UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-08928
HSBC INVESTOR PORTFOLIOS
(Exact name of registrant as specified in charter)
452 FIFTH AVENUE
NEW YORK, NY 10018
(Address of principal executive offices) (Zip code)
CITI FUND SERVICES
3435 STELZER ROAD
COLUMBUS, OH 43219
(Name and address of agent for service)
Registrant’s telephone number, including area code: 1-800-782-8183
Date of fiscal year end: October 31
Date of reporting period: October 31, 2008
Item 1. Reports to Stockholders.
HSBC Global Asset Management (USA) Inc.
October 31st, 2008
HSBC Investor LifeLine FundsTM
Annual Report
HSBC Investor Aggressive Growth Strategy Fund
HSBC Investor Growth Strategy Fund
HSBC Investor Moderate Growth Strategy Fund
HSBC Investor Conservative Growth Strategy Fund
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Table of Contents |
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HSBC Investor Lifeline Funds |
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(This Page Intentionally Left Blank)
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Barclays Capital U.S. Aggregate Index (formerly Lehman Brothers U.S. Aggregate Index) is an unmanaged index generally representative of investment-grade fixed-rate debt issues, including government, corporate, asset-backed, and mortgage-backed securities, with maturities of at least one year.
Barclays Capital Intermediate U.S. Aggregate Index (formerly Lehman Bros. U.S. Intermerdiate Aggregate Index) is an unmanaged index generally representative of investment-grade issues with maturities between three- and ten-years.
Citigroup U.S. Domestic Three Month Treasury Bill Index is government guaranteed and offers a fixed rate of return. Return and principal of stocks and bonds will vary with market conditions. Treasury bills are less volatile than longer-term fixed-income securities and are guaranteed as to timely payment of principal and interest by the U.S. Government.
Citigroup U.S. High Yield Market Capped Index, the “U.S. High Yield Market Capped Index” uses the U.S. High-Yield Market Index as its foundation imposing a cap on the par amount of each issuer in order to limit the impact of large issuers while retaining the characteristics of the issuer’s distribution across different maturities. The U.S. High-Yield Market Index captures the performance of below-investments-grade debt issued by corporations domiciled in the United States or Canada.
Gross Domestic Product (GDP) is the measure of the market value of the goods and services produced by labor and property in the United States.
Morgan Stanley Capital International Europe, Australasia and Far East (“MSCI EAFE”) Index is an unmanaged free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. & Canada. As of June 2007 the MSCI EAFE Index consisted of the following 21 developed market country indices: Australia, Austria, Belgium, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, and the United Kingdom.
The Russell Universe - Russell is a recognized leader in consulting, multi-manager investing and institutional investment management. Our consultants advise clients on more than $2 trillion in assets. We deliver investment programs to over 2,000 clients in 44 countries. With more than $230 billion in assets in our funds, Russell researchers meet with over 4,000 investment managers around the world to evaluate their investment process.
Russell 1000® Growth Index is an unmanaged index which measures the performance of the large-cap growth segment of the U.S. equity universe. It includes those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values.
Russell 1000® Value Index is an unmanaged index which measures the performance of the large-cap value segment of the U.S. equity universe. It includes those Russell 1000 companies with lower price-to-book ratios and lower expected growth values.
Russell 2000® Index is an unmanaged index which easures the performance of the 2,000 smallest companies in the Russell 3000 Index, which represents approximately 8% of the total market capitalization of the Russell 3000 Index. The companies which comprise this index have high price-to-book ratios and higher forecasted growth values.
Russell 2500™ Growth Index is an unmanaged index which measures the performance of the small to mid-cap growth segment of the U.S. equity universe. It includes those Russell 2500 companies with higher price-to-book ratios and higher forecasted growth values.
Standard & Poor’s (“S&P 500”) 500 Index is an unmanaged index that is widely regarded as a gauge of the U.S. equities market, this index includes 500 leading companies in leading industries of the U.S. economy. The S&P 500 focuses on the large cap segment of the market, with approximately 75% coverage of U.S. equities.
Securities indexes assume reinvestment of all distributions and interest payments and do not take in account brokerage fees or expenses. Securities in the Fund do not match those in the indexes and performance of the Fund will differ. Investors cannot invest directly in an index.
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Dear Shareholder,
Over the past eighteen months, the financial markets have experienced arguably the most difficult conditions in recent history. The underlying causes of the market’s significant and persistent downturn have had devastating effects on corporations around the world. The value of equity, fixed income and even money market securities has all been affected by the slowing economy, decreasing corporate earnings and the lack of available credit to support business operations. Many organizations with renowned histories of success and profitability are now seeking government relief in order to remain solvent. The result has been significant double-digit losses for U.S. and international market indices over the past year.
During this period of extreme volatility, the HSBC Investor Funds (the “Funds”) were committed to offering sound, long-term investment solutions to investors. Now, more than ever, the Funds are diligently seeking and working with investment sub-advisers who can assist in navigating through this market environment. Moreover, the Board of Trustees is also aware that the Funds’ ability to execute shareholder instructions in an accurate and timely manner is also an important part of a fund’s overall performance. In performing its oversight role, the Board continuously attempts to maintain the highest level of responsiveness to shareholders.
Recognizing its responsibility to shareholders, the Board considers a wide range of factors including relative expertise and the financial viability in selecting the Funds’ service providers. We believe that aligning the Funds’ interests with strong partners provides a tangible benefit to shareholders, now and in the future.
We understand that these are extremely challenging times in the financial markets. We remain committed to managing the HSBC Investor Funds in a prudent and consistent manner for long-term performance.
For further market insight and investment results for the Funds, please see our portfolio manager commentary in this Annual Report.
Thank you for your investment in the HSBC Investor Funds.
Sincerely,
Larry M. Robbins, Chairman, HSBC Investor Funds
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1 | HSBC INVESTOR FAMILY OF FUNDS |
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U.S. Economic Review
The 12-month period from November 1, 2007 through October 31, 2008 was extraordinarily challenging for the U.S. economy and the global financial system. Over the course of this period, a growing number of signs indicated that the health of the economy was deteriorating and the risk of a recession was rising. In addition, a number of financial institutions faced serious problems and incurred heavy financial losses that threatened their ability to operate.
These issues largely stemmed from the housing market’s prolonged downturn. Rising default rates on subprime mortgages during the period generated huge losses for a wide variety of global financial institutions, which had invested heavily in securities that were backed by those risky mortgages. The losses were so severe that they eventually resulted in the collapse of Bear Sterns, Lehman Brothers and others, the nationalization of Fannie Mae and Freddie Mac, the failure of some banks and the forced mergers of several financial institutions. In that environment, lenders became suspicious of borrowers’ financial health and significantly reduced their willingness to lend money. The result was a crisis that effectively froze the credit markets and depressed economic growth.
The economic slowdown and declining home prices were particularly hard on consumers, who account for approximately two-thirds of U.S. economic activity. Retail sales fell sharply, real personal incomes declined, unemployment rose to its highest levels in years and consumer confidence plummeted. Corporate profits declined and U.S. Gross Domestic Product1 growth fell during two of the past four quarters (through the third quarter of 2008).
Problems in the U.S. economy spread overseas, creating fears of a global economic downturn. Consensus 2009 forecasts for economic growth in Europe and Asia declined during the third quarter, driven lower by factors such as falling business activities and confidence.
Aggressive steps were taken during the period to stabilize the credit markets and respark the economy. For example, the Federal Reserve Board (the “Fed”) cut its target short-term interest rate, the federal funds rate, from 4.50% in November to 1.00% by the end of October in an effort to inject liquidity into the markets. The Fed also established and increased auction lending facilities. Additionally, the U.S. government began implementing a $700 billion financial bailout package, and helped engineer the rescue of several large financial institutions and guaranteed senior debt issued by banks. Governments in Europe and Asia adopted similar strategies to improve sentiment and ease the strains in their financial systems.
The weak economy did have some relatively positive consequences. Energy prices, which had risen sharply during the first half of the period as the price of oil soared to record highs, fell significantly during later months. Falling commodity prices also reduced inflationary pressures, giving central banks around the world a greater ability to target their monetary policy to support growth, liquidity and financial market stability.
Market Review
The U.S. stock market was extremely volatile during the period as investors reacted strongly to new developments in the economy, the housing sector and the financial markets. Investors during most of the period fled from stocks into assets that were perceived to be safer, such as high-quality government bonds and cash. The S&P 500 Index1 returned -36.08% for the 12-month period ended October 31, 2008. Small-company stocks, represented by the Russell 2000® Index1, returned
-34.16%.
Shares of financial services firms suffered particularly large declines during the period due to the turmoil in the credit and banking system and concerns that more problems could occur if the subprime mortgage crisis spread. Consumer discretionary stocks also posted significant losses as increasingly nervous consumers cut their spending on non-essential items. Investors also shunned shares of auto-related companies, which faced critical credit shortages and an uncertain future.
The energy sector posted strong returns during the first half of the period as the price of oil and other commodities rose, but lagged later in the period as oil prices fell sharply. Conversely, health care stocks outperformed the overall market, especially as economic conditions worsened during the final months of the period.
Foreign stocks also delivered negative returns, as banks worldwide suffered from their exposure to problem assets related to the mortgage industry and the outlook for global economic growth worsened. The MSCI EAFE Index1 of developed foreign stock markets returned -46.34% during the period. Emerging markets stocks also suffered as investors avoided the perceived riskiness of developing markets in favor of assets they believed to be more stable. Falling commodity prices during the second half of the period also hurt some emerging economies, which are heavily dependent on commodity exports.
The Barclays Capital U.S. Aggregate Index1, which tracks the broad fixed-income markets, returned 0.3% for the period. High-quality government bonds, such as those issued by the U.S. Treasury, performed well as investors seeking to avoid risk fled into these securities. The rally pushed yields for government bonds lower, particularly among short-term fixed-income securities. Investors favored shorter maturities as they focused on liquidity and safety during the period of heightened market volatility. Other types of fixed-income securities—including corporate bonds and high-yield bonds—performed poorly, as investors favored the stability of government-backed bonds and worried about companies’ ability to fulfill their debt obligations in a weak economic environment. As a result, the spread between yields on government securities and corporate bonds widened substantially.
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1 | For additional information, please refer to the Glossary of Terms. |
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HSBC INVESTOR FAMILY OF FUNDS | 2 |
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HSBC Investor Aggressive Growth Strategy Fund |
Investment Concerns
Common stocks, and funds investing in common stocks, generally provide greater return potential when compared with other types of investments.
Equity securities (stocks) are more volatile and carry more risk than other forms of investments, including investments in high-grade fixed income securities. The net asset value per share of this Fund will fluctuate as the value of the securities in the portfolio changes.
There are risks associated with investing in foreign companies, such as erratic market conditions, economic and political instability and fluctuations in currency and exchange rates.
Value-based investments are subject to the risk that the broad market may not recognize their intrinsic value.
Small capitalization funds typically carry additional risks, since smaller companies generally have a higher risk of failure and historically have experienced a greater degree of market volatility than average. There are risks associated with investing in a fund that invests in securities of foreign countries, such as erratic market conditions, economic and political instabilities and fluctuations in currency exchanges.
Bonds offer a relatively stable level of income, although bond prices will fluctuate providing the potential for principal gain or loss. Intermediate-term, higher-quality bonds generally offer less risk than longer-term bonds and a lower rate of return.
The mortgage market in the U.S. recently experienced difficulties that may adversely affect the performance and market value of certain mortgage-related investments.
An investment in money market funds is not insured or guaranteed by the FDIC or any other government agency. Although the money market funds seek to preserve the value of your investment at $1.00.
The HSBC Investor Funds feature a number of funds that are structured as “master/feeder” funds. Under this two-tier structure, one fund (the “feeder fund”) invests all of its investable assets in a second fund (the “master fund”). The LifeLine Funds, through this master/feeder structure, provide an asset allocation option to investors who seek to diversify their investment across a variety of asset classes. Each LifeLine Fund provides an asset allocation option corresponding to different investment objectives and risk tolerances. Each LifeLine Fund is a feeder fund. However, unlike most feeder funds, a LifeLine Fund will not direct all of its assets to a single master fund. Instead, the LifeLine Fund will allocate its assets to different master funds in accordance with its asset allocation model. HSBC Global Asset Management (USA) Inc. (the “Adviser”), according to specific target allocations, invested each LifeLine Fund’s assets in some or all of the following master funds (“underlying Portfolios”):
HSBC Investor Growth Portfolio (“Growth Portfolio”); HSBC Investor Value Portfolio (“Value Portfolio”); HSBC Investor Opportunity Portfolio (“Small Cap Equity Portfolio”); HSBC Investor International Equity Portfolio (“International Equity Portfolio”); HSBC Investor Core Plus Fixed Income Portfolio (“Core Plus Fixed Income Portfolio”); HSBC Investor High Yield Fixed Income Portfolio (High Yield Fixed Income Fund); HSBC Investor Intermediate Duration Fixed Income Portfolio (“Intermediate Duration Fixed Income Portfolio”); and the HSBC Investor Money Market Fund (“Money Market Fund”).
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3 | HSBC INVESTOR FAMILY OF FUNDS |
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Portfolio Reviews |
During the last period, each LifeLine Fund invested in a different combination of the underlying Portfolios according to the various target percentage weightings selected by the Adviser, approximately as set forth in the table below.
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Underlying Portfolio |
| HSBC Investor |
| HSBC Investor |
| HSBC Investor |
| HSBC Investor |
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Prime Money Market Fund |
| 1 | % |
| 1 | % |
| 6 | % |
| 21 | % |
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Core Plus Fixed Income Portfolio |
| None |
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| 15 | % |
| 26 | % |
| 25 | % |
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High Yield Fixed Income Portfolio |
| None |
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| 2 | % |
| 5 | % |
| 8 | % |
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Intermediate Duration Fixed Income Portfolio |
| None |
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| None |
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| None |
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| 3 | % |
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Growth Portfolio |
| 21 | % |
| 21 | % |
| 19 | % |
| 15 | % |
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International Equity Portfolio |
| 23 | % |
| 20 | % |
| 15 | % |
| 10 | % |
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Opportunity Portfolio |
| 34 | % |
| 20 | % |
| 11 | % |
| 4 | % |
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Value Portfolio |
| 21 | % |
| 21 | % |
| 18 | % |
| 14 | % |
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Total: |
| 100 | % |
| 100 | % |
| 100 | % |
| 100 | % |
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HSBC INVESTOR FAMILY OF FUNDS | 4 |
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Portfolio Reviews |
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Value of a $10,000 Investment |
The charts above represent a comparison of a hypothetical $10,000 investment in the indicated share class versus a similar investment in the Funds’ benchmark and represents the reinvestment of dividends and capital gains in the Funds. The above Indexes and Benchmarks are for the period beginning 1/31/05.
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Fund Performance |
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| Average Annual |
| Expense |
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As of October 31, 2008 |
| Inception |
| 1 |
| 3 |
| Since |
| Gross |
| Net |
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HSBC Investor Aggressive Growth Strategy Fund Class A1 |
| 2/14/05 |
| -43.88 |
| -6.12 |
| -3.49 |
| 2.27 |
| 1.50 |
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HSBC Investor Aggressive Growth Strategy Fund Class B2 |
| 2/9/05 |
| -43.56 |
| -5.82 |
| -3.05 |
| 3.02 |
| 2.25 |
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HSBC Investor Aggressive Growth Strategy Fund Class C3 |
| 6/10/05 |
| -41.87 |
| -5.17 |
| -3.07 |
| 3.02 |
| 2.25 |
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Standard & Poor’s 500 Index |
| — |
| -36.08 |
| -5.21 |
| N/A |
| N/A |
| N/A |
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Aggressive Growth Blended Portfolio Index5 |
| — |
| -40.14 |
| -5.45 |
| N/A |
| N/A |
| N/A |
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Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. Total return figures include change in share price, reinvestment of dividends and capital gains and do not reflect the taxes that a shareholder would pay on fund distributions or on the redemption of fund shares. The investment return and principal value will fluctuate so that an investor’s shares, when redeemed may be worth more or less than the original cost. To obtain performance information current to the most recent month end, please call 1-800-782-8183.
The performance above reflects any fee waivers that have been in effect during the applicable periods, as well as any expense reimbursements that have periodically been made. Absent such waivers and reimbursements, returns would have been lower. Currently, contractual fee waivers are in effect from March 1, 2008 through March 1, 2009.
During the year ended October 31, 2008, the respective Portfolios the Fund invests in received monies related to certain nonrecurring litigation settlements. Without the receipt of this payment, the returns for the applicable periods would have been lower.
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1 | Reflects the maximum sales charge of 5.00%. |
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2 | Reflects the applicable contingent deferred sales charge, maximum of 4.00%. |
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3 | Reflects the applicable contingent deferred sales charge, maximum of 1.00%. |
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4 | Reflects the expense ratio as reported in the prospectus dated February 28, 2008. |
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5 | The performance of the HSBC Investor Aggressive Growth Strategy Fund is compared to a Blended Portfolio Index, which is a hypothetical combination of broad-based indexes. The components of the Blended Portfolio Index and their weighting are as follows: The Citigroup U.S. Domestic Three-Month T-Bill Index (1%); Russell 1000® Growth Index (21%); Russell 1000® Value Index (21%); Russell 2500™ Growth Index (34%) and the MSCI EAFE Index (23%). These indices are unmanaged and do not reflect the expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these value-added services. Investors cannot invest directly in an index. For a complete definition of the above referenced indices, please refer to the Glossary of Terms. |
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5 | HSBC INVESTOR FAMILY OF FUNDS |
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Portfolio Reviews |
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Value of a $10,000 Investment |
The charts above represent a comparison of a hypothetical $10,000 investment in the indicated share class versus a similar investment in the Funds’ benchmark and represents the reinvestment of dividends and capital gains in the Funds. The above Indexes and Benchmarks are for the period beginning 1/31/05.
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Fund Performance |
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| Average Annual |
| Expense |
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As of October 31, 2008 |
| Inception |
| 1 |
| 3 |
| Since |
| Gross |
| Net |
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HSBC Investor Growth Strategy Fund Class A1 |
| 2/8/05 |
| -39.63 |
| -5.52 |
| -2.69 |
| 1.65 |
| 1.50 |
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HSBC Investor Growth Strategy Fund Class B2 |
| 2/1/05 |
| -39.34 |
| -5.25 |
| -2.04 |
| 2.40 |
| 2.25 |
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HSBC Investor Growth Strategy Fund Class C3 |
| 4/27/05 |
| -37.54 |
| -4.62 |
| -1.78 |
| 2.40 |
| 2.25 |
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Standard & Poor’s 500 Index |
| — |
| -36.08 |
| -5.21 |
| N/A |
| N/A |
| N/A |
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Growth Blended Portfolio Index5 |
| — |
| -34.39 |
| -3.86 |
| N/A |
| N/A |
| N/A |
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Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. Total return figures include change in share price, reinvestment of dividends and capital gains and do not reflect the taxes that a shareholder would pay on fund distributions or on the redemption of fund shares. The investment return and principal value will fluctuate so that an investor’s shares, when redeemed may be worth more or less than the original cost. To obtain performance information current to the most recent month end, please call 1-800-782-8183.
The performance above reflects any fee waivers that have been in effect during the applicable periods, as well as any expense reimbursements that have periodically been made. Absent such waivers and reimbursements, returns would have been lower. Currently, contractual fee waivers are in effect from March 1, 2008 through March 1, 2009.
During the years ended October 31, 2007, and 2008, the respective Portfolios the Fund invests in received monies related to certain nonrecurring litigation settlements. Without the receipt of this payment, the returns for applicable periods would have been lower.
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1 | Reflects the maximum sales charge of 5.00%. |
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2 | Reflects the applicable contingent deferred sales charge, maximum of 4.00%. |
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3 | Reflects the applicable contingent deferred sales charge, maximum of 1.00%. |
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4 | Reflects the expense ratio as reported in the prospectus dated February 28, 2008. |
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5 | The performance of the HSBC Investor Growth Strategy Fund is compared to a Blended Portfolio Index, which is a hypothetical combination of broad-based indexes. The components of the Blended Portfolio Index and their weighting are as follows: The Citigroup U.S. Domestic Three-Month T-Bill Index (1%); Barclays Capital U.S. Aggregate Index (formerly Lehman Brothers U.S. Aggregate Index) (15%); Citigroup U.S. High Yield Market Capped Index (2%); Russell 1000® Growth Index (21%); Russell 1000® Value Index (21%); Russell 2500™ Growth Index (20%) and the MSCI EAFE Index (20%). The stated performance for the Blended Index from April 30, 2006 to February 28, 2008 reflects a 2% allocation for the Merrill Lynch U.S. High Yield Master II Index. On February 29, 2008, the Merrill Lynch U.S. High Yield Master II Index was replaced with the Citigroup U.S. High Yield Market Capped Index. These indices are unmanaged and do not reflect the expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these value-added services. Investors cannot invest directly in an index. For a complete definition of the above referenced indices, please refer to the Glossary of Terms. |
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HSBC INVESTOR FAMILY OF FUNDS | 6 |
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Portfolio Reviews |
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Value of a $10,000 Investment |
The charts above represent a comparison of a hypothetical $10,000 investment in the indicated share class versus a similar investment in the Funds’ benchmark and represents the reinvestment of dividends and capital gains in the Funds. The above Indexes and Benchmarks are for the period beginning 1/31/05.
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Fund Performance |
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| Average Annual |
| Expense |
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As of October 31, 2008 |
| Inception |
| 1 |
| 3 |
| Since |
| Gross |
| Net |
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HSBC Investor Moderate Growth Strategy Fund Class A1 |
| 2/3/05 |
| -34.12 |
| -4.62 |
| -2.49 |
| 1.60 |
| 1.50 |
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HSBC Investor Moderate Growth Strategy Fund Class B2 |
| 2/1/05 |
| -33.79 |
| -4.33 |
| -1.97 |
| 2.35 |
| 2.25 |
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HSBC Investor Moderate Growth Strategy Fund Class C3 |
| 6/10/05 |
| -31.74 |
| -3.69 |
| -2.48 |
| 2.35 |
| 2.25 |
|
Standard & Poor’s 500 Index |
| — |
| -36.08 |
| -5.21 |
| N/A |
| N/A |
| N/A |
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Moderate Growth Blended Portfolio Index5 |
| — |
| -27.70 |
| -2.28 |
| N/A |
| N/A |
| N/A |
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Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. Total return figures include change in share price, reinvestment of dividends and capital gains and do not reflect the taxes that a shareholder would pay on fund distributions or on the redemption of fund shares. The investment return and principal value will fluctuate so that an investor’s shares, when redeemed may be worth more or less than the original cost. To obtain performance information current to the most recent month end, please call 1-800-782-8183.
The performance above reflects any fee waivers that have been in effect during the applicable periods, as well as any expense reimbursements that have periodically been made. Absent such waivers and reimbursements, returns would have been lower. Currently, contractual fee waivers are in effect from March 1, 2008 through March 1, 2009.
During the years ended October 31, 2007 and 2008, the respective Portfolios the Fund invests in received monies related to certain nonrecurring litigation settlements. Without the receipt of this payment, the returns for applicable periods would have been lower.
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1 | Reflects the maximum sales charge of 5.00%. |
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2 | Reflects the applicable contingent deferred sales charge, maximum of 4.00%. |
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3 | Reflects the applicable contingent deferred sales charge, maximum of 1.00%. |
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4 | Reflects the expense ratio as reported in the prospectus dated February 28, 2008. |
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5 | The performance of the HSBC Investor Moderate Growth Strategy Fund is compared to a Blended Portfolio Index, which is a hypothetical combination of broad-based indexes. The components of the Blended Portfolio Index and their weighting are as follows: The Citigroup U.S. Domestic Three-Month T-Bill Index (6%); Citigroup U.S. High Yield Market Capped Index (5%); Barclays Capital U.S. Aggregate Index (formerly Lehman Brothers U.S. Aggregate Index) (26%); Russell 1000® Growth Index (19%); Russell 1000® Value Index (18%); Russell 2500™ Growth Index (11%) and the MSCI EAFE Index (15%). The stated performance for the Blended Index from April 30, 2006 to February 28, 2008 reflects a 5% allocation for the Merrill Lynch U.S. High Yield Master II Index. On February 29, 2008, the Merrill Lynch U.S. High Yield Master II Index was replaced with the Citigroup U.S. High Yield Market Capped Index. These indices are unmanaged and do not reflect the expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these value-added services. Investors cannot invest directly in an index. For a complete definition of the above referenced indices, please refer to the Glossary of Terms. |
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7 | HSBC INVESTOR FAMILY OF FUNDS |
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Portfolio Reviews |
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Value of a $10,000 Investment |
The charts above represent a comparison of a hypothetical $10,000 investment in the indicated share class versus a similar investment in the Funds’ benchmark and represents the reinvestment of dividends and capital gains in the Funds. The above Indexes and Benchmarks are for the period beginning 1/31/05.
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Fund Performance |
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| Average Annual |
| Expense |
| ||||||
As of October 31, 2008 |
| Inception |
| 1 |
| 3 |
| Since |
| Gross |
| Net |
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HSBC Investor Conservative Growth Strategy Fund Class A1 |
| 2/23/05 |
| -26.99 |
| -3.30 |
| -1.93 |
| 2.06 |
| 1.50 |
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HSBC Investor Conservative Growth Strategy Fund Class B2 |
| 2/17/05 |
| -26.69 |
| -2.92 |
| -1.62 |
| 2.81 |
| 2.25 |
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HSBC Investor Conservative Growth Strategy Fund Class C3 |
| 4/19/05 |
| -24.47 |
| -2.16 |
| -0.72 |
| 2.81 |
| 2.25 |
|
Standard & Poor’s 500 Index |
| — |
| -36.08 |
| -5.21 |
| N/A |
| N/A |
| N/A |
|
Conservative Growth Blended Portfolio Index5 |
| — |
| -20.06 |
| -0.54 |
| N/A |
| N/A |
| N/A |
|
Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. Total return figures include change in share price, reinvestment of dividends and capital gains and do not reflect the taxes that a shareholder would pay on fund distributions or on the redemption of fund shares. The investment return and principal value will fluctuate so that an investor’s shares, when redeemed may be worth more or less than the original cost. To obtain performance information current to the most recent month end, please call 1-800-782-8183.
The performance above reflects any fee waivers that have been in effect during the applicable periods, as well as any expense reimbursements that have periodically been made. Absent such waivers and reimbursements, returns would have been lower. Currently, contractual fee waivers are in effect from March 1, 2008 through March 1, 2009.
During the years ended October 31, 2007 and 2008, the respective Portfolios the Fund invests in received monies related to certain nonrecurring litigation settlements. Without the receipt of this payment, the returns for applicable periods would have been lower.
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|
1 | Reflects the maximum sales charge of 5.00%. |
|
|
2 | Reflects the applicable contingent deferred sales charge, maximum of 4.00%. |
|
|
3 | Reflects the applicable contingent deferred sales charge, maximum of 1.00%. |
|
|
4 | Reflects the expense ratio as reported in the prospectus dated February 28, 2008. |
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|
5 | The performance of the HSBC Investor Conservative Growth Strategy Fund is compared to a Blended Portfolio Index, which is a hypothetical combination of broad-based indexes. The components of the Blended Portfolio Index and their weighting are as follows: The Citigroup U.S. Domestic 3-Month T-Bill Index (21%); Citigroup U.S. High Yield Market Capped Index (8%); Barclays Capital U.S. Aggregate Index (formerly Lehman Bros. U.S. Aggregate Index) (25%); Barclays Capital U.S. Interm. Aggregate Index (formerly Lehman Bros. U.S. Interm. Aggregate Index) (3%); Russell 1000® Growth Index (15%); Russell 1000® Value Index (14%); Russell 2500™ Growth Index (4%) and the MSCI EAFE Index (10%). The stated performance for the Blended Index from April 30, 2006 to February 28, 2008 reflects an 8% allocation for the Merrill Lynch U.S. High Yield Master II Index. On February 29, 2008, the Merrill Lynch U.S. High Yield Master II Index was replaced with the Citigroup U.S. High Yield Market Capped Index. These indices are unmanaged and do not reflect the expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these value-added services. Investors cannot invest directly in an index. For a complete definition of the above referenced indices, please refer to the Glossary of Terms. |
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HSBC INVESTOR FAMILY OF FUNDS | 8 |
|
Portfolio Reviews |
|
|
|
|
Standardized Performance Benchmark Indices for the |
| 1 |
|
Citigroup U.S. Domestic 3-Month U.S. Treasury Bill Index |
| 2.31 |
|
Citigroup U.S. High Yield Market Capped Index |
| -24.05 |
|
Barclays Capital U.S. Aggregate Index |
| 0.30 |
|
Barclays Capital Intermediate U.S. Aggregate Index |
| 1.48 |
|
MSCI EAFE Index |
| -46.34 |
|
Russell 1000® Growth Index |
| -36.95 |
|
Russell 1000® Value Index |
| -36.80 |
|
Russell 2500™ Growth Index |
| -41.00 |
|
Citigroup U.S. Domestic 3-Month U.S. Treasury Bill Index is government guaranteed and offers a fixed rate of return. Return and principal of stocks and bonds will vary with market conditions. Treasury bills are less volatile than longer-term fixed-income securities and are guaranteed as to timely payment of principal and interest by the U.S. Government.
Citigroup U.S. High Yield Market Capped Index uses the U.S. High-Yield Market Index as its foundation imposing a cap on the par amount of each issuer in order to limit the impact of large issuers while retaining the characteristics of the issuer’s distribution across different maturities. The U.S. High-Yield Market Index captures the performance of below-investments-grade debt issued by corporations domiciled in the United States or Canada.
Barclays Capital U.S. Aggregate Index (formerly Lehman Brothers U.S. Aggregate Index) is an unmanaged index generally representative of the investment-grade debt issues with at least one year to final maturity.
Barclays Capital Intermediate U.S. Aggregate Index (formerly Lehman Brothers Intermediate U.S. Aggregate Index) is an unmanaged index market value-weighted performance benchmark for investment-grade fixed-rate debt issues, including government, corporate, asset-backed, and mortgage-backed securities, with maturities of at least one year.
Morgan Stanley Capital International Europe, Australasia and Far East Index (MSCI EAFE) is an unmanaged free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. & Canada. As of June 2007 the MSCI EAFE Index consisted of the following 21 developed market country indices: Australia, Austria, Belgium, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, and the United Kingdom.
Russell 1000® Growth Index is an unmanaged index which measures the performance of the large-cap growth segment of the U.S. equity universe. It includes those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values.
Russell 1000® Value Index is an unmanaged index which measures the performance of the large-cap value segment of the U.S. equity universe. It includes those Russell 1000 companies with lower price-to-book ratios and lower expected growth values.
Russell 2500™ Growth Index is an unmanaged index which measures the performance of the small to mid-cap growth segment of the U.S. equity universe. It includes those Russell 2500 companies with higher price-to-book ratios and higher forecasted growth values.
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9 | HSBC INVESTOR FAMILY OF FUNDS |
|
|
| Portfolio Reviews |
| |
HSBC Investor Prime Money Market Fund | Moody’s and Standard & Poor’s |
| has assigned an “Aaa” and “AAAm” |
| rating to the HSBC Investor Prime |
by John Chiodi | Money Market Fund.1 |
Senior Portfolio Manager | |
Investment Concerns
An investment in the fund is not insured or guaranteed by the FDIC or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund.
The money markets experienced a turbulent environment during the 12-month period under review, as rising defaults on subprime mortgages brought on a credit and liquidity crisis. The Federal Reserve Board (the “Fed”) attempted to address the financial system’s problems by lowering its target short-term interest rate from 4.50% to 1.00% between November 2007 and October 2008, causing yields on money market securities to decline.
We sought to protect shareholders’ principal in this uncertain environment. In particular, we sacrificed some yield in exchange for increased liquidity during periods of extreme stress in the money markets. We favored intermediate-term assets to help offset the effect of falling rates on the Fund’s yield while also meeting our conservative liquidity goals. As the markets settled somewhat during the fiscal third quarter, we took advantage of strategic opportunities to capture higher yields available on longer-term securities. Additionally, we took advantage of a program by the U.S. Treasury to insure money market funds.†
We also looked to safeguard shareholder assets by increasing our position in government securities. This strategy also reduced the Fund’s yield, but provided greater security as the credit and liquidity crisis roiled the money markets.*
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|
* | Portfolio composition is subject to change. |
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|
† | On October 7, 2008 and December 4, 2008 the Fund participated in the Treasury Money Market Guarantee Program and related extension. The Program is for shareholders as of September 19, 2008 and generally covers the lesser of the amount that the shareholder held on September 19 or the amount they hold on the date the fund needs to utilize the guarantee. If a shareholder closes their account with the Fund or broker dealer after September 19, any future investment in the Fund will not be guaranteed. The extended guarantee is through April 30, 2009, but may be further extended at the Treasury’s discretion. |
Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. Total return figures include change in share price, reinvestment of dividends and capital gains and do not reflect taxes that a shareholder would pay on fund distributions or on the redemption of fund shares. The investment return and principal value will fluctuate so that an investor’s shares, when redeemed may be worth more or less than the original cost. To obtain performance information current to the most recent month end, please call 1-800-782-8183.
|
|
HSBC INVESTOR FAMILY OF FUNDS | 10 |
|
Portfolio Reviews |
HSBC Investor Core Plus Fixed Income Portfolio |
by Halbis Capital Management (USA) Inc., U.S. Core Fixed Income Team |
The HSBC Investor Fixed Income Fund (the “Portfolio”) seeks to maximize total return, consistent with reasonable risk. The “total return” sought by the Fund consists of income earned on investments, plus capital appreciation, if any, which generally arises from decreases in interest rates or improving credit fundamentals for a particular sector or security. The Portfolio employs Halbis Capital Management (USA) Inc. as subadviser to the Portfolio.
Investment Concerns
Bonds offer a relatively stable level of income, although bond prices will fluctuate providing the potential for principal gain or loss. Intermediate-term, higher-quality bonds generally offer less risk than longer-term bonds and a lower rate of return.
The mortgage market in the U.S. recently experienced difficulties that may adversely affect the performance and market value of certain mortgage-related investments.
Market Commentary
The period was marked by a worsening of the credit crisis, which led to the failure of several financial institutions as well as federal bailouts for select banks and insurers. Liquidity in the credit markets and money markets evaporated in that environment, which led to a standstill in investment activity. Investors during the period favored the relative safety of Treasury securities and shunned all other fixed-income securities. Sector exposure in anything other than Treasury securities resulted in negative returns.
The main driver of the Fund’s underperformance relative to its benchmarks was its overweight positions in mortgage-backed and corporate securities. Our strategy of emphasizing various types of “spread” bonds—bonds that offer higher yields than Treasuries—is designed to provide shareholders with greater income over time. Although these securities offered attractive yields relative to Treasury bonds, they performed poorly as investors flocked to Treasuries and avoided other sectors of the bond market.*
For much of the period, the Fund focused on intermediate-term securities and maintained a duration slightly longer than that of its benchmarks. That strategy benefited the fund as such securities offered more attractive yields shorter-term issues.*
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|
* | Portfolio composition is subject to change. |
Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. Total return figures include change in share price, reinvestment of dividends and capital gains and do not reflect taxes that a shareholder would pay on fund distributions or on the redemption of fund shares. The investment return and principal value will fluctuate so that an investor’s shares, when redeemed may be worth more or less than the original cost. To obtain performance information current to the most recent month end, please call 1-800-782-8183.
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|
11 | HSBC INVESTOR FAMILY OF FUNDS |
|
Portfolio Reviews |
HSBC Investor High Yield Fixed Income Portfolio |
by Halbis Capital Management (USA) Inc., High Yield Team |
The HSBC Investor High Yield Fixed Income Portfolio (the “Portfolio”) seeks to provide a high level of current income and capital appreciation. HSBC Global Asset Management (USA) Inc. serves as investment adviser to the Fund. The Halbis High Yield Team provides the day to day management of the portfolio. The Team’s philosophy is focused on delivering sustainable value added performance in the high yield fixed income market. The investment approach is a combination of top-down sector/ industry selection and bottom-up security/quality selection. The team rotates sectors and themes within the high yield universe during different market environments seeking to add value, endeavoring to take advantage of market inefficiencies in order to outperform in both up and down markets. The Portfolio employs Halbis Capital Management (USA) Inc. as subadviser to the Portfolio.
Investment Concerns
Bond funds will tend to experience smaller fluctuations in value than stock funds. However, investors in any bond fund should anticipate fluctuations in price, especially for longer-term issues and in environments of rising interest rates. High yield bonds are subject to greater risks than investment grade bonds, such as the increased risk of default because of the lower credit quality of the issues.
Market Commentary
High-yield bonds performed poorly during the period under review, which was characterized by a severe economic slowdown and a deepening credit crisis that led to unprecedented moves by the U.S. government to attempt to shore up the economy and the financial system. Investors in that environment flocked to Treasury securities with extremely high levels of liquidity and safety, and shunned high-yield bonds due to fears that the companies issuing such bonds would default on their obligations. In addition, liquidity in the high-yield market was often extremely tight, making it difficult to buy and sell securities.
The Fund’s performance remained relatively in line or slightly under its benchmark indices during the period which was the result of several key strategies. Our decision to underweight the homebuilding, building products and financial sectors contributed to strong relative performance, as these industries suffered due to the weak economy, the credit crisis and the prolonged downturn in the housing market. We also overweighted the energy and utilities sectors. Energy prices soared during the first half of the period, and energy companies remained healthy despite a downturn in energy prices during the second half of the period. Additionally, we increased the Fund’s overall credit quality whenever possible. That benefited performance as investors favored higher-quality bonds.*
The Fund’s relatively large position in bonds of gaming companies dampened performance somewhat. As the economic environment deteriorated throughout the period, consumers cut back on their discretionary spending—hurting revenues among companies in the gaming sector.*
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|
* | Portfolio composition is subject to change. |
Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. Total return figures include change in share price, reinvestment of dividends and capital gains and do not reflect taxes that a shareholder would pay on fund distributions or on the redemption of fund shares. The investment return and principal value will fluctuate so that an investor’s shares, when redeemed may be worth more or less than the original cost. To obtain performance information current to the most recent month end, please call 1-800-782-8183.
|
|
HSBC INVESTOR FAMILY OF FUNDS | 12 |
|
Portfolio Reviews |
HSBC Investor Intermediate Duration Fixed Income Portfolio |
by Halbis Capital Management (USA) Inc., U.S. Core Fixed Income Team |
The HSBC Investor Intermediate Duration Fixed Income Portfolio (the “Portfolio”) seeks to maximize total return, consistent with reasonable risk. The “total return” sought by the Fund consists of income earned on investments, plus capital appreciation, if any, which generally arises from decreases in interest rates or improving credit fundamentals for a particular sector or security. Under normal market conditions, the Portfolio invest at least 80% of its net assets in fixed income securities. The Portfolio expects to maintain an average portfolio duration with respect to fixed income securities of 3 to 6 years. The Portfolio employs Halbis Capital Management (USA) Inc. as subadviser to the Portfolio.
Investment Concerns
Bonds offer a relatively stable level of income, although bond prices will fluctuate providing the potential for principal gain or loss. Intermediate-term, higher-quality bonds generally offer less risk than longer-term bonds and a lower rate of return.
The mortgage market in the U.S. recently experienced difficulties that may adversely affect the performance and market value of certain mortgage-related investments.
Market Commentary
The collapse of the subprime mortgage market led to the failure of several financial institutions during the period as the credit market dried up and lending activity froze. Other financial institutions, including banks and insurers, were rescued by federal bailouts. In that environment, investors fled to high-quality issues, favoring Treasury bonds over other securities in the fixed-income market.
The Fund underperformed its benchmarks in large part due to its focus on sectors other than Treasuries. Our strategy of emphasizing various types of “spread” bonds—bonds that offer higher yields than Treasuries—is designed to provide shareholders with greater income over time. However, such issues significantly underperformed during the period as investors shunned any fixed-income securities outside of the Treasury market.*
As investors sought liquidity and relative safety in short-term Treasury issues, the yield curve steepened and longer-term securities offered higher yields. The Fund maintained a duration slightly longer than that of its benchmarks. That strategy benefited the fund as such securities offered higher yields than shorter-term issues.*
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|
* | Portfolio composition is subject to change. |
Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. Total return figures include change in share price, reinvestment of dividends and capital gains and do not reflect taxes that a shareholder would pay on fund distributions or on the redemption of fund shares. The investment return and principal value will fluctuate so that an investor’s shares, when redeemed may be worth more or less than the original cost. To obtain performance information current to the most recent month end, please call 1-800-782-8183.
|
|
13 | HSBC INVESTOR FAMILY OF FUNDS |
|
Portfolio Reviews |
HSBC Investor Growth Portfolio |
by Clark J. Winslow, Chief Executive Officer/Portfolio Manager |
The HSBC Investor Growth Portfolio (the “Portfolio”) seeks long-term growth of capital by investing primarily in U.S. and foreign equity securities of high quality companies with market capitalization generally in excess of $2 billion, which the subadviser believes have the potential to generate superior levels of long-term profitability and growth. Effective May 12, 2008, Winslow Capital Management Inc, replaced Waddell & Reed Investment Management Company (Waddell & Reed) as subadviser.
Investment Concerns
Equity securities (stocks) are more volatile and carry more risk than other forms of investments, including investments in high-grade fixed income securities. The net asset value per share of this Fund will fluctuate as the value of the securities in the portfolio changes.
Market Commentary
The subprime mortgage crisis continued to worsen during the period, forcing the federal government to bail out several failing financial institutions. That environment had a significantly negative impact on both the domestic and international equity markets.
The Fund’s returns relative to the benchmark benefited from its overweight position in the health care sector. Health care stocks outperformed the market as a whole—especially during the three months through September, which were among the most difficult of the 12-month period under review. Stock selection among financial services shares also benefited performance relative to the benchmark, despite the poor performance of the overall sector throughout the period.*
Stock selection in the consumer staples and technology sectors hurt performance relative to the benchmark. The Fund’s holdings in the energy sector hurt relative returns as well. Oil prices declined steeply off of July highs, and investors sold energy shares as a result.*
It is clear that the global economic outlook is negative. However, we see valuations for many companies at levels similar to those we encountered in late 2002 and early 2003. We remain focused on implementing our investment discipline: we will continue to focus on companies with strong potential future earnings growth, attractive absolute valuations, favorable risk/reward and downside protection, and catalysts/ inflection points to improve /sustain profitability or recognize value.
|
|
* | Portfolio composition is subject to change. |
Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. Total return figures include change in share price, reinvestment of dividends and capital gains and do not reflect taxes that a shareholder would pay on fund distributions or on the redemption of fund shares. The investment return and principal value will fluctuate so that an investor’s shares, when redeemed may be worth more or less than the original cost. To obtain performance information current to the most recent month end, please call 1-800-782-8183.
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HSBC INVESTOR FAMILY OF FUNDS | 14 |
|
Portfolio Reviews |
HSBC Investor International Equity Portfolio |
by Kevin F. Simms |
Co-CIO International Value Equities and Director of Research – Global and International Value Equities AllianceBernstein Investment Research and Management |
The HSBC Investor International Equity Portfolio (the “Portfolio”) seek to provide their shareholders with long-term growth of capital and future income by investing at least 80% of its net assets in equity securities of companies organized and domiciled in developed nations outside the United States or for which the principal trading market is outside the United States, including Europe, Canada, Australia and the Far East. The Portfolio may invest up to 20% of its assets in equity securities of companies in emerging markets. The Portfolio employs AllianceBernstein L.P. (“AllianceBernstein”), a unit of AllianceBernstein Investment Research and Management as subadviser.
Investment Concerns
There are risks associated with investing in foreign companies, such as erratic market conditions, economic and political instability and fluctuations in currency and exchange rates.
Equity securities (stocks) are more volatile and carry more risk than other forms of investments, including investments in high-grade fixed income securities. The net asset value per share of this Fund will fluctuate as the value of the securities in the portfolio changes.
Market Commentary
Investor worries about slowing global economic growth and further repercussions from the subprime mortgage crisis dominated financial markets during the period under review, contributing to the Fund’s negative performance. The U.S. and U.K. housing markets continued to decline, and banks worldwide suffered from exposure to problem assets related to the mortgage industry. Global stocks declined during the period as prospects for economic growth fell sharply.
The Fund’s sector selection hurt relative returns, due primarily to underweight positions in shares of consumer staples, medical and utilities firms. The Fund’s overweight position in financials also dragged on returns, as these companies suffered some of the period’s largest losses.*
Security selection weighed on the Fund’s performance relative to its benchmark. Key detractors included shares of U.K. banks with significant exposure to that country’s housing market. Meanwhile, softening consumer spending hurt performance among shares of certain automakers in the Fund’s portfolio. Those events cascaded through the supply chain, eventually weakening shares of some materials firms in the Fund’s portfolio.
The Fund’s investment in shares of certain securities enhanced its relative performance. Such securities included a major Japanese utility, a French financial services firm and a global energy company.*
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* | Portfolio composition is subject to change. |
Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. Total return figures include change in share price, reinvestment of dividends and capital gains and do not reflect taxes that a shareholder would pay on fund distributions or on the redemption of fund shares. The investment return and principal value will fluctuate so that an investor’s shares, when redeemed may be worth more or less than the original cost. To obtain performance information current to the most recent month end, please call 1-800-782-8183.
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15 | HSBC INVESTOR FAMILY OF FUNDS |
|
Portfolio Reviews |
HSBC Investor Opportunity Portfolio |
by William A. Muggia |
President–Chief Investment Officer |
The HSBC Investor Opportunity Fund (“the Fund”) seeks to provide its shareholders with long-term growth of capital by investing in equity securities of small cap companies. The Portfolio may also invest in bonds, notes, commercial paper, U.S. Government securities, and foreign securities. Small cap companies generally are defined as those that have market capitalizations within the range of market capitalizations represented in the Russell 2500™ Growth Index1. The Portfolio may also invest in equity securities of larger, more established companies if they are expected to show increased earnings. The Portfolio employs Westfield Capital Management Company, LLC as subadviser.
Investment Concerns
Equity securities (stocks) are more volatile and carry more risk than other forms of investments, including investments in high-grade fixed income securities. The net asset value per share of this Fund will fluctuate as the value of the securities in the portfolio changes.
Small-capitalization funds typically carry additional risks since smaller companies generally have a higher risk of failure, and historically, their stocks have experienced a greater degree of market volatility than stocks on average.
Market Commentary
The fallout from the subprime mortgage crisis intensified during the 12 months under review, leading to larger credit and liquidity crises in the financial markets. Fears of U.S. and global recessions grew as a result, particularly toward the end of the period. Stocks of almost all kinds posted heavy losses.
The Fund benefited from holding a larger position than its benchmark in the health care sector. The Fund did not have a bullish view on the sector as a whole, but managed to identify a number of attractive investments in sub-sectors such as biotechnology and health care equipment, and those holdings helped relative performance. The Fund also held an underweight position in consumer discretionary stocks. Consumer discretionary proved to be the second-worst performing sector during the period, following only the financial services sector, so the Fund’s underweight position benefited relative performance.*
Stock selection within the industrial sector was the greatest drag on the Fund’s relative performance during the period. We believe that the pace of development in foreign countries would continue to increase, making shares of building and construction firms attractive. But stocks of such companies suffered as the economic woes in the United States spread globally. Stock selection in the financial services sector also weighed on returns relative to the benchmark.
The economic realities are grim, but we believe that this is largely reflected in stocks. Valuation levels of US stocks are well below their ten-year averages. Stocks have traded down as an asset class, with little regard for company specific prospects or fundamentals. We believe that once the financial markets have stabilized, we will look back on this period as an opportunity to invest in high quality growth companies trading at very attractive historical valuations. We remain focused on company fundamentals and are committed to upgrading quality in the portfolio wherever possible.
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1 | For additional information, please refer to the Glossary of Terms. |
|
|
* | Portfolio composition is subject to change. |
Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. Total return figures include change in share price, reinvestment of dividends and capital gains and do not reflect taxes that a shareholder would pay on fund distributions or on the redemption of fund shares. The investment return and principal value will fluctuate so that an investor’s shares, when redeemed may be worth more or less than the original cost. To obtain performance information current to the most recent month end, please call 1-800-782-8183.
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|
HSBC INVESTOR FAMILY OF FUNDS | 16 |
|
Portfolio Reviews |
HSBC Investor Value Portfolio |
by Jon D. Bosse, CFA |
NWQ Investment Management Company, LLC |
The HSBC Investor Value Portfolio (the “Portfolio”) seeks long-term growth of capital and income by investing primarily in U.S. and foreign companies with large and medium capitalizations that the subadviser believes possess opportunities underappreciated or misperceived by the market. The Portfolio employs NWQ Investment Management Company, LLC (“NWQ”) as subadviser.
Investment Concerns
Value-based investments are subject to the risk that the broad market may not recognize their intrinsic value.
Equity securities (stocks) are more volatile and carry more risk than other forms of investments, including investments in high-grade fixed income securities. The net asset value per share of this Fund will fluctuate as the value of the securities in the Portfolio changes.
Market Commentary
U.S and Global Equity markets experienced significant declines during the period under review, with most of the decline occurring during the last weeks. This has been an unprecedented period and one of the most challenging investment environments in our country’s history. Given the crisis of confidence, the U.S. Government took decisive action regarding the fate of many companies. The U.S. Government has either: assumed control of companies; sponsored/engineered “takeovers;” or allowed companies to fail. In many cases, such events might signal a bottom and thereby provide a floor in equity valuations. However, the magnitude of recent events and continued economic deterioration combined with the realization that a company’s financial well-being could quickly evaporate, have heightened investor fears and market volatility. The U.S. Treasury/the Federal Reserve Board (as well as Central Banks broadly) have begun implementing broad and meaningful financial rescue measures in order to stabilize global markets.
There were few places to “hide” during the period under review; and most of the Fund’s holdings declined. The credit markets dysfunction has led to fear and panic, particularly within the financial sector. While the Fund was underweighted in the financial sector (relative to the Russell 1000® Value Index1), the sector adversely impacted absolute and relative performance. The Fund’s positions within the materials/processing sector adversely impacted the portfolio. These stocks came under pressure as commodity prices declined amid a deteriorating outlook for global growth. Oil and gas prices declined during the latter part of the period adversely affecting the Fund’s energy holdings. We would like to note that we reduced the energy position in Fund during the first half of the period — at higher share prices. Finally, the Fund’s consumer discretionary sector, primarily media, adversely impacted the portfolio. There were positive contributors during the period. One of the Fund’s health care companies, as well as the Fund’s railroad holding, appreciated during the period. Consumer staples contributed positively to the portfolio.*
It is clear that the global economic outlook is negative. However, we see valuations for many companies at levels similar to those we encountered in late 2002 and early 2003. We remain focused on implementing our investment discipline: we will continue to focus on companies with attractive absolute valuations, favorable risk/reward and downside protection, and catalysts/inflection points to improve/sustain profitability or recognize value.
It is clear that the global economic outlook is negative. However, we see valuations for many companies at levels similar to those we encountered in late 2002 and early 2003. We remain focused on implementing our investment discipline: we will continue to focus on companies with attractive absolute valuations, favorable risk/reward and downside protection, and catalysts/ inflection points to improve /sustain profitability or recognize value.
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|
1 | For additional information, please refer to the Glossary of Terms. |
|
|
* | Portfolio composition is subject to change. |
Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. Total return figures include change in share price, reinvestment of dividends and capital gains and do not reflect taxes that a shareholder would pay on fund distributions or on the redemption of fund shares. The investment return and principal value will fluctuate so that an investor’s shares, when redeemed may be worth more or less than the original cost. To obtain performance information current to the most recent month end, please call 1-800-782-8183.
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17 | HSBC INVESTOR FAMILY OF FUNDS |
|
Portfolio Composition* |
October 31, 2008 |
(Unaudited) |
|
|
|
|
|
HSBC Investor Core Plus Fixed Income Portfolio |
|
|
|
|
|
|
|
|
|
Investment Allocation |
| Percentage of Investments at Value |
| |
U.S. Government and Government Agency Obligations |
| 33.4 | % |
|
Corporate Obligations |
| 29.5 | % |
|
Asset Backed Securities |
| 19.4 | % |
|
Commercial Mortgage Backed Securities |
| 8.8 | % |
|
Collateralized Mortgage Obligations |
| 4.5 | % |
|
Cash and Equivalents |
| 2.1 | % |
|
Municipal Bonds |
| 1.8 | % |
|
Foreign Bonds |
| 0.4 | % |
|
Certificates of Deposit |
| 0.1 | % |
|
Total |
| 100.0 | % |
|
|
|
|
|
|
HSBC Investor High Yield Fixed Income Portfolio |
|
|
|
|
|
|
|
|
|
Investment Allocation |
| Percentage of Investments at Value |
| |
Corporate Obligations |
| 100.0 | % |
|
Common Stock |
| 0.0 | % |
|
Total |
| 100.0 | % |
|
|
|
|
|
|
HSBC Investor Intermediate Duration Fixed Income Portfolio |
|
|
|
|
|
|
|
|
|
Investment Allocation |
| Percentage of Investments at Value |
| |
U.S. Government and Government Agency Obligations |
| 42.6 | % |
|
Corporate Obligations |
| 21.2 | % |
|
Asset Backed Securities |
| 15.4 | % |
|
Cash and Equivalents |
| 9.8 | % |
|
Commercial Mortgage Backed Securities |
| 5.7 | % |
|
Collateralized Mortgage Obligations |
| 4.0 | % |
|
Municipal Bonds |
| 0.4 | % |
|
Foreign Bonds |
| 0.4 | % |
|
Certificates of Deposit |
| 0.5 | % |
|
Total |
| 100.0 | % |
|
|
|
|
|
|
HSBC Investor Growth Portfolio |
|
|
|
|
|
|
|
|
|
Investment Allocation |
| Percentage of Investments at Value |
| |
Biotechnology |
| 7.8 | % |
|
Retail |
| 7.2 | % |
|
Software Services |
| 7.2 | % |
|
Industrial Conglomerates |
| 6.8 | % |
|
Medical Services & Distributors |
| 6.7 | % |
|
Medical Products |
| 6.6 | % |
|
Cash and Equivalents |
| 5.6 | % |
|
Telecommunication |
| 5.3 | % |
|
Hardware & Peripherals |
| 4.4 | % |
|
Credit Card |
| 4.2 | % |
|
Communication Equipment |
| 3.4 | % |
|
Railroad |
| 3.3 | % |
|
Agriculture |
| 3.0 | % |
|
Investment Management |
| 2.5 | % |
|
Internet |
| 2.3 | % |
|
Retail Pharmacy |
| 2.3 | % |
|
Aerospace & Defense |
| 2.3 | % |
|
Oil & Gas Drill & Equipment |
| 2.1 | % |
|
Pharmaceuticals |
| 2.1 | % |
|
Engineering & Construction |
| 2.0 | % |
|
Distribution & Wholesale |
| 1.8 | % |
|
Household Products |
| 1.5 | % |
|
Exchanges |
| 1.5 | % |
|
Oil & Gas Exploration & Production |
| 1.4 | % |
|
Transportation |
| 1.3 | % |
|
Computer Storage |
| 1.1 | % |
|
Solar |
| 1.0 | % |
|
Travel & Leisure |
| 1.0 | % |
|
Electric, Gas & Water |
| 0.8 | % |
|
Coal |
| 0.8 | % |
|
Business Services |
| 0.7 | % |
|
Total |
| 100.0 | % |
|
|
|
|
|
|
HSBC International Equity Portfolio |
|
|
|
|
|
|
|
|
|
Investment Allocation |
| Percentage of Investments at Value |
| |
Europe |
| 66.9 | % |
|
Japan |
| 18.6 | % |
|
Australia & Far East |
| 6.2 | % |
|
Canada |
| 5.1 | % |
|
Cash and Equivalents |
| 2.4 | % |
|
Other |
| 0.8 | % |
|
Total |
| 100.0 | % |
|
|
|
HSBC INVESTOR FAMILY OF FUNDS | 18 |
|
Portfolio Reviews |
Portfolio Composition* |
October 31, 2008 |
(Unaudited) |
|
|
|
|
|
HSBC Investor Opportunity Portfolio |
|
|
|
|
|
|
|
|
|
Investment Allocation |
| Percentage of Investments at Value |
| |
Computer Software |
| 14.9 | % |
|
Pharmaceuticals |
| 12.6 | % |
|
Oil & Gas |
| 9.4 | % |
|
Health Care |
| 8.1 | % |
|
Consumer Products |
| 8.0 | % |
|
Industrial Manufacturing |
| 5.7 | % |
|
Financial Services |
| 5.4 | % |
|
Biotechnology |
| 5.2 | % |
|
Education |
| 4.7 | % |
|
Retail |
| 4.7 | % |
|
Cash and Equivalents |
| 3.7 | % |
|
Telecommunications |
| 3.1 | % |
|
Diversified Manufacturing Operations |
| 2.6 | % |
|
Transportation |
| 2.3 | % |
|
Business Services |
| 2.3 | % |
|
Utilities |
| 1.4 | % |
|
Aerospace & Defense |
| 1.4 | % |
|
Internet Related |
| 1.4 | % |
|
Media |
| 1.3 | % |
|
Homebuilders |
| 1.3 | % |
|
Electronic Components & Semiconductors |
| 0.5 | % |
|
Total |
| 100.0 | % |
|
|
|
|
|
|
HSBC Investor Value Portfolio |
|
|
|
|
|
|
|
|
|
Investment Allocation |
| Percentage of Investments at Value |
| |
Oil & Gas |
| 11.8 | % |
|
Cash and Equivalents |
| 9.7 | % |
|
Computer Software |
| 9.2 | % |
|
Insurance |
| 7.3 | % |
|
Telecommunications |
| 6.6 | % |
|
Media |
| 6.4 | % |
|
Metals & Mining |
| 6.4 | % |
|
Consumer Products |
| 6.0 | % |
|
Pharmaceuticals |
| 5.9 | % |
|
Aerospace & Defense |
| 5.4 | % |
|
Tobacco |
| 4.5 | % |
|
Financial Services |
| 4.2 | % |
|
Business Services |
| 3.5 | % |
|
Banking |
| 3.4 | % |
|
Conglomerates |
| 2.5 | % |
|
Diversified Manufacturing Operations |
| 2.4 | % |
|
Transportation |
| 2.4 | % |
|
Energy |
| 1.6 | % |
|
Paper & Related Products |
| 0.8 | % |
|
Total |
| 100.0 | % |
|
|
|
* | Portfolio composition is subject to change. |
|
|
19 | HSBC INVESTOR FAMILY OF FUNDS |
(This Page Intentionally Left Blank)
HSBC INVESTOR LIFELINE FUNDS
Statements of Assets and Liabilities—As of October 31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Aggressive |
| Growth |
| Moderate |
| Conservative |
| ||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in Affiliated Portfolios |
| $ | 7,993,224 |
| $ | 24,179,015 |
| $ | 26,458,188 |
| $ | 7,559,224 |
|
Investments in Affiliated Fund, at value(a) |
|
| 74,513 |
|
| 230,718 |
|
| 1,629,963 |
|
| 1,974,707 |
|
|
|
|
|
|
| ||||||||
Total Investments |
|
| 8,067,737 |
|
| 24,409,733 |
|
| 28,088,151 |
|
| 9,533,931 |
|
|
|
|
|
|
| ||||||||
Receivable for capital shares issued |
|
| 3,851 |
|
| 7,077 |
|
| 5,624 |
|
| 7,500 |
|
Reclaims receivable |
|
| 2,950 |
|
| 10,161 |
|
| 7,960 |
|
| 239 |
|
Receivable from Investment Adviser |
|
| 9,045 |
|
| 10,157 |
|
| — |
|
| 5,118 |
|
Prepaid expenses and other assets |
|
| 5,593 |
|
| 4,609 |
|
| 5,367 |
|
| 3,808 |
|
|
|
|
|
|
| ||||||||
Total Assets |
|
| 8,089,176 |
|
| 24,441,737 |
|
| 28,107,102 |
|
| 9,550,596 |
|
|
|
|
|
|
| ||||||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Payable for capital shares redeemed |
|
| 1,340 |
|
| 12,018 |
|
| 43,732 |
|
| — |
|
Accrued expenses and other liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Management |
|
| 348 |
|
| 1,053 |
|
| 1,213 |
|
| 420 |
|
Administration |
|
| 136 |
|
| 413 |
|
| 478 |
|
| 166 |
|
Distribution |
|
| 2,314 |
|
| 6,855 |
|
| 8,989 |
|
| 3,136 |
|
Shareholder Servicing |
|
| 1,754 |
|
| 5,292 |
|
| 6,092 |
|
| 2,110 |
|
Compliance Service |
|
| 7 |
|
| 22 |
|
| 23 |
|
| 8 |
|
Transfer Agent |
|
| 17,096 |
|
| 27,702 |
|
| 30,180 |
|
| 13,472 |
|
Trustee |
|
| 9 |
|
| 27 |
|
| 28 |
|
| 11 |
|
Other |
|
| 8,934 |
|
| 27,290 |
|
| 28,893 |
|
| 6,211 |
|
|
|
|
|
|
| ||||||||
Total Liabilities |
|
| 31,938 |
|
| 80,672 |
|
| 119,628 |
|
| 25,534 |
|
|
|
|
|
|
| ||||||||
Net Assets |
| $ | 8,057,238 |
| $ | 24,361,065 |
| $ | 27,987,474 |
| $ | 9,525,062 |
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Composition of Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital |
| $ | 11,673,697 |
| $ | 33,631,352 |
| $ | 37,025,703 |
| $ | 12,010,124 |
|
Accumulated net investment income (loss) |
|
| — |
|
| 117,076 |
|
| — |
|
| — |
|
Accumulated net realized gains (losses) from investment and foreign currency transactions |
|
| (962,096 | ) |
| (2,238,069 | ) |
| (2,057,829 | ) |
| (558,957 | ) |
Unrealized appreciation/depreciation from investments and foreign currencies |
|
| (2,654,363 | ) |
| (7,149,294 | ) |
| (6,980,400 | ) |
| (1,926,105 | ) |
|
|
|
|
|
| ||||||||
Net Assets |
| $ | 8,057,238 |
| $ | 24,361,065 |
| $ | 27,987,474 |
| $ | 9,525,062 |
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A Shares |
| $ | 4,572,025 |
| $ | 13,908,165 |
| $ | 14,225,654 |
| $ | 4,747,154 |
|
Class B Shares |
|
| 3,165,735 |
|
| 9,516,049 |
|
| 12,354,009 |
|
| 4,347,825 |
|
Class C Shares |
|
| 319,478 |
|
| 936,851 |
|
| 1,407,811 |
|
| 430,083 |
|
|
|
|
|
|
| ||||||||
|
| $ | 8,057,238 |
| $ | 24,361,065 |
| $ | 27,987,474 |
| $ | 9,525,062 |
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares Outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
($0.001 par value, unlimited number of shares authorized): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A Shares |
|
| 530,382 |
|
| 1,579,475 |
|
| 1,636,612 |
|
| 536,918 |
|
Class B Shares |
|
| 377,234 |
|
| 1,086,027 |
|
| 1,420,997 |
|
| 496,386 |
|
Class C Shares |
|
| 38,091 |
|
| 106,453 |
|
| 165,887 |
|
| 47,798 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Asset Value, Offering Price and Redemption Price per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A Shares |
| $ | 8.62 |
| $ | 8.81 |
| $ | 8.69 |
| $ | 8.84 |
|
Class B Shares* |
| $ | 8.39 |
| $ | 8.76 |
| $ | 8.69 |
| $ | 8.76 |
|
Class C Shares* |
| $ | 8.39 |
| $ | 8.80 |
| $ | 8.49 |
| $ | 9.00 |
|
Maximum Sales Charge — Class A Shares |
|
| 5.00 | % |
| 5.00 | % |
| 5.00 | % |
| 5.00 | % |
|
|
|
|
|
| ||||||||
Maximum Offering Price per share (Net Asset Value/(100%—maximum sales charge)) — Class A Shares |
| $ | 9.07 |
| $ | 9.27 |
| $ | 9.15 |
| $ | 9.31 |
|
|
|
|
|
|
| ||||||||
Investments in Affiliated Fund, at cost (a) |
| $ | 74,513 |
| $ | 230,718 |
| $ | 1,629,963 |
| $ | 1,974,707 |
|
|
|
|
|
|
| ||||||||
|
|
* | Redemption Price per share varies by length of time shares are held. |
|
|
(a) | The investment in the affiliated fund are holdings of the HSBC Investor Prime Money Market Fund Class I Shares (See Note 1). The shares are held in the Fund are identical to value since it is at a $1.00 net asset value per share. In addition, value and cost for financial reporting and federal income tax purposes are the same. |
|
|
|
21 | HSBC INVESTOR LIFELINE FUNDS | See notes to financial statements. |
HSBC INVESTOR LIFELINE FUNDS
Statements of Operations—For the year ended October 31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Aggressive |
| Growth |
| Moderate |
| Conservative |
| ||||
Investment Income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Income from Affiliated Portfolios (a) |
| $ | 200,481 |
| $ | 850,561 |
| $ | 1,135,367 |
| $ | 370,160 |
|
Investment Income from Affiliated Fund |
|
| 3,956 |
|
| 11,215 |
|
| 72,600 |
|
| 81,348 |
|
Tax reclaims (a) |
|
| 2,950 |
|
| 10,161 |
|
| 7,960 |
|
| 239 |
|
Foreign tax withholding from Affiliated Portfolios (a) |
|
| (14,909 | ) |
| (35,955 | ) |
| (29,356 | ) |
| (6,324 | ) |
Expenses from Affiliated Portfolios (a) |
|
| (87,214 | ) |
| (237,243 | ) |
| (241,779 | ) |
| (67,484 | ) |
|
|
|
|
|
| ||||||||
Total Investment Income (Loss) |
|
| 105,264 |
|
| 598,739 |
|
| 944,792 |
|
| 377,939 |
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Management |
|
| 5,924 |
|
| 16,836 |
|
| 18,382 |
|
| 5,975 |
|
Administration |
|
| 2,523 |
|
| 7,185 |
|
| 7,842 |
|
| 2,547 |
|
Distribution: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Class B Shares |
|
| 34,993 |
|
| 96,743 |
|
| 119,950 |
|
| 38,520 |
|
Class C Shares |
|
| 3,652 |
|
| 9,519 |
|
| 13,455 |
|
| 3,703 |
|
Shareholder Servicing: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A Shares |
|
| 16,738 |
|
| 48,760 |
|
| 47,443 |
|
| 15,799 |
|
Class B Shares |
|
| 11,664 |
|
| 32,248 |
|
| 39,983 |
|
| 12,840 |
|
Class C Shares |
|
| 1,217 |
|
| 3,173 |
|
| 4,485 |
|
| 1,235 |
|
Accounting |
|
| 23,499 |
|
| 23,499 |
|
| 23,499 |
|
| 23,787 |
|
Compliance Service |
|
| 50 |
|
| 142 |
|
| 155 |
|
| 52 |
|
Printing |
|
| 15,164 |
|
| 40,963 |
|
| 44,685 |
|
| 17,393 |
|
Professional fees |
|
| 360 |
|
| 1,008 |
|
| 1,117 |
|
| 4,373 |
|
Transfer Agent |
|
| 59,513 |
|
| 92,864 |
|
| 98,260 |
|
| 46,935 |
|
Trustee |
|
| 174 |
|
| 494 |
|
| 536 |
|
| 176 |
|
Registration fees |
|
| 187 |
|
| 545 |
|
| 577 |
|
| 168 |
|
Other |
|
| 10,548 |
|
| 10,443 |
|
| 14,175 |
|
| 7,197 |
|
|
|
|
|
|
| ||||||||
Total expenses before fee reductions |
|
| 186,206 |
|
| 384,422 |
|
| 434,544 |
|
| 180,700 |
|
Fees reduced by Investment Adviser |
|
| (57,390 | ) |
| (11,222 | ) |
| — |
|
| (26,936 | ) |
|
|
|
|
|
| ||||||||
Net Expenses |
|
| 128,816 |
|
| 373,200 |
|
| 434,544 |
|
| 153,764 |
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Investment Income (Loss) |
|
| (23,552 | ) |
| 225,539 |
|
| 510,248 |
|
| 224,175 |
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Realized/Unrealized Gains (Losses) from Investments: (a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized losses from investments and foreign currency transactions |
|
| (1,008,442 | ) |
| (2,323,453 | ) |
| (2,119,789 | ) |
| (572,415 | ) |
Change in unrealized appreciation/depreciation from investments and foreign currencies |
|
| (4,611,582 | ) |
| (12,045,449 | ) |
| (11,008,540 | ) |
| (2,729,503 | ) |
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized/unrealized gains/losses from investments and foreign currency transactions |
|
| (5,620,024 | ) |
| (14,368,902 | ) |
| (13,128,329 | ) |
| (3,301,918 | ) |
|
|
|
|
|
| ||||||||
Change In Net Assets Resulting From Operations |
| $ | (5,643,576 | ) | $ | (14,143,363 | ) | $ | (12,618,081 | ) | $ | (3.077,743 | ) |
|
|
|
|
|
| ||||||||
|
|
(a) | Represents amounts allocated from the respective Affiliated Portfolios. |
|
|
|
See notes to financial statements. | HSBC INVESTOR LIFELINE FUNDS | 22 |
HSBC INVESTOR LIFELINE FUNDS
Statements of Changes in Net Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Aggressive Growth Strategy Fund |
| Growth Strategy Fund |
| ||||||||
|
| For the year |
| For the year |
| For the year |
| For the year |
| ||||
Investment Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income (loss) |
| $ | (23,552 | ) | $ | (35,215 | ) | $ | 225,539 |
| $ | 155,873 |
|
Net realized gains (losses) from investment transactions |
|
| (1,008,442 | ) |
| 810,981 |
|
| (2,323,453 | ) |
| 1,888,561 |
|
Change in unrealized appreciation/depreciation from investments and foreign currencies |
|
| (4,611,582 | ) |
| 1,335,250 |
|
| (12,045,449 | ) |
| 3,251,636 |
|
|
|
|
|
|
| ||||||||
Change in net assets resulting from operations |
|
| (5,643,576 | ) |
| 2,111,016 |
|
| (14,143,363 | ) |
| 5,296,070 |
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A Shares |
|
| — |
|
| — |
|
| (137,880 | ) |
| (91,507 | ) |
Class B Shares |
|
| — |
|
| — |
|
| (1,259 | ) |
| (11,110 | ) |
Class C Shares |
|
| — |
|
| — |
|
| (816 | ) |
| (784 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gains: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A Shares |
|
| (420,292 | ) |
| — |
|
| (1,103,525 | ) |
| (94,565 | ) |
Class B Shares |
|
| (302,904 | ) |
| — |
|
| (702,526 | ) |
| (64,734 | ) |
Class C Shares |
|
| (31,294 | ) |
| — |
|
| (63,975 | ) |
| (5,227 | ) |
Return of Capital: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A Shares |
|
| (1,758 | ) |
| — |
|
| — |
|
| — |
|
Class B Shares |
|
| (1,250 | ) |
| — |
|
| — |
|
| — |
|
Class C Shares |
|
| (126 | ) |
| — |
|
| — |
|
| — |
|
|
|
|
|
|
| ||||||||
Change in net assets resulting from shareholder dividends |
|
| (757,624 | ) |
| — |
|
| (2,009,981 | ) |
| (267,927 | ) |
|
|
|
|
|
| ||||||||
Change in net assets resulting from capital transactions |
|
| 1,942,878 |
|
| 3,061,815 |
|
| 3,984,572 |
|
| 9,652,802 |
|
|
|
|
|
|
| ||||||||
Change in net assets |
|
| (4,458,322 | ) |
| 5,172,831 |
|
| (12,168,772 | ) |
| 14,680,945 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of period |
|
| 12,515,560 |
|
| 7,342,729 |
|
| 36,529,837 |
|
| 21,848,892 |
|
|
|
|
|
|
| ||||||||
End of period |
| $ | 8,057,238 |
| $ | 12,515,560 |
| $ | 24,361,065 |
| $ | 36,529,837 |
|
|
|
|
|
|
| ||||||||
Accumulated net investment income (loss) |
| $ | — |
| $ | (4,459 | ) | $ | 117,076 |
| $ | 112,089 |
|
|
|
|
|
|
| ||||||||
|
|
|
23 | HSBC INVESTOR LIFELINE FUNDS | See notes to financial statements. |
HSBC INVESTOR LIFELINE FUNDS
Statements of Changes in Net Assets (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Aggressive Growth Strategy Fund |
| Growth Strategy Fund |
| ||||||||
|
| For the year |
| For the year |
| For the year |
| For the year |
| ||||
CAPITAL TRANSACTIONS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A Shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from shares issued |
| $ | 1,808,587 |
| $ | 2,836,042 |
| $ | 4,094,924 |
| $ | 7,969,359 |
|
Dividends reinvested |
|
| 421,632 |
|
| — |
|
| 1,235,211 |
|
| 185,652 |
|
Value of shares redeemed |
|
| (1,135,189 | ) |
| (1,111,410 | ) |
| (3,486,779 | ) |
| (2,339,143 | ) |
|
|
|
|
|
| ||||||||
Class A Shares capital transactions |
|
| 1,095,030 |
|
| 1,724,632 |
|
| 1,843,356 |
|
| 5,815,868 |
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class B Shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from shares issued |
|
| 1,075,628 |
|
| 1,516,999 |
|
| 2,700,023 |
|
| 4,252,061 |
|
Dividends reinvested |
|
| 303,827 |
|
| — |
|
| 701,613 |
|
| 75,546 |
|
Value of shares redeemed |
|
| (597,445 | ) |
| (405,168 | ) |
| (1,552,870 | ) |
| (1,033,237 | ) |
|
|
|
|
|
| ||||||||
Class B Shares capital transactions |
|
| 782,010 |
|
| 1,111,831 |
|
| 1,848,766 |
|
| 3,294,370 |
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class C Shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from shares issued |
|
| 160,943 |
|
| 328,562 |
|
| 471,136 |
|
| 768,456 |
|
Dividends reinvested |
|
| 31,420 |
|
| — |
|
| 64,791 |
|
| 6,011 |
|
Value of shares redeemed |
|
| (126,525 | ) |
| (103,210 | ) |
| (243,477 | ) |
| (231,903 | ) |
|
|
|
|
|
| ||||||||
Class C Shares capital transactions |
|
| 65,838 |
|
| 225,352 |
|
| 292,450 |
|
| 542,564 |
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in net assets resulting from capital transactions |
| $ | 1,942,878 |
| $ | 3,061,815 |
| $ | 3,984,572 |
| $ | 9,652,802 |
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHARE TRANSACTIONS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A Shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued |
|
| 140,000 |
|
| 206,802 |
|
| 323,501 |
|
| 599,873 |
|
Reinvested |
|
| 30,686 |
|
| — |
|
| 93,719 |
|
| 14,632 |
|
Redeemed |
|
| (93,561 | ) |
| (81,057 | ) |
| (287,477 | ) |
| (173,704 | ) |
|
|
|
|
|
| ||||||||
Change in Class A Shares |
|
| 77,125 |
|
| 125,745 |
|
| 129,743 |
|
| 440,801 |
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class B Shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued |
|
| 84,358 |
|
| 112,606 |
|
| 218,579 |
|
| 318,815 |
|
Reinvested |
|
| 22,556 |
|
| — |
|
| 53,152 |
|
| 5,949 |
|
Redeemed |
|
| (53,351 | ) |
| (29,929 | ) |
| (133,643 | ) |
| (77,193 | ) |
|
|
|
|
|
| ||||||||
Change in Class B Shares |
|
| 53,563 |
|
| 82,677 |
|
| 138,088 |
|
| 247,571 |
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class C Shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued |
|
| 12,747 |
|
| 24,063 |
|
| 37,995 |
|
| 56,478 |
|
Reinvested |
|
| 2,334 |
|
| — |
|
| 4,890 |
|
| 471 |
|
Redeemed |
|
| (11,560 | ) |
| (7,943 | ) |
| (22,815 | ) |
| (17,406 | ) |
|
|
|
|
|
| ||||||||
Change in Class C Shares |
|
| 3,521 |
|
| 16,120 |
|
| 20,070 |
|
| 39,543 |
|
|
|
|
|
|
| ||||||||
|
|
|
See notes to financial statements. | HSBC INVESTOR LIFELINE FUNDS | 24 |
HSBC INVESTOR LIFELINE FUNDS
Statements of Changes in Net Assets (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Moderate Growth Strategy Fund |
| Conservative Growth Strategy Fund |
| ||||||||
|
| For the year |
| For the year |
| For the year |
| For the year |
| ||||
Investment Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income (loss) |
| $ | 510,248 |
| $ | 409,400 |
| $ | 224,175 |
| $ | 168,893 |
|
Net realized gains (losses) from investment transactions |
|
| (2,119,789 | ) |
| 1,499,302 |
|
| (572,415 | ) |
| 267,881 |
|
Change in unrealized appreciation/depreciation from investments and foreign currencies |
|
| (11,008,540 | ) |
| 2,609,124 |
|
| (2,729,503 | ) |
| 433,433 |
|
|
|
|
|
|
| ||||||||
Change in net assets resulting from operations |
|
| (12,618,081 | ) |
| 4,517,826 |
|
| (3,077,743 | ) |
| 870,207 |
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A Shares |
|
| (306,761 | ) |
| (262,090 | ) |
| (141,579 | ) |
| (94,234 | ) |
Class B Shares |
|
| (139,765 | ) |
| (132,843 | ) |
| (79,044 | ) |
| (56,207 | ) |
Class C Shares |
|
| (16,616 | ) |
| (11,916 | ) |
| (7,481 | ) |
| (6,383 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gains: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A Shares |
|
| (772,146 | ) |
| (107,302 | ) |
| (146,067 | ) |
| (34,028 | ) |
Class B Shares |
|
| (634,501 | ) |
| (94,696 | ) |
| (110,864 | ) |
| (29,598 | ) |
Class C Shares |
|
| (74,952 | ) |
| (6,378 | ) |
| (9,305 | ) |
| (3,582 | ) |
Return of Capital: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A Shares |
|
| (20,619 | ) |
| — |
|
| (262 | ) |
| — |
|
Class B Shares |
|
| (17,902 | ) |
| — |
|
| (242 | ) |
| — |
|
Class C Shares |
|
| (2,090 | ) |
| — |
|
| (23 | ) |
| — |
|
|
|
|
|
|
| ||||||||
Change in net assets resulting from shareholder dividends |
|
| (1,985,352 | ) |
| (615,225 | ) |
| (494,867 | ) |
| (224,032 | ) |
|
|
|
|
|
| ||||||||
Change in net assets resulting from capital transactions |
|
| 4,171,062 |
|
| 11,050,090 |
|
| 1,063,369 |
|
| 5,431,997 |
|
|
|
|
|
|
| ||||||||
Change in net assets |
|
| (10,432,371 | ) |
| 14,952,691 |
|
| (2,509,241 | ) |
| 6,078,172 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of period |
|
| 38,419,845 |
|
| 23,467,154 |
|
| 12,034,303 |
|
| 5,956,131 |
|
|
|
|
|
|
| ||||||||
End of period |
| $ | 27,987,474 |
| $ | 38,419,845 |
| $ | 9,525,062 |
| $ | 12,034,303 |
|
|
|
|
|
|
| ||||||||
Accumulated net investment income (loss) |
| $ | — |
| $ | 14,138 |
| $ | — |
| $ | 18,083 |
|
|
|
|
|
|
| ||||||||
|
|
|
25 | HSBC INVESTOR LIFELINE FUNDS | See notes to financial statements. |
HSBC INVESTOR LIFELINE FUNDS
Statements of Changes in Net Assets (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Moderate Growth Strategy Fund |
| Conservative Growth Strategy Fund |
| ||||||||
|
| For the year |
| For the year |
| For the year |
| For the year |
| ||||
CAPITAL TRANSACTIONS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A Shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from shares issued |
| $ | 4,477,845 |
| $ | 7,912,763 |
| $ | 1,702,567 |
| $ | 1,988,365 |
|
Proceeds from shares issued in conversion |
|
| — |
|
| — |
|
| — |
|
| 1,774,237 |
|
Dividends reinvested |
|
| 1,096,649 |
|
| 366,055 |
|
| 277,201 |
|
| 127,648 |
|
Value of shares redeemed |
|
| (3,953,091 | ) |
| (2,131,003 | ) |
| (2,025,309 | ) |
| (631,447 | ) |
|
|
|
|
|
| ||||||||
Class A Shares capital transactions |
|
| 1,621,403 |
|
| 6,147,815 |
|
| (45,541 | ) |
| 3,258,803 |
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class B Shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from shares issued |
|
| 3,948,083 |
|
| 4,788,564 |
|
| 1,595,118 |
|
| 1,387,844 |
|
Proceeds from shares issued in conversion |
|
| — |
|
| — |
|
| — |
|
| 981,527 |
|
Dividends reinvested |
|
| 790,250 |
|
| 226,308 |
|
| 183,107 |
|
| 84,374 |
|
Value of shares redeemed |
|
| (2,551,316 | ) |
| (966,698 | ) |
| (813,124 | ) |
| (366,939 | ) |
|
|
|
|
|
| ||||||||
Class B Shares capital transactions |
|
| 2,187,017 |
|
| 4,048,174 |
|
| 965,101 |
|
| 2,086,806 |
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class C Shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from shares issued |
|
| 778,453 |
|
| 1,158,749 |
|
| 203,099 |
|
| 109,629 |
|
Proceeds from shares issued in conversion |
|
| — |
|
| — |
|
| — |
|
| 23,289 |
|
Dividends reinvested |
|
| 93,634 |
|
| 18,281 |
|
| 16,809 |
|
| 9,965 |
|
Value of shares redeemed |
|
| (509,445 | ) |
| (322,929 | ) |
| (76,099 | ) |
| (56,495 | ) |
|
|
|
|
|
| ||||||||
Class C Shares capital transactions |
|
| 362,642 |
|
| 854,101 |
|
| 143,809 |
|
| 86,388 |
|
|
|
|
|
|
| ||||||||
Change in net assets resulting from capital transactions |
| $ | 4,171,062 |
| $ | 11,050,090 |
| $ | 1,063,369 |
| $ | 5,431,997 |
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHARE TRANSACTIONS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A Shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued |
|
| 382,474 |
|
| 638,805 |
|
| 157,831 |
|
| 172,826 |
|
Issued in conversion |
|
| — |
|
| — |
|
| — |
|
| 148,136 |
|
Reinvested |
|
| 91,761 |
|
| 29,777 |
|
| 25,060 |
|
| 11,167 |
|
Redeemed |
|
| (355,687 | ) |
| (173,246 | ) |
| (199,713 | ) |
| (54,690 | ) |
|
|
|
|
|
| ||||||||
Change in Class A Shares |
|
| 118,548 |
|
| 495,336 |
|
| (16,822 | ) |
| 277,439 |
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class B Shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued |
|
| 340,238 |
|
| 387,531 |
|
| 148,878 |
|
| 121,528 |
|
Issued in conversion |
|
| — |
|
| — |
|
| — |
|
| 82,738 |
|
Reinvested |
|
| 65,629 |
|
| 18,521 |
|
| 16,609 |
|
| 7,465 |
|
Redeemed |
|
| (229,160 | ) |
| (77,311 | ) |
| (81,932 | ) |
| (31,991 | ) |
|
|
|
|
|
| ||||||||
Change in Class B Shares |
|
| 176,707 |
|
| 328,741 |
|
| 83,555 |
|
| 179,740 |
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class C Shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued |
|
| 68,169 |
|
| 95,099 |
|
| 18,026 |
|
| 9,224 |
|
Issued in conversion |
|
| — |
|
| — |
|
| — |
|
| 1,922 |
|
Reinvested |
|
| 7,964 |
|
| 1,520 |
|
| 1,489 |
|
| 864 |
|
Redeemed |
|
| (46,372 | ) |
| (27,016 | ) |
| (7,369 | ) |
| (4,861 | ) |
|
|
|
|
|
| ||||||||
Change in Class C Shares |
|
| 29,761 |
|
| 69,603 |
|
| 12,146 |
|
| 7,149 |
|
|
|
|
|
|
| ||||||||
|
|
|
See notes to financial statements. | HSBC INVESTOR LIFELINE FUNDS | 26 |
|
HSBC INVESTOR AGGRESSIVE GROWTH STRATEGY FUND |
|
Selected data for a share outstanding throughout the periods indicated. (a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Investment Activities |
| Dividends |
|
|
| |||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||
|
| Net Asset |
| Net |
| Net Realized |
| Total from |
| Net |
| Total |
| Net Asset |
| |||||||
CLASS A SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended October 31, 2005(h) |
| $ | 10.00 |
|
| (0.01 | ) |
| 0.61 |
|
| 0.60 |
|
| — |
|
| — |
| $ | 10.60 |
|
Year Ended October 31, 2006 |
|
| 10.60 |
|
| 0.01 |
|
| 2.01 |
|
| 2.02 |
|
| (0.05 | ) |
| (0.05 | ) |
| 12.57 |
|
Year Ended October 31, 2007 |
|
| 12.57 |
|
| — | *(g) |
| 2.98 |
|
| 2.98 |
|
| — |
|
| — |
|
| 15.55 |
|
Year Ended October 31, 2008 |
|
| 15.55 |
|
| 0.02 | * |
| (6.05 | ) |
| (6.03 | ) |
| (0.90 | ) |
| (0.90 | ) |
| 8.62 |
|
CLASS B SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended October 31, 2005(i) |
| $ | 10.00 |
|
| (0.04 | ) |
| 0.61 |
|
| 0.57 |
|
| — |
|
| — |
| $ | 10.57 |
|
Year Ended October 31, 2006 |
|
| 10.57 |
|
| (0.05 | ) |
| 1.97 |
|
| 1.92 |
|
| (0.05 | ) |
| (0.05 | ) |
| 12.44 |
|
Year Ended October 31, 2007 |
|
| 12.44 |
|
| (0.11 | )* |
| 2.94 |
|
| 2.83 |
|
| — |
|
| — |
|
| 15.27 |
|
Year Ended October 31, 2008 |
|
| 15.27 |
|
| (0.08 | )* |
| (5.90 | ) |
| (5.98 | ) |
| (0.90 | ) |
| (0.90 | ) |
| 8.39 |
|
CLASS C SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended October 31, 2005(j) |
| $ | 10.00 |
|
| (0.05 | ) |
| 0.60 |
|
| 0.55 |
|
| — |
|
| — |
| $ | 10.55 |
|
Year Ended October 31, 2006 |
|
| 10.55 |
|
| (0.04 | ) |
| 1.95 |
|
| 1.91 |
|
| (0.05 | ) |
| (0.05 | ) |
| 12.41 |
|
Year Ended October 31, 2007 |
|
| 12.41 |
|
| (0.11 | )* |
| 2.96 |
|
| 2.85 |
|
| — |
|
| — |
|
| 15.26 |
|
Year Ended October 31, 2008 |
|
| 15.26 |
|
| (0.08 | )* |
| (5.89 | ) |
| (5.97 | ) |
| (0.90 | ) |
| (0.90 | ) |
| 8.39 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Ratios/Supplementary Data |
| ||||||||||||||
|
|
|
| ||||||||||||||||
|
| Total |
| Net Assets |
| Ratio of Net |
| Ratio of Net |
| Ratio of |
| Portfolio |
| ||||||
CLASS A SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended October 31, 2005(h) |
|
| 6.00 | % | $ | 726 |
|
| 1.50 | % |
| (0.20 | )% |
| 11.72 | % |
| 49.10 | % |
Year Ended October 31, 2006 |
|
| 19.15 | % |
| 4,116 |
|
| 1.50 | % |
| 0.05 | % |
| 3.52 | % |
| 48.46 | % |
Year Ended October 31, 2007 |
|
| 23.71 | % |
| 7,046 |
|
| 1.50 | % |
| (0.03 | )% |
| 2.27 | % |
| 45.50 | % |
Year Ended October 31, 2008 |
|
| (40.92 | )%(f) |
| 4,572 |
|
| 1.50 | % |
| 0.13 | % |
| 1.98 | % |
| 72.33 | % |
CLASS B SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended October 31, 2005(i) |
|
| 5.70 | % | $ | 700 |
|
| 2.25 | % |
| (1.01 | )% |
| 11.63 | % |
| 49.10 | % |
Year Ended October 31, 2006 |
|
| 18.25 | % |
| 2,998 |
|
| 2.25 | % |
| (0.70 | )% |
| 4.33 | % |
| 48.46 | % |
Year Ended October 31, 2007 |
|
| 22.75 | % |
| 4,942 |
|
| 2.25 | % |
| (0.77 | )% |
| 3.02 | % |
| 45.50 | % |
Year Ended October 31, 2008 |
|
| (41.36 | )%(f) |
| 3,166 |
|
| 2.25 | % |
| (0.62 | )% |
| 2.73 | % |
| 72.33 | % |
CLASS C SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended October 31, 2005(j) |
|
| 5.50 | % | $ | 21 |
|
| 2.25 | % |
| (1.15 | )% |
| 9.79 | % |
| 49.10 | % |
Year Ended October 31, 2006 |
|
| 18.19 | % |
| 229 |
|
| 2.25 | % |
| (0.69 | )% |
| 4.20 | % |
| 48.46 | % |
Year Ended October 31, 2007 |
|
| 22.97 | % |
| 528 |
|
| 2.25 | % |
| (0.79 | )% |
| 2.99 | % |
| 45.50 | % |
Year Ended October 31, 2008 |
|
| (41.32 | )%(f) |
| 319 |
|
| 2.25 | % |
| (0.64 | )% |
| 2.73 | % |
| 72.33 | % |
|
|
* | Calculated based on average shares outstanding. |
|
|
(a) | The per share amounts and percentages reflect income and expenses assuming inclusion of the Fund’s proportionate share of the income and expenses of the applicable HSBC Investor Portfolios. |
|
|
(b) | Not annualized for periods less than one year. Total return calculations do not include any sales or redemption charges. |
|
|
(c) | Annualized for periods less than one year. |
|
|
(d) | During the period certain fees were reduced. If such fee reductions had not occurred, the ratio would have been as indicated. |
|
|
(e) | Portfolio turnover rate is calculated by aggregating the results of multiplying the Fund’s investment percentage in the respective Portfolios by the corresponding Portfolio’s portfolio turnover rates. Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued. |
|
|
(f) | During the year ended October 31, 2008, certain HSBC Investor Portfolios in which the Fund invests in received certain nonrecurring litigation settlements. The corresponding impact to the total return was 0.11%, 0.11% and 0.11% for Class A Shares, Class B Shares and Class C Shares, respectively. |
|
|
(g) | Rounds to less than $0.01. |
|
|
(h) | Class A Shares commenced operations on February 14, 2005. |
|
|
(i) | Class B Shares commenced operations on February 9, 2005. |
|
|
(j) | Class C Shares commenced operations on June 9, 2005. |
|
|
|
27 | HSBC INVESTOR LIFELINE FUNDS | See notes to financial statements. |
|
HSBC INVESTOR GROWTH STRATEGY FUND |
Financial Highlights |
Selected data for a share outstanding throughout the periods indicated. (a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Investment Activities |
| Dividends |
|
|
|
| ||||||||||||||||||
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
|
| Net Asset |
| Net |
| Net Realized |
| Total from |
| Net |
| Net |
| Total |
| Net Asset |
| ||||||||||||
CLASS A SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended October 31, 2005(f) |
|
| $ | 10.00 |
|
| 0.02 |
|
| 0.70 |
|
| 0.72 |
|
| — |
|
| — |
|
| — |
|
|
| $ | 10.72 |
|
|
Year Ended October 31, 2006 |
|
|
| 10.72 |
|
| 0.07 |
|
| 1.69 |
|
| 1.76 |
|
| — |
|
| (0.03 | ) |
| (0.03 | ) |
|
|
| 12.45 |
|
|
Year Ended October 31, 2007 |
|
|
| 12.45 |
|
| 0.11 | * |
| 2.34 |
|
| 2.45 |
|
| (0.08 | ) |
| (0.09 | ) |
| (0.17 | ) |
|
|
| 14.73 |
|
|
Year Ended October 31, 2008 |
|
|
| 14.73 |
|
| 0.12 | * |
| (5.21 | ) |
| (5.09 | ) |
| (0.09 | ) |
| (0.74 | ) |
| (0.83 | ) |
|
|
| 8.81 |
|
|
CLASS B SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended October 31, 2005(i) |
|
| $ | 10.00 |
|
| (0.01 | ) |
| 0.79 |
|
| 0.78 |
|
| — |
|
| — |
|
| — |
|
|
| $ | 10.78 |
|
|
Year Ended October 31, 2006 |
|
|
| 10.78 |
|
| 0.02 |
|
| 1.66 |
|
| 1.68 |
|
| — |
|
| (0.03 | ) |
| (0.03 | ) |
|
|
| 12.43 |
|
|
Year Ended October 31, 2007 |
|
|
| 12.43 |
|
| 0.01 | * |
| 2.34 |
|
| 2.35 |
|
| (0.02 | ) |
| (0.09 | ) |
| (0.11 | ) |
|
|
| 14.67 |
|
|
Year Ended October 31, 2008 |
|
|
| 14.67 |
|
| 0.03 | * |
| (5.20 | ) |
| (5.17 | ) |
| — | (k) |
| (0.74 | ) |
| (0.74 | ) |
|
|
| 8.76 |
|
|
CLASS C SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended October 31, 2005(j) |
|
| $ | 10.00 |
|
| (0.02 | ) |
| 0.84 |
|
| 0.82 |
|
| — |
|
| — |
|
| — |
|
|
| $ | 10.82 |
|
|
Year Ended October 31, 2006 |
|
|
| 10.82 |
|
| 0.02 |
|
| 1.67 |
|
| 1.69 |
|
| — |
|
| (0.03 | ) |
| (0.03 | ) |
|
|
| 12.48 |
|
|
Year Ended October 31, 2007 |
|
|
| 12.48 |
|
| 0.01 | * |
| 2.35 |
|
| 2.36 |
|
| (0.01 | ) |
| (0.09 | ) |
| (0.10 | ) |
|
|
| 14.74 |
|
|
Year Ended October 31, 2008 |
|
|
| 14.74 |
|
| 0.03 | * |
| (5.22 | ) |
| (5.19 | ) |
| (0.01 | ) |
| (0.74 | ) |
| (0.75 | ) |
|
|
| 8.80 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Ratios/Supplementary Data |
| |||||||||||||||
|
|
|
|
| |||||||||||||||||
|
|
|
|
|
|
| |||||||||||||||
|
| Total |
| Net Assets |
| Ratio of Net |
| Ratio of Net |
| Ratio of |
| Portfolio |
| ||||||||
CLASS A SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended October 31, 2005(f) |
| 7.20 | % |
|
| $ | 2,814 |
|
| 1.50 | % |
| 0.42 | % |
| 5.19 | % |
| 69.23 | % |
|
Year Ended October 31, 2006 |
| 16.41 | % |
|
|
| 12,562 |
|
| 1.50 | % |
| 0.87 | % |
| 2.19 | % |
| 80.30 | % |
|
Year Ended October 31, 2007 |
| 19.92 | %(g) |
|
|
| 21,352 |
|
| 1.50 | % |
| 0.84 | % |
| 1.65 | % |
| 73.45 | % |
|
Year Ended October 31, 2008 |
| (36.43 | )%(h) |
|
|
| 13,908 |
|
| 1.50 | % |
| 0.98 | % |
| 1.53 | % |
| 78.59 | % |
|
CLASS B SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended October 31, 2005(i) |
| 7.80 | % |
|
| $ | 2,670 |
|
| 2.25 | % |
| (0.38 | )% |
| 5.74 | % |
| 69.23 | % |
|
Year Ended October 31, 2006 |
| 15.57 | % |
|
|
| 8,702 |
|
| 2.25 | % |
| 0.11 | % |
| 2.94 | % |
| 80.30 | % |
|
Year Ended October 31, 2007 |
| 18.98 | %(g) |
|
|
| 13,905 |
|
| 2.25 | % |
| 0.09 | % |
| 2.40 | % |
| 73.45 | % |
|
Year Ended October 31, 2008 |
| (36.95 | )%(h) |
|
|
| 9,516 |
|
| 2.25 | % |
| 0.24 | % |
| 2.28 | % |
| 78.59 | % |
|
CLASS C SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended October 31, 2005(j) |
| 8.20 | % |
|
| $ | 106 |
|
| 2.25 | % |
| (0.55 | )% |
| 5.24 | % |
| 69.23 | % |
|
Year Ended October 31, 2006 |
| 15.61 | % |
|
|
| 585 |
|
| 2.25 | % |
| 0.14 | % |
| 2.90 | % |
| 80.30 | % |
|
Year Ended October 31, 2007 |
| 19.04 | %(g) |
|
|
| 1,273 |
|
| 2.25 | % |
| 0.07 | % |
| 2.39 | % |
| 73.45 | % |
|
Year Ended October 31, 2008 |
| (36.94 | )%(h) |
|
|
| 937 |
|
| 2.25 | % |
| 0.25 | % |
| 2.29 | % |
| 78.59 | % |
|
|
|
* | Calculated based on average shares outstanding. |
|
|
(a) | The per share amounts and percentages reflect income and expenses assuming inclusion of the Fund’s proportionate share of the income and expenses of the applicable HSBC Investor Portfolios. |
|
|
(b) | Not annualized for periods less than one year. Total return calculations do not include any sales or redemption charges. |
|
|
(c) | Annualized for periods less than one year. |
|
|
(d) | During the period certain fees were reduced. If such fee reductions had not occurred, the ratio would have been as indicated. |
|
|
(e) | Portfolio turnover rate is calculated by aggregating the results of multiplying the Fund’s investment percentage in the respective Portfolios by the corresponding Portfolio’s portfolio turnover rates. Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued. |
|
|
(f) | Class A Shares commenced operations on February 8, 2005. |
|
|
(g) | During the year ended October 31, 2007, certain HSBC Investor Portfolios in which the Fund invests in received monies related to certain nonrecurring litigation settlements. The corresponding impact to the total return was 0.23%, 0.24% and 0.23% for Class A Shares, Class B Shares and Class C Shares, respectively. |
|
|
(h) | During the year ended October 31, 2008, certain HSBC Investor Portfolios in which the Fund invests in received monies related to certain nonrecurring litigation settlements. The corresponding impact to the total return was 0.15%, 0.15% and 0.15% for Class A Shares, Class B Shares and Class C Shares, respectively. |
|
|
(i) | Class B Shares commenced operations on February 1, 2005. |
|
|
(j) | Class C Shares commenced operations on April 27, 2005. |
|
|
(k) | Rounds to less than $0.01. |
|
|
|
See notes to financial statements. | HSBC INVESTOR LIFELINE FUNDS | 28 |
|
HSBC INVESTOR MODERATE GROWTH STRATEGY FUND |
Financial Highlights |
Selected data for a share outstanding throughout the periods indicated. (a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Investment Activities |
| Dividends |
|
|
|
| |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||
|
| Net Asset |
| Net |
| Net Realized |
| Total from |
| Net |
| Net |
| Return |
| Total |
| Net Asset |
| |||||||||||||
CLASS A SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended October 31, 2005(f) |
|
| $ | 10.00 |
|
| 0.04 |
|
| 0.45 |
|
| 0.49 |
|
| — | (g) |
| — |
|
| — |
|
| — | (g) |
|
| $ | 10.49 |
|
|
Year Ended October 31, 2006 |
|
|
| 10.49 |
|
| 0.17 |
|
| 1.23 |
|
| 1.40 |
|
| (0.17 | ) |
| (0.01 | ) |
| — |
|
| (0.18 | ) |
|
|
| 11.71 |
|
|
Year Ended October 31, 2007 |
|
|
| 11.71 |
|
| 0.21 | * |
| 1.65 |
|
| 1.86 |
|
| (0.20 | ) |
| (0.10 | ) |
| — |
|
| (0.30 | ) |
|
|
| 13.27 |
|
|
Year Ended October 31, 2008 |
|
|
| 13.27 |
|
| 0.20 | * |
| (4.08 | ) |
| (3.88 | ) |
| (0.19 | ) |
| (0.50 | ) |
| (0.01 | ) |
| (0.70 | ) |
|
|
| 8.69 |
|
|
CLASS B SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended October 31, 2005(j) |
|
| $ | 10.00 |
|
| 0.01 |
|
| 0.49 |
|
| 0.50 |
|
| — | (g) |
| — |
|
| — |
|
| — | (g) |
|
| $ | 10.50 |
|
|
Year Ended October 31, 2006 |
|
|
| 10.50 |
|
| 0.09 |
|
| 1.22 |
|
| 1.31 |
|
| (0.08 | ) |
| (0.01 | ) |
| — |
|
| (0.09 | ) |
|
|
| 11.72 |
|
|
Year Ended October 31, 2007 |
|
|
| 11.72 |
|
| 0.12 | * |
| 1.65 |
|
| 1.77 |
|
| (0.12 | ) |
| (0.10 | ) |
| — |
|
| (0.22 | ) |
|
|
| 13.27 |
|
|
Year Ended October 31, 2008 |
|
|
| 13.27 |
|
| 0.11 | * |
| (4.08 | ) |
| (3.97 | ) |
| (0.10 | ) |
| (0.50 | ) |
| (0.01 | ) |
| (0.61 | ) |
|
|
| 8.69 |
|
|
CLASS C SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended October 31, 2005(k) |
|
| $ | 10.00 |
|
| — | (g) |
| 0.28 |
|
| 0.28 |
|
| — |
|
| — |
|
| — |
|
| — |
|
|
| $ | 10.28 |
|
|
Year Ended October 31, 2006 |
|
|
| 10.28 |
|
| 0.09 |
|
| 1.19 |
|
| 1.28 |
|
| (0.08 | ) |
| (0.01 | ) |
| — |
|
| (0.09 | ) |
|
|
| 11.47 |
|
|
Year Ended October 31, 2007 |
|
|
| 11.47 |
|
| 0.12 | * |
| 1.60 |
|
| 1.72 |
|
| (0.12 | ) |
| (0.10 | ) |
| — |
|
| (0.22 | ) |
|
|
| 12.97 |
|
|
Year Ended October 31, 2008 |
|
|
| 12.97 |
|
| 0.11 | * |
| (3.97 | ) |
| (3.86 | ) |
| (0.11 | ) |
| (0.50 | ) |
| (0.01 | ) |
| (0.62 | ) |
|
|
| 8.49 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Ratios/Supplementary Data |
| |||||||||||||||
|
|
|
|
| |||||||||||||||||
|
|
|
|
|
|
| |||||||||||||||
|
| Total |
| Net Assets |
| Ratio of Net |
| Ratio of Net |
| Ratio of |
| Portfolio |
| ||||||||
CLASS A SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended October 31, 2005(f) |
| 4.94 | % |
|
| $ | 3,241 |
|
| 1.50 | % |
| 0.95 | % |
| 4.30 | % |
| 84.55 | % |
|
Year Ended October 31, 2006 |
| 13.40 | % |
|
|
| 11,973 |
|
| 1.50 | % |
| 1.65 | % |
| 2.12 | % |
| 101.57 | % |
|
Year Ended October 31, 2007 |
| 16.12 | %(h) |
|
|
| 20,140 |
|
| 1.50 | % |
| 1.70 | % |
| 1.60 | % |
| 92.87 | % |
|
Year Ended October 31, 2008 |
| (30.65 | )%(i) |
|
|
| 14,226 |
|
| 1.48 | % |
| 1.75 | % |
| 1.48 | % |
| 79.86 | % |
|
CLASS B SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended October 31, 2005(j) |
| 5.03 | % |
|
| $ | 3,604 |
|
| 2.25 | % |
| 0.18 | % |
| 5.01 | % |
| 84.55 | % |
|
Year Ended October 31, 2006 |
| 12.45 | % |
|
|
| 10,731 |
|
| 2.25 | % |
| 0.91 | % |
| 2.87 | % |
| 101.57 | % |
|
Year Ended October 31, 2007 |
| 15.25 | %(h) |
|
|
| 16,513 |
|
| 2.25 | % |
| 0.95 | % |
| 2.35 | % |
| 92.87 | % |
|
Year Ended October 31, 2008 |
| (31.17 | )%(i) |
|
|
| 12,354 |
|
| 2.23 | % |
| 1.00 | % |
| 2.23 | % |
| 79.86 | % |
|
CLASS C SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended October 31, 2005(k) |
| 2.80 | % |
|
| $ | 278 |
|
| 2.25 | % |
| 0.05 | % |
| 4.69 | % |
| 84.55 | % |
|
Year Ended October 31, 2006 |
| 12.53 | % |
|
|
| 763 |
|
| 2.25 | % |
| 0.87 | % |
| 2.83 | % |
| 101.57 | % |
|
Year Ended October 31, 2007 |
| 15.20 | %(h) |
|
|
| 1,766 |
|
| 2.25 | % |
| 0.95 | % |
| 2.33 | % |
| 92.87 | % |
|
Year Ended October 31, 2008 |
| (31.09 | )%(i) |
|
|
| 1,408 |
|
| 2.23 | % |
| 1.00 | % |
| 2.23 | % |
| 79.86 | % |
|
|
|
* | Calculated based on average shares outstanding. |
|
|
(a) | The per share amounts and percentages reflect income and expenses assuming inclusion of the Fund’s proportionate share of the income and expenses of the applicable HSBC Investor Portfolios. |
|
|
(b) | Not annualized for periods less than one year. Total return calculations do not include any sales or redemption charges. |
|
|
(c) | Annualized for periods less than one year. |
|
|
(d) | During the period certain fees were reduced. If such fee reductions had not occurred, the ratio would have been as indicated. |
|
|
(e) | Portfolio turnover rate is calculated by aggregating the results of multiplying the Fund’s investment percentage in the respective Portfolios by the corresponding Portfolio’s portfolio turnover rates. Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued. |
|
|
(f) | Class A Shares commenced operations on February 3, 2005. |
|
|
(g) | Rounds to less than $0.01. |
|
|
(h) | During the year ended October 31, 2007, certain HSBC Investor Portfolios in which the Fund invests in received monies related to certain nonrecurring litigation settlements. The corresponding impact to the total return was 0.41%, 0.41% and 0.33% for Class A Shares, Class B Shares and Class C Shares, respectively. |
|
|
(i) | During the year ended October 31, 2008, certain HSBC Investor Portfolios in which the Fund invests in received monies related to certain nonrecurring litigation settlements. The corresponding impact to the total return was 0.19%, 0.19% and 0.19% for Class A Shares, Class B Shares and Class C Shares, respectively. |
|
|
(j) | Class B Shares commenced operations on February 1, 2005. |
|
|
(k) | Class C Shares commenced operations on June 9, 2005. |
|
|
|
29 | HSBC INVESTOR LIFELINE FUNDS | See notes to financial statements. |
|
HSBC INVESTOR CONSERVATIVE GROWTH STRATEGY FUND |
Financial Highlights |
Selected data for a share outstanding throughout the periods indicated. (a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Investment Activities |
| Dividends |
|
|
|
| ||||||||||||||||||
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
|
| Net Asset |
| Net |
| Net Realized |
| Total from |
| Net |
| Net |
| Total |
| Net Asset |
| ||||||||||||
CLASS A SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended October 31, 2005(i) |
|
| $ | 10.00 |
|
| 0.04 |
|
| 0.26 |
|
| 0.30 |
|
| (0.01 | ) |
| — |
|
| (0.01 | ) |
|
| $ | 10.29 |
|
|
Year Ended October 31, 2006 |
|
|
| 10.29 |
|
| 0.22 |
|
| 0.85 |
|
| 1.07 |
|
| (0.25 | ) |
| — |
|
| (0.25 | ) |
|
|
| 11.11 |
|
|
Year Ended October 31, 2007 |
|
|
| 11.11 |
|
| 0.29 | * |
| 1.03 |
|
| 1.32 |
|
| (0.27 | ) |
| (0.12 | ) |
| (0.39 | ) |
|
|
| 12.04 |
|
|
Year Ended October 31, 2008 |
|
|
| 12.04 |
|
| 0.24 | * |
| (2.93 | ) |
| (2.69 | ) |
| (0.25 | ) |
| (0.26 | ) |
| (0.51 | ) |
|
|
| 8.84 |
|
|
CLASS B SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended October 31, 2005(j) |
|
| $ | 10.00 |
|
| 0.03 |
|
| 0.16 |
|
| 0.19 |
|
| — | (f) |
| — |
|
| — | (f) |
|
| $ | 10.19 |
|
|
Year Ended October 31, 2006 |
|
|
| 10.19 |
|
| 0.15 |
|
| 0.83 |
|
| 0.98 |
|
| (0.16 | ) |
| — |
|
| (0.16 | ) |
|
|
| 11.01 |
|
|
Year Ended October 31, 2007 |
|
|
| 11.01 |
|
| 0.20 | * |
| 1.05 |
|
| 1.25 |
|
| (0.20 | ) |
| (0.12 | ) |
| (0.32 | ) |
|
|
| 11.94 |
|
|
Year Ended October 31, 2008 |
|
|
| 11.94 |
|
| 0.16 | * |
| (2.91 | ) |
| (2.75 | ) |
| (0.17 | ) |
| (0.26 | ) |
| (0.43 | ) |
|
|
| 8.76 |
|
|
CLASS C SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended October 31, 2005(k) |
|
| $ | 10.00 |
|
| 0.03 |
|
| 0.38 |
|
| 0.41 |
|
| — |
|
| — |
|
| — |
|
|
| $ | 10.41 |
|
|
Year Ended October 31, 2006 |
|
|
| 10.41 |
|
| 0.15 |
|
| 0.85 |
|
| 1.00 |
|
| (0.17 | ) |
| — |
|
| (0.17 | ) |
|
|
| 11.24 |
|
|
Year Ended October 31, 2007 |
|
|
| 11.24 |
|
| 0.21 | * |
| 1.11 |
|
| 1.32 |
|
| (0.19 | ) |
| (0.12 | ) |
| (0.31 | ) |
|
|
| 12.25 |
|
|
Year Ended October 31, 2008 |
|
|
| 12.25 |
|
| 0.16 | * |
| (2.98 | ) |
| (2.82 | ) |
| (0.17 | ) |
| (0.26 | ) |
| (0.43 | ) |
|
|
| 9.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Ratios/Supplementary Data |
| |||||||||||||
|
|
|
|
| |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
| Total |
| Net Assets |
| Ratio of Net |
| Ratio of Net |
| Ratio of |
| Portfolio |
| ||||||
CLASS A SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended October 31, 2005(i) |
| 2.96 | % |
| $ | 1,054 |
| 1.50 | % |
| 1.28 | % |
| 8.01 | % |
| 72.14 | % |
|
Year Ended October 31, 2006 |
| 10.48 | % |
|
| 3,069 |
| 1.50 | % |
| 2.33 | % |
| 3.22 | % |
| 96.58 | % |
|
Year Ended October 31, 2007 |
| 12.13 | %(g) |
|
| 6,669 |
| 1.50 | % |
| 2.52 | % |
| 2.06 | % |
| 88.67 | % |
|
Year Ended October 31, 2008 |
| (23.17 | )%(h) |
|
| 4,747 |
| 1.50 | % |
| 2.24 | % |
| 1.72 | % |
| 68.74 | % |
|
CLASS B SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended October 31, 2005(j) |
| 1.92 | % |
| $ | 1,306 |
| 2.25 | % |
| 0.53 | % |
| 9.21 | % |
| 72.14 | % |
|
Year Ended October 31, 2006 |
| 9.65 | % |
|
| 2,567 |
| 2.25 | % |
| 1.54 | % |
| 3.98 | % |
| 96.58 | % |
|
Year Ended October 31, 2007 |
| 11.51 | %(g) |
|
| 4,928 |
| 2.25 | % |
| 1.77 | % |
| 2.82 | % |
| 88.67 | % |
|
Year Ended October 31, 2008 |
| (23.76 | )%(h) |
|
| 4,348 |
| 2.25 | % |
| 1.48 | % |
| 2.48 | % |
| 68.74 | % |
|
CLASS C SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended October 31, 2005(k) |
| 4.10 | % |
| $ | 82 |
| 2.25 | % |
| 0.66 | % |
| 7.94 | % |
| 72.14 | % |
|
Year Ended October 31, 2006 |
| 9.66 | % |
|
| 320 |
| 2.25 | % |
| 1.56 | % |
| 3.92 | % |
| 96.58 | % |
|
Year Ended October 31, 2007 |
| 11.97 | %(g) |
|
| 437 |
| 2.25 | % |
| 1.78 | % |
| 2.85 | % |
| 88.67 | % |
|
Year Ended October 31, 2008 |
| (23.73 | )%(h) |
|
| 430 |
| 2.25 | % |
| 1.46 | % |
| 2.48 | % |
| 68.74 | % |
|
|
|
* | Calculated based on average shares outstanding. |
|
|
(a) | The per share amounts and percentages reflect income and expenses assuming inclusion of the Fund’s proportionate share of the income and expenses of the applicable HSBC Investor Portfolios. |
|
|
(b) | Not annualized for periods less than one year. Total return calculations do not include any sales or redemption charges. |
|
|
(c) | Annualized for periods less than one year. |
|
|
(d) | During the period certain fees were reduced. If such fee reductions had not occurred, the ratio would have been as indicated. |
|
|
(e) | Portfolio turnover rate is calculated by aggregating the results of multiplying the Fund’s investment percentage in the respective Portfolios by the corresponding Portfolio’s portfolio turnover rates. Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued. |
|
|
(f) | Rounds to less than $0.01. |
|
|
(g) | During the year ended October 31, 2007, certain HSBC Investor Portfolios in which the Fund invests in received monies related to certain nonrecurring litigation settlements. The corresponding impact to the total return was 0.44%, 0.47% and 0.48% for Class A Shares, Class B Shares and Class C Shares, respectively. |
|
|
(h) | During the year ended October 31, 2008, certain HSBC Investor Portfolios in which the Fund invests in received monies related to certain nonrecurring litigation settlements. The corresponding impact to the total return was 0.19%, 0.19% and 0.19% for Class A Shares, Class B Shares and Class C Shares, respectively. |
|
|
(i) | Class A Shares commenced operations on February 23, 2005. |
|
|
(j) | Class B Shares commenced operations on February 17, 2005. |
|
|
(k) | Class C Shares commenced operations on April 19, 2005. |
|
|
|
See notes to financial statements. | HSBC INVESTOR LIFELINE FUNDS | 30 |
|
HSBC INVESTOR LIFELINE FUNDS |
|
|
1. | Organization: |
|
|
| The HSBC Investor Funds (the “Trust”), a Massachusetts business trust organized on April 22, 1987, is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company. As of October 31, 2008, the Trust is comprised of 19 separate operational funds, each a series of the HSBC Investor Family of Funds. The accompanying financial statements are presented for the following 4 funds (individually a “Fund”, collectively the “LifeLine Funds”): |
|
|
|
|
|
|
| Fund |
|
| Short Name |
|
|
|
|
| ||
| HSBC Investor Aggressive Growth Strategy Fund |
| Aggressive Growth Fund | ||
| HSBC Investor Growth Strategy Fund |
| Growth Strategy Fund | ||
| HSBC Investor Moderate Growth Strategy Fund |
| Moderate Growth Fund | ||
| HSBC Investor Conservative Growth Strategy Fund |
| Conservative Growth Fund | ||
|
|
| The LifeLine Funds are diversified series of the Trust and part of the HSBC Investor Family of Funds. Financial statements for all other funds of the HSBC Investor Family of Funds are published separately. |
|
|
| The HSBC Investor Core Plus Fixed Income Portfolio, HSBC Investor High Yield Fixed Income Portfolio, HSBC Investor Intermediate Duration Fixed Income Portfolio, HSBC Investor Growth Portfolio, HSBC Investor International Equity Portfolio, HSBC Investor Opportunity Portfolio and the HSBC Investor Value Portfolio (individually a “Portfolio,” collectively the “Portfolios”) are each diversified series of the HSBC Investor Portfolios (the “Portfolio Trust”). The Portfolios operate as master funds in master-feeder arrangements. |
|
|
| The HSBC Investor Prime Money Market Fund (the “Prime Money Market Fund”) is an open-end management investment company and is a diversified series of the Trust. |
|
|
| The financial statements of the Portfolios, including the Schedules of Portfolio Investments, are included elsewhere in this report. The financial statements of the Portfolios should be read in conjunction with the financial statements of the LifeLine Funds. |
|
|
| The LifeLine Funds utilize a master-feeder fund structure and seek to achieve its investment objectives by investing all of its investable assets in the Portfolios and the Prime Money Market Fund (collectively the “Underlying Portfolios”) as follows: |
|
|
| LifeLine Funds Portfolio Weightings |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underlying Portfolios |
| Aggressive |
| Growth |
| Moderate |
| Conservative |
| ||||
|
|
|
|
| |||||||||
Core Plus Fixed Income Portfolio |
|
| None |
|
| 14 | % |
| 25 | % |
| 25 | % |
High Yield Fixed Income Portfolio |
|
| None |
|
| 2 | % |
| 5 | % |
| 8 | % |
Intermediate Duration Fixed Income Portfolio |
|
| None |
|
| None |
|
| None |
|
| 3 | % |
Growth Portfolio |
|
| 21 | % |
| 21 | % |
| 19 | % |
| 15 | % |
International Equity Portfolio |
|
| 23 | % |
| 20 | % |
| 16 | % |
| 10 | % |
Opportunity Portfolio |
|
| 34 | % |
| 21 | % |
| 11 | % |
| 4 | % |
Value Portfolio |
|
| 21 | % |
| 21 | % |
| 18 | % |
| 14 | % |
Prime Money Market Fund |
|
| 1 | % |
| 1 | % |
| 6 | % |
| 21 | % |
|
|
|
|
|
| ||||||||
Total |
|
| 100 | % |
| 100 | % |
| 100 | % |
| 100 | % |
|
|
|
|
|
| ||||||||
|
|
31 | HSBC INVESTOR LIFELINE FUNDS |
|
HSBC INVESTOR LIFELINE FUNDS |
Notes to Financial Statements—As of October 31, 2008 (continued) |
LifeLine Funds Portfolio Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underlying Portfolios |
| Aggressive |
| Growth |
| Moderate |
| Conservative |
| ||||
|
|
|
|
| |||||||||
Core Plus Fixed Income Portfolio |
| $ | — |
| $ | 3,514,143 |
| $ | 7,079,763 |
| $ | 2,329,883 |
|
High Yield Fixed Income Portfolio |
|
| — |
|
| 468,980 |
|
| 1,362,730 |
|
| 746,240 |
|
Intermediate Duration Fixed Income Portfolio |
|
| — |
|
| — |
|
| — |
|
| 279,768 |
|
Growth Portfolio |
|
| 1,691,953 |
|
| 5,169,383 |
|
| 5,435,928 |
|
| 1,468,786 |
|
International Equity Portfolio |
|
| 1,841,669 |
|
| 4,892,903 |
|
| 4,265,057 |
|
| 973,151 |
|
Opportunity Portfolio |
|
| 2,775,443 |
|
| 4,988,081 |
|
| 3,188,581 |
|
| 396,836 |
|
Value Portfolio |
|
| 1,684,159 |
|
| 5,145,525 |
|
| 5,126,129 |
|
| 1,364,560 |
|
Prime Money Market Fund |
|
| 74,513 |
|
| 230,718 |
|
| 1,629,963 |
|
| 1,974,707 |
|
|
|
|
|
|
| ||||||||
Total |
| $ | 8,067,737 |
| $ | 24,409,733 |
| $ | 28,088,151 |
| $ | 9,533,931 |
|
|
|
|
|
|
| ||||||||
|
|
| The LifeLine Funds are authorized to issue an unlimited number of shares of beneficial interest with a par value of $0.001 per share. Each Fund offers three classes of shares: Class A Shares, Class B Shares and Class C Shares. Class A Shares of the Aggressive Growth Fund, Growth Strategy Fund, Moderate Growth Fund, and the Conservative Growth Fund have a maximum sales charge of 5.00% as a percentage of the original purchase price. The Class B Shares of the LifeLine Funds are offered without any front-end sales charge, but will be subject to a contingent deferred sales charge (“CDSC”) ranging from a maximum of 4.00% if redeemed less than one year after purchase to 0.00% if redeemed more than four years after purchase. Class C Shares of the LifeLine Funds are offered without any front-end sales charge, but will be subject to a maximum CDSC of 1.00% if redeemed less than one year after purchase. Each class of shares in the LifeLine Funds has identical rights and privileges except with respect to arrangements pertaining to shareholder servicing or distribution, class-related expenses, voting rights on matters affecting a single class of shares, and the exchange privileges of each class of shares. |
|
|
| Under the Trust’s organizational documents, the LifeLine Funds’ Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the LifeLine Funds. In addition, in the normal course of business, the LifeLine Funds enter into contracts with its service providers, which also provide for indemnifications by the LifeLine Funds. The LifeLine Funds’ maximum exposure under these arrangements is unknown as this would involve any future claims that may be made against the LifeLine Funds. However, based on experience, the LifeLine Funds expect that risk of loss to be remote. |
|
|
2. | Significant Accounting Policies: |
|
|
| The following is a summary of the significant accounting policies followed by the LifeLine Funds in the preparation of their financial statements. The policies are in conformity with U.S. generally accepted accounting principles (“GAAP”). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. |
|
|
| Securities Valuation: |
|
|
| The LifeLine Funds record their investments in the Underlying Portfolios at fair value. The LifeLine Funds record their investments in the Prime Money Market Fund at the respective net asset value reported by the fund. The underlying securities of the Portfolios and the Prime Money Market Fund are recorded at fair value and at amortized cost, respectively, as more fully discussed in the notes to those financial statements. |
|
|
| Investment Transactions and Related Income: |
|
|
| The LifeLine Funds record daily their pro-rata income, expenses and unrealized/realized gains and losses derived from their respective Portfolio. Dividend income is recorded on the ex-dividend date for the Prime Money Market Fund. Changes in holdings of the Prime Money Market Fund for each LifeLine Fund are reflected no later than the first business day following trade date. However, for financial reporting purposes, changes in holdings of the Prime Money Market Fund are reflected as of trade date. In addition, the LifeLine Funds accrue their own expenses daily as incurred. |
|
|
HSBC INVESTOR LIFELINE FUNDS | 32 |
|
HSBC INVESTOR LIFELINE FUNDS |
Notes to Financial Statements—As of October 31, 2008 (continued) |
|
|
| Allocations: |
|
|
| Expenses directly attributable to a Fund are charged to that Fund. Expenses not directly attributable to a Fund are allocated proportionately among various or all LifeLine Funds within the HSBC Investor Family of Funds in relation to the net assets of each Fund or on another reasonable basis. Class specific expenses are charged directly to the class incurring the expense. In addition, income, expenses (other than class specific expenses), and unrealized/realized gains and losses are allocated to each class based on relative net assets on a daily basis. |
|
|
| Dividends to Shareholders: |
|
|
| Dividends from net investment income, if any, are declared and distributed quarterly in the case of the Moderate Growth Fund and Conservative Growth Fund, and annually in the case of the Aggressive Growth Fund and Growth Strategy Fund. |
|
|
| The LifeLine Funds’ net realized gains, if any, are distributed to shareholders at least annually. Additional distributions are also made to the LifeLine Funds’ shareholders to the extent necessary to avoid the federal excise tax on certain undistributed income and net capital gains of regulated investment companies. |
|
|
| The amount and character of net investment income and net realized gains distributions are determined in accordance with federal income tax regulations which may differ from GAAP. These “book/tax” differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature (e.g., reclassification of market discounts, certain gain/loss, paydowns, and certain distributions), such amounts are reclassified within the composition of net assets; temporary differences (e.g., wash losses and post-october loss deferrals) do not require reclassification. The LifeLine Funds may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized gains distributed to shareholders on redemption of shares, as a part of the dividends paid deduction for income tax purposes. |
|
|
| Redemption Fee: |
|
|
| A redemption fee of 2.00% will be charged and recorded as paid-in-capital for any shares redeemed or exchanged after holding them for less than 30 days. This fee does not apply to shares purchased through reinvested dividends or capital gains or shares held in certain omnibus accounts or retirement plans that cannot implement the fee. For the fiscal years ended October 31, 2007 and October 31, 2008, respective of the following LifeLine Funds collected redemption fees as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
Fund |
| Fees Collected |
| Fees Collected |
| ||||||
|
|
| |||||||||
Aggressive Growth Fund |
|
| $ | 1,573 |
|
|
| $ | 119 |
|
|
Growth Strategy Fund |
|
|
| 729 |
|
|
|
| 1,152 |
|
|
Moderate Growth Fund |
|
|
| 515 |
|
|
|
| 187 |
|
|
Conservative Growth Fund |
|
|
| 1,305 |
|
|
|
| 2,849 |
|
|
|
|
| Federal Income Taxes: |
|
|
| Each Fund is a separate taxable entity for federal income tax purposes. Each Fund has qualified and intends to continue to qualify each year as a “regulated investment company” under Subchapter M of the Internal Revenue Code, as amended and to distribute substantially all of their taxable net investment income and net realized gains, if any, to their shareholders. Accordingly, no provision for federal income or excise tax is required. |
|
|
| In addition, effective April 30, 2008, the Funds adopted Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes (“FIN 48”). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the affirmative evaluation of tax positions taken or expected to be taken in the course of preparing the Trust’s tax returns to determine whether it is more-likely-than-not (i.e., greater than 50-percent) that each tax position will be sustained upon examination by a taxing authority based on the technical merits of the position. A tax position that meets the more-likely-than-not recognition threshold is measured to determine the amount of benefit to recognize in the financial statements. Differences between tax positions taken in a tax return and amounts recognized in the financial statements will generally result in an increase in a liability for taxes payable (or a reduction of a tax refund receivable), including the recognition of any related interest and penalties as an operating expense. Implementation of FIN 48 included a review of tax positions taken in tax years that remain subject to examination by tax authorities in all major tax jurisdictions, including federal (i.e., the last 4 tax year ends and the interim tax period since then, as applicable). The adoption of FIN 48 did not impact the Funds’ net assets or results of operations. |
|
|
33 | HSBC INVESTOR LIFELINE FUNDS |
|
HSBC INVESTOR LIFELINE FUNDS |
Notes to Financial Statements—As of October 31, 2008 (continued) |
|
|
| New Accounting Pronouncements: |
|
|
| In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement on Financial Accounting Standards (“SFAS”) No. 157, “Fair Value Measurements” (“SFAS No. 157”). This standard establishes a single authoritative definition of fair value, sets out a framework for measuring fair value and requires additional disclosures about fair value measurements. SFAS No. 157 applies to fair value measurements already required or permitted by existing standards. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. The changes to current generally accepted accounting principles from the application of this Statement relate to the definition of fair value, the methods used to measure fair value, and the expanded disclosures about fair value measurements. Effective November 1, 2008 the Trust adopted SFAS No. 157. The adoption of this standard did not have an impact to the net assets or results of operations of the Fund, however, additional disclosures will be required about the inputs used to develop fair value measurements and the effect of certain measurements on the changes in net assets in fiscal reporting periods subsequent to the adoption date. |
|
|
| In March 2008, the FASB issued the SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities” (“SFAS 161”). SFAS 161 is effective for fiscal years and interim periods beginning after November 15, 2008. SFAS 161 requires enhanced disclosures about the Fund’s derivative and hedging activities, including how such activities are accounted for and their effect on the Lifeline Funds financial position, performance and cash flows. Management is currently evaluating the impact, the adoption of SFAS 161 will have on the Fund’s financial statements and related disclosures. |
|
|
3. | Related Party Transactions: |
|
|
| Investment Management: |
|
|
| HSBC Global Asset Management (USA) Inc. (“HSBC” or the “Investment Adviser”), a wholly owned subsidiary of HSBC Bank USA, N.A., a national bank organized under the laws of the United States, acts as Investment Adviser to the LifeLine Funds. As Investment Adviser, HSBC manages the investments of the LifeLine Funds and continuously reviews, supervises and administers the LifeLine Funds’ investments. For its services as Investment Adviser, HSBC is entitled to receive a fee, computed daily and paid monthly, based on average daily net assets, at an annual rate of 0.05% for each Fund. |
|
|
| Administration: |
|
|
| HSBC serves the LifeLine Funds as Administrator. Under the terms of the Administration Agreement, HSBC receives from the LifeLine Funds a fee, accrued daily and paid monthly, at an annual rate of: |
|
|
|
|
Based on Average Daily Net Assets of |
| Fee Rate |
|
|
| ||
Up to $12 billion |
| 0.0525% |
|
In excess of $12 billion |
| 0.0350% |
|
|
|
| The fee breakpoints are determined on the basis of the aggregate average daily net assets of the HSBC Investor Family of Funds. The fee is allocated to each series of the HSBC Investor Family of Funds based upon its pro-rata share of net assets. For assets invested in Underlying Portfolios by LifeLine Funds, the Portfolios pay half of the administration fee and the LifeLine Funds pay half, for a combination of the total fee rate above. |
|
|
| The administration fees accrued for each class by Fund, of which 50% of such fees are deemed to be class specific, are as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Aggressive |
| Growth |
| Moderate |
| Conservative |
| ||||||||||||
|
|
|
|
|
| ||||||||||||||||
Class A |
|
| $ | 1,432 |
|
|
| $ | 4,101 |
|
|
| $ | 3,986 |
|
|
| $ | 1,270 |
|
|
Class B |
|
|
| 991 |
|
|
|
| 2,808 |
|
|
|
| 3,461 |
|
|
|
| 1,163 |
|
|
Class C |
|
|
| 100 |
|
|
|
| 276 |
|
|
|
| 395 |
|
|
|
| 114 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Total |
|
| $ | 2,523 |
|
|
| $ | 7,185 |
|
|
| $ | 7,842 |
|
|
| $ | 2,547 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
|
|
| Pursuant to a Sub-Administration Agreement with HSBC, Citi Fund Services Ohio, Inc. (“Citi Ohio”), a wholly-owned subsidiary of Citigroup, Inc., serves as the Trust’s Sub-Administrator, subject to the general supervision of the Trusts’ Board of Trustees and HSBC. For these services, Citi Ohio is entitled to a fee, payable by HSBC, at an annual rate equivalent to the fee rates set forth above, minus 0.02% (2 basis points) which is retained by HSBC. |
|
|
HSBC INVESTOR LIFELINE FUNDS | 34 |
|
HSBC INVESTOR LIFELINE FUNDS |
Notes to Financial Statements—As of October 31, 2008 (continued) |
|
|
| Under a Compliance Services Agreement between the Trusts and Citi Ohio (the “CCO Agreement”), Citi Ohio makes an employee available to serve as the Trusts’ Chief Compliance Officer (the “CCO”). Under the CCO Agreement, Citi Ohio also provides infrastructure and support in implementing the written policies and procedures comprising the Trusts’ compliance program, including support services to the CCO. For the services provided under the CCO Agreement, the HSBC Investor Family of Funds paid Citi Ohio $250,800 for the year ended October 31, 2008, plus reimbursement of certain out of pocket expenses. Expenses incurred are reflected on the Statements of Operations as “Compliance Service.” Citi Ohio pays the salary and other compensation earned by any such individuals as employees of Citi Ohio. |
|
|
| Distribution Plan: |
|
|
| Foreside Distribution Services, L.P. (“Foreside”), a wholly-owned subsidiary of Foreside Financial Group LLC, serves the Trust as Distributor (the “Distributor”). The Trust has adopted a non-compensatory Distribution Plan and Agreement (the “Plan”) pursuant to Rule 12b-1 of the Act. The Plan provides for reimbursement of expenses incurred by the Distributor related to distribution and marketing, at a rate not to exceed 0.25%, 1.00%, and 1.00% of the average daily net assets of Class A Shares (currently not being charged), Class B Shares (currently charging 0.75%), and Class C Shares (currently charging 0.75%) of the LifeLine Funds, respectively. Foreside, as Distributor, also received $609,707, $380,866 and $21,569 in commissions from sales of HSBC Investor Family of Funds, for Class A Shares, Class B Shares, and Class C Shares, respectively of which $433,949, $280,535, and $14,592 were reallowed to affiliated brokers and dealers, for Class A Shares, Class B Shares, and Class C Shares, respectively. |
|
|
| Shareholder Servicing: |
|
|
| The Trust has adopted an Shareholder Services Plan, formerly known as Administrative Service Plan, which provides for payments to Shareholder Servicing Agents (which currently consist of HSBC and its affiliates) for providing various shareholder services. For performing these services, the Shareholder Servicing Agents receive a fee up to 0.25%, 0.25%, and 0.25% that is computed daily and paid monthly equal to a percentage of average daily net assets of Class A Shares, Class B Shares and Class C Shares of the Lifeline Funds, respectively. The fees paid to the Distributor pursuant to the Distribution Plan and to shareholder servicing agents pursuant to the Shareholder Services Plan currently are not intended to exceed, in the aggregate, 0.25% of the average daily net assets of Class A Shares, 1.00% of the average daily net assets of Class B Shares and Class C Shares. |
|
|
| Fund Accounting, Transfer Agency and Trustee: |
|
|
| Citi Ohio provides fund accounting and transfer agency services for each Fund. As Transfer Agent for the LifeLine Funds, Citi Ohio receives a fee based on the number of LifeLine Funds and shareholder accounts, subject to certain minimums and reimbursement of certain expenses. As Fund Accountant for the LifeLine Funds, Citi Ohio receives an annual fee per Fund and share class, subject to minimums and reimbursement of certain expenses. |
|
|
| Effective April 1, 2008 each of the non-interested Trustees are compensated with a $60,000 annual Board retainer, as well as a $3,000 annual retainer for each Committee of the Board. Each non-interested Trustee also receives a $5,000 and $3,000 meeting fee for each regular in-person Board meeting and Committee meeting, respectively. Furthermore, each non-interested Trustee receives compensation for attending special meetings and/or functioning as a Committee Chairperson or Lead Trustee. In addition, the non-interested Trustees are reimbursed for certain expenses incurred in connection with their Board membership. |
|
|
| Prior to April 1, 2008 each of the non-interested Trustees were compensated with a $35,000 annual Board retainer, as well as a $3,000 annual retainer for each Committee of the Board. Each non-interested Trustee also received a $5,000 and $3,000 meeting fee for each regular in-person Board meeting and Committee meeting, respectively. Furthermore, each non-interested Trustee received compensation for attending special meetings and/or functioning as a Committee Chairperson or Lead Trustee. In addition, the non-interested Trustees were reimbursed for certain expenses incurred in connection with their Board membership. |
|
|
| Fee Reductions: |
|
|
| The Investment Adviser has agreed to contractually limit through March 1, 2009 the total expenses, exclusive of interest, taxes, brokerage commissions, and extraordinary expenses of the LifeLine Funds. Each Fund Class has its own expense limitations based on the average daily net assets for any full fiscal year as follows: Class A Shares 1.50%, Class B Shares 2.25%, Class C Shares 2.25%. |
|
|
35 | HSBC INVESTOR LIFELINE FUNDS |
|
HSBC INVESTOR LIFELINE FUNDS |
Notes to Financial Statements—As of October 31, 2008 (continued) |
|
|
| The Administrator and Citi Ohio may voluntarily waive/reimburse fees to help support the expense limits of each Fund. In addition, the Investment Adviser may waive/reimburse additional fees at their discretion. Amounts waived/reimbursed by the Investment Adviser, Administrator, and Citi Ohio are reported separately on the Statements of Operations, as applicable. All contractual and any voluntary fee waivers/reimbursements are not subject to recoupment in subsequent fiscal periods. Voluntary waivers/reimbursements may be stopped at any time. |
|
|
4. | Investment Transactions: |
|
|
| Aggregate contributions and withdrawals of the Underlying Portfolios for the year ended October 31, 2008 totaled: |
|
|
|
|
|
|
|
|
|
| Contributions |
| Withdrawals |
| ||
|
|
|
| ||||
Aggressive Growth Fund |
| $ | 3,120,255 |
| $ | 2,057,906 |
|
Growth Strategy Fund |
|
| 8,228,397 |
|
| 6,694,064 |
|
Moderate Growth Fund |
|
| 10,956,451 |
|
| 8,966,405 |
|
Conservative Growth Fund |
|
| 4,525,048 |
|
| 4,097,349 |
|
|
|
5. | Federal Tax Information: |
|
|
| The tax character of dividends paid by the LifeLine Funds as of the latest tax year ended October 31, 2008 were as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Distributions paid from |
|
|
|
| ||||||||||
|
|
|
|
|
| |||||||||||
|
| Ordinary |
| Net |
| Total |
| Return of |
| Total |
| |||||
|
|
|
|
|
|
| ||||||||||
Aggressive Growth Fund |
| $ | 87,226 |
| $ | 667,264 |
| $ | 754,490 |
| $ | 3,134 |
| $ | 757,624 |
|
Growth Strategy Fund |
|
| 434,489 |
|
| 1,575,492 |
|
| 2,009,981 |
|
| — |
|
| 2,009,981 |
|
Moderate Growth Fund |
|
| 686,794 |
|
| 1,257,947 |
|
| 1,944,741 |
|
| 40,611 |
|
| 1,985,352 |
|
Conservative Growth Fund |
|
| 265,882 |
|
| 228,458 |
|
| 494,340 |
|
| 527 |
|
| 494,867 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The tax character of dividends paid by the LifeLine Funds as of the latest tax year ended October 31, 2007 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Distributions paid from |
|
|
|
| ||||||||||
|
|
|
|
|
| |||||||||||
|
| Ordinary |
| Net |
| Total |
| Return of |
| Total |
| |||||
|
|
|
|
|
|
| ||||||||||
Aggressive Growth Fund |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
|
Growth Strategy Fund |
|
| 103,401 |
|
| 164,526 |
|
| 267,927 |
|
| — |
|
| 267,927 |
|
Moderate Growth Fund |
|
| 406,849 |
|
| 208,376 |
|
| 615,225 |
|
| — |
|
| 615,225 |
|
Conservative Growth Fund |
|
| 156,824 |
|
| 67,208 |
|
| 224,032 |
|
| — |
|
| 224,032 |
|
|
|
|
| ||
* | Total dividends paid may differ from the amount reported in the Statement of Changes in Net Assets because dividends are recognized when actually paid for tax purposes. | |
|
|
| As of the latest tax year end October 31, 2008, the components of accumulated earnings/(deficit) on a tax basis for the LifeLine Funds were as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Undistributed |
| Undistributed |
| Accumulated |
| Dividends |
| Accumulated |
| Unrealized |
| Total |
| |||||||
|
|
|
|
|
|
|
|
| ||||||||||||||
Aggressive Growth Fund |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | (911,837 | ) | $ | (2,704,622 | ) | $ | (3,616,459 | ) |
Growth Strategy Fund |
|
| 117,076 |
|
| — |
|
| 117,076 |
|
| — |
|
| (2,102,770 | ) |
| (7,284,593 | ) |
| (9,270,287 | ) |
Moderate Growth Fund |
|
| — |
|
| — |
|
| — |
|
| — |
|
| (1,920,789 | ) |
| (7,117,440 | ) |
| (9,038,229 | ) |
Conservative Growth Fund |
|
| — |
|
| — |
|
| — |
|
| — |
|
| (522,075 | ) |
| (1,962,987 | ) |
| (2,485,062 | ) |
|
|
|
| ||
(1) | The differences between book-basis and tax-basis unrealized appreciation/depreciation are attributable primarily to: tax deferral of losses on wash sales, the realization for tax purposes of unrealized gains/losses on certain derivative instruments, the difference between book and tax amortization methods for premium and market discount, the realization for tax purposes of unrealized gains/losses on investments in passive foreign investment companies, and the return of capital adjustments from real estate investment trusts. | |
|
|
HSBC INVESTOR LIFELINE FUNDS | 36 |
|
HSBC INVESTOR LIFELINE FUNDS |
Notes to Financial Statements—As of October 31, 2008 (continued) |
|
|
| As of the latest tax year ended of October 31, 2008, the following Funds have net capital loss carryforwards, which are available to offset future realized gains, if any, to the extent provided by the Treasury regulations. To the extent that these carryforwards are used to offset future capital gains, it is probable that the gains that are offset will not be distributed to shareholders. |
|
|
|
|
|
|
|
Fund |
| Amount |
| Expires |
| |
|
|
| ||||
Aggressive Growth Fund |
| $ | 911,837 |
| 2016 |
|
Growth Strategy Fund |
|
| 2,102,771 |
| 2016 |
|
Moderate Growth Fund |
|
| 1,920,789 |
| 2016 |
|
Conservative Growth Fund |
|
| 522,075 |
| 2016 |
|
|
|
6. | Legal and Regulatory Matters: |
|
|
| On September 26, 2006 BISYS Fund Services, Inc. (“BISYS”), an affiliate of BISYS Fund Services Ohio, Inc. which provides various services to the LifeLine Funds as described in footnote 3, reached a settlement with the Securities and Exchange Commission (“the SEC”) regarding the SEC’s investigation related to BISYS’ past payment of certain marketing and other expenses with respect to certain of its mutual fund clients. Although BISYS has reached a settlement with the SEC, the LifeLine Funds’ management is not aware that any determination has been made as to how the BISYS settlement monies will be distributed. While the LifeLine Funds’ management is currently unable to determine the impact, if any, of such matters on the Portfolios or the LifeLine Funds’ financial statements, management does not anticipate a material, adverse impact to the LifeLine Funds or the LifeLine Funds’ financial statements. |
|
|
7. | Subsequent Event (unaudited): |
|
|
| Each of the Underlying Portfolios represents a different asset class. At a Board meeting held on December 8-9, 2008, HSBC Global Asset Management (USA) Inc. (the “Adviser”), the investment adviser to the LifeLine Funds, received approval from the Board to restructure the LifeLine Funds and how the Funds invest in their respective asset classes in order to provide the Funds with greater flexibility. The LifeLine Funds normally invest in affiliated Underlying Portfolios, i.e., those funds within the HSBC Family of Funds. The change in structure will allow a LifeLine Fund to invest in unaffiliated underlying funds in order to gain access to other managers with similar asset classes. The change in structure will also allow a LifeLine Fund to invest in a specified asset class as opposed to a specified underlying fund. As an example, the HSBC Investor Aggressive Growth Strategy Fund currently invests 21% of its portfolio in the HSBC Growth Portfolio. After the change, the HSBC Investor Aggressive Growth Strategy Fund may invest 21% of its assets in an underlying fund or combination of funds that invest in a portfolio of large cap growth securities. A revised target portfolio weightings table is presented below. Other than as noted below with regard to the HSBC Investor Conservative Growth Strategy Fund, the portfolio weightings of the Funds in the various asset classes remain unchanged. The Adviser will have the discretion to select and substitute underlying funds and to establish target weightings. Should the Adviser determine to change the portfolio weightings of a LifeLine Fund, shareholders of that Fund will receive 60 days’ advance notice. |
|
|
| In addition to the above changes applicable to each LifeLine Fund, the HSBC Investor Conservative Growth Strategy Fund will no longer allocate 3% of its assets to the Intermediate Duration Fixed Income Portfolio (an intermediate duration fixed income asset class); rather it will allocate 28% instead of 25% to a fixed income asset class. This change is reflected in the portfolio weightings table below. |
|
|
| The changes to the structure of the LifeLine Funds and the allocation of the HSBC Investor Conservative Growth Strategy Fund will become effective February 9, 2009. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset Class |
| HSBC Investor |
| HSBC Investor |
| HSBC Investor |
| HSBC Investor |
| ||||||||
|
|
|
|
| |||||||||||||
Large Cap Growth |
|
| 21 | % |
|
| 21 | % |
|
| 19 | % |
|
| 15 | % |
|
Large Cap Value |
|
| 21 | % |
|
| 21 | % |
|
| 18 | % |
|
| 14 | % |
|
Small-cap |
|
| 34 | % |
|
| 20 | % |
|
| 11 | % |
|
| 4 | % |
|
International Equity |
|
| 23 | % |
|
| 20 | % |
|
| 15 | % |
|
| 10 | % |
|
Fixed Income |
|
| None |
|
|
| 15 | % |
|
| 26 | % |
|
| 28 | % |
|
High Yield Fixed Income |
|
| None |
|
|
| 2 | % |
|
| 5 | % |
|
| 8 | % |
|
Money Market |
|
| 1 | % |
|
| 1 | % |
|
| 6 | % |
|
| 21 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total: |
|
| 100 | % |
|
| 100 | % |
|
| 100 | % |
|
| 100 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
37 | HSBC INVESTOR LIFELINE FUNDS |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Trustees of
HSBC Investor LifeLine Funds:
We have audited the accompanying statements of assets and liabilities of HSBC Investor LifeLine Funds – HSBC Investor Aggressive Growth Strategy Fund, HSBC Investor Growth Strategy Fund, HSBC Investor Moderate Growth Strategy Fund and HSBC Investor Conservative Growth Strategy Fund (the Funds), as of October 31, 2008, and the related statements of operations for the year then ended, the statements of changes in net assets for each year in the two-year period then ended and the financial highlights for each period in the four-year period then ended. These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Funds as of October 31, 2008, the results of their operations for the year then ended, the changes in their net assets for each year in the two-year period then ended, and the financial highlights for each period in the four-year period then ended, in conformity with U.S. generally accepted accounting principles.
KPMG LLP
Columbus, Ohio
December 19, 2008
|
|
HSBC INVESTOR LIFELINE FUNDS | 38 |
|
HSBC INVESTOR LIFELINE FUNDS |
|
|
| For the year ended October 31, 2008, the following percentages of the total ordinary income dividends paid by the LifeLine Funds qualify for the corporate dividends received deduction available to corporate shareholders: |
|
|
|
|
|
|
|
Fund |
| Dividends |
| |||
|
| |||||
Aggressive Growth Fund |
|
|
| 67.01 | % |
|
Growth Strategy Fund |
|
|
| 40.45 | % |
|
Moderate Growth Strategy Fund |
|
|
| 34.27 | % |
|
Conservative Growth Strategy Fund |
|
|
| 19.28 | % |
|
|
|
| For the year ended October 31, 2008, dividends paid by the LifeLine Funds may be subject to a maximum tax rate of 15%, as provided for by the Jobs and Growth Tax Relief Reconciliation Act of 2003. The LifeLine Funds intend to designate the maximum amount allowable as taxed at a maximum rate of 15%. Complete information will be reported in conjunction with your 2008 Form 1099-DIV: |
|
|
|
|
|
|
|
Fund |
| Qualified |
| |||
|
| |||||
Aggressive Growth Fund |
|
|
| 100.00 | % |
|
Growth Strategy Fund |
|
|
| 71.25 | % |
|
Moderate Growth Strategy Fund |
|
|
| 72.72 | % |
|
Conservative Growth Strategy Fund |
|
|
| 39.29 | % |
|
|
|
| During the year ended October 31, 2008, the following LifeLine Funds declared net long term capital gain distributions: |
|
|
|
|
|
Fund |
| Amount |
| |
|
| |||
Aggressive Growth Fund |
| $ | 667,264 |
|
Growth Strategy Fund |
|
| 1,575,492 |
|
Moderate Growth Strategy Fund |
|
| 1,257,947 |
|
Conservative Growth Strategy Fund |
|
| 228,458 |
|
|
|
39 | HSBC INVESTOR LIFELINE FUNDS |
|
HSBC INVESTOR LIFELINE FUNDS |
Table of Shareholder Expenses (Unaudited)—As of October 31, 2008 |
|
|
| As a shareholder of the HSBC Investor LifeLine Funds (“Funds”), you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchases, redemption fees; and exchange fees; (2) ongoing costs, including management fees; distribution and/or shareholder servicing fees; and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds. |
|
|
| These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from May 1, 2008 through November 31, 2008. |
|
|
| Actual Example |
|
|
| The table below provides information about actual account values and actual expenses. You may use the information below, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Beginning |
| Ending |
| Expenses |
| Annualized |
| ||||||
|
|
|
|
|
|
|
| ||||||||||
Aggressive Growth Strategy Fund |
| Class A Shares |
| $ | 1,000.00 |
| $ | 639.90 |
|
| $ | 6.18 |
|
| 1.50 | % |
|
|
| Class B Shares |
|
| 1,000.00 |
|
| 637.50 |
|
|
| 9.26 |
|
| 2.25 | % |
|
|
| Class C Shares |
|
| 1,000.00 |
|
| 638.00 |
|
|
| 9.26 |
|
| 2.25 | % |
|
Growth Strategy Fund |
| Class A Shares |
|
| 1,000.00 |
|
| 684.00 |
|
|
| 6.43 |
|
| 1.52 | % |
|
|
| Class B Shares |
|
| 1,000.00 |
|
| 681.20 |
|
|
| 9.59 |
|
| 2.27 | % |
|
|
| Class C Shares |
|
| 1,000.00 |
|
| 681.10 |
|
|
| 9.59 |
|
| 2.27 | % |
|
Moderate Growth Strategy Fund |
| Class A Shares |
|
| 1,000.00 |
|
| 736.60 |
|
|
| 6.68 |
|
| 1.53 | % |
|
|
| Class B Shares |
|
| 1,000.00 |
|
| 733.60 |
|
|
| 9.94 |
|
| 2.28 | % |
|
|
| Class C Shares |
|
| 1,000.00 |
|
| 734.20 |
|
|
| 9.94 |
|
| 2.28 | % |
|
Conservative Growth Strategy Fund |
| Class A Shares |
|
| 1,000.00 |
|
| 801.60 |
|
|
| 6.79 |
|
| 1.50 | % |
|
|
| Class B Shares |
|
| 1,000.00 |
|
| 799.20 |
|
|
| 10.18 |
|
| 2.25 | % |
|
|
| Class C Shares |
|
| 1,000.00 |
|
| 798.60 |
|
|
| 10.17 |
|
| 2.25 | % |
|
|
|
* | Expenses are equal to the average account value over the period multiplied by the Funds’ annualized expense ratio, multiplied by the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year (to reflect the one half year period). |
|
|
HSBC INVESTOR LIFELINE FUNDS | 40 |
|
HSBC INVESTOR LIFELINE FUNDS |
Table of Shareholder Expenses (Unaudited)—As of October 31, 2008 (continued) |
|
|
| Hypothetical Example for Comparison Purposes |
|
|
| The table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. |
|
|
| Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Beginning |
| Ending |
| Expenses |
| Annualized |
| ||||||
|
|
|
|
|
|
|
| ||||||||||
Aggressive Growth Strategy Fund |
| Class A Shares |
| $ | 1,000.00 |
| $ | 1,017.60 |
|
| $ | 7.61 |
|
| 1.50 | % |
|
|
| Class B Shares |
|
| 1,000.00 |
|
| 1,013.83 |
|
|
| 11.39 |
|
| 2.25 | % |
|
|
| Class C Shares |
|
| 1,000.00 |
|
| 1,013.83 |
|
|
| 11.39 |
|
| 2.25 | % |
|
Growth Strategy Fund |
| Class A Shares |
|
| 1,000.00 |
|
| 1,017.50 |
|
|
| 7.71 |
|
| 1.52 | % |
|
|
| Class B Shares |
|
| 1,000.00 |
|
| 1,013.72 |
|
|
| 11.49 |
|
| 2.27 | % |
|
|
| Class C Shares |
|
| 1,000.00 |
|
| 1,013.72 |
|
|
| 11.49 |
|
| 2.27 | % |
|
Moderate Growth Strategy Fund |
| Class A Shares |
|
| 1,000.00 |
|
| 1,017.44 |
|
|
| 7.76 |
|
| 1.53 | % |
|
|
| Class B Shares |
|
| 1,000.00 |
|
| 1,013.67 |
|
|
| 11.54 |
|
| 2.28 | % |
|
|
| Class C Shares |
|
| 1,000.00 |
|
| 1,013.67 |
|
|
| 11.54 |
|
| 2.28 | % |
|
Conservative Growth Strategy Fund |
| Class A Shares |
|
| 1,000.00 |
|
| 1,017.60 |
|
|
| 7.61 |
|
| 1.50 | % |
|
|
| Class B Shares |
|
| 1,000.00 |
|
| 1,013.83 |
|
|
| 11.39 |
|
| 2.25 | % |
|
|
| Class C Shares |
|
| 1,000.00 |
|
| 1,013.83 |
|
|
| 11.39 |
|
| 2.25 | % |
|
|
|
* | Expenses are equal to the average account value over the period multiplied by the Funds’ annualized expense ratio, multiplied by the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year (to reflect the one half year period). |
|
|
41 | HSBC INVESTOR LIFELINE FUNDS |
|
|
|
|
|
|
|
|
|
Certificates of Deposit—0.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares or |
| Value($) |
| ||
|
|
|
| ||||
Banking—0.1% |
|
|
|
|
|
|
|
First Tennessee Bank, 2.96%, |
|
| 100,000 |
|
| 99,029 |
|
|
|
|
|
|
| ||
TOTAL CERTIFICATES OF DEPOSIT |
|
|
|
|
| 99,029 |
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
U.S. Government and Government Agency Obligations—43.4% |
|
|
|
|
|
|
|
Federal Home Loan Mortgage Corp.—10.8% |
|
|
|
|
|
|
|
Pool #1B2655, 6.21%, 12/1/34 (a)(h) |
|
| 487,814 |
|
| 490,212 |
|
Pool #1J1313, 6.37%, 6/1/36 (a) |
|
| 1,142,823 |
|
| 1,159,719 |
|
Pool #847557, 5.85%, 7/1/34 (a)(h) |
|
| 585,641 |
|
| 598,062 |
|
Pool #C00368, 8.50%, 10/1/24 |
|
| 23,979 |
|
| 25,815 |
|
Pool #C00922, 8.00%, 2/1/30 |
|
| 142,230 |
|
| 150,163 |
|
Pool #C54447, 7.00%, 7/1/31 |
|
| 32,243 |
|
| 33,088 |
|
Pool #C60712, 6.50%, 11/1/31 |
|
| 472,414 |
|
| 482,778 |
|
Pool #C80387, 6.50%, 4/1/26 |
|
| 23,016 |
|
| 23,571 |
|
Pool #D62926, 6.50%, 8/1/25 |
|
| 19,016 |
|
| 19,479 |
|
Pool #G01317, 7.00%, 10/1/31 |
|
| 116,043 |
|
| 119,084 |
|
Pool #G02981, 6.00%, 6/1/37 |
|
| 1,009,949 |
|
| 1,008,749 |
|
TBA November: |
|
|
|
|
|
|
|
5.00%, 11/15/22 |
|
| 3,865,000 |
|
| 3,773,206 |
|
5.50%, 11/15/22 |
|
| 960,000 |
|
| 955,500 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 8,839,426 |
|
|
|
|
|
|
| ||
Federal National Mortgage Association—23.7% |
|
|
|
|
|
|
|
Pool #253438, 8.50%, 9/1/30 |
|
| 31,300 |
|
| 33,652 |
|
Pool #256723, 6.50%, 5/1/37 |
|
| 982,919 |
|
| 996,901 |
|
Pool #329530, 7.00%, 12/1/25 |
|
| 52,627 |
|
| 54,838 |
|
Pool #329655, 7.00%, 11/1/25 |
|
| 21,900 |
|
| 22,820 |
|
Pool #356905, 5.66%, 10/1/36 (a) |
|
| 140,731 |
|
| 142,435 |
|
Pool #398958, 6.50%, 10/1/12 |
|
| 24,077 |
|
| 24,644 |
|
Pool #535332, 8.50%, 4/1/30 |
|
| 34,148 |
|
| 36,727 |
|
Pool #535440, 8.50%, 8/1/30 |
|
| 38,193 |
|
| 41,063 |
|
Pool #548965, 8.50%, 7/1/30 |
|
| 38,096 |
|
| 40,959 |
|
Pool #568486, 7.00%, 1/1/31 |
|
| 38,058 |
|
| 39,422 |
|
Pool #573752, 8.50%, 2/1/31 |
|
| 29,026 |
|
| 31,208 |
|
Pool #575328, 6.50%, 4/1/31 |
|
| 48,163 |
|
| 49,220 |
|
Pool #922090, 5.84%, 3/1/37 (a) |
|
| 1,676,596 |
|
| 1,693,705 |
|
TBA November: |
|
|
|
|
|
|
|
5.00%, 11/15/36 |
|
| 3,100,000 |
|
| 2,936,283 |
|
5.50%, 11/15/36 |
|
| 8,690,000 |
|
| 8,489,044 |
|
6.00%, 11/15/37 |
|
| 4,800,000 |
|
| 4,797,000 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 19,429,921 |
|
|
|
|
|
|
| ||
Government National Mortgage Association—6.3% |
|
|
|
|
|
|
|
Pool #346406, 7.50%, 2/15/23 |
|
| 41,467 |
|
| 43,910 |
|
Pool #412530, 7.50%, 12/15/25 |
|
| 68,806 |
|
| 72,830 |
|
Pool #781300, 7.00%, 6/15/31 |
|
| 112,141 |
|
| 114,877 |
|
TBA November: |
|
|
|
|
|
|
|
5.00%, 11/15/36 |
|
| 2,800,000 |
|
| 2,671,374 |
|
5.50%, 11/15/36 |
|
| 610,000 |
|
| 598,181 |
|
6.00%, 11/15/36 |
|
| 1,680,000 |
|
| 1,680,000 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 5,181,172 |
|
|
|
|
|
|
| ||
U.S. Treasury Bonds—2.3% |
|
|
|
|
|
|
|
5.00%, 5/15/37 |
|
| 1,685,000 |
|
| 1,855,869 |
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
U.S. Government and Government Agency Obligations, cont’d |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares or |
| Value($) |
| ||
|
|
|
| ||||
U.S. Treasury Notes—0.3% |
|
|
|
|
|
|
|
3.13%, 9/30/13 |
|
| 245,000 |
|
| 248,981 |
|
|
|
|
|
|
| ||
TOTAL U.S. GOVERNMENT AND |
|
|
|
|
| 35,555,369 |
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
Corporate Obligations—38.3% |
|
|
|
|
|
|
|
Agricultural Chemicals—1.3% |
|
|
|
|
|
|
|
Agrium, Inc., 6.75%, 1/15/19 |
|
| 600,000 |
|
| 541,220 |
|
Cargill, Inc., 5.60%, 9/15/12 (b) |
|
| 600,000 |
|
| 557,003 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 1,098,223 |
|
|
|
|
|
|
| ||
Banking—0.6% |
|
|
|
|
|
|
|
American Express Centurion Bank, |
|
| 700,000 |
|
| 517,176 |
|
|
|
|
|
|
| ||
Building & Construction Products—1.3% |
|
|
|
|
|
|
|
Martin Marietta Materials, Inc., |
|
| 600,000 |
|
| 579,362 |
|
Masco Corp., 3.12%, 3/12/10 (a)(h) |
|
| 550,000 |
|
| 518,006 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 1,097,368 |
|
|
|
|
|
|
| ||
Cable Television—0.6% |
|
|
|
|
|
|
|
Time Warner Cable, Inc., |
|
| 625,000 |
|
| 522,927 |
|
|
|
|
|
|
| ||
Chemicals—0.1% |
|
|
|
|
|
|
|
Chemtura Corp., 6.88%, 6/1/16 |
|
| 175,000 |
|
| 109,375 |
|
|
|
|
|
|
| ||
Computer Services—0.8% |
|
|
|
|
|
|
|
Electronic Data Systems, Series B, |
|
| 700,000 |
|
| 660,792 |
|
|
|
|
|
|
| ||
Consumer Products—1.0% |
|
|
|
|
|
|
|
Clorox Co. (The), 5.45%, 10/15/12 |
|
| 900,000 |
|
| 832,055 |
|
|
|
|
|
|
| ||
Electric—5.7% |
|
|
|
|
|
|
|
Commonwealth Edison Co., 6.45%, |
|
| 700,000 |
|
| 524,802 |
|
Dominion Resources, Inc., 6.40%, |
|
| 250,000 |
|
| 211,832 |
|
Duke Energy Corp., 5.65%, 6/15/13 |
|
| 450,000 |
|
| 406,335 |
|
Florida Power Corp., 5.65%, 6/15/18 |
|
| 550,000 |
|
| 486,898 |
|
MidAmerican Energy Co., 5.95%, |
|
| 2,900,000 |
|
| 2,535,000 |
|
Puget Sound Energy, Inc., 6.97%, |
|
| 600,000 |
|
| 501,000 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 4,665,867 |
|
|
|
|
|
|
| ||
Finance—8.2% |
|
|
|
|
|
|
|
American Honda Finance Corp., |
|
| 250,000 |
|
| 226,784 |
|
Bear Stearns Co., Inc.: |
|
|
|
|
|
|
|
4.50%, 10/28/10 |
|
| 600,000 |
|
| 583,206 |
|
Series B, 6.95%, 8/10/12, MTN |
|
| 950,000 |
|
| 937,422 |
|
Citigroup, Inc., 6.50%, 8/19/13 |
|
| 225,000 |
|
| 213,291 |
|
Countrywide Home Loans, Series L, |
|
| 1,150,000 |
|
| 1,060,545 |
|
Ford Motor Credit Co., LLC, |
|
| 1,550,000 |
|
| 1,054,076 |
|
|
|
|
See notes to financial statements. | HSBC INVESTOR PORTFOLIOS | 42 |
|
HSBC INVESTOR CORE PLUS FIXED INCOME PORTFOLIO |
Schedule of Portfolio Investments—as of October 31, 2008 (continued) |
|
|
|
|
|
|
|
|
Corporate Obligations, continued |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares or |
| Value($) |
| ||
|
|
|
| ||||
Lehman Brothers Holdings, Series I, |
|
| 500,000 |
|
| 65,000 |
|
Morgan Stanley, Series F, 6.00%, |
|
| 565,000 |
|
| 459,090 |
|
Preferred Term Securities Ltd., |
|
| 768,227 |
|
| 556,004 |
|
Wells Fargo Financial, 5.50%, 8/1/12 |
|
| 850,000 |
|
| 841,140 |
|
XTRA Finance Corp., 5.15%, 4/1/17 |
|
| 750,000 |
|
| 681,810 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 6,678,368 |
|
|
|
|
|
|
| ||
Forestry/Paper—0.2% |
|
|
|
|
|
|
|
Georgia-Pacific Corp., 7.70%, |
|
| 250,000 |
|
| 173,750 |
|
|
|
|
|
|
| ||
Gaming—0.1% |
|
|
|
|
|
|
|
MGM MIRAGE, Inc., 6.75%, 4/1/13 |
|
| 175,000 |
|
| 109,375 |
|
|
|
|
|
|
| ||
Health Services—0.2% |
|
|
|
|
|
|
|
Community Health Systems, Inc., 8.88%, |
|
| 175,000 |
|
| 146,562 |
|
|
|
|
|
|
| ||
Hospitals—1.2% |
|
|
|
|
|
|
|
Covidien International Finance SA, 5.45%, |
|
| 550,000 |
|
| 530,755 |
|
HCA, Inc., 5.75%, 3/15/14 |
|
| 750,000 |
|
| 442,500 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 973,255 |
|
|
|
|
|
|
| ||
Media—0.9% |
|
|
|
|
|
|
|
News America Holdings, 7.90%, 12/1/95 |
|
| 500,000 |
|
| 376,145 |
|
Vivendi, 5.75%, 4/4/13 (b) |
|
| 350,000 |
|
| 321,553 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 697,698 |
|
|
|
|
|
|
| ||
Media - Cable—0.2% |
|
|
|
|
|
|
|
Cablevision Systems Corp., Series B, |
|
| 175,000 |
|
| 147,219 |
|
|
|
|
|
|
| ||
Office Equipment & Services—0.6% |
|
|
|
|
|
|
|
Xerox Corp., 3.63%, 12/18/09 (a)(h) |
|
| 550,000 |
|
| 501,750 |
|
|
|
|
|
|
| ||
Oil & Gas—0.2% |
|
|
|
|
|
|
|
Pioneer Natural Resources Co., 5.88%, |
|
| 175,000 |
|
| 127,860 |
|
|
|
|
|
|
| ||
Pipelines—0.6% |
|
|
|
|
|
|
|
Dynegy Holdings, Inc., 7.75%, 6/1/19 |
|
| 175,000 |
|
| 117,250 |
|
Transcontinental Gas Pipeline Corp., |
|
| 450,000 |
|
| 359,968 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 477,218 |
|
|
|
|
|
|
| ||
Retail—2.5% |
|
|
|
|
|
|
|
Kohl’s Corp., 6.25%, 12/15/17 |
|
| 550,000 |
|
| 433,181 |
|
Kroger Co. (The), 5.00%, 4/15/13 |
|
| 250,000 |
|
| 225,420 |
|
Wal-Mart Stores, Inc., 6.50%, 8/15/37 |
|
| 1,500,000 |
|
| 1,346,407 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 2,005,008 |
|
|
|
|
|
|
| ||
Support - Services—0.4% |
|
|
|
|
|
|
|
Aramark Services, Inc., 8.50%, 2/1/15, |
|
| 175,000 |
|
| 149,625 |
|
Iron Mountain, Inc., 8.00%, 6/15/20, |
|
| 175,000 |
|
| 137,375 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 287,000 |
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
Corporate Obligations, continued |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares or |
| Value($) |
| ||
|
|
|
| ||||
Telecom - Integrated/Services—0.2% |
|
|
|
|
|
|
|
Qwest Corp., 7.63%, 6/15/15 |
|
| 175,000 |
|
| 133,875 |
|
|
|
|
|
|
| ||
Telecommunications—5.3% |
|
|
|
|
|
|
|
AOL Time Warner, Inc.: |
|
|
|
|
|
|
|
6.88%, 5/1/12 |
|
| 600,000 |
|
| 539,112 |
|
7.70%, 5/1/32 |
|
| 550,000 |
|
| 444,292 |
|
BellSouth Telecommunications, 7.00%, |
|
| 700,000 |
|
| 510,027 |
|
GTE Corp., 6.84%, 4/15/18 |
|
| 750,000 |
|
| 677,726 |
|
Sprint Nextel Corp., 6.00%, 12/1/16 |
|
| 1,110,000 |
|
| 768,675 |
|
Time Warner Entertainment Co., 8.38%, |
|
| 800,000 |
|
| 713,912 |
|
Verizon Communications, Inc., 6.10%, |
|
| 750,000 |
|
| 655,259 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 4,309,003 |
|
|
|
|
|
|
| ||
Transportation—6.1% |
|
|
|
|
|
|
|
American Airlines, Inc.: |
|
|
|
|
|
|
|
Series 2001-2, Class A1, 6.98%, 4/1/11 |
|
| 386,067 |
|
| 354,216 |
|
Series 2001-2, Class A2, 7.86%, 10/1/11 |
|
| 1,250,000 |
|
| 993,750 |
|
Burlington North Santa Fe: |
|
|
|
|
|
|
|
5.65%, 5/1/17 |
|
| 600,000 |
|
| 525,046 |
|
7.57%, 1/2/21 |
|
| 277,493 |
|
| 272,529 |
|
Continental Airlines, Inc., 5.98%, 4/19/22 |
|
| 750,000 |
|
| 521,250 |
|
Norfolk Southern Corp., 5.75%, 4/1/18 |
|
| 250,000 |
|
| 215,192 |
|
Union Pacific Corp.: |
|
|
|
|
|
|
|
5.75%, 11/15/17 |
|
| 1,200,000 |
|
| 1,017,030 |
|
6.85%, 1/2/19 |
|
| 1,104,592 |
|
| 1,090,806 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 4,989,819 |
|
|
|
|
|
|
| ||
TOTAL CORPORATE OBLIGATIONS |
|
|
|
|
| 31,261,543 |
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
Asset Backed Securities—25.1% |
|
|
|
|
|
|
|
Asset Backed Funding Certificates, |
|
| 738,743 |
|
| 611,712 |
|
Cairn Mezzanine plc, Series 2007-3A, |
|
| 905,000 |
|
| 0 |
|
Capital Auto Receivables Asset Trust: |
|
|
|
|
|
|
|
Series 2005-1, Class A5, 4.66%, |
|
| 338,358 |
|
| 337,515 |
|
Series 2006-SN1A, Class A3, 5.31%, |
|
| 222,717 |
|
| 222,717 |
|
Series 2006-SN1A, Class A4B, 4.39%, |
|
| 810,000 |
|
| 797,815 |
|
Series 2007-SN1, Class A3A, 5.38%, |
|
| 740,000 |
|
| 732,665 |
|
Series 2007-SN1, Class A3B, 4.62%, |
|
| 860,000 |
|
| 840,073 |
|
Capital One Prime Auto Receivables Trust: |
|
|
|
|
|
|
|
Series 2005-1, Class A4, 4.58%, |
|
| 398,489 |
|
| 390,219 |
|
Series 2006-1, Class A3, 4.99%, |
|
| 694,871 |
|
| 694,856 |
|
Carmax Auto Owner Trust, Series 2008-2, |
|
| 1,400,000 |
|
| 1,346,140 |
|
|
|
|
43 | HSBC INVESTOR PORTFOLIOS | See notes to financial statements. |
|
HSBC INVESTOR CORE PLUS FIXED INCOME PORTFOLIO |
Schedule of Portfolio Investments—as of October 31, 2008 (continued) |
|
|
|
|
|
|
|
|
Asset Backed Securities, continued |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares or |
| Value($) |
| ||
|
|
|
| ||||
Chase Issuance Trust, Series 2005-A12, |
|
| 1,250,000 |
|
| 1,244,194 |
|
Countrywide Asset-Backed Certificates: |
|
|
|
|
|
|
|
Series 2006-S2, Class A5, 5.75%, |
|
| 1,023,000 |
|
| 286,360 |
|
Series 2006-S4, Class A3, 5.80%, |
|
| 1,056,485 |
|
| 613,547 |
|
Dominos Pizza Master Issuer LLC, |
|
| 1,200,000 |
|
| 986,561 |
|
Duane Street CLO, Series 2007-4A, Class C, |
|
| 850,000 |
|
| 306,850 |
|
Ford Credit Auto Owner Trust, Series 2006-C, |
|
| 649,602 |
|
| 649,356 |
|
GE Business Loan Trust, Series 2006-2A, |
|
| 1,371,669 |
|
| 1,135,950 |
|
GE Equipment Small Ticket LLC, |
|
| 116,827 |
|
| 116,553 |
|
GMAC Mortgage Corp., Loan Trust, |
|
| 900,000 |
|
| 504,450 |
|
Hyundai Auto Receivables Trust: |
|
|
|
|
|
|
|
Series 2007-A, Class A2B, 4.91%, |
|
| 180,360 |
|
| 180,014 |
|
Series 2008-A, Class A2, 4.16%, |
|
| 1,020,000 |
|
| 1,000,608 |
|
IOWA Student Loan Liquidity Corp., |
|
| 354,144 |
|
| 352,230 |
|
National Collegiate Student Loan Trust, |
|
| 763,889 |
|
| 677,437 |
|
Nissan Auto Receivables Owner Trust, |
|
| 410,838 |
|
| 410,563 |
|
Preferred Term Securities XXII Ltd., 3.16%, |
|
| 1,079,503 |
|
| 583,472 |
|
Residential Funding Mortgage Securities, |
|
| 490,000 |
|
| 125,573 |
|
SLM Student Loan Trust: |
|
|
|
|
|
|
|
Series 2005-4, Class A2, 3.62%, |
|
| 490,000 |
|
| 455,390 |
|
Series 2005-9, Class A4, 3.64%, |
|
| 1,360,000 |
|
| 1,286,200 |
|
Series 2006-7, Class A2, 3.53%, |
|
| 1,214,374 |
|
| 1,212,078 |
|
Series 2006-9, Class A2, 3.54%, |
|
| 264,353 |
|
| 263,039 |
|
Series 2006-B, Class A1, 2.83%, |
|
| 1,085,646 |
|
| 1,015,079 |
|
South Carolina Student Loan Corp., |
|
| 942,901 |
|
| 923,748 |
|
World Omni Auto Receivables Trust, |
|
| 245,333 |
|
| 244,941 |
|
|
|
|
|
|
| ||
TOTAL ASSET BACKED SECURITIES |
|
|
|
|
| 20,547,905 |
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
Collateralized Mortgage Obligations—5.9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares or |
| Value($) |
| ||
|
|
|
| ||||
Banc of America Mortgage Securities, |
|
| 968,912 |
|
| 931,909 |
|
Deutsche Mortgage Securities, Inc., |
|
| 824,958 |
|
| 821,186 |
|
Fannie Mae IO: |
|
|
|
|
|
|
|
Series 270, Class 2, 8.50%, 9/1/23 (c) |
|
| 37,649 |
|
| 10,022 |
|
Series 296, Class 2, 8.00%, 4/1/24 (c) |
|
| 45,014 |
|
| 11,879 |
|
Series 306, Class IO, 8.00%, 5/1/30 (c) |
|
| 53,648 |
|
| 12,238 |
|
Series 2000-16, Class PS, 5.34%, |
|
| 25,030 |
|
| 880 |
|
Series 2001-4, Class SA, 3.19%, |
|
| 177,348 |
|
| 17,877 |
|
FHA Weyerhauser, 7.43%, 1/1/24 (e)(f) |
|
| 26,158 |
|
| 26,158 |
|
Freddie Mac: |
|
|
|
|
|
|
|
Series 2988, Class AF, 4.89%, |
|
| 979,755 |
|
| 922,366 |
|
Series 3212, Class BK, 5.50%, 9/15/36 |
|
| 900,000 |
|
| 827,195 |
|
Freddie Mac IO: |
|
|
|
|
|
|
|
Series 1534, Class K, 2.78%, |
|
| 119,246 |
|
| 15,870 |
|
Series 2141, Class SD, 3.56%, |
|
| 100,776 |
|
| 14,795 |
|
Series 2247, Class SC, 2.91%, |
|
| 50,605 |
|
| 5,882 |
|
Government National Mortgage |
|
|
|
|
|
|
|
Series 1999-30, Class S, 4.13%, |
|
| 43,767 |
|
| 6,419 |
|
Series 1999-30, Class SA, 3.53%, |
|
| 61,089 |
|
| 6,151 |
|
Residential Asset Securitization Trust, |
|
| 1,325,412 |
|
| 1,177,631 |
|
|
|
|
|
|
| ||
TOTAL COLLATERALIZED |
|
|
|
|
| 4,808,458 |
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
Commercial Mortgage Backed Securities—11.4% |
|
|
|
|
|
|
|
Citigroup Commercial Mortgage Trust, |
|
| 1,100,000 |
|
| 984,285 |
|
Citigroup/Deutsche Bank Commercial |
|
| 1,300,000 |
|
| 1,134,177 |
|
Commercial Mortgage Pass - |
|
|
|
|
|
|
|
Series 2005-LP5, Class AJ, 5.05%, |
|
| 1,550,000 |
|
| 1,050,694 |
|
Series 2006-FL12, Class A2, 4.66%, |
|
| 1,443,883 |
|
| 1,228,923 |
|
CWCapital Cobalt, Series 2006-C1, Class A2, |
|
| 1,232,000 |
|
| 1,115,979 |
|
DLJ Mortgage Acceptance Corp., IO, |
|
| 17,984 |
|
| 1 |
|
Greenwich Capital Commercial Funding Corp.: |
|
|
|
|
|
|
|
Series 2006-GG7, Class A2, 5.91%, |
|
| 640,000 |
|
| 591,822 |
|
|
|
|
See notes to financial statements. | HSBC INVESTOR PORTFOLIOS | 44 |
|
HSBC INVESTOR CORE PLUS FIXED INCOME PORTFOLIO |
Schedule of Portfolio Investments—as of October 31, 2008 (continued) |
|
|
|
|
|
|
|
|
Commercial Mortgage Backed Securities, continued |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares or |
| Value($) |
| ||
|
|
|
| ||||
Series 2006-GG7, Class A4, 5.91%, |
|
| 1,040,000 |
|
| 829,480 |
|
GS Mortgage Securities Corp., IO, |
|
| 35,694 |
|
| 414 |
|
LB-UBS Commercial Mortgage Trust, |
|
| 480,000 |
|
| 440,906 |
|
Morgan Stanley Capital I, Series 2007-IQ14, |
|
| 1,380,000 |
|
| 1,197,531 |
|
Washington Mutual Commercial Mortgage |
|
| 963,607 |
|
| 722,705 |
|
|
|
|
|
|
| ||
TOTAL COMMERCIAL MORTGAGE |
|
|
|
|
| 9,296,917 |
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
Foreign Bonds—0.6% |
|
|
|
|
|
|
|
United Kingdom—0.6% |
|
|
|
|
|
|
|
Barclays Bank plc, 5.93%, 12/31/49 (b) |
|
| 850,000 |
|
| 456,304 |
|
|
|
|
|
|
| ||
TOTAL FOREIGN BONDS |
|
|
|
|
| 456,304 |
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
Municipal Bonds—2.4% |
|
|
|
|
|
|
|
Arizona Educational Loan Marketing Corp. |
|
| 534,000 |
|
| 521,985 |
|
Chicago Transit Authority Sales & Transfer |
|
| 800,000 |
|
| 723,216 |
|
Connecticut State, GO, Series B, 5.00%, |
|
| 650,000 |
|
| 678,834 |
|
|
|
|
|
|
| ||
TOTAL MUNICIPAL BONDS |
|
|
|
|
| 1,924,035 |
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
Investment Company—2.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares or |
| Value($) |
| ||
|
|
|
| ||||
Northern Institutional Diversified Assets |
|
| 2,193,345 |
|
| 2,193,345 |
|
TOTAL INVESTMENT COMPANY |
|
|
|
|
| 2,193,345 |
|
|
|
|
|
|
| ||
TOTAL INVESTMENTS |
|
|
|
|
| 106,142,905 |
|
|
|
|
|
|
| ||
|
|
| Percentages indicated are based on net assets of $81,727,877. |
|
|
(a) | Variable rate security. The interest rates on these securities are adjusted periodically to reflect then-current short-term interest rates. The rates presented represent the rates in effect on October 31, 2008. The maturity dates presented reflect the final maturity dates. However, some of these securities may contain put or demand features that allow the fund to require the issuer to repurchase the security from the fund within various time periods, including daily, weekly, monthly, or semi-annually. |
|
|
(b) | Security exempt from registration under Rule 144a of the Securities Act of 1933. This security may be resold in transactions exempt from registration, normally to qualified institutional buyers. This security has been deemed liquid by the Investment Adviser based on procedures approved by the Board of Trustees. |
|
|
(c) | Interest-Only represents securities that entitle holders to receive only interest payments on the underlying mortgages. The yield to maturity of an Interest-Only is extremely sensitive to the rate of principal payments on the underlying mortgage assets. A rapid (slow) rate of principal repayments may have an adverse (positive) effect on yield to maturity. Interest rate adjusts periodically based on the pay off of the underlying mortgage. The interest rate presented represents the rates in effect on October 31, 2008. The principal amount shown is the notional amount of the underlying mortgages. |
|
|
(d) | The rates presented represent the annualized one day yield that was in effect on October 31, 2008. |
|
|
(e) | Rule 144a, section 4(2) or other security which is restricted as to resale to institutional investors. The Investment Adviser, using Board approved procedures, has deemed these securities to be illiquid. Represents 0.03% of total net assets. |
|
|
(f) | Security was fair valued as of October 31, 2008. Represents 0.03% of net assets. |
|
|
(g) | Security is non-income producing; Defaulted Bond. |
|
|
(h) | Security held as collateral for to be announced securities. |
|
|
|
AMT | — | Interest on security is subject to federal alternative minimum tax |
CLO | — | Collateralized Loan Obligation |
FHA | — | Federal Housing Administration |
GO | — | General Obligation |
IO | — | Interest-Only security. Represents 0.13% of net assets. |
LLC | — | Limited Liability Co. |
MTN | — | Medium Term Note |
PLC | — | Public Limited Co. |
TBA | — | Security was traded on a “to be announced” basis. Represents 31.7% of net assets. |
|
|
|
45 | HSBC INVESTOR PORTFOLIOS | See notes to financial statements. |
|
Schedule of Portfolio Investments—as of October 31, 2008 |
|
|
|
|
|
|
|
|
Common Stock—0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares or |
| Value($) |
| ||
|
|
|
| ||||
Consumer Discretionary—0.0% |
|
|
|
|
|
|
|
Tembec, Inc. (a) |
|
| 937 |
|
| 1,012 |
|
|
|
|
|
|
| ||
TOTAL COMMON STOCK |
|
|
|
|
| 1,012 |
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
Corporate Obligations—96.8% |
|
|
|
|
|
|
|
Aerospace & Defense—3.4% |
|
|
|
|
|
|
|
BE Aerospace, Inc., 8.50%, 7/1/18, |
|
| 25,000 |
|
| 21,500 |
|
Bombardier, Inc., 8.00%, 11/15/14, |
|
| 25,000 |
|
| 21,375 |
|
DRS Technologies, Inc., 7.63%, 2/1/18, |
|
| 100,000 |
|
| 99,000 |
|
Hawker Beechcraft Acquisition Co.: |
|
|
|
|
|
|
|
8.50%, 4/1/15, Callable 4/1/11 @ 104.25 |
|
| 50,000 |
|
| 30,000 |
|
9.75%, 4/1/17, Callable 4/1/12 @ 104.88 |
|
| 25,000 |
|
| 14,000 |
|
L-3 Communications Holdings, Inc., |
|
| 100,000 |
|
| 82,000 |
|
Sequa Corp., 11.75%, 12/1/15, |
|
| 50,000 |
|
| 31,000 |
|
TransDigm Group, Inc., 7.75%, 7/15/14, |
|
| 50,000 |
|
| 40,000 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 338,875 |
|
|
|
|
|
|
| ||
Airline—0.4% |
|
|
|
|
|
|
|
DAE Aviation Holdings, Inc., 11.25%, |
|
| 50,000 |
|
| 37,500 |
|
|
|
|
|
|
| ||
Apparel/Textiles—1.4% |
|
|
|
|
|
|
|
AGY Holding Corp., 11.00%, 11/15/14, |
|
| 50,000 |
|
| 35,000 |
|
Levi Strauss & Co., 8.88%, 4/1/16, |
|
| 50,000 |
|
| 32,750 |
|
Quiksilver, Inc., 6.88%, 4/15/15, |
|
| 150,000 |
|
| 72,000 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 139,750 |
|
|
|
|
|
|
| ||
Auto Loans—3.8% |
|
|
|
|
|
|
|
Ford Motor Credit Co.: |
|
|
|
|
|
|
|
7.38%, 10/28/09 |
|
| 250,000 |
|
| 207,526 |
|
7.38%, 2/1/11 |
|
| 50,000 |
|
| 31,112 |
|
General Motors Acceptance Corp., 6.88%, |
|
| 250,000 |
|
| 136,825 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 375,463 |
|
|
|
|
|
|
| ||
Auto Parts & Equipment—2.2% |
|
|
|
|
|
|
|
Altra Industrial Motion, Inc., 9.00%, |
|
| 50,000 |
|
| 45,000 |
|
Cooper Tire & Rubber Co., 8.00%, |
|
| 50,000 |
|
| 27,500 |
|
Cooper-Standard Automotive, Inc., |
|
| 50,000 |
|
| 21,000 |
|
MSX International, 12.50%, 4/1/12, |
|
| 25,000 |
|
| 11,250 |
|
Stoneridge, Inc., 11.50%, 5/1/12, |
|
| 50,000 |
|
| 45,000 |
|
The Goodyear Tire & Rubber Co., 8.63%, |
|
| 17,000 |
|
| 14,365 |
|
|
|
|
|
|
|
|
|
Corporate Obligations, continued |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares or |
| Value($) |
| ||
|
|
|
| ||||
Auto Parts & Equipment, continued |
|
|
|
|
|
|
|
TRW Automotive, Inc., 7.25%, 3/15/17 (b) |
|
| 50,000 |
|
| 28,750 |
|
UCI Holdco, Inc., 10.32%, 12/15/13, |
|
| 61,214 |
|
| 23,261 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 216,126 |
|
|
|
|
|
|
| ||
Automotive—0.5% |
|
|
|
|
|
|
|
General Motors Corp., 7.13%, 7/15/13 |
|
| 150,000 |
|
| 51,000 |
|
|
|
|
|
|
| ||
Beverages—0.9% |
|
|
|
|
|
|
|
Beverages & More, Inc., 9.25%, 3/1/12, |
|
| 50,000 |
|
| 42,500 |
|
Constellation Brands, Inc., 8.38%, 12/15/14 |
|
| 50,000 |
|
| 44,500 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 87,000 |
|
|
|
|
|
|
| ||
Building Materials—2.8% |
|
|
|
|
|
|
|
Belden, Inc., 7.00%, 3/15/17, |
|
| 50,000 |
|
| 38,250 |
|
Coleman Cable, Inc., 9.88%, 10/1/12, |
|
| 50,000 |
|
| 35,625 |
|
General Cable Technologies Corp., 7.13%, |
|
| 50,000 |
|
| 32,000 |
|
Gibraltar Industries, Inc., 8.00%, 12/1/15, |
|
| 100,000 |
|
| 67,000 |
|
Interline Brands, Inc., 8.13%, 6/15/14, |
|
| 50,000 |
|
| 38,500 |
|
Maax Corp., 9.75%, 6/15/12, |
|
| 50,000 |
|
| 250 |
|
Ply Gem Industries, Inc., 11.75%, 6/15/13, |
|
| 50,000 |
|
| 33,000 |
|
U.S. Concrete, Inc., 8.38%, 4/1/14, |
|
| 50,000 |
|
| 31,250 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 275,875 |
|
|
|
|
|
|
| ||
Chemicals—3.8% |
|
|
|
|
|
|
|
Airgas, Inc., 7.13%, 10/1/18, |
|
| 50,000 |
|
| 41,250 |
|
Chemtura Corp., 6.88%, 6/1/16 |
|
| 25,000 |
|
| 15,625 |
|
Georgia Gulf Corp., 9.50%, 10/15/14, |
|
| 75,000 |
|
| 31,500 |
|
Huntsman International LLC, 7.88%, |
|
| 35,000 |
|
| 31,150 |
|
Innophos, Inc., 8.88%, 8/15/14, |
|
| 50,000 |
|
| 44,000 |
|
Koppers Holdings, Inc., 9.88%, 11/15/14, |
|
| 25,000 |
|
| 20,000 |
|
LyondellBasell Industries AF, 8.38%, |
|
| 50,000 |
|
| 17,500 |
|
Momentive Performance Materials, Inc., |
|
| 50,000 |
|
| 28,000 |
|
Mosaic Co., 7.63%, 12/1/16, |
|
| 25,000 |
|
| 21,832 |
|
Nalco Finance Holdings, Inc., 0.00%, 2/1/14, |
|
| 50,000 |
|
| 40,000 |
|
Nova Chemicals Corp., 6.50%, 1/15/12 |
|
| 50,000 |
|
| 39,500 |
|
Terra Capital, Inc., 7.00%, 2/1/17, |
|
| 50,000 |
|
| 42,500 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 372,857 |
|
|
|
|
|
|
| ||
|
|
|
See notes to financial statements. | HSBC INVESTOR PORTFOLIOS | 46 |
|
HSBC INVESTOR HIGH YIELD FIXED INCOME PORTFOLIO |
Schedule of Portfolio Investments—as of October 31, 2008 (continued) |
|
|
|
|
|
|
|
|
Corporate Obligations, continued |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares or |
| Value($) |
| ||
|
|
|
| ||||
Computer Hardware—0.3% |
|
|
|
|
|
|
|
Activant Solutions, Inc., 9.50%, 5/1/16, |
|
| 50,000 |
|
| 30,500 |
|
Consumer Products—1.5% |
|
|
|
|
|
|
|
Central Garden & Pet Co., 9.13%, 2/1/13, |
|
| 50,000 |
|
| 30,500 |
|
Chattem, Inc., 7.00%, 3/1/14, |
|
| 50,000 |
|
| 43,375 |
|
Jarden Corp., 7.50%, 5/1/17, |
|
| 25,000 |
|
| 18,625 |
|
MCBC Holdings, Inc., 10.75%, 10/15/14, |
|
| 25,000 |
|
| 12,500 |
|
Spectrum Brands, Inc., 7.38%, 2/1/15, |
|
| 75,000 |
|
| 25,125 |
|
True Temper Sports, Inc., 8.38%, 9/15/11, |
|
| 50,000 |
|
| 19,000 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 149,125 |
|
|
|
|
|
|
| ||
Diversified Capital Goods—1.8% |
|
|
|
|
|
|
|
Greenbrier Cos., Inc., 8.38%, 5/15/15, |
|
| 50,000 |
|
| 38,125 |
|
Mueller Water Products, Inc., 7.38%, 6/1/17, |
|
| 50,000 |
|
| 32,750 |
|
Sensata Technologies, 8.00%, 5/1/14, |
|
| 50,000 |
|
| 27,500 |
|
TriMas Corp., 9.88%, 6/15/12, |
|
| 77,000 |
|
| 42,350 |
|
Trinity Industries, Inc., 6.50%, 3/15/14, |
|
| 50,000 |
|
| 41,500 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 182,225 |
|
|
|
|
|
|
| ||
Electric - Generation—4.8% |
|
|
|
|
|
|
|
AES Corp.: |
|
|
|
|
|
|
|
7.75%, 3/1/14 |
|
| 60,000 |
|
| 48,600 |
|
7.75%, 10/15/15 |
|
| 50,000 |
|
| 39,188 |
|
Dynegy Holdings, Inc., 8.38%, 5/1/16 |
|
| 150,000 |
|
| 111,000 |
|
Edison Mission Energy: |
|
|
|
|
|
|
|
7.00%, 5/15/17 |
|
| 25,000 |
|
| 19,781 |
|
7.20%, 5/15/19 |
|
| 50,000 |
|
| 37,500 |
|
Energy Future Holdings, 10.88%, 11/1/17, |
|
| 125,000 |
|
| 96,250 |
|
Mirant North America LLC, 7.38%, 12/31/13, |
|
| 50,000 |
|
| 43,687 |
|
NRG Energy, Inc., 7.38%, 2/1/16, |
|
| 50,000 |
|
| 43,125 |
|
Reliant Energy, Inc., 7.63%, 6/15/14 |
|
| 50,000 |
|
| 38,500 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 477,631 |
|
|
|
|
|
|
| ||
Electric - Integrated—0.8% |
|
|
|
|
|
|
|
CMS Energy Corp., 6.88%, 12/15/15 |
|
| 100,000 |
|
| 81,776 |
|
|
|
|
|
|
| ||
Electronics—0.2% |
|
|
|
|
|
|
|
Freescale Semiconductor, Inc., 10.13%, |
|
| 50,000 |
|
| 19,625 |
|
|
|
|
|
|
| ||
Energy - Exploration & Production—5.7% |
|
|
|
|
|
|
|
Chaparral Energy, Inc., 8.50%, 12/1/15, |
|
| 100,000 |
|
| 51,000 |
|
Chesapeake Energy Corp., 6.88%, 1/15/16, |
|
| 100,000 |
|
| 80,250 |
|
|
|
|
|
|
|
|
|
Corporate Obligations, continued |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
| Shares or |
| Value($) |
| ||
|
|
|
| ||||
Energy - Exploration & Production, continued |
|
|
|
|
|
|
|
Cimarex Energy Co., 7.13%, 5/1/17, |
|
| 50,000 |
|
| 40,000 |
|
Clayton Williams Energy, Inc., 7.75%, 8/1/13, |
|
| 100,000 |
|
| 61,500 |
|
Compton Petroleum Finance Corp., 7.63%, |
|
| 100,000 |
|
| 58,000 |
|
Forest Oil Corp., 7.25%, 6/15/19, |
|
| 50,000 |
|
| 34,000 |
|
Linn Energy LLC, 9.88%, 7/1/18, |
|
| 50,000 |
|
| 33,750 |
|
Newfield Exploration Co., 6.63%, 9/1/14, |
|
| 100,000 |
|
| 77,250 |
|
Opti Canada, Inc., 7.88%, 12/15/14, |
|
| 50,000 |
|
| 30,000 |
|
Plains Exploration & Production Co.: |
|
|
|
|
|
|
|
7.75%, 6/15/15, Callable 6/15/11 @ 103.88 |
|
| 50,000 |
|
| 36,500 |
|
7.63%, 6/1/18, Callable 6/1/13 @ 103.81 |
|
| 25,000 |
|
| 16,375 |
|
Swift Energy Co., 7.63%, 7/15/11, |
|
| 50,000 |
|
| 42,250 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 560,875 |
|
|
|
|
|
|
| ||
Environmental—0.8% |
|
|
|
|
|
|
|
Waste Services, Inc., 9.50%, 4/15/14, |
|
| 50,000 |
|
| 40,000 |
|
WCA Waste Corp., 9.25%, 6/15/14, |
|
| 50,000 |
|
| 41,000 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 81,000 |
|
|
|
|
|
|
| ||
Food & Drug Retailers—0.4% |
|
|
|
|
|
|
|
Stater Bros. Holdings, Inc., 7.75%, 4/15/15, |
|
| 50,000 |
|
| 41,000 |
|
|
|
|
|
|
| ||
Food - Wholesale—0.3% |
|
|
|
|
|
|
|
Smithfield Foods, Inc., 7.75%, 7/1/17 |
|
| 50,000 |
|
| 31,500 |
|
|
|
|
|
|
| ||
Forestry/Paper—2.8% |
|
|
|
|
|
|
|
Catalyst Paper Corp., Series D, 8.63%, 6/15/11, |
|
| 50,000 |
|
| 29,500 |
|
Cellu Tissue Holdings, Inc., 9.75%, 3/15/10, |
|
| 50,000 |
|
| 40,000 |
|
Georgia-Pacific Corp., 7.70%, 6/15/15 |
|
| 50,000 |
|
| 34,750 |
|
NewPage Corp., 10.00%, 5/1/12, |
|
| 25,000 |
|
| 17,000 |
|
Norampac, Inc., 6.75%, 6/1/13, |
|
| 100,000 |
|
| 57,000 |
|
Stone Container Finance Co. of Canada, |
|
| 150,000 |
|
| 73,500 |
|
Verso Paper Holdings LLC, Series B, 9.13%, |
|
| 50,000 |
|
| 26,500 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 278,250 |
|
|
|
|
|
|
| ||
Gaming—8.0% |
|
|
|
|
|
|
|
Buffalo Thunder Development Authority, |
|
| 25,000 |
|
| 8,750 |
|
CCM Merger, Inc., 8.00%, 8/1/13, |
|
| 100,000 |
|
| 59,000 |
|
|
|
|
47 | HSBC INVESTOR PORTFOLIOS | See notes to financial statements. |
|
HSBC INVESTOR HIGH YIELD FIXED INCOME PORTFOLIO |
Schedule of Portfolio Investments—as of October 31, 2008 (continued) |
|
|
|
|
|
|
|
|
Corporate Obligations, continued |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares or |
| Value($) |
| ||
|
|
|
| ||||
Gaming, continued |
|
|
|
|
|
|
|
Choctaw Resort Development Entertainment, |
|
| 46,000 |
|
| 26,220 |
|
Chukchansi Economic Development Authority, |
|
| 25,000 |
|
| 13,250 |
|
Fontainebleau Las Vegas, 10.25%, 6/15/15, |
|
| 100,000 |
|
| 13,500 |
|
Great Canadian Gaming Co., 7.25%, 2/15/15, |
|
| 50,000 |
|
| 37,500 |
|
Greektown Holdings, Inc., 10.75%, 12/1/13, |
|
| 75,000 |
|
| 16,125 |
|
Indianapolis Downs LLC, 11.00%, 11/1/12, |
|
| 25,000 |
|
| 12,500 |
|
Inn of the Mountain Gods, 12.00%, 11/15/10, |
|
| 50,000 |
|
| 22,000 |
|
Isle of Capri Casinos, Inc., 7.00%, 3/1/14, |
|
| 100,000 |
|
| 48,500 |
|
Mashantucket Pequot Tribal Nation, Series A, |
|
| 50,000 |
|
| 27,500 |
|
MGM MIRAGE, Inc., 6.75%, 4/1/13 |
|
| 100,000 |
|
| 62,500 |
|
Mohegan Tribal Gaming, 7.13%, 8/15/14, |
|
| 50,000 |
|
| 30,000 |
|
MTR Gaming Group, Inc., 9.00%, 6/1/12, |
|
| 100,000 |
|
| 55,500 |
|
Pokagon Gaming Authority, 10.38%, 6/15/14, |
|
| 69,000 |
|
| 62,790 |
|
San Pasqual Casino, 8.00%, 9/15/13, |
|
| 25,000 |
|
| 19,250 |
|
Scientific Games Corp., 6.25%, 12/15/12, |
|
| 50,000 |
|
| 38,125 |
|
Seminole Hard Rock Entertainment, |
|
| 50,000 |
|
| 33,000 |
|
Seneca Gaming Corp., 7.25%, 5/1/12, |
|
| 50,000 |
|
| 33,500 |
|
Shingle Springs, 9.38%, 6/15/15, |
|
| 50,000 |
|
| 24,500 |
|
Snoqualmie Entertainment Authority, 6.88%, |
|
| 25,000 |
|
| 16,125 |
|
Turning Stone Resort Casino, 9.13%, 9/15/14, |
|
| 75,000 |
|
| 59,250 |
|
Waterford Gaming LLC, 8.63%, 9/15/14 (b) |
|
| 21,000 |
|
| 19,845 |
|
Wynn Las Vegas LLC, 6.63%, 12/1/14, |
|
| 50,000 |
|
| 36,875 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 776,105 |
|
|
|
|
|
|
| ||
Gas Distribution—6.2% |
|
|
|
|
|
|
|
Atlas Pipeline Partners LP, 8.13%, 12/15/15, |
|
| 50,000 |
|
| 34,875 |
|
Colorado Interstate Gas Co., 6.80%, |
|
| 150,000 |
|
| 126,956 |
|
Copano Energy LLC, 8.13%, 3/1/16, |
|
| 50,000 |
|
| 36,750 |
|
El Paso Corp., 7.00%, 6/15/17 |
|
| 100,000 |
|
| 76,320 |
|
Ferrellgas Partners LP, 6.75%, 5/1/14, |
|
| 50,000 |
|
| 35,500 |
|
Inergy LP/Inergy Finance, 8.25%, 3/1/16, |
|
| 100,000 |
|
| 76,750 |
|
|
|
|
|
|
|
|
|
Corporate Obligations, continued |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares or |
| Value($) |
| ||
|
|
|
| ||||
Gas Distribution, continued |
|
|
|
|
|
|
|
Regency Energy Partners LP, 8.38%, 12/15/13, |
|
| 17,000 |
|
| 12,920 |
|
Southern Star Central Corp., Inc., 6.75%, 3/1/16, |
|
| 50,000 |
|
| 43,250 |
|
Suburban Propane Partners LP, 6.88%, 12/15/13, |
|
| 50,000 |
|
| 38,500 |
|
Williams Cos., Inc., 6.38%, 10/1/10 (b) |
|
| 100,000 |
|
| 89,000 |
|
Williams Partners LP, 7.25%, 2/1/17 |
|
| 50,000 |
|
| 39,750 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 610,571 |
|
|
|
|
|
|
| ||
Health Services—3.4% |
|
|
|
|
|
|
|
Advanced Medical Optics, 7.50%, 5/1/17, |
|
| 50,000 |
|
| 33,000 |
|
Carriage Services, Inc., 7.88%, 1/15/15, |
|
| 50,000 |
|
| 41,750 |
|
Community Health Systems, Inc., 8.88%, |
|
| 50,000 |
|
| 41,875 |
|
DJO Finance LLC, 10.88%, 11/15/14, |
|
| 25,000 |
|
| 20,125 |
|
HCA, Inc., 9.25%, 11/15/16, |
|
| 25,000 |
|
| 21,250 |
|
MultiPlan, Inc., 10.38%, 4/15/16, |
|
| 100,000 |
|
| 92,000 |
|
Omnicare, Inc., 6.75%, 12/15/13, |
|
| 100,000 |
|
| 83,000 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 333,000 |
|
|
|
|
|
|
| ||
Hotels & Lodging—0.3% |
|
|
|
|
|
|
|
Gaylord Entertainment Co., 8.00%, |
|
| 50,000 |
|
| 34,125 |
|
|
|
|
|
|
| ||
Household & Leisure Products—0.3% |
|
|
|
|
|
|
|
Sealy Mattress Co., 8.25%, 6/15/14, |
|
| 50,000 |
|
| 28,250 |
|
|
|
|
|
|
| ||
Integrated Energy—0.3% |
|
|
|
|
|
|
|
VeraSun Energy Corp.: |
|
|
|
|
|
|
|
9.88%, 12/15/12, Callable 12/15/09 |
|
| 50,000 |
|
| 20,500 |
|
9.38%, 6/1/17, Callable 6/1/12 |
|
| 50,000 |
|
| 4,250 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 24,750 |
|
|
|
|
|
|
| ||
Investments & Miscellaneous Financial Services—0.1% |
|
|
|
|
|
|
|
Nuveen Investments, Inc., 10.50%, 11/15/15, |
|
| 50,000 |
|
| 13,500 |
|
|
|
|
|
|
| ||
Machinery—1.0% |
|
|
|
|
|
|
|
Baldor Electric Co., 8.63%, 2/15/17, |
|
| 50,000 |
|
| 38,250 |
|
Case New Holland, Inc., 7.13%, 3/1/14, |
|
| 50,000 |
|
| 37,250 |
|
Terex Corp., 8.00%, 11/15/17, |
|
| 25,000 |
|
| 18,500 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 94,000 |
|
|
|
|
|
|
| ||
|
|
|
See notes to financial statements. | HSBC INVESTOR PORTFOLIOS | 48 |
|
HSBC INVESTOR HIGH YIELD FIXED INCOME PORTFOLIO |
Schedule of Portfolio Investments—as of October 31, 2008 (continued) |
|
|
|
|
|
|
|
|
Corporate Obligations, continued |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares or |
| Value($) |
| ||
|
|
|
| ||||
Media - Broadcast—1.2% |
|
|
|
|
|
|
|
Barrington Broadcasting Group LLC, |
|
| 50,000 |
|
| 24,500 |
|
Bonten Media Acquisition, 9.00%, 6/1/15, |
|
| 75,000 |
|
| 29,250 |
|
Local TV Finance LLC, 9.25%, 6/15/15, |
|
| 50,000 |
|
| 25,000 |
|
Newport Television LLC, 13.00%, 3/15/17, |
|
| 50,000 |
|
| 21,250 |
|
Radio One, Inc., 6.38%, 2/15/13, |
|
| 50,000 |
|
| 22,500 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 122,500 |
|
|
|
|
|
|
| ||
Media - Cable—3.6% |
|
|
|
|
|
|
|
Atlantic Broadband Finance LLC, |
|
| 50,000 |
|
| 36,000 |
|
Cablevision Systems Corp., Series B, |
|
| 25,000 |
|
| 21,031 |
|
Charter Communications Operating LLC, |
|
| 50,000 |
|
| 40,625 |
|
DIRECTV Holdings LLC, 7.63%, 5/15/16, |
|
| 50,000 |
|
| 42,000 |
|
Mediacom LLC, 7.88%, 2/15/11, |
|
| 100,000 |
|
| 85,000 |
|
Videotron Ltd., 9.13%, 4/15/18, |
|
| 50,000 |
|
| 44,375 |
|
Virgin Media Finance plc, 9.13%, 8/15/16, |
|
| 125,000 |
|
| 82,500 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 351,531 |
|
|
|
|
|
|
| ||
Media - Diversified—0.9% |
|
|
|
|
|
|
|
Block Communications, Inc., 8.25%, |
|
| 50,000 |
|
| 37,000 |
|
Canwest Mediaworks LP, 9.25%, 8/1/15, |
|
| 50,000 |
|
| 30,500 |
|
Quebecor Media, Inc., 7.75%, 3/15/16, |
|
| 25,000 |
|
| 17,313 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 84,813 |
|
|
|
|
|
|
| ||
Media - Services—1.0% |
|
|
|
|
|
|
|
Baker & Taylor, Inc., 11.50%, 7/1/13, |
|
| 100,000 |
|
| 59,125 |
|
Lamar Media Corp., 6.63%, 8/15/15, |
|
| 50,000 |
|
| 36,750 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 95,875 |
|
|
|
|
|
|
| ||
Metals/Mining Excluding Steel—1.9% |
|
|
|
|
|
|
|
Freeport-McMoran Copper & Gold, Inc., |
|
| 50,000 |
|
| 40,000 |
|
International Coal Group, Inc., 10.25%, |
|
| 50,000 |
|
| 42,000 |
|
Massey Energy Co., 6.88%, 12/15/13, |
|
| 100,000 |
|
| 81,000 |
|
Noranda Aluminum Acquisition, 6.83%, |
|
| 50,000 |
|
| 22,500 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 185,500 |
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
Corporate Obligations, continued |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares or |
| Value($) |
| ||
|
|
|
| ||||
Non-Food & Drug Retailers—2.7% |
|
|
|
|
|
|
|
ACE Hardware Corp., 9.13%, 6/1/16, |
|
| 25,000 |
|
| 18,750 |
|
AutoNation, Inc., 7.00%, 4/15/14, |
|
| 50,000 |
|
| 32,500 |
|
Claire’s Stores, Inc., 9.63%, 6/1/15, |
|
| 50,000 |
|
| 9,000 |
|
Hanesbrands, Inc., 6.51%, 12/15/14, |
|
| 50,000 |
|
| 33,937 |
|
Libbey Glass, Inc., 9.93%, 6/1/11, |
|
| 25,000 |
|
| 16,125 |
|
Penske Automotive Group, Inc., 7.75%, |
|
| 50,000 |
|
| 23,875 |
|
Pep Boys, 7.50%, 12/15/14, Callable |
|
| 50,000 |
|
| 24,000 |
|
Susser Holdings LLC, 10.63%, 12/15/13, |
|
| 103,000 |
|
| 87,550 |
|
Yankee Acquisition Corp., 9.75%, 2/15/17, |
|
| 50,000 |
|
| 24,813 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 270,550 |
|
|
|
|
|
|
| ||
Oil & Gas—0.4% |
|
|
|
|
|
|
|
Pioneer Natural Resources Co., 5.88%, |
|
| 50,000 |
|
| 36,532 |
|
|
|
|
|
|
| ||
Oil Field Equipment & Services—0.9% |
|
|
|
|
|
|
|
Bristow Group, Inc., 7.50%, 9/15/17, |
|
| 50,000 |
|
| 37,500 |
|
CIE Gener de Geophysique, 7.50%, 5/15/15, |
|
| 50,000 |
|
| 33,500 |
|
National Oilwell Varco, Inc., Series B, |
|
| 25,000 |
|
| 21,843 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 92,843 |
|
|
|
|
|
|
| ||
Oil Refining & Marketing—1.0% |
|
|
|
|
|
|
|
Petroplus Finance Ltd., 7.00%, 5/1/17, |
|
| 50,000 |
|
| 32,750 |
|
Tesoro Corp.: |
|
|
|
|
|
|
|
6.63%, 11/1/15, Callable 11/1/10 |
|
| 50,000 |
|
| 34,000 |
|
6.50%, 6/1/17, Callable 6/1/12 @ |
|
| 50,000 |
|
| 33,500 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 100,250 |
|
|
|
|
|
|
| ||
Packaging—2.8% |
|
|
|
|
|
|
|
Exopack Holding Corp., 11.25%, 2/1/14, |
|
| 50,000 |
|
| 38,500 |
|
Intertape Polymer U.S., Inc., 8.50%, 8/1/14, |
|
| 75,000 |
|
| 60,000 |
|
Owens-Brockway Glass Containers, 6.75%, |
|
| 50,000 |
|
| 43,250 |
|
Solo Cup Co., 8.50%, 2/15/14, |
|
| 200,000 |
|
| 134,000 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 275,750 |
|
|
|
|
|
|
| ||
Printing & Publishing—2.0% |
|
|
|
|
|
|
|
Cenveo Corp., 10.50%, 8/15/16, |
|
| 50,000 |
|
| 42,250 |
|
Morris Publishing, 7.00%, 8/1/13, |
|
| 100,000 |
|
| 10,000 |
|
|
|
|
49 | HSBC INVESTOR PORTFOLIOS | See notes to financial statements. |
|
HSBC INVESTOR HIGH YIELD FIXED INCOME PORTFOLIO |
Schedule of Portfolio Investments—as of October 31, 2008 (continued) |
|
|
|
|
|
|
|
|
Corporate Obligations, continued |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares or |
| Value($) |
| ||
|
|
|
| ||||
Printing & Publishing, continued |
|
|
|
|
|
|
|
R.H. Donnelley Corp., 6.88%, 1/15/13, |
|
| 2,000 |
|
| 460 |
|
R.H. Donnelley, Inc., 11.75%, 5/15/15, |
|
| 127,000 |
|
| 49,530 |
|
Sheridan Group, Inc., 10.25%, 8/15/11, |
|
| 100,000 |
|
| 83,000 |
|
Valassis Communications, Inc., 8.25%, |
|
| 25,000 |
|
| 13,500 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 198,740 |
|
|
|
|
|
|
| ||
Restaurants—2.1% |
|
|
|
|
|
|
|
Buffets, Inc., 12.50%, 11/1/14, |
|
| 50,000 |
|
| 125 |
|
Dave & Buster’s, Inc., 11.25%, 3/15/14, |
|
| 50,000 |
|
| 37,250 |
|
Landry’s Restaurants, Inc., 9.45%, 12/15/14, |
|
| 100,000 |
|
| 89,500 |
|
NPC International, Inc., 9.50%, 5/1/14, |
|
| 50,000 |
|
| 31,000 |
|
Rare Restaurant Group LLC, 9.25%, |
|
| 50,000 |
|
| 25,000 |
|
Sbarro, Inc., 10.38%, 2/1/15, |
|
| 50,000 |
|
| 29,000 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 211,875 |
|
|
|
|
|
|
| ||
Software/Services—0.7% |
|
|
|
|
|
|
|
CompuCom Systems, Inc., 12.50%, 10/1/15, |
|
| 50,000 |
|
| 40,000 |
|
Unisys Corp., 12.50%, 1/15/16, |
|
| 35,000 |
|
| 24,413 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 64,413 |
|
|
|
|
|
|
| ||
Steel Producers/Products—1.4% |
|
|
|
|
|
|
|
AK Steel Corp., 7.75%, 6/15/12, |
|
| 100,000 |
|
| 80,000 |
|
Ryerson, Inc., 12.00%, 11/1/15, |
|
| 50,000 |
|
| 34,000 |
|
Tube City IMS Corp., 9.75%, 2/1/15, |
|
| 50,000 |
|
| 29,000 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 143,000 |
|
|
|
|
|
|
| ||
Support - Services—6.3% |
|
|
|
|
|
|
|
Aramark Services, Inc., 8.50%, 2/1/15, |
|
| 75,000 |
|
| 64,125 |
|
Avis Budget Car Rental, Inc., 7.63%, 5/15/14, |
|
| 100,000 |
|
| 36,000 |
|
Education Management LLC: |
|
|
|
|
|
|
|
8.75%, 6/1/14, Callable 6/1/10 @ 104.38 |
|
| 25,000 |
|
| 18,250 |
|
10.25%, 6/1/16, Callable 6/1/11 @ 105.13 |
|
| 25,000 |
|
| 17,250 |
|
H&E Equipment Services, Inc., 8.38%, |
|
| 75,000 |
|
| 39,750 |
|
Hertz Corp., 8.88%, 1/1/14, |
|
| 100,000 |
|
| 73,000 |
|
Iron Mountain, Inc., 8.63%, 4/1/13, |
|
| 100,000 |
|
| 91,250 |
|
JohnsonDiversey, Inc., 9.63%, 5/15/12, |
|
| 100,000 |
|
| 89,000 |
|
KAR Holdings, Inc., 8.75%, 5/1/14, |
|
| 50,000 |
|
| 32,500 |
|
|
|
|
|
|
|
|
|
Corporate Obligations, continued |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares or |
| Value($) |
| ||
|
|
|
| ||||
Support - Services, continued |
|
|
|
|
|
|
|
MediMedia USA, Inc., 11.38%, 11/15/14, |
|
| 50,000 |
|
| 40,000 |
|
Pegasus Solutions, Inc., 10.50%, 4/15/15, |
|
| 50,000 |
|
| 34,500 |
|
RSC Equipment Rental, Inc., 9.50%, 12/1/14, |
|
| 50,000 |
|
| 30,000 |
|
Sotheby’s, 7.75%, 6/15/15 (b) |
|
| 50,000 |
|
| 29,500 |
|
United Rentals, Inc., 6.50%, 2/15/12, |
|
| 25,000 |
|
| 17,500 |
|
West Corp., 11.00%, 10/15/16, |
|
| 25,000 |
|
| 11,687 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 624,312 |
|
|
|
|
|
|
| ||
Telecom - Integrated/Services—3.7% |
|
|
|
|
|
|
|
Broadview Networks Holdings, Inc., 11.38%, |
|
| 25,000 |
|
| 18,000 |
|
Cincinnati Bell, Inc., 8.38%, 1/15/14, |
|
| 85,000 |
|
| 61,413 |
|
Citizens Communications Co., 7.13%, |
|
| 50,000 |
|
| 30,750 |
|
Fairpoint Communications, Inc., 13.13%, |
|
| 25,000 |
|
| 17,625 |
|
Level 3 Financing, Inc., 9.25%, 11/1/14, |
|
| 50,000 |
|
| 28,500 |
|
Nordic Telephone Co., Holdings, 8.88%, |
|
| 50,000 |
|
| 42,000 |
|
PAETEC Holding Corp., 9.50%, 7/15/15, |
|
| 50,000 |
|
| 28,375 |
|
Qwest Corp., 7.63%, 6/15/15 |
|
| 150,000 |
|
| 114,750 |
|
Windstream Corp., 8.63%, 8/1/16, |
|
| 25,000 |
|
| 18,875 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 360,288 |
|
|
|
|
|
|
| ||
Telecom - Wireless—4.5% |
|
|
|
|
|
|
|
Centennial Communications Corp., 10.00%, |
|
| 100,000 |
|
| 88,500 |
|
Cricket Communications, 9.38%, 11/1/14, |
|
| 50,000 |
|
| 40,625 |
|
iPCS, Inc., 6.05%, 5/1/14, |
|
| 100,000 |
|
| 69,000 |
|
MetroPCS Wireless, Inc., 9.25%, 11/1/14, |
|
| 100,000 |
|
| 83,250 |
|
Sprint Capital Corp., 8.38%, 3/15/12 |
|
| 100,000 |
|
| 80,500 |
|
Wind Acquisition Financial SA, 10.75%, |
|
| 100,000 |
|
| 77,000 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 438,875 |
|
|
|
|
|
|
| ||
Theaters & Entertainment—0.8% |
|
|
|
|
|
|
|
AMC Entertainment, Inc., 11.00%, 2/1/16, |
|
| 100,000 |
|
| 79,000 |
|
|
|
|
|
|
| ||
Tobacco—0.4% |
|
|
|
|
|
|
|
Alliance One International, Inc., 8.50%, |
|
| 50,000 |
|
| 38,500 |
|
|
|
|
|
|
| ||
Transportation Excluding Air/Rail—0.3% |
|
|
|
|
|
|
|
Navios Maritime Holdings, Inc., 9.50%, |
|
| 25,000 |
|
| 20,500 |
|
Swift Transportation Co., Inc., 10.55%, |
|
| 50,000 |
|
| 10,000 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 30,500 |
|
|
|
|
|
|
| ||
|
|
|
See notes to financial statements. | HSBC INVESTOR PORTFOLIOS | 50 |
|
HSBC INVESTOR HIGH YIELD FIXED INCOME PORTFOLIO |
Schedule of Portfolio Investments—as of October 31, 2008 (continued) |
|
|
|
|
|
|
|
|
Corporate Obligations, continued |
|
|
|
|
|
|
|
|
| Shares or |
| Value($) |
| ||
|
|
|
| ||||
TOTAL CORPORATE OBLIGATIONS |
|
|
|
|
| 9,547,901 |
|
|
|
|
|
|
| ||
TOTAL INVESTMENTS |
|
|
|
|
| 9,548,913 |
|
|
|
|
|
|
| ||
|
|
|
| ||
| Percentages indicated are based on net assets of $9,862,202. | |
|
|
|
(a) | Represents non-income producing security. | |
|
|
|
(b) | Security exempt from registration under Rule 144a of the Securities Act of 1933. This security may be resold in transactions exempt from registration, normally to qualified institutional buyers. This security has been deemed liquid by the Investment Adviser based on procedures approved by the Board of Trustees. | |
|
|
|
(c) | Variable rate security. The interest rates on these securities are adjusted periodically to reflect then-current short-term interest rates. The rates presented represent the rates in effect on October 31, 2008. The maturity dates presented reflect the final maturity dates. However, some of these securities may contain put or demand features that allow the fund to require the issuer to repurchase the security from the fund within various time periods, including daily, weekly, monthly, or semi-annually. | |
|
|
|
(d) | Non-Income Producing; Defaulted Bond. | |
|
|
|
(e) | Step Bond. Income recognition is on the effective yield method for Step Bonds. | |
|
|
|
LLC | — | Limited Liability Co. |
LP | — | Limited Partnership |
PLC | — | Public Limited Co. |
|
|
|
51 | HSBC INVESTOR PORTFOLIOS | See notes to financial statements. |
|
Schedule of Portfolio Investments—as of October 31, 2008 |
|
|
|
|
|
|
|
|
Certificates of Deposit—0.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares or |
| Value($) |
| ||
|
|
|
| ||||
Banking—0.7% |
|
|
|
|
|
|
|
First Tennessee Bank, 2.96%, |
|
| 100,000 |
|
| 99,029 |
|
|
|
|
|
|
| ||
TOTAL CERTIFICATES OF DEPOSIT |
|
|
|
|
| 99,029 |
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
U.S. Government and Government Agency Obligations—59.2% |
|
|
|
|
|
|
|
Federal Home Loan Mortgage Corp.—13.0% |
|
|
|
|
|
|
|
5.13%, 11/17/17 |
|
| 400,000 |
|
| 396,699 |
|
Pool #1B2655, 6.21%, 12/1/34 (a)(d) |
|
| 90,336 |
|
| 90,780 |
|
Pool #1J1313, 6.37%, 6/1/36 (a) |
|
| 212,618 |
|
| 215,762 |
|
Pool #847557, 5.89%, 7/1/34 (a)(d) |
|
| 93,181 |
|
| 95,158 |
|
Pool #G02981, 6.00%, 6/1/37 |
|
| 162,895 |
|
| 162,701 |
|
TBA November: |
|
|
|
|
|
|
|
5.00%, 11/15/22 |
|
| 660,000 |
|
| 644,325 |
|
5.50%, 11/15/22 |
|
| 150,000 |
|
| 149,297 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 1,754,722 |
|
|
|
|
|
|
| ||
Federal National Mortgage Association—32.6% |
|
|
|
|
|
|
|
3.25%, 8/12/10 |
|
| 150,000 |
|
| 150,374 |
|
Pool #922090, 5.84%, 3/1/37 (a) |
|
| 268,540 |
|
| 271,281 |
|
TBA November: |
|
|
|
|
|
|
|
5.00%, 11/15/36 |
|
| 350,000 |
|
| 331,516 |
|
5.50%, 11/15/36 |
|
| 2,175,000 |
|
| 2,124,703 |
|
6.00%, 11/15/37 |
|
| 975,000 |
|
| 974,391 |
|
6.50%, 11/15/37 |
|
| 550,000 |
|
| 557,391 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 4,409,656 |
|
|
|
|
|
|
| ||
Government National Mortgage Association—4.6% |
|
|
|
|
|
|
|
TBA November: |
|
|
|
|
|
|
|
5.00%, 11/15/36 |
|
| 300,000 |
|
| 286,218 |
|
5.50%, 11/15/36 |
|
| 90,000 |
|
| 88,256 |
|
6.00%, 11/15/36 |
|
| 250,000 |
|
| 250,000 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 624,474 |
|
|
|
|
|
|
| ||
U.S. Treasury Notes—9.0% |
|
|
|
|
|
|
|
4.75%, 2/15/10 |
|
| 340,000 |
|
| 353,919 |
|
2.63%, 5/31/10 |
|
| 68,000 |
|
| 69,232 |
|
4.75%, 1/31/12 |
|
| 35,000 |
|
| 38,101 |
|
2.75%, 2/28/13 |
|
| 382,000 |
|
| 387,282 |
|
3.38%, 7/31/13 |
|
| 185,000 |
|
| 190,434 |
|
3.88%, 5/15/18 |
|
| 45,000 |
|
| 44,926 |
|
4.00%, 8/15/18 |
|
| 130,000 |
|
| 130,173 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 1,214,067 |
|
|
|
|
|
|
| ||
TOTAL U.S. GOVERNMENT AND |
|
|
|
|
| 8,002,919 |
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
Corporate Obligations—29.4% |
|
|
|
|
|
|
|
Agricultural Chemicals—0.7% |
|
|
|
|
|
|
|
Agrium, Inc., 6.75%, 1/15/19 |
|
| 100,000 |
|
| 90,203 |
|
|
|
|
|
|
| ||
Banking—0.5% |
|
|
|
|
|
|
|
American Express Centurion Bank, |
|
| 100,000 |
|
| 73,882 |
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
Corporate Obligations, continued |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares or |
| Value($) |
| ||
|
|
|
| ||||
Building & Construction Products—1.4% |
|
|
|
|
|
|
|
Martin Marietta Materials, Inc., |
|
| 100,000 |
|
| 96,560 |
|
Masco Corp., 3.12%, 3/12/10 (a)(d) |
|
| 100,000 |
|
| 94,183 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 190,743 |
|
|
|
|
|
|
| ||
Chemicals—0.1% |
|
|
|
|
|
|
|
Chemtura Corp., 6.88%, 6/1/16 |
|
| 25,000 |
|
| 15,625 |
|
|
|
|
|
|
| ||
Computer Services—0.7% |
|
|
|
|
|
|
|
Electronic Data Systems, Series B, |
|
| 100,000 |
|
| 94,399 |
|
|
|
|
|
|
| ||
Electric—4.5% |
|
|
|
|
|
|
|
Duke Energy Corp., 5.65%, 6/15/13 |
|
| 75,000 |
|
| 67,723 |
|
Florida Power Corp., 5.65%, 6/15/18 |
|
| 75,000 |
|
| 66,395 |
|
MidAmerican Energy Co., 5.95%, 7/15/17 |
|
| 450,000 |
|
| 393,362 |
|
Puget Sound Energy, Inc., 6.97%, 6/1/67, |
|
| 100,000 |
|
| 83,500 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 610,980 |
|
|
|
|
|
|
| ||
Finance—5.9% |
|
|
|
|
|
|
|
Bear Stearns Co., Inc.: |
|
|
|
|
|
|
|
4.50%, 10/28/10 |
|
| 75,000 |
|
| 72,901 |
|
Series B, 6.95%, 8/10/12, MTN |
|
| 150,000 |
|
| 148,014 |
|
Citigroup, Inc., 6.50%, 8/19/13 |
|
| 25,000 |
|
| 23,699 |
|
Countrywide Home Loans, Series L, 4.00%, |
|
| 150,000 |
|
| 138,332 |
|
Ford Motor Credit Co., LLC, 9.75%, |
|
| 300,000 |
|
| 204,015 |
|
Lehman Brothers Holdings, Series I, |
|
| 75,000 |
|
| 9,750 |
|
Morgan Stanley, Series F, 6.00%, |
|
| 75,000 |
|
| 60,941 |
|
XTRA Finance Corp., 5.15%, 4/1/17 |
|
| 150,000 |
|
| 136,362 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 794,014 |
|
|
|
|
|
|
| ||
Forestry/Paper—0.1% |
|
|
|
|
|
|
|
Georgia-Pacific Corp., 7.70%, 6/15/15 |
|
| 25,000 |
|
| 17,375 |
|
|
|
|
|
|
| ||
Gaming—0.1% |
|
|
|
|
|
|
|
MGM MIRAGE, Inc., 6.75%, 4/1/13 |
|
| 25,000 |
|
| 15,625 |
|
|
|
|
|
|
| ||
Health Services—0.2% |
|
|
|
|
|
|
|
Community Health Systems, Inc., 8.88%, |
|
| 25,000 |
|
| 20,938 |
|
|
|
|
|
|
| ||
Hospitals—0.4% |
|
|
|
|
|
|
|
HCA, Inc., 5.75%, 3/15/14 |
|
| 100,000 |
|
| 59,000 |
|
|
|
|
|
|
| ||
Media—2.9% |
|
|
|
|
|
|
|
Time Warner Entertainment, 8.88%, |
|
| 350,000 |
|
| 344,075 |
|
Vivendi, 5.75%, 4/4/13 (b) |
|
| 50,000 |
|
| 45,936 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 390,011 |
|
|
|
|
|
|
| ||
Media - Cable—0.2% |
|
|
|
|
|
|
|
Cablevision Systems Corp., Series B, |
|
| 25,000 |
|
| 21,031 |
|
|
|
|
|
|
| ||
Medical—0.2% |
|
|
|
|
|
|
|
Glaxosmithkline Capital, Inc., 4.85%, |
|
| 25,000 |
|
| 23,713 |
|
|
|
|
|
|
| ||
|
|
|
See notes to financial statements. | HSBC INVESTOR PORTFOLIOS | 52 |
|
HSBC INVESTOR INTERMEDIATE DURATION FIXED INCOME PORTFOLIO |
Schedule of Portfolio Investments—as of October 31, 2008 (continued) |
|
|
|
|
|
|
|
|
Corporate Obligations, continued |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares or |
| Value($) |
| ||
|
|
|
| ||||
Office Equipment & Services—0.7% |
|
|
|
|
|
|
|
Xerox Corp., 3.63%, 12/18/09 (a)(d) |
|
| 100,000 |
|
| 91,227 |
|
|
|
|
|
|
| ||
Oil & Gas—0.1% |
|
|
|
|
|
|
|
Pioneer Natural Resources Co., 5.88%, |
|
| 25,000 |
|
| 18,266 |
|
|
|
|
|
|
| ||
Pipelines—0.7% |
|
|
|
|
|
|
|
Dynegy Holdings, Inc., 7.75%, 6/1/19 |
|
| 25,000 |
|
| 16,750 |
|
Transcontinental Gas Pipeline Corp., 6.05%, |
|
| 100,000 |
|
| 79,993 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 96,743 |
|
|
|
|
|
|
| ||
Retail—0.2% |
|
|
|
|
|
|
|
Kroger Co. (The), 5.00%, 4/15/13 |
|
| 25,000 |
|
| 22,542 |
|
|
|
|
|
|
| ||
Support - Services—0.3% |
|
|
|
|
|
|
|
Aramark Services, Inc., 8.50%, 2/1/15, |
|
| 25,000 |
|
| 21,375 |
|
Iron Mountain, Inc., 8.00%, 6/15/20, |
|
| 25,000 |
|
| 19,625 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 41,000 |
|
|
|
|
|
|
| ||
Telecom - Integrated/Services—0.1% |
|
|
|
|
|
|
|
Qwest Corp., 7.63%, 6/15/15 |
|
| 25,000 |
|
| 19,125 |
|
|
|
|
|
|
| ||
Telecommunications—2.6% |
|
|
|
|
|
|
|
Sprint Nextel Corp., 6.00%, 12/1/16 |
|
| 135,000 |
|
| 93,487 |
|
Verizon Pennsylvania, Inc., 5.65%, 11/15/11 |
|
| 275,000 |
|
| 257,789 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 351,276 |
|
|
|
|
|
|
| ||
Transportation—6.9% |
|
|
|
|
|
|
|
American Airlines, Inc.: |
|
|
|
|
|
|
|
Series 2001-2, Class A1, 6.98%, 4/1/11 |
|
| 56,774 |
|
| 52,091 |
|
Series 2001-2, Class A2, 7.86%, 10/1/11 |
|
| 200,000 |
|
| 159,000 |
|
Burlington Northern Santa Fe Railway Co., |
|
| 230,919 |
|
| 222,400 |
|
Continental Airlines, Inc., 5.98%, 4/19/22 |
|
| 100,000 |
|
| 69,500 |
|
Norfolk Southern Corp., 5.75%, 4/1/18 |
|
| 50,000 |
|
| 43,038 |
|
Union Pacific Corp., 5.75%, 11/15/17 |
|
| 150,000 |
|
| 127,129 |
|
Union Pacific Railroad, 5.08%, 1/2/29 |
|
| 293,571 |
|
| 247,530 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 920,688 |
|
|
|
|
|
|
| ||
TOTAL CORPORATE OBLIGATIONS |
|
|
|
|
| 3,978,406 |
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
Asset Backed Securities—21.4% |
|
|
|
|
|
|
|
Asset Backed Funding Certificates, |
|
| 210,318 |
|
| 174,153 |
|
Cairn Mezzanine plc, Series 2007-3A, |
|
| 145,000 |
|
| 0 |
|
Capital Auto Receivables Asset Trust: |
|
|
|
|
|
|
|
Series 2005-1, Class A5, 4.66%, |
|
| 47,113 |
|
| 46,996 |
|
Series 2006-SN1A, Class A3, 5.31%, |
|
| 30,933 |
|
| 30,933 |
|
Series 2006-SN1A, Class A4B, 4.39%, |
|
| 150,000 |
|
| 147,743 |
|
Series 2007-SN1, Class A3A, 5.47%, |
|
| 100,000 |
|
| 99,009 |
|
|
|
|
|
|
|
|
|
Asset Backed Securities, continued |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares or |
| Value($) |
| ||
|
|
|
| ||||
Series 2007-SN1, Class A3B, 4.62%, |
|
| 110,000 |
|
| 107,451 |
|
Capital One Prime Auto Receivables Trust: |
|
|
|
|
|
|
|
Series 2005-1, Class A4, 4.58%, |
|
| 56,927 |
|
| 55,746 |
|
Series 2006-1, Class A3, 4.99%, 9/15/10 (d) |
|
| 103,464 |
|
| 103,462 |
|
Carmax Auto Owner Trust, Series 2008-2, |
|
| 190,000 |
|
| 182,690 |
|
Chase Issuance Trust, Series 2005-A12, |
|
| 190,000 |
|
| 189,117 |
|
Countrywide Asset-Backed Certificates: |
|
|
|
|
|
|
|
Series 2006-S2, Class A5, 5.75%, |
|
| 134,000 |
|
| 37,510 |
|
Series 2006-S4, Class A3, 5.80%, |
|
| 209,304 |
|
| 121,552 |
|
Ford Credit Auto Owner Trust, |
|
| 99,232 |
|
| 99,194 |
|
GE Business Loan Trust, Series 2006-2A, |
|
| 234,628 |
|
| 194,307 |
|
GMAC Mortgage Corp., Loan Trust, |
|
| 170,000 |
|
| 95,285 |
|
Hyundai Auto Receivables Trust: |
|
|
|
|
|
|
|
Series 2007-A, Class A2B, 4.91%, |
|
| 27,636 |
|
| 27,583 |
|
Series 2008-A, Class A2, 4.16%, |
|
| 140,000 |
|
| 137,338 |
|
IOWA Student Loan Liquidity Corp., |
|
| 46,087 |
|
| 45,838 |
|
National Collegiate Student Loan Trust, |
|
| 105,364 |
|
| 93,440 |
|
Nissan Auto Receivables Owner Trust, |
|
| 53,588 |
|
| 53,552 |
|
Preferred Term Securities XXII Ltd., 3.16%, |
|
| 196,273 |
|
| 106,086 |
|
Residential Funding Mortgage Securities, |
|
| 65,000 |
|
| 16,658 |
|
SLM Student Loan Trust: |
|
|
|
|
|
|
|
Series 2005-4, Class A2, 3.62%, |
|
| 60,000 |
|
| 55,762 |
|
Series 2005-9, Class A4, 3.64%, |
|
| 190,000 |
|
| 179,690 |
|
Series 2006-7, Class A2, 3.53%, |
|
| 167,543 |
|
| 167,226 |
|
Series 2006-9, Class A2, 3.54%, |
|
| 33,569 |
|
| 33,402 |
|
Series 2006-B, Class A1, 2.83%, |
|
| 147,433 |
|
| 137,850 |
|
South Carolina Student Loan Corp., |
|
| 126,487 |
|
| 123,917 |
|
World Omni Auto Receivables Trust, |
|
| 38,426 |
|
| 38,364 |
|
|
|
|
|
|
| ||
TOTAL ASSET BACKED SECURITIES |
|
|
|
|
| 2,901,854 |
|
|
|
|
|
|
| ||
|
|
|
53 | HSBC INVESTOR PORTFOLIOS | See notes to financial statements. |
|
HSBC INVESTOR INTERMEDIATE DURATION FIXED INCOME PORTFOLIO |
Schedule of Portfolio Investments—as of October 31, 2008 (continued) |
|
|
|
|
|
|
|
|
Collateralized Mortgage Obligations—5.6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares or |
| Value($) |
| ||
|
|
|
| ||||
Banc of America Mortgage Securities, |
|
| 176,166 |
|
| 169,438 |
|
Deutsche Mortgage Securities, Inc., |
|
| 125,537 |
|
| 124,963 |
|
Freddie Mac: |
|
|
|
|
|
|
|
Series 2988, Class AF, 4.89%, |
|
| 146,963 |
|
| 138,355 |
|
Series 3212, Class BK, 5.40%, |
|
| 150,000 |
|
| 137,866 |
|
Residential Asset Securitization Trust, |
|
| 214,932 |
|
| 190,967 |
|
|
|
|
|
|
| ||
TOTAL COLLATERALIZED |
|
|
|
|
| 761,589 |
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
Commercial Mortgage Backed Securities—7.9% |
|
|
|
|
|
|
|
Citigroup/Deutsche Bank Commercial |
|
| 200,000 |
|
| 174,489 |
|
Commercial Mortgage Pass - |
|
|
|
|
|
|
|
Series 2005-LP5, Class AJ, 5.05%, |
|
| 200,000 |
|
| 135,573 |
|
Series 2006-FL12, Class A2, 4.66%, |
|
| 239,553 |
|
| 203,889 |
|
Greenwich Capital Commercial Funding Corp.: |
|
|
|
|
|
|
|
Series 2006-GG7, Class A2, 5.91%, |
|
| 90,000 |
|
| 83,225 |
|
Series 2006-GG7, Class A4, 5.91%, |
|
| 140,000 |
|
| 111,661 |
|
LB-UBS Commercial Mortgage Trust, |
|
| 70,000 |
|
| 64,299 |
|
Morgan Stanley Capital I, Series 2007-IQ14, |
|
| 220,000 |
|
| 190,911 |
|
Washington Mutual Commercial Mortgage |
|
| 144,541 |
|
| 108,406 |
|
|
|
|
|
|
| ||
TOTAL COMMERCIAL MORTGAGE |
|
|
|
|
| 1,072,453 |
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
Foreign Bonds—0.6% |
|
|
|
|
|
|
|
United Kingdom—0.6% |
|
|
|
|
|
|
|
Barclays Bank plc, 5.93%, 12/31/49 (b) |
|
| 150,000 |
|
| 80,524 |
|
|
|
|
|
|
| ||
TOTAL FOREIGN BONDS |
|
|
|
|
| 80,524 |
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
Municipal Bonds—0.5% |
|
|
|
|
|
|
|
Arizona Educational Loan Marketing Corp. |
|
| 74,000 |
|
| 72,335 |
|
|
|
|
|
|
| ||
TOTAL MUNICIPAL BONDS |
|
|
|
|
| 72,335 |
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
Investment Company—13.6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares or |
| Value($) |
| ||
|
|
|
| ||||
Northern Institutional Diversified Assets |
|
| 1,838,531 |
|
| 1,838,531 |
|
|
|
|
|
|
| ||
TOTAL INVESTMENT COMPANY |
|
|
|
|
| 1,838,531 |
|
|
|
|
|
|
| ||
TOTAL INVESTMENTS |
|
|
|
|
| 18,807,640 |
|
|
|
|
|
|
| ||
|
|
| Percentages indicated are based on net assets of $13,530,986. |
|
|
(a) | Variable rate security. The interest rates on these securities are adjusted periodically to reflect then-current short-term interest rates. The rates presented represent the rates in effect on October 31, 2008. The maturity dates presented reflect the final maturity dates. However, some of these securities may contain put or demand features that allow the fund to require the issuer to repurchase the security from the fund within various time periods, including daily, weekly, monthly, or semi-annually. |
|
|
(b) | Security exempt from registration under Rule 144a of the Securities Act of 1933. This security may be resold in transactions exempt from registration, normally to qualified institutional buyers. This security has been deemed liquid by the Investment Adviser based on procedures approved by the Board of Trustees. |
|
|
(c) | The rates presented represent the annualized one day yield that was in effect on October 31, 2008. |
|
|
(d) | Security held as collateral for to be announced securities. |
|
|
(e) | Security is non-income producing; Defaulted Bond. |
|
|
(f) | In connection with the Lehman Brothers Holdings, Inc. bankruptcy filing announcement on September 15, 2008, the Fund stopped accruing prospective interest amounts on that date. |
|
|
|
LB | — | Lehman Brothers |
LLC | — | Limited Liability Co. |
MTN | — | Medium Term Note |
PLC | — | Public Limited Co. |
TBA | — | Security was traded on a “to be announced” basis. Represents 40.0% of net assets. |
|
|
|
See notes to financial statements. | HSBC INVESTOR PORTFOLIOS | 54 |
|
Schedule of Portfolio Investments—as of October 31, 2008 |
|
|
|
|
|
|
|
|
Common Stocks—97.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares |
| Value($) |
| ||
|
|
|
| ||||
Aerospace & Defense—2.3% |
|
|
|
|
|
|
|
Precision Castparts Corp. |
|
| 15,400 |
|
| 998,074 |
|
Rockwell Collins, Inc. |
|
| 24,500 |
|
| 912,135 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 1,910,209 |
|
|
|
|
|
|
| ||
Agriculture—3.1% |
|
|
|
|
|
|
|
Monsanto Co. |
|
| 28,800 |
|
| 2,562,624 |
|
|
|
|
|
|
| ||
Biotechnology—8.3% |
|
|
|
|
|
|
|
Cephalon, Inc. (a) |
|
| 10,700 |
|
| 767,404 |
|
Genzyme Corp. (a) |
|
| 34,900 |
|
| 2,543,512 |
|
Gilead Sciences, Inc. (a) |
|
| 58,900 |
|
| 2,700,565 |
|
Illumina, Inc. (a) |
|
| 24,900 |
|
| 767,667 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 6,779,148 |
|
|
|
|
|
|
| ||
Business Services—0.7% |
|
|
|
|
|
|
|
Ecolab, Inc. |
|
| 14,900 |
|
| 555,174 |
|
|
|
|
|
|
| ||
Coal—0.8% |
|
|
|
|
|
|
|
Consol Energy, Inc. |
|
| 21,200 |
|
| 665,468 |
|
|
|
|
|
|
| ||
Communication Equipment—3.5% |
|
|
|
|
|
|
|
Cisco Systems, Inc. (a) |
|
| 117,800 |
|
| 2,093,306 |
|
Juniper Networks, Inc. (a) |
|
| 39,500 |
|
| 740,230 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 2,833,536 |
|
|
|
|
|
|
| ||
Computer Storage—1.1% |
|
|
|
|
|
|
|
EMC Corp. (a) |
|
| 76,200 |
|
| 897,636 |
|
|
|
|
|
|
| ||
Credit Card—4.3% |
|
|
|
|
|
|
|
MasterCard, Inc., Class A |
|
| 9,600 |
|
| 1,419,072 |
|
Visa, Inc., Class A |
|
| 37,800 |
|
| 2,092,230 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 3,511,302 |
|
|
|
|
|
|
| ||
Distribution & Wholesale—1.8% |
|
|
|
|
|
|
|
Fastenal Co. |
|
| 37,000 |
|
| 1,489,620 |
|
|
|
|
|
|
| ||
Electric, Gas & Water—0.8% |
|
|
|
|
|
|
|
FirstEnergy Corp. |
|
| 12,800 |
|
| 667,648 |
|
|
|
|
|
|
| ||
Engineering & Construction—2.0% |
|
|
|
|
|
|
|
Fluor Corp. |
|
| 19,100 |
|
| 762,663 |
|
Quanta Services, Inc. (a) |
|
| 46,000 |
|
| 908,960 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 1,671,623 |
|
|
|
|
|
|
| ||
Exchanges—1.5% |
|
|
|
|
|
|
|
IntercontinentalExchange, Inc. (a) |
|
| 14,800 |
|
| 1,266,288 |
|
|
|
|
|
|
| ||
Hardware & Peripherals—4.6% |
|
|
|
|
|
|
|
Apple, Inc. (a) |
|
| 12,000 |
|
| 1,291,080 |
|
Hewlett-Packard Co. |
|
| 63,800 |
|
| 2,442,264 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 3,733,344 |
|
|
|
|
|
|
| ||
Household Products—1.6% |
|
|
|
|
|
|
|
The Procter & Gamble Co. |
|
| 19,800 |
|
| 1,277,892 |
|
|
|
|
|
|
| ||
Industrial Conglomerates—6.9% |
|
|
|
|
|
|
|
Danaher Corp. |
|
| 40,900 |
|
| 2,422,916 |
|
SPX Corp. |
|
| 33,300 |
|
| 1,290,042 |
|
United Technologies Corp. |
|
| 36,000 |
|
| 1,978,560 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 5,691,518 |
|
|
|
|
|
|
| ||
Internet—2.4% |
|
|
|
|
|
|
|
Google, Inc., Class A (a) |
|
| 5,480 |
|
| 1,969,293 |
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
Common Stocks, continued |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares |
| Value($) |
| ||
|
|
|
| ||||
Investment Management—2.5% |
|
|
|
|
|
|
|
BlackRock, Inc. |
|
| 6,100 |
|
| 801,174 |
|
The Charles Schwab Corp. |
|
| 66,500 |
|
| 1,271,480 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 2,072,654 |
|
|
|
|
|
|
| ||
Medical Products—6.8% |
|
|
|
|
|
|
|
Alcon, Inc. ADR |
|
| 8,300 |
|
| 731,396 |
|
Allergan, Inc. |
|
| 24,100 |
|
| 956,047 |
|
Baxter International, Inc. |
|
| 26,000 |
|
| 1,572,740 |
|
Mindray Medical International Ltd. ADR |
|
| 33,690 |
|
| 726,356 |
|
St. Jude Medical, Inc. (a) |
|
| 42,500 |
|
| 1,616,275 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 5,602,814 |
|
|
|
|
|
|
| ||
Medical Services & Distributors—6.9% |
|
|
|
|
|
|
|
Medco Health Solutions, Inc. (a) |
|
| 94,300 |
|
| 3,578,685 |
|
Thermo Fisher Scientific, Inc. (a) |
|
| 50,800 |
|
| 2,062,480 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 5,641,165 |
|
|
|
|
|
|
| ||
Oil & Gas Drill & Equipment—2.2% |
|
|
|
|
|
|
|
FMC Technologies, Inc. (a) |
|
| 23,300 |
|
| 815,267 |
|
Weatherford International Ltd. (a) |
|
| 56,800 |
|
| 958,784 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 1,774,051 |
|
|
|
|
|
|
| ||
Oil & Gas Exploration & Production—1.4% |
|
|
|
|
|
|
|
Southwestern Energy Co. (a) |
|
| 32,400 |
|
| 1,154,088 |
|
|
|
|
|
|
| ||
Pharmaceuticals—2.2% |
|
|
|
|
|
|
|
Teva Pharmaceutical Industries Ltd. ADR |
|
| 41,100 |
|
| 1,762,368 |
|
|
|
|
|
|
| ||
Railroad—3.4% |
|
|
|
|
|
|
|
Norfolk Southern Corp. |
|
| 17,900 |
|
| 1,072,926 |
|
Union Pacific Corp. |
|
| 25,400 |
|
| 1,695,958 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 2,768,884 |
|
|
|
|
|
|
| ||
Retail—7.4% |
|
|
|
|
|
|
|
Costco Wholesale Corp. |
|
| 17,800 |
|
| 1,014,778 |
|
Kohl’s Corp. (a) |
|
| 24,100 |
|
| 846,633 |
|
Lowe’s Cos., Inc. |
|
| 37,700 |
|
| 818,090 |
|
Target Corp. |
|
| 29,200 |
|
| 1,171,504 |
|
Wal-Mart Stores, Inc. |
|
| 40,100 |
|
| 2,237,981 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 6,088,986 |
|
|
|
|
|
|
| ||
Retail Pharmacy—2.4% |
|
|
|
|
|
|
|
CVS Caremark Corp. |
|
| 63,000 |
|
| 1,930,950 |
|
|
|
|
|
|
| ||
Software Services—7.4% |
|
|
|
|
|
|
|
Cognizant Technology Solutions Corp. (a) |
|
| 78,400 |
|
| 1,505,280 |
|
Dolby Laboratories, Inc., Class A (a) |
|
| 24,800 |
|
| 782,936 |
|
Microsoft Corp. |
|
| 110,700 |
|
| 2,471,931 |
|
Oracle Corp. (a) |
|
| 71,000 |
|
| 1,298,590 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 6,058,737 |
|
|
|
|
|
|
| ||
Solar—1.0% |
|
|
|
|
|
|
|
First Solar, Inc. (a) |
|
| 5,700 |
|
| 819,090 |
|
|
|
|
|
|
| ||
Telecommunication—5.5% |
|
|
|
|
|
|
|
Equinix, Inc. (a) |
|
| 19,400 |
|
| 1,210,948 |
|
QUALCOMM, Inc. |
|
| 86,000 |
|
| 3,290,360 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 4,501,308 |
|
|
|
|
|
|
| ||
Transportation—1.3% |
|
|
|
|
|
|
|
C.H. Robinson Worldwide, Inc. |
|
| 20,700 |
|
| 1,071,846 |
|
|
|
|
|
|
| ||
|
|
|
55 | HSBC INVESTOR PORTFOLIOS | See notes to financial statements. |
|
HSBC INVESTOR GROWTH PORTFOLIO |
Schedule of Portfolio Investments—as of October 31, 2008 (continued) |
|
|
|
|
|
|
|
|
Common Stocks, continued |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares |
| Value($) |
| ||
|
|
|
| ||||
Travel & Leisure—1.0% |
|
|
|
|
|
|
|
Priceline.com, Inc. (a) |
|
| 15,500 |
|
| 815,765 |
|
|
|
|
|
|
| ||
TOTAL COMMON STOCKS |
|
|
|
|
| 79,545,029 |
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
Investment Company—5.8% |
|
|
|
|
|
|
|
Northern Institutional Diversified Assets |
|
| 4,761,126 |
|
| 4,761,126 |
|
|
|
|
|
|
| ||
TOTAL INVESTMENT COMPANY |
|
|
|
|
| 4,761,126 |
|
|
|
|
|
|
| ||
TOTAL INVESTMENTS |
|
|
|
|
| 84,306,155 |
|
|
|
|
|
|
| ||
|
|
| Percentages indicated are based on net assets of $81,941,512. |
|
|
(a) | Represents non-income producing security. |
|
|
(b) | The rates presented represent the annualized one day yield that was in effect on October 31, 2008. |
|
|
|
ADR | — | American Depositary Receipt |
|
|
|
See notes to financial statements. | HSBC INVESTOR PORTFOLIOS | 56 |
|
Schedule of Portfolio Investments—as of October 31, 2008 |
|
|
|
|
|
|
|
|
Common Stocks—96.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares |
| Value($) |
| ||
|
|
|
| ||||
Australia—2.3% |
|
|
|
|
|
|
|
BHP Billiton Ltd. |
|
| 98,200 |
|
| 1,885,840 |
|
Caltex Australia Ltd. |
|
| 66,600 |
|
| 419,310 |
|
Lend Lease Corp., Ltd. |
|
| 143,700 |
|
| 664,688 |
|
National Australia Bank Ltd. |
|
| 47,565 |
|
| 771,507 |
|
OZ Minerals Ltd. |
|
| 316,752 |
|
| 198,914 |
|
Qantas Airways Ltd. |
|
| 412,833 |
|
| 670,300 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 4,610,559 |
|
|
|
|
|
|
| ||
Austria—0.6% |
|
|
|
|
|
|
|
Voestalpine AG |
|
| 51,400 |
|
| 1,254,245 |
|
|
|
|
|
|
| ||
Belgium—1.2% |
|
|
|
|
|
|
|
Fortis |
|
| 60,632 |
|
| 68,770 |
|
Solvay SA, Class A |
|
| 24,600 |
|
| 2,287,892 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 2,356,662 |
|
|
|
|
|
|
| ||
Brazil—0.2% |
|
|
|
|
|
|
|
Banco Do Brasil SA |
|
| 60,000 |
|
| 396,305 |
|
|
|
|
|
|
| ||
Canada—5.1% |
|
|
|
|
|
|
|
Barrick Gold Corp. |
|
| 37,500 |
|
| 857,819 |
|
Canadian Imperial Bank of Commerce |
|
| 21,000 |
|
| 952,739 |
|
Fairfax Financial Holdings Ltd. |
|
| 5,200 |
|
| 1,428,619 |
|
Gerdau Ameristeel Corp. |
|
| 89,300 |
|
| 478,075 |
|
Industrial Alliance Insurance and Financial Services, Inc. |
|
| 26,100 |
|
| 541,584 |
|
Inmet Mining Corp. |
|
| 11,300 |
|
| 253,706 |
|
Nexen, Inc. |
|
| 40,284 |
|
| 639,970 |
|
Petro-Canada |
|
| 90,000 |
|
| 2,251,494 |
|
Royal Bank of Canada |
|
| 45,400 |
|
| 1,765,053 |
|
Teck Cominco Ltd., B Shares |
|
| 41,100 |
|
| 409,362 |
|
WestJet Airlines Ltd. |
|
| 59,300 |
|
| 508,440 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 10,086,861 |
|
|
|
|
|
|
| ||
China—0.6% |
|
|
|
|
|
|
|
China Petroleum & Chemical Corp. |
|
| 1,920,000 |
|
| 1,260,840 |
|
|
|
|
|
|
| ||
Finland—2.1% |
|
|
|
|
|
|
|
Nokia Oyj |
|
| 129,400 |
|
| 1,981,949 |
|
Stora Enso Oyj, R Shares |
|
| 236,600 |
|
| 2,199,992 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 4,181,941 |
|
|
|
|
|
|
| ||
France—14.7% |
|
|
|
|
|
|
|
Air France-KLM |
|
| 28,700 |
|
| 413,454 |
|
BNP Paribas SA |
|
| 64,580 |
|
| 4,662,229 |
|
Compagnie Generale des Establissements Michelin, B Shares |
|
| 39,700 |
|
| 2,043,167 |
|
Credit Agricole SA |
|
| 185,402 |
|
| 2,681,907 |
|
France Telecom SA |
|
| 107,200 |
|
| 2,702,802 |
|
Lagardere SCA |
|
| 46,400 |
|
| 1,844,655 |
|
Renault SA |
|
| 51,500 |
|
| 1,578,181 |
|
Sanofi-Aventis |
|
| 68,900 |
|
| 4,364,808 |
|
Societe Generale |
|
| 44,231 |
|
| 2,410,536 |
|
Total SA |
|
| 109,700 |
|
| 6,034,287 |
|
Vallourec SA |
|
| 4,500 |
|
| 503,308 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 29,239,334 |
|
|
|
|
|
|
| ||
Germany—13.5% |
|
|
|
|
|
|
|
Allianz SE |
|
| 39,800 |
|
| 2,994,584 |
|
BASF AG |
|
| 127,200 |
|
| 4,269,723 |
|
|
|
|
|
|
|
|
|
Common Stocks, continued |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares |
| Value($) |
| ||
|
|
|
| ||||
Germany, continued |
|
|
|
|
|
|
|
Deutsche Bank AG |
|
| 64,400 |
|
| 2,447,181 |
|
Deutsche Lufthansa AG |
|
| 162,600 |
|
| 2,262,064 |
|
Deutsche Telekom AG |
|
| 220,300 |
|
| 3,270,737 |
|
E.ON AG |
|
| 115,500 |
|
| 4,419,777 |
|
Infineon Technologies AG (a) |
|
| 304,300 |
|
| 951,825 |
|
Muenchener Rueckversicherungs-Gesellschaft AG |
|
| 27,700 |
|
| 3,668,974 |
|
RWE AG |
|
| 31,860 |
|
| 2,649,103 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 26,933,968 |
|
|
|
|
|
|
| ||
India—0.4% |
|
|
|
|
|
|
|
State Bank of India GDR |
|
| 17,600 |
|
| 805,200 |
|
|
|
|
|
|
| ||
Italy—3.1% |
|
|
|
|
|
|
|
ENI SpA |
|
| 189,900 |
|
| 4,532,045 |
|
Fondiaria-SAI SpA |
|
| 52,400 |
|
| 984,315 |
|
Telecom Italia SpA |
|
| 536,000 |
|
| 615,668 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 6,132,028 |
|
|
|
|
|
|
| ||
Japan—18.4% |
|
|
|
|
|
|
|
Alps Electric Co., Ltd. |
|
| 55,000 |
|
| 302,628 |
|
FUJITSU Ltd. |
|
| 573,000 |
|
| 2,253,381 |
|
Hitachi Ltd. |
|
| 170,000 |
|
| 798,321 |
|
Honda Motor Co., Ltd. |
|
| 99,000 |
|
| 2,462,174 |
|
JFE Holdings, Inc. |
|
| 86,100 |
|
| 2,197,321 |
|
Mitsubishi Chemical Holdings Corp. |
|
| 303,000 |
|
| 1,225,178 |
|
Mitsubishi Corp. |
|
| 129,000 |
|
| 2,162,718 |
|
Mitsui & Co., Ltd. |
|
| 149,000 |
|
| 1,444,030 |
|
Mitsui O.S.K. Lines Ltd. |
|
| 234,000 |
|
| 1,222,176 |
|
NAMCO BANDAI Holdings, Inc. |
|
| 123,800 |
|
| 1,273,343 |
|
Nippon Mining Holdings, Inc. |
|
| 360,000 |
|
| 1,102,311 |
|
Nippon Steel Corp. |
|
| 329,000 |
|
| 1,107,611 |
|
Nippon Telegraph & Telephone Corp. |
|
| 630 |
|
| 2,571,377 |
|
Nippon Yusen Kabushiki Kaisha |
|
| 50,000 |
|
| 241,833 |
|
Nissan Motor Co., Ltd. |
|
| 534,700 |
|
| 2,656,072 |
|
ORIX Corp. |
|
| 21,300 |
|
| 2,188,873 |
|
Sharp Corp. |
|
| 261,000 |
|
| 1,863,202 |
|
Sony Corp. |
|
| 12,510 |
|
| 296,552 |
|
Sumitomo Mitsui Financial Group, Inc. |
|
| 570 |
|
| 2,285,517 |
|
The Tokyo Electric Power Co., Inc. |
|
| 100,900 |
|
| 2,858,120 |
|
Toshiba Corp. |
|
| 543,000 |
|
| 1,963,027 |
|
Toyota Motor Corp. |
|
| 56,700 |
|
| 2,214,637 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 36,690,402 |
|
|
|
|
|
|
| ||
Luxembourg—0.8% |
|
|
|
|
|
|
|
ArcelorMittal |
|
| 64,352 |
|
| 1,673,566 |
|
|
|
|
|
|
| ||
Netherlands—2.6% |
|
|
|
|
|
|
|
ING Groep NV |
|
| 155,768 |
|
| 1,460,992 |
|
Koninklijke Ahold NV |
|
| 266,720 |
|
| 2,863,012 |
|
Koninklijke DSM NV |
|
| 32,100 |
|
| 893,832 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 5,217,836 |
|
|
|
|
|
|
| ||
Norway—1.5% |
|
|
|
|
|
|
|
StatoilHydro ASA |
|
| 153,100 |
|
| 3,081,362 |
|
|
|
|
|
|
| ||
Russian Federation—0.7% |
|
|
|
|
|
|
|
JSC MMC Norilsk Nickel ADR |
|
| 68,750 |
|
| 689,953 |
|
LUKOIL ADR |
|
| 16,550 |
|
| 635,372 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 1,325,325 |
|
|
|
|
|
|
| ||
|
|
|
57 | HSBC INVESTOR PORTFOLIOS | See notes to financial statements. |
|
HSBC INVESTOR INTERNATIONAL EQUITY PORTFOLIO |
Schedule of Portfolio Investments—as of October 31, 2008 (continued) |
|
|
|
|
|
|
|
|
Common Stocks, continued |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares |
| Value($) |
| ||
|
|
|
| ||||
Singapore—0.4% |
|
|
|
|
|
|
|
Flextronics International Ltd. (a) |
|
| 80,400 |
|
| 336,072 |
|
Neptune Orient Lines Ltd. |
|
| 427,000 |
|
| 360,769 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 696,841 |
|
|
|
|
|
|
| ||
South Africa—0.6% |
|
|
|
|
|
|
|
Sanlam Ltd. |
|
| 554,040 |
|
| 910,406 |
|
Standard Bank Group Ltd. |
|
| 31,023 |
|
| 246,649 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 1,157,055 |
|
|
|
|
|
|
| ||
South Korea—1.1% |
|
|
|
|
|
|
|
Honam Petrochemical Corp. |
|
| 8,100 |
|
| 331,597 |
|
Hynix Semiconductor, Inc. (a) |
|
| 24,700 |
|
| 211,635 |
|
Industrial Bank of Korea GDR |
|
| 88,300 |
|
| 488,915 |
|
KB Financial Group, Inc. ADR (a) |
|
| 14,600 |
|
| 359,306 |
|
Samsung Electronics Co., Ltd., Preferred |
|
| 2,900 |
|
| 761,674 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 2,153.127 |
|
|
|
|
|
|
| ||
Spain—1.1% |
|
|
|
|
|
|
|
Repsol YPF SA |
|
| 118,600 |
|
| 2,255,028 |
|
|
|
|
|
|
| ||
Sweden—1.5% |
|
|
|
|
|
|
|
Ericsson LM, B Shares |
|
| 83,000 |
|
| 565,321 |
|
Nordea Bank AB |
|
| 73,600 |
|
| 590,233 |
|
Svenska Cellusoa AB (SCA), B Shares |
|
| 189,700 |
|
| 1,401,579 |
|
Volvo AB, B Shares |
|
| 86,500 |
|
| 452,262 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 3,009,395 |
|
|
|
|
|
|
| ||
Switzerland—3.8% |
|
|
|
|
|
|
|
Credit Suisse Group |
|
| 81,100 |
|
| 3,033,689 |
|
Novartis AG |
|
| 90,330 |
|
| 4,586,554 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 7,620,243 |
|
|
|
|
|
|
| ||
Taiwan—1.0% |
|
|
|
|
|
|
|
China Steel Corp. GDR |
|
| 40,044 |
|
| 572,629 |
|
Compal Electronics, Inc. |
|
| 581,895 |
|
| 417,870 |
|
Taiwan Semiconductor Manufacturing Co., Ltd. |
|
| 510,961 |
|
| 743,872 |
|
United Microelectronics Corp. |
|
| 1,143,805 |
|
| 314,232 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 2,048,603 |
|
|
|
|
|
|
| ||
Thailand—0.3% |
|
|
|
|
|
|
|
PTT Public Co., Ltd. |
|
| 121,400 |
|
| 558,102 |
|
|
|
|
|
|
| ||
United Kingdom—18.9% |
|
|
|
|
|
|
|
Associated British Foods plc |
|
| 199,300 |
|
| 2,229,597 |
|
Aviva plc |
|
| 352,191 |
|
| 2,100,382 |
|
Barclays plc |
|
| 591,100 |
|
| 1,694,081 |
|
BP plc |
|
| 319,500 |
|
| 2,603,851 |
|
British Energy Group plc |
|
| 277,000 |
|
| 3,312,478 |
|
GlaxoSmithKline plc |
|
| 259,600 |
|
| 4,989,491 |
|
HBOS plc |
|
| 853,235 |
|
| 1,396,818 |
|
Kazakhmys plc |
|
| 84,600 |
|
| 396,563 |
|
Lloyds TSB Group plc |
|
| 370,300 |
|
| 1,196,597 |
|
Royal Bank of Scotland Group plc |
|
| 1,065,102 |
|
| 1,172,982 |
|
Royal Dutch Shell plc, A Shares |
|
| 277,887 |
|
| 7,701,302 |
|
Royal Dutch Shell plc, B Shares |
|
| 45,973 |
|
| 1,246,147 |
|
RSA Insurance Group plc |
|
| 776,127 |
|
| 1,725,616 |
|
Vodafone Group plc |
|
| 2,624,658 |
|
| 5,048,034 |
|
Xstrata plc |
|
| 51,700 |
|
| 884,107 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 37,698,046 |
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
Common Stocks, continued |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares |
| Value($) |
| ||
|
|
|
| ||||
|
|
|
|
|
|
|
|
TOTAL COMMON STOCKS |
|
|
|
|
| 192,442,874 |
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
Right—0.0% |
|
|
|
|
|
|
|
Belgium—0.0% |
|
|
|
|
|
|
|
Fortis (a) |
|
| 121,532 |
|
| 0 |
|
|
|
|
|
|
| ||
Investment Company—2.4% |
|
|
|
|
|
|
|
Northern Institutional Diversified Assets |
|
| 4,744,098 |
|
| 4,744,098 |
|
|
|
|
|
|
| ||
TOTAL INVESTMENT COMPANY |
|
|
|
|
| 4,744,098 |
|
|
|
|
|
|
| ||
TOTAL INVESTMENTS |
|
|
|
|
| 197,186,972 |
|
|
|
|
|
|
| ||
|
|
| Percentages indicated are based on net assets of $199,308,910. |
|
|
(a) | Represents non-income producing security. |
|
|
(b) | The rates presented represent the annualized one day yield that was in effect on October 31, 2008. |
|
|
ADR | — American Depositary Receipt |
GDR | — Global Depositary Receipt |
PLC | — Public Limited Co. |
SPA | — Standby Purchase Agreement |
|
|
|
|
|
Schedule Portfolio Investments - October 31, 2008 |
|
|
|
|
|
|
|
|
|
Industry |
| Percent of Net Assets |
| |
|
| |||
Automotive |
| 5.5 | % |
|
Banking & Financial Services |
| 17.6 | % |
|
Broadcasting |
| 0.0 | % |
|
Building & Construction |
| 0.7 | % |
|
Cash & Cash Equivalents |
| 2.4 | % |
|
Chemicals |
| 4.5 | % |
|
Drugs - Medical |
| 7.0 | % |
|
Electrical |
| 7.6 | % |
|
Electronic Components & Semiconductors |
| 4.7 | % |
|
Food & Beverage |
| 1.1 | % |
|
Import/Export |
| 0.7 | % |
|
Insurance |
| 6.5 | % |
|
Manufacturing |
| 1.9 | % |
|
Metals & Mining |
| 6.7 | % |
|
Oil & Gas |
| 17.4 | % |
|
Paper & Related Products |
| 1.1 | % |
|
Publishing |
| 0.9 | % |
|
Retail |
| 1.4 | % |
|
Telecommunications |
| 8.4 | % |
|
Transportation Services |
| 2.8 | % |
|
|
|
| ||
Total Investments |
| 98.9 | % |
|
|
|
| ||
At October 31, 2008 the portfolio’s open forward currency contracts were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency |
| Delivery |
| Amount |
| Contract |
| Value |
| Unrealized |
| |||||
|
|
|
|
|
| |||||||||||
SHORT CONTRACTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Canadian Dollar |
| 12/15/08 |
|
| 7,997,000 |
|
| 6,689,531 |
|
| 6,638,553 |
|
| 50,978 |
|
|
|
|
|
See notes to financial statements. | HSBC INVESTOR PORTFOLIOS | 58 |
|
Schedule of Portfolio Investments—as of October 31, 2008 |
|
|
|
|
|
|
|
|
Common Stocks—96.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares |
| Value($) |
| ||
|
|
|
| ||||
Aerospace & Defense—1.4% |
|
|
|
|
|
|
|
BE Aerospace, Inc. (a) |
|
| 142,500 |
|
| 1,833,975 |
|
|
|
|
|
|
| ||
Biotechnology—5.2% |
|
|
|
|
|
|
|
Illumina, Inc. (a) |
|
| 144,300 |
|
| 4,448,769 |
|
Invitrogen Corp. (a) |
|
| 76,900 |
|
| 2,213,951 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 6,662,720 |
|
|
|
|
|
|
| ||
Business Services—2.3% |
|
|
|
|
|
|
|
Navigant Consulting, Inc. (a) |
|
| 179,550 |
|
| 2,903,324 |
|
|
|
|
|
|
| ||
Computer Software—14.9% |
|
|
|
|
|
|
|
ACI Worldwide, Inc. (a) |
|
| 92,200 |
|
| 1,263,140 |
|
BMC Software, Inc. (a) |
|
| 127,400 |
|
| 3,289,468 |
|
Brocade Communications Systems, Inc. (a) |
|
| 342,200 |
|
| 1,290,094 |
|
Check Point Software Technologies Ltd. (a) |
|
| 155,450 |
|
| 3,143,199 |
|
Citrix Systems, Inc. (a) |
|
| 108,200 |
|
| 2,788,314 |
|
NetApp, Inc. (a) |
|
| 91,400 |
|
| 1,236,642 |
|
Nuance Communications, Inc. (a) |
|
| 262,850 |
|
| 2,405,077 |
|
Satyam Computer Services Ltd. ADR |
|
| 135,400 |
|
| 2,129,842 |
|
VeriFone Holdings, Inc. (a) |
|
| 138,400 |
|
| 1,572,224 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 19,118,000 |
|
|
|
|
|
|
| ||
Consumer Products—8.1% |
|
|
|
|
|
|
|
AptarGroup, Inc. |
|
| 58,500 |
|
| 1,773,720 |
|
Church & Dwight Co., Inc. |
|
| 72,100 |
|
| 4,260,389 |
|
Crown Holdings, Inc. (a) |
|
| 135,400 |
|
| 2,732,372 |
|
Packaging Corp. of America |
|
| 93,800 |
|
| 1,578,654 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 10,345,135 |
|
|
|
|
|
|
| ||
Diversified Manufacturing Operations—2.6% |
|
|
|
|
|
|
|
Actuant Corp., Class A |
|
| 44,800 |
|
| 803,264 |
|
AMETEK, Inc. |
|
| 74,500 |
|
| 2,477,125 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 3,280,389 |
|
|
|
|
|
|
| ||
Education—4.7% |
|
|
|
|
|
|
|
Corinthian Colleges, Inc. (a) |
|
| 154,429 |
|
| 2,205,246 |
|
DeVry, Inc. |
|
| 67,350 |
|
| 3,818,072 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 6,023,318 |
|
|
|
|
|
|
| ||
Electronic Components & |
|
|
|
|
|
|
|
ATMI, Inc. (a) |
|
| 51,300 |
|
| 623,808 |
|
|
|
|
|
|
| ||
Financial Services—5.4% |
|
|
|
|
|
|
|
Annaly Capital Management, Inc. |
|
| 72,100 |
|
| 1,002,190 |
|
Huntington Bancshares, Inc. |
|
| 152,600 |
|
| 1,442,070 |
|
PrivateBancorp, Inc. |
|
| 86,600 |
|
| 3,118,466 |
|
Zions Bancorporation |
|
| 36,900 |
|
| 1,406,259 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 6,968,985 |
|
|
|
|
|
|
| ||
Health Care—8.2% |
|
|
|
|
|
|
|
DaVita, Inc. (a) |
|
| 71,300 |
|
| 4,046,275 |
|
DENTSPLY International, Inc. |
|
| 58,500 |
|
| 1,777,230 |
|
Gen-Probe, Inc. (a) |
|
| 65,700 |
|
| 3,091,842 |
|
Pediatrix Medical Group, Inc. (a) |
|
| 40,450 |
|
| 1,563,392 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 10,478,739 |
|
|
|
|
|
|
| ||
Homebuilders—1.3% |
|
|
|
|
|
|
|
Toll Brothers, Inc. (a) |
|
| 70,500 |
|
| 1,629,960 |
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
Common Stocks, continued |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares |
| Value($) |
| ||
|
|
|
| ||||
Industrial Manufacturing—5.7% |
|
|
|
|
|
|
|
IDEX Corp. |
|
| 99,400 |
|
| 2,304,092 |
|
Mettler-Toledo International, Inc. (a) |
|
| 49,650 |
|
| 3,800,211 |
|
WESCO International, Inc. (a) |
|
| 62,500 |
|
| 1,242,500 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 7,346,803 |
|
|
|
|
|
|
| ||
Internet Related—1.4% |
|
|
|
|
|
|
|
VeriSign, Inc. (a) |
|
| 85,000 |
|
| 1,802,000 |
|
|
|
|
|
|
| ||
Media—1.4% |
|
|
|
|
|
|
|
DreamWorks Animation SKG, Inc. (a) |
|
| 61,700 |
|
| 1,733,770 |
|
|
|
|
|
|
| ||
Oil & Gas—9.5% |
|
|
|
|
|
|
|
BJ Services Co. |
|
| 54,900 |
|
| 705,465 |
|
Consol Energy, Inc. |
|
| 35,700 |
|
| 1,120,623 |
|
Denbury Resources, Inc. (a) |
|
| 247,700 |
|
| 3,148,267 |
|
Exterran Holdings, Inc. (a) |
|
| 64,900 |
|
| 1,454,409 |
|
Massey Energy Co. |
|
| 143,250 |
|
| 3,307,642 |
|
Range Resources Corp. |
|
| 56,900 |
|
| 2,402,318 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 12,138,724 |
|
|
|
|
|
|
| ||
Pharmaceuticals—12.6% |
|
|
|
|
|
|
|
Alexion Pharmaceuticals, Inc. (a) |
|
| 121,350 |
|
| 4,945,012 |
|
Elan Corp. plc ADR (a) |
|
| 262,900 |
|
| 2,005,927 |
|
OSI Pharmaceuticals, Inc. (a) |
|
| 125,050 |
|
| 4,745,648 |
|
Santarus, Inc. (a) |
|
| 236,400 |
|
| 397,152 |
|
Shire plc ADR |
|
| 102,600 |
|
| 4,047,570 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 16,141,309 |
|
|
|
|
|
|
| ||
Retail—4.7% |
|
|
|
|
|
|
|
Foot Locker, Inc. |
|
| 111,400 |
|
| 1,628,668 |
|
O’Reilly Automotive, Inc. (a) |
|
| 80,900 |
|
| 2,193,199 |
|
PetSmart, Inc. |
|
| 110,600 |
|
| 2,177,714 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 5,999,581 |
|
|
|
|
|
|
| ||
Telecommunications—3.2% |
|
|
|
|
|
|
|
Comverse Technology, Inc. (a) |
|
| 218,800 |
|
| 1,590,676 |
|
Polycom, Inc. (a) |
|
| 116,250 |
|
| 2,442,413 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 4,033,089 |
|
|
|
|
|
|
| ||
Transportation—2.3% |
|
|
|
|
|
|
|
Kansas City Southern (a) |
|
| 96,200 |
|
| 2,969,694 |
|
|
|
|
|
|
| ||
Utilities—1.4% |
|
|
|
|
|
|
|
Equitable Resources, Inc. |
|
| 52,900 |
|
| 1,836,159 |
|
|
|
|
|
|
| ||
TOTAL COMMON STOCKS |
|
|
|
|
| 123,869,482 |
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
Investment Company—3.7% |
|
|
|
|
|
|
|
Northern Institutional Government |
|
| 4,716,252 |
|
| 4,716,252 |
|
TOTAL INVESTMENT COMPANY |
|
|
|
|
| 4,716,252 |
|
|
|
|
|
|
| ||
TOTAL INVESTMENTS |
|
|
|
|
| 128,585,734 |
|
|
|
|
|
|
| ||
|
|
Percentages indicated are based on net assets of $127,969,639. | |
|
|
(a) | Represents non-income producing security. |
|
|
(b) | The rates presented represent the annualized one day yield that was in effect on October 31, 2008. |
|
|
ADR | — American Depositary Receipt |
PLC | — Public Limited Co. |
|
|
|
59 | HSBC INVESTOR PORTFOLIOS | See notes to financial statements. |
|
Schedule of Portfolio Investments—as of October 31, 2008 |
|
|
|
|
|
|
|
|
Common Stocks—91.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares |
| Value($) |
| ||
|
|
|
| ||||
Aerospace & Defense—5.5% |
|
|
|
|
|
|
|
Lockheed Martin Corp. |
|
| 14,900 |
|
| 1,267,245 |
|
Raytheon Co. |
|
| 28,300 |
|
| 1,446,413 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 2,713,658 |
|
|
|
|
|
|
| ||
Banking—3.5% |
|
|
|
|
|
|
|
Wells Fargo & Co. |
|
| 50,700 |
|
| 1,726,335 |
|
|
|
|
|
|
| ||
Business Services—3.6% |
|
|
|
|
|
|
|
Pitney Bowes, Inc. |
|
| 71,600 |
|
| 1,774,248 |
|
|
|
|
|
|
| ||
Computer Software—9.3% |
|
|
|
|
|
|
|
CA, Inc. |
|
| 135,600 |
|
| 2,413,680 |
|
Microsoft Corp. |
|
| 98,900 |
|
| 2,208,437 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 4,622,117 |
|
|
|
|
|
|
| ||
Conglomerates—2.6% |
|
|
|
|
|
|
|
Loews Corp. |
|
| 38,332 |
|
| 1,273,006 |
|
|
|
|
|
|
| ||
Consumer Products—6.0% |
|
|
|
|
|
|
|
Altria Group, Inc. |
|
| 30,800 |
|
| 591,052 |
|
Kimberly-Clark Corp. |
|
| 27,500 |
|
| 1,685,475 |
|
Kraft Foods, Inc. |
|
| 25,069 |
|
| 730,511 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 3,007,038 |
|
|
|
|
|
|
| ||
Diversified Manufacturing |
|
|
|
|
|
|
|
Illinois Tool Works, Inc. |
|
| 18,400 |
|
| 614,376 |
|
Ingersoll-Rand Co., Class A |
|
| 32,400 |
|
| 597,780 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 1,212,156 |
|
|
|
|
|
|
| ||
Energy—1.6% |
|
|
|
|
|
|
|
NRG Energy, Inc. (a) |
|
| 33,800 |
|
| 785,850 |
|
|
|
|
|
|
| ||
Financial Services—4.2% |
|
|
|
|
|
|
|
JP Morgan Chase & Co. |
|
| 50,750 |
|
| 2,093,437 |
|
|
|
|
|
|
| ||
Insurance—7.4% |
|
|
|
|
|
|
|
Aetna, Inc. |
|
| 18,800 |
|
| 467,556 |
|
Aon Corp. |
|
| 32,700 |
|
| 1,383,210 |
|
Genworth Financial, Inc., Class A |
|
| 93,500 |
|
| 452,540 |
|
MetLife, Inc. |
|
| 30,100 |
|
| 999,922 |
|
The Hartford Financial Services Group, Inc. |
|
| 37,300 |
|
| 384,936 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 3,688,164 |
|
|
|
|
|
|
| ||
Media—6.5% |
|
|
|
|
|
|
|
CBS Corp., Class B |
|
| 34,350 |
|
| 333,538 |
|
Comcast Corp., Class A |
|
| 51,650 |
|
| 796,443 |
|
Liberty Media Corp. Interactive, Class A (a) |
|
| 37,087 |
|
| 180,985 |
|
Viacom, Inc., Class B (a) |
|
| 94,000 |
|
| 1,900,680 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 3,211,646 |
|
|
|
|
|
|
| ||
Metals & Mining—6.4% |
|
|
|
|
|
|
|
AngloGold Ashanti Ltd. ADR |
|
| 70,027 |
|
| 1,277,993 |
|
Barrick Gold Corp. |
|
| 62,600 |
|
| 1,422,272 |
|
United States Steel Corp. |
|
| 13,800 |
|
| 508,944 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 3,209,209 |
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
Common Stocks, continued |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares |
| Value($) |
| ||
|
|
|
| ||||
Oil & Gas—12.1% |
|
|
|
|
|
|
|
Apache Corp. |
|
| 24,400 |
|
| 2,008,852 |
|
ConocoPhillips |
|
| 9,571 |
|
| 497,883 |
|
Hess Corp. |
|
| 13,600 |
|
| 818,856 |
|
Noble Energy, Inc. |
|
| 40,700 |
|
| 2,109,074 |
|
Talisman Energy, Inc. |
|
| 55,200 |
|
| 556,416 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 5,991,081 |
|
|
|
|
|
|
| ||
Paper & Related Products—0.8% |
|
|
|
|
|
|
|
International Paper Co. |
|
| 22,300 |
|
| 384,006 |
|
|
|
|
|
|
| ||
Pharmaceuticals—6.0% |
|
|
|
|
|
|
|
Amgen, Inc. (a) |
|
| 27,000 |
|
| 1,617,030 |
|
Sanofi-Aventis ADR |
|
| 42,700 |
|
| 1,350,174 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 2,967,204 |
|
|
|
|
|
|
| ||
Telecommunications—6.6% |
|
|
|
|
|
|
|
AT&T, Inc. |
|
| 51,791 |
|
| 1,386,445 |
|
Motorola, Inc. |
|
| 202,400 |
|
| 1,086,888 |
|
Verizon Communications, Inc. |
|
| 27,800 |
|
| 824,826 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 3,298,159 |
|
|
|
|
|
|
| ||
Tobacco—4.5% |
|
|
|
|
|
|
|
Lorillard, Inc. |
|
| 13,627 |
|
| 897,474 |
|
Philip Morris International, Inc. |
|
| 30,800 |
|
| 1,338,876 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 2,236,350 |
|
|
|
|
|
|
| ||
Transportation—2.4% |
|
|
|
|
|
|
|
Union Pacific Corp. |
|
| 18,000 |
|
| 1,201,860 |
|
|
|
|
|
|
| ||
TOTAL COMMON STOCKS |
|
|
|
|
|
|
|
(COST $58,020,424 |
|
|
|
|
| 45,395,524 |
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
Investment Company—9.8% |
|
|
|
|
|
|
|
Northern Institutional Government |
|
| 4,851,586 |
|
| 4,851,586 |
|
|
|
|
|
|
| ||
TOTAL INVESTMENT COMPANY |
|
|
|
|
| 4,851,586 |
|
|
|
|
|
|
| ||
TOTAL INVESTMENTS |
|
|
|
|
| 50,247,110 |
|
|
|
|
|
|
| ||
|
|
| Percentages indicated are based on net assets of $49,663,172. |
|
|
(a) | Represents non-income producing security. |
|
|
(b) | The rates presented represent the annualized one day yield that was in effect on October 31, 2008. |
|
|
ADR | — American Depositary Receipt |
|
|
|
See notes to financial statements. | HSBC INVESTOR PORTFOLIOS | 60 |
Statements of Assets and Liabilities—as of October 31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
| Core Plus |
| High Yield |
| Intermediate |
| Growth |
| International |
| ||||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Investments in non-affiliates, at value |
| $ | 106,142,905 |
| $ | 9,548,913 |
| $ | 18,807,640 |
| $ | 84,306,155 |
| $ | 197,186,972 |
| |
Foreign currency, at value |
|
| — |
|
| — |
|
| — |
|
| — |
|
| 887,216 |
| |
Variation margin on forward foreign currency exchange contracts |
|
| — |
|
| — |
|
| — |
|
| — |
|
| 50,978 |
| |
Segregated cash balances with brokers for futures contracts |
|
| 226,031 |
|
| — |
|
| 42,034 |
|
| — |
|
| — |
| |
Variation margin on futures contracts |
|
| 228,891 |
|
| — |
|
| 45,938 |
|
| — |
|
| — |
| |
Interest and dividends receivable |
|
| 826,801 |
|
| 360,084 |
|
| 114,507 |
|
| 17,099 |
|
| 855,270 |
| |
Receivable for investments sold |
|
| 6,946,604 |
|
| 84,625 |
|
| 7,467 |
|
| 673,542 |
|
| 485,998 |
| |
Prepaid expenses and other assets |
|
| 174 |
|
| 540 |
|
| — |
|
| 384 |
|
| 493 |
| |
|
|
|
|
|
|
| |||||||||||
Total Assets |
|
| 114,371,406 |
|
| 9,994,162 |
|
| 19,017,586 |
|
| 84,997,180 |
|
| 199,466,927 |
| |
|
|
|
|
|
|
| |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Cash overdraft |
|
| — |
|
| 125,637 |
|
| — |
|
| — |
|
| — |
| |
Payable for investments purchased |
|
| 32,592,501 |
|
| — |
|
| 5,476,635 |
|
| 2,930,835 |
|
| — |
| |
Accrued expenses and other liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Investment Management |
|
| 40,706 |
|
| 5,517 |
|
| 4,707 |
|
| 119,846 |
|
| 122,908 |
| |
Administration |
|
| 1,579 |
|
| 183 |
|
| 236 |
|
| 1,396 |
|
| 3,455 |
| |
Compliance Service |
|
| 150 |
|
| 9 |
|
| 9 |
|
| 51 |
|
| 490 |
| |
Trustee |
|
| 77 |
|
| 11 |
|
| 11 |
|
| 67 |
|
| 203 |
| |
Other |
|
| 8,516 |
|
| 603 |
|
| 5,002 |
|
| 3,473 |
|
| 30,961 |
| |
|
|
|
|
|
|
| |||||||||||
Total Liabilities |
|
| 32,643,529 |
|
| 131,960 |
|
| 5,486,600 |
|
| 3,055,668 |
|
| 158,017 |
| |
|
|
|
|
|
|
| |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Applicable to investors’ beneficial interest |
| $ | 81,727,877 |
| $ | 9,862,202 |
| $ | 13,530,986 |
| $ | 81,941,512 |
| $ | 199,308,910 |
| |
|
|
|
|
|
|
| |||||||||||
Total Investments, at cost |
| $ | 118,769,635 |
| $ | 14,005,584 |
| $ | 20,454,274 |
| $ | 104,357,221 |
| $ | 318,332,935 |
| |
|
|
|
|
|
|
| |||||||||||
Foreign currency, at cost |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | 891,417 |
| |
|
|
|
|
|
|
| |||||||||||
|
|
|
61 | HSBC INVESTOR PORTFOLIOS | See notes to financial statements. |
HSBC INVESTOR PORTFOLIOS
Statements of Assets and Liabilities—as of October 31, 2008 (continued)
|
|
|
|
|
|
|
|
|
| Opportunity |
| Value |
| ||
Assets: |
|
|
|
|
|
|
|
Investments in non-affiliates, at value |
| $ | 128,585,734 |
| $ | 50,247,110 |
|
Interest and dividends receivable |
|
| 21,479 |
|
| 63,780 |
|
Receivable for investments sold |
|
| 1,964,302 |
|
| — |
|
Prepaid expenses and other assets |
|
| 254 |
|
| 76 |
|
|
|
|
| ||||
Total Assets |
|
| 130,571,769 |
|
| 50,310,966 |
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
Payable for investments purchased |
|
| 2,501,090 |
|
| 623,619 |
|
Accrued expenses and other liabilities: |
|
|
|
|
|
|
|
Investment Management |
|
| 86,166 |
|
| 20,875 |
|
Administration |
|
| 2,111 |
|
| 783 |
|
Compliance Services |
|
| 116 |
|
| 42 |
|
Trustee |
|
| 135 |
|
| 54 |
|
Other |
|
| 12,512 |
|
| 2,421 |
|
|
|
|
| ||||
Total Liabilities |
|
| 2,602,130 |
|
| 647,794 |
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
Net Assets: |
|
|
|
|
|
|
|
Applicable to investors’ beneficial interest |
| $ | 127,969,639 |
| $ | 49,663,172 |
|
|
|
|
| ||||
Total Investments, at cost |
| $ | 159,201,824 |
| $ | 62,864,410 |
|
|
|
|
| ||||
|
|
|
See notes to financial statements. | HSBC INVESTOR PORTFOLIOS | 62 |
HSBC INVESTOR PORTFOLIOS
Statements of Operations—For the year ended October 31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Core Plus |
| High Yield |
| Intermediate |
| Growth |
| International |
| |||||
Investment Income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest |
| $ | 5,571,151 |
| $ | 1,238,822 |
| $ | 697,529 |
| $ | — |
| $ | 62,754 |
|
Dividends |
|
| 159,338 |
|
| 6,169 |
|
| 37,052 |
|
| 663,139 |
|
| 13,819,514 |
|
Foreign tax withholding |
|
| — |
|
| — |
|
| — |
|
| — |
|
| (1,896,444 | ) |
|
|
|
|
|
|
| ||||||||||
Total Investment Income |
|
| 5,730,489 |
|
| 1,244,991 |
|
| 734,581 |
|
| 663,139 |
|
| 11,985,824 |
|
|
|
|
|
|
|
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Management |
|
| 512,368 |
|
| 80,253 |
|
| 58,198 |
|
| 419,329 |
|
| 2,264,311 |
|
Administration |
|
| 22,821 |
|
| 2,861 |
|
| 3,115 |
|
| 17,490 |
|
| 75,275 |
|
Accounting |
|
| 68,386 |
|
| 81,154 |
|
| 63,439 |
|
| 53,618 |
|
| 96,381 |
|
Compliance Service |
|
| 518 |
|
| 55 |
|
| 56 |
|
| 342 |
|
| 1,769 |
|
Custodian |
|
| 8,469 |
|
| 1,011 |
|
| 1,741 |
|
| 6,991 |
|
| 187,083 |
|
Printing |
|
| 3,398 |
|
| 836 |
|
| 924 |
|
| 2,767 |
|
| 11,793 |
|
Professional fees |
|
| 3,277 |
|
| 712 |
|
| 338 |
|
| 2,742 |
|
| 10,731 |
|
Trustee |
|
| 1,541 |
|
| 192 |
|
| 203 |
|
| 1,175 |
|
| 5,260 |
|
Other |
|
| 6,134 |
|
| 833 |
|
| 3,729 |
|
| 4,908 |
|
| 20,989 |
|
|
|
|
|
|
|
| ||||||||||
Total expenses before fee reductions |
|
| 626,912 |
|
| 167,907 |
|
| 131,743 |
|
| 509,362 |
|
| 2,673,592 |
|
Fees reduced by Investment Adviser |
|
| — |
|
| — |
|
| — |
|
| (4,476 | ) |
| — |
|
|
|
|
|
|
|
| ||||||||||
Total Expenses |
|
| 626,912 |
|
| 167,907 |
|
| 131,743 |
|
| 504,886 |
|
| 2,673,592 |
|
|
|
|
|
|
|
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Investment Income (Loss) |
|
| 5,103,577 |
|
| 1,077,084 |
|
| 602,838 |
|
| 158,253 |
|
| 9,312,232 |
|
|
|
|
|
|
|
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Realized/Unrealized Gains (Losses) from Investments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gains (losses) from investments and foreign currency transactions |
|
| (1,716,057 | ) |
| (527,678 | ) |
| (133,789 | ) |
| (145,266 | ) |
| 10,348,234 |
|
Net realized gains (losses) from futures |
|
| (44,872 | ) |
| — |
|
| (4,155 | ) |
| — |
|
| — |
|
Payment by affiliate for the violation of certain investment policies and limitations |
|
| — |
|
| — |
|
| — |
|
| 64,658 |
|
| — |
|
Change in unrealized appreciation/depreciation from investments,futures and foreign currencies |
|
| (12,280,378 | ) |
| (4,243,608 | ) |
| (1,515,259 | ) |
| (42,269,939 | ) |
| (242,760,619 | ) |
|
|
|
| �� |
|
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized/unrealized gains/losses from investment, future and foreign currency transactions |
|
| (14,041,307 | ) |
| (4,771,286 | ) |
| (1,653,203 | ) |
| (42,350,547 | ) |
| (232,412,385 | ) |
|
|
|
|
|
|
| ||||||||||
Change In Net Assets Resulting From Operations |
| $ | (8,937,730 | ) | $ | (3,694,202 | ) | $ | (1,050,365 | ) | $ | (42,192,294 | ) | $ | (223,100,153 | ) |
|
|
|
|
|
|
| ||||||||||
|
|
|
63 | HSBC INVESTOR PORTFOLIOS | See notes to financial statements. |
HSBC INVESTOR PORTFOLIOS
Statements of Operations—For the year ended October 31, 2008 (continued)
|
|
|
|
|
|
|
|
|
| Opportunity |
| Value |
| ||
Investment Income: |
|
|
|
|
|
|
|
Dividends |
| $ | 774,001 |
| $ | 1,505,621 |
|
|
|
|
| ||||
Total Investment Income |
|
| 774,001 |
|
| 1,505,621 |
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
Investment Management |
|
| 1,494,232 |
|
| 361,899 |
|
Administration |
|
| 39,939 |
|
| 14,767 |
|
Accounting |
|
| 54,168 |
|
| 53,235 |
|
Compliance Service |
|
| 660 |
|
| 279 |
|
Custodian |
|
| 14,652 |
|
| 3,847 |
|
Printing |
|
| 6,180 |
|
| 2,131 |
|
Professional fees |
|
| 5,212 |
|
| 2,028 |
|
Trustee |
|
| 2,470 |
|
| 1,007 |
|
Other |
|
| 10,784 |
|
| 4,032 |
|
|
|
|
| ||||
Total Expenses |
|
| 1,628,297 |
|
| 443,225 |
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
Net Investment Income (Loss) |
|
| (854,296 | ) |
| 1,062,396 |
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
Net Realized/Unrealized Gains (Losses) from Investments: |
|
|
|
|
|
|
|
Net realized gains (losses) from investments transactions |
|
| 2,354,698 |
|
| (7,776,127 | ) |
Change in unrealized appreciation/depreciation from investments and foreign currencies |
|
| (73,360,727 | ) |
| (25,258,253 | ) |
|
|
|
| ||||
|
|
|
|
|
|
|
|
Net realized/unrealized gains/losses from investment transactions |
|
| (71,006,029 | ) |
| (33,034,380 | ) |
|
|
|
| ||||
Change In Net Assets Resulting From Operations |
| $ | (71,860,325 | ) | $ | (31,971,984 | ) |
|
|
|
| ||||
|
|
|
See notes to financial statements. | HSBC INVESTOR PORTFOLIOS | 64 |
HSBC INVESTOR PORTFOLIOS
Statements of Changes in Net Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Core Plus |
| High Yield |
| ||||||||
|
| For the year |
| For the year |
| For the year |
| For the year |
| ||||
Investment Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income (loss) |
| $ | 5,103,577 |
| $ | 5,909,376 |
| $ | 1,077,084 |
| $ | 931,443 |
|
Net realized gains (losses) from investment transactions |
|
| (1,760,929 | ) |
| 2,910,717 |
|
| (527,678 | ) |
| 119,132 |
|
Change in unrealized appreciation/depreciation from investments |
|
| (12,280,378 | ) |
| (1,031,793 | ) |
| (4,243,608 | ) |
| (279,652 | ) |
|
|
|
|
|
| ||||||||
Change in net assets resulting from operations |
|
| (8,937,730 | ) |
| 7,788,300 |
|
| (3,694,202 | ) |
| 770,923 |
|
|
|
|
|
|
| ||||||||
Proceeds from contributions |
|
| 13,894,668 |
|
| 24,166,324 |
|
| 3,041,484 |
|
| 5,258,548 |
|
Value of withdrawals |
|
| (43,040,969 | ) |
| (23,334,647 | ) |
| (3,972,343 | ) |
| (4,260,973 | ) |
|
|
|
|
|
| ||||||||
Change in net assets resulting from transactions in investors’ beneficial interest |
|
| (29,146,301 | ) |
| 831,677 |
|
| (930,859 | ) |
| 997,575 |
|
|
|
|
|
|
| ||||||||
Change in net assets |
|
| (38,084,031 | ) |
| 8,619,977 |
|
| (4,625,061 | ) |
| 1,768,498 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of period |
|
| 119,811,908 |
|
| 111,191,931 |
|
| 14,487,263 |
|
| 12,718,765 |
|
|
|
|
|
|
| ||||||||
End of period |
| $ | 81,727,877 |
| $ | 119,811,908 |
| $ | 9,862,202 |
| $ | 14,487,263 |
|
|
|
|
|
|
| ||||||||
|
|
|
65 | HSBC INVESTOR PORTFOLIOS | See notes to financial statements. |
HSBC INVESTOR PORTFOLIOS
Statements of Changes in Net Assets (continued)
|
|
|
|
|
|
|
|
|
| Intermediate Duration |
| ||||
|
| For the year |
| For the year |
| ||
Investment Activities: |
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
Net investment income (loss) |
| $ | 602,838 |
| $ | 882,974 |
|
Net realized gains (losses) from investment transactions |
|
| (137,944 | ) |
| 848,391 |
|
Change in unrealized appreciation/depreciation from investments |
|
| (1,515,259 | ) |
| (182,994 | ) |
|
|
|
| ||||
Change in net assets resulting from operations |
|
| (1,050,365 | ) |
| 1,548,371 |
|
|
|
|
| ||||
Proceeds from contributions |
|
| 3,554,894 |
|
| 2,605,895 |
|
Value of withdrawals |
|
| (4,032,112 | ) |
| (8,612,265 | ) |
|
|
|
| ||||
Change in net assets resulting from transactions in investors’ beneficial interest |
|
| (477,218 | ) |
| (6,006,370 | ) |
|
|
|
| ||||
Change in net assets |
|
| (1,527,583 | ) |
| (4,457,999 | ) |
|
|
|
|
|
|
|
|
Net Assets: |
|
|
|
|
|
|
|
Beginning of period |
|
| 15,058,569 |
|
| 19,516,568 |
|
|
|
|
| ||||
End of period |
| $ | 13,530,986 |
| $ | 15,058,569 |
|
|
|
|
| ||||
|
|
|
See notes to financial statements. | HSBC INVESTOR PORTFOLIOS | 66 |
HSBC INVESTOR PORTFOLIOS
Statements of Changes in Net Assets (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Growth |
| International Equity |
| ||||||||
|
| For the year |
| For the year |
| For the year |
| For the year |
| ||||
Investment Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income (loss) |
| $ | 158,253 |
| $ | 334,013 |
| $ | 9,312,232 |
| $ | 8,527,724 |
|
Net realized gains (losses) from investment transactions |
|
| (80,608 | ) |
| 4,271,356 |
|
| 10,348,234 |
|
| 36,079,080 |
|
Change in unrealized appreciation/depreciation from investments and foreign currencies |
|
| (42,269,939 | ) |
| 16,611,654 |
|
| (242,760,619 | ) |
| 42,586,569 |
|
|
|
|
|
|
| ||||||||
Change in net assets resulting from operations |
|
| (42,192,294 | ) |
| 21,217,023 |
|
| (223,100,153 | ) |
| 87,193,373 |
|
|
|
|
|
|
| ||||||||
Proceeds from contributions |
|
| 50,198,227 |
|
| 25,944,124 |
|
| 43,694,202 |
|
| 90,634,524 |
|
Value of withdrawals |
|
| (15,750,298 | ) |
| (17,303,034 | ) |
| (76,346,748 | ) |
| (56,520,981 | ) |
|
|
|
|
|
| ||||||||
Change in net assets resulting from transactions in investors’ beneficial interest |
|
| 34,447,929 |
|
| 8,641,090 |
|
| (32,652,546 | ) |
| 34,113,543 |
|
|
|
|
|
|
| ||||||||
Change in net assets |
|
| (7,744,365 | ) |
| 29,858,113 |
|
| (255,752,699 | ) |
| 121,306,916 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of period |
|
| 89,685,877 |
|
| 59,827,764 |
|
| 455,061,609 |
|
| 333,754,693 |
|
|
|
|
|
|
| ||||||||
End of period |
| $ | 81,941,512 |
| $ | 89,685,877 |
| $ | 199,308,910 |
| $ | 455,061,609 |
|
|
|
|
|
|
| ||||||||
|
|
|
67 | HSBC INVESTOR PORTFOLIOS | See notes to financial statements. |
HSBC INVESTOR PORTFOLIOS
Statements of Changes in Net Assets (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Opportunity |
| Value |
| ||||||||
|
| For the year |
| For the year |
| For the year |
| For the year |
| ||||
Investment Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income (loss) |
| $ | (854,296 | ) | $ | (1,201,508 | ) | $ | 1,062,396 |
| $ | 992,431 |
|
Net realized gains (losses) from investment transactions |
|
| 2,354,698 |
|
| 58,390,322 |
|
| (7,776,127 | ) |
| 6,083,399 |
|
Change in unrealized appreciation/depreciation from investments |
|
| (73,360,727 | ) |
| 1,890,389 |
|
| (25,258,253 | ) |
| 71,241 |
|
|
|
|
|
|
| ||||||||
Change in net assets resulting from operations |
|
| (71,860,325 | ) |
| 59,079,203 |
|
| (31,971,984 | ) |
| 7,147,071 |
|
|
|
|
|
| �� | ||||||||
Proceeds from contributions |
|
| 20,402,348 |
|
| 77,393,032 |
|
| 12,224,588 |
|
| 23,927,675 |
|
Value of withdrawals |
|
| (44,840,850 | ) |
| (153,698,612 | ) |
| (13,247,672 | ) |
| (15,848,601 | ) |
|
|
|
|
|
| ||||||||
Change in net assets resulting from transactions in investors’ beneficial interest |
|
| (24,438,502 | ) |
| (76,305,580 | ) |
| (1,023,084 | ) |
| 8,079,074 |
|
|
|
|
|
|
| ||||||||
Change in net assets |
|
| (96,298,827 | ) |
| (17,226,377 | ) |
| (32,995,068 | ) |
| 15,226,145 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of period |
|
| 224,268,466 |
|
| 241,494,843 |
|
| 82,658,240 |
|
| 67,432,095 |
|
|
|
|
|
|
| ||||||||
End of period |
| $ | 127,969,639 |
| $ | 224,268,466 |
| $ | 49,663,172 |
| $ | 82,658,240 |
|
|
|
|
|
|
| ||||||||
|
|
|
See notes to financial statements. | HSBC INVESTOR PORTFOLIOS | 68 |
|
HSBC INVESTOR PORTFOLIOS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Ratios/Supplementary Data |
| ||||||||||||||
|
|
|
|
| |||||||||||||||
|
| Total |
| Net Assets |
| Ratio of Net |
| Ratio of Net |
| Ratio of |
| Portfolio |
| ||||||
CORE PLUS FIXED INCOME PORTFOLIO |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended October 31, 2004 |
|
| 5.56 | % | $ | 169,459 |
| 0.52 | % |
| 4.31 | % |
| 0.52 | % |
|
| 34.88 | % |
Year Ended October 31, 2005 |
|
| 1.64 | %(d) |
| 122,530 |
| 0.40 | %(d) |
| 4.25 | %(d) |
| 0.53 | % |
|
| 176.60 | % |
Year Ended October 31, 2006 |
|
| 5.55 | % |
| 111,192 |
| 0.63 | % |
| 4.96 | % |
| 0.63 | % |
|
| 273.91 | % |
Year Ended October 31, 2007 |
|
| 6.94 | % |
| 119,812 |
| 0.59 | % |
| 4.99 | % |
| 0.59 | % |
|
| 252.56 | % |
Year Ended October 31, 2008 |
|
| (8.78 | )% |
| 81,728 |
| 0.59 | % |
| 4.80 | % |
| 0.59 | % |
|
| 119.38 | % |
HIGH YIELD FIXED INCOME PORTFOLIO |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended October 31, 2006(f) |
|
| 7.41 | % | $ | 12,719 |
| 1.86 | % |
| 6.33 | % |
| 1.86 | % |
|
| 13.61 | % |
Year Ended October 31, 2007 |
|
| 6.41 | % |
| 14,487 |
| 1.37 | % |
| 7.12 | % |
| 1.37 | % |
|
| 30.77 | % |
Year Ended October 31, 2008 |
|
| (26.32 | )% |
| 9,862 |
| 1.26 | % |
| 8.06 | % |
| 1.26 | % |
|
| 24.10 | % |
INTERMEDIATE DURATION FIXED INCOME PORTFOLIO |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended October 31, 2004 |
|
| 4.48 | % | $ | 63,697 |
| 0.57 | % |
| 3.54 | % |
| 0.57 | % |
|
| 50.06 | % |
Year Ended October 31, 2005 |
|
| 0.76 | %(d) |
| 32,810 |
| 0.49 | %(d) |
| 3.85 | %(d) |
| 0.58 | % |
|
| 107.26 | % |
Year Ended October 31, 2006 |
|
| 5.29 | % |
| 19,517 |
| 0.78 | % |
| 4.58 | % |
| 0.78 | % |
|
| 236.51 | % |
Year Ended October 31, 2007 |
|
| 8.38 | % |
| 15,059 |
| 0.84 | % |
| 4.68 | % |
| 0.84 | % |
|
| 219.76 | % |
Year Ended October 31, 2008 |
|
| (7.08 | )% |
| 13,531 |
| 0.91 | % |
| 4.15 | % |
| 0.91 | % |
|
| 124.23 | % |
GROWTH PORTFOLIO |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended October 31, 2004(f) |
|
| (0.86 | )% | $ | 49,680 |
| 0.72 | % |
| 0.06 | % |
| 0.72 | % |
|
| 53.08 | % |
Year Ended October 31, 2005 |
|
| 13.59 | %(d) |
| 49,415 |
| 0.63 | %(d) |
| 0.77 | %(d) |
| 0.68 | % |
|
| 79.54 | % |
Year Ended October 31, 2006 |
|
| 7.53 | % |
| 59,828 |
| 0.69 | % |
| 0.38 | % |
| 0.69 | % |
|
| 75.06 | % |
Year Ended October 31, 2007 |
|
| 31.11 | % |
| 89,686 |
| 0.62 | % |
| 0.45 | % |
| 0.62 | % |
|
| 57.04 | % |
Year Ended October 31, 2008 |
|
| (37.75 | )%(e) |
| 81,942 |
| 0.62 | % |
| 0.19 | % |
| 0.62 | % |
|
| 157.87 | % |
INTERNATIONAL EQUITY PORTFOLIO |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended October 31, 2004 |
|
| 20.29 | % | $ | 220,025 |
| 0.94 | % |
| 1.53 | % |
| 0.94 | % |
|
| 106.11 | % |
Year Ended October 31, 2005 |
|
| 19.54 | % |
| 230,230 |
| 0.84 | % |
| 1.92 | % |
| 0.84 | % |
|
| 31.32 | % |
Year Ended October 31, 2006 |
|
| 32.79 | % |
| 333,755 |
| 0.86 | % |
| 2.03 | % |
| 0.86 | % |
|
| 33.39 | % |
Year Ended October 31, 2007 |
|
| 25.17 | % |
| 455,062 |
| 0.79 | % |
| 2.16 | % |
| 0.79 | % |
|
| 26.08 | % |
Year Ended October 31, 2008 |
|
| (51.95 | )% |
| 199,309 |
| 0.76 | % |
| 2.65 | % |
| 0.76 | % |
|
| 28.98 | % |
OPPORTUNITY PORTFOLIO |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended October 31, 2004 |
|
| 5.93 | % | $ | 359,333 |
| 0.88 | % |
| (0.52 | )% |
| 0.88 | % |
|
| 81.75 | % |
Year Ended October 31, 2005 |
|
| 14.35 | %(d) |
| 218,778 |
| 0.85 | %(d) |
| (0.45 | )%(d) |
| 0.90 | % |
|
| 63.95 | % |
Year Ended October 31, 2006 |
|
| 19.54 | % |
| 241,495 |
| 0.91 | % |
| (0.40 | )% |
| 0.91 | % |
|
| 60.83 | % |
Year Ended October 31, 2007 |
|
| 30.54 | % |
| 224,268 |
| 0.91 | % |
| (0.55 | )% |
| 0.91 | % |
|
| 69.41 | % |
Year Ended October 31, 2008 |
|
| (35.30 | )% |
| 127,970 |
| 0.87 | % |
| (0.46 | )% |
| 0.87 | % |
|
| 80.42 | % |
VALUE PORTFOLIO |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended October 31, 2004(f) |
|
| 6.12 | % | $ | 61,414 |
| 0.71 | % |
| 1.28 | % |
| 0.71 | % |
|
| 10.33 | % |
Year Ended October 31, 2005 |
|
| 15.23 | %(d) |
| 54,150 |
| 0.64 | %(d) |
| 1.15 | %(d) |
| 0.69 | % |
|
| 16.45 | % |
Year Ended October 31, 2006 |
|
| 22.21 | % |
| 67,432 |
| 0.71 | % |
| 1.23 | % |
| 0.71 | % |
|
| 20.63 | % |
Year Ended October 31, 2007 |
|
| 10.28 | % |
| 82,658 |
| 0.66 | % |
| 1.29 | % |
| 0.66 | % |
|
| 18.67 | % |
Year Ended October 31, 2008 |
|
| (39.91 | )% |
| 49,663 |
| 0.64 | % |
| 1.54 | % |
| 0.64 | % |
|
| 24.61 | % |
|
|
(a) | Not annualized for periods less than one year. |
|
|
(b) | Annualized for periods less than one year. |
|
|
(c) | During the period, certain fees were reduced. If such fee reductions had not occurred, the ratio would have been as indicated. |
|
|
(d) | During the year ended October 31, 2005, HSBC reimbursed certain amounts to the Portfolios related to violations of certain investment policies and limitations. The corresponding impact to the net expense ratio, net income ratio and total return were 0.12%, 0.09%, 0.05%, 0.04% and 0.05% for the Core Plus Fixed Income Portfolio, Intermediate Duration Fixed Income Portfolio, Growth Portfolio, Opportunity Portfolio and Value Portfolio, respectively. |
|
|
(e) | During the year ended October 31, 2008, Winslow Capital Management, Inc. reimbursed $64,658 to the Portfolio related to violations of certain investment policies and limitations. The corresponding impact to the total return was 0.08%. |
|
|
(f) | High Yield Fixed Income Portfolio commenced operations on November 18, 2005. |
|
|
| Growth Portfolio commenced operations on May 7, 2004. |
|
|
| Value Portfolio commenced operations on May 7, 2004. |
|
|
|
69 | HSBC INVESTOR PORTFOLIOS | See notes to financial statements. |
|
HSBC INVESTOR PORTFOLIOS |
|
|
1. | Organization: |
|
|
| The HSBC Investor Portfolios (the “Portfolio Trust”), is an open-end management investment company organized as a New York trust under the laws of the State of New York on November 1, 1994. The Portfolio Trust contains the following master funds (individually a “Portfolio,” collectively the “Portfolios”): |
|
|
|
|
| Portfolio |
| Short Name |
|
| ||
| HSBC Investor Core Plus Fixed Income Portfolio |
| Core Plus Fixed Income Portfolio |
| HSBC Investor High Yield Fixed Income Portfolio |
| High Yield Fixed Income Portfolio |
| HSBC Investor Intermediate Duration Fixed Income Portfolio |
| Intermediate Duration Fixed Income Portfolio |
| HSBC Investor Growth Portfolio |
| Growth Portfolio |
| HSBC Investor International Equity Portfolio |
| International Equity Portfolio |
| HSBC Investor Opportunity Portfolio |
| Opportunity Portfolio |
| HSBC Investor Value Portfolio |
| Value Portfolio |
|
|
| The Portfolios operate as master funds in master-feeder arrangements, in which other funds invest all of their investable assets in the Portfolios. The Declaration of Trust permits the Board of Trustees to issue an unlimited number of beneficial interests in the Portfolios. |
|
|
| The Portfolios are diversified series of the Portfolio Trust and are part of the HSBC Investor Family of Funds. Financial statements for all other funds of the HSBC Investor Family of Funds are published separately. |
|
|
| Under the Portfolio Trust’s organizational documents, the Portfolios’ Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Portfolios. In addition, in the normal course of business, the Portfolios may enter into contracts with their service providers, which also provide for indemnifications by the Portfolios. The Portfolios’ maximum exposure under these arrangements is unknown as this would involve any future claims that may be made against the Portfolios. However, based on experience, the Portfolios expect that risk of loss to be remote. |
|
|
2. | Significant Accounting Policies: |
|
|
| The following is a summary of the significant accounting policies followed by the Portfolios in the preparation of their financial statements. The policies are in conformity with U.S. generally accepted accounting principles (“GAAP”). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. |
|
|
Securities Valuation: | |
|
|
| Bonds and other fixed income securities (other than short-term obligations but including listed issues) are valued on the basis of valuations furnished by a pricing service, the use of which has been approved by the Portfolios’ Board of Trustees. In making such valuations, the pricing service utilizes both dealer-supplied valuations and the use of matrix techniques which take into account appropriate factors such as institutional-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics other than market data and without exclusive reliance upon quoted prices or exchanges or over-the-counter prices, since such valuations are believed to reflect more accurately the fair value of such securities. |
|
|
| The value of each equity security is based either on the last sale price on a national securities exchange, or in the absence of recorded sales, at the closing bid prices on such exchanges, or at the quoted bid price in the over-the-counter market. Securities or other assets for which market quotations are not readily available, or are deemed unreliable due to a significant event or otherwise, are valued by or at the direction of the Portfolios’ Board of Trustees. Examples of potentially significant events that could affect the value of an individual security include corporate actions by the issuer, announcements by the issuer relating to its earnings or products, regulatory news, natural disasters, and litigation. Examples of potentially significant events that could affect multiple securities held by a Portfolio include governmental actions, natu- |
|
|
HSBC INVESTOR PORTFOLIOS | 70 |
|
HSBC INVESTOR PORTFOLIOS |
Notes to Financial Statements—as of October 31, 2008 (continued) |
|
|
| ral disasters, and armed conflicts. In addition, if events materially affecting the value of foreign securities occur between the time when the exchange on which they are traded closes and the time when the Portfolios’ net assets are calculated, such securities may be valued using fair value pricing in accordance with procedures adopted by the Board of Trustees. Management identifies possible fluctuations in foreign securities by monitoring the rise or fall in the value of a designated benchmark index. In the event of a rise or fall greater than predetermined levels, the International Equity Portfolio may use a systematic valuation model provided by an independent third party to value its foreign securities, rather than local market closing prices. When the International Equity Portfolio uses such a valuation model, the value assigned to the International Equity Portfolio’s foreign securities may not be the quoted or published prices of the investment on their primary markets or exchanges. |
|
|
Investment Transactions and Related Income: | |
|
|
| Investment transactions are accounted for no later than one business day after trade date. For financial reporting purposes, changes in holdings are accounted for on trade date on the last business day of the reporting period. Investment gains and losses are calculated on the identified cost basis. Interest income is recognized on the accrual basis and includes, where applicable, the amortization or accretion of premium or discount. Dividend income is recorded on the ex-dividend date. |
|
|
Foreign Currency Translation: | |
|
|
| The accounting records of the Portfolios are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars at the current rate of exchange to determine the value of investments, assets and liabilities. Purchases and sales of securities, and income and expenses are translated at the prevailing rate of exchange on the respective dates of such transactions. The Portfolios do not isolate the portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments and foreign currencies. |
|
|
Forward Foreign Currency Exchange Contracts: | |
|
|
| The Portfolios may enter into forward foreign currency exchange contracts in connection with planned purchases or sales of securities or to hedge the U.S. dollar value of portfolio securities denominated in a particular currency. The Portfolios could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts and from unanticipated movements in the value of a foreign currency relative to the U.S. dollar. The forward foreign currency exchange contracts are adjusted by the daily exchange rate of the underlying currency and any gains or losses are recorded for financial statement purposes as unrealized gains or losses until the contract settlement date. |
|
|
Futures Contracts: | |
|
|
| Each Portfolio may invest in futures contracts for the purpose of hedging their existing portfolio securities or securities it intends to purchase against fluctuations in fair value caused by changes in prevailing market interest rates. Upon entering into a futures contract, the Portfolio is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount (initial margin deposit). Subsequent payments, known as “variation margin,” are made or received by the Portfolio each day, depending on the daily fluctuations in the fair value of the underlying security. The Portfolio recognizes a gain or loss equal to the daily variation margin. Should market conditions move unexpectedly, the Portfolio may not achieve the anticipated benefits of the futures contracts and may realize a loss. The use of futures transactions involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates, and the underlying hedged assets. The Core Plus Fixed Income Portfolio and the Intermediate Duration Fixed Income Portfolio had the following open futures contracts at October 31, 2008: |
|
|
71 | HSBC INVESTOR PORTFOLIOS |
|
HSBC INVESTOR PORTFOLIOS |
Notes to Financial Statements—as of October 31, 2008 (continued) |
|
|
|
|
|
|
|
|
|
|
|
| Position |
| Contracts |
| Unrealized |
|
|
|
|
|
|
| |||
| Core Plus Fixed Income Portfolio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| US Treasury Two Year Note Futures Contract expiring December 31, 2008 (Notional Value At $5,155,870) |
| Long |
| 24 |
| 63,375 |
|
|
|
|
|
|
|
|
|
|
| US Treasury Ten Year Note Futures Contract expiring December 31, 2008 (Notional Value At $7,463,156) |
| Short |
| 66 |
| 165,516 |
|
|
|
|
|
|
|
|
|
|
| Intermediate Duration Fixed Income Portfolio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| US Treasury Two Year Note Futures Contract expiring December 31, 2008 (Notional Value At $1,288,969) |
| Long |
| 6 |
| 15,844 |
|
|
|
|
|
|
|
|
|
|
| US Treasury Ten Year Note Futures Contract expiring December 31, 2008 (Notional Value At $1,356,938) |
| Short |
| 12 |
| 30,094 |
|
|
|
Mortgage Dollar Roll Transactions: | |
|
|
| The Core Plus Fixed Income Portfolio, the High Yield Fixed Income Portfolio and the Intermediate Duration Fixed Income Portfolio may engage in dollar roll transactions with respect to mortgage securities issued by the Government National Mortgage Association, the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation. In a dollar roll transaction, the Portfolio sells a mortgage-backed security and simultaneously agrees to repurchase a similar security on a specified future date at an agreed upon price. During the roll period, the Portfolio will not be entitled to receive any interest or principal paid on the securities sold. The Portfolio is compensated for the lost interest on the securities sold by the difference between the sales price and the lower price for the future repurchase as well as by the interest earned on the reinvestment of the sales proceeds. The Portfolio may also be compensated by receipt of a commitment fee. |
|
|
Restricted and Illiquid Securities: | |
|
|
| A restricted security is a security which has been purchased through a private offering and cannot be resold to the general public without prior registration under the Securities Act of 1933 (the “1933 Act”) or pursuant to the resale limitations provided by Rule 144 under the 1933 Act, or an exemption from the registration requirements of the 1933 Act. Certain restricted securities may be resold in transactions exempt from registration, normally to qualified institutional buyers, and may be deemed liquid by the investment adviser based on procedures established by the Board of Trustees. Therefore, not all restricted securities are considered illiquid. At October 31, 2008 the HSBC Core Plus Fixed Income Portfolio held restricted securities that were illiquid, representing 0.03% of net assets, as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
| Security Name |
| Acquisition |
| Acquisition |
| Principal |
| Value($) |
| |
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
| DLJ Mortgage Acceptance Corp. IO, Series 1997-CFI, Class S, 1.19%, 5/15/30 |
| 5/16/1997 |
| 1,344 |
|
| 17,984 |
| 1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| FHA Weyerhauser, 7.43%, 1/1/24 |
| 3/28/2002 |
| 24,933 |
|
| 26,158 |
| 26,158 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| GS Mortgage Securities Corp. IO, Series 1997-GL, Class X2, 0.29 7/13/30 |
| 8/14/1997 |
| 1,349 |
|
| 35,694 |
| 414 |
|
|
|
Repurchase Agreements: | |
|
|
| The Portfolios may enter into repurchase agreements with an entity which is a member of the Federal Reserve System or which is a “primary dealer” (as designated by the Federal Reserve Bank of New York) in U.S. Government obligations. The repurchase price generally equals the price paid by a Portfolio plus interest negotiated on the basis of current short-term rates, which may be more or less than the rate on the underlying portfolio securities. The seller, under a repurchase agreement, is required to maintain the collateral held pursuant to the agreement, with a fair value equal to or greater than the repurchase price (including accrued interest). Collateral subject to repurchase agreements is held by the Portfolios’ Custodian or another qualified Custodian or in the Federal Reserve/Treasury book-entry system. In the event of counter-party default, the Portfolio has the right to use the collateral to offset losses incurred. There is a potential for loss to the Portfolio in the event the Portfolio is delayed or prevented from exercising its rights to dispose of the collateral securities, including the risk of a possible decline in the fair value of the underlying securities during the period while the Portfolio seeks to assert its rights. |
|
|
HSBC INVESTOR PORTFOLIOS | 72 |
|
HSBC INVESTOR PORTFOLIOS |
Notes to Financial Statements—as of October 31, 2008 (continued) |
|
|
Expense Allocations: | |
|
|
| Expenses directly attributable to a Portfolio are charged to that Portfolio. Expenses not directly attributable to a Portfolio are allocated proportionally among various or all funds within the HSBC Investor Family of Funds in relation to net assets or on another reasonable basis. |
|
|
Federal Income Taxes: | |
|
|
| Each Portfolio will be treated as a partnership for U.S. Federal income tax purposes. Accordingly, each Portfolio passes through all of its net investment income and gains and losses to its feeder funds, and is therefore not subject to U.S. Federal income tax. As such, investors in the Portfolios will be taxed on their respective share of the Portfolios’ ordinary income and realized gains. It is intended that the Portfolios will be managed in such a way that an investor will be able to satisfy the requirements of the Internal Revenue Code applicable to regulated investment companies. |
|
|
| In addition, effective April 30, 2008, the Trust adopted Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes (“FIN 48”). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the affirmative evaluation of tax positions taken or expected to be taken in the course of preparing the Portfolio Trust’s tax returns to determine whether it is more-likely-than-not (i.e., greater than 50-percent) that each tax position will be sustained upon examination by a taxing authority based on the technical merits of the position. A tax position that meets the more-likely-than-not recognition threshold is measured to determine the amount of benefit to recognize in the financial statements. Differences between tax positions taken in a tax return and amounts recognized in the financial statements will generally result in an increase in a liability for taxes payable (or a reduction of a tax refund receivable), including the recognition of any related interest and penalties as an operating expense. Implementation of FIN 48 included a review of tax positions taken in tax years that remain subject to examination by tax authorities in all major tax jurisdictions, including federal (i.e., the last 4 tax year ends and the interim tax period since then, as applicable). The adoption of FIN 48 did not impact the Portfolios’ net assets or results of operations. |
|
|
New Accounting Pronouncements: | |
|
|
| In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement on Financial Accounting Standards (“SFAS”) No. 157, “Fair Value Measurements” (“SFAS No. 157”). This standard establishes a single authoritative definition of fair value, sets out a framework for measuring fair value and requires additional disclosures about fair value measurements. SFAS No. 157 applies to fair value measurements already required or permitted by existing standards. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. The changes to current generally accepted accounting principles from the application of this Statement relate to the definition of fair value, the methods used to measure fair value, and the expanded disclosures about fair value measurements. Effective November 1, 2008 the Trust adopted SFAS No. 157. The adoption of this standard did not have an impact to the net assets or results of operations of the Fund, however, additional disclosures will be required about the inputs used to develop fair value measurements and the effect of certain measurements on the changes in net assets in fiscal reporting periods subsequent to the adoption date. |
|
|
| In March 2008, the FASB issued the SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities” (“SFAS 161”). SFAS 161 is effective for fiscal years and interim periods beginning after November 15, 2008. SFAS 161 requires enhanced disclosures about the Fund’s derivative and hedging activities, including how such activities are accounted for and their effect on the Portfolio’s financial position, performance and cash flows. Management is currently evaluating the impact, the adoption of SFAS 161 will have on the Funds’ financial statements and related disclosures. |
|
|
73 | HSBC INVESTOR PORTFOLIOS |
|
HSBC INVESTOR PORTFOLIOS |
Notes to Financial Statements—as of October 31, 2008 (continued) |
|
|
3. | Related Party Transactions: |
|
|
Investment Management: | |
|
|
| HSBC Global Asset Management (USA) Inc. (“HSBC” or the “Investment Adviser”), a wholly owned subsidiary of HSBC Bank USA, N.A., a national bank organized under the laws of the United States, acts as the Investment Adviser to the Portfolios pursuant to an investment management contract with the Portfolio Trust. As Investment Adviser, HSBC manages the investments of the Portfolios and continuously reviews, supervises, and administers the Portfolios’ investments, except that Winslow Capital Management, Inc., AllianceBernstein Investment Research and Management, Westfield Capital Management, LLC and NWQ Investment Management Co., LLC serve as Sub-Investment Advisers for the Growth Portfolio, International Equity Portfolio, Opportunity Portfolio, and the Value Portfolio, respectively, and are paid for their services directly by the respective Portfolios. |
|
|
| For its services, the Investment Adviser receives a fee, accrued daily and paid monthly, at an annual rate of 0.60% of the High Yield Fixed Income Portfolio’s average daily net assets and 0.40% of the Intermediate Duration Fixed Income Portfolio’s average daily net assets. Halbis Capital Management, a wholly owned subsidiary of Halbis Capital Management (UK) Limited an affiliate of the Investment Adviser, serves as the Sub-Investment Advisor and is paid by the Investment Adviser. |
|
|
| For its services as Investment Adviser, HSBC receives, from the Core Plus Fixed Income Portfolio, a fee, accrued daily and paid monthly, at an annual rate of: |
|
|
|
|
| Based on Average Daily Net Assets of |
| Fee Rate |
|
| ||
| Up to $50 million |
| 0.575% |
| In excess of $50 million but not exceeding $95 million |
| 0.450% |
| In excess of $95 million but not exceeding $150 million |
| 0.200% |
| In excess of $150 million but not exceeding $250 million |
| 0.400% |
| In excess of $250 million |
| 0.350% |
|
|
| Effective May 12, 2008, Winslow Capital Management, Inc. (“Winslow”) serves as the Sub-Adviser to the Growth Portfolio. For their services, the Investment Adviser and Winslow Capital Management, Inc. receive in aggregate, from the Growth Portfolio, a fee, accrued daily and paid monthly, at an annual rate of: |
|
|
|
|
| Based on Sub-Advised HSBC Investor Family of Funds Average Daily Net Assets of |
| Fee Rate |
|
| ||
| Up to $250 million |
| 0.400% |
| In excess of $250 million but not exceeding $500 million |
| 0.350% |
| In excess of $500 million but not exceeding $750 million |
| 0.300% |
| In excess of $750 million but not exceeding $1 billion |
| 0.250% |
| In excess of $1 billion |
| 0.200% |
|
|
| Prior to May 12, 2008, Waddell and Reed Investment Management Company(“Waddell & Reed”) served as the Sub-Adviser to the Growth Portfolio. For their services, the Investment Adviser and Waddell & Reed Investment Management Company receive in aggregate, from the Growth Portfolio, a fee, accrued daily and paid monthly, at an annual rate of: |
|
|
|
|
| Based on Average Daily Net Assets of |
| Fee Rate |
|
| ||
| Up to $50 million |
| 0.500% |
| In excess of $50 million but not exceeding $100 million |
| 0.425% |
| In excess of $100 million but not exceeding $200 million |
| 0.375% |
| In excess of $200 million |
| 0.325% |
|
|
| For their services, the Investment Adviser and AllianceBernstein Investment Research and Management receive in aggregate, from the International Equity Portfolio, a fee, accrued daily and paid monthly, at an annual rate of: |
|
|
|
| |
| Based on Average Daily Net Assets of: |
| Fee Rate | |
|
| |||
| Up to $10 million |
| 1.015 | % |
| In excess of $10 million but not exceeding $25 million |
| 0.925 | % |
| In excess of $25 million but not exceeding $50 million |
| 0.79 | % |
| In excess of $50 million but not exceeding $100 million |
| 0.70 | % |
| In excess of $100 million |
| 0.61 | % |
|
|
HSBC INVESTOR PORTFOLIOS | 74 |
|
HSBC INVESTOR PORTFOLIOS |
Notes to Financial Statements—as of October 31, 2008 (continued) |
|
|
| For their services, the Investment Adviser and Westfield Capital Management, LLC receive in aggregate, a fee, accrued daily and paid monthly, at an annual rate of 0.80% of the Opportunity Portfolio’s average daily net assets. |
|
|
| For their services, the Investment Adviser and NWQ Investment Management Co., LLC receive in aggregate, from the Value Portfolio, a fee, accrued daily and paid monthly, at an annual rate of: |
|
|
|
|
| Based on Average Daily Net Assets of |
| Fee Rate |
|
| ||
| Up to $500 million |
| 0.525% |
| In excess of $500 million but not exceeding $1 billion |
| 0.475% |
| In excess of $1 billion |
| 0.425% |
|
|
| All contractual and any voluntary fee waivers/reimbursements are not subject to recoupment in subsequent fiscal periods. Voluntary waiver/reimbursements may be stopped at any time. |
|
|
Administration: | |
|
|
| HSBC serves the Portfolios as Administrator. Under the terms of the Administration Agreement, HSBC receives from the Portfolios a fee, accrued daily and paid monthly, at an annual rate of: |
|
|
|
|
| Based on Average Daily Net Assets of |
| Fee Rate |
|
| ||
| Up to $12 billion |
| 0.0525% |
| In excess of $12 billion |
| 0.0350% |
|
|
| The fee rates and breakpoints are determined on the basis of the aggregate average daily net assets of the HSBC Investor Family of Funds, however, the assets of the Portfolios and Feeder Funds that invest in the Portfolios are not double-counted. The total administration fee paid to HSBC is allocated to each series in the HSBC Investor Family of Funds based upon its proportionate share of the aggregate net assets of the Family of Funds. For assets invested in the Portfolios by Feeder Funds, the Portfolios pay half of the administration fee and the Feeder Funds pay half of the administration fee, for a combination of the total fee rate set forth above. |
|
|
| Pursuant to a Sub-Administration Agreement with HSBC, Citi Fund Services Ohio, Inc. (“Citi Ohio”), a wholly-owned subsidiary of The Citigroup, Inc., serves as the Portfolio Trust’s Sub-Administrator subject to the general supervision of the Portfolio Trust’s Board of Trustees and HSBC. For these services, Citi Ohio is entitled to a fee, payable by HSBC, at an annual rate equivalent to the fee rates set forth above, minus 0.02% (2 basis points) which is retained by HSBC. |
|
|
| Under a Compliance Services Agreement between the Portfolios and Citi Ohio (the “CCO Agreement”), Citi Ohio makes an employee available to serve as the Portfolios’ Chief Compliance Officer (the “CCO”). Under the CCO Agreement, Citi Ohio also provides infrastructure and support in implementing the written policies and procedures comprising the Portfolios’ compliance program, including support services to the CCO. For the services provided under the CCO Agreement, the HSBC Investor Family of Funds paid Citi Ohio $250,800 for the year ended October 31, 2008, plus reimbursement of certain expenses. Expenses incurred by each Portfolio are reflected on the Statements of Operations as “Compliance Service.” Citi Ohio pays the salary and other compensation earned by any such individuals as employees of Citi Ohio. |
|
|
Fund Accounting and Trustee: | |
|
|
| Citi Ohio provides fund accounting services for the Portfolios. For its services to the Portfolios, Citi Ohio receives an annual fee per Portfolio, including reimbursement of certain expenses, that is accrued daily and paid monthly. |
|
|
| Effective April 1, 2008 each of the non-interested Trustees are compensated with a $60,000 annual Board retainer, as well as a $3,000 annual retainer for each Committee of the Board. Each non-interested Trustee also receives a $5,000 and $3,000 meeting fee for each regular in-person Board meeting and Committee meeting, respectively. Furthermore, each non-interested Trustee receives compensation for attending special meetings and/or functioning as a Committee Chairperson or Lead Trustee. In addition, the non-interested Trustees are reimbursed for certain expenses incurred in connection with their Board membership. |
|
|
| Prior to April 1, 2008 each of the non-interested Trustees were compensated with a $35,000 annual Board retainer, as well as a $3,000 annual retainer for each Committee of the Board. Each non-interested Trustee also received a $5,000 and $3,000 meeting fee for each regular in-person Board meeting and Committee meeting, respectively. Furthermore, each non-interested Trustee received compensation for attending special meetings and/or functioning as a Committee |
|
|
75 | HSBC INVESTOR PORTFOLIOS |
|
HSBC INVESTOR PORTFOLIOS |
Notes to Financial Statements—as of October 31, 2008 (continued) |
|
|
| Chairperson or Lead Trustee. In addition, the non-interested Trustees were reimbursed for certain expenses incurred in connection with their Board membership. |
|
|
4. | Investment Transactions: |
|
|
| Purchases and sales of securities (excluding securities maturing less than one year from acquisition) for the year ended October 31, 2008 were as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Portfolio Name |
| Purchases |
| Sales |
| Purchases |
| Sales |
| ||||
|
|
|
|
|
| |||||||||
| Core Plus Fixed Income Portfolio |
| $ | 69,036,342 |
| $ | 80,690,896 |
| $ | 49,065,754 |
| $ | 55,677,401 |
|
| High Yield Fixed Income Portfolio |
|
| 3,234,787 |
|
| 3,081,017 |
|
| — |
|
| — |
|
| Intermediate Duration Fixed Income Portfolio |
|
| 8,739,811 |
|
| 10,328,525 |
|
| 7,299,067 |
|
| 6,054,432 |
|
| Growth Portfolio |
|
| 161,944,892 |
|
| 127,516,379 |
|
| — |
|
| — |
|
| International Equity Portfolio |
|
| 100,701,900 |
|
| 116,158,373 |
|
| — |
|
| — |
|
| Opportunity Portfolio |
|
| 147,097,284 |
|
| 172,313,505 |
|
| — |
|
| — |
|
| Value Portfolio |
|
| 18,574,861 |
|
| 16,117,722 |
|
| — |
|
| — |
|
|
|
5. | Federal Income Tax Information: |
|
|
| At October 31, 2008, the cost, gross unrealized appreciation and gross unrealized depreciation on securities for federal income tax purposes, were as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Fund |
| Tax Cost |
| Tax |
| Tax |
| Net Unrealized |
| ||||
|
|
|
|
|
| |||||||||
| Core Plus Fixed Income Portfolio |
| $ | 118,920,436 |
| $ | 404,331 |
| $ | (13,181,862 | ) | $ | (12,777,531 | ) |
| High Yield Fixed Income Portfolio |
|
| 14,005,674 |
|
| — |
|
| (4,456,761 | ) |
| (4,456,761 | ) |
| Intermediate Duration Fixed Income Portfolio |
|
| 20,454,405 |
|
| 65,632 |
|
| (1,712,397 | ) |
| (1,646,765 | ) |
| Growth Portfolio |
|
| 104,366,399 |
|
| 1,301,129 |
|
| (21,361,373 | ) |
| (20,060,244 | ) |
| International Portfolio |
|
| 319,238,690 |
|
| 4,981,933 |
|
| (127,033,651 | ) |
| (122,051,718 | ) |
| Opportunity Portfolio |
|
| 160,227,856 |
|
| 5,851,082 |
|
| (37,493,204 | ) |
| (31,642,122 | ) |
| Value Portfolio |
|
| 62,715,935 |
|
| 4,905,550 |
|
| (17,374,375 | ) |
| (12,468,825 | ) |
|
|
|
| ||
| * | The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to: tax deferral of losses on wash sales. |
|
|
6. | Legal and Regulatory Matters: |
|
|
| On September 26, 2006 BISYS Fund Services, Inc. (“BISYS”), an affiliate of BISYS Fund Services Ohio, Inc. which provides various services to the Portfolios as described in footnote 3, reached a settlement with the Securities and Exchange Commission (“the SEC”) regarding the SEC’s investigation related to BISYS’ past payment of certain marketing and other expenses with respect to certain of its mutual fund clients. Although BISYS has reached a settlement with the SEC, the Portfolios’ management is not aware that any determination has been made as to how the BISYS settlement monies will be distributed. While the Portfolios’ management is currently unable to determine the impact, if any, of such matters on the Portfolios or the Portfolios’ financial statements, management does not anticipate a material, adverse impact to the Portfolios or the Portfolios’ financial statements. |
|
|
7. | Subsequent Event: |
|
|
| HSBC Investor Core Plus Fixed Income Portfolio |
|
|
| Each of the Fixed Income Portfolios is currently sub-advised by Halbis Capital Management (USA) Inc. (“Halbis”), an affiliate of the Portfolios’ investment adviser, HSBC Global Asset Management (USA) Inc. (the “Adviser”). |
|
|
HSBC INVESTOR PORTFOLIOS | 76 |
|
HSBC INVESTOR PORTFOLIOS |
Notes to Financial Statements—as of October 31, 2008 (continued) |
|
|
| Due to changes in its U.S. business model, Halbis has determined to resign as sub-adviser to the Fixed Income Portfolios effective January 31, 2009. The Adviser is actively exploring options for the Fixed Income Portfolios. Options under consideration are reorganizing the Fixed Income Portfolios into an unaffiliated fund family or liquidation of the Fixed Income Portfolios. |
|
|
| The Adviser anticipates presenting its recommendations to the Board of Trustees of the Fixed Income Portfolios in the near future. Once the Board of Trustees has made a determination as to the course of action, the Adviser will provide notice to the shareholders. |
|
|
77 | HSBC INVESTOR PORTFOLIOS |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Trustees of
HSBC Investor Portfolios:
We have audited the accompanying statements of assets and liabilities of HSBC Investor Portfolios – HSBC Investor Core Plus Fixed Income Portfolio, HSBC Investor High Yield Fixed Income Portfolio, HSBC Investor Intermediate Duration Fixed Income Portfolio, HSBC Investor Growth Portfolio, HSBC Investor International Equity Portfolio, HSBC Investor Opportunity Portfolio and HSBC Investor Value Portfolio (the Funds), including the schedules of portfolio investments, as of October 31, 2008, and the related statements of operations for the year then ended, the changes in net assets for each year in the two-year period then ended, and the financial highlights for each period in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2008, by correspondence with custodians and brokers; or other appropriate auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Funds as of October 31, 2008, the results of their operations for the year then ended, the changes in their net assets for each year in the two-year period then ended, and the financial highlights for each period in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.
KPMG LLP
Columbus, Ohio
December 19, 2008
|
|
HSBC INVESTOR PORTFOLIOS | 78 |
|
HSBC INVESTOR PORTFOLIOS |
Table of Shareholder Expenses (Unaudited)—as of October 31, 2008 |
|
|
| As a shareholder of the HSBC Investor Portfolios (“Portfolios”), you incur ongoing costs, including management fees and other Fund expenses. |
|
|
| These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Portfolios and to compare these costs with the ongoing costs of investing in other mutual funds. |
|
|
| These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from May 1, 2008 through October 31, 2008. |
|
|
| Actual Example |
|
|
| The table below provides information about actual account values and actual expenses. You may use the information below, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period. |
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|
|
| Beginning |
| Ending Account |
| Expenses Paid |
| Annualized |
| ||||||||||
|
|
|
|
|
| ||||||||||||||
Core Plus Fixed Income Portfolio |
|
| $ | 1,000.00 |
|
|
| $ | 920.30 |
|
|
| $ | 2.90 |
|
| 0.60 | % |
|
High Yield Fixed Income Portfolio |
|
|
| 1,000.00 |
|
|
|
| 750.40 |
|
|
|
| 5.63 |
|
| 1.28 | % |
|
Intermediate Duration Fixed Income Portfolio |
|
|
| 1,000.00 |
|
|
|
| 943.70 |
|
|
|
| 4.49 |
|
| 0.92 | % |
|
Growth Portfolio |
|
|
| 1,000.00 |
|
|
|
| 679.10 |
|
|
|
| 2.70 |
|
| 0.64 | % |
|
International Equity Portfolio |
|
|
| 1,000.00 |
|
|
|
| 538.60 |
|
|
|
| 2.86 |
|
| 0.74 | % |
|
Opportunity Portfolio |
|
|
| 1,000.00 |
|
|
|
| 664.50 |
|
|
|
| 3.64 |
|
| 0.87 | % |
|
Value Portfolio |
|
|
| 1,000.00 |
|
|
|
| 670.60 |
|
|
|
| 2.73 |
|
| 0.65 | % |
|
|
|
* | Expenses are equal to the average account value over the period multiplied by the Portfolio’s annualized expense ratio, multiplied by the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year (to reflect the one half year period). |
|
|
79 | HSBC INVESTOR PORTFOLIOS |
|
HSBC INVESTOR FAMILY OF FUNDS |
Table of Shareholder Expenses (Unaudited)—as of October 31, 2008 (continued) |
|
|
| Hypothetical Example for Comparison Purposes |
|
|
| The table below provides information about hypothetical account values and hypothetical expenses based on each Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. |
|
|
| Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. |
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|
|
| Beginning |
| Ending Account |
| Expenses Paid |
| Annualized |
| ||||||||||
|
|
|
|
|
| ||||||||||||||
Core Plus Fixed Income Portfolio |
|
| $ | 1,000.00 |
|
|
| $ | 1,022.12 |
|
|
| $ | 3.05 |
|
| 0.60 | % |
|
High Yield Fixed Income Portfolio |
|
|
| 1,000.00 |
|
|
|
| 1,018.70 |
|
|
|
| 6.50 |
|
| 1.28 | % |
|
Intermediate Duration Fixed Income Portfolio |
|
|
| 1,000.00 |
|
|
|
| 1,020.51 |
|
|
|
| 4.67 |
|
| 0.92 | % |
|
Growth Portfolio |
|
|
| 1,000.00 |
|
|
|
| 1,021.92 |
|
|
|
| 3.25 |
|
| 0.64 | % |
|
International Equity Portfolio |
|
|
| 1,000.00 |
|
|
|
| 1,021.42 |
|
|
|
| 3.76 |
|
| 0.74 | % |
|
Opportunity Portfolio |
|
|
| 1,000.00 |
|
|
|
| 1,020.76 |
|
|
|
| 4.42 |
|
| 0.87 | % |
|
Value Portfolio |
|
|
| 1,000.00 |
|
|
|
| 1,021.87 |
|
|
|
| 3.30 |
|
| 0.65 | % |
|
|
|
* | Expenses are equal to the average account value over the period multiplied by the Portfolio’s annualized expense ratio, multiplied by the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year (to reflect the one half year period). |
|
|
HSBC INVESTOR PORTFOLIOS | 80 |
HSBC INVESTOR FAMILY OF FUNDS |
MANAGEMENT OF THE TRUST
The following table contains information regarding HSBC Investor Family of Funds Board of Trustees (“Trustees”). Asterisks indicate those Trustees who are “interested persons,” as defined in the Investment company act of 1940, as amended, of the Funds. The Funds’ Statement of Additional Information includes additional information about the Trustees and is available by calling (888) 525-5757.
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|
Name, Address, |
| Position(s) |
| Term of Office and |
| Principal Occupation(s) |
| Number of |
| Other |
|
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|
|
NON-INTERESTED TRUSTEE |
|
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|
|
Marcia L. Beck |
| Trustee |
| Indefinite; June 2008 |
| Private Investor; Executive Vice President and Chief Operating Officer of Prudential Investments (1997-1999) |
| 40 |
| None |
Susan S. Huang |
| Trustee |
| Indefinite; June 2008 |
| Investment Consultant, self employed (2001 to present); Senior Vice President, Schroeder Investment Management (2001 - 2004) |
| 40 |
| United Church Foundation; Huntington’s Disease Society; Second Congregational Church (Greenwich) Endowment, Inc. |
Alan S. Parsow |
| Trustee |
| Indefinite; 1987 |
| General Partner of Elkhorn Partners, L.P. (a private investment partnership) (since 1989) |
| 40 |
| None |
Thomas F. Robards |
| Trustee |
| Indefinite; 2005 |
| Partner, Robards & Co. LLC (2005-present); Chief Financial Officer, American Museum of Natural History (2003 to 2004) |
| 40 |
| Ellington Financial LLC and Overseas Shipholding Group |
Larry M. Robbins |
| Trustee |
| Indefinite; 1987 |
| Private Investor; Director, Center for Teaching and Learning, University of Pennsylvania (1999-2006) |
| 40 |
| None |
Michael Seely |
| Trustee |
| Indefinite; 1987 |
| Private Investor; Global Multi Manager Partners (1999-2003); President of Investor Access Corporation (1981-2003) |
| 40 |
| None |
|
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|
|
INTERESTED TRUSTEE |
|
|
|
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| ||
|
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|
|
Stephen J. Baker** |
| Trustee |
| Indefinite; 2004 |
| Chief Executive Officer, HSBC Global Asset Management (USA) Inc. and Executive Vice President, HSBC (USA), N.A. (2003 to present); Chief Executive Officer, HSBC Asset Management (Canada) Limited (1998 to 2003) |
| 40 |
| None |
|
|
* | Includes both the fund and the underlying Portfolio for Funds with a master/feeder structure. |
|
|
** | Mr. Baker is an “interested person” of the Trust, as defined by the 1940 Act, because of his employment with the Adviser. |
|
|
81 | HSBC INVESTOR PORTFOLIOS |
|
HSBC INVESTOR FAMILY OF FUNDS |
Board of Trustees and Officers (unaudited)(continued) |
The names of the officers, their addresses, ages, position(s) held with the Trust, and principal occupation(s) during the past five years are described in the table below.
|
|
|
|
|
|
|
Name, Address, |
| Position(s) |
| Term of Office and |
| Principal Occupation(s) |
Richard A. Fabietti |
| President |
| Indefinite; 2004 |
| Senior Vice President, Head of Product Management, HSBC Global Asset Management (USA) Inc. (1998 to present) |
Elba L. Vasquez |
| Vice President |
| Indefinite; 2006 |
| Vice President of Product Administration, HSBC Global Asset Management (USA) Inc. (2005 to present); Vice President of Client Services, Citi (1996 to2005) |
Troy Sheets* |
| Treasurer |
| Indefinite; 2004 |
| Senior Vice President, Citi (2002 to present) |
Jennifer A English* |
| Secretary |
| Indefinite; September |
| Vice President, Regulatory Administration, Citi (2005 to present); Assistant Vice President and Assistant Counsel, PFPC, Inc. (2002-2005) |
F. Martin Fox |
| Assistant Secretary |
| Indefinite; September |
| Assistant Vice President, Regulatory Administration, Citi (May 2008 to present); Contract Attorney, Update Legal LLC (2002 to 2008) |
Frederick J. Schmidt* |
| Chief Compliance Officer |
| Term expires 2009; |
| Senior Vice President and Chief Compliance Officer, CCO Services, Citi (2004 to present); President, FJS Associates (2002 to 2004) |
|
|
* | Mr. Sheets, Mr. Schmidt and Ms. English also are officers of certain other investment companies of which Citi (or an affiliate) is the administrator or sub-administrator. |
|
|
HSBC INVESTOR PORTFOLIOS | 82 |
A description of the policies and procedures that the Funds use to determine how to vote proxies relating to the portfolio securities is available without charge, upon request, by calling 1-800-525-5757 for HSBC Bank USA and HSBC Brokerage (USA) Inc. clients and 1-800-782-8183 for all other shareholders or on the Fund’s website at www.investorfunds.us.hsbc.com and the Securities and Exchange Commission’s (“Commission”) website at http://www.sec.gov. A copy of the Fund’s voting record for the most recent 12 month period ending June 30 is available at the Commission’s website at http://www.sec.gov.
Schedules of Portfolio Investments for fiscal quarters ending January 31 and July 31 will be available no later than 60 days after each period end, without charge, on the Fund’s website at www.investorfunds.us.hsbc.com and on the Commission’s web-site at http://www.sec.gov.
An investment in a Fund is not a deposit of HSBC Bank USA, National Association, and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
|
|
83 | HSBC INVESTOR PORTFOLIOS |
(This Page Intentionally Left Blank)
(This Page Intentionally Left Blank)
|
|
|
HSBC Investor LifeLine Funds: |
| For All Other Shareholders |
|
| HSBC Investor Funds |
INVESTMENT ADVISER AND ADMINISTRATOR |
| P.O. Box 182845 |
HSBC Global Asset Management (USA) Inc. |
| Columbus, OH 43218-2845 |
452 Fifth Avenue |
| 1-800-782-8183 |
New York, NY 10018 |
|
|
|
| TRANSFER AGENT AND SPONSOR |
SUB-ADVISERS |
| Citi Fund Services |
HSBC Investor Growth Portfolio |
| 3435 Stelzer Road |
Winslow Capital Management, Inc. |
| Columbus, OH 43219 |
4720 IDS Tower |
|
|
80th South Eighth Street |
| DISTRIBUTOR |
Minneapolis, MN 55402 |
| Foreside Distribution Services. L.P. |
|
| 690 Taylor Road, Suite 150 |
HSBC Investor International Equity Portfolio |
| Gahanna, OH 43230-3202 |
AllianceBernstein Investment Research and Management |
|
|
1345 Avenue of the Americas, 39th Floor |
| CUSTODIAN |
New York, NY 10105 |
| HSBC Investor Core Plus Fixed Income Portfolio |
|
| HSBC Investor High Yield Fixed Income Portfolio |
HSBC Investor Opportunity Portfolio |
| HSBC Investor Intermediate Duration Fixed Income Portfolio |
One Financial Center |
| HSBC Investor Growth Portfolio |
Boston, MA 02111 |
| HSBC Investor International Equity Portfolio |
|
| HSBC Investor Opportunity Portfolio |
HSBC Investor Value Portfolio |
| HSBC Investor Value Portfolio |
NWQ Investment Management Co., LLC |
| The Northern Trust Company |
2049 Century Park East, 16th Floor |
| 50 South LaSalle Street |
Los Angeles, CA 90067 |
| Chicago, IL 60603 |
|
|
|
HSBC Investor Core Plus Fixed Income Portfolio |
| INDEPENDENT REGISTERED PUBLIC ACCOUNTING |
HSBC Investor High Yield Fixed Income Portfolio |
| FIRM |
HSBC Investor Intermediate Duration Fixed Income Portfolio |
| KPMG LLP |
Halbis Capital Management (USA) Inc. |
| Columbus, OH 43215 |
452 Fifth Avenue, 18th Floor |
|
|
New York, NY 10018 |
| LEGAL COUNSEL |
|
| Dechert LLP |
SHAREHOLDER SERVICING AGENTS |
| 1775 I Street, N.W. |
For HSBC Bank USA, N.A. and |
| Washington, D.C. 20006 |
HSBC Securities (USA) Inc. Clients |
|
|
HSBC Bank USA, N.A. |
|
|
452 Fifth Avenue |
|
|
New York, NY 10018 |
|
|
1-888-525-5757 |
|
|
The HSBC LifeLine Funds are distributed by Foreside Distribution Services L.P. This document must be preceded or accompanied by a current prospectus for the HSBC Investor Funds, which you should read carefully before you invest or send money.
|
|
|
|
|
— NOT FDIC INSURED |
| — NO BANK GUARANTEE |
| — MAY LOSE VALUE |
|
|
|
|
HSB-SR-LL | 12/08 |
Item 2. Code of Ethics.
(a) The registrant has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. This code of ethics is included as Exhibit 12(a)(i).
(b) During the period covered by the report, with respect to the registrant’s code of ethics that applies to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions; there have been no amendments to, nor any waivers granted from, a provision that relates to any element of the code of ethics definition enumerated in paragraph (b) of this Item 2.
Item 3. Audit Committee Financial Expert.
3(a)(1) The registrant’s board of directors has determined that the registrant has at least one audit committee financial expert serving on its audit committee.
3(a)(2) The audit committee financial expert is Thomas Robards, who is “independent” for purposes of this Item 3 of Form N-CSR.
Item 4. Principal Accountant Fees and Services.
(a) Audit Fees,
2007 $305,380
2008 $303,300
(b) Audit-Related Fees,
2007 $14,000
2008 $10,200
2007 – Fees of $14,000 relate to the consent of N-1A filing and the consent of the N-14 filing for the Conservative Income Strategy Fund and the Conservative Growth Strategy Fund.
2008 – Fees of $10,200 relate to the consent of N-1A filing and the consent of the N-14 filing for the Growth and Income Fund and the Growth Fund.
(c) Tax Fees,
2007 $162,068
2008 $161,500
Tax fees for both 2007 and 2008 relate to the preparation of the Fund’s federal and state income, excise tax calculations and the review of capital gain and income distribution calculations.
(d) All Other Fees,
2007 $0
2008 $0
(e)(1) Except as permitted by Rule 2-01(c)(7)(i)(C) of Regulation S-X, the Trust’s Audit Committee must preapprove all audit and non-audit services by the independent accountants relating to the operations or financial reporting of the Funds. Prior to the commencement of any audit or non-audit services to a fund, the Audit Committee reviews the services to determine whether they are appropriate and permissible under applicable law.
(2) Disclose the percentage of services described in each of paragraphs (b) through (d) of this Item that were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
None of the services summarized in (b) – (d), above, were approved by the audit Committee pursuant to Rule 2-01(c)(7)(i)(C) of Regulation S-X.
(f) Not applicable.
(g) Non-Audit Fees.
2007 $176,068
2008 $171,700
(h) The audit committee considered the nonaudit services rendered to the registrant’s investment adviser and any entity controlling, controlled by, or under common control with the investment adviser, and believes the services are compatible with the principal accountant’s independence.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments.
(a) Included as a part of the report to shareholders filed under Item 1.
(b) Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 11. Controls and Procedures.
(a) The registrant’s principal executive officer and principal financial officer have concluded, based on their evaluation of the registrant’s disclosure controls and procedures as conducted within 90 days of the filing date of this report, that these disclosure controls and procedures are adequately designed and are operating effectively to ensure that information required to be disclosed by the registrant on Form N-CSR is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.
(b) There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a -3(d)) that occurred during the second fiscal quarter of the period covered by this report that have materially affected or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. Exhibits.
(a)(1) The code of ethics that is the subject of the disclosure required by Item 2 is attached hereto.
(a)(2) Certifications pursuant to Rule 30a-2(a) are attached hereto.
(a)(3) Not applicable.
(b) Certifications pursuant to Rule 30a-2(b) are furnished herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| (Registrant) | HSBC INVESTOR PORTFOLIOS |
| By (Signature and Title)* | /s/ Richard A. Fabietti |
| Richard A. Fabietti | |
| President |
| Date | December 23, 2008 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| By (Signature and Title)* | /s/ Richard A. Fabietti |
| Richard A. Fabietti | |
| President |
| Date | December 23, 2008 |
| By (Signature and Title)* | /s/ Troy A. Sheets |
| Troy A. Sheets | |
| Treasurer |
| Date | December 23, 2008 |
* Print the name and title of each signing officer under his or her signature.