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BM-BE HSBC Global Funds - Global Securitised Credit

Share Class AC 31 Jul 2021 AC LU1823213035 31/07/2021 Fund Objective and Strategy Investment Objective

The Fund aims to provide term capital growth and income by investing in a of “crossover” (that is, at the intersection of investment grade and non-investment grade) securitised bonds.

Investment Policy

In normal conditions, the Fund will invest its assets in securitised bonds rated between BBB+ and BB-; including asset backed securities, commercial mortgage backed securities, collateralised loan obligations and residential mortgage backed securities. The underlying exposures of these assets include, but are not limited to, mortgages (residential and commercial), auto-loans, corporate loans, bonds, credit cards, student loans and other receivables. The Fund may also invest in other bonds issued by companies, governments, government related-entities and supranational bodies worldwide.The Fund may temporarily, in the event a large subscription is received, invest in cash, money-market instruments and/ or -dated bonds issued by governments in developed markets.The Fund may invest up to 10% in onshore Chinese bonds which are issued within the People’s Republic of China and traded on the China Interbank Bond Market.The Fund may invest up to 10% in other funds, including HSBC funds.The Fund’s primary currency exposure is to US dollars.See the Prospectus for a full description of the investment objectives and derivative usage.

Since Inception Performance (%) Class Details UCITS V Compliant Fund Yes Distribution Type Accumulating 110 Dealing Frequency Weekly 105 Valuation Time 17:00 Luxembourg 100 Min. Initial Investment USD 5,000 95 Ongoing Charge Figure 2 1.554% 90 Management Fee 1.30% Share Class Base USD Currency Since Domicile Luxembourg Performance (%) YTD 1M 3M 1Y 3Y¹ 5Y¹ Inception¹ ISIN LU1823213035 AC 1.75 0.27 0.55 4.75 1.44 - 1.49 Share Class Inception 16 Jul 2018 Date Rolling NAV per Share USD 10.46 31 Jul 2020- 31 Jul 2019- 31 Jul 2018- 31 Jul 2017- 31 Jul 2016- Performance Fund Size USD 111,076,828 31 Jul 2021 31 Jul 2020 31 Jul 2019 31 Jul 2018 31 Jul 2017 (%) Bloomberg Ticker HSGLAAC LX AC 4.75 -3.13 2.86 - - Manager Andrew John Jackson

Past performance is not an indicator of future returns. The figures are calculated in 1Result is annualised when calculation period the share class base currency, reinvested, net of fees. is over one year. Source: HSBC Global , data as at 31 July 2021 2Ongoing Charges Figure, is based on expenses over a year. The figure includes annual management charge but not the Risk Disclosure transaction costs. Such figures may vary from • The Fund's unit value can go up as well as down, and any capital invested in the Fund time to time. may be at risk. • The Fund invests in bonds whose value generally falls when interest rates rise. This risk is typically greater the longer the maturity of a bond investment and the higher its credit quality. The issuers of certain bonds, could become unwilling or unable to make payments on their bonds and default. Bonds that are in default may become hard to sell or worthless. • The Fund may invest in Emerging Markets, these markets are less established, and often more volatile, than developed markets and involve higher risks, particularly market, liquidity and currency risks. • Derivatives may be used by the Fund, and these can behave unexpectedly. The pricing and volatility of many derivatives may diverge from strictly reflecting the pricing or volatility of their underlying reference(s), instrument or asset. • Investment Leverage occurs when the economic exposure is greater than the amount invested, such as when derivatives are used. A Fund that employs leverage may experience greater gains and/or losses due to the amplification effect from a movement in the price of the reference source. • Further information on the Fund's potential risks can be found in the Key Information Document and Prospectus.

Until 23 August 2019 the name of the fund was HSBC Global Investment Funds – Global Asset-Backed Crossover Bond 3-Year Risk Measures AC 5-Year Risk Measures AC

Volatility 9.02% Volatility - Sharpe Ratio 0.00 Sharpe Ratio -

Characteristics Fund Characteristics Fund Spread Duration 3.71 Number of Holdings ex Cash 92 Rating Average3 BBB Yield to Maturity (Gross) 3.20 Weighted Average Life4 4.17 Floating Rate Weight 88.57 Modified Duration 0.58 Sector Allocation (Market Fund Value %) Credit Quality Rating CLO 37.61 Fund Allocation (Market Value %) CMBS 33.78 AAA 7.21 RMBS non-conforming 22.69 AA 2.17 RMBS prime 2.70 A 23.06 Whole Business ABS 2.24 BBB 48.71 Cash 0.99 BB 14.83 Sorted from largest to smallest per market values of weight. B 3.04 Cash 0.99 Weighted Average Life Fund Sorted from highest to lowest rating. Cash is not included in any Allocation (Market Value %) rating. 0 - 2 years 25.43 Geographical Allocation 2 - 5 years 42.40 Fund (Market Value %) 5 - 10 years 30.67 United States 59.09 10+ years 1.49 Pan European 14.50 Sorted from shortest to longest per the length of expected paydown 14.09 Australia 7.29 France 2.92 Ireland 1.09 Netherlands 1.03 Sorted from largest to smallest per market values of weight.

3Average credit rating uses 'Index rating' which is an average of S&P, Fitch, Moody’s. The average fund and benchmark rating does not include securities rated NR or NA. 4The Weighted Average Life (WAL) of the fund is the weighted average time until paydown of principal of all instruments calculated using the expected amortisation date of all instruments, based on internal credit assumptions. Source: HSBC Global Asset Management, data as at 31 July 2021 Monthly Performance Commentary Market Overview In July, the US, UK and European vaccination programmes continued to be rolled out. However, the spread of the Delta variant also accelerated, so that countries not sufficiently vaccinated potentially could fall back. Despite this, economies and global travel look increasingly to be re-opening. Inflation expectations and long yields rose in July, but remain volatile as many still believe that inflation will be temporary and the impact of any withdrawal of stimulus is seen as having limited impact. In Securitised Credit, primary issuance kept up a good pace in most asset classes, although CLOs continues to see more elevated issuance. The positive economic and market sentiment and improved fundamental performance of most assets is supporting spreads. The healthy supply balances fundamental support, so that spreads are only marginally tighter at the end of July compared to end of June for most asset classes other than CLOs. CLO refinancing and new issue continued the impressive run, causing spreads to be weakest here and widen marginally. June CLO issuance comprised circa $24.5bn of US CLOs (March $48bn, June $36bn). European CLOs issued over €8bn (the same as June). Year to date there have been 529 new US CLOs (including refinances and resets) compared to 159 at the same time in 2020. New issue volumes outside the US and excluding CLOs were €36.2bn compared to €14.5bn last month. Of this, €10.7bn was distributed (the same as last month), the remainder being retained for financing trades. Distributed new issues were dominated by Australian, UK and Irish Buy to Let/ non-conforming RMBS, with a UK CMBS for variety. US CMBS new issue came in at a $18.7bn compared to $24bn last month (split between Agency and private CMBS). Fund Overview At the end of July, there were 92 securities in 78 securitisations and a cash holding which is available to cover currency hedging collateral. In July a US CLO refinanced (bond redeemed and the fund reinvested in the new issue). The fund received a full repayment of a US Single Family Rental RMBS amongst the expected amortisations. CLO remains the largest sector with 38%, ahead of CMBS with 34%, with RMBS in third position with 25%. The major geographic exposure is to the USA at 59%, with the United Kingdom comprising 14%, the Eurozone comprises 20% (of which 15% is Pan-European with exposures in multiple countries) and Australia 7% of the fund. The portfolio is 11% fixed rate and 89% floating rate at the end of the month, with floating rate income based on 1 month or 3 month USD Libor, EURIBOR, GBP Libor or AUD BBSW or other replacement IBOR rate. Approximately 59% of the instruments are USD-denominated and pay all income and repayments in US Dollars. The remaining 41% is denominated in GBP, AUD and Euro. We hedge the full market value and accrued income back to USD each month. This hedge effectively covers all principal repayments. The fund remains invested in the intersection of Investment grade and sub investment grade bonds, with the weighted average rating of BBB at month end.

Outlook The economic outlook looks more uncertain than it has in the recent past. Many economies look set to continue to recover from the economic effects of the global shutdown from Covid. However, the spread of the Delta variant and low vaccination rates add considerable uncertainty. Some economies, notably the US, appear to have peaked in the recovery in some sectors (goods). Hence, the recovery path will be uneven by country and sector with a higher probability of pullbacks. Spreads in developed market credit recently pulled back a little, but remain close to all time tight levels, suggesting further tightening is unlikely and some widening may occur into the year end. The future path of interest rates also appears to be flattening, as expectations of rising rates ameliorates, but there is considerable uncertainty and volatility in rates as inflation remains stubbornly elevated. Longer term, the recovery should continue despite temporary setbacks and consequently Securitised Credit should benefit over time. Extensions of stimulus mean that loan delinquencies and defaults across all sectors and countries should continue to be muted and provide fundamental performance support to Securitised Credit. Going into the Summer, the strength from the first half for Securitised Credit looks unlikely to continue and volatility should be expected, but the medium term outlooks remains benign. Once the stimulus is withdrawn, some more permanent issues may arise as those unable to afford loan payments default. Hence, the way in which the great unwind occurs and when it occurs will be important for performance, albeit indications are that the stimulus will only be withdrawn slowly and further into the future than initially expected. The impact will differ by sector and individual bonds, so fundamental credit research is increasingly important to avoid weaker credits and take advantage of emerging opportunities. There are few direct exposures in this fund to the most impacted sectors (travel, hospitality, retail etc.), but all will be impacted by the eventual path of the recovery and stimulus withdrawal. All of the positions in this fund also enjoy decent , such that at the time of writing this fund remains conservatively positioned. As the crisis develops, there will be opportunities to reposition the fund to take advantage of the resumption of more normal economic activity. Important Information HSBC Global Asset Management (Bermuda) Limited (“AMBM”) of 37 Front Street, Hamilton, Bermuda, is a wholly owned subsidiary of HSBC Bermuda Limited (the “Bank”). AMBM and the Bank are licensed to conduct investment business by the Bermuda Monetary Authority.

Funds managed by AMBM are offered by Prospectus only in those jurisdictions where they are permitted by law. Persons are required to inform themselves and observe any relevant restrictions. AMBM makes no representation as to the suitability of the funds for .

Investors should be aware that performance returns are affected by market fluctuations. Investing entails risks, including possible loss of principal. Past performance is no guarantee of future performance. Investors should note that the use of derivatives and involving a currency other than their own will create foreign exchange exposure, which involves special risks. It is the aim of the Company to preserve capital and, where applicable, to maintain a stable per share; these aims are not guaranteed. Additionally, investors should consider their investment objectives, whether or not they can assume these risks and should undertake their own appropriate professional advice. Expressions of opinion contained herein are subject to change without notice.

For investors investing via a nominee service provider, the nominee service provider will process the transaction and route all proceeds to you, which may extend the settlement period. Please contact your investment advisor/introducing agent, or in the absence of those the nominee provider directly, to confirm the settlement period.

Issued by HSBC Global Asset Management (Bermuda) Limited

Licensed to conduct investment business by the Bermuda Monetary Authority

© Copyright HSBC Global Asset Management (Bermuda) Limited 2021. All Rights Reserved.

Further information can be found in the prospectus. Terms of Glossary Accumulation Share: a type of share where the income earned by the Fund is retained in the Fund ACD: HSBC Global Asset Management (UK) Limited, the Authorised Corporate Director of the Company Actively Managed: where the fund manager uses their expertise to pick investments to achieve the fund’s objectives : an historical measure of volatility to measure how a fund moves versus its benchmark (i.e. an Index) Bond(s): a loan, usually to a company or government, that pays interest Bond Index Futures: a contract stating that the holder agrees to purchase a bond index at a particular price on a specified future date Collective Investment Scheme: a fund that more than one person contributes to with the aim of increasing the value of their investments or receiving income from a pooled investment. A fund manager will invest the pooled money into one or more types of asset, such as , bonds or property Credit Rating: an assessment of the of a company, government or other organisation. It seeks to measure how likely it is that the issuer of a bond will be able to continue to make interest payments and repay the money loaned to it Developed Markets: countries with relatively high levels of personal income and established economies Duration: a measure of how long it takes in years for an investor in a bond to recoup the price they paid for the bond from its interest payments. It provides an indication of how much bond prices are likely to change if and when interest rates change Emerging Markets (EM): countries that are progressing toward becoming advanced, usually shown by some development in financial markets, the existence of some form of exchange and a regulatory body Futures: a financial contract obligating the buyer to purchase an asset (or the seller to sell an asset), such as a physical commodity or a financial instrument, at a predetermined future date and price Growth: the increase in the value of investments Government Bond or Gilt: a loan to a national government in return for regular payments (known as the coupon) and a promise that the original investment (principal) is paid back at a specified date. Gilts are loans to the UK government Hedge Funds: an that pools money from investors and invests in a variety of assets, often with complex investment strategies and risk management techniques Hedge or Hedging: using derivative type investments as a way to reduce risk High yield bond: a bond paying a higher level of interest but which has a lower credit rating than investment grade Income: money generated by a fund, such as interest from a bond or a dividend from a share, which can be paid out to its investors or paid back into the fund and reinvested Income Share: the type of Share where the income earned by the Fund is paid out to you Information Ratio: a measure of the risk-adjusted return of a fund against its benchmark Investment Grade: a credit rating that indicates the issuer of a bond has a relatively low risk of being unable to make interest payments and repay the money to it Maturity: the period of time left for a bond or gilt to remain outstanding before the original loan and any final interest is repaid to the lender

Net Asset Value (NAV): the value of the scheme property of a fund less the liabilities of the fund Ongoing Charges Figure: a measure of what it costs to invest in a fund. It includes the fee paid to the ACD and other operating costs Option adjusted duration (OAD): a duration value based on the probability of early redemption call by the bond issuer Option adjusted spread duration (OASD): estimates the price sensitivity of a bond to a 100 basis-point movement (either widening or narrowing) in its spread relative to treasuries, taking into account the likelihood of early redemption Property-related securities: shares of property companies that own, manage or develop property and Real Estate Investment Trusts (REITs), which are investment companies that own buildings and land Return(s): the money made or lost on an investment Share(s): an equally valued holding in a fund of a company, representing part ownership of that fund, (including larger denomination shares and smaller denomination shares) Sharpe ratio: a measure for calculating risk-adjusted return, and this ratio has become the industry standard for such calculations Volatility: a measure of the size and frequency of changes in the value of an investment over a short space of time Yield: the income from an investment, usually stated as a percentage of the value of the investment Yield to Maturity: the total return anticipated on a bond if the bond is held until the end of its lifetime, excluding strategic currency hedges for Portfolio/Benchmark calculations. Number is shown in percentage Yield to Worst: the lowest potential yield that can be received on a bond without the issuer actually defaulting, excluding strategic currency hedges for Portfolio/Benchmark calculations. Number is shown in percentage