HSBC Advisor Funds Trust PRE 14A Preliminary proxy

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.)

Filed by the Registrant [X]

Filed by a Party other than the Registrant [ ]

Check the appropriate box:
	[X]	Preliminary Proxy Statement
	[ ]	Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
	[ ]	Definitive Proxy Statement
	[ ]	Definitive Additional Materials
	[ ]	Soliciting Material Pursuant to §240.14a-12

(Name of Registrant as Specified In Its Charter)

HSBC Advisor Funds Trust

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):
	[X]	No fee required.
	[ ]	Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
			(1)	Title of each class of securities to which transaction applies:

			(2)	Aggregate number of securities to which transaction applies:

			(3)	Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

			(4)	Proposed maximum aggregate value of transaction:

			(5)	Total fee paid:

	[ ]	Fee paid previously with preliminary materials.
	[ ]	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
			(1)	Amount Previously Paid:

			(2)	Form, Schedule or Registration Statement No.:

			(3)	Filing Party:

			(4)	Date Filed:

HSBC Funds

HSBC U.S. Government Money Market Fund	HSBC Opportunity Fund
HSBC Prime Money Market Fund	Aggressive Strategy Fund
HSBC U.S. Treasury Money Market Fund	Balanced Strategy Fund
HSBC Emerging Markets Debt Fund	Moderate Strategy Fund
HSBC Emerging Markets Local Debt Fund	Conservative Strategy Fund
HSBC Total Return Fund	Income Strategy Fund
HSBC Frontier Markets Fund	HSBC Global High Income Bond Fund
HSBC Asia ex-Japan Smaller Companies Equity Fund	HSBC Global High Yield Bond Fund
HSBC Euro High Yield Bond Fund (USD Hedged)	HSBC Global Equity Volatility Focused Fund

HSBC Advisor Funds Trust	HSBC Portfolios

HSBC Opportunity Fund	HSBC Opportunity Portfolio

(HSBC Funds, HSBC Advisor Funds Trust and HSBC Portfolios
each a “Trust” and, collectively,
the “Trusts” and each of their series, each a “Fund” and,
collectively, the “Funds”)

3435 Stelzer Road
Columbus, Ohio 43219-3035

[DATE]

Dear Shareholder:

On behalf of the Boards of Trustees of the Trusts (collectively, the “Boards”), I invite you to a joint special meeting of shareholders of the Trusts scheduled for April 14, 2016, at the offices of Citi Fund Services, 800 Boylston Street, 24^th Floor, Boston, Massachusetts 02116, at 10:00 a.m., Eastern Time (the “Special Meeting”).

The purpose of the Special Meeting is to ask shareholders to consider the following proposals:

	1.		To approve the election of five nominees to serve as Trustees of the Trusts;

	2.		To approve the reorganization of each Trust into a single newly established Delaware statutory trust from a Massachusetts business trust or New York trust, as applicable;

	3.		To approve an amendment to the current “managers of managers” arrangement;

	4.		To approve revisions to the Funds’ fundamental investment policies.

Importantly, the Boards have considered the proposals and determined that they are in the best interest of the Funds, and unanimously recommend that you vote “FOR” the proposals. Whether or not you plan to attend the Special Meeting in person, please take a few minutes to read the Proxy Statement and cast your vote promptly.

Shareholder meetings of the Funds do not occur often, so we strongly encourage you to take the time to carefully consider and vote on these proposals promptly, regardless of the number of shares you own. BY VOTING AS SOON AS POSSIBLE YOU SAVE YOUR FUND THE ADDITIONAL EXPENSE OF FURTHER SOLICITING YOUR VOTE.

VOTING IS QUICK AND EASY.

You can vote in one of four ways:

●	By mail with the enclosed Proxy Card – be sure to sign, date and return it in the enclosed postage-paid envelope,
●	Through the web site listed in the proxy voting instructions on the enclosed Proxy Card,
●	By telephone using the toll-free number listed in the proxy voting instructions on the enclosed Proxy Card, or
●	In person at the Special Meeting on April 14, 2016.

We appreciate your participation and prompt response in this matter. If you should have any questions regarding the proposals, or to quickly vote your shares, please call Okapi Partners, the Funds’ proxy solicitor, toll-free at877-279-2311. Thank you for your continued investment in the Funds.

Sincerely,

Richard A. Fabietti
President
HSBC Funds
HSBC Advisor Funds
Trust HSBC Portfolios

VERY IMPORTANT INFORMATION FOR SHAREHOLDERS

By its very nature, the following “Questions and Answers” section is a summary and is not intended to be as detailed as the discussion found later in the proxy materials. For that reason, the information is qualified in its entirety by reference to the enclosed Proxy Statement to shareholders.

QUESTIONS AND ANSWERS

General

Q. Why am I receiving this proxy statement?

A.You are receiving these proxy materials—a booklet that includes the Proxy Statement and your Proxy Card—because you as a Fund shareholder have the right to vote on important matters concerning the series of HSBC Funds, HSBC Advisor Funds Trust and HSBC Portfolios (the “Funds” of the “Trusts”). In particular, you are being asked to vote on four proposals (the “Proposals”), which require the approval of Fund shareholders.

Proposal 1 relates to the election of the Board of Trustees of each Trust (collectively, the “Boards” and the members of the Boards individually, the “Trustees”), all of whom currently serve as Trustees of the Trust. The nominees for election to the Boards are: Marcia L. Beck, Susan C. Gause, Deborah A. Hazell, Susan S. Huang and Thomas F. Robards (each a “Nominee” and, collectively, the “Nominees”).

Proposal 2 relates to reorganizing the Funds with and into corresponding series of a single newly organized Delaware statutory trust (the “Delaware Trust”) in order to redomicile the Trusts from either a Massachusetts business trust or a New York trust (the “Reorganization”). A Delaware statutory trust is a form of organization that is more modern and more often used by investment companies. The Funds would continue to be subject to the same federal securities laws that apply to mutual funds, including, principally, the Investment Company Act of 1940 (the “1940 Act”), and they would continue to be subject to the same rules of the U.S. Securities and Exchange Commission (“SEC”) that are intended to protect mutual funds and their shareholders. Shareholders would receive corresponding shares of the series of the Delaware Trust (“New Funds”) in exchange for shares of the same value of the Funds.

Proposal 3 relates to an amendment to the current “manager of managers” arrangement to permit HSBC Global Asset Management (USA) Inc., the Funds’ investment adviser (the “Adviser”), subject to prior Board approval, to enter into or amend sub-advisory agreements with sub-advisers that are unaffiliated with the Adviser orwholly-owned by the same company that owns the Adviser (“Wholly-Owned Sub-Adviser”). The expanded manager of managers arrangement would permit the Funds to operate more efficiently and cost-effectively.

Proposal 4 relates to proposed changes to the “fundamental investment policies” of the Funds. Currently, some of the Funds’ fundamental investment policies are antiquated or more prohibitive than the law requires. Proposal 4 is intended to create more uniform policies among the Funds, simplify and modernize the policies to reflect current law and increase the investment flexibility of the Funds to be able to adapt over time.

Q. Why am I being asked to vote?

A.You are, or were, as of February 16, 2016 (the “Record Date”) a shareholder of one or more of the Funds listed in the attachment to the Notice of Joint Special Meeting of Shareholders. Under applicable law, each of the Proposals requires the approval of shareholders of the relevant Funds. The Boards have approved the Proposals and recommend that you vote “FOR” each of them.

iii

Proposal 1: The Election of Trustees

Q. Why am I being asked to elect the Nominees to the Boards?

A.The 1940 Act requires that at least a majority of an investment company’s board members be elected by its shareholders. In addition, the 1940 Act allows trustees to fill a vacancy on the board if, after filling the vacancy, at least two-thirds of its board members have been elected by shareholders. Currently, three of the Trustees serving on the Boards have been elected by shareholders, and the remaining two Trustees were appointed by the Boards without shareholder votes in order to fill vacancies.

Although the Funds are not currently required to ask shareholders to elect Trustees because the applicable board composition requirements are satisfied, the Boards believe that it is in the best interests of the Funds’ shareholders for the Boards to be composed of elected Trustees. In addition, following the recent retirement of one of the Trustees, if the Boards were to appoint a new Trustee to fill the vacancy, only three of the six Trustees (or 50%) will have been elected by shareholders—less than the two-thirds required by 1940 Act. Thus, the election by shareholders of all of the Nominees will provide flexibility in the future for the Boards to appoint additional new members who could replace retired Trustees and also bring new skills or experiences to the Boards, without incurring the expense of holding other shareholder meetings.

Proposal 2: The Reorganization

Q. What is the purpose of the Reorganization?

A.The purpose of the Reorganization is to redomicile the Funds from their current place of incorporation (either Massachusetts or New York) into a Delaware statutory trust, which offers many advantages that should benefit the Funds and their shareholders over the long term, including simplified operations and increased flexibility to respond to changing market conditions or heightened regulations. The Trusts were established decades ago under the optimal form of organization available to the Trusts at that time. However, over time, the Delaware statutory trust has become the more favorable choice for organizational form among registered investment companies due to a variety of benefits associated with this form. Accordingly, the Boards believe that the Funds’ current organizational forms and governance structure are outdated and that the Funds would be best served going forward by operating as series of a single Delaware statutory trust.

Q. Will the Reorganization affect me?

A.The Reorganization will not affect the value of your investment in the Funds. The Delaware Trust would continue the business of the Trusts, except to the extent modified by the other Proposals included in this Proxy Statement. In fact, the investment objectives, policies, strategies and risks of each Fund will not change solely as a result of the Reorganization. No material change would be made to the manner in which a Fund currently invests or operates without prior Board approval and an appropriate amendment or supplement to the Fund’s prospectus and/or Statement of Additional Information (“SAI”), which would be communicated to shareholders, if necessary. On the effective date of the Reorganization, each New Fund will hold the same portfolio of securities previously held by the corresponding Fund.

Q. Will there be any changes to the Funds’ investment adviser or other service providers?

A.No. The main operating agreements of the Delaware Trust and New Funds would be identical to those of the corresponding Trusts and Funds, except for any reference to place of incorporation. Therefore, the Funds will continue to have the same investment adviser (and sub-adviser, if applicable) and service providers as provided by the existing agreements. The fees and expenses of the Funds would also be the same.

Proposal 3: Amendment to the “Manager of Managers” Arrangement

Q. What is a “manager of managers” arrangement?

A.Under the provisions of the 1940 Act, the appointment of a sub-adviser or an amendment to a sub-advisory agreement requires a shareholder vote. An advisory structure commonly referred to as a “manager of managers” arrangement permits a fund’s investment adviser to enter into or amend sub-advisory agreements with unaffiliated sub-advisers and Wholly-Owned Sub-Advisers, with prior Board approval but without shareholder approval. The use of a “manager of managers” arrangement is subject to the SEC issuing an exemptive order, which the Trusts and the Adviser have previously received, but only with respect to the ability to enter into or amend agreements withunaffiliated sub-advisers. The HSBC Opportunity Portfolio currently uses an unaffiliated sub-adviser and certain of the Funds use affiliated sub-advisers.

Q. What is the purpose of the amendment to the current “manager of managers” arrangement?

A.The purpose of the amendment is to modernize the existing relief from the SEC on which the Funds currently rely (or could rely) from time to time to appointunaffiliated investment sub-advisers with more flexibility than what the standard provisions of the 1940 Act would otherwise permit. The amended relief would expand the existing relief to allow the Funds to also benefit from that flexibility to enter into and amend sub-advisory agreements withWholly-Owned Sub-Advisers.

In light of the global investment network available to the Adviser as a result of its unique organizational structure as part of the HSBC group of global asset management companies, the Adviser has been able to utilize the expertise of affiliated asset managers over the past few years to assist with the day-to-day management of the Funds, notably to invest in markets outside of the United States. It is anticipated that the Adviser will continue to utilize the valuable lineup of HSBC global asset managers to provide portfolio management services and foreign investment expertise to the Funds as well as possible new funds. Accordingly, the amended manager of managers arrangement would enable the Funds to operate with greater efficiency in the future by allowing the Funds to change sub-advisers, including Wholly-Owned Sub-Advisers, and use HSBC global asset managers that are best suited to the Funds’ needs without incurring the expense and delay of obtaining shareholder approvals.

Q. Will the Amended Manager of Managers Arrangement affect me?

A.Because the Adviser and the Funds already benefit from an existing older form of manager of managers order from the SEC and certain of the Funds already use sub-advisers, affiliated or not, a modern order would not substantially change the way in which the Funds operate. However, the modern order may result in cost savings and better access to HSBC’s global asset management expertise over time. The modern order also would not affect the amount of management fees paid by the Funds to the Adviser.

Proposal 4: Changes to the Funds’ Fundamental Investment Policies

Q. What affect will the proposed changes to the fundamental investment policies have on the Funds?

A. Proposal 4 is intended to create more uniform investment policies among the Funds, simplify and modernize these investment policies to reflect current law and increase the investment flexibility of the Funds. However, the Funds would continue to be managed subject to the limitations imposed by the 1940 Act, as well as the investment objectives, strategies and policies expressed in the Funds’ registration statements, which may be changed by the Boards from time to time. No material change would be made to the manner in which a Fund currently invests or operates without prior Board approval and an appropriate amendment or supplement to the Fund’s prospectus and/or SAI, which would be communicated to shareholders, if necessary.

Voting

Q. Who is asking for my vote?

A.The enclosed proxy is being solicited by the Board of Trustees of your Fund for use at the joint special meeting of shareholders to be held on April 14, 2016 or any adjournment or postponement thereof (the “Special Meeting”), and if the Special Meeting is adjourned or postponed, at any later meetings, for the purposes stated in the Notice of Joint Special Meeting of Shareholders.

Q. How do the Boards suggest that I vote?

A.After careful consideration, the Boards have unanimously approved each of the Proposals contained in this Proxy Statement and recommend that you vote “FOR” the Proposals that apply to your Fund(s).

Q. Why am I receiving information about Funds I do not own?

A.Some Proposals are common to each Fund, and management of the Funds has concluded that it is more cost-effective to have a common Proxy Statement and hold the Special Meeting for all of the Funds. You will be asked to vote only on each Proposal that affects the Fund(s) you own.

Q. What vote is required to approve the Proposals?

A.Regulatory requirements vary based on the type of proposal that is being considered.Proposal 1 requires approval by a plurality of the votes cast in person or by proxy at the Special Meeting for each Trust, provided a quorum is present.Proposal 2 requires approval by the affirmative vote of a majority of the outstanding voting securities of each Trust. The term “a majority of the outstanding voting securities” is defined in the 1940 Act as the affirmative vote of the lesser of (a) 67 percent or more of the voting securities present at the Special Meeting, if the holders of more than 50 percent of the Fund’s outstanding shares are present or represented by proxy, or (b) more than 50 percent of the Fund’s outstanding voting securities (“1940 Act Majority Vote”). Shareholders of all Funds of a Trust will vote together as a single class on each of these two Proposals.

Each ofProposals 3 and 4 require approval by a 1940 Act Majority Vote of each Fund voting separately. All shareholders of all classes of shares of a Fund will vote together as a single class on each of these two Proposals.

Q. Will my vote make a difference?

A.Yes! Your vote is very important and can make a difference in the governance and management of your Fund(s). Your vote can help ensure that the Proposals can be acted upon. We encourage all shareholders to participate in the governance of their Fund(s). In addition, your immediate response on the enclosed Proxy Card, on the Internet or over the phone will help save the costs of any further solicitations.

Q. If I am a small investor, why should I bother to vote?

A.You should vote becauseevery vote is important. If numerous shareholders just like you fail to vote, the Funds may not receive enough votes to go forward with the Special Meeting. If this happens, the Funds will need to solicit votes again. This may delay the Special Meeting and the approval of the Proposals and generate unnecessary additional costs.

Q. How do I cast my vote?

A.You may provide a Fund with your vote by mail with the enclosed Proxy Card, by Internet by following the instructions in the proxy voting instructions, by telephone using the toll-free number listed in the proxy voting instructions, or in person at the Special Meeting. You may use the enclosed postage-paid envelope to mail your Proxy Card. Please follow the enclosed instructions to utilize any of these voting methods. If you need more information on how to vote, or if you have any questions, please call the Funds’ proxy solicitation agent at the telephone number below.

If you change your mind after you vote, but before the Special Meeting, you can revoke your proxy by executing and submitting a revised proxy (following the methods noted above), or by giving written notice of revocation to the Fund(s) prior to the Special Meeting, or by voting in person at the meeting.

Q. Whom do I call if I have questions?

A.We will be happy to answer your questions regarding this proxy solicitation. Should you have any questions, please call the Funds’ proxy solicitor Okapi Partners LLC at877-279-2311.

PROMPT EXECUTION AND RETURN OF THE ENCLOSED PROXY CARD IS REQUESTED. A SELF-ADDRESSED, POSTAGE-PAID ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE, ALONG WITH INSTRUCTIONS ON HOW TO VOTE OVER THE INTERNET OR BY TELEPHONE SHOULD YOU PREFER TO VOTE BY ONE OF THOSE METHODS.

vii

HSBC Funds

HSBC U.S. Government Money Market Fund	HSBC Opportunity Fund
HSBC Prime Money Market Fund	Aggressive Strategy Fund
HSBC U.S. Treasury Money Market Fund	Balanced Strategy Fund
HSBC Emerging Markets Debt Fund	Moderate Strategy Fund
HSBC Emerging Markets Local Debt Fund	Conservative Strategy Fund
HSBC Total Return Fund	Income Strategy Fund
HSBC Frontier Markets Fund	HSBC Global High Income Bond Fund
HSBC Asia ex-Japan Smaller Companies Equity Fund	HSBC Global High Yield Bond Fund
HSBC Euro High Yield Bond Fund (USD Hedged)	HSBC Global Equity Volatility Focused Fund

HSBC Advisor Funds Trust	HSBC Portfolios

HSBC Opportunity Fund	HSBC Opportunity Portfolio

3435 Stelzer Road
Columbus, Ohio 43219-3035

NOTICE OF JOINT SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 14, 2016

To the Shareholders:

The HSBC Funds, HSBC Advisor Funds Trust and HSBC Portfolios (each a “Trust” and, collectively, the “Trusts”), on behalf of each of their separate series (each a “Fund” and, collectively, the “Funds”), will hold a joint special meeting of shareholders (the “Special Meeting”) on April 14, 2016, at the offices of Citi Fund Services, 800 Boylston Street, 24^th Floor, Boston, Massachusetts 02116 at 10:00 a.m., Eastern Time, for the following purposes:

	1.		To approve the election of five nominees to serve as Trustees of the Trusts: Marcia L. Beck, Susan C. Gause, Deborah A. Hazell, Susan S. Huang and Thomas F. Robards;

	2.		To approve the reorganization of each Trust into a single newly established Delaware statutory trust from a Massachusetts business trust or New York trust, as applicable;

	3.		To approve an amendment to the current “managers of managers” arrangement;

	4.		To approve revisions to the Funds’ fundamental investment policies.

You are entitled to vote at the Special Meeting or any adjournment(s) or postponement(s) thereof if you owned shares of any Fund at the close of business on February 16, 2016.

Whether or not you plan to attend the Special Meeting in person, please vote your shares. In addition to voting in person at the Special Meeting, you may also vote by mail, by telephone or via the Internet, as provided on the enclosed Proxy Card. Use of telephone or Internet voting will reduce the time and costs associated with this proxy solicitation. Whichever method you choose, please read the enclosed Proxy Statement carefully before you vote.

viii

PLEASE RESPOND

WE ASK THAT YOU VOTE PROMPTLY
IN ORDER TO AVOID THE ADDITIONAL EXPENSE OF FURTHER SOLICITATION.
YOUR VOTE IS IMPORTANT.

	By Order of the Boards of Trustees



	Heather Melito-Dezan
	Assistant Secretary
	HSBC Funds
	HSBC Advisor Funds Trust
	HSBC Portfolios

[DATE]

TABLE OF CONTENTS

		Page
VERY IMPORTANT INFORMATION FOR SHAREHOLDERS		III
NOTICE OF JOINT SPECIAL MEETING OF SHAREHOLDERS		VIII
PROXY STATEMENT		1
PROPOSAL 1 – ELECTION OF TRUSTEES		4
PROPOSAL 2 – APPROVAL OF THE REORGANIZATION		11
PROPOSAL 3 – APPROVAL OF AMENDED “MANAGER OF MANAGERS” ARRANGEMENT		16
PROPOSAL 4 – APPROVAL OF CHANGES TO FUNDAMENTAL INVESTMENT POLICIES		19
PROPOSAL 4.A—BORROWING		20
PROPOSAL 4.B—SENIOR SECURITIES		21
PROPOSAL 4.C—UNDERWRITING		21
PROPOSAL 4.D—INDUSTRY CONCENTRATION		22
PROPOSAL 4.E—REAL ESTATE		23
PROPOSAL 4.F—COMMODITIES		24
PROPOSAL 4.G—LOANS		24
PROPOSAL 4.H—DIVERSIFICATION		25
PROPOSAL 4.I—PLEDGING, MORTGAGING AND HYPOTHECATING		26
PROPOSAL 4.J—INVESTMENTS FOR CONTROL		26
PROPOSAL 4.K—INVESTMENTS IN OTHER INVESTMENT COMPANIES		26
PROPOSAL 4.L—ILLIQUID SECURITIES		27
PROPOSAL 4.M—SHORT SALES		27
PROPOSAL 4.N—WRITING AND SELLING OPTIONS		27
PROPOSAL 4.O—SECURITIES OWNED BY TRUSTEES OR OFFICERS		28
PROPOSAL 4.P—SECURITIES ON MARGIN		28
GENERAL INFORMATION ABOUT THE FUNDS		29
OTHER INFORMATION ABOUT VOTING AND THE MEETING		32
EXHIBIT A – CURRENT EXECUTIVE OFFICERS OF THE TRUSTS		A-1
EXHIBIT B – NOMINATING AND CORPORATE GOVERNANCE COMMITTEE CHARTER		B-1
EXHIBIT C – FORM OF AGREEMENT AND PLAN OF REORGANIZATION		C-1
EXHIBIT D – COMPARISON OF MASSACHUSETTS AND DELAWARE LAW		D-1
EXHIBIT E – COMPARISON OF ORGANIZATIONAL DOCUMENT PROVISIONS		E-1
EXHIBIT F – CURRENT FUNDAMENTAL INVESTMENT POLICIES		F-1
EXHIBIT G – PRINCIPAL SHAREHOLDERS OF THE FUNDS		G-1

HSBC Funds

HSBC U.S. Government Money Market Fund		HSBC Opportunity Fund
HSBC Prime Money Market Fund		Aggressive Strategy Fund
HSBC U.S. Treasury Money Market Fund		Balanced Strategy Fund
HSBC Emerging Markets Debt Fund		Moderate Strategy Fund
HSBC Emerging Markets Local Debt Fund		Conservative Strategy Fund
HSBC Total Return Fund		Income Strategy Fund
HSBC Frontier Markets Fund		HSBC Global High Income Bond Fund
HSBC Asia ex-Japan Smaller Companies Equity Fund		HSBC Global High Yield Bond Fund
HSBC Euro High Yield Bond Fund (USD Hedged)		HSBC Global Equity Volatility Focused Fund

HSBC Advisor Funds Trust		HSBC Portfolios

HSBC Opportunity Fund		HSBC Opportunity Portfolio

3435 Stelzer Road
Columbus, Ohio 43219-3035

PROXY STATEMENT

JOINT SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 14, 2016

THIS PROXY STATEMENT IS BEING FURNISHED TO YOU IN CONNECTION WITH THE SOLICITATION OF PROXIES BY THE BOARDS OF TRUSTEES (collectively, the “Boards”) OF HSBC FUNDS, HSBC ADVISOR FUNDS TRUST AND HSBC PORTFOLIOS (each a “Trust” and, collectively, the “Trusts”), on behalf of each of their series (each a “Fund” and, collectively, the “Funds”), to be voted at a Joint Special Meeting of Shareholders to be held on April 14, 2016, at the offices of Citi Fund Services, 800 Boylston Street, 24^th Floor, Boston, Massachusetts 02116, at 10:00 a.m., Eastern Time, for the purposes set forth below and described in greater detail in this Proxy Statement (the “Special Meeting”).

The table below indicates which proposals shareholders are asked to approve at the Special Meeting.

Proposals			Shareholders Solicited To Vote
1.	To approve the election of five nominees to serve as Trustees of the Trusts (“Proposal 1”)		All Funds

2.	To approve the reorganization of each Trust into a single newly established Delaware statutory trust from a Massachusetts business trust or New York trust, as applicable (“Proposal 2”)		All Funds

3.	To approve an amendment to the current “managers of managers” arrangement (“Proposal 3”)		All Funds

4.	To approve revisions to the Funds’ fundamental investment policies regarding: (“Proposal 4”)

	4.A	Borrowing	All Funds (except HSBC Euro High Yield Bond Fund (USD Hedged))
	4.B	Senior Securities	All Funds (except HSBC Euro High Yield Bond Fund (USD Hedged))
	4.C	Underwriting	All Funds (except HSBC Euro High Yield Bond Fund (USD Hedged))
	4.D	Industry Concentration	All Funds (except HSBC Euro High Yield Bond Fund (USD Hedged))
	4.E	Real Estate	All Funds (except HSBC Euro High Yield Bond Fund (USD Hedged))
	4.F	Commodities	All Funds (except HSBC Euro High Yield Bond Fund (USD Hedged))
	4.G	Loans	All Funds (except HSBC Euro High Yield Bond Fund (USD Hedged))

	4.H	Diversification	HSBC Prime Money Market Fund
			HSBC U.S. Government Money Market Fund
			HSBC U.S. Treasury Money Market Fund
			HSBC Global High Yield Bond Fund
			HSBC Global High Income Bond Fund
			HSBC Global Equity Volatility Focused Fund
			Aggressive Strategy Fund
			Balanced Strategy Fund
			Moderate Strategy Fund
			Conservative Strategy Fund
			Income Strategy Fund
			HSBC Opportunity Fund
			HSBC Opportunity Fund (Advisor)
			HSBC Opportunity Portfolio
	4.I	Pledging, Mortgaging and Hypothecating	HSBC Prime Money Market Fund
			HSBC U.S. Government Money Market Fund
			HSBC U.S. Treasury Money Market Fund
	4.J	Investments for Control	HSBC Prime Money Market Fund
			HSBC U.S. Government Money Market Fund
	4.K	Investments in Other Investment Companies	HSBC Prime Money Market Fund
			HSBC U.S. Government Money Market Fund
	4.L	Illiquid Securities	HSBC Prime Money Market Fund
			HSBC U.S. Government Money Market Fund
			HSBC U.S. Treasury Money Market Fund
	4.M	Short Sales	HSBC Prime Money Market Fund
			HSBC U.S. Government Money Market Fund
			HSBC U.S. Treasury Money Market Fund
	4.N	Writing and Selling Options	HSBC Prime Money Market Fund
			HSBC U.S. Government Money Market Fund
	4.O	Securities Owned by Trustees or Officers	HSBC Prime Money Market Fund
			HSBC U.S. Government Money Market Fund
	4.P	Securities on Margin	HSBC Prime Money Market Fund
			HSBC U.S. Government Money Market Fund
			HSBC U.S. Treasury Money Market Fund
5.	To transact such other business that may properly come before the Special Meeting or any adjournment(s) or postponement(s) thereof.

You are entitled to vote at the Special Meeting or any adjournment(s) or postponement(s) thereof if you owned shares of any Fund at the close of business on February 16, 2016 (the “Record Date”). The date of the first mailing of the Proxy Cards and this Proxy Statement to shareholders will be on or about [DATE].

Only shareholders of record at the close of business on the Record Date will be entitled to notice of, and to vote at, the Special Meeting or any adjournment(s) or postponement(s) thereof. Shares represented by proxies, unless previously revoked, will be voted at the Special Meeting or any adjournment(s) or postponement(s) thereof in accordance with the instructions of the shareholders. If Proxy Cards have been executed, but no instructions are given, such proxies will be voted in favor of the proposal. To revoke a proxy, the shareholder giving such proxy must either (1) submit to the relevant Trust a subsequently dated Proxy Card, (2) deliver to the relevant Trust a written notice of revocation, or (3) otherwise give notice of revocation at the Special Meeting or any adjournment(s) or postponement(s) thereof, and in all cases prior to the exercise of the authority granted in the Proxy Card.

If a shareholder wishes to participate in the Special Meeting or any adjournment(s) or postponement(s) thereof, but does not wish to authorize the execution of a proxy by telephone or through the Internet, the shareholder may submit the Proxy Card included with this Proxy Statement or attend the Special Meeting or any adjournment(s) or postponement(s) in person.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY
MATERIALS FOR THE SPECIAL MEETING TO BE HELD ON APRIL 14, 2016

This Proxy Statement is available online at www.okapivote.com/HSBC. In addition, the most recent annual report of each Trust, including financial statements, for the fiscal year ended October 31, 2015 has been mailed previously to shareholders.If you would like to receive additional copies of a shareholder report free of charge, or copies of any subsequent shareholder report, please contact the relevant Trust by writing to the address set forth on the first page of this Proxy Statement or by calling 1-800-782-8183, or go to the Trusts’ website at investorfunds.us.hsbc.com.Requested shareholder reports will be sent by first class mail within three (3) business days of the receipt of the request.

——————

PROPOSAL 1

ELECTION OF TRUSTEES

All Funds

——————

What are shareholders being asked to approve?

The purpose of this Proposal is to elect each of the following five nominees to serve as a Trustee on the Boards: Marcia L. Beck, Susan C. Gause, Deborah A. Hazell, Susan S. Huang and Thomas F. Robards (each a “Nominee” and collectively, the “Nominees”).

Who are the Nominees to the Boards?

Information about each of the Nominees, including his or her business address, age and principal occupations during the past five years, and other information, such as the Nominee’s experience, qualifications, attributes or skills, is set forth below. Each of the Nominees currently serves as a Trustee of the Trusts, and each such Trustee has served in that capacity since originally elected or appointed. Each of the Nominees were nominated by the Boards upon a recommendation from the Boards’ Nominating and Corporate Governance Committee, which is composed solely of Trustees who are not “interested persons” (as that term is defined by Section 2(a)(19) of the Investment Company Act of 1940, as amended (the “1940 Act”)) of the Trusts (the “Independent Trustees”). Each Nominee has agreed to continue to serve on the Boards if elected by shareholders.

Why am I being asked to vote on the election of incumbent Nominees?

The Boards have determined that it is in the best interests of the Funds to seek the election by shareholders of all of the current Trustees of the Trusts. As currently constituted, the Boards have five Trustees, three of whom have been previously elected by shareholders (Mses. Beck and Huang and Mr. Robards) and two of whom have been appointed but not previously elected by shareholders (Mses. Gause and Hazell).

Although not currently required by applicable law, the Boards believe that providing shareholders with an opportunity to elect the full slate of current Board members is an important way in which the Boards may promote meaningful representation of the shareholders’ interests and is also a corporate governance “best practice.” In recommending that shareholders elect the full slate of Trustees, the Boards also considered that such elections would satisfy the applicable provisions of the Trusts’ organizational documents regarding trustee elections. In the future, the Trustees may seek to fill vacancies on the Boards created by recent retirements.

What additional benefits will the elections have on the composition of the Boards?

The election by shareholders of the Nominees will give the Boards additional flexibility in the future to appoint a limited number of additional new Trustees, if deemed necessary, without incurring the costs of holding expensive shareholder meetings to elect each new Trustee. As background, the 1940 Act permits a mutual fund board of trustees to appoint a new trustee to fill a vacancy provided that after such trustee is appointed, at least two-thirds of the trustees have been elected by shareholders. At this time, three of the five current Trustees have been elected by shareholders (or 60%). Accordingly, the appointment of a new Trustee by the Boards to fill the vacancy left by recent retirements would not be permissible because, after such an appointment, only three of the six Trustees would have been elected by shareholders (or 50%) and, thus, less than two-thirds of the Trustees would have been elected by shareholders.

The Trustees believe that the Boards’ current composition and governance structure facilitates the effective oversight of the management of the Trusts. The Boards may decide in the future, however, that it is in the best interests of the Trusts to add one or more new Trustees with capabilities and experiences that complement those of the current Trustees. The increased flexibility to appoint new Trustees will permit the Boards to more easily adapt to changes in circumstances of the Trusts and/or the Fund’s investment adviser in order to be able to discharge their fiduciary obligations in a manner that effectively protects and advances the interests of the Trusts.

How many of the Nominees would be Independent Trustees if elected?

Mses. Beck, Gause and Huang and Mr. Robards are, and would continue to be, Independent Trustees if elected by shareholders. Ms. Hazell is, and would continue to be, an interested Trustee if elected by shareholders because she is the Chief Executive Officer of HSBC Global Asset Management (USA) Inc., the Funds’ investment adviser (the “Adviser”). Accordingly, if the Nominees are elected by shareholders, four of the five Trustees would be Independent Trustees (or 80%).

Information about the Nominees

Name, Address and	Position(s)	Term of	Principal Occupation(s)	Portfolios in	Other Directorships
Year of Birth*	with the	Office and	During Past 5 Years	Fund Complex	Held by Nominee
	Trusts	Length of		Overseen by	During the Past 5
		Time Served		Nominee⁽²⁾	Years⁽³⁾
Independent Nominees
			Private Investor (1999 –
			present); Executive Vice
Marcia L. Beck		2008 to	President, Prudential
Age: 60	Trustee	present	Investments (1997 – 1999);	[21]	None
			President and Trustee, The
			Goldman Sachs Mutual
			Funds (1992 – 1996)
			Private Investor (2003 –
			present); Chief Executive
			Officer, Dresdner RCM Global
			Investors and Allianz Dresdner
			Asset Management (2000 –
			2002); Board Member,		Met Investors Series
Susan C. Gause		2013 to	Dresdner Global Asset		Trust; and
Age: 63	Trustee	present	Management Board (2000 –	[21]	Metropolitan Series
			2002); Chief Operating Officer		Fund
			and Senior Managing Director,
			Dresdner RCM Global Investors
			(1998 – 2000); Global Chief
			Financial Officer, Dresdner
			RCM Global Investors (1996 –
			1998)
			Private Investor (2000 –
			present); Senior Vice President,
Susan S. Huang		2008 to	Schroder Investment	[21]	None
Age: 61	Trustee	present	Management (2001 – 2004);
			Managing Director, Chase Asset
			Management (1995 – 2000)

Name, Address and	Position(s)	Term of	Principal Occupation(s)	Portfolios in	Other Directorships
Year of Birth*	with the	Office and	During Past 5 Years	Fund Complex	Held by Nominee
	Trusts	Length of		Overseen by	During the Past 5
		Time Served		Nominee⁽²⁾	Years⁽³⁾
			Private Investor (2003 -		Ellington Financial
			present); Partner, Robards &		LLC (NYSE listed
Thomas F. Robards		2005 to	Co. LLC (investment and		financial services);
Age: 69	Trustee	present	advisory services) (2005 –	[21]	and Ellington
			present); Chief Financial		Residential Mortgage
			Officer, American Museum		REIT (NYSE listed
			of Natural History (2003 –		real estate investment
			2004); Chief Financial		trust); Director,
			Officer, Datek Online		Overseas
			Holdings (2000-2003);		Shipholding Group
			Executive Vice President and		(OSG) (NYSE listed
			Chief Financial Officer,		company)
			Republic New York
			Corporation (1976 – 2000)
Interested Nominee
			Chief Executive Officer,
			HSBC Global Asset
			Management (USA) Inc.
Deborah A. Hazell^†Age: 52	Trustee	2011 to present	(2011 – present); President and Chief Executive Officer,	[21]	None
			Fischer Francis Trees &
			Watts (“FFTW”) (investment
			adviser) (2008 – 2011)

*	Each Independent Nominee may be contacted by writing to the Nominee, c/o Citi Fund Services, P.O. Box 182845 Columbus, OH 43218-3035, Attn: Richard A. Fabietti. Ms. Hazell may be contacted by writing to 452 Fifth Avenue, New York, NY 10018.
⁽²⁾	The “Fund Complex” is comprised of the [19] portfolios of the HSBC Funds, [1] portfolio of the HSBC Advisor Funds Trust, and [1] portfolio of the HSBC Portfolios.
(3)	This column includes only directorships of companies required to report to the SEC under the Securities Exchange Act of 1934 (i.e., “public companies”) or other investment companies registered under the 1940 Act.
†	Ms. Hazell will be considered to be an interested Nominee (i.e., not independent) because of her affiliation with the Adviser.

Board Composition and Leadership Structure

Each Trust has a Board of Trustees. Each Board consists of five Trustees, four of whom are Independent Trustees, and one of whom is an “interested person” (as that term is defined by Section 2(a)(19) of the 1940 Act) of the Trusts (“Interested Trustee”) by virtue of her employment with the Adviser. Each Board is responsible for the overall management of each Trust, including general supervision and review of each Trust’s investment activities. The Board of each Trust, in turn, elects the officers of the Trusts who are responsible for administering the Trust’s day-to-day operations.

The Chairman of each Board, Mr. Robards, is an Independent Trustee, and, among other duties and responsibilities, serves as a point person for communications between the Trustees and the Trusts’ management and service providers. The Trustees interact directly with the Chairman, Chairs of the Trusts’ standing Committees, each other, the Trusts’ officers, and senior management of the Adviser and other service providers of the Trusts at scheduled meetings and between meetings, as appropriate.

Each Board has established the following standing committees: an Audit Committee; a Valuation and Investment Oversight Committee; and a Nominating and Corporate Governance Committee (the “Committees”) to facilitate the Trustees’ oversight of the management of those aspects of the Trusts’ operations. Each Committee has a Chair, who is an Independent Trustee. Each Committee’s responsibilities are discussed in greater detail below. Each Board believes that its leadership structure is appropriate because it allows the Board to exercise informed and independent judgment over the matters within its purview and it allocates areas of responsibility to committees of Trustees and to the full Board in a manner that enhances effective oversight.

The Boards’ Role in Risk Oversight of the Trusts

Each Board, as a whole, considers risk management issues as part of its general oversight responsibilities throughout the year at regular Board meetings, including, but not limited to, through regular reports that have been developed by management, in consultation with the Board and its counsel. These reports address investment, valuation, and compliance matters. The Board may also receive special written reports or presentations on a variety of risk issues, either upon the Board’s request or upon the manager’s initiative. In addition, the Valuation and Investment Oversight Committee of the Board meets regularly with the manager’s internal risk department to review reports on their examinations of liquidity risks to the Funds’ investment portfolios.

With respect to investment risk, each Board receives regular written reports describing and analyzing the investment performance of the Funds, which may include the comparison of the Funds’ performance to their respective benchmarks and/or peer groups when applicable. In addition, investment personnel for the Funds meet regularly with the Boards to discuss Fund performance, including investment risk and market updates. Also, to the extent that the Fund changes a particular investment strategy or invests in a new type of security that could have a material effect on the Fund’s risk profile, the Board generally is consulted.

With respect to valuation, each Board receives regular written reports summarizing the discussions from the Adviser’s internal Pricing and Valuation Committee meetings. The Trusts’ administrator provides regular written reports to each Board that enable the Board to monitor the number of fair valued securities in a particular Fund, the reasons for the fair valuation and the methodology used to arrive at the fair value. In addition, the Trusts’ Audit Committee reviews valuation procedures and results with the Funds’ Treasurer, and with the Trusts’ auditors in connection with such Committee’s review of the results of the audit of the Funds’ financial statements.

With respect to compliance risks, the Board receives regular compliance reports and meets regularly with the Trusts’ Chief Compliance Officer (CCO) to discuss compliance issues, including compliance risks. In accordance with SEC rules, the Independent Trustees meet regularly in executive session with the CCO, and the Trusts’ CCO prepares and presents an annual written compliance report to the Board. Each Board also meets regularly with the Chief Compliance Officer of the Adviser. Each Board adopts compliance policies and procedures for the Trusts and approves such procedures of certain of the Trusts’ service providers, such as the Adviser and the Subadvisers. The compliance policies and procedures are specifically designed to detect and prevent violations of the federal securities laws.

Nominee Experience, Qualifications, Attributes or Skills

The following provides an overview of the considerations that led each Board to conclude that each individual serving as a Trustee of the Trusts should so serve. The current members of the Boards joined at different points in time since 2005. Generally, no one factor was decisive in the original selection of an individual to join the Boards. Among the factors each Board considered when concluding that an individual should serve on the Boards were the following: (i) the individual’s business and professional experience and accomplishments, including prior experience in the financial services and investment management fields or on other Boards; (ii) the individual’s ability to work effectively with other members of the Board; (iii) how the individual’s skills, experiences and attributes would contribute to an appropriate mix of relevant skills and experience on the Boards.

In addition to personal qualities, such as integrity, the role of an effective Trustee inherently requires the ability to comprehend, discuss and critically analyze materials and issues presented in exercising judgments and reaching informed conclusions relevant to his or her duties and obligations. The Board believes that the specific background of each Board member (including as set forth above) evidences such ability and is appropriate to his or her serving on the Boards. The Chairman of each Board, Mr. Robards, has governance and operating experience in banking, brokerage and specialty finance companies and, as indicated, serves as a director of several public companies. Mses. Beck and Huang each have experience managing risk as well as portfolios of money market and fixed income instruments, respectively. Ms. Beck also has asset management operating and leadership experience having served as President and Trustee of an unaffiliated mutual fund complex. Ms. Gause has significant experience in the financial services industry, having served as, among other things, Chief Executive Officer of an asset management company. In that position, Ms. Gause was responsible for the day-to-day activities of the investment adviser of various registered open-end funds. Ms. Hazell has significant experience in the financial services industry and is currently the Chief Executive Officer of HSBC Global Asset Management (USA) Inc. Previously, Ms. Hazell was the President and Chief Executive Officer of a global investment management firm that provided active, fixed income capabilities to institutional investors.

Other Board Information

It is expected that the Boards will meet at least quarterly at regularly scheduled meetings. During the recent fiscal year ended October 31, 2015, each Board met 5 times. Each Trustee attended 100% of the meetings of a Board held during the last fiscal year, including the meetings of the Board’s standing Committees on which such Trustee was a member.

None of the Trusts’ Declarations of Trust provide for the annual election of Trustees. Accordingly, the Boards do not have a policy with regard to Trustee attendance at annual shareholder meetings. Except in the event of resignation or removal (as described in each Trust’s Declaration of Trust), each Trustee serves: (i) in the case of HSBC Funds, until the next meeting of shareholders called for the purpose of electing Trustees and his or her successor is elected and qualified; or (ii) in the case of HSBC Advisor Funds Trust and HSBC Portfolios, during the lifetime of the Trust and until its termination.

Executive Officers

Officers of the Trusts are appointed by the Boards to oversee the day-to-day activities of each Trust. Information about the executive officers of the Trusts, including their principal occupations during the past five years, is set forth in Exhibit A. Certain of these officers are also officers of the Adviser or officers and/or employees of Citi Fund Services, Inc., the Funds’ sub-administrator (“Citi”).

Share Ownership By Nominees and Executive Officers

As of February 16, 2016, (the “Record Date”), the Nominees and executive officers of the Trusts beneficially owned, individually and collectively as a group, [less than 1% of the outstanding shares of each class of each Fund, respectively.]

The following table sets forth the aggregate dollar range of equity securities owned by each Nominee of each Fund solicited by this Proxy Statement and of all Funds that would be overseen by the Nominees in the HSBC Family of Funds as of December 31, 2015. The information as to beneficial ownership is based on statements furnished by each Nominee.

		Dollar Range of		Aggregate Dollar
	Dollar Range of Equity	Equity Securities in	Dollar Range of Equity	Range of Equity
	Securities in the	the HSBC Advisor	Securities in the	Securities in the HSBC
Name of Nominee	HSBC Funds	Funds Trust	HSBC Portfolios	Family of Funds⁽¹⁾
Independent Nominees
Marcia L. Beck	$10,001-$50,000	None	None	$10,001-$50,000
Susan C. Gause	$10,001-$50,000	None	None	$10,001-$50,000
Susan S. Huang	$10,001-$50,000	None	None	$10,001-$50,000
Thomas F. Robards	$10,001-$50,000	None	None	$10,001-$50,000
Interested Nominees
Deborah A. Hazell	Over $100,000	None	None	Over $100,000

⁽¹⁾	The “HSBC Family of Funds” is comprised of the [19] portfolios of the HSBC Funds, [1] portfolio of the HSBC Advisor Funds Trust, and [1] portfolio of the HSBC Portfolios.

Trustee Compensation

Effective January 1, 2015, the Trusts pay each Independent Trustee an annual retainer of $100,000. The Trusts pay a fee of $12,000 for each regular meeting of the Boards of Trustees attended and a fee of $3,000 for each special telephonic meeting attended. The Trusts pay each Committee Chair an annual retainer of $12,000, with the exception of the Chair of the Audit Committee, who receives a retainer of $15,000. The Trusts also pay Mr. Robards, as Chairman of the Boards, an additional annual retainer of $30,000.

The following table sets forth the total compensation paid to the Trustees from the Fund Complex for the fiscal year ended October 31, 2015.

Name	Aggregate	Pension or	Estimated Annual	Total Compensation
	Compensation From	Retirement Benefits	Benefits Upon	From the Fund
	the Trusts	Accrued as Part of	Retirement	Complex⁽²⁾
		Fund Expenses⁽¹⁾
Independent Nominee
Marcia L. Beck	$177,500	N/A	N/A	$177,500
Susan C. Gause	$167,750	N/A	N/A	$167,750
Susan S. Huang	$164,750	N/A	N/A	$164,750
Thomas F. Robards	$182,000	N/A	N/A	$182,000
Interested Nominee
Deborah A. Hazell⁽³⁾	$0	N/A	N/A	$0

(1)	The Trusts do not accrue pension or retirement benefits as part of Fund expenses, and the Trustees are not entitled to retirement benefits upon retirement from the Boards.
(2)	For these purposes, the “Fund Complex” consisted of [19] portfolios of the HSBC Funds, [1] portfolio of the HSBC Advisor Funds Trust, and [2] portfolios of the HSBC Portfolios as of October 31, 2015.
(3)	Ms. Hazell, an Interested Trustee, is not compensated from the Trusts for her services as an Interested Trustee.

Standing Committees

The Boards of Trustees of the Trusts currently have three standing committees: Audit Committee, Valuation and Investment Oversight Committee, and Nominating and Corporate Governance Committee.

Audit Committee

The Audit Committee is comprised of all of the Independent Trustees of the Trusts. The Audit Committee is currently chaired by Ms. Beck. Ms. Beck, Mr. Robards and Ms. Gause are audit committee financial experts of the Trusts. The primary purpose of the Audit Committee is to oversee the accounting and financial reporting policies, practices and internal controls of the Trusts. The Audit Committee, among other things: (i) recommends to the Boards the selection, retention, compensation and termination of an independent public accounting firm; (ii) annually reviews the scope of the proposed audit and, generally, the audit procedures to be utilized and the proposed audit fees; (iii) reviews the results of the annual audit with the independent auditors, as presented to the Audit Committee; (iv) reviews the annual financial statements of the Funds with management and the independent auditors; and (v) reviews the adequacy and effectiveness of internal controls and procedures with management and the independent auditors. The Audit Committee of the Trusts met four times during the most recent fiscal year.

Valuation and Investment Oversight Committee

The Valuation and Investment Oversight Committee is comprised of all of the Trustees of the Trusts. The Committee is currently chaired by Ms. Huang. The Valuation and Investment Oversight Committee, among other things: (i) oversees Fund management, investment risk management, performance and brokerage practices relating to the Funds; (ii) reviews certain proposals that the Adviser may wish to make concerning the Funds and their investments; (iii) oversees the implementation and operation of the Trusts’ Valuation Procedures andthe amortized cost method of valuation pursuant to Rule 2a-7 under the 1940 Act with respect to the Funds that are money market funds; (iv) reviews the proxy voting guidelines, policies, and procedures and makes related recommendations to the Boards; and (v) oversees the performance of the investment sub-advisers to the applicable series of the Trusts. The Valuation and Investment Oversight Committee met four times during the most recent fiscal year.

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee is comprised of all of the Independent Trustees of the Trusts. The Committee is currently chaired by Ms. Gause. This Committee, among other things: (i) makes nominations for trustee membership on the Boards or a Committee; (ii) evaluates on a periodic basis the operations and effectiveness of the Boards as a whole; (iii) periodically reviews the composition of the Boards to determine whether it may be appropriate to add individuals with different backgrounds or skills from those already on the Boards; (iv) periodically reviews Board governance procedures and recommends appropriate changes to the full Boards; (v) periodically reviews Trustee compensation and Committee responsibilities and recommends appropriate changes to the full Boards; and (vi) makes recommendations to the Boards regarding the retention of professional liability insurance (D&O/E&O Insurance) and investment company fidelity bonds. The Nominating and Corporate Governance Committee also considers nominees recommended by shareholders. Such recommendations should be forwarded to the President of the Trusts. The Charter of the Nominating and Corporate Governance Committee is attached as Exhibit B. The Nominating and Corporate Governance Committee met four times during the most recent fiscal year.

When evaluating a person as a potential nominee to serve as an Independent Trustee, the Nominating and Corporate Governance Committee may consider, among other factors: (i) whether or not the person is “independent” and whether the person is otherwise qualified under applicable laws and regulations to serve as a Trustee; (ii) whether or not the person is willing to serve, and willing and able to commit the time necessary for the performance of the duties of an Independent Trustee; (iii) the contribution that the person can make to the Boards, with consideration being given to the person’s business experience, education and such other factors as the Committee may consider relevant; (iv) the character and integrity of the person; (v) the desirable personality traits, including independence, leadership and the ability to work with the other members of the Boards; and (vi) consistency with the 1940 Act.

The process of identifying nominees involves the consideration of candidates recommended by one or more of the following: current Independent Trustees, officers, and other sources that the Committee deems appropriate.

What is the required vote to approve Proposal 1?

Election of the Nominees for Trustees, with regard to each of the HSBC Funds, HSBC Advisor Funds Trust and HSBC Portfolios, must be approved by a plurality of the votes cast in person or by proxy at the Special Meeting for that Trust at which a quorum exists. A majority of the shares of each of the HSBC Funds and the HSBC Advisor Funds Trust, and one-third (1/3) of the shares of the HSBC Portfolios, outstanding on the Record Date, present in person or represented by proxy constitutes a quorum for the transaction of business for that Trust with respect to the Proposal. Shareholders of all Funds of a Trust will vote together as a single class on the Proposal.

BOARD RECOMMENDATION

THE BOARDS OF TRUSTEES, INCLUDING THE INDEPENDENT TRUSTEES, UNANIMOUSLY
RECOMMEND A VOTE “FOR” THE ELECTION OF EACH OF THE NOMINEES TO THE BOARD
OF TRUSTEES OF EACH TRUST

——————

PROPOSAL 2

APPROVAL OF THE REORGANIZATION

All Funds

——————

What are shareholders being asked to approve?

The shareholders are being asked to approve the reorganization of each Fund with and into a corresponding series of a newly formed Delaware statutory trust (the “Delaware Trust”) in order to redomicile each Trust from a Massachusetts business trust or New York trust, as applicable, into a Delaware statutory trust (the “Reorganization”). Each shareholder would receive corresponding shares of the series of the Delaware Trust (the “New Funds”) in exchange for the shares of the Funds of the same value.

In approving the Reorganization, you will be authorizing: (i) the transfer of all assets of each Fund to the corresponding New Fund in exchange for the shares of the corresponding New Fund having an aggregate value equal to the assets and liabilities of the Fund and the assumption by the New Fund of all of the liabilities of the Fund; (ii) the distribution to each shareholder of each Fund of the shares of the corresponding New Fund having an aggregate net asset value equal to the aggregate net asset value of the shares of the Fund; and (iii) the subsequent liquidation of the Fund.

Why are the Boards recommending approval of the Reorganization?

Since inception, HSBC Funds and HSBC Advisor Funds Trust have operated as Massachusetts business trusts and HSBC Portfolios has operated as a New York trust. These entities were established several decades ago (nearly 30 years ago in the case of HSBC Funds) under the optimal form of organization available to the Trusts at that time. For example, when the Trusts decided to organize certain Funds as a two-tier fund structure commonly referred to as a “master/feeder” structure, whereby one fund (the “feeder fund”) invests all of its assets in a second fund (the “master fund”), the state laws of Massachusetts and New York offered certain benefits that were not otherwise available to other organizational forms.

However, over time the Delaware statutory trust has become the more favorable choice for organizational form among registered investment companies due to a variety of benefits associated with this form, including, among other things:

More Flexibility.The Delaware Statutory Trust Act (the “DSTA”), which governs the formation and operation of Delaware statutory trusts, is specifically designed to accommodate the unique governance needs of investment companies. In contrast, the state law applicable to Massachusetts business trusts and New York trusts are not fully adapted for investment companies and, at times, can be less flexible than what the 1940 Act allows. As a result, the DSTA is generally considered to be more flexible with respect to the operation and governance of investment companies, which has the potential to minimize the cost and complexity of many routine corporate actions. For example, the Board of Trustees of the Delaware Trust will not need to undergo the costly and time-consuming process of procuring shareholder approval for amendments to the Declaration of Trust to address pressing issues or to implement certain strategic alternatives.

More Legal Certainty.The comprehensive body of law in Delaware may also reduce legal uncertainty and risk. For example, Delaware law provides comparatively greater certainty with regard to limiting the liability of shareholders for obligations of the trust or its trustees. Specifically, the DSTA entitles shareholders to the same limitation of personal liability extended to stockholders of Delaware for-profit corporations (generally limited to the price of the stock). Delaware is also renowned for its sophisticated business courts and developed body of law governing business entities generally and investment companies specifically, which might be relied upon for interpretation of the relevant statutes. New York law is not nearly as developed as either Delaware or Massachusetts law with respect to investment companies and so, in the case of HSBC Portfolios, redomiciling to Delaware could result in substantial efficiencies, both in terms of reduced costs in determining the requirements of law in unique circumstances and the certainty of operating routinely in a familiar environment.

Greater Operating Efficiencies. The Reorganization may also reduce the substantial inefficiencies and costs associated with maintaining three separate business entities in two states that have different governing documents, varying state regulatory requirements and separate registration statements. In this regard, the Board and the Adviser, over the course of the past several years, have explored a number of ways to promote consistency and realize efficiencies in the corporate organizational structure and product offerings of the Funds. This project began with the harmonization of the By-Laws of the Trusts to the extent possible in 2012, an important first step to unifying the Funds and streamlining the Fund governance process. Consolidating the corporate structure of the Funds into a single trust has the potential to further advance these efforts and result in additional benefits to the Funds by way of a more simplified and modernized governance process and, over the longer term, potential cost savings. For example, the establishment of a single trust could produce efficiencies by simplifying required filings with the U.S. Securities and Exchange Commission (the “SEC”) and providing for a single board of trustees, which should reduce some operating redundancies caused by maintaining multiple boards.

Modernized Governing Instruments.The Trusts were organized decades ago and at different times, and as a result their governing instruments are inefficient and at times inconsistent. If the Reorganization is approved, the Delaware Trust will be able to adopt a uniform set of new modernized organizational documents, which will eliminate certain antiquated provisions in the existing governing instruments. For example, the Declaration of Trust for HSBC Portfolios provides that any beneficial interest in the trust property shall consist ofnon-transferable interests, whereas in the case of HSBC Funds and HSBC Advisor Funds Trust the interests of the beneficiaries may be divided into transferable shares. Moreover, the voting and quorum requirements are different throughout the existing governing instruments, which under certain circumstances could lead to varying levels of proxy solicitations and unnecessarily different shareholder vote outcomes for each of the Trusts.

For the reasons described above, among others, the Boards believe that the Funds’ current organizational forms and governance structure are outdated and in need of modernization. Accordingly, to implement the Reorganization, the Boards approved an Agreement and Plan of Reorganization for each Trust (each a “Plan of Reorganization”) with respect to each Fund substantially in the form attached to this Proxy Statement as Exhibit C. If shareholders approve this Proposal, the Trustees will implement the Reorganization on behalf of the Funds, which would be expected to take effect on or about April [29], 2016 (the “Exchange Date”), although this date may change in accordance with each Plan of Reorganization.

Please see Exhibit D for a comparison between Massachusetts and Delaware law and Exhibit E for a comparison between the organizational documents of the Trusts and the Delaware Trust.

What is the effect of shareholder approval of the Reorganization?

If the Reorganization is approved, you will become a shareholder of a mutual fund organized as a series of a Delaware statutory trust instead of a series of a Massachusetts business trust, with Board members, investment advisory agreement(s), distribution plans and other service arrangements that are substantially identical as those in place for the Trusts. In other words, the Reorganization would not have any impact on the value of shareholders’ investments in the Funds.

Prior to the Reorganization, a sole initial shareholder of the Delaware Trust would approve the following items with respect to the Delaware Trust:

●	Election of the Board of Trustees of the Delaware Trust, which would be the current Trustees;
●	Operation as a “manager of managers” arrangement, which permits the Adviser, subject to prior approval by the Board of Trustees, to enter into and amend agreements with unaffiliated sub-advisers (and sub-advisers wholly-owned by the same company that owns the Adviser, if approved by shareholders under Proposal 3);
●	Investment advisory agreements (and any applicable sub-advisory agreements), all of which will be identical to the agreements currently in place for each Fund, except for any reference to place of incorporation;
●	Distribution agreements, distribution and service plans and other agreements with respect to each applicable New Fund and its classes, all of which will be identical to the agreements and plans currently in place for each Fund, except for any reference to place of incorporation; and
●	PricewaterhouseCoopers LLP as the independent public accounting firm to the Delaware Trust.

Shareholders of the Funds are not being asked to vote separately on these arrangements. However, implementation of these arrangements is contingent upon the approval of the Reorganization. Thus, shareholders of the Funds, in approving the Reorganization, will also in effect be deemed to be approving all of the agreements and arrangements with respect to the Delaware Trust and the New Funds, which would be identical to those of the corresponding Trusts and Funds, except for any reference to place of incorporation.

What is the effect of the Reorganization on shareholders?

Immediately after the Reorganization, shareholders of each Fund will own shares of the corresponding class of the corresponding New Fund that are equal in value to the shares of each Fund that were held by those shareholders immediately prior to the closing of the Reorganization.

The Reorganization itself will not result in any change in the name, investment objective, principal investment strategies, investment adviser (and sub-adviser, if applicable), portfolio managers or service providers of any of the Funds. Each New Fund will offer the same shareholder services as its corresponding Fund. The fees and expenses will also be the same. Thus, on the effective date of the Reorganization, you would hold an interest in the applicable New Fund(s) that is equivalent to your interest in the corresponding Fund(s).

What are the procedures and consequences of the Reorganization?

Each Plan of Reorganization provides that each New Fund will acquire all of the assets, subject to all of the liabilities, of the corresponding Fund in exchange for shares of the New Fund having the same value. Subject to the satisfaction of the conditions described below, such acquisition is scheduled to occur on the Exchange Date, as that date may be adjusted from time to time.

As part of the closing of the Reorganization, each Fund will liquidate and distributepro rata to its shareholders of record determined as of immediately after the close of business on the Exchange Date. The liquidation and distribution with respect to each class of each Fund’s shares will be accomplished by the transfer of the New Fund shares then credited to the account of the Fund on the books of the corresponding New Fund to newly-opened accounts on the books of that New Fund in the names of the Fund shareholders. All issued and outstanding shares of the Fund will simultaneously be redeemed and cancelled on the books of the Fund. The New Fund will not issue certificates representing the New Fund shares issued in connection with such exchange.

After the distribution, the Trusts will take all necessary steps under applicable state law, their governing instruments, and any other applicable law to effect a complete dissolution under state law. As the successor to the HSBC Funds’ operations, the Delaware Trust will adopt and succeed to the registration statement of HSBC Funds under federal securities laws and amend the registration statement as necessary to reflect the Reorganization in its entirety.

Each Plan of Reorganization may be terminated and the Reorganization abandoned by the Boards, with respect to any or all of the Funds, at any time prior to the consummation of the Reorganization, before or after approval by the shareholders of the Funds, if among other things: (i) there is a material breach by the other party of any representation, warranty or agreement contained in the Plan of Reorganization; (ii) it reasonably appears that a party cannot meet a condition of the Plan of Reorganization; or (iii) circumstances should develop that, in the Boards’ opinion, make proceeding with the Reorganization inadvisable with respect to such Fund(s). Each Plan of Reorganization provides that the Delaware Trust or a Trust may waive compliance with any of the covenants or conditions made therein, or amend the Plan of Reorganization for the benefit of any Fund or New Fund, as applicable, provided that such waiver or amendment does not materially adversely affect the benefits intended upon the Plan of Reorganization and is consistent with the best interests of shareholders.

The foregoing discussion is qualified in its entirety by reference to each Plan of Reorganization, a form of which is attached as Exhibit C.

What did the Boards consider in approving the Plan of Reorganization and the Reorganization?

The Boards unanimously approved the submission of the Reorganization to shareholders for their approval and recommended approval of the Reorganization. The Boards have determined that participation in the Reorganization is in the best interests of each Fund and its shareholders.

In determining whether it was appropriate to recommend the Reorganization for approval by shareholders, the Boards requested and carefully considered information that they believed to be reasonably necessary to reach its conclusion. The Trustees recommended that shareholders approve the Reorganization on the basis of the following considerations, among others:

●	The interests of the shareholders of the Funds will not be diluted as a result of the Reorganization. Fund shares will be exchanged for an equivalent dollar and share amount of the corresponding New Fund. Account registration and account options will remain the same.
●	The Board of Trustees of the Delaware Trust would have substantially greater flexibility to reorganize Funds without shareholder approval or to make other necessary changes, which could allow the Funds to avoid future costs associated with shareholder approval in such situations in a manner consistent with the 1940 Act.
●	Delaware has a well-established body of legal precedent that tends to reduce legal uncertainty on matters of mutual fund governance and shareholder liability, which can have the effect of reducing litigation risks and costs.
●	By consolidating each Trust into a single Delaware Trust, the Funds could realize certain benefits from greater operating efficiency.
●	The investment objectives, policies and restrictions, as modified by Proposal 4, of each New Fund will be identical to those of the corresponding Fund and the New Funds will be managed by the same personnel and in accordance with the same investment strategies and techniques utilized in the management of each Fund immediately prior to the Reorganization.
●	Each New Fund will be subject to investment advisory fees, sales charges, and operating expenses that will be identical to those of the corresponding Fund.

●

In the case of HSBC Funds and HSBC Advisor Funds Trust, the Reorganization will be effected on a tax-free basis for federal income tax purposes, so the Reorganization will be tax-free to the shareholders of these Trusts. In addition, neither these Funds nor the corresponding New Funds are expected to recognize any gain or loss for federal income tax purposes from the transactions contemplated by the Plan of Reorganization.

●

The Reorganization will involve certain costs that will be borne by the Funds, although it is expected that the Reorganization will result in cost reductions in the form of operating efficiencies over time.

In reaching their decision to recommend approval of the Reorganization, the Boards did not identify any single factor as being of paramount importance. After consideration of the above factors, and such other factors and information the Boards considered relevant, the Boards voted to recommend approval of the Reorganization by each Fund’s shareholders.

What are the tax consequences of the Reorganization?

As a condition to each Fund’s obligation to consummate the Reorganization, in the case of HSBC Funds and HSBC Advisor Funds Trust, legal counsel to the Funds will issue an opinion to the effect that, on the basis of the existing provisions of the Internal Revenue Code of 1986, as amended (“Tax Code”), current administrative rules and court decisions, (i) the transactions contemplated by the Plan of Reorganization constitute a tax-free reorganization for federal income tax purposes; (ii) shareholders in these Funds will have the same aggregate tax basis in the shares of the New Funds that they receive in the Reorganization as their aggregate tax basis in the shares of the Funds before the Reorganization; and (iii) shareholders in these Funds who hold their shares as capital assets will include their holding period in Fund shares in determining their holding period in New Fund shares.

Shareholders should consult their tax advisers regarding the effect of the Reorganization in light of their individual circumstances. As the foregoing relates only to federal income tax consequences, shareholders should also consult their tax advisers as to the foreign, state, local and other tax consequences of the Reorganization.

What is the required vote to approve Proposal 2?

The affirmative vote of a majority of the outstanding voting securities of each Trust is required to approve the Reorganization for that Trust. The term “a majority of the outstanding voting securities” is defined in the 1940 Act as the affirmative vote of the lesser of (a) 67 percent or more of the voting securities present at the Special Meeting, if the holders of more than 50 percent of the Fund’s outstanding voting shares are present or represented by proxy, or (b) more than 50 percent of the Fund’s outstanding voting securities (“1940 Act Majority Vote”). Shareholders of all Funds of a Trust will vote together as a single class on the Proposal.

BOARD RECOMMENDATION

THE BOARDS OF TRUSTEES, INCLUDING THE INDEPENDENT TRUSTEES, UNANIMOUSLY
RECOMMEND A VOTE “FOR” THE REORGANIZATION OF EACH TRUST INTO A SINGLE
DELAWARE STATUTORY TRUST

——————

PROPOSAL 3

APPROVAL OF AMENDED “MANAGER OF MANAGERS” ARRANGEMENT

All Funds

——————

What are shareholders being asked to approve?

Shareholders are being asked to approve an amendment to an exemptive order from the SEC which currently permits the Funds and the Adviser to enter into or amend sub-advisory agreements withunaffiliated sub-advisers without submitting the agreement to a vote of shareholders (the “Existing Relief”). A Fund that operates in this manner typically is referred to as a “Manager of Managers Fund.” The amendment to the Existing Relief would enable the Funds and the Adviser to enter into or amend sub-advisory agreements with Wholly-Owned Sub Advisers (as defined below), without submitting the sub-advisory agreement to a vote of shareholders (the “Amended Relief”).

Together, the Existing Relief and Amended Relief would permit the Funds and the Adviser to enter into and amend sub-advisory agreements with: (i) an indirect “wholly-owned subsidiary” (as such term is defined in the 1940 Act) of the Adviser for that Fund; (ii) a sister company of the Adviser for that Fund that is an indirect or direct “wholly-owned subsidiary” (as such term is defined in the 1940 Act) of the same company that indirectly or directly wholly owns the Adviser (each of (i) and (ii) a “Wholly-Owned Sub Adviser”); or (iii) sub-advisers that are not “affiliated persons” (as defined in the 1940 Act) of the Adviser, other than by reason of serving as a sub adviser to the Fund (collectively, with the Wholly-Owned Sub-Advisers, “Eligible Sub Advisers”).

Many other mutual fund complexes have obtained from the SEC exemptive relief similar to the Amended Relief, which includes a condition requiring shareholder approval of a policy permitting the adviser of the fund to enter into and amend any sub-advisory agreements with Wholly-Owned Sub-Advisers without shareholder approval (an “Amended Manager of Managers Arrangement”). In anticipation of the conditions imposed on other fund complexes that have obtained relief to permit an Amended Manager of Managers Arrangement, the Adviser and the Funds are asking shareholders to approve a policy allowing the Funds to operate in accordance with the Amended Manager of Managers Arrangement.

To what extent do the Funds currently use the Existing Relief and how would this change if the Amended Relief is granted?

Each of the Funds has reserved the ability to rely on the Existing Relief and currently is permitted to operate as a Manager of Managers Fund. However, many of the Funds currently do not use the services of a sub-adviser and, thus, do not at this time rely on the Existing Relief. If approved by shareholders and granted by the SEC, the Amended Relief would be available to these Funds, in case it is deemed appropriate in the future for any of these Funds to become a Manager of Managers Fund.

Because each of the sub-advisers were not affiliated with the Adviser at the time the Existing Relief was granted by the SEC over a decade ago, the Existing Relief was useful for the Funds during that period and under those circumstances. However, over time the use of unaffiliated sub-advisers has declined and many of the Funds, including the most recently launched Funds, have instead retained the services of Wholly-Owned Sub-Advisers, which are not covered by the Existing Relief. Currently, the HSBC Opportunity Portfolio is the only Fund that has an unaffiliated sub-adviser. The Amended Manager of Managers Arrangement therefore would modernize the Existing Relief to more appropriately reflect the current sub-advisory structure employed by the Funds.

Why am I being asked to vote on the Amended Manager of Managers Arrangement?

The Adviser is one of many regional asset managers that comprise HSBC Global Asset Management (“HSBC”), a single global asset management entity offering investment capabilities to a broad range of investors worldwide. This unique organizational structure provides certain benefits to the Funds because it allows the Adviser to leverage the global investment platform and operations support offered by HSBC. As a result of HSBC’s global presence and scale, the Adviser has been able to expand its product offerings and offer global investment expertise to Fund shareholders. Indeed, the Adviser has added four new funds in the past year to its suite of globally-oriented funds and anticipates continuing to develop additional global funds.

The global investment network offered by HSBC has allowed the Adviser to utilize the foreign investing expertise and portfolio management services of other entities in the HSBC group of asset managers that are Wholly-Owned Sub-Advisers (“HSBC Global Asset Managers”). The Adviser has expanded its use of HSBC Global Asset Managers over the past few years to assist with the day-to-day investment management decisions of Funds that invest primarily in markets outside of the United States, which has allowed shareholders to benefit from HSBC’s global asset management expertise. Notably, with respect to each of the five most recently launched Funds, the Adviser has retained one or more HSBC Global Asset Managers located in the United Kingdom, France and Hong Kong: (i) HSBC Global Asset Management (UK); (ii) HSBC Global Asset Management (France); and (iii) HSBC Global Asset Management (Hong Kong). As the Adviser seeks to further expand the fund complex by organizing and launching new funds, it is anticipated that the Adviser will continue to utilize the valuable lineup of HSBC Global Asset Managers to assist in the management of these new funds.

Under applicable law, a Fund must call and hold a meeting of the Fund’s shareholders, create and distribute proxy materials, and arrange for the solicitation of voting instructions from shareholders to appoint a Wholly-Owned Sub-Adviser. Accordingly, the Funds and the Adviser anticipate that the Amended Relief would give the Adviser additional flexibility to select, supervise and evaluate HSBC Global Asset Managers without incurring the expense and potential delay of seeking shareholder approval to utilize its investment management expertise. Without the delay inherent in holding shareholder meetings, a Fund would be able to replace an HSBC Global Asset Manager more quickly and at less cost when the Boards and the Adviser believe that a change would benefit a Fund and its shareholders, as in the case of an HSBC Global Asset Manager that is performing below expectations.

If shareholders of a Fund do not approve the Amended Manager of Managers Arrangement, the Fund will not apply to the SEC for the relief provided by the Amended Manager of Managers Arrangement and will continue to be required to obtain shareholder approval to enter into or amend sub-advisory agreements with HSBC Global Asset Managers unless otherwise permitted by the 1940 Act. The Funds and the Adviser would continue to rely on the Existing Relief with respect to unaffiliated sub-advisers regardless of whether the SEC issues the Amended Relief.

What are the expected proposed conditions of the Amended Relief?

It is expected that, under the terms of the Amended Relief, the Funds and the Adviser would continue to be subject to several conditions imposed by the SEC, some of which are currently applicable under the Existing Relief.

For example, it expected that the Funds would be required to obtain shareholder approval to enter into or modify a sub-advisory agreement with any sub-adviser other than an Eligible Sub-Adviser. In addition, any new sub-advisory agreement, or any changes to an existing advisory agreement or sub-advisory agreement, that would result in an increase in the overall advisory fee rate payable by a Fund would be required to be approved by the shareholders of the Fund. Moreover, if a sub-adviser change is proposed for an Eligible Sub-Adviser to a Fund, the Boards, including a majority of the Independent Trustees, would be required to make a finding that such change would be in the best interests of the Fund and its shareholders.

As is the case with the Existing Relief, under the expected conditions of the Amended Relief, within 90 days of entering into a new sub-advisory arrangement, a Fund would be required to provide shareholders with an information statement that contains information about the sub-adviser and sub-advisory agreement, among other things. The Amended Relief would also provide that a majority of the Boards must consist of Independent Trustees and the nomination of new or additional Independent Trustees must be at the discretion of the then-existing Independent Trustees.

What did the Boards consider in approving the proposed Amended Manager of Managers Arrangement?

In determining whether to approve the proposed Amended Manager of Managers Arrangement and to recommend approval of such arrangement to the shareholders, the Boards considered certain information and representations provided by the Adviser as well as their experience with the Adviser, the Adviser’s strategy for continued growth of its mutual fund business and the capabilities and operations of HSBC Global Asset Managers. In addition, the Independent Trustees were advised by independent legal counsel with respect to these matters.

The Boards considered the benefits associated with providing the Adviser and the Boards with additional flexibility to recommend, supervise and evaluate sub-advisers, including HSBC Global Asset Managers, that are best suited to the Funds’ needs without incurring the unnecessary delay or expense of obtaining shareholder approval. The Boards also considered that the proposed arrangement could lead to additional operating efficiencies in the future. The Boards considered the Adviser’s recommendation that the Boards approve the arrangement because it was in the best interests of the Funds and their shareholders to have access to this flexibility.

In addition, the Boards considered that the Amended Relief has been the subject of numerous prior exemptive applications and the conditions for the SEC granting this type of exemptive relief have become well established since the SEC began granting the Amended Relief such that the relief was very likely to be obtained from the SEC.

If the Amended Relief is granted by the SEC, the Boards would continue to be required to provide oversight of the sub-adviser selection and engagement process, which includes evaluating and considering for approval all new or amended sub-advisory agreements for HSBC Global Asset Managers. In addition, under the 1940 Act and the terms of the sub-advisory agreements, the Boards would continue to be required to review and consider annually the renewal of any sub-advisory agreement after the initial term. Upon entering into, renewing or amending a sub-advisory agreement, the Adviser and the sub-adviser will continue to have a legal duty to provide to the Board such pertinent information as may be reasonably necessary for the Board to consider the terms of the sub-advisory agreement.

In addition, shareholder approval of this Proposal will not result in an increase or decrease in the total amount of investment advisory fees paid by the Funds to the Adviser. Any future increase in the investment management fee paid to the Adviser by the Funds would continue to require shareholder approval. If shareholders approve this Proposal, the Adviser, pursuant to the current advisory contracts and other agreements, will continue to provide the same level of management and administrative services to the Funds as it is currently providing.

What is the required vote for Proposal 3?

Approval of this Proposal requires a 1940 Act Majority Vote of each Fund voting separately. All shareholders of all classes of shares of a Fund will vote together as a single class on this Proposal.

BOARD RECOMMENDATION

THE BOARDS OF TRUSTEES, INCLUDING THE INDEPENDENT TRUSTEES, UNANIMOUSLY
RECOMMEND A VOTE “FOR” THE APPROVAL OF THE AMENDED MANAGER OF MANAGERS
ARRANGEMENT

——————

PROPOSAL 4

APPROVAL OF CHANGES TO FUNDAMENTAL INVESTMENT POLICIES

All Funds
(except HSBC Euro High Yield Bond Fund (USD Hedged))

——————

What are shareholders being asked to approve?

Fundamental investment policies of mutual funds (such as the Funds) are generally those that may be modified or eliminated only with the approval of a majority of a fund’s outstanding voting securities. In contrast, investment policies that are non-fundamental may be modified or eliminated by action of the Boards, without separate shareholder action.

The 1940 Act requires all mutual funds to adopt “fundamental” investment policies with respect to several specific types of activities, including a Fund’s ability to: (1) borrow money; (2) issue senior securities; (3) underwrite securities issued by other persons; (4) purchase or sell real estate; (5) purchase or sell commodities; (6) make loans to other persons; and (7) concentrate its investments in any particular industry or group of industries. The 1940 Act also requires funds to state whether they are diversified or non-diversified, as those terms are defined in the 1940 Act. The 1940 Act permits a fund to designate any other of its policies as fundamental policies, as the fund deems necessary or desirable.

The Boards have reviewed the Funds’ current fundamental investment policies and have recommended that several of the current fundamental investment policies be amended in order to promote greater uniformity of fundamental investment policies across all of the Funds, simplify and modernize the fundamental investment policies to reflect current regulatory requirements; and increase the investment flexibility of the Funds.

Why are shareholders being asked to approve changes to the Funds’ fundamental investment policies?

As described more fully in each individual Proposal below, many of the Funds’ investment policies are more prohibitive than what is currently required by the 1940 Act and the rules and regulations thereunder. Many of the Funds’ current fundamental investment policies can be traced back to federal or state securities law requirements that were in effect when the Funds were organized. These policies have subsequently been made less restrictive or are no longer applicable to the Funds. For example, the National Securities Markets Improvement Act of 1996 (“NSMIA”) preempted many investment policies formerly imposed by state securities laws and regulations, so those state requirements no longer apply. As a result, the current fundamental investment policies unnecessarily limit the investment strategies available to the Adviser and sub-advisers in managing each Fund’s assets and result in operating inefficiencies and costs, which are ultimately borne by the Funds’ shareholders.

In general, the proposed changes are intended to provide the Funds with more investment flexibility and to allow the Funds to operate more efficiently within the limits of the 1940 Act. These revisions are expected to give the Funds greater flexibility to take advantage of, and react to, changes in financial markets and new investment vehicles. The Adviser believes that its ability to manage the Funds’ portfolios in a changing regulatory or investment environment will be enhanced. Furthermore, by making the fundamental policies of all Funds consistent where it is possible to do so, monitoring compliance would be streamlined and more efficient. A more uniform set of fundamental investment policies across all of the Funds would also facilitate Fund comparisons by shareholders. Due to these and other factors, the Boards recommend that shareholders approve certain changes to the Funds’ current fundamental investment policies.

Generally, only those investment policies that the 1940 Act specifically requires to be fundamental are proposed to remain fundamental investment policies of the Fund. However, shareholders are being asked to approve amendments to these fundamental investment policies, as set forth in Proposals 4.A – 4.H. Investment policies that are currently deemed fundamental by a Fund, but which the 1940 Act does not require to be fundamental, are proposed to be eliminated entirely. The fundamental investment policies that are proposed to be eliminated entirely are addressed in Proposals 4.I – 4.P.

What effect will the proposed changes to the Funds’ investment policies have on the Funds?

While this Proposal is intended to provide the Adviser and sub-advisers with greater flexibility in managing each Fund’s portfolio, the Funds would continue to be managed subject to the limitations imposed by the 1940 Act, as well as the investment objectives, strategies, and policies stated in each Fund’s Prospectus and/or Statement of Additional Information (“SAI”). Importantly, neither the Adviser nor any sub-adviser presently intends to alter the way in which they currently manage any of the Funds, nor do they believe that the proposed changes will, either individually or in the aggregate, materially affect the investment risks currently associated with any Fund. No material change would be made to the manner in which a Fund currently invests or operates without prior Board approval and an appropriate amendment or supplement to the Fund’s Prospectus and/or SAI, which would be communicated to shareholders, if necessary.

It is expected that, if a Proposal is approved by a Fund’s shareholders, the Proposal will take effect on [DATE]. Should a Fund’s shareholders not approve a specific Proposal to amend or eliminate a particular fundamental investment policy, the Fund’s current fundamental investment policy would continue to apply. If Proposal 2 is approved for a Trust, the Fund(s) of that Trust will reorganize into corresponding New Funds with the fundamental policies as adopted (or not) under this Proposal.

Exhibit F sets forth all of the Funds’ current fundamental investment policies for comparative purposes with the Proposals below.

What is the required vote for Proposal 3?

Approval of this Proposal requires a 1940 Act Majority Vote of each Fund voting separately. Shareholders of all classes of shares of a Fund will vote together as a single class on this Proposal.

PROPOSAL 4.A—BORROWING

Affected Funds	Proposed Fundamental Investment Policy
Each Fund	The [Fund/Portfolio] may borrow money to the extent permitted under
(other than HSBC Euro High Yield	the 1940 Act and the rules and regulations thereunder.
Bond Fund (USD Hedged))

Discussion of Proposed Modification

Mutual funds are limited in the amount they may borrow by the 1940 Act. Currently, the 1940 Act permits a fund to borrow from banks in an amount up to 33 1/3% of the Fund’s assets, including the amount borrowed. One exception is that a fund may also issue a note evidencing a temporary loan (i.e., one that must be repaid within 60 days), as long as it does not exceed 5% of the fund’s total assets.

Borrowing for investment purposes tends to exaggerate the effect of any changes in the market value of a fund’s portfolio securities on the fund’s net asset value per share. In addition, any money borrowed will be subject to interest and other costs, which may exceed the gain on any securities purchased with borrowed funds.

The proposed fundamental policy would permit a Fund to borrow to the full extent permitted by the 1940 Act and the rules and regulations thereunder and would enable the Fund to conform its borrowing policy to future changes in the 1940 Act that govern borrowing by mutual funds without further action by shareholders or the Boards. However, even if permitted by law, a Fund’s borrowing would only occur if it would be consistent with disclosure in the Fund’s Prospectus and SAI and Board-approved borrowing policies. Accordingly, approval of this Proposal is not expected to change the way in which a Fund is currently managed, and no material change would be made to the manner in which a Fund currently invests or operates without prior Board approval and an appropriate amendment or supplement to the Fund’s prospectus and/or SAI, which would be communicated to shareholders, if necessary.

With respect to those Funds for which the proposed fundamental investment policy is substantially the same as the current fundamental investment policy, the proposed changes are intended to lead to more uniformity and assist in monitoring compliance with this policy.

PROPOSAL 4.B—SENIOR SECURITIES

Affected Funds		Proposed Fundamental Investment Policy
Each Fund (other than HSBC Euro High Yield Bond Fund (USD Hedged))		The [Fund/Portfolio] may issue senior securities to the extent permitted under the 1940 Act and the rules and regulations thereunder.

Discussion of Proposed Modification

The 1940 Act prohibits investment companies from issuing senior securities, except for borrowings where certain conditions are met. In addition, under the 1940 Act, certain types of transactions entered into by a fund, including reverse repurchase agreements, short sales, and when-issued and delayed delivery transactions, may be considered forms of indebtedness having priority over shareholders to fund assets in liquidation and, therefore, may be considered to be senior securities. Currently, these activities are permissible investments under the 1940 Act so long as certain collateral or coverage requirements designed to protect shareholders are met.

The proposed changes would simplify the current fundamental investment policies. For example, with respect to the HSBC Opportunity Portfolio, the fundamental policy currently specifies that collateral arrangements with respect to options and futures, including deposits of initial deposit and variation margin, are not considered to be the issuance of a senior security for purposes of this policy. Because this exception is consistent with the 1940 Act, it would not be required if the fundamental policy is revised as proposed. As a result, the proposed fundamental policy would not change the current restrictions for these Funds, because in each case, the Fund would continue to be subject to the limitation on borrowing and may engage in such other activities only to the extent permitted by applicable law.

PROPOSAL 4.C—UNDERWRITING

Affected Funds		Proposed Fundamental Investment Policy
Each Fund (other than HSBC Euro High Yield Bond Fund (USD Hedged))		The [Fund/Portfolio] may not act as an underwriter of securities issued by others, except to the extent it could be considered an underwriter in the acquisition and disposition of restricted securities.

Discussion of Proposed Modification

Under the federal securities laws, a person or company generally is considered to be an underwriter if the person or company participates in the public distribution of securities of other issuers, which involves purchasing the securities from another issuer with the intention of reselling such securities to the public. However, a fund may purchase securities in a private transaction for investment purposes and later sell such securities to institutional or other investors. In these circumstances, a fund could possibly be considered to be within the technical definition of an underwriter under the federal securities laws notwithstanding the fact that the fund does not hold itself out as being engaged in the business of underwriting. The current fundamental policy for each Fund permits the Fund to resell restricted securities, and the proposed fundamental investment policy would not change this. The proposed fundamental investment policy clarifies that purchases and sales of restricted securities will be permitted even if a Fund could be deemed an underwriter due to a purchase or sale.

PROPOSAL 4.D—INDUSTRY CONCENTRATION

Affected Funds		Proposed Fundamental Investment Policy
HSBC Prime Money Market Fund HSBC U.S. Government Money Market Fund HSBC U.S. Treasury Money Market Fund		The Fund may not “concentrate” its investments in any one industry (excluding the U.S. Government, its agencies or instrumentalities and repurchase agreementscollateralized by such investments), except to the extent permitted under the 1940 Act and the rules and regulations thereunder; provided, however, that the Fund may invest without limitation in U.S. dollar-denominated obligations of U.S. banks, foreign branches of U.S. banks and U.S. branches of foreign banks.

HSBC Emerging Markets Debt Fund HSBC Emerging Markets Local Debt Fund HSBC Total Return Fund HSBC Global High Yield Bond Fund HSBC Global High Income Bond Fund Aggressive Strategy Fund Balanced Strategy Fund Moderate Strategy Fund Conservative Strategy Fund Income Strategy Fund HSBC Opportunity Fund HSBC Opportunity Fund (Advisor) HSBC Opportunity Portfolio		The [Fund/Portfolio] may not “concentrate” its investments in any one industry (excluding the U.S. Government, its agencies or instrumentalities and repurchase agreement collateralized by such investments), except to the extent permitted under the 1940 Act and the rules and regulations thereunder.

HSBC Asia ex-Japan Smaller Companies Equity Fund HSBC Global Equity Volatility Focused Fund		The Fund may not “concentrate” its investments in any one industry (excluding the U.S. Government, its agencies or instrumentalities and repurchase agreement collateralized by such investments), except to the extent permitted under the 1940 Act and the rules and regulations thereunder; provided, however, that the Fund may invest up to 35% of its total assets in the securities of issuers in a particular industry if, at the time of investment, that industry represents 20% or more of the Fund’s then-current benchmark index.

HSBC Frontier Markets Fund		The Fund may not “concentrate” its investments in any one industry (excluding the U.S. Government, its agencies or instrumentalities and repurchase agreement collateralized by such investments), except to the extent permitted under the 1940 Act and the rules and regulations thereunder; provided, however, that the Fund will, under normal market conditions, concentrate its investments in the securities of issuers in the financial services group of industries.

Discussion of Proposed Modification

Each Fund currently has, and will continue to have, a fundamental investment policy that specifies whether the Fund may concentrate its investments in any one industry. While the 1940 Act does not define what constitutes “concentration” in an industry, the SEC staff has taken the position that investment of more than 25% of a fund’s total assets in one or more issuers conducting their principal business activities in the same industry (excluding the U.S. Government, its agencies or instrumentalities) normally constitutes concentration. It is possible that this interpretation of concentration could change in the future. If this interpretation were to change, the Funds would not be able to change their concentration policies without seeking shareholder approval.

Accordingly, the proposed fundamental investment policy would give each Fund the flexibility to take advantage of any future changes in the legal definition or interpretation of “concentration” under the 1940 Act without the Boards or shareholders taking further action. Additionally, the proposed changes are intended to create uniformity across all Funds included in this Proxy Statement, to the extent possible.

For purposes of a Fund’s industry concentration policy, the Adviser or a sub-adviser may analyze the characteristics of a particular issuer and instrument and may assign an industry classification consistent with those characteristics. The Adviser may, but need not, consider industry classifications provided by third parties, and the classifications applied to Fund investments will be informed by applicable law.

PROPOSAL 4.E—REAL ESTATE

Affected Funds		Proposed Fundamental Investment Policy
Each Fund (other than HSBC Euro High Yield Bond Fund (USD Hedged))		The [Fund/Portfolio] may purchase or sell real estate or any interest therein (such as securities or instruments backed by or related to real estate) to the extent permitted under the 1940 Act and the rules and regulations thereunder.

Discussion of Proposed Modification

The proposed fundamental investment policy would provide the Funds with greater flexibility with respect to investments in real estate. For example, the proposed fundamental investment policy would permit a Fund to acquire real estate limited partnerships, to the extent consistent with the Fund’s investment objectives, strategies and policies as stated in the Fund’s Prospectus and/or SAI. Each Fund would also be able to hold and sell real estate acquired as a result of the ownership of securities (for example, as the holder of a bond in a company that goes bankrupt that is collateralized by real estate). Investments in real estate are subject to the risks of the real estate industry, which is especially sensitive to economic downturn. However, approval of this Proposal is not expected to change the way a Fund is currently managed. The proposed fundamental investment policy would also enable the Funds to take advantage of future changes in the 1940 Act. No material change would be made to the manner in which a Fund currently invests or operates without prior Board approval and an appropriate amendment or supplement to the Fund’s prospectus and/or SAI, which would be communicated to shareholders, if necessary.

With respect to the HSBC Prime Money Market Fund, HSBC U.S. Government Money Market Fund, HSBC U.S. Treasury Money Market Fund, HSBC Opportunity Fund, HSBC Opportunity Fund (Advisor) and HSBC Opportunity Portfolio, the current fundamental investment policy prohibits investing in oil, gas or other mineral leases. There is no federal requirement for such a fundamental investment restriction. It is based on laws and regulations of several states that are no longer applicable. Therefore, removing this restriction would provide these Funds with greater investment flexibility to engage in otherwise permissible activities to the full extent provided for under the 1940 Act.

PROPOSAL 4.F—COMMODITIES

Affected Funds		Proposed Fundamental Investment Policy
Each Fund (other than HSBC Euro High Yield Bond Fund (USD Hedged))		The [Fund/Portfolio] may purchase or sell commodities, including physical commodities, or contracts, instruments and interests relating to commodities to the extent permitted under the 1940 Act and the rules and regulations thereunder.

Discussion of Proposed Modification

For many of the Funds, the current fundamental investment policy regarding commodities prohibits such Funds from investing in commodities or commodities contracts. These restrictions are unduly restrictive because the 1940 Act permits a fund to invest in financial instruments or derivatives, certain of which may be deemed to be commodities or commodities interests. Consistent with the requirements of the 1940 Act, the proposed policy would not limit the Funds’ purchase or sale of derivatives that have a value tied to the value of a commodity, financial index, financial instrument or other asset and allows investments for both hedging and non-hedging purposes. These derivatives include, for example, certain swaps, options, futures contracts and options on futures contracts. Such investments are generally accepted under modern investment management and are regularly used by many mutual funds and institutional investors. Accordingly, the proposed fundamental investment policy would permit each of these Funds to purchase or sell commodities and contracts, instruments and interests relating to commodities to the fullest extent permitted by the 1940 Act, in accordance with the Fund’s investment objectives, strategies and policies as stated in the Fund’s Prospectus and SAI.

While several of the Funds may already invest in derivatives, the proposed policy may expand the types of derivatives in which those Funds may invest and may allow Funds that could not previously invest in derivatives to invest in derivatives for the first time, if such investments are otherwise in accordance with the Funds’ investment objective and strategies. To the extent a Fund invests in derivative instruments, it will be exposed to additional risks.

However, approval of this Proposal is not expected to change the way any of these Funds are currently managed, and no material change would be made to the manner in which a Fund currently invests or operates without prior Board approval and an appropriate amendment or supplement to the Fund’s prospectus and/or SAI, which would be communicated to shareholders, if necessary. Furthermore, the proposed changes are intended to create a uniform fundamental investment policy regarding commodities across all Funds included in this Proxy Statement.

PROPOSAL 4.G—LOANS

Affected Funds		Proposed Fundamental Investment Policy
Each Fund (other than HSBC Euro High Yield Bond Fund (USD Hedged))		The [Fund/Portfolio] may make loans to the extent permitted under the 1940 Act and the rules and regulations thereunder.

Discussion of Proposed Modification

Current SEC guidance limits the amount of loans a fund may invest in to one-third of the fund’s total assets, except through the purchase of debt obligations or the use of repurchase agreements. The current fundamental investment policy of each Fund is consistent with this limitation. However, the proposed fundamental investment policy will enable the Funds to take advantage of future changes in the 1940 Act, if any. The proposed fundamental investment policy would also permit each Fund to engage in all forms of lending, including securities lending, to the extent permitted by the 1940 Act and by applicable regulatory guidance. Additionally, approval of this Proposal is not expected to change the way in which a Fund is currently managed and its lending practices. No material change would be made to the manner in which a Fund currently invests or operates without prior Board approval and an appropriate amendment or supplement to the Fund’s prospectus and/or SAI, which would be communicated to shareholders, if necessary. It is not currently anticipated that the Funds would engage in forms of lending other than as described in each Fund’s Prospectus and SAI.

PROPOSAL 4.H—DIVERSIFICATION

Affected Funds		Proposed Fundamental Investment Policy
HSBC Prime Money Market Fund HSBC U.S. Government Money Market Fund HSBC U.S. Treasury Money Market Fund HSBC Global High Yield Bond Fund HSBC Global High Income Bond Fund HSBC Global Equity Volatility Focused Fund Aggressive Strategy Fund Balanced Strategy Fund Moderate Strategy Fund Conservative Strategy Fund Income Strategy Fund HSBC Opportunity Fund HSBC Opportunity Fund (Advisor) HSBC Opportunity Portfolio		The [Fund/Portfolio] is a “diversified company,” as that term is defined in the 1940 Act.

Discussion of Proposed Modification

Section 8(b) of the 1940 Act requires each series of an investment company to state whether it is “diversified” or “non-diversified,” as those terms are defined in the 1940 Act. As the term “diversified” is used in the 1940 Act, and as reflected in the Funds’ current fundamental investment policies, a diversified fund may not, with respect to 75% of its total assets: (i) invest more than 5% of its total assets in the securities of one issuer, or (ii) hold more than 10% of the outstanding securities of such issuer (the “75% test”). Under the 1940 Act, a “non-diversified” fund is any fund that is not considered diversified and is not, therefore, constrained by the 75% test. The HSBC Emerging Markets Debt Fund, HSBC Emerging Markets Local Debt Fund, HSBC Total Return Fund and HSBC Asia ex-Japan Smaller Companies Equity Fund are non-diversified.

No change is being proposed to a Fund’s designation as a diversified or non-diversified Fund. Instead, the proposed change would modify the Funds’ fundamental investment policies regarding each Fund’s sub-classification under the 1940 Act to rely on the definitions of the terms diversified and non-diversified in the 1940 Act rather than stating, in the case of certain Funds, the relevant percentage limitations expressed under current law. Thus, the proposed fundamental policy will apply the requirements of the 1940 Act, as they may be amended from time to time, to each diversified Fund without the Boards or shareholders taking further action. Furthermore, the proposed changes are intended to create a more uniform diversification fundamental investment policy across all diversified Funds included in this Proxy Statement.

It is not anticipated that this change would have any effect on the operations of the Funds or the manner in which the Fund would be managed. The Funds would remain subject to the same limitations on their investments under the definition of “diversified” and “non-diversified” as embodied in the Funds’ current fundamental investment policies, as well as to any additional restrictions on concentration under the 1940 Act (as discussed in Proposal 4.D) or other fundamental investment policies of the Funds.

PROPOSAL 4.I—PLEDGING, MORTGAGING AND HYPOTHECATING

Affected Funds		Proposal
HSBC Prime Money Market Fund HSBC U.S. Government Money Market Fund HSBC U.S. Treasury Money Market Fund		It is proposed that the fundamental investment restriction on pledging, mortgaging and hypothecating a Fund’s assets be eliminated in its entirety.