066 34 0.22 Daiichi Sankyo 5,500 111 0.73 Kaken Pharmaceutical 2,387 68 0.45 Kyowa Kirin 1,268 25 0.16 Medipal Holdings Corporation 3,787 54 0.36 Nihon Kohden 4,404 85 0.56 Nipro 4,300 38 0.25 Olympus Optical 600 9 0.06 Ono Pharmaceutical 1,010 19 0.12 Sawai Pharmaceutical 2,872 92 0.60 Sysmex 1,267 94 0.62 Takara Bio 1,454 28 0.18 Takeda Pharmaceutical Company 4,268 103 0.68 Terumo 2,481 66 0.43 Total Healthcare 980 6.43

Consumer Services - 7.52% (10.98%) AIN Holdings 1,026 47 0.31 Bic Camera 2,033 16 0.11 Central Japan Railway 869 101 0.66 Cosmos Pharmaceutical 450 46 0.30 East Japan Railway 200 10 0.07 Fast Retailing 118 83 0.55 K's Holdings 6,900 66 0.43 Lawson 1,000 33 0.22 Nitori 543 72 0.47 Oriental Land 156 19 0.13 Seven & I Holdings 638 17 0.11 Shochiku 826 88 0.58 So-Net M3 2,754 156 1.02 Sugi Holdings 619 31 0.20 Sundrug 1,060 28 0.18 Sushiro Global Holdings 500 13 0.09 Takashimaya 3,800 28 0.18 Toho 3,275 88 0.58 TV Asahi 6,300 86 0.56 Welcia 500 11 0.07 Yamada Denki 4,300 15 0.10 Yaoko 1,819 80 0.53 ZOZO 500 11 0.07 Total Consumer Services 1,145 7.52 JAPAN MULTI-FACTOR EQUITY FUND 13

Portfolio Statement as at 28 February 2021 (unaudited)

Security Holding Bid Total value net £’000 assets % Telecommunications - 4.25% (6.31%) KDDI 4,403 97 0.64 Nippon Telegraph & Telephone 7,016 130 0.85 Softbank 5,688 378 2.48 Softbank Corporation 4,477 43 0.28 Total Telecommunications 648 4.25

Utilities - 0.00% (0.53%)

Financials - 10.97% (11.21%) Aeon Mall 6,700 81 0.53 Daito Trust Construction 1,360 108 0.71 Hokuhoku Financial 4,500 29 0.19 Hulic 9,297 74 0.49 Japan Exchange Group 5,103 79 0.52 Mitsubishi Estate 5,029 62 0.41 Mitsubishi UFJ Financial Group 36,492 137 0.90 Mizuho Financial Group 3,500 37 0.24 MS & AD Insurance Group 3,438 69 0.45 Nihon M&A Center 1,052 41 0.27 Nomura Real Estate Holdings 2,022 32 0.22 Open House 3,200 87 0.58 Orix 13,034 158 1.04 Seven Bank 42,900 69 0.45 Seventy Seven Bank 7,300 69 0.45 Sompo Japan Nipponkoa Holdings 788 22 0.14 Sumitomo Mitsui Financial Group 7,070 177 1.16 Sumitomo Realty & Development 1,005 25 0.16 T&D 11,100 107 0.70 Tokio Marine Holdings 3,381 119 0.78 Zenkoku Hosho 2,720 89 0.58 Total Financials 1,671 10.97

Technology - 10.70% (7.39%) Advantest 1,507 88 0.58 Anritsu 5,600 85 0.56 Canon Marketing Japan 5,500 86 0.56 Capcom 2,237 97 0.64 Fujitsu 426 44 0.29 IT Holdings 4,030 60 0.39 ITOCHU Techno-Solutions 2,028 44 0.29 Lasertec 1,020 89 0.58 NEC 593 23 0.15 NEC System 6,900 82 0.54 Nexon 5,800 131 0.86 Nihon Unisys 2,018 42 0.28 14 JAPAN MULTI-FACTOR EQUITY FUND

Portfolio Statement as at 28 February 2021 (unaudited)

Security Holding Bid Total value net £’000 assets % OBIC 638 77 0.51 OBIC Business Consultants 607 24 0.16 Oracle Japan 355 26 0.17 Rohm 694 49 0.32 SCSK 1,434 60 0.39 Shinnittetsu Sumikin Solutions Corporations 2,300 48 0.32 Square Enix 1,968 80 0.53 Sumco Corporation 6,386 104 0.68 Tecmo Koei Holdings 300 12 0.08 Tokyo Electron 762 223 1.46 Yahoo Japan 12,600 55 0.36 Total Technology 1,629 10.70

Futures - 0.05% (0.00%) OSE Minitpx Index Future March 2021 9 7 0.05 Total Futures 9 7 0.05 Total Japan 15,133 99.36

Portfolio of investments 15,133 99.36

Net other assets 97 0.64

Net assets 15,230 100.00 Figures in brackets denote the comparative percentage holdings as at 31 August 2020. Unless otherwise stated, all investments are listed securities. The counterparty for the Future is HSBC. Total purchases for the period, including transaction charges, were £5,525,932. Total sales for the period, net of transaction charges, were £5,757,623. JAPAN MULTI-FACTOR EQUITY FUND 15

Comparative Tables for the six months ended 28 February 2021 (unaudited)

Institutional Accumulation# 28.2.21 31.8.20 31.8.19 31.8.18 Change in net assets per share Opening net asset value per share 167.40p 162.90p N/A N/A Return before operating charges* 16.16p 4.50p N/A N/A Operating charges** (0.16p) 0.00p N/A N/A Return after operating charges* 16.00p 4.50p N/A N/A Distributions on accumulation shares 0.00p (0.05p) N/A N/A Retained distributions on accumulation shares 0.00p 0.05p N/A N/A Closing net asset value per share 183.40p 167.40p N/A N/A *after direct transaction costs of:*** 0.05p 0.04p N/A N/A

Performance Return after charges 9.56% 2.76% N/A N/A

Other information Closing net asset value £45,044 £41,101 N/A N/A Closing number of shares 24,555 24,555 N/A N/A Operating charges - OCF 0.18% 0.07% N/A N/A Direct transaction costs 0.03% 0.02% N/A N/A

Prices Highest share price 197.10p 199.10p N/A N/A Lowest share price 166.80p 164.50p N/A N/A

Institutional Income 28.2.21 31.8.20 31.8.19 31.8.18 Change in net assets per share Opening net asset value per share 139.80p 145.70p 149.00p 141.60p Return before operating charges* 13.53p (2.51p) 0.15p 10.36p Operating charges** (0.13p) (0.28p) (0.33p) (0.18p) Return after operating charges* 13.40p (2.79p) (0.18p) 10.18p Distributions on income shares 0.00p (3.11p) (3.12p) (2.78p) Closing net asset value per share 153.20p 139.80p 145.70p 149.00p *after direct transaction costs of:*** 0.04p 0.04p 0.07p 0.05p

Performance Return after charges 9.59% (1.91%) (0.12%) 7.19%

Other information Closing net asset value £4,198,626 £4,059,981 £4,067,160 £6,862,740 Closing number of shares 2,740,711 2,904,948 2,791,194 4,604,655 Operating charges - OCF 0.18% 0.19% 0.23% 0.12% Direct transaction costs 0.03% 0.02% 0.05% 0.03%

Prices Highest share price 164.60p 153.00p 154.40p 157.40p Lowest share price 139.30p 117.80p 133.60p 134.70p #The Institutional Accumulation share class launched on 3 August 2020. **The operating charges include all costs borne by the Fund, except for direct transaction costs. ***The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers, levies by regulatory agencies and securities exchanges as well as transfer taxes and duties. 16 JAPAN MULTI-FACTOR EQUITY FUND

Comparative Tables for the six months ended 28 February 2021 (unaudited)

Institutional A Accumulation 28.2.21 31.8.20 31.8.19 31.8.18 Change in net assets per share Opening net asset value per share 167.40p 171.10p 171.90p 161.10p Return before operating charges* 16.19p (2.96p) 0.07p 11.85p Operating charges** (0.39p) (0.74p) (0.87p) (1.05p) Return after operating charges* 15.80p (3.70p) (0.80p) 10.80p Distributions on accumulation shares (0.00p) (3.23p) (3.12p) (2.32p) Retained distributions on accumulation shares 0.00p 3.23p 3.12p 2.32p Closing net asset value per share 183.20p 167.40p 171.10p 171.90p *after direct transaction costs of:*** 0.05p 0.04p 0.08p 0.05p

Performance Return after charges 9.44% (2.16%) (0.47%) 6.70%

Other information Closing net asset value £10,986,230 £10,375,222 £10,580,616 £17,479,251 Closing number of shares 5,996,938 6,199,047 6,183,502 10,171,368 Operating charges - OCF 0.40%† 0.44% 0.48% 0.62% Direct transaction costs 0.03% 0.02% 0.05% 0.03%

Prices Highest share price 196.90p 179.60p 178.00p 178.70p Lowest share price 166.80p 138.20p 153.90p 153.30p †Estimated value following a change to the charging structure on 1 October 2020. **The operating charges include all costs borne by the Fund, except for direct transaction costs. ***The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers, levies by regulatory agencies and securities exchanges as well as transfer taxes and duties. JAPAN MULTI-FACTOR EQUITY FUND 17

Statement of Total Return for the six months ended 28 February 2021 (unaudited)

28.2.21 28.2.20 £’000 £’000 £’000 £’000 Income Net capital gains/(losses) 1,270 (1,009) Revenue 163 170 Expenses (19) (18) Net revenue before taxation 144 152 Taxation (16) (17) Net revenue after taxation 128 135 Total return/(deficit) before distributions 1,398 (874) Distributions (5) (1) Change in net assets attributable to shareholders from investment activities 1,393 (875)

Statement of Change in Net Assets Attributable to Shareholders for the six months ended 28 February 2021 (unaudited)

28.2.21 28.2.20 £’000 £’000 £’000 £’000 Opening net assets attributable to shareholders 14,476 14,648 Amounts receivable on creation of shares 133 13 Amounts payable on cancellation of shares (775) (88) (642) (75) Dilution adjustment 3 - Change in net assets attributable to shareholders from investment activities (see Statement of Total Return above) 1,393 (875) Closing net assets attributable to shareholders 15,230 13,698

Balance Sheet as at 28 February 2021 (unaudited)

28.2.21 31.8.20 £’000 £’000 £’000 £’000 Assets Investments 15,133 14,146 Current assets Debtors 22 151 Cash and bank balances 99 281 Total current assets 121 432 Total assets 15,254 14,578 Liabilities Creditors Distribution payable on income shares - (90) Other creditors (24) (12) Total creditors (24) (102) Total liabilities (24) (102) Net assets attributable to shareholders 15,230 14,476 18 UK MULTI-FACTOR EQUITY FUND

UK Multi-Factor Equity Fund

Investment Objective The Fund aims to provide growth in the long term, which is a period of five years or more.

Investment Policy and Strategy* To achieve its objective the Fund will invest at least 80% of its value in shares (equities) of UK companies. UK companies are those that are based in the UK, or earn at least 80% of their revenue from the UK. The Fund may invest up to 20% of its value in other assets, such as shares in non-UK companies, assets equivalent to shares of companies and cash. The Fund may also invest up to 10% of its value in other funds, which may be managed by the HSBC Group. The Fund may invest in different types of derivatives for efficient portfolio management purposes, including hedging. The Fund does not currently use derivatives to reduce the risk of movements in the rate of exchange between sterling and other currencies in which the Fund’s assets may be held. The Fund does not intend to use derivatives extensively and their use will be consistent with the risk profile of the Fund. The investment manager identifies potential shares of companies from the FTSE 350 ex Investment Trust Index and ranks them from the least attractive to most attractive based upon certain factors, such as value, quality and size. The manager’s investment approach then aims to maximise exposure to the highest ranked shares whilst maintaining a portfolio diversified by companies and sectors to manage risk. The Fund is managed with reference to the FTSE 350 ex Investment Trust Index. The sector and stock constraints, relative to the FTSE 350 ex Investment Trust Index, within the investment strategy mean the Fund returns are more likely to be closer to the returns of the FTSE 350 ex Investment Trust Index than if there were no limits on the level of risk the Fund may take. The FTSE 350 ex Investment Trust Index is also considered as part of our investment risk monitoring process, to check that the overall level of risk taken by the fund manager is not inconsistent with the UK equities market. The performance of the Fund is therefore shown against the performance of the FTSE 350 ex Investment Trust Index. *For details of the full Investment Policy and Strategy please refer to the HSBC Universal Investment Funds prospectus. We have also published a Glossary of key terms used which you may wish to refer to. Both documents can be found at https://www.assetmanagement.hsbc.co.uk/en/individual-investor/fund-centre.

Portfolio Activity Over the review period, the Fund outperformed its market cap weighted index. Our overall exposure to alpha styles (including industries) contributed to relative performance. From a factor perspective, our exposures to Value and Size factors contributed to performance, while allocations to Quality and Low Risk proved headwinds. Industry Momentum exposure effect was broadly flat on relative performance. At sector level, our overweight allocations to Consumer Discretionary and Industrials coupled with our underweight exposures to Consumer Staples and Materials contributed to performance. Conversely, an overweight allocation to Healthcare coupled with an underweight exposure to Energy weighed on performance. At stock level, our overweight allocations to Aggreko, Ferrexpo and contributed to performance. Conversely, our underweight exposures to HSBC Holdings, Anglo American and weighed on performance. The Fund is managed using a systematic, model driven process, giving the portfolio exposure to factors like Value, Quality, Momentum, Size and Low Risk. It aims to provide investors with consistent performance against traditional market capitalisation weighted index. Purchases during the period included: , Just Group, Chemring Group, Plus500 and Centamin. Sales included: RLEX, , Aggreko, BT Group and Group. UK MULTI-FACTOR EQUITY FUND 19

Investment Performance During the period under review, the value of the shares in the Fund increased by 3.73% whilst the value of the FTSE 350 ex Investment Trust Index rose by 1.77%. (Source: Morningstar Direct, GBP, UK net of tax, income reinvested for the Institutional A Income share class. Returns based on the NAV, which is a single price.) Please note that the above information refers to the past and that past performance is not a reliable indication of future returns.

Fund Particulars as at 1 March 2021 (unaudited)

Institutional Institutional Institutional A Income Accumulation Income

Price 109.9p xd 111.8p 108.6p xd

Distribution payable (on 30 April 2021) 1.250000p 1.260000p 1.110000p per share net

Current net estimated yield 1.70% 1.68% 2.61%

Annual ACD charge 0.00% 0.00% 0.25% 20 UK MULTI-FACTOR EQUITY FUND

Portfolio Statement as at 28 February 2021 (unaudited)

Security Holding Bid Total value net £’000 assets % UNITED KINGDOM - 90.79% (89.73%) Oil & Gas - 8.35% (7.82%) BP 271,529 792 2.42 A 60,720 877 2.68 Royal Dutch Shell A rights 60,720 - 0.00 Royal Dutch Shell B 62,143 862 2.63 Royal Dutch Shell B rights 62,143 - 0.00 Vivo Energy 233,300 204 0.62 Total Oil & Gas 2,735 8.35

Basic Materials - 10.36% (7.90%) Anglo American 13,382 371 1.13 BHP Group 33,823 768 2.35 Evraz Group 27,798 159 0.49 Ferrexpo 58,306 195 0.59 Hochschild Mining 9,139 20 0.06 Kaz Minerals 19,818 165 0.50 12,696 219 0.67 21,015 1,300 3.97 Victrex 9,281 196 0.60 Total Basic Materials 3,393 10.36

Industrials - 10.04% (9.54%) Aggreko 3,576 29 0.09 3,789 147 0.45 BAE Systems 50,333 244 0.74 6,842 153 0.47 Chemring Group 74,707 207 0.63 Clarkson 6,217 158 0.48 Diploma 5,018 116 0.35 Electrocomp 5,992 58 0.18 Essentra 28,897 85 0.26 Hays 54,578 83 0.25 Hill & Smith Holdings 13,673 174 0.53 Howden Joinery Group 36,212 252 0.77 IMI 10,196 133 0.41 Group 3,726 199 0.61 Meggitt 24,131 102 0.31 Morgan Advanced Materials 43,219 134 0.41 Oxford Instruments 10,183 182 0.56 PageGroup 15,377 74 0.23 Redrow 16,953 92 0.28 Renishaw 558 32 0.10 7,486 35 0.11 Rotork 65,646 234 0.71 10,940 50 0.15 Serco Group 63,100 82 0.25 Smith (DS) 11,504 46 0.14 1,270 19 0.06 Spectris 5,471 166 0.51 Total Industrials 3,286 10.04 UK MULTI-FACTOR EQUITY FUND 21

Portfolio Statement as at 28 February 2021 (unaudited)

Security Holding Bid Total value net £’000 assets % Consumer Goods - 15.22% (15.40%) 5,068 34 0.10 Bellway 4,928 138 0.42 3,809 154 0.47 36,107 897 2.74 Crest Nicholson 7,280 23 0.07 30,314 853 2.61 Games Workshop 269 26 0.08 13,001 173 0.53 Persimmon 8,521 221 0.68 Premier Foods 68,957 62 0.19 PZ Cussons 85,741 210 0.64 Benckiser 7,118 427 1.30 Tate & Lyle 22,261 161 0.49 83,551 132 0.40 Unilever 38,654 1,443 4.41 Vistry Group 3,276 28 0.09 Total Consumer Goods 4,982 15.22

Healthcare - 9.80% (12.39%) AstraZeneca 19,192 1,332 4.07 ConvaTec Group 49,777 94 0.29 Genus 2,478 125 0.38 GlaxoSmithKline 84,245 1,003 3.07 Hikma Pharmaceuticals 1,085 24 0.07 Mediclinic International 29,619 84 0.26 Oxford BioMedica 3,941 40 0.12 PureTech Health 41,358 171 0.52 Smith & Nephew 21,533 298 0.91 32,372 36 0.11 Total Healthcare 3,207 9.80

Consumer Services - 10.27% (9.19%) 4imprint 6,999 170 0.52 14,623 213 0.65 Domino's Pizza Group 12,009 37 0.11 Dunelm Group 5,675 71 0.22 Frasers Group 45,749 215 0.66 Gamesys Group 4,098 56 0.17 Greggs 3,921 82 0.25 Inchcape 35,836 254 0.78 ITV 153,316 168 0.51 JD Sports Fashion 4,130 34 0.10 Kingfisher 52,640 140 0.43 Marks & Spencer 13,712 19 0.06 Mitchells & Butlers 43,025 130 0.40 22 UK MULTI-FACTOR EQUITY FUND

Portfolio Statement as at 28 February 2021 (unaudited)

Security Holding Bid Total value net £’000 assets % Mitchells & Butlers rights 16,731 - 0.00 Moneysupermarket.com 76,799 223 0.68 Morrison (Wm) Supermarkets 63,055 108 0.33 4,629 102 0.31 Pearson 6,695 50 0.15 Pets at Home Group 22,186 88 0.27 Rank Group 83,517 148 0.45 RELX 19,613 332 1.02 Sainsbury (J) 110,333 250 0.76 137,478 309 0.94 The Watches of Switzerland Group 11,376 73 0.22 WHSmith 4,768 91 0.28 Total Consumer Services 3,363 10.27

Telecommunications - 1.50% (2.41%) Telecom Plus 6,924 82 0.25 Group 334,270 408 1.25 Total Telecommunications 490 1.50

Utilities - 3.13% (3.38%) Centrica 85,250 45 0.14 ContourGlobal 83,459 173 0.53 Drax Group 21,825 83 0.25 National Grid 65,056 525 1.60 2,816 61 0.19 SSE 5,678 75 0.23 7,060 61 0.19 Total Utilities 1,023 3.13

Financials - 19.92% (19.24%) Group 19,146 212 0.65 Ashmore Group 16,106 66 0.20 98,535 357 1.09 248,886 397 1.21 Close Brothers 9,847 153 0.47 CLS Holdings 76,846 168 0.51 CMC Markets 29,239 119 0.36 Direct Line Insurance 52,732 169 0.52 GCP Student Living 141,172 218 0.67 +HSBC Holdings (London listed) 232,318 990 3.02 IG Group 31,362 244 0.75 IntegraFin Holdings 13,616 68 0.21 Investec 48,599 95 0.29 Jupiter Fund Management 49,090 145 0.44 Just Group 238,447 216 0.66 Legal & General 21,009 54 0.16 UK MULTI-FACTOR EQUITY FUND 23

Portfolio Statement as at 28 February 2021 (unaudited)

Security Holding Bid Total value net £’000 assets % 1,621,459 632 1.93 Group 3,119 300 0.92 M&G 118,115 217 0.66 NatWest Group 152,763 281 0.86 Ninety One 92,771 203 0.62 Paragon Banking Group 38,605 173 0.53 Provident Financial 44,695 125 0.38 Prudential 28,416 400 1.22 Quilter 77,216 113 0.35 Rathbone Brothers 9,421 145 0.44 Savills 6,648 77 0.24 Segro REIT 2,251 20 0.06 10,771 50 0.15 TBC Bank 10,462 114 0.35 Total Financials 6,521 19.92

Technology - 2.20% (2.46%) 23,038 127 0.39 16,815 78 0.24 FDM Group 2,203 22 0.07 Kainos 1,601 21 0.06 24,363 138 0.42 19,166 107 0.33 Softcat 6,146 90 0.27 Spirent Communications 36,222 85 0.26 Trainline 10,296 53 0.16 Total Technology 721 2.20 Total United Kingdom 29,721 90.79

BERMUDA - 0.17% (0.00%) Financials - 0.17% (0.00%) Lancashire Holdings 9,236 57 0.17 Total Financials 57 0.17 Total Bermuda 57 0.17

CHANNEL ISLANDS - 5.04% (5.10%) Oil & Gas - 0.35% (0.06%) Petrofac 86,456 113 0.35 Total Oil & Gas 113 0.35

Basic Materials - 2.12% (1.71%) Centamin 199,708 202 0.62 149,262 434 1.32 4,169 59 0.18 Total Basic Materials 695 2.12 24 UK MULTI-FACTOR EQUITY FUND

Portfolio Statement as at 28 February 2021 (unaudited)

Security Holding Bid Total value net £’000 assets % Industrials - 1.93% (2.87%) Experian Group 6,965 158 0.48 Ferguson 5,622 474 1.45 Total Industrials 632 1.93

Consumer Services - 0.30% (0.24%) WPP 11,469 98 0.30 Total Consumer Services 98 0.30

Financials - 0.34% (0.22%) Man Group 30,290 45 0.14 Sirius Real Estate 40,376 37 0.11 TP ICAP 12,411 30 0.09 Total Financials 112 0.34 Total Channel Islands 1,650 5.04

GERMANY - 0.28% (0.19%) Consumer Services - 0.28% (0.19%) TUI 21,642 93 0.28 Total Consumer Services 93 0.28 Total 93 0.28

GIBRALTAR - 0.15% (0.11%) Consumer Services - 0.15% (0.11%) 888 Holdings 16,080 48 0.15 Total Consumer Services 48 0.15 Total Gibraltar 48 0.15

IRELAND - 1.59% (1.95%) Industrials - 1.31% (1.61%) CRH 7,045 218 0.67 Grafton Group 8,885 88 0.27 Group 3,585 122 0.37 Total Industrials 428 1.31

Consumer Services - 0.28% (0.34%) 668 92 0.28 Total Consumer Services 92 0.28 Total Ireland 520 1.59

ISLE OF MAN - 0.33% (0.27%) Technology - 0.33% (0.27%) Playtech 22,593 107 0.33 Total Technology 107 0.33 Total Isle Of Man 107 0.33 UK MULTI-FACTOR EQUITY FUND 25

Portfolio Statement as at 28 February 2021 (unaudited)

Security Holding Bid Total value net £’000 assets % ISRAEL - 0.00% (0.10%) Financials - 0.00% (0.10%)

NETHERLANDS - 0.39% (0.70%) Industrials - 0.00% (0.17%)

Consumer Goods - 0.39% (0.53%) .com 1,833 127 0.39 Total Consumer Goods 127 0.39 Total Netherlands 127 0.39

SINGAPORE - 0.19% (0.17%) Industrials - 0.19% (0.17%) XP Power 1,140 62 0.19 Total Industrials 62 0.19 Total Singapore 62 0.19

SPAIN - 0.00% (0.23%) Consumer Services - 0.00% (0.23%)

SWITZERLAND - 0.41% (0.16%) Consumer Goods - 0.41% (0.16%) Coca-Cola HBC 6,021 135 0.41 Total Consumer Goods 135 0.41 Total Switzerland 135 0.41

FUTURES - -0.01% (-0.02%) ICF FTSE 100 Index Future March 2021 3 (3) (0.01) Total Futures (3) (0.01)

Portfolio of investments 32,517 99.33

Net other assets 220 0.67

Net assets 32,737 100.00 +related party Figures in brackets denote comparative percentage holdings as at 31 August 2020. Unless otherwise stated, all investments are listed equities. The counterparty for the Future is HSBC. Total purchases for the period, including transaction charges, were £10,245,291. Total sales for the period, net of transaction charges, were £9,072,194. 26 UK MULTI-FACTOR EQUITY FUND

Comparative Tables for the six months ended 28 February 2021 (unaudited)

Institutional Income# 28.2.21 31.8.20 31.8.19 31.8.18 Change in net assets per share Opening net asset value per share 98.08p 97.06p N/A N/A Return before operating charges* 11.90p 1.65p N/A N/A Operating charges** (0.03p) (0.01p) N/A N/A Return after operating charges* 11.87p 1.64p N/A N/A Distributions on income shares (1.25p) (0.62p) N/A N/A Closing net asset value per share 108.70p 98.08p N/A N/A *after direct transaction costs of:*** 0.17p 0.24p N/A N/A

Performance Return after charges 12.10% 1.69% N/A N/A

Other information Closing net asset value £44,780 £40,419 N/A N/A Closing number of shares 41,212 41,212 N/A N/A Operating charges - OCF 0.05% 0.06% N/A N/A Direct transaction costs 0.17% 0.24% N/A N/A

Prices Highest share price 114.50p 102.20p N/A N/A Lowest share price 92.16p 97.06p N/A N/A

Institutional Accumulation## 28.2.21 31.8.20 31.8.19 31.8.18 Change in net assets per share Opening net asset value per share 98.70p 97.06p N/A N/A Return before operating charges* 11.93p 1.65p N/A N/A Operating charges** (0.03p) (0.01p) N/A N/A Return after operating charges* 11.90p 1.64p N/A N/A Distributions on accumulation shares (1.26p) (0.62p) N/A N/A Retained distributions on accumulation shares 1.26p 0.62p N/A N/A Closing net asset value per share 110.60p 98.70p N/A N/A *after direct transaction costs of:*** 0.18p 0.24p N/A N/A

Performance Return after charges 12.06% 1.69% N/A N/A

Other information Closing net asset value £45,580 £40,675 N/A N/A Closing number of shares 41,212 41,212 N/A N/A Operating charges - OCF 0.05% 0.06% N/A N/A Direct transaction costs 0.17% 0.24% N/A N/A

Prices Highest share price 115.20p 102.20p N/A N/A Lowest share price 92.74p 97.06p N/A N/A #The Institutional Income share class launched on 3 August 2020. ##The Institutional Accumulation share class launched on 3 August 2020. **The operating charges include all costs borne by the Fund, except for direct transaction costs. ***The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers, levies by regulatory agencies and securities exchanges as well as transfer taxes and duties. UK MULTI-FACTOR EQUITY FUND 27

Comparative Tables for the six months ended 28 February 2021 (unaudited)

Institutional A Income 28.2.21 31.8.20 31.8.19 31.8.18 Change in net assets per share Opening net asset value per share 96.95p 115.30p 119.30p 118.40p Return before operating charges* 11.71p (14.79p) 1.04p 5.70p Operating charges** (0.15p) (0.33p) (0.42p) (0.65p) Return after operating charges* 11.56p (15.12p) 0.62p 5.05p Distributions on income shares (1.11p) (3.23p) (4.62p) (4.15p) Closing net asset value per share 107.40p 96.95p 115.30p 119.30p *after direct transaction costs of:*** 0.17p 0.26p 0.28p 0.22p

Performance Return after charges 11.92% (13.11%) 0.52% 4.27%

Other information Closing net asset value £32,646,604 £28,608,602 £28,634,992 £49,470,712 Closing number of shares 30,394,120 29,508,847 24,827,212 41,477,802 Operating charges - OCF 0.32%† 0.30% 0.30% 0.53% Direct transaction costs 0.17% 0.24% 0.24% 0.19%

Prices Highest share price 113.10p 126.30p 124.50p 127.80p Lowest share price 91.10p 79.16p 106.70p 112.20p †Estimated value following a change to the charging structure on 1 October 2020. **The operating charges include all costs borne by the Fund, except for direct transaction costs. ***The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers, levies by regulatory agencies and securities exchanges as well as transfer taxes and duties. 28 UK MULTI-FACTOR EQUITY FUND

Statement of Total Return for the six months ended 28 February 2021 (unaudited)

28.2.21 28.2.20 £'000 £'000 £'000 £'000 Income Net capital gains/(losses) 3,138 (1,762) Revenue 394 428 Expenses (43) (41) Net revenue before taxation 351 387 Taxation (3) (5) Net revenue after taxation 348 382 Total return/(deficit) before distributions 3,486 (1,380) Distributions (335) (361) Change in net assets attributable to shareholders from investment activities 3,151 (1,741)

Statement of Change in Net Assets Attributable to Shareholders for the six months ended 28 February 2021 (unaudited)

28.2.21 28.2.20 £'000 £'000 £'000 £'000 Opening net assets attributable to shareholders 28,690 28,635 Amounts receivable on creation of shares 1,878 - Amounts payable on cancellation of shares (994) (1,991) 884 (1,991) Dilution adjustment 12 2 Change in net assets attributable to shareholders from investment activities (see Statement of Total Return above) 3,151 (1,741) Closing net assets attributable to shareholders 32,737 24,905

Balance Sheet as at 28 February 2021 (unaudited)

28.2.21 31.8.20 £’000 £’000 £’000 £’000 Assets Investments 32,520 28,321 Current assets Debtors 149 732 Cash and bank balances 443 172 Total current assets 592 904 Total assets 33,112 29,225 Liabilities Investment liabilities (3) (7) Creditors Distribution payable on income shares (338) (509) Other creditors (34) (19) Total creditors (372) (528) Total liabilities (375) (535) Net assets attributable to shareholders 32,737 28,690 UK MULTI-FACTOR EQUITY FUND 29

Distribution Table (pence per share) for the six months ended 28 February 2021 (unaudited)

Group 1: Shares purchased prior to 1 September 2020 Group 2: Shares purchased from 1 September 2020 to 28 February 2021 Net Equalisation Distribution Distribution income payable paid 30.4.21 30.4.20

Institutional Income† Group 1 1.250000 - 1.250000 N/A Group 2 1.250000 0.000000 1.250000 N/A

Institutional Accumulation† Group 1 1.260000 - 1.260000 N/A Group 2 1.260000 0.000000 1.260000 N/A

Institutional A Income Group 1 1.110000 - 1.110000 1.510000 Group 2 0.590000 0.520000 1.110000 1.510000 †The Institutional Income and Institutional Accumulation share classes launched on 3 August 2020. 30 US MULTI-FACTOR EQUITY FUND

US Multi-Factor Equity Fund

Investment Objective The Fund aims to provide growth in the long term, which is a period of five years or more.

Investment Policy and Strategy* To achieve its objective the Fund will invest at least 80% of its value in shares (equities) of US companies. US companies are those that are based in the US, or earn at least 80% of their revenue from the US. The Fund may invest up to 20% of its value in other assets, such as shares in non-US companies, assets equivalent to shares of companies and cash. The Fund may also invest up to 10% of its value in other funds, which may be managed by the HSBC Group. The Fund may invest in different types of derivatives for efficient portfolio management purposes, including hedging. The Fund does not currently use derivatives to reduce the risk of movements in the rate of exchange between sterling and other currencies in which the Fund’s assets may be held. The Fund does not intend to use derivatives extensively and their use will be consistent with the risk profile of the Fund. The investment manager identifies potential shares of companies from the S&P 500 Index and ranks them from the least attractive to most attractive based upon certain factors, such as value, quality and size. The manager’s investment approach then aims to maximise exposure to the highest ranked shares whilst maintaining a portfolio diversified by companies and sectors to manage risk. The Fund is managed with reference to the S&P 500 Index. The sector and stock constraints, relative to the S&P 500 Index, within the investment strategy mean the Fund returns are more likely to be closer to the returns of the S&P 500 Index than if there were no limits on the level of risk the Fund may take. The S&P 500 Index is also considered as part of our investment risk monitoring process, to check that the overall level of risk taken by the fund manager is not inconsistent with the US equities market. The performance of the Fund is therefore shown against the performance of the S&P 500 Index. *For details of the full Investment Policy and Strategy please refer to the HSBC Universal Investment Funds prospectus. We have also published a Glossary of key terms used which you may wish to refer to. Both documents can be found at https://www.assetmanagement.hsbc.co.uk/en/individual-investor/fund-centre.

Portfolio Activity Over the review period, the Fund outperformed its market cap weighted index. Our overall exposure to alpha styles (including industries) contributed to relative performance. From a factor perspective, our exposures to Value, Size and Industry Momentum factors contributed to performance, while allocations to Quality and Low Risk proved headwinds. At sector level, our overweight allocations to Consumer Discretionary and Materials coupled with an underweight exposure to Consumer Staples contributed to performance. Conversely, our underweight allocations to Energy, Financials and Communication Services weighed on performance. At stock level, our overweight allocations to Mohawk Industries, Lyondell Basell Industries and Skyworks Solutions contributed to performance. Conversely, our underweight exposures to Exxon Mobil, General Electric and Deere & Company weighed on performance. The Fund is managed using a systematic, model driven process, giving the portfolio exposure to factors like Value, Quality, Momentum, Size and Low Risk. It aims to provide investors with consistent performance against traditional market capitalisation weighted index. Purchases during the period included: Tesla Motors, NortonLifeLock, JPMorgan Chase & Company, Vornado Realty Trust and Allegion. Sales included: Microsoft, Apple, Procter & Gamble, Amazon.com and Berkshire Hathaway. US MULTI-FACTOR EQUITY FUND 31

Investment Performance During the period under review, the value of the shares in the Fund increased by 5.60% whilst the value of the S&P 500 Index rose by 5.10%. (Source: Morningstar Direct, GBP, UK net of tax, income reinvested for the Institutional A Accumulation share class. Returns based on the NAV, which is a single price.) Please note that the above information refers to the past and that past performance is not a reliable indication of future returns.

Fund Particulars as at 1 March 2021 (unaudited)

Institutional Institutional Institutional A Income Accumulation Accumulation

Price 424.3p 496.9p 496.3p

Current net estimated yield 1.40% 0.13% 1.16%

Annual ACD charge 0.00% 0.00% 0.25% 32 US MULTI-FACTOR EQUITY FUND

Portfolio Statement as at 28 February 2021 (unaudited)

Security Holding Bid Total value net £’000 assets % UNITED STATES - 93.39% (95.16%) Oil & Gas - 0.85% (2.02%) ConocoPhillips 7,625 284 0.17 EOG Resources 11,635 537 0.32 Exxon Mobil 1,735 67 0.04 Marathon Petroleum Corporation 705 28 0.02 Occidental Petroleum 2,009 38 0.02 Pioneer Natural Resources 1,165 124 0.07 Schlumberger 2,155 43 0.02 Valero Energy 5,730 315 0.19 Total Oil & Gas 1,436 0.85

Basic Materials - 2.15% (1.57%) Air Products & Chemicals 3,021 552 0.32 Avery Dennison 5,531 693 0.41 Celanese A 1,881 187 0.11 Dow 4,039 171 0.10 EastMANChemicals 2,789 218 0.13 FMC 4,146 301 0.18 International Paper 17,415 618 0.36 Newmont Mining 9,363 364 0.21 Nucor 8,027 343 0.20 PPG Industries 2,215 214 0.13 Total Basic Materials 3,661 2.15

Industrials - 11.21% (8.67%) 3M 2,259 283 0.17 A.O. Smith 17,763 754 0.44 Amphenol Corporation A 509 46 0.03 Automatic Data Processing 4,845 602 0.35 Boeing 3,260 494 0.29 Carrier Global Corporation 31,194 815 0.48 Caterpillar 2,675 413 0.24 CSX 1,582 104 0.06 Emerson Electric 634 39 0.02 Fastenal 13,430 445 0.26 Fedex 533 97 0.06 Flir Systems 32,593 1,244 0.73 Flowserve 37,617 995 0.59 Fortive 6,209 292 0.17 Fortune Brands Home & Security 4,341 258 0.15 General Dynamics 3,942 461 0.27 Huntington Ingalls Industries 1,741 219 0.13 IDEX 5,436 758 0.45 Illinois Tool Works 1,276 185 0.11 IPG Photonics Corporation 6,981 1,133 0.67 US MULTI-FACTOR EQUITY FUND 33

Portfolio Statement as at 28 February 2021 (unaudited)

Security Holding Bid Total value net £’000 assets % J.B. Hunt Transport Services 5,194 545 0.32 Jacobs Engineering Group 936 77 0.05 Kansas City Southern 2,546 386 0.23 Keysight Technologies 3,978 403 0.24 Martin Marietta Materials 250 60 0.04 Masco 8,977 342 0.20 Mettler Toledo 1,067 851 0.50 Norfolk Southern 1,101 198 0.12 Old Dominion Freight Line 4,003 615 0.36 Paccar 3,394 221 0.13 Packaging Corporation of America 8,467 799 0.47 Paychex 6,235 406 0.24 Republic Services 4,558 290 0.17 Robert Half International 12,346 686 0.40 Sherwin-Williams 122 59 0.03 Teledyne Technologies 206 55 0.03 Union Pacific 4,532 667 0.39 United Parcel Services 2,804 316 0.19 United Rentals 2,326 494 0.29 Waste Management 5,093 404 0.24 WestRock Company 32,298 1,007 0.59 Xylem 1,240 88 0.05 Zebra Technologies A 1,255 448 0.26 Total Industrials 19,054 11.21

Consumer Goods - 8.23% (7.40%) Altria Group 14,285 445 0.26 Campbell Soup 2,397 78 0.05 Church & Dwight 5,715 322 0.19 Clorox 992 128 0.07 D.R.Horton 6,343 349 0.20 Electronic Arts 4,377 419 0.25 Estee Lauder 154 31 0.02 Ford Motor 7,730 65 0.04 General Mills 9,451 372 0.22 General Motors 2,583 95 0.06 Genuine Parts 3,877 292 0.17 Hanesbrands 97,898 1,238 0.73 Hershey 3,220 335 0.20 Hormel Foods 7,544 250 0.15 JM Smucker 3,209 257 0.15 Kellogg 2,949 122 0.07 Kimberly-Clark 694 64 0.04 Lamb Weston Holdings 1,115 64 0.04 Leggett & Platt 38,457 1,189 0.70 Lennar 1,500 89 0.05 34 US MULTI-FACTOR EQUITY FUND

Portfolio Statement as at 28 February 2021 (unaudited)

Security Holding Bid Total value net £’000 assets % Mohawk Industries 5,628 704 0.41 Molson Coors Brewing B 19,179 610 0.36 NVR 103 331 0.19 PepsiCo 8,049 743 0.44 Philip Morris International 8,104 487 0.29 Procter & Gamble 5,345 472 0.28 PulteGroup 8,654 279 0.16 Snap-on 6,337 920 0.54 Tesla Motors 5,487 2,633 1.55 Tyson Foods 5,351 259 0.15 VF 424 24 0.01 Whirlpool 2,352 320 0.19 Total Consumer Goods 13,986 8.23

Healthcare - 10.15% (12.00%) Abbott Laboratories 12,970 1,111 0.65 Abbvie 11,090 854 0.50 Alexion Pharmaceuticals 5,708 623 0.37 Amgen 4,676 752 0.44 Anthem 1,372 297 0.17 5,953 331 0.19 Becton Dickinson 2,452 423 0.25 Biogen IDEC 1,307 255 0.15 Bio-Rad Laboratories 1,268 530 0.31 Boston Scientific 2,670 74 0.04 Bristol Myers Squibb 9,496 416 0.25 Cigna Corporation 1,310 197 0.12 Dentsply Sirona 8,740 331 0.19 Edwards Lifesciences 7,556 449 0.26 Eli Lilly and Company 3,889 569 0.34 Gilead Sciences 11,851 520 0.31 Humana 1,770 480 0.28 IDEXX Laboratories 676 251 0.15 Illumina 2,402 754 0.44 Incyte Genomics 5,680 319 0.19 IQVIA 2,026 279 0.16 Johnson & Johnson 14,668 1,660 0.98 Merck & Co. 19,527 1,014 0.60 Pfizer 47,086 1,128 0.66 Quest Diagnostics 3,062 253 0.15 Regeneron Pharmaceuticals 612 197 0.12 ResMed 1,139 157 0.09 Stryker 2,372 412 0.24 Thermo Fisher Scientific 2,257 726 0.43 UnitedHealth Group 1,549 368 0.22 Vertex Pharmaceuticals 2,486 377 0.22 Viatris 5,696 60 0.04 Waters 3,522 690 0.41 Zimmer Biomet Holdings 3,413 398 0.23 Total Healthcare 17,255 10.15 US MULTI-FACTOR EQUITY FUND 35

Portfolio Statement as at 28 February 2021 (unaudited)

Security Holding Bid Total value net £’000 assets % Consumer Services - 12.04% (14.60%) Amazon.com 3,155 6,973 4.10 AmerisourceBergen 4,278 310 0.18 Autozone 512 425 0.25 Cardinal Health 6,784 250 0.15 Charter Communications A 371 163 0.10 Comcast 11,828 445 0.26 Copart 7,330 572 0.34 Costco Wholesale 2,395 567 0.33 CVS Health 25,294 1,233 0.73 Dollar General 325 44 0.03 Home Depot 7,976 1,474 0.87 Kroger 36,620 843 0.50 Lowe’s Companies 3,278 374 0.22 McDonald’s 1,287 190 0.11 McKesson HBOC 872 106 0.06 NetFlix 3,262 1,256 0.74 O’Reilly Automotive 637 204 0.12 PayPal 2,355 438 0.26 Pool 2,578 617 0.36 Rollins 10,221 242 0.14 Ross Stores 3,642 303 0.18 TJX Companies 12,867 607 0.36 Tractor Supply Company 3,222 366 0.21 Ulta Beauty 2,158 497 0.29 Walgreens Boots Alliance 7,805 267 0.16 Walt Disney 12,359 1,671 0.98 Yum! Brands 307 23 0.01 Total Consumer Services 20,460 12.04

Telecommunications - 1.71% (2.33%) AT&T 63,200 1,261 0.74 Lumen Technologies 24,207 213 0.13 T-Mobile US 643 55 0.03 Verizon Communications 34,943 1,382 0.81 Total Telecommunications 2,911 1.71

Utilities - 2.48% (2.66%) AES 16,635 316 0.19 Alliant Energy 2,192 72 0.04 Ameren 5,297 266 0.16 Atmos Energy 10,542 638 0.38 Consolidation Edison (New York registered) 2,611 123 0.07 Entergy 3,910 243 0.14 Exelon 14,084 389 0.23 NextEra Energy 1,324 70 0.04 36 US MULTI-FACTOR EQUITY FUND

Portfolio Statement as at 28 February 2021 (unaudited)

Security Holding Bid Total value net £’000 assets % Nisource 41,450 640 0.38 NRG Energy 29,120 761 0.45 Pinnacle West Capital 3,776 189 0.11 PPL 7,444 139 0.08 Public Service Enterprise Group 8,582 330 0.19 Xcel Energy 744 31 0.02 Total Utilities 4,207 2.48

Financials - 13.35% (13.30%) Aflac 6,130 210 0.12 Allstate 3,766 287 0.17 Ameriprise Financial 2,704 428 0.25 Assurant 4,347 383 0.23 AvalonBay Communities 2,155 271 0.16 Bank of America 53,852 1,336 0.79 Berkshire Hathaway B 6,174 1,061 0.62 Boston Properties 1,250 89 0.05 Capital One Financial 5,560 478 0.28 CBOE Global Markets 14,417 1,019 0.60 Citigroup 14,285 673 0.40 Discover Financial Services 6,621 445 0.26 Essex Property REIT 818 149 0.09 Extra Space Storage 567 51 0.03 Fifth Third Bancorp 9,631 239 0.14 Franklin Resources 5,153 96 0.06 Globe Life 424 28 0.02 Hartford Financial Services 8,022 291 0.17 Host Marriott 22,078 262 0.15 Huntingdon Bancshares 8,129 89 0.05 Intercontinental Exchange Group 975 77 0.05 Iron Mountain 24,812 617 0.36 JPMorgan Chase & Company 23,004 2,420 1.42 KeyCorp 6,395 92 0.05 Kimco Realty 12,978 170 0.10 Loews 7,709 264 0.16 M&T Bank 2,510 271 0.16 MarketAxess Holdings 1,378 547 0.32 Mastercard 1,034 261 0.15 Mid-America Apartment Communities 2,603 251 0.15 MSCI 152 45 0.03 Nasdaq OMX Group 903 89 0.05 Northern Trust 5,666 385 0.23 Peoples United Financial 4,746 61 0.04 PNC Financial ServicesGroup 1,905 229 0.13 Principal Financial Group 6,460 261 0.15 Prudential Financial 5,754 357 0.21 US MULTI-FACTOR EQUITY FUND 37

Portfolio Statement as at 28 February 2021 (unaudited)

Security Holding Bid Total value net £’000 assets % Public Storage 2,616 438 0.26 Raymond James Financial 1,579 132 0.08 Realty Income 3,989 172 0.10 Regency Centers 9,953 390 0.23 SBA Communications Corporation 150 27 0.02 State Street 2,728 142 0.08 Synchrony Financial 54,631 1,511 0.89 T Rowe Price Group 4,203 487 0.29 Travelers 2,183 227 0.13 Truist Financial 931 38 0.02 UDR 4,345 128 0.08 Unum 28,610 542 0.32 US Bancorp 6,204 222 0.13 Visa 14,867 2,259 1.33 Vornado Realty Trust 44,519 1,367 0.80 Wells Fargo & Co. 9,315 241 0.14 Welltower 714 35 0.02 Western Union 3,248 54 0.03 Total Financials 22,694 13.35

Technology - 31.22% (30.61%) Adobe 2,706 889 0.52 Advanced Micro Devices 837 51 0.03 Akamai Technologies 1,295 87 0.05 Alphabet A 2,304 3,329 1.96 Alphabet C 2,186 3,180 1.87 Analog Devices 319 36 0.02 Ansys 3,350 817 0.48 Apple 117,309 10,169 5.98 Applied Materials 5,004 423 0.25 Autodesk 278 55 0.03 Booking Holdings 376 625 0.37 Broadcom 3,923 1,318 0.78 Cadence Design Systems 5,224 527 0.31 CDW 9,740 1,092 0.64 Cerner 6,709 332 0.20 Cisco Systems 26,693 856 0.50 Citrix Systems 2,681 256 0.15 Cognizant Technology Solutions 430 23 0.01 eBay 12,136 489 0.29 F5 Networks 443 60 0.04 Facebook 18,644 3,428 2.02 Fortinet 4,004 484 0.29 Hewlett-Packard 2,107 22 0.01 Intel 30,287 1,314 0.77 Intuit 2,739 764 0.45 38 US MULTI-FACTOR EQUITY FUND

Portfolio Statement as at 28 February 2021 (unaudited)

Security Holding Bid Total value net £’000 assets % Jack Henry & Associates 4,072 432 0.25 Juniper Networks 2,593 43 0.03 KLA Tencor 2,853 634 0.37 LAM Research 207 84 0.05 Maxim Integrated Products 14,671 977 0.58 Microsoft 52,799 8,768 5.16 NortonLifeLock 95,929 1,339 0.79 Nvidia 4,644 1,821 1.07 Oracle 22,761 1,050 0.62 Qorvo 5,189 648 0.38 Qualcomm 5,603 545 0.32 Salesforce.com 8,896 1,377 0.81 ServiceNow 95 36 0.02 Skyworks Solutions 12,029 1,529 0.90 Synopsys 2,804 491 0.29 Texas Instruments 7,045 868 0.51 Twitter 1,227 68 0.04 Tyler Technologies 2,613 866 0.51 Vontier 37,999 853 0.50 Total Technology 53,055 31.22 Total United States 158,719 93.39

BERMUDA - 0.13% (0.23%) Financials - 0.13% (0.23%) Everest 1,301 225 0.13 Total Financials 225 0.13 Total Bermuda 225 0.13

IRELAND - 3.11% (3.21%) Basic Materials - 0.50% (0.65%) Linde 4,813 841 0.50 Total Basic Materials 841 0.50

Industrials - 1.12% (1.07%) Allegion 17,035 1,325 0.78 Eaton 5,811 541 0.32 Trane Technologies 403 44 0.02 Total Industrials 1,910 1.12

Healthcare - 0.81% (0.81%) Medtronic 12,733 1,065 0.63 Steris 2,467 308 0.18 Total Healthcare 1,373 0.81 US MULTI-FACTOR EQUITY FUND 39

Portfolio Statement as at 28 February 2021 (unaudited)

Security Holding Bid Total value net £’000 assets % Consumer Services - 0.39% (0.31%) Johnson Controls 16,561 661 0.39 Total Consumer Services 661 0.39

Financials - 0.22% (0.32%) Willis Towers Watson 2,422 381 0.22 Total Financials 381 0.22

Technology - 0.07% (0.05%) Seagate Technology 2,208 116 0.07 Total Technology 116 0.07 Total Ireland 5,282 3.11

NETHERLANDS - 0.93% (0.14%) Basic Materials - 0.92% (0.14%) Lyondell Basell Industries 21,108 1,556 0.92 Total Basic Materials 1,556 0.92

Industrials - 0.01% (0.00%) Technip Energies 2,600 24 0.01 Total Industrials 24 0.01 Total Netherlands 1,580 0.93

PANAMA - 0.02% (0.02%) Consumer Services - 0.02% (0.02%) Carnival 2,000 38 0.02 Total Consumer Services 38 0.02 Total Panama 38 0.02

SWITZERLAND - 1.16% (0.71%) Industrials - 0.27% (0.22%) TE Connectivity 4,947 460 0.27 Total Industrials 460 0.27

Financials - 0.35% (0.29%) Chubb 5,016 583 0.35 Total Financials 583 0.35

Technology - 0.54% (0.20%) Garmin 10,393 921 0.54 Total Technology 921 0.54 Total Switzerland 1,964 1.16 40 US MULTI-FACTOR EQUITY FUND

Portfolio Statement as at 28 February 2021 (unaudited)

Security Holding Bid Total value net £’000 assets %

United Kingdom - 0.15% (0.18%) Oil & Gas - 0.05% (0.05%) TechnipFMC 13,001 76 0.05 Total Oil & Gas 76 0.05

Consumer Services - 0.10% (0.13%) Nielsen 11,034 177 0.10 Total Consumer Services 177 0.10 Total United Kingdom 253 0.15

Futures - 0.00% (0.00%) CME S&P 500 E-Mini Index Future March 2021 11 8 0.00 Total Futures 8 0.00

Portfolio of investments 168,069 98.89

Net other assets 1,891 1.11

Net assets 169,960 100.00 Figures in brackets denote comparative percentage holdings as at 31 August 2020. Unless otherwise stated, all investments are listed securities. The counterparty for the Future is HSBC Bank. Total purchases for the period, including transaction charges, were £40,739,770. Total sales for the period, net of transaction charges, were £75,490,253. US MULTI-FACTOR EQUITY FUND 41

Comparative Tables for the six months ended 28 February 2021 (unaudited)

Institutional Income 28.2.21 31.8.20 31.8.19 31.8.18 Change in net assets per share Opening net asset value per share 402.40p 371.80p 347.30p 296.40p Return before operating charges* 20.90p 36.70p 30.60p 56.14p Operating charges** (0.10p) (0.17p) (0.15p) (0.13p) Return after operating charges* 20.80p 36.53p 30.45p 56.01p Distributions on income shares 0.00p (5.93p) (5.95p) (5.11p) Closing net asset value per share 423.20p 402.40p 371.80p 347.30p *after direct transaction costs of:*** 0.09p 0.11p 0.09p 0.11p

Performance Return after charges 5.17% 9.83% 8.77% 18.90%

Other information Closing net asset value £79,210,737 £93,300,800 £45,929,333 £52,337,886 Closing number of shares 18,715,440 23,184,787 12,353,890 15,068,786 Operating charges - OCF 0.05% 0.04% 0.04% 0.04% Direct transaction costs 0.02% 0.03% 0.03% 0.03%

Prices Highest share price 441.80p 412.70p 390.60p 355.10p Lowest share price 390.70p 302.40p 298.80p 284.70p

Institutional Accumulation# 28.2.21 31.8.20 31.8.19 31.8.18 Change in net assets per share Opening net asset value per share 471.40p 453.80p N/A N/A Return before operating charges* 24.52p 17.61p N/A N/A Operating charges** (0.12p) (0.01p) N/A N/A Return after operating charges* 24.40p 17.60p N/A N/A Distributions on accumulation shares 0.00p (0.63p) N/A N/A Retained distributions on accumulation shares 0.00p 0.63p N/A N/A Closing net asset value per share 495.80p 471.40p N/A N/A *after direct transaction costs of:*** 0.10p 0.13p N/A N/A

Performance Return after charges 5.18% 3.88% N/A N/A

Other information Closing net asset value £43,700 £41,553 N/A N/A Closing number of shares 8,814 8,814 N/A N/A Operating charges - OCF 0.05% 0.04% N/A N/A Direct transaction costs 0.02% 0.03% N/A N/A

Prices Highest share price 517.60p 476.50p N/A N/A Lowest share price 457.70p 455.20p N/A N/A #The Institutional Accumulation share class launched on 3 August 2020. **The operating charges include all costs borne by the Fund, except for direct transaction costs. ***The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers, levies by regulatory agencies and securities exchanges as well as transfer taxes and duties. 42 US MULTI-FACTOR EQUITY FUND

Comparative Tables for the six months ended 28 February 2021 (unaudited)

Institutional A Accumulation 28.2.21 31.8.20 31.8.19 31.8.18 Change in net assets per share Opening net asset value per share 471.40p 430.20p 396.80p 335.30p Return before operating charges* 24.42p 42.48p 34.70p 63.40p Operating charges** (0.72p) (1.28p) (1.30p) (1.90p) Return after operating charges* 23.70p 41.20p 33.40p 61.50p Distributions on accumulation shares 0.00p (5.77p) (5.65p) (4.00p) Retained distributions on accumulation shares 0.00p 5.77p 5.65p 4.00p Closing net asset value per share 495.10p 471.40p 430.20p 396.80p *after direct transaction costs of:*** 0.10p 0.12p 0.11p 0.12p

Performance Return after charges 5.03% 9.58% 8.42% 18.34%

Other information Closing net asset value £90,705,409 £101,669,233 £95,307,488 £88,938,148 Closing number of shares 18,320,943 21,569,476 22,152,423 22,416,670 Operating charges - OCF 0.31%† 0.29% 0.29% 0.54% Direct transaction costs 0.02% 0.03% 0.03% 0.03%

Prices Highest share price 516.90p 476.40p 445.00p 399.70p Lowest share price 457.50p 349.50p 340.90p 322.10p †Estimated value following a change to the charging structure on 1 October 2020. **The operating charges include all costs borne by the Fund, except for direct transaction costs. ***The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers, levies by regulatory agencies and securities exchanges as well as transfer taxes and duties. US MULTI-FACTOR EQUITY FUND 43

Statement of Total Return for the six months ended 28 February 2021 (unaudited)

28.2.21 28.2.20 £’000 £’000 £’000 £’000 Income Net capital gains/(losses) 8,357 (5,088) Revenue 1,367 1,343 Expenses (137) (136) Net revenue before taxation 1,230 1,207 Taxation (190) (195) Net revenue after taxation 1,040 1,012 Total return/(deficit) before distributions 9,397 (4,076) Distributions (43) (41) Change in net assets attributable to shareholders from investment activities 9,354 (4,117)

Statement of Change in Net Assets Attributable to Shareholders for the six months ended 28 February 2021 (unaudited)

28.2.21 28.2.20 £’000 £’000 £’000 £’000 Opening net assets attributable to shareholders 195,012 141,237 Amounts receivable on creation of shares 18,645 14,997 Amounts payable on cancellation of shares (53,090) (23,201) (34,445) (8,204) Dilution adjustment 39 30 Change in net assets attributable to shareholders from investment activities (see Statement of Total Return above) 9,354 (4,117) Closing net assets attributable to shareholders 169,960 128,946

Balance Sheet as at 28 February 2021 (unaudited)

28.2.21 31.8.20 £’000 £’000 £’000 £’000 Assets Investments 168,069 194,338 Current assets Debtors 571 2,421 Cash and bank balances 1,432 127 Total current assets 2,003 2,548 Total assets 170,072 196,886 Liabilities Creditors Distribution payable on income shares - (1,374) Other creditors (112) (500) Total creditors (112) (1,874) Net assets attributable to shareholders 169,960 195,012 44

General Information

How to Buy, Sell or Switch Your Investment • Call our Dealers on 0800 358 3011* or • Write to our Administration Office at: HSBC Global Asset Management (UK) Ltd, Sunderland, SR43 4BF (w.e.f 6/4/21).

Switching Your Investment • Some discounts are available for switching between our OEIC Funds. • Switching from one OEIC Fund to another may create a capital gains tax liability. No subscription can be received on the basis of financial reports. Subscriptions are only valid if made on the basis of the current KIID (in conjunction with the Supplementary Information Document (SID)) and Prospectus accompanied by the latest Annual Report and the most recent Interim Report, if published thereafter. Further details of our switching discounts may be obtained by:- • Telephoning our Customer Services, on 0800 358 3011*

Minimum Additional Subscription • The minimum additional subscription is £1,000 for the institutional A share class and £1,000,000 for the institutional share class.

Selling your Investment You can sell or make a withdrawal at any time. • You must take at least £100 each time. • We reserve the right to request that you leave the minimum investment of £1,000,000 for institutional A holdings and £10,000,000 for institutional holdings, or close the investment. • Settlement is normally made within 3 business days from the receipt of your instructions.

When We Will Buy or Sell Your Investment Share prices are calculated at 12 noon each business day. The price at which shares are bought or sold depends on when we receive your instructions. • Before 12 noon. That day’s share prices will be used. • After 12 noon. The following business day’s prices will be used. We will send you a contract note within 24 hours of the transaction. This confirms the transaction was made.

Cancellation Rights • In certain circumstances we will send you a cancellation notice. If so this will be sent within 7 days of making your investment. • Return this notice to us within 30 days if you do not wish to proceed with your investment. • It is possible to receive back less than your original investment, if the value of your shares has fallen.

Publication of Prices The prices of shares are updated daily on the following website: www.assetmanagement.hsbc.com/uk. Alternatively you can call our Investments Helpline on 0800 358 3011*. 45

Prospectus The Prospectus provides further details on our OEICs. For a copy of the latest Prospectus (available free of charge):- • Telephone our Customer Services on 0800 358 3011* • Write to our Administration Office

Income Income is distributed or accumulated in the following way:- • If you hold income shares, income will be distributed to you on the payment dates shown for each of the Funds in the table on page 52. • If you hold accumulation shares, income will be retained within the Fund. No additional shares will be bought. The price of shares will reflect the net income received. We must disclose details of such distributions to HM Revenue and Customs (HMRC). The distribution also needs to be disclosed on your tax return.

Income Tax A tax voucher is sent to all shareholders when distributions are paid or accumulated which will aid completion of tax returns. Interest Distributions: Income that is distributed from our funds as interest is paid or accumulated gross of tax to all shareholders. A Personal Savings Allowance currently applies for UK individual taxpayers. This means that no tax is payable on savings income, which includes interest distributions, of up to £1,000 for basic rate taxpayers and up to £500 for higher rate taxpayers. This allowance is not available for additional rate taxpayers. UK taxpayers, including basic rate taxpayers, are liable to pay UK tax on savings income above the allowance, subject to the starting rate of tax for savings. For UK corporate shareholders, interest distributions will be paid without the deduction of tax. Such shareholders will be subject to corporation tax on the gross amount of the distribution or accumulation. For non-UK resident shareholders, interest distributions will be paid without the deduction of tax. Tax may or may not be payable depending on the shareholder’s tax position and the provisions of any relevant double tax treaty with the UK. Dividend Distributions: A dividend allowance applies for UK resident individual shareholders which charges the first £2,000 of dividends received in the tax year at 0%. A UK resident individual shareholder will have to pay income tax at the applicable basic, higher or additional rate (depending on the shareholder’s individual tax position) on dividend income in excess of the £2,000 allowance. Note that dividend income within the £2,000 allowance will still count towards basic, higher and additional rate bands and may therefore affect the rate of income tax that a shareholder pays on dividends they receive in excess of the £2,000 allowance. Where a corporate shareholder receives a dividend distribution from a Fund, such a shareholder should apportion the amount of the distribution (by way of a formula) between that part representing the Fund’s income subject to corporation tax and that part representing the Fund’s other income. Only that part which represents the income subject to corporation tax in the Fund will be liable to corporation tax (in the hands of the corporate shareholder) and will be treated as an annual payment received after deduction of income tax at the basic rate. That deemed income tax will be available to offset against the corporation tax liability of the shareholder or may be repaid subject to certain restrictions. For non-UK resident shareholders, tax may or may not be payable depending on the shareholder’s tax position and the provisions of any relevant double tax treaty with the UK. This information is based on our understanding of current UK law and HM Revenue & Customs practice which may be subject to retrospective change. The future basis and rates of taxation may change without warning. Shareholders are recommended to consult their professional advisers if they are in any doubt as to their individual tax position. 46

Capital Gains Tax You will not need to pay capital gains tax unless your net gains from all sources exceed the annual exemption limit. The limit for the 2021/2022 tax year is £12,300.

Assessment of Value The Authorised Fund Manager is required to perform a detailed assessment on whether funds are ‘providing value to investors’. The resulting findings are published in a consolidated report on our website.

*To help us continually improve our service, and in the interests of security, we may monitor and/or record your communications with us. Lines are open Monday to Friday from 9am to 5pm (excluding public holidays). 47

Important Notes

The Interim Report covers the period 1 September 2020 to 28 February 2021. Investments in stocks and shares can go down as well as up and investors may not get back the amount they originally invested. This can affect the price of shares within open-ended investment companies and the income from them. Past performance should not be seen as an indication of future returns. Your holding in an open-ended investment company must be regarded as a medium to long-term investment; this means for at least five years. Where overseas securities are held the prices and income may also be affected by changes in currency exchange rates. It is possible that the value of an investment may fall below its original level. Investments in emerging markets are by their nature higher risk and potentially more volatile than those inherent in some established markets. These risks include the possibility of failed or delayed settlement, registration and custody of securities and the level of investor protection offered. Where a Fund holds gilts or other fixed interest securities, the value of the underlying assets is strongly affected by interest rate fluctuations and by changes in the credit ratings of the underlying issuer of the assets. There is a risk that both the relative yield and the capital value of these may be reduced if interest rates go up. Please note any reference to “Fund” or “Funds” means a sub fund of the Company. This report is issued in the UK by HSBC Global Asset Management (UK) Limited, authorised and regulated by the Financial Conduct Authority. There are risks involved in investing in HSBC Universal Investment Funds. Please refer to the Prospectus, Key Investor Information Document (KIID) and Supplementary Information Document (SID) for further details. The information in this report is based on our understanding of current law and HM Revenue and Customs practice as at 28 February 2021. Both law and practice may of course change. The views expressed are those of HSBC Global Asset Management (UK) Limited and do not constitute investment advice. No liability can be accepted for recipients acting independently on its content. The Company is authorised and regulated by the Financial Conduct Authority and is structured as an umbrella company, in that the Company proposes to issue shares linked to different Funds which have been established. The Company is a UCITS scheme. Shareholders are not liable for the debts of the Company. A shareholder is not liable to make any further payment to the Company after the purchase price of the shares has been paid for.

Accounting Policies The interim financial statements have been prepared on the historical cost basis, as modified by the revaluation of investments, in compliance with FRS 102 and in accordance with the Statement of Recommended Practice for Authorised Funds (SORP) issued by The Investment Association in May 2014.

S. White T.J. Palmer

Director Director

For and on behalf of HSBC Global Asset Management (UK) Limited ACD

21 April 2021 48

Important Changes to the Company and/or Fund Documentation

The following changes to the Company have resulted in the ACD (Authorised Corporate Director) making changes to the Company’s Instrument of Incorporation and its Prospectus.

Amendments to the Instrument The Instrument was updated with effect from 1 October 2020 to allow a deferral of any redemptions at a valuation point to the next valuation point and to allow a deferral of an exchange of shares between classes issued in respect of different sub-funds at a valuation point to the next valuation point. The Instrument was updated on 7 January 2021 to reflect the changes due to Brexit or the departure of the United Kingdom from the EU.

Amendments to the Company Prospectus The Company Prospectus was updated on 1 October 2020 to reflect updates to the dealing in shares section; the significant activities not connected to the ACD for directors; updates to the OCF and fund administration fee. The Company Prospectus was updated on 7 January 2021 to reflect the changes due to Brexit or the departure of the United Kingdom from the EU and addition of European Benchmark Regulation disclosure and an update to eligible securities markets and eligible derivatives markets. The Company Prospectus was updated on 10 March 2021 to reflect the change in fund administration fee and inserting a new section ‘integration of sustainability risks into investment decisions’ as required under SFDR. 49

Other Information

Equalisation Revenue received by the Fund during the distribution period is reflected in the price of shares until the revenue is distributed. The cost of Group 2 shares bought during a distribution period will therefore include an element of revenue. Equalisation represents the average amount of accrued revenue included in the purchase price of all Group 2 shares sold in the year, which is refunded as part of a shareholder’s first distribution. This amount is treated as a capital repayment for tax purposes. It is not liable to income or corporation tax and is deducted from the original cost of the shares for capital gains tax purposes.

Corporate Shareholders

All Funds in this OEIC have a 100% franked distribution shown on their annual consolidated tax voucher. 50

Risk and Reward Profile

Fund Rating* Lower risk Higher risk

Japan Multi-Factor Equity Fund 5† Typically lower rewards Typically higher rewards

UK Multi-Factor Equity Fund 6 1 2 3 4 5 6 7

US Multi-Factor Equity Fund 5†

†The previous rating for this Fund was 6 until 25 April 2021.

*More About this Rating The rating is based on price volatility over the last five years, and is an indicator of absolute risk. Historical data may not be a reliable indication for the future. The rating is not guaranteed to remain unchanged and the categorisation may shift over time. The lowest rating does not mean a risk-free investment. For further information on the specific risks applicable to each Fund please visit www.assetmanagement.hsbc.com/uk. 51

Directory

The Company HSBC Universal Investment Funds, 8 Canada Square, London, E14 5HQ

Authorised Corporate Director (ACD) and Head Office HSBC Global Asset Management (UK) Limited, 8 Canada Square, London, E14 5HQ

Investment Manager HSBC Global Asset Management (UK) Limited, 8 Canada Square, London, E14 5HQ

Depositary State Street Trustees Limited, Quartermile 3, 10 Nightingale Way, Edinburgh, EH3 9EG

Regulator Financial Conduct Authority (FCA), 12 Endeavour Square, London, E20 1JN

Auditor KPMG LLP, 15 Canada Square, London, E14 5GL

Registrar HSBC Global Asset Management (UK) Limited (delegated to Northern Trust Global Services SE), 50 Bank Street, Canary Wharf, London, E14 5NT Telephone: 0800 358 3011* +44 800 358 3011 (Overseas)* *Lines are open 9am to 5pm Monday to Friday (excluding public holidays).

Administrator (delegated to Northern Trust Global Services SE) - postal address HSBC Global Asset Management (UK) Ltd, Sunderland, SR43 4BF (w.e.f 6/4/21)

Website www.assetmanagement.hsbc.com/uk

To help us continually improve our services, and in the interests of security, we may monitor and/or record your communications with us. 52

Quick Reference Guide to HSBC Universal Investment Funds

Name of Japan Multi-Factor UK Multi-Factor US Multi-Factor OEIC Fund Equity Fund Equity Fund Equity Fund

Number of distributions 1 2 1 per year

Distribution 30 April, 31 October 31 October dates 31 October

Lump sum minimum £1,000,000 £1,000,000 £1,000,000 investment level

Regular saver minimum N/A N/A N/A investment level

Authorised Corporate Director periodic 0.25 0.25 0.25 charge % †

Available N/A N/A N/A as an ISA

In ISA can income N/A N/A N/A be paid

Income shares Yes Yes Yes available

Accumulation Yes Yes Yes shares available

†The above information relates only to Institutional A share classes. Other share classes may differ. Issued by HSBC Global Asset Management (UK) Limited. Authorised and regulated by the Financial Conduct Authority. www.assetmanagement.hsbc.com/uk

HSBC Global Asset Management (UK) Limited Forum One Parkway Whiteley Fareham PO15 7PA United Kingdom

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