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, 2009
Item 1. Reports to Stockholders.
HSBC Global Asset Management (USA) Inc.
October 31, 2009
HSBC Investor LifeLine Funds
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
|
Table of Contents |
|
HSBC Investor Lifeline Funds |
|
|
|
|
|
|
| 3 |
| |
|
| 4 |
| |
|
| 5 |
| |
|
| 6 |
| |
|
| 7 |
| |
|
| 19 |
| |
|
| 20 |
| |
|
| 21 |
| |
|
| 22 |
| |
|
| 26 |
| |
|
| 30 |
| |
|
| 39 |
| |
|
| 40 |
| |
|
| 42 |
| |
| ||||
|
|
|
| |
|
| 44 |
| |
|
|
|
| |
|
| 52 |
| |
|
| 54 |
| |
|
| 57 |
| |
|
| 58 |
| |
|
| 59 |
| |
|
| 60 |
| |
|
| 62 |
| |
|
| 64 |
| |
|
| 65 |
| |
|
| 72 |
| |
|
| 73 |
| |
|
| 74 |
| |
|
| 76 |
|
(This Page Intentionally Left Blank)
|
Barclays Capital Intermediate U.S. Aggregate Index is an unmanaged index generally representative of investment-grade issues with maturities between three- and ten-years.
Barclays Capital U.S. Aggregate Bond 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 U.S. Corporate High-Yield Bond Index is an unmanaged index that covers the USD-denominated, non-investment grade, fixed-rate, taxable corporate bond market. Securities are classified as high-yield if the middle rating of Moody’s, Fitch, and S&P is Ba1/BB+/BB+ or below. The index excludes Emerging Markets debt.
Barclays Capital U.S. Corporate High-Yield Bond Index, 2% Capped is an unmanaged market value-weighted index which covers the universe of fixed rate, non-investment grade debt.
Citigroup U.S. Domestic Three Month Treasury Bill Index is an unmanaged index of three-month Treasury bills.
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 is an index that 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.
The Group of 20 (G-20) Finance Ministers and Central Bank Governors was established in 1999 to bring together systemically important industrialized and developing economies to discuss key issues in the global economy.
The MSCI EAFE Index (Europe, Australasia, Far East) which is a free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the U.S. & Canada. The MSCI EAFE Index currently consists 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.
MSCI Emerging Markets Index is a market capitalization weighted index composed of companies representative of the market structure of 26 emerging market countries in Europe, Latin America, and the Pacific Basin.
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 measures the performance of the small-cap segment of the U.S. equity universe. The Russell 2000® Index is a subset of the Russell 3000® Index representing approximately 10% of the total market capitalization of that index. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership.
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 500 Index (“S&P 500”) 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 Funds do not match those in the indexes and performance of the Funds will differ. Investors cannot invest directly in an index.
|
|
|
| HSBC INVESTOR FAMILY OF FUNDS | 3 |
|
December 18, 2009
To Our Shareholders:
It is a pleasure to report on a challenging, but fruitful year.
Since money market funds comprise the vast majority of the HSBC Investor Funds family assets, we have focused especially closely on events in the credit markets over the past year, hallmarked by the freezing of the commercial paper market in the wake of the Lehman bankruptcy and the September 15, 2008 “breaking of the buck” by The Reserve Fund, and the ultra-low short-term interest yields which prevail as a result of unprecedented fiscal and monetary stimulus.
Throughout the year, the Board of Trustees and the Funds’ Adviser have sought to ensure that all of the HSBC Investor money market funds appropriately managed their liquidity and risk. Each of the money market funds, with the exception of the US Treasury Money Market Fund, participated in the US Treasury Temporary Guarantee Program for Money Market Funds, which provided insurance against loss on investments in covered money market funds. This program expired on September 18, 2009, with no claims made by any money market funds.
The Adviser also instituted minimum yields on each of the money market funds which required the Adviser and shareholder servicing agents to waive significant portions of their fees to sustain a competitive yield.
HSBC’s Investor Funds include long-term funds, which we expect to grow in number, expanding your choices within the fund group. The Board, with input from HSBC’s competitively-distinguishing Multimanager analytical team, regularly reviews these funds’ investment performance in great detail. From time to time, we change sub-advisors and believe that the Board’s consistent and careful scrutiny has contributed to the funds’ generally excellent long-term performance. Information about this performance is included in the commentaries from the portfolio managers within this annual report.
To better fulfill our responsibilities, the Board has redesigned our committee structure; it now consists of: Audit, Contracts and Expense, Valuation and Investment Oversight, and Nominating and Corporate Governance committees. All independent trustees are members of these “committees of the whole”, which are chaired by a different member of the Board. I might add that our board had perfect attendance at all meetings last year—including telephone meetings.
There is much talk in the mutual fund industry of regulatory change. We monitor these trends, and our funds’ compliance, very carefully. In connection with this responsibility, the board invited a senior staff member of the U.S. Securities and Exchange Commission to discuss the regulatory environment and possible future developments.
Regulatory change may come from the judiciary as well. The U.S. Supreme Court recently heard arguments about how mutual fund fees are set—a case known as Jones v. Harris Associates. The plaintiff seeks to supplant the rule under which mutual funds have operated since 1982—the so-called Gartenberg standard which gives boards considerable discretion in establishing advisory fees. As you know, there are over 7,000 funds in the US, a number that assures vigorous competition—one reason US fund fees are the lowest in the world. A Wall Street Journal editorial (November 3, 2009) noted: “The Jones suit is a culmination of the plaintiffs bar assault on mutual funds that began earlier this decade and seeks to achieve via judicial fiat what it hasn’t been able to accomplish in legislation. Let’s hope the high Court shuts them down.” It would be a great disservice to fund investors if the tort bar were to prevail in this case.
Our fund family has shown rapid growth in recent years, and we thank you for the confidence you’ve placed in us. On behalf of the Board of Trustees and Advisory staff, we pledge our very best effort to making the future a good one for our shareholders.
Cordially,
Michael Seely
Chairperson, HSBC Investor Funds
|
|
|
4 | HSBC INVESTOR FAMILY OF FUNDS |
|
|
Dear Shareholder,
Welcome to the HSBC Investor Funds annual report, covering the period between November 1, 2008 and October 31, 2009. This report offers detailed information about your funds’ results, from investment operations and composition. We encourage you to review it carefully.
Inside these pages you will find a letter from the Funds’ Chairman, as well as commentary from the portfolio managers discussing the investment markets and explaining the primary reasons each fund performed as it did. The report also includes each fund’s return during the 12-month period, as well as the performance of its benchmark index and peer group average. We believe the HSBC Investor Funds have provided their shareholders with competitive returns.
In closing, we want to thank you for investing through the HSBC Investor Funds. We recognize that the past year has presented challenges for many investors, and we appreciate and honor the trust you place in us. Please contact us at any time with questions or concerns.
Sincerely,
Richard A. Fabietti
President
|
|
|
| HSBC INVESTOR FAMILY OF FUNDS | 5 |
|
HSBC Global Asset Management (USA) Inc. |
U.S. Economic Review
The 12-month period between November 1, 2008 and October 31, 2009 began with the U.S. economy in severe recession and the financial system suffering from a major credit crunch.
The federal government took unprecedented steps to try to restore the economy and financial system to health. The Federal Reserve Board in December reduced the federal funds rate, its target short-term interest rate, from 1.00% to a range between 0.00% and 0.25%, and also took a wide range of other actions to inject liquidity and improve confidence in the system. The government also enacted a massive fiscal stimulus package. All told, the U.S. government and Federal Reserve committed a total of $12.8 trillion, an amount nearly equal to 2008 gross domestic product1. Governments around the world took similar steps: For example, the G-20 group1 of nations agreed to a $1.1 trillion program through which the International Monetary Fund would help countries afflicted by the global crisis to boost economic activity.
Leading economic indicators began showing signs of improvement during the second quarter of 2009. Credit spreads declined, the housing market’s descent slowed and survey data turned up. The economy continued to regain its footing throughout the period. Unemployment continued to rise, however, as is typical in the end stages of recession.
The U.S. economy contracted at an annualized rate of 5.4% during the fourth calendar quarter of 2008. It fell 6.4% and 0.7% in the first and second quarters of 2009, respectively, before recovering to grow 2.8% during the third quarter of 2009.
Market Review
Investors during the first four months of the period responded to the financial crisis by fleeing assets perceived as risky. Higher-risk assets generally fared worst during this time, with emerging markets stocks, small caps and high-yield bonds posting some of the largest losses. Assets considered safe and stable, particularly bonds backed by the U.S. government, produced the best returns.
The market environment changed dramatically beginning in early 2009. As the financial system and economy began showing signs of stabilizing, investors moved quickly back into risk assets. Between March 9 and the end of the reporting period the stock market posted a powerful rebound, with the S&P 5001 gaining roughly 55.31%. For the period as a whole the S&P 500 returned 9.80%, while the small-cap Russell 2000®, 1 gained 6.46%.
Foreign stocks on the whole declined considerably through early March, then surged to produce strong returns for the 12-month period. Foreign currencies’ strength against the dollar further boosted the gains of U.S. investors’ international holdings. Japan’s market did not keep pace with other major markets: It generated a 10.62% gain in U.S. dollar terms—and just a 2.05% return in local currency—as its economic recovery proved anemic.
During the rally investors especially favored shares in emerging markets, which in many cases offered more-attractive macroeconomic backdrops than developed countries. The MSCI EAFE Index1 of developed foreign stock markets gained 28.41% in U.S. dollar terms during the period under review, while the MSCI Emerging Markets Index1 gained 64.63%.
Investors in the fixed-income markets began the period fleeing to the most conservative and secure types of securities, particularly Treasury bills. The rally in government debt was so extreme that Treasury bills briefly offered negative yields. Meanwhile, investors sold bonds not backed by the federal government. That environment caused spreads between yields on Treasuries and other types of debt to widen to historic levels.
Conditions in the fixed-income markets changed dramatically during 2009. As the financial crisis began to recede, investors sought the greater yield available on higher-risk debt securities. Corporate bonds, in particular high-yield bonds, staged a strong rally. The Barclays Capital U.S. Aggregate Bond Index1, which tracks the broad fixed-income market, returned 13.79% for the 12 months through October, while the Barclays Capital U.S. Corporate High-Yield Bond Index1 returned 48.10%.
|
|
1 | For additional information, please refer to the Glossary of Terms. |
|
|
|
6 | HSBC INVESTOR FAMILY OF FUNDS |
|
|
HSBC Investor Aggressive Growth Strategy Fund |
HSBC Investor Growth Strategy Fund |
HSBC Investor Moderate Growth Strategy Fund |
HSBC Investor Conservative 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.
Smaller companies generally have a higher risk of failure and historically have experienced a greater degree of market volatility than average.
Bonds can 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 and a lower rate of return than longer-term bonds.
The mortgage market in the U.S. recently experienced difficulties that may adversely affect the performance and market value of certain mortgage-related investments.
The risks associated with higher-yielding, lower-rated securities (commonly called junk bonds) include higher risk of default and loss of principal.
Investing in derivatives, such as financial futures and option contracts, and the use of foreign currency techniques involve special risks and as such may not achieve the anticipated benefits and/or may result in losses to the fund.
Investments in commodities may be affected by changes in overall market movements, commodity index volatility, changes in interest rates or factors affecting a particular industry or commodity.
Alternative investments such as hedge funds are subject to less regulation than other types of pooled investment vehicles such as mutual funds, may make speculative investments, may be illiquid and can involve a significant use of leverage, making them substantially riskier than the other investments. An alternative investment fund may incur high fees and expenses which would offset trading profits.
Interest rate movements and mortgage prepayments will affect the fund’s share price and yield.
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 “funds of funds”. Under this two-tier structure, one fund (the “funds of funds”) invests in multiple underlying funds (the “Underlying Funds”). The LifeLine Funds, through this funds of funds 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 fund of funds. HSBC Global Asset Management (USA) Inc. (the “Investment Adviser”), according to specific target allocations, invested each LifeLine Fund’s assets in some or all of the following underlying funds: 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”); Franklin Total Return Fund; Goldman Sachs High Yield Fund; and the HSBC Investor Money Market Fund (“Money Market Fund”).
|
|
|
| HSBC INVESTOR FAMILY OF FUNDS | 7 |
|
Portfolio Reviews |
During the last period, each LifeLine Fund invested in a different combination of the Underlying Funds according to the various target percentage weightings selected by the Investment Adviser, approximately as set forth in the table below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 | % |
|
|
|
8 | HSBC INVESTOR FAMILY OF FUNDS |
(This Page Intentionally Left Blank)
|
Portfolio Reviews |
|
HSBC Investor Aggressive Growth Strategy Fund |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Performance |
|
|
| Average Annual |
| Expense |
| |||||||||
As of October 31, 2009 |
| Inception |
| 1 |
| 3 |
| Since |
| Gross |
| Net |
| |||
HSBC Investor Aggressive Growth Strategy Fund Class A1 |
| 2/14/05 |
| 12.46 |
| -6.33 |
| 0.78 |
|
|
| 1.98 |
|
| 1.50 |
|
HSBC Investor Aggressive Growth Strategy Fund Class B2 |
| 2/9/05 |
| 13.52 |
| -6.02 |
| 1.19 |
|
|
| 2.73 |
|
| 2.25 |
|
HSBC Investor Aggressive Growth Strategy Fund Class C3 |
| 6/10/05 |
| 16.40 |
| -5.38 |
| 1.25 |
|
|
| 2.73 |
|
| 2.25 |
|
Standard & Poor’s 500 Index7 |
| — |
| 9.80 |
| -7.02 |
| -0.67 | 5 |
|
| N/A |
|
| N/A |
|
Aggressive Growth Blended Portfolio Index7, 8 |
| — |
| 17.44 |
| -5.75 |
| 1.07 | 6 |
|
| 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, 2009 through March 1, 2010.
During the periods ended October 31, 2008 and October 31, 2009, one or more Underlying Funds in which the Fund invests received monies related to certain nonrecurring litigation settlements. Without the receipt of these payments, the returns for the applicable periods would be lower.
|
|
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 27, 2009. |
|
|
5 | Return for the period 2/9/05 to 10/31/09. |
|
|
6 | Return for the period 2/1/05 to 10/31/09. |
|
|
7 | For additional information, please refer to the description of the components of the Aggressive Growth Blended Portfolio index on the next page and to the Glossary of Terms. |
|
|
8 | The performance of the HSBC Investor Aggressive Growth Strategy Fund is compared to an Aggressive Growth Blended Portfolio Index, which is a hypothetical combination of broad-based indexes. These indexes are unmanaged and do not reflect the fees and expenses associated with a mutual fund, and investors cannot directly invest in an index. |
|
|
10 | HSBC INVESTOR FAMILY OF FUNDS |
|
Portfolio Reviews |
HSBC Investor Aggressive Growth Strategy Fund (continued) |
Value of a $10,000 Investment |
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000930413-10-000060/c59500004.jpg)
The charts above represent a comparison of a hypothetical $10,000 investment in the indicated share class versus a similar investment in the Fund’s benchmark and represents the reinvestment of dividends and capital gains in the Fund. The hypothetical performance for the above benchmarks are for the period beginning 1/31/05.
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, 2009 through March 1, 2010.
During the periods ended October 31, 2008 and October 31, 2009, one or more Underlying Funds in which the Fund invests received monies related to certain nonrecurring litigation settlements. Without the receipt of these payments, the returns for the applicable periods would be lower.
|
|
1 | Reflects the applicable contingent deferred sales charge, maximum of 4.00%. |
|
|
2 | The performance of the HSBC Investor Aggressive Growth Strategy Fund is compared to an Aggressive Growth Blended Portfolio index, which is a hypothetical combination of broad-based indexes. The components of the Aggressive Growth Blended Portfolio index and their weighting as of October 31, 2009 are as follows: |
|
|
|
|
|
Asset Allocation |
| Benchmark3 |
|
|
Large Cap Growth |
| Russell 2500™ Growth Index | 34.0 | % |
International Equity |
| MSCI EAFE Index | 23.0 | % |
Small-Cap |
| Russell 1000® Growth Index | 21.0 | % |
Large Cap Value |
| Russell 1000® Value Index | 21.0 | % |
Money Market |
| Citigroup U.S. Domestic 3-Month U.S. Treasury Bill Index | 1.0 | % |
|
|
3 | For additional information, please refer to the Glossary of Terms. |
|
|
HSBC INVESTOR FAMILY OF FUNDS | 11 |
|
Portfolio Reviews |
HSBC Investor Growth Strategy Fund |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Performance |
|
|
| Average Annual |
| Expense |
| |||||||
As of October 31, 2009 |
| Inception |
| 1 |
| 3 |
| Since |
| Gross |
| Net |
| |
HSBC Investor Growth Strategy Fund Class A1 |
| 2/8/05 |
| 12.77 |
| -4.94 |
| 1.48 |
|
| 1.53 |
| 1.50 |
|
HSBC Investor Growth Strategy Fund Class B2 |
| 2/1/05 |
| 13.80 |
| -4.64 |
| 2.05 |
|
| 2.28 |
| 2.25 |
|
HSBC Investor Growth Strategy Fund Class C3 |
| 4/27/05 |
| 16.81 |
| -4.01 |
| 2.26 |
|
| 2.28 |
| 2.25 |
|
Standard & Poor’s 500 Index7 |
| — |
| 9.80 |
| -7.02 |
| -0.67 | 5 |
| N/A |
| N/A |
|
Growth Blended Portfolio Index7, 8 |
| — |
| 17.34 |
| -3.59 |
| 1.92 | 6 |
| 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, 2009 through March 1, 2010.
During the periods ended October 31, 2007, October 31, 2008 and October 31, 2009, one or more Underlying Funds in which the Fund invests received monies related to certain nonrecurring litigation settlements. Without the receipt of these payments, the returns for the applicable periods would be lower.
|
|
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 27, 2009. |
|
|
5 | Return for the period 1/31/05 to 10/31/09. |
|
|
6 | Return for the period 2/1/05 to 10/31/09. |
|
|
7 | For additional information, please refer to the description of the components of the Growth Blended Portfolio index on the next page and to the Glossary of Terms. |
|
|
8 | The performance of the HSBC Investor Growth Strategy Fund is compared to a Growth Blended Portfolio Index, which is a hypothetical combination of broad-based indexes. These indexes are unmanaged and do not reflect the fees and expenses associated with a mutual fund, and investors cannot directly invest in an index. The stated performance for the Growth Blended Portfolio 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. Due to the liquidation of the HSBC Investor High Yield Fixed Income Portfolio, the underlying high yield index was changed from the Citigroup U.S. High Yield Market Capped Index to the Barclays Capital U.S. Corp HY Bond Index, 2% Capped, on March 31, 2009. |
|
|
12 | HSBC INVESTOR FAMILY OF FUNDS |
|
Portfolio Reviews |
HSBC Investor Growth Strategy Fund (continued) |
Value of a $10,000 Investment |
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000930413-10-000060/c59500005.jpg)
The charts above represent a comparison of a hypothetical $10,000 investment in the indicated share class versus a similar investment in the Fund’s benchmark and represents the reinvestment of dividends and capital gains in the Fund. The hypothetical performance for the above benchmarks are for the period beginning 1/31/05.
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, 2009 through March 1, 2010.
During the periods ended October 31, 2007, October 31, 2008 and October 31, 2009 one or more Underlying Funds in which the Fund invests received monies related to certain nonrecurring litigation settlements. Without the receipt of these payments, the returns for the applicable periods would be lower.
|
|
1 | Reflects the applicable contingent deferred sales charge, maximum of 4.00%. |
|
|
2 | 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 Growth Blended Portfolio Index and their weighting as of October 31, 2009 are as follows: |
|
|
|
|
|
Asset Allocation |
| Benchmark3 |
|
|
Large Cap Growth |
| Russell 1000® Growth Index | 21.0 | % |
Large Cap Value |
| Russell 1000® Value Index | 21.0 | % |
International Equity |
| MSCI EAFE Index | 20.0 | % |
Small-Cap |
| Russell 2500TM Growth Index | 20.0 | % |
Fixed Income |
| Barclays Capital U.S. Aggregate Bond Index | 15.0 | % |
High Yield Fixed Income |
| Barclays Capital U.S. Corporate High Yield Bond Index, 2% Capped | 2.0 | % |
Money Market |
| Citigroup U.S. Domestic 3-Month U.S. Treasury Bill Index | 1.0 | % |
|
|
3 | For additional information, please refer to the Glossary of Terms. |
The stated performance for the Growth Blended Portfolio 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. Due to the liquidation of the HSBC Investor High Yield Fixed Income Portfolio, the underlying high yield index was changed from the Citigroup U.S. High Yield Market Capped Index to Barclays Capital U.S. Corp HY Bond Index, 2% Capped, on March 31, 2009.
|
|
HSBC INVESTOR FAMILY OF FUNDS | 13 |
|
Portfolio Reviews |
HSBC Investor Moderate Growth Strategy Fund |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Performance |
|
|
| Average Annual |
| Expense |
| |||||||
As of October 31, 2009 |
| Inception |
| 1 |
| 3 |
| Since |
| Gross |
| Net |
| |
HSBC Investor Moderate Growth Strategy Fund Class A1 |
| 2/3/05 |
| 11.72 |
| -3.46 |
| 1.45 |
|
| 1.48 |
| 1.48 |
|
HSBC Investor Moderate Growth Strategy Fund Class B2 |
| 2/1/05 |
| 12.85 |
| -3.11 |
| 1.92 |
|
| 2.23 |
| 2.23 |
|
HSBC Investor Moderate Growth Strategy Fund Class C3 |
| 6/10/05 |
| 15.75 |
| -2.50 |
| 1.60 |
|
| 2.23 |
| 2.23 |
|
Standard & Poor’s 500 Index7 |
| — |
| 9.80 |
| -7.02 |
| -0.67 | 5 |
| N/A |
| N/A |
|
Moderate Growth Blended Portfolio Index7, 8 |
| — |
| 16.78 |
| -1.39 |
| 2.67 | 6 |
| 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, 2009 through March 1, 2010.
During the periods ended October 31, 2007, October 31, 2008 and October 31, 2009, one or more Underlying Funds in which the Fund invests received monies related to certain nonrecurring litigation settlements. Without the receipt of these payments, the returns for the applicable periods would be lower.
|
|
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 27, 2009. |
|
|
5 | Return for the period 1/31/05 to 10/31/09. |
|
|
6 | Return for the period 2/1/05 to 10/31/09. |
|
|
7 | For additional information, please refer to the description of the components of the Moderate Growth Blended Portfolio index on the next page and to the Glossary of Terms. |
|
|
8 | The performance of the HSBC Investor Moderate Growth Strategy Fund is compared to a Moderate Growth Blended Portfolio Index, which is a hypothetical combination of broad-based indexes. These indexes are unmanaged and do not reflect the fees and expenses associated with a mutual fund, and investors cannot directly invest in an index. The stated performance for the Moderate Growth 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. Due to the liquidation of the HSBC Investor High Yield Fixed Income Portfolio, the underlying high yield index was changed from the Citigroup U.S. High Yield Market Capped Index to the Barclays Capital U.S. Corp HY Bond Index, 2% Capped, on March 31, 2009. |
|
|
14 | HSBC INVESTOR FAMILY OF FUNDS |
|
Portfolio Reviews |
HSBC Investor Moderate Growth Strategy Fund (continued) |
Value of a $10,000 Investment |
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000930413-10-000060/c59500006.jpg)
The charts above represent a comparison of a hypothetical $10,000 investment in the indicated share class versus a similar investment in the Fund’s benchmark and represents the reinvestment of dividends and capital gains in the Fund. The hypothetical performance for the above benchmarks are for the period beginning 1/31/05.
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, 2009 through March 1, 2010.
During the periods ended October 31, 2007, October 31, 2008 and October 31, 2009, one or more Underlying Funds in which the Fund invests received monies related to certain nonrecurring litigation settlements. Without the receipt of these payments, the returns for the applicable periods would be lower.
|
|
1 | Reflects the applicable contingent deferred sales charge, maximum of 4.00%. |
|
|
2 | The performance of the HSBC Investor Moderate Growth Strategy Fund is compared to a Moderate Growth Blended Portfolio Index, which is a hypothetical combination of broad-based indexes. The components of the Moderate Growth Blended Portfolio Index and their weighting as of October 31, 2009 are as follows: |
|
|
|
|
|
|
Asset Allocation |
| Benchmark3 |
|
|
|
Fixed Income |
| Barclays Capital U.S. Aggregate Bond Index |
| 26.0% |
|
Large Cap Growth |
| Russell 1000® Growth Index |
| 19.0% |
|
Large Cap Value |
| Russell 1000® Value Index |
| 18.0% |
|
International Equity |
| MSCI EAFE Index |
| 15.0% |
|
Small-Cap |
| Russell 2500TM Index |
| 11.0% |
|
Money Market |
| Citigroup U.S. Domestic 3-Month U.S. Treasury Bill Index |
| 6.0% |
|
High Yield Fixed Income |
| Barclays Capital U.S. Corporate High Yield Bond Index, 2% Capped |
| 5.0% |
|
|
|
3 | For additional information, please refer to the Glossary of Terms. |
The stated performance for the Moderate Growth 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. Due to the liquidation of the HSBC Investor High Yield Fixed Income Portfolio, the underlying high yield index was changed from the Citigroup U.S. High Yield Market Capped Index to Barclays Capital U.S. Corp HY Bond Index, 2% Capped, on March 31, 2009.
|
|
HSBC INVESTOR FAMILY OF FUNDS | 15 |
|
Portfolio Reviews |
HSBC Investor Conservative Growth Strategy Fund |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Performance |
|
|
| Average Annual |
| Expense |
| |||||||
As of October 31, 2009 |
| Inception |
| 1 |
| 3 |
| Since |
| Gross |
| Net |
| |
HSBC Investor Conservative Growth Strategy Fund Class A1 |
| 2/23/05 |
| 9.15 |
| -2.00 |
| 1.45 |
|
| 1.72 |
| 1.50 |
|
HSBC Investor Conservative Growth Strategy Fund Class B2 |
| 2/17/05 |
| 10.05 |
| -1.64 |
| 1.72 |
|
| 2.47 |
| 2.25 |
|
HSBC Investor Conservative Growth Strategy Fund Class C3 |
| 4/19/05 |
| 12.97 |
| -0.90 |
| 2.35 |
|
| 2.47 |
| 2.25 |
|
Standard & Poor’s 500 Index7 |
| — |
| 9.80 |
| -7.02 |
| -1.05 | 5 |
| N/A |
| N/A |
|
Conservative Growth Blended Portfolio Index7, 8 |
| — |
| 14.64 |
| 0.50 |
| 3.25 | 6 |
| 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, 2009 through March 1, 2010.
During the periods October 31, 2007, October 31, 2008 and October 31, 2009, one or more Underlying Funds in which the Fund invests received monies related to certain nonrecurring litigation settlements. Without the receipt of these payments, the returns for the applicable periods would be lower.
|
|
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 27, 2009. |
|
|
5 | Return for the period 2/17/05 to 10/31/09. |
|
|
6 | Return for the period 2/1/05 to 10/31/09. |
|
|
7 | For additional information, please refer to the description of the components of the Conservative Growth Blended Portfolio index on the next page and to the Glossary of Terms. |
|
|
8 | The performance of the HSBC Investor Conservative Growth Strategy Fund is compared to a Conservative Growth Blended Portfolio index, which is a hypothetical combination of broad-based indexes. These indexes are unmanaged and do not reflect the fees and expenses associated with a mutual fund, and investors cannot directly invest in an index. The stated performance for the Conservative Growth Blended Portfolio 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. Due to the liquidation of the HSBC Investor High Yield Fixed Income Portfolio, the underlying high yield index was changed from the Citigroup U.S. High Yield Market Capped Index to the Barclays Capital U.S. Corp HY Bond Index, 2% Capped, on March 31, 2009. |
|
|
16 | HSBC INVESTOR FAMILY OF FUNDS |
|
Portfolio Reviews |
HSBC Investor Conservative Growth Strategy Fund (continued) |
Value of a $10,000 Investment |
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000930413-10-000060/c59500007.jpg)
The charts above represent a comparison of a hypothetical $10,000 investment in the indicated share class versus a similar investment in the Fund’s benchmark and represents the reinvestment of dividends and capital gains in the Fund. The hypothetical performance for the above benchmarks are for the period beginning 1/31/05.
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, 2009 through March 1, 2010.
During the periods October 31, 2007, October 31, 2008 and October 31, 2009, one or more Underlying Funds in which the Fund invests received monies related to certain nonrecurring litigation settlements. Without the receipt of these payments, the returns for the applicable periods would be lower.
|
|
1 | Reflects the applicable contingent deferred sales charge, maximum of 4.00%. |
|
|
2 | The performance of the HSBC Investor Conservative Growth Strategy Fund is compared to a Conservative Growth Blended Portfolio index, which is a hypothetical combination of broad-based indexes. The components of the Conservative Growth Blended Portfolio index and their weighting as of October 31, 2009 are as follows: |
|
|
|
|
|
|
Asset Allocation |
| Benchmark3 |
|
|
|
Fixed Income |
| Barclays Capital U.S. Aggregate Bond Index |
| 25.0% |
|
Money Market |
| Citigroup U.S. Domestic 3-Month U.S. Treasury Bill Index |
| 21.0% |
|
Large Cap Growth |
| Russell 1000® Growth Index |
| 15.0% |
|
Large Cap Value |
| Russell 1000® Value Index |
| 14.0% |
|
International Equity |
| MSCI EAFE Index |
| 10.0% |
|
High Yield Fixed Income |
| Barclays Capital U.S. Corporate High Yield Bond Index, 2% Capped |
| 8.0% |
|
Small-Cap |
| Russell 2500TM Growth Index |
| 4.0% |
|
Fixed Income |
| Barclays Capital U.S. Intermediate Aggregate Bond Index |
| 3.0% |
|
|
|
3 | For additional information, please refer to the Glossary of Terms. |
The stated performance for the Conservative Growth Blended Portfolio 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. Due to the liquidation of the HSBC Investor High Yield Fixed Income Portfolio, the underlying high yield index was changed from the Citigroup U.S. High Yield Market Capped Index to Barclays Capital U.S. Corp HY Bond Index, 2% Capped, on March 31, 2009.
|
|
HSBC INVESTOR FAMILY OF FUNDS | 17 |
|
Portfolio Reviews |
|
|
|
|
|
Standardized Performance Benchmark Indices for the |
| 1 |
| |
Barclays Capital Intermediate U.S. Aggregate Index |
|
| 12.39 |
|
Barclays Capital U.S. Corporate High Yield Bond Index, 2% Capped |
|
| 48.66 |
|
Barclays Capital U.S. Aggregate Bond Index |
|
| 13.79 |
|
Citigroup U.S. Domestic Three Month U.S. Treasury Bill Index |
|
| 0.28 |
|
MSCI EAFE Index |
|
| 28.41 |
|
Russell 1000® Growth Index |
|
| 17.51 |
|
Russell 1000® Value Index |
|
| 4.78 |
|
Russell 2500™ Growth Index |
|
| 18.21 |
|
Barclays Capital Intermediate U.S. Aggregate Index (formerly Lehman Brothers U.S. Intermediate Aggregate Index) is an unmanaged index generally representative of investment-grade issues with maturities between three- and ten-years.
Barclays Capital U.S. Aggregate Bond 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 U.S. Corporate High Yield Bond Index, 2% Capped covers the universe of U.S. dollar denominated, non-convertible, fixed rate, non-investment grade debt. Index holdings must have at least one year to final maturity, at least $150 million par amount outstanding, and be publicly issued with a rating of Ba1 or lower. The Index is a total return performance benchmark for fixed income securities having a maximum quality rating of Ba1 (as determined by Moody’s Investors Service). The Index is unmanaged and the figures for the Index do not include any deduction for fees, expenses or taxes. It is not possible to invest directly in an unmanaged index.
Citigroup U.S. Domestic Three Month Treasury Bill Index is an unmanaged index of three-month Treasury bills.
The MSCI EAFE Index (Europe, Australasia, Far East) which is a free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the U.S. & Canada. The MSCI EAFE Index currently consists 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.
Investors cannot invest directly in an index.
|
|
18 | HSBC INVESTOR FAMILY OF FUNDS |
|
HSBC INVESTOR LIFELINE FUNDS |
|
|
|
|
|
|
|
|
HSBC INVESTOR AGGRESSIVE GROWTH STRATEGY FUND |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares |
| Value ($) |
| ||
|
|
|
| ||||
Investment Companies – 100.9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Affiliated Investment Companies – 100.9% |
|
|
|
|
|
|
|
HSBC Investor Growth Portfolio |
|
|
|
|
| 1,995,639 |
|
HSBC Investor International Equity Portfolio |
|
|
|
|
| 2,192,711 |
|
HSBC Investor Opportunity Portfolio |
|
|
|
|
| 3,269,782 |
|
HSBC Investor Value Portfolio |
|
|
|
|
| 2,018,514 |
|
HSBC Investor Prime Money Market Fund – Class I Shares, 0.12% (a) |
|
| 94,361 |
|
| 94,361 |
|
|
|
|
|
|
| ||
TOTAL INVESTMENTS – 100.9%* |
|
|
|
|
| 9,571,007 |
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
* Percentages indicated are based on net assets of $9,482,289. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HSBC INVESTOR GROWTH STRATEGY FUND |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares |
| Value ($) |
| ||
|
|
|
| ||||
Investment Companies – 100.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Affiliated Investment Companies – 83.4% |
|
|
|
|
|
|
|
HSBC Investor Growth Portfolio |
|
|
|
|
| 5,866,416 |
|
HSBC Investor International Equity Portfolio |
|
|
|
|
| 5,604,940 |
|
HSBC Investor Opportunity Portfolio |
|
|
|
|
| 5,654,037 |
|
HSBC Investor Value Portfolio |
|
|
|
|
| 5,933,586 |
|
HSBC Investor Prime Money Market Fund – Class I Shares, 0.12% (a) |
|
| 280,464 |
|
| 280,464 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 23,339,443 |
|
|
|
|
|
|
| ||
Unaffiliated Investment Companies – 17.1% |
|
|
|
|
|
|
|
Goldman Sachs High Yield Fund – Class I Shares |
|
| 81,938 |
|
| 562,785 |
|
Franklin Total Return Fund, Advisor Class |
|
| 437,059 |
|
| 4,236,095 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 4,798,880 |
|
|
|
|
|
|
| ||
TOTAL INVESTMENTS – 100.5%* |
|
|
|
|
| 28,138,323 |
|
|
|
|
|
|
|
|
|
* | Percentages indicated are based on net assets of $28,007,326. |
|
|
|
|
|
|
|
|
HSBC INVESTOR MODERATE GROWTH STRATEGY FUND |
|
|
|
|
|
|
|
| |||||||
|
| Shares |
| Value ($) |
| ||
|
|
|
| ||||
Investment Companies – 100.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Affiliated Investment Companies – 68.9% |
|
|
|
|
|
|
|
HSBC Investor Growth Portfolio |
|
|
|
|
| 5,966,860 |
|
HSBC Investor International Equity Portfolio |
|
|
|
|
| 4,725,863 |
|
HSBC Investor Opportunity Portfolio |
|
|
|
|
| 3,495,961 |
|
HSBC Investor Value Portfolio |
|
|
|
|
| 5,717,753 |
|
HSBC Investor Prime Money Market Fund – Class I Shares, 0.12% (a) |
|
| 1,900,737 |
|
| 1,900,737 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 21,807,174 |
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
Unaffiliated Investment Companies – 31.1% |
|
|
|
|
|
|
|
Goldman Sachs High Yield Fund – Class I Shares |
|
| 230,247 |
|
| 1,581,542 |
|
Franklin Total Return Fund, Advisor Class |
|
| 851,556 |
|
| 8,253,809 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 9,835,351 |
|
|
|
|
|
|
| ||
TOTAL INVESTMENTS – 100.0%* |
|
|
|
|
| 31,642,525 |
|
|
|
|
|
|
|
|
|
* | Percentages indicated are based on net assets of $31,627,460. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HSBC INVESTOR CONSERVATIVE GROWTH STRATEGY FUND |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares |
| Value ($) |
| ||
|
|
|
| ||||
Investment Companies – 99.9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Affiliated Investment Companies – 63.9% |
|
|
|
|
|
|
|
HSBC Investor Growth Portfolio |
|
|
|
|
| 1,552,990 |
|
HSBC Investor International Equity Portfolio |
|
|
|
|
| 1,038,645 |
|
HSBC Investor Opportunity Portfolio |
|
|
|
|
| 419,096 |
|
HSBC Investor Value Portfolio |
|
|
|
|
| 1,466,064 |
|
HSBC Investor Prime Money Market Fund – Class I Shares, 0.12% (a) |
|
| 2,193,545 |
|
| 2,193,545 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 6,670,340 |
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
Unaffiliated Investment Companies – 36.0% |
|
|
|
|
|
|
|
Goldman Sachs High Yield Fund – Class I Shares |
|
| 121,428 |
|
| 834,248 |
|
Franklin Total Return Fund, Advisor Class |
|
| 302,309 |
|
| 2,930,460 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 3,764,708 |
|
|
|
|
|
|
| ||
TOTAL INVESTMENTS – 99.9%* |
|
|
|
|
| 10,435,048 |
|
|
|
|
|
|
|
|
|
| |
* | Percentages indicated are based on net assets of $10,450,322. |
(a) | The rate represents the annualized one-day yield that was in effect on October 31, 2009. |
|
|
|
See notes to financial statements. | HSBC INVESTOR LIFELINE FUNDS | 19 |
HSBC INVESTOR LIFELINE FUNDS
Statements of Assets and Liabilities—As of October 31, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Aggressive |
| Growth |
| Moderate |
| Conservative |
| ||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in Affiliated Portfolios |
| $ | 9,476,646 |
| $ | 23,058,979 |
| $ | 19,906,437 |
| $ | 4,476,795 |
|
Investments in Affiliated Fund, at value (a) |
|
| 94,361 |
|
| 280,464 |
|
| 1,900,737 |
|
| 2,193,545 |
|
Investments in non-affiliates, at value |
|
| — |
|
| 4,798,880 |
|
| 9,835,351 |
|
| 3,764,708 |
|
|
|
|
|
|
| ||||||||
Total Investments |
|
| 9,571,007 |
|
| 28,138,323 |
|
| 31,642,525 |
|
| 10,435,048 |
|
|
|
|
|
|
| ||||||||
Receivable for capital shares issued |
|
| 12,598 |
|
| 52,624 |
|
| 81,109 |
|
| 42,031 |
|
Reclaims receivable |
|
| 5,262 |
|
| 18,471 |
|
| 14,844 |
|
| 857 |
|
Receivable from Investment Adviser |
|
| 3,112 |
|
| 1,188 |
|
| 1,375 |
|
| 456 |
|
Prepaid expenses and other assets |
|
| 6,060 |
|
| 4,461 |
|
| 6,799 |
|
| 2,780 |
|
|
|
|
|
|
| ||||||||
Total Assets |
|
| 9,598,039 |
|
| 28,215,067 |
|
| 31,746,652 |
|
| 10,481,172 |
|
|
|
|
|
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Payable for capital shares redeemed |
|
| 97,506 |
|
| 148,743 |
|
| 59,005 |
|
| 6,172 |
|
Payable to Investment Adviser |
|
| — |
|
| 12,552 |
|
| 574 |
|
| 5,416 |
|
Accrued expenses and other liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Management |
|
| 423 |
|
| 1,229 |
|
| 1,375 |
|
| 456 |
|
Administration |
|
| 160 |
|
| 467 |
|
| 522 |
|
| 173 |
|
Distribution |
|
| 2,695 |
|
| 8,404 |
|
| 10,249 |
|
| 3,499 |
|
Shareholder Servicing |
|
| 2,117 |
|
| 6,147 |
|
| 6,873 |
|
| 2,279 |
|
Compliance Services |
|
| 4 |
|
| 10 |
|
| 13 |
|
| 5 |
|
Transfer Agent |
|
| 8,608 |
|
| 12,529 |
|
| 17,494 |
|
| 7,023 |
|
Trustee |
|
| 21 |
|
| 56 |
|
| 61 |
|
| 20 |
|
Other |
|
| 4,216 |
|
| 17,604 |
|
| 23,026 |
|
| 5,807 |
|
|
|
|
|
|
| ||||||||
Total Liabilities |
|
| 115,750 |
|
| 207,741 |
|
| 119,192 |
|
| 30,850 |
|
|
|
|
|
|
| ||||||||
Net Assets |
| $ | 9,482,289 |
| $ | 28,007,326 |
| $ | 31,627,460 |
| $ | 10,450,322 |
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Composition of Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital |
| $ | 11,634,898 |
| $ | 33,183,413 |
| $ | 36,405,296 |
| $ | 11,687,690 |
|
Accumulated net investment income (loss) |
|
| — |
|
| 122,678 |
|
| 46,429 |
|
| 11,295 |
|
Accumulated net realized gains (losses) from investment and foreign currency transactions |
|
| (2,117,413 | ) |
| (5,490,016 | ) |
| (5,444,840 | ) |
| (1,542,679 | ) |
Unrealized appreciation/depreciation from investments and foreign currencies |
|
| (35,196 | ) |
| 191,251 |
|
| 620,575 |
|
| 294,016 |
|
|
|
|
|
|
| ||||||||
Net Assets |
| $ | 9,482,289 |
| $ | 28,007,326 |
| $ | 31,627,460 |
| $ | 10,450,322 |
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A Shares |
| $ | 5,426,304 |
| $ | 15,304,013 |
| $ | 15,909,337 |
| $ | 5,058,675 |
|
Class B Shares |
|
| 3,767,179 |
|
| 11,196,342 |
|
| 14,229,931 |
|
| 4,906,623 |
|
Class C Shares |
|
| 288,806 |
|
| 1,506,971 |
|
| 1,488,192 |
|
| 485,024 |
|
|
|
|
|
|
| ||||||||
|
| $ | 9,482,289 |
| $ | 28,007,326 |
| $ | 31,627,460 |
| $ | 10,450,322 |
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares Outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
($0.001 par value, unlimited number of shares authorized): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A Shares |
|
| 531,871 |
|
| 1,480,708 |
|
| 1,577,412 |
|
| 505,597 |
|
Class B Shares |
|
| 382,169 |
|
| 1,085,931 |
|
| 1,411,366 |
|
| 495,278 |
|
Class C Shares |
|
| 29,311 |
|
| 145,613 |
|
| 151,236 |
|
| 47,637 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Asset Value, Offering Price and Redemption Price per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A Shares |
| $ | 10.20 |
| $ | 10.34 |
| $ | 10.09 |
| $ | 10.01 |
|
Class B Shares* |
| $ | 9.86 |
| $ | 10.31 |
| $ | 10.08 |
| $ | 9.91 |
|
Class C Shares* |
| $ | 9.85 |
| $ | 10.35 |
| $ | 9.84 |
| $ | 10.18 |
|
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 |
| $ | 10.74 |
| $ | 10.88 |
| $ | 10.62 |
| $ | 10.54 |
|
|
|
|
|
|
| ||||||||
Investments in Affiliated Fund, at cost (a) |
| $ | 94,361 |
| $ | 280,464 |
| $ | 1,900,737 |
| $ | 2,193,545 |
|
|
|
|
|
|
| ||||||||
Investments in non-affiliates, at cost |
| $ | — |
| $ | 4,519,390 |
| $ | 9,176,781 |
| $ | 3,470,446 |
|
|
|
|
|
|
|
|
|
* | Redemption Price per share varies by length of time shares are held. |
|
|
(a) | The investment in the affiliated fund is the HSBC Investor Prime Money Market Fund Class I Shares (See Note 1). |
|
|
|
20 | HSBC INVESTOR LIFELINE FUNDS | See notes to financial statements. |
HSBC INVESTOR LIFELINE FUNDS
Statements of Operations—For the year ended October 31, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Aggressive |
| Growth |
| Moderate |
| Conservative |
| ||||
Investment Income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment income from non-affiliates |
| $ | — |
| $ | 66,516 |
| $ | 153,930 |
| $ | 70,899 |
|
Investment income from Affiliated Portfolios (a) |
|
| 134,185 |
|
| 518,819 |
|
| 658,866 |
|
| 212,191 |
|
Investment income from Affiliated Fund |
|
| 2,174 |
|
| 1,470 |
|
| 10,536 |
|
| 12,514 |
|
Tax reclaims from Affiliated Portfolios (a) |
|
| 2,312 |
|
| 8,309 |
|
| 6,883 |
|
| 619 |
|
Foreign tax withholding from Affiliated Portfolios (a) |
|
| (9,832 | ) |
| (25,623 | ) |
| (22,135 | ) |
| (5,191 | ) |
Expenses from Affiliated Portfolios (a) |
|
| (64,641 | ) |
| (178,518 | ) |
| (180,290 | ) |
| (50,165 | ) |
|
|
|
|
|
| ||||||||
Total Investment Income (Loss) |
|
| 64,198 |
|
| 390,973 |
|
| 627,790 |
|
| 240,867 |
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Management |
|
| 4,054 |
|
| 12,186 |
|
| 13,903 |
|
| 4,804 |
|
Administration: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A Shares |
|
| 900 |
|
| 2,629 |
|
| 2,741 |
|
| 932 |
|
Class B Shares |
|
| 622 |
|
| 1,869 |
|
| 2,413 |
|
| 854 |
|
Class C Shares |
|
| 56 |
|
| 249 |
|
| 263 |
|
| 86 |
|
Distribution: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Class B Shares |
|
| 23,946 |
|
| 71,910 |
|
| 92,768 |
|
| 32,852 |
|
Class C Shares |
|
| 2,152 |
|
| 9,615 |
|
| 10,089 |
|
| 3,308 |
|
Shareholder Servicing: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A Shares |
|
| 11,548 |
|
| 33,696 |
|
| 35,155 |
|
| 11,938 |
|
Class B Shares |
|
| 7,992 |
|
| 23,998 |
|
| 30,963 |
|
| 10,957 |
|
Class C Shares |
|
| 720 |
|
| 3,207 |
|
| 3,368 |
|
| 1,103 |
|
Accounting |
|
| 18,998 |
|
| 18,999 |
|
| 18,998 |
|
| 18,999 |
|
Compliance Services |
|
| 38 |
|
| 111 |
|
| 129 |
|
| 45 |
|
Printing |
|
| 8,514 |
|
| 23,369 |
|
| 31,626 |
|
| 11,419 |
|
Professional |
|
| 179 |
|
| 540 |
|
| 637 |
|
| 226 |
|
Transfer Agent |
|
| 45,360 |
|
| 67,279 |
|
| 73,136 |
|
| 36,606 |
|
Trustee |
|
| 122 |
|
| 362 |
|
| 415 |
|
| 142 |
|
Registration fees |
|
| 10,130 |
|
| 8,021 |
|
| 12,926 |
|
| 4,767 |
|
Other |
|
| 1,228 |
|
| 6,433 |
|
| 7,258 |
|
| 2,636 |
|
|
|
|
|
|
| ||||||||
Total expenses before fee reductions |
|
| 136,559 |
|
| 284,473 |
|
| 336,788 |
|
| 141,674 |
|
Fees reduced by Investment Adviser |
|
| (53,311 | ) |
| (15,434 | ) |
| (13,903 | ) |
| (11,396 | ) |
|
|
|
|
|
| ||||||||
Net Expenses |
|
| 83,248 |
|
| 269,039 |
|
| 322,885 |
|
| 130,278 |
|
|
|
|
|
|
| ||||||||
Net Investment Income (Loss) |
|
| (19,050 | ) |
| 121,934 |
|
| 304,905 |
|
| 110,589 |
|
|
|
|
|
|
| ||||||||
Net Realized/Unrealized Gains (Losses) from Investments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized losses from investments and foreign currency transactions (a) |
|
| (1,143,628 | ) |
| (3,229,403 | ) |
| (3,394,340 | ) |
| (1,012,633 | ) |
Net realized gains (losses) from non-affiliates investment transactions |
|
| — |
|
| 10,119 |
|
| 36,466 |
|
| 38,780 |
|
Change in unrealized appreciation/depreciation from Affiliated Portfolios investments and foreign currencies (a) |
|
| 2,619,167 |
|
| 7,079,125 |
|
| 6,981,433 |
|
| 1,942,126 |
|
Change in unrealized appreciation/depreciation from non-affiliates investments |
|
| — |
|
| 261,420 |
|
| 619,542 |
|
| 277,995 |
|
|
|
|
|
|
| ||||||||
Net realized/unrealized gains from investments and foreign currency transactions |
|
| 1,475,539 |
|
| 4,121,261 |
|
| 4,243,101 |
|
| 1,246,268 |
|
|
|
|
|
|
| ||||||||
Change In Net Assets Resulting From Operations |
| $ | 1,456,489 |
| $ | 4,243,195 |
| $ | 4,548,006 |
| $ | 1,356,857 |
|
|
|
|
|
|
|
|
|
(a) | Represents amounts allocated from the respective Affiliated Portfolios. |
|
|
|
See notes to financial statements. | HSBC INVESTOR LIFELINE FUNDS | 21 |
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) |
| $ | (19,050 | ) | $ | (23,552 | ) | $ | 121,934 |
| $ | 225,539 |
|
Net realized gains (losses) from investment and foreign currency transactions |
|
| (1,143,628 | ) |
| (1,008,442 | ) |
| (3,219,284 | ) |
| (2,323,453 | ) |
Change in unrealized appreciation/depreciation from investments and foreign currencies |
|
| 2,619,167 |
|
| (4,611,582 | ) |
| 7,340,545 |
|
| (12,045,449 | ) |
|
|
|
|
|
| ||||||||
Change in net assets resulting from operations |
|
| 1,456,489 |
|
| (5,643,576 | ) |
| 4,243,195 |
|
| (14,143,363 | ) |
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A Shares |
|
| — |
|
| — |
|
| (139,550 | ) |
| (137,880 | ) |
Class B Shares |
|
| — |
|
| — |
|
| (7,901 | ) |
| (1,259 | ) |
Class C Shares |
|
| — |
|
| — |
|
| (1,544 | ) |
| (816 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gains: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A Shares |
|
| — |
|
| (420,292 | ) |
| — |
|
| (1,103,525 | ) |
Class B Shares |
|
| — |
|
| (302,904 | ) |
| — |
|
| (702,526 | ) |
Class C Shares |
|
| — |
|
| (31,294 | ) |
| — |
|
| (63,975 | ) |
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 | ) |
| (148,995 | ) |
| (2,009,981 | ) |
|
|
|
|
|
| ||||||||
Change in net assets resulting from capital transactions |
|
| (31,438 | ) |
| 1,942,878 |
|
| (447,939 | ) |
| 3,984,572 |
|
|
|
|
|
|
| ||||||||
Change in net assets |
|
| 1,425,051 |
|
| (4,458,322 | ) |
| 3,646,261 |
|
| (12,168,772 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of period |
|
| 8,057,238 |
|
| 12,515,560 |
|
| 24,361,065 |
|
| 36,529,837 |
|
|
|
|
|
|
| ||||||||
End of period |
| $ | 9,482,289 |
| $ | 8,057,238 |
| $ | 28,007,326 |
| $ | 24,361,065 |
|
|
|
|
|
|
| ||||||||
Accumulated net investment income (loss) |
| $ | — |
| $ | — |
| $ | 122,678 |
| $ | 117,076 |
|
|
|
|
|
|
|
|
|
|
22 | 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 |
| $ | 919,824 |
| $ | 1,808,587 |
| $ | 1,604,683 |
| $ | 4,094,924 |
|
Dividends reinvested |
|
| — |
|
| 421,632 |
|
| 138,893 |
|
| 1,235,211 |
|
Value of shares redeemed |
|
| (913,945 | ) |
| (1,135,189 | ) |
| (2,526,023 | ) |
| (3,486,779 | ) |
|
|
|
|
|
| ||||||||
Class A Shares capital transactions |
|
| 5,879 |
|
| 1,095,030 |
|
| (782,447 | ) |
| 1,843,356 |
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class B Shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from shares issued |
|
| 424,668 |
|
| 1,075,628 |
|
| 935,667 |
|
| 2,700,023 |
|
Dividends reinvested |
|
| — |
|
| 303,827 |
|
| 7,888 |
|
| 701,613 |
|
Value of shares redeemed |
|
| (383,617 | ) |
| (597,445 | ) |
| (915,409 | ) |
| (1,552,870 | ) |
|
|
|
|
|
| ||||||||
Class B Shares capital transactions |
|
| 41,051 |
|
| 782,010 |
|
| 28,146 |
|
| 1,848,766 |
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class C Shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from shares issued |
|
| 16,971 |
|
| 160,943 |
|
| 496,755 |
|
| 471,136 |
|
Dividends reinvested |
|
| — |
|
| 31,420 |
|
| 1,544 |
|
| 64,791 |
|
Value of shares redeemed |
|
| (95,339 | ) |
| (126,525 | ) |
| (191,937 | ) |
| (243,477 | ) |
|
|
|
|
|
| ||||||||
Class C Shares capital transactions |
|
| (78,368 | ) |
| 65,838 |
|
| 306,362 |
|
| 292,450 |
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in net assets resulting from capital transactions |
| $ | (31,438 | ) | $ | 1,942,878 |
| $ | (447,939 | ) | $ | 3,984,572 |
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHARE TRANSACTIONS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A Shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued |
|
| 108,502 |
|
| 140,000 |
|
| 177,228 |
|
| 323,501 |
|
Reinvested |
|
| — |
|
| 30,686 |
|
| 17,211 |
|
| 93,719 |
|
Redeemed |
|
| (107,013 | ) |
| (93,561 | ) |
| (293,206 | ) |
| (287,477 | ) |
|
|
|
|
|
| ||||||||
Change in Class A Shares |
|
| 1,489 |
|
| 77,125 |
|
| (98,767 | ) |
| 129,743 |
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class B Shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued |
|
| 50,718 |
|
| 84,358 |
|
| 104,902 |
|
| 218,579 |
|
Reinvested |
|
| — |
|
| 22,556 |
|
| 973 |
|
| 53,152 |
|
Redeemed |
|
| (45,783 | ) |
| (53,351 | ) |
| (105,971 | ) |
| (133,643 | ) |
|
|
|
|
|
| ||||||||
Change in Class B Shares |
|
| 4,935 |
|
| 53,563 |
|
| (96 | ) |
| 138,088 |
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class C Shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued |
|
| 2,243 |
|
| 12,747 |
|
| 58,266 |
|
| 37,995 |
|
Reinvested |
|
| — |
|
| 2,334 |
|
| 190 |
|
| 4,890 |
|
Redeemed |
|
| (11,023 | ) |
| (11,560 | ) |
| (19,296 | ) |
| (22,815 | ) |
|
|
|
|
|
| ||||||||
Change in Class C Shares |
|
| (8,780 | ) |
| 3,521 |
|
| 39,160 |
|
| 20,070 |
|
|
|
|
|
|
|
|
|
|
See notes to financial statements. | HSBC INVESTOR LIFELINE FUNDS | 23 |
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) |
| $ | 304,905 |
| $ | 510,248 |
| $ | 110,589 |
| $ | 224,175 |
|
Net realized gains (losses) from investment and foreign currency transactions |
|
| (3,357,874 | ) |
| (2,119,789 | ) |
| (973,853 | ) |
| (572,415 | ) |
Change in unrealized appreciation/depreciation from investments and foreign currencies |
|
| 7,600,975 |
|
| (11,008,540 | ) |
| 2,220,121 |
|
| (2,729,503 | ) |
|
|
|
|
|
| ||||||||
Change in net assets resulting from operations |
|
| 4,548,006 |
|
| (12,618,081 | ) |
| 1,356,857 |
|
| (3,077,743 | ) |
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A Shares |
|
| (193,616 | ) |
| (306,761 | ) |
| (71,561 | ) |
| (141,579 | ) |
Class B Shares |
|
| (84,484 | ) |
| (139,765 | ) |
| (34,422 | ) |
| (79,044 | ) |
Class C Shares |
|
| (9,513 | ) |
| (16,616 | ) |
| (3,180 | ) |
| (7,481 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gains: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A Shares |
|
| — |
|
| (772,146 | ) |
| — |
|
| (146,067 | ) |
Class B Shares |
|
| — |
|
| (634,501 | ) |
| — |
|
| (110,864 | ) |
Class C Shares |
|
| — |
|
| (74,952 | ) |
| — |
|
| (9,305 | ) |
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 |
|
| (287,613 | ) |
| (1,985,352 | ) |
| (109,163 | ) |
| (494,867 | ) |
|
|
|
|
|
| ||||||||
Change in net assets resulting from capital transactions |
|
| (620,407 | ) |
| 4,171,062 |
|
| (322,434 | ) |
| 1,063,369 |
|
|
|
|
|
|
| ||||||||
Change in net assets |
|
| 3,639,986 |
|
| (10,432,371 | ) |
| 925,260 |
|
| (2,509,241 | ) |
| |||||||||||||
Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of period |
|
| 27,987,474 |
|
| 38,419,845 |
|
| 9,525,062 |
|
| 12,034,303 |
|
|
|
|
|
|
| ||||||||
End of period |
| $ | 31,627,460 |
| $ | 27,987,474 |
| $ | 10,450,322 |
| $ | 9,525,062 |
|
|
|
|
|
|
| ||||||||
Accumulated net investment income (loss) |
| $ | 46,429 |
| $ | — |
| $ | 11,295 |
| $ | — |
|
|
|
|
|
|
|
|
|
|
24 | 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 |
| $ | 1,737,577 |
| $ | 4,477,845 |
| $ | 845,986 |
| $ | 1,702,567 |
|
Dividends reinvested |
|
| 193,104 |
|
| 1,096,649 |
|
| 69,473 |
|
| 277,201 |
|
Value of shares redeemed |
|
| (2,409,781 | ) |
| (3,953,091 | ) |
| (1,218,686 | ) |
| (2,025,309 | ) |
|
|
|
|
|
| ||||||||
Class A Shares capital transactions |
|
| (479,100 | ) |
| 1,621,403 |
|
| (303,227 | ) |
| (45,541 | ) |
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class B Shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from shares issued |
|
| 1,513,370 |
|
| 3,948,083 |
|
| 770,085 |
|
| 1,595,118 |
|
Dividends reinvested |
|
| 84,267 |
|
| 790,250 |
|
| 33,341 |
|
| 183,107 |
|
Value of shares redeemed |
|
| (1,629,024 | ) |
| (2,551,316 | ) |
| (820,164 | ) |
| (813,124 | ) |
|
|
|
|
|
| ||||||||
Class B Shares capital transactions |
|
| (31,387 | ) |
| 2,187,017 |
|
| (16,738 | ) |
| 965,101 |
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class C Shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from shares issued |
|
| 297,893 |
|
| 778,453 |
|
| 79,844 |
|
| 203,099 |
|
Dividends reinvested |
|
| 9,424 |
|
| 93,634 |
|
| 3,101 |
|
| 16,809 |
|
Value of shares redeemed |
|
| (417,237 | ) |
| (509,445 | ) |
| (85,414 | ) |
| (76,099 | ) |
|
|
|
|
|
| ||||||||
Class C Shares capital transactions |
|
| (109,920 | ) |
| 362,642 |
|
| (2,469 | ) |
| 143,809 |
|
|
|
|
|
|
| ||||||||
| |||||||||||||
Change in net assets resulting from capital transactions |
| $ | (620,407 | ) | $ | 4,171,062 |
| $ | (322,434 | ) | $ | 1,063,369 |
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHARE TRANSACTIONS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A Shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued |
|
| 194,386 |
|
| 382,474 |
|
| 94,440 |
|
| 157,831 |
|
Reinvested |
|
| 22,198 |
|
| 91,761 |
|
| 7,802 |
|
| 25,060 |
|
Redeemed |
|
| (275,784 | ) |
| (355,687 | ) |
| (133,563 | ) |
| (199,713 | ) |
|
|
|
|
|
| ||||||||
Change in Class A Shares |
|
| (59,200 | ) |
| 118,548 |
|
| (31,321 | ) |
| (16,822 | ) |
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class B Shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued |
|
| 172,132 |
|
| 340,238 |
|
| 87,053 |
|
| 148,878 |
|
Reinvested |
|
| 9,836 |
|
| 65,629 |
|
| 3,828 |
|
| 16,609 |
|
Redeemed |
|
| (191,599 | ) |
| (229,160 | ) |
| (91,989 | ) |
| (81,932 | ) |
|
|
|
|
|
| ||||||||
Change in Class B Shares |
|
| (9,631 | ) |
| 176,707 |
|
| (1,108 | ) |
| 83,555 |
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class C Shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued |
|
| 33,657 |
|
| 68,169 |
|
| 8,443 |
|
| 18,026 |
|
Reinvested |
|
| 1,125 |
|
| 7,964 |
|
| 348 |
|
| 1,489 |
|
Redeemed |
|
| (49,433 | ) |
| (46,372 | ) |
| (8,952 | ) |
| (7,369 | ) |
|
|
|
|
|
| ||||||||
Change in Class C Shares |
|
| (14,651 | ) |
| 29,761 |
|
| (161 | ) |
| 12,146 |
|
|
|
|
|
|
|
|
|
|
See notes to financial statements. | HSBC INVESTOR LIFELINE FUNDS | 25 |
|
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 (i) |
|
| $ | 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 |
|
|
Year Ended October 31, 2009 |
|
|
| 8.62 |
|
|
|
| 0.01 | * |
|
|
| 1.57 |
|
|
|
| 1.58 |
|
|
|
| — |
|
|
|
| — |
|
|
|
| 10.20 |
|
|
CLASS B SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended October 31, 2005 (j) |
|
| $ | 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 |
|
|
Year Ended October 31, 2009 |
|
|
| 8.39 |
|
|
|
| (0.06 | )* |
|
|
| 1.53 |
|
|
|
| 1.47 |
|
|
|
| — |
|
|
|
| — |
|
|
|
| 9.86 |
|
|
CLASS C SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended October 31, 2005 (k) |
|
| $ | 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 |
|
|
Year Ended October 31, 2009 |
|
|
| 8.39 |
|
|
|
| (0.05 | )* |
|
|
| 1.51 |
|
|
|
| 1.46 |
|
|
|
| — |
|
|
|
| — |
|
|
|
| 9.85 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Ratios/Supplementary Data |
| |||||||||||||||||||||||||
|
|
|
|
|
| ||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||||
|
| Total |
| Net Assets |
| Ratio of Net |
| Ratio of Net |
| Ratio of |
| Portfolio |
| ||||||||||||||||||
CLASS A SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Period Ended October 31, 2005 (i) |
|
|
| 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 | % |
|
Year Ended October 31, 2009 |
|
|
| 18.33 | %(h) |
|
|
| 5,426 |
|
|
|
| 1.50 | % |
|
|
| 0.09 | % |
|
|
| 2.16 | % |
|
|
| 53.42 | % |
|
CLASS B SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended October 31, 2005 (j) |
|
|
| 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 | % |
|
Year Ended October 31, 2009 |
|
|
| 17.52 | %(h) |
|
|
| 3,767 |
|
|
|
| 2.25 | % |
|
|
| (0.66 | )% |
|
|
| 2.91 | % |
|
|
| 53.42 | % |
|
CLASS C SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended October 31, 2005 (k) |
|
|
| 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 | % |
|
Year Ended October 31, 2009 |
|
|
| 17.40 | %(h) |
|
|
| 289 |
|
|
|
| 2.25 | % |
|
|
| (0.59 | )% |
|
|
| 2.93 | % |
|
|
| 53.42 | % |
|
|
|
* | 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 monies related to 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 or $(0.01). |
|
|
(h) | During the year ended October 31, 2009, 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 0.11%, 0.11% and 0.11% for Class A Shares, Class B Shares and Class C Shares, respectively. |
|
|
(i) | Class A Shares commenced operations on February 14, 2005. |
|
|
(j) | Class B Shares commenced operations on February 9, 2005. |
|
|
(k) | Class C Shares commenced operations on June 9, 2005. |
|
|
|
26 | 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 |
|
|
Year Ended October 31, 2009 |
|
|
| 8.81 |
|
| 0.07 | * |
| 1.55 |
|
| 1.62 |
|
| (0.09 | ) |
| — |
|
| (0.09 | ) |
|
|
| 10.34 |
|
|
CLASS B SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended October 31, 2005(j) |
|
| $ | 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 | ) |
| — | (l) |
| (0.74 | ) |
| (0.74 | ) |
|
|
| 8.76 |
|
|
Year Ended October 31, 2009 |
|
|
| 8.76 |
|
| 0.01 | * |
| 1.55 |
|
| 1.56 |
|
| (0.01 | ) |
| — |
|
| (0.01 | ) |
|
|
| 10.31 |
|
|
CLASS C SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended October 31, 2005(k) |
|
| $ | 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 |
|
|
Year Ended October 31, 2009 |
|
|
| 8.80 |
|
| 0.01 | * |
| 1.55 |
|
| 1.56 |
|
| (0.01 | ) |
| — |
|
| (0.01 | ) |
|
|
| 10.35 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 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 | % |
|
Year Ended October 31, 2009 |
| 18.66 | %(i) |
|
|
| 15,304 |
|
| 1.50 | % |
| 0.84 | % |
| 1.57 | % |
| 47.74 | % |
|
CLASS B SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended October 31, 2005(j) |
| 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 | % |
|
Year Ended October 31, 2009 |
| 17.80 | %(i) |
|
|
| 11,196 |
|
| 2.25 | % |
| 0.08 | % |
| 2.31 | % |
| 47.74 | % |
|
CLASS C SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended October 31, 2005(k) |
| 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 | % |
|
Year Ended October 31, 2009 |
| 17.81 | %(i) |
|
|
| 1,507 |
|
| 2.25 | % |
| 0.06 | % |
| 2.30 | % |
| 47.74 | % |
|
|
|
* | 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, the Fund does not include expenses of the unaffiliated investment companies in which the Fund invests in. |
|
|
(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 and unaffiliated investment companies by their corresponding 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) | During the year ended October 31, 2009, 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 0.11%, 0.11% and 0.11% 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 April 27, 2005. |
|
|
(l) | Rounds to less than $0.01. |
|
|
|
See notes to financial statements. | HSBC INVESTOR LIFELINE FUNDS | 27 |
|
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 |
|
|
Year Ended October 31, 2009 |
|
|
| 8.69 |
|
| 0.13 | * |
| 1.39 |
|
| 1.52 |
|
| (0.12 | ) |
| — |
|
| — |
|
| (0.12 | ) |
|
|
| 10.09 |
|
|
CLASS B SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended October 31, 2005(k) |
|
| $ | 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 |
|
|
Year Ended October 31, 2009 |
|
|
| 8.69 |
|
| 0.06 | * |
| 1.39 |
|
| 1.45 |
|
| (0.06 | ) |
| — |
|
| — |
|
| (0.06 | ) |
|
|
| 10.08 |
|
|
CLASS C SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended October 31, 2005(l) |
|
| $ | 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 |
|
|
Year Ended October 31, 2009 |
|
|
| 8.49 |
|
| 0.06 | * |
| 1.35 |
|
| 1.41 |
|
| (0.06 | ) |
| — |
|
| — |
|
| (0.06 | ) |
|
|
| 9.84 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 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 | % |
|
Year Ended October 31, 2009 |
| 17.75 | %(j) |
|
|
| 15,909 |
|
| 1.44 | % |
| 1.47 | % |
| 1.49 | % |
| 41.29 | % |
|
CLASS B SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended October 31, 2005(k) |
| 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 | % |
|
Year Ended October 31, 2009 |
| 16.82 | %(j) |
|
|
| 14,230 |
|
| 2.19 | % |
| 0.71 | % |
| 2.24 | % |
| 41.29 | % |
|
CLASS C SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended October 31, 2005(l) |
| 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 | % |
|
Year Ended October 31, 2009 |
| 16.75 | %(j) |
|
|
| 1,488 |
|
| 2.19 | % |
| 0.72 | % |
| 2.24 | % |
| 41.29 | % |
|
|
|
* | 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, the Fund does not include expenses of the unaffiliated investment companies in which the Fund invests in. |
|
|
(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 and unaffiliated investment companies by their corresponding 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 or $(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) | During the year ended October 31, 2009, 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 0.09%, 0.09% and 0.09% for Class A Shares, Class B Shares and Class C Shares, respectively. |
|
|
(k) | Class B Shares commenced operations on February 1, 2005. |
|
|
(l) | Class C Shares commenced operations on June 9, 2005. |
|
|
|
28 | 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(j) |
| $ | 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 |
|
Year Ended October 31, 2009 |
|
| 8.84 |
| 0.14 | * |
| 1.16 |
|
| 1.30 |
|
| (0.13 | ) |
| — |
|
| (0.13 | ) |
|
| 10.01 |
|
CLASS B SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended October 31, 2005(k) |
| $ | 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 |
|
Year Ended October 31, 2009 |
|
| 8.76 |
| 0.07 | * |
| 1.15 |
|
| 1.22 |
|
| (0.07 | ) |
| — |
|
| (0.07 | ) |
|
| 9.91 |
|
CLASS C SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended October 31, 2005(l) |
| $ | 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 |
|
Year Ended October 31, 2009 |
|
| 9.00 |
| 0.07 | * |
| 1.18 |
|
| 1.25 |
|
| (0.07 | ) |
| — |
|
| (0.07 | ) |
|
| 10.18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Ratios/Supplementary Data |
| ||||||||||||||
|
|
|
|
| |||||||||||||||
|
| Total |
| Net Assets |
| Ratio of Net |
| Ratio of Net |
| Ratio of |
| Portfolio |
| ||||||
CLASS A SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended October 31, 2005(j) |
| 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 | % |
|
Year Ended October 31, 2009 |
| 14.95 | %(i) |
|
| 5,059 |
| 1.50 | % |
| 1.53 | % |
| 1.62 | % |
| 34.40 | % |
|
CLASS B SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended October 31, 2005(k) |
| 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 | % |
|
Year Ended October 31, 2009 |
| 14.05 | %(i) |
|
| 4,907 |
| 2.25 | % |
| 0.77 | % |
| 2.38 | % |
| 34.40 | % |
|
CLASS C SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended October 31, 2005(l) |
| 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 | % |
|
Year Ended October 31, 2009 |
| 13.97 | %(i) |
|
| 485 |
| 2.25 | % |
| 0.78 | % |
| 2.37 | % |
| 34.40 | % |
|
|
|
* | 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, the Fund does not include expenses of the unaffiliated investment companies in which the Fund invests in. |
|
|
(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 and unaffilated investment companies by their corresponding 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) | During the year ended October 31, 2009, 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 0.08%, 0.08% and 0.08% for Class A Shares, Class B Shares and Class C Shares, respectively. |
|
|
(j) | Class A Shares commenced operations on February 23, 2005. |
|
|
(k) | Class B Shares commenced operations on February 17, 2005. |
|
|
(l) | Class C Shares commenced operations on April 19, 2005. |
|
|
|
See notes to financial statements. | HSBC INVESTOR LIFELINE FUNDS | 29 |
|
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, 2009, the Trust is comprised of 15 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 LifeLine Funds are funds of funds that invest in other funds in the HSBC Investor Family of Funds, as well as mutual funds that are not affiliated with the HSBC Investor Family of Funds (collectively the “Underlying Funds”). The LifeLine Funds currently invest in the 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”), which are each diversified series of the HSBC Investor Portfolios (the “Portfolio Trust”). The Portfolios operate as master funds in master-feeder arrangements in addition to receiving investments from the LifeLine Funds. |
|
|
| The LifeLine Funds also invest in the HSBC Investor Prime Money Market Fund (the “Prime Money Market Fund”), an open-end management investment company that is a diversified series of the Trust. In addition, effective February 9, 2009, the applicable LifeLine Funds began investing in the Goldman Sachs High Yield Fund, Class I (“GS High Yield Fund”), as a replacement to the HSBC Investor High Yield Fixed Income Portfolio. The Goldman Sachs High Yield Fund is an open-end management investment company that is a diversified series of the Goldman Sachs Trust. Effective August 4, 2009, the applicable LifeLine Funds began investing in the Franklin Total Return Fund, Advisor Class (“Franklin Total Return Fund”), an open end management investment company that is a diversified series of the Franklin Investors Securities 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 target portfolio weightings and summary of Underlying Funds are as follows: |
|
|
| LifeLine Funds Portfolio Weightings |
|
|
|
|
|
|
|
|
|
|
|
| Asset Class of Underlying Funds |
| Aggressive |
| Growth |
| Moderate |
| Conservative |
|
|
|
|
|
|
| |||||
| 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 | % |
|
|
|
|
|
|
|
|
|
30 | HSBC INVESTOR LIFELINE FUNDS |
|
HSBC INVESTOR LIFELINE FUNDS |
Notes to Financial Statements—As of October 31, 2009 (continued) |
LifeLine Funds Portfolio Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Underlying Funds |
| Aggressive |
| Growth |
| Moderate |
| Conservative |
| ||||
|
|
|
|
|
| |||||||||
| Growth Portfolio |
| $ | 1,995,639 |
| $ | 5,866,416 |
| $ | 5,966,860 |
| $ | 1,552,990 |
|
| International Equity Portfolio |
|
| 2,192,711 |
|
| 5,604,940 |
|
| 4,725,863 |
|
| 1,038,645 |
|
| Opportunity Portfolio |
|
| 3,269,782 |
|
| 5,654,037 |
|
| 3,495,961 |
|
| 419,096 |
|
| Value Portfolio |
|
| 2,018,514 |
|
| 5,933,586 |
|
| 5,717,753 |
|
| 1,466,064 |
|
| Prime Money Market Fund |
|
| 94,361 |
|
| 280,464 |
|
| 1,900,737 |
|
| 2,193,545 |
|
| GS High Yield Fund, Class I |
|
| — |
|
| 562,785 |
|
| 1,581,542 |
|
| 834,248 |
|
| Franklin Total Return Fund |
|
| — |
|
| 4,236,095 |
|
| 8,253,809 |
|
| 2,930,460 |
|
|
|
|
|
|
|
| ||||||||
| Total |
| $ | 9,571,007 |
| $ | 28,138,323 |
| $ | 31,642,525 |
| $ | 10,435,048 |
|
|
|
|
|
|
|
|
|
|
| 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 LifeLine Funds 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 Trust enters 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 Trust expects 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 certain 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 increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. Management has evaluated events and transactions through December 21, 2009, the date the financial statements were issued, for purposes of recognition or disclosure in these financial statements. |
|
|
| Securities Valuation: |
|
|
| The LifeLine Funds record their investments in the Prime Money Market Fund, GS High Yield Fund and Franklin Total Return Fund at the net asset value reported by those funds. The LifeLine Funds record their investments in the Portfolios at fair value. The underlying securities of the Portfolios are recorded at fair value, respectively, as more fully discussed in the notes to those financial statements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The valuation techniques used to determine fair value in funds or portfolios in which the LifeLine Funds are invested are described in their respective notes to 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 Portfolios. Dividend income is recorded on the ex-dividend date for the Prime Money Market Fund, GS High Yield Fund and Franklin Total Return Fund. Changes in holdings of the Prime Money Market Fund, GS High Yield |
|
|
HSBC INVESTOR LIFELINE FUNDS | 31 |
|
HSBC INVESTOR LIFELINE FUNDS |
Notes to Financial Statements—As of October 31, 2009 (continued) |
|
|
| Fund and the Franklin Total Return 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, GS High Yield Fund and Franklin Total Return Fund are reflected as of trade date. In addition, the LifeLine Funds accrue their own expenses daily as incurred. |
|
|
| 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 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 to shareholders 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. To the extent distributions to shareholders from net investment income and net realized gains exceed net investment income and net realized gains for tax purposes, they are reported as distributions of capital. |
|
|
| 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. The Trustees have approved the removal of such redemption fee effective February 28, 2010. For the fiscal years ended October 31, 2008 and October 31, 2009, respectively, the following LifeLine Funds collected redemption fees as follows: |
|
|
|
|
|
|
|
|
|
|
|
| Fund |
| Fees Collected |
| Fees Collected |
| ||||
|
|
|
| |||||||
| Aggressive Growth Fund |
| $ | 119 |
|
| $ | 47 |
|
|
| Growth Strategy Fund |
|
| 1,152 |
|
|
| 431 |
|
|
| Moderate Growth Fund |
|
| 187 |
|
|
| 259 |
|
|
| Conservative Growth Fund |
|
| 2,849 |
|
|
| 63 |
|
|
|
|
| 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. |
|
|
| Management of the Funds has reviewed tax positions taken in tax years that remain subject to examination by all major tax jurisdictions, including federal (i.e., the last four tax year ends and the interim tax period since then, as applicable). Management believes that there is no tax liability resulting from unrecognized tax benefits related to uncertain tax positions taken. |
|
|
32 | HSBC INVESTOR LIFELINE FUNDS |
|
HSBC INVESTOR LIFELINE FUNDS |
Notes to Financial Statements—As of October 31, 2009 (continued) |
|
|
|
|
| New Accounting Pronouncements: | ||
|
|
| |
| In June 2009, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Codification 105-10, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles – a replacement of FASB Statement No. 162” (“ASC 105-10, formerly “SFAS 168”). ASC 105-10 replaces SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles” and establishes the “FASB Accounting Standards Codification” (“Codification”) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with U.S. GAAP. All guidance contained in the Codification carries an equal level of authority. The Codification supersedes all existing non-SEC accounting and reporting standards. All other non-grandfathered non-SEC accounting literature not included in the Codification will become nonauthoritative. ASC 105-10 is effective for financial statements issued for interim and annual periods ending after September 15, 2009. The LifeLine Funds adopted ASC 105-10 in the current reporting period. Management has evaluated this new statement and has determined that it did not have a significant impact on the determination or reporting of the LifeLine Funds’ financial statements. | ||
|
|
| |
3. | Investment Valuation Summary | ||
|
|
| |
| The valuation techniques employed by the LifeLine Funds, as described in Note 2 above, maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The inputs used for valuing the LifeLine Funds’ investments are summarized in the three broad levels listed below: | ||
|
|
|
|
|
| • | Level 1: quoted prices in active markets for identical assets |
|
|
|
|
|
| • | Level 2: other significant observable inputs (including quoted prices for similar securities, interest rates, prepayments speeds, credit risk, etc.) |
|
|
|
|
|
| • | Level 3: significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments) |
|
|
| |
| The inputs or methodology used for valuing investments are not necessarily an indication of the risk associated with investing in those investments. For example, short-term debt securities of sufficient credit quality maturing in sixty days or less are generally valued at amortized cost, which approximates fair value. Generally, amortized cost approximates the current fair value of a security, but since the valuation is not obtained from a quoted price in an active market, such securities are reflected as Level 2. | ||
|
|
| |
| The Schedules of Portfolio Investments for the Portfolios include additional information regarding the investments for the LifeLine Funds. The following is a summary of the valuation inputs used as of October 31, 2009 in valuing the LifeLine Funds’ investments based upon the three levels defined above: |
|
|
|
|
|
|
|
|
|
|
|
|
| LEVEL 1 |
| LEVEL 2 |
| TOTAL |
| |||
|
|
|
|
| ||||||
Aggressive Growth Strategy Fund |
|
|
|
|
|
|
|
|
|
|
Investments: |
|
|
|
|
|
|
|
|
|
|
Affiliated Investment Companies |
| $ | 94,361 |
| $ | 9,476,646 |
| $ | 9,571,007 |
|
|
|
|
|
| ||||||
Total Investments |
| $ | 94,361 |
| $ | 9,476,646 |
| $ | 9,571,007 |
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
Growth Strategy Fund |
|
|
|
|
|
|
|
|
|
|
Investments: |
|
|
|
|
|
|
|
|
|
|
Affiliated Investment Companies |
| $ | 280,464 |
| $ | 23,058,979 |
| $ | 23,339,443 |
|
Unaffiliated Investment Companies |
|
| 4,798,880 |
|
| — |
|
| 4,798,880 |
|
|
|
|
|
| ||||||
Total Investments |
| $ | 5,079,344 |
| $ | 23,058,979 |
| $ | 28,138,323 |
|
|
|
|
|
|
|
|
HSBC INVESTOR LIFELINE FUNDS | 33 |
|
HSBC INVESTOR LIFELINE FUNDS |
Notes to Financial Statements—As of October 31, 2009 (continued) |
|
|
|
|
|
|
|
|
|
|
|
|
| LEVEL 1 |
| LEVEL 2 |
| TOTAL |
| |||
|
|
|
|
| ||||||
Moderate Growth Strategy Fund |
|
|
|
|
|
|
|
|
|
|
Investments: |
|
|
|
|
|
|
|
|
|
|
Affiliated Investment Companies |
| $ | 1,900,737 |
| $ | 19,906,437 |
| $ | 21,807,174 |
|
Unaffiliated Investment Companies |
|
| 9,835,351 |
|
| — |
|
| 9,835,351 |
|
|
|
|
|
| ||||||
Total Investments |
| $ | 11,736,088 |
| $ | 19,906,437 |
| $ | 31,642,525 |
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
Conservative Growth Strategy Fund |
|
|
|
|
|
|
|
|
|
|
Investments: |
|
|
|
|
|
|
|
|
|
|
Affiliated Investment Companies |
| $ | 2,193,545 |
| $ | 4,476,794 |
| $ | 6,670,339 |
|
Unaffiliated Investment Companies |
|
| 3,764,709 |
|
| — |
|
| 3,764,709 |
|
|
|
|
|
| ||||||
Total Investments |
| $ | 5,958,254 |
| $ | 4,476,794 |
| $ | 10,435,048 |
|
|
|
|
|
|
|
|
4. | Related Party Transactions and Other Agreements and Plans: |
|
|
| 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. The Investment Adviser is currently waiving all of the fee for each of the LifeLine Funds. Any voluntary fee waivers/reimbursements are not subject to recoupment in subsequent fiscal periods. Voluntary waivers/reimbursements may be stopped at any time. |
|
|
| Administration: |
|
|
| HSBC serves the LifeLine Funds as Administrator. Under the terms of the Administration Agreement, HSBC received from the LifeLine Funds (as well as the other funds in the HSBC Investor Family of Funds) a fee, accrued daily and paid monthly, during the period November 1, 2008 to December 31, 2008, 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 | % |
|
|
|
| Effective January 1, 2009, the terms of the Administration Agreement were amended. Pursuant to the amended Administration Agreement, HSBC receives from the LifeLine Funds (as well as the other funds in the HSBC Investor Family of Funds) a fee, accrued daily and paid monthly, at an annual rate of: |
|
|
|
|
|
Based on Average Daily Net Assets of |
| Fee Rate |
| |
|
| |||
Up to $10 billion |
| 0.0550 | % |
|
In excess of $10 billion but not exceeding $20 billion |
| 0.0350 | % |
|
In excess of $20 billion but not exceeding $50 billion |
| 0.0275 | % |
|
In excess of $50 billion |
| 0.0250 | % |
|
|
|
| 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. Certain administration fees of the Portfolios also may be reduced by treating them as apportioned in part to other funds making investments in the Portfolios in master-feeder structures. An amount equal to 50% of the administration fees is deemed to be class-specific. |
|
|
| 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 Sub-Administrator for the Trust and the HSBC Investor Family of Funds |
|
|
34 | HSBC INVESTOR LIFELINE FUNDS |
|
HSBC INVESTOR LIFELINE FUNDS |
Notes to Financial Statements—As of October 31, 2009 (continued) |
|
|
| (collectively, the “Trusts”) 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. |
|
|
| 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 $266,099 for the year ended October 31, 2009, plus reimbursement of certain out of pocket expenses. Expenses incurred by each Fund are reflected on the Statements of Operations as “Compliance Services.” Citi Ohio pays the salary and other compensation earned by individuals performing these services, as employees of Citi Ohio. |
|
|
| Distribution Arrangements: |
|
|
| 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 “Distribution Plan”) pursuant to Rule 12b-1 of the Act. The Distribution 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 $222,439, $151,254, and $10,302 in commissions from sales of HSBC Investor Family of Funds, for Class A Shares, Class B Shares, and Class C Shares, respectively of which $75, $12, and $0 were reallocated to HSBC-affiliated brokers and dealers, for Class A Shares, Class B Shares, and Class C Shares, respectively. |
|
|
| Shareholder Servicing: |
|
|
| The Trust has adopted a Shareholder Services Plan which provides for payments to shareholder servicing agents (which primarily 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 of the 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 and 1.00% of the average daily net assets of Class B Shares and Class C Shares. |
|
|
| Fund Accounting, Transfer Agency and Trustees: |
|
|
| Citi Ohio provides fund accounting and transfer agency services for the Trusts. As transfer agent, Citi Ohio receives a fee based on the number of funds and shareholder accounts, subject to certain minimums and reimbursement of certain expenses. As fund accountant, Citi Ohio receives an annual fee per fund and share class, subject to minimums and reimbursement of certain expenses. |
|
|
| Each non-interested Trustee is compensated with a $60,000 annual Board retainer for service as a Trustee of the Trusts and Portfolio Trust, as well as a $3,000 annual retainer for each Committee of the Board of the Trusts and Portfolio Trust. Each non-interested Trustee also receives a $5,000 and $3,000 meeting fee for each regular in-person Board meeting and Committee meeting, respectively. Furthermore, each non-interested Trustee receives compensation for attending special meetings and/or functioning as a Committee or Board Chairperson. In addition, the non-interested Trustees are reimbursed for certain expenses incurred in connection with their Board membership. |
|
|
| Fee Reductions: |
|
|
| The Investment Adviser has agreed to contractually limit through March 1, 2010 the total expenses, exclusive of interest, taxes, brokerage commissions, and extraordinary expenses of the LifeLine Funds. Each Fund Class has its own expense limitations based on the average daily net assets for any full fiscal year as follows: Class A Shares 1.50%, Class B Shares 2.25%, Class C Shares 2.25%. |
|
|
| Any amounts contractually waived or reimbursed by the Investment Adviser will be subject to repayment by the Fund to the Investment Adviser within three years to the extent that the repayment will not cause the Fund’s operating expenses to exceed the contractual expense limit that was in effect at the time of such waiver or reimbursement. During |
|
|
HSBC INVESTOR LIFELINE FUNDS | 35 |
|
HSBC INVESTOR LIFELINE FUNDS |
Notes to Financial Statements—As of October 31, 2009 (continued) |
|
|
| the year ended October 31, 2009, the Investment Adviser did not recapture any of its prior contractual waivers or reimbursements. As of October 31, 2009, the repayments that may potentially be made by the Funds are as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
Fund |
|
| 2012($) |
| 2011($) |
| 2010($) |
| |||
|
|
|
|
| |||||||
Aggressive Growth Fund |
|
| 49,257 |
|
| 51,467 |
|
| 71,425 |
| |
Growth Strategy Fund |
|
| 3,289 |
|
| — |
|
| 29,729 |
| |
Moderate Growth Fund |
|
| — |
|
| — |
|
| 14,225 |
| |
Conservative Growth Fund |
|
| 6,592 |
|
| 20,961 |
|
| 40,321 |
|
|
|
| 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. Any voluntary fee waivers/reimbursements are not subject to recoupment in subsequent fiscal periods. Voluntary waivers/reimbursements may be stopped at any time. Amounts waived/reimbursed by the Investment Adviser, Administrator, and Citi Ohio are reported separately on the Statements of Operations, as applicable. |
|
|
5. | Investment Transactions: |
|
|
| Aggregate contributions and withdrawals of the Underlying Portfolios for the year ended October 31, 2009 totaled: |
|
|
|
|
|
|
|
|
|
| Contributions |
| Withdrawals |
| ||
|
|
|
| ||||
Aggressive Growth Fund |
| $ | 1,447,942 |
| $ | (1,488,474 | ) |
Growth Strategy Fund |
|
| 7,761,778 |
|
| (8,532,057 | ) |
Moderate Growth Fund |
|
| 14,521,430 |
|
| (15,831,571 | ) |
Conservative Growth Fund |
|
| 7,532,723 |
|
| (8,118,122 | ) |
|
|
| Purchases and sales of securities (excluding securities maturing less than one year from acquisition) for the year ended October 31, 2009 were as follows: |
|
|
|
|
|
|
|
Fund | Purchases |
| Sales |
| ||
|
|
| ||||
Growth Strategy Fund | $ | 4,616,544 |
| $ | 107,272 |
|
Moderate Growth Fund | $ | 9,435,634 |
| $ | 295,318 |
|
Conservative Growth Fund | $ | 3,766,261 |
| $ | 334,595 |
|
|
|
6. | Federal Tax Information: |
|
|
| At October 31, 2009, the cost basis of securities (which excludes investments in the Affiliated Portfolios) for federal income tax purposes, gross unrealized appreciation, gross unrealized depreciation and net unrealized appreciation/depreciation were as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund |
|
| Tax Cost |
| Tax Unrealized |
| Tax Unrealized |
| Net Unrealized |
| ||||
|
|
|
|
|
| |||||||||
Aggressive Growth Fund |
|
| 94,361 |
|
| — |
|
| — |
|
| — |
| |
Growth Strategy Fund |
|
| 4,799,854 |
|
| 279,490 |
|
| — |
|
| 279,490 |
| |
Moderate Growth Strategy Fund |
|
| 11,077,518 |
|
| 658,570 |
|
| — |
|
| 658,570 |
| |
Conservative Growth Strategy Fund |
|
| 5,663,991 |
|
| 294,262 |
|
| — |
|
| 294,262 |
|
|
|
| The tax character of dividends paid by the LifeLine Funds for the year ended October 31, 2009 was as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Distributions paid from |
|
|
| |||||||||||
|
|
|
|
| ||||||||||||
|
| Ordinary |
| Net |
| Total Taxable |
| Return of |
| Total |
| |||||
|
|
|
|
|
|
| ||||||||||
Aggressive Growth Fund |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
|
Growth Strategy Fund |
|
| 148,995 |
|
| — |
|
| 148,995 |
|
| — |
|
| 148,995 |
|
Moderate Growth Fund |
|
| 287,613 |
|
| — |
|
| 287,613 |
|
| — |
|
| 287,613 |
|
Conservative Growth Fund |
|
| 109,163 |
|
| — |
|
| 109,163 |
|
| — |
|
| 109,163 |
|
|
|
36 | HSBC INVESTOR LIFELINE FUNDS |
|
HSBC INVESTOR LIFELINE FUNDS |
Notes to Financial Statements—As of October 31, 2009 (continued) |
|
|
| The tax character of dividends paid by the LifeLine Funds for the year ended October 31, 2008 was as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Distributions paid from |
|
|
| |||||||||||
|
|
|
|
| ||||||||||||
|
| Ordinary |
| Net |
| Total Taxable |
| 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 |
|
|
|
* | 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 October 31, 2009, 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 |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | (2,039,823 | ) | $ | (112,786 | ) | $ | (2,152,609 | ) |
Growth Strategy Fund |
|
| 122,678 |
|
| — |
|
| 122,678 |
|
| — |
|
| (5,334,226 | ) |
| 35,461 |
|
| (5,176,087 | ) |
Moderate Growth Fund |
|
| 46,429 |
|
| — |
|
| 46,429 |
|
| — |
|
| (5,325,093 | ) |
| 500,828 |
|
| (4,777,836 | ) |
Conservative Growth Fund |
|
| 11,295 |
|
| — |
|
| 11,295 |
|
| — |
|
| (1,518,116 | ) |
| 269,453 |
|
| (1,237,368 | ) |
|
|
(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. |
|
|
| As of October 31, 2009, the following LifeLine 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 |
|
|
|
| 1,127,986 |
|
| 2017 |
|
Growth Strategy Fund |
|
| 2,102,771 |
|
| 2016 |
|
|
|
| 3,231,455 |
|
| 2017 |
|
Moderate Growth Fund |
|
| 1,920,789 |
|
| 2016 |
|
|
|
| 3,404,304 |
|
| 2017 |
|
Conservative Growth Fund |
|
| 522,074 |
|
| 2016 |
|
|
|
| 996,042 |
|
| 2017 |
|
|
|
7. | Legal and Regulatory Matters: |
|
|
| On September 26, 2006, BISYS Fund Services, Inc. (“BISYS”), an affiliate of BISYS Fund Services Ohio, Inc. which provided various services to the Funds, 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 Funds’ management is not aware that any determination has been made as to how the BISYS settlement monies will be distributed. While the Funds’ management is currently unable to determine the impact, if any, of such matters on the |
|
|
HSBC INVESTOR LIFELINE FUNDS | 37 |
|
HSBC INVESTOR LIFELINE FUNDS |
Notes to Financial Statements—As of October 31, 2009 (continued) |
|
|
| Funds or the Funds’ financial statements, management does not anticipate a material, adverse impact to the Funds or the Funds’ financial statements. |
|
|
8. | Subsequent Events (Unaudited) |
|
|
| On September 14, 2009, the Board of Trustees (the “Board”) of the HSBC Investor LifeLine Funds (collectively, the “Funds”) approved a proposal to restructure and rebrand the Funds as the HSBC Investor World Selection Funds. In addition, the Board approved changes to each Fund’s investment strategies and certain other aspects of the Fund’s operations that will become effective as of December 30, 2009. |
|
|
38 | 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, 2009, 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 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 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. Our procedures included confirmation of securities owned as of October 31, 2009, by correspondence with the respective transfer agents. 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, 2009, 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.
Columbus, Ohio
December 21, 2009
|
|
HSBC INVESTOR LIFELINE FUNDS | 39 |
|
HSBC INVESTOR LIFELINE FUNDS |
|
|
| For the year ended October 31, 2009, 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 | |
|
| |||
Growth Strategy Fund |
| 100.00 | % | |
Moderate Growth Strategy Fund |
| 44.03 | % | |
Conservative Growth Strategy Fund |
| 31.54 | % |
|
|
| For the year ended October 31, 2009, 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 2009 Form 1099-DIV: |
|
|
|
|
|
Fund |
|
| Qualified | |
|
| |||
Growth Strategy Fund |
| 100.00 | % | |
Moderate Growth Strategy Fund |
| 92.38 | % | |
Conservative Growth Strategy Fund |
| 63.22 | % |
|
|
40 | HSBC INVESTOR LIFELINE FUNDS |
(This Page Intentionally Left Blank)
|
HSBC INVESTOR LIFELINE FUNDS |
Table of Shareholder Expenses—As of October 31, 2009 (Unaudited) |
|
|
| 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, 2009 through October 31, 2009. |
|
|
| 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 Paid |
| Annualized | ||||||
|
|
|
|
|
|
| ||||||||||
Aggressive Growth Strategy Fund |
| Class A Shares |
| $ | 1,000.00 |
| $ | 1,221.60 |
|
| $ | 8.40 |
|
| 1.50 | % |
|
| Class B Shares |
|
| 1,000.00 |
|
| 1,217.30 |
|
|
| 12.57 |
|
| 2.25 | % |
|
| Class C Shares |
|
| 1,000.00 |
|
| 1,217.60 |
|
|
| 12.58 |
|
| 2.25 | % |
Growth Strategy Fund |
| Class A Shares |
|
| 1,000.00 |
|
| 1,205.10 |
|
|
| 8.34 |
|
| 1.50 | % |
|
| Class B Shares |
|
| 1,000.00 |
|
| 1,200.20 |
|
|
| 12.48 |
|
| 2.25 | % |
|
| Class C Shares |
| �� | 1,000.00 |
|
| 1,200.70 |
|
|
| 12.48 |
|
| 2.25 | % |
Moderate Growth Strategy Fund |
| Class A Shares |
|
| 1,000.00 |
|
| 1,177.30 |
|
|
| 7.63 |
|
| 1.39 | % |
|
| Class B Shares |
|
| 1,000.00 |
|
| 1,173.30 |
|
|
| 11.67 |
|
| 2.13 | % |
|
| Class C Shares |
|
| 1,000.00 |
|
| 1,174.20 |
|
|
| 11.73 |
|
| 2.14 | % |
Conservative Growth Strategy Fund |
| Class A Shares |
|
| 1,000.00 |
|
| 1,141.40 |
|
|
| 8.10 |
|
| 1.50 | % |
|
| Class B Shares |
|
| 1,000.00 |
|
| 1,136.30 |
|
|
| 12.12 |
|
| 2.25 | % |
|
| Class C Shares |
|
| 1,000.00 |
|
| 1,135.80 |
|
|
| 12.11 |
|
| 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). |
|
|
42 | HSBC INVESTOR LIFELINE FUNDS |
|
HSBC INVESTOR LIFELINE FUNDS |
Table of Shareholder Expenses—As of October 31, 2009 (Unaudited) (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 Paid |
| Annualized | ||||||
|
|
|
|
|
|
| ||||||||||
Aggressive Growth Strategy Fund |
| Class A Shares |
| $ | 1,000.00 |
| $ | 1,017.64 |
|
| $ | 7.63 |
|
| 1.50 | % |
|
| Class B Shares |
|
| 1,000.00 |
|
| 1,013.86 |
|
|
| 11.42 |
|
| 2.25 | % |
|
| Class C Shares |
|
| 1,000.00 |
|
| 1,013.86 |
|
|
| 11.42 |
|
| 2.25 | % |
Growth Strategy Fund |
| Class A Shares |
|
| 1,000.00 |
|
| 1,017.64 |
|
|
| 7.63 |
|
| 1.50 | % |
|
| Class B Shares |
|
| 1,000.00 |
|
| 1,013.86 |
|
|
| 11.42 |
|
| 2.25 | % |
|
| Class C Shares |
|
| 1,000.00 |
|
| 1,013.86 |
|
|
| 11.42 |
|
| 2.25 | % |
Moderate Growth Strategy Fund |
| Class A Shares |
|
| 1,000.00 |
|
| 1,018.20 |
|
|
| 7.07 |
|
| 1.39 | % |
|
| Class B Shares |
|
| 1,000.00 |
|
| 1,014.47 |
|
|
| 10.82 |
|
| 2.13 | % |
|
| Class C Shares |
|
| 1,000.00 |
|
| 1,014.42 |
|
|
| 10.87 |
|
| 2.14 | % |
Conservative Growth Strategy Fund |
| Class A Shares |
|
| 1,000.00 |
|
| 1,017.64 |
|
|
| 7.63 |
|
| 1.50 | % |
|
| Class B Shares |
|
| 1,000.00 |
|
| 1,013.86 |
|
|
| 11.42 |
|
| 2.25 | % |
|
| Class C Shares |
|
| 1,000.00 |
|
| 1,013.86 |
|
|
| 11.42 |
|
| 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 | 43 |
|
HSBC Investor Growth Portfolio |
by Clark J. Winslow, Chief Executive Officer/Portfolio Manager |
Justin H. Kelly, CFA, Managing Director/Portfolio Manager |
R. Bart Wear CFA, Managing Director/Portfolio Manager |
Winslow Capital Management, Inc. |
The HSBC Investor Growth Portfolio (the “Portfolio”) seeks long-term growth of capital. Under normal market conditions, the Portfolio invests 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.
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 growth investment style may fall out of favor in the marketplace and result in significant declines in the value of the Portfolio’s securities. Securities of companies considered to be growth investments may have rapid price swings in the event of earnings disappointments or during periods of market, political, regulatory and economics uncertainty.
The net asset value per share of this Portfolio will fluctuate as the value of the securities in the portfolio changes.
Past performance does not guarantee future results.
Market Commentary
The stock market in the beginning of the period declined steeply as a result of the global financial crisis. Intervention by the federal government in the form of fiscal and monetary stimulus programs helped stanch the market downturn, and by early March the stock market began a sustained rally that continued through the end of the period.
The Portfolio benefited from its shift to an overweight position in the information technology and energy sectors, as stocks in those sectors performed well. Stock selection in those sectors and in the financial services sector further boosted the Portfolio’s relative performance. We positioned the Portfolio with a smaller-than-benchmark stake in consumer staples stocks. That strategy also helped the Portfolio outperform its benchmark index, the Russell 1000® Growth Index, as the sector lagged the benchmark during the period.*
The Portfolio maintained a neutral weighting in the small materials sector, but its materials allocation significantly underperformed the benchmark’s allocation. The underperformance was the result of our decision to avoid shares of non-energy, resource-related materials companies. Such shares rebounded sharply in the latter half of the period, fueling much of the sector’s gains.*
|
|
* | 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.
|
|
44 | HSBC INVESTOR PORTFOLIOS |
|
|
| 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 L.P. |
|
The HSBC Investor International Equity Portfolio (the “Portfolio”) seeks to provide its shareholders with long-term growth of capital and future income. Under normal market conditions, the Portfolio invests 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. AllianceBernstein L.P., acting through the Bernstein Value Equities Unit (“AllianceBernstein”), serves as the subadviser to the Portfolio and manages its investments.
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 Portfolio will fluctuate as the value of the securities in the portfolio changes.
Past performance does not guarantee future results.
Market Commentary
The period was marked by two significantly different environments in the equity markets. The beginning of the period was dominated by stress in the global financial system, including a credit crunch and a contraction of economies around the world. As the period wore on, economies generally stabilized and economic growth resumed.
Stocks fell initially, then rebounded strongly. International stocks performed particularly well as many foreign markets were less affected by the issues that plagued the U.S. market, including overextended consumers and declines in the housing market. Those trends benefited the Portfolio’s absolute return.
We positioned the Portfolio to take advantage of an improving economic environment. That strategy included holding an overweight position relative to the benchmark in sectors such as financials, autos, energy and technology. Those overweight positions boosted relative performance, as did individual stock selection in each of those sectors.*
The Portfolio also maintained a modest allocation to emerging markets stocks, which are absent from the benchmark. Emerging markets were among the period’s best performers, so holding such stocks significantly helped the Portfolio’s relative performance.*
The Portfolio was hurt in relative terms by its underweight position in the consumer cyclical sector. Such stocks benefited as economic fundamentals improved and consumer spending increased. We positioned the Portfolio with an overweight stake in the telecommunications sector, believing that such stocks would benefit from a market rebound. That sector underperformed the benchmark, and dragged on the Portfolio’s relative performance.*
|
|
* | 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 PORTFOLIOS | 45 |
|
Portfolio Reviews |
HSBC Investor Opportunity Portfolio |
by William A. Muggia |
President–Chief Investment Officer |
Westfield Capital Management Company, L.P. |
The HSBC Investor Opportunity Portfolio (the “Portfolio”) 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 Index.1 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, L.P. 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 Portfolio 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.
Past performance does not guarantee future results.
Market Commentary
The 12-month period consisted of two distinct market and economic environments. In the first half of the period, continued fallout from the financial crisis caused equities to fall sharply. Stocks recovered dramatically in the second half of the period, as investors began to act on their belief that a depression had been averted.
The Portfolio’s performance relative to its benchmark index benefited from certain stock selection decisions. Within the energy sector, the focus on companies with solid fundamentals and strong competitive positions led to investments in coal and oil & gas exploration firms. This emphasis boosted the Portfolio’s performance relative to the benchmark. Stock selection in industrials and technology also boosted relative returns.*
The Portfolio held a smaller position than its benchmark in consumer discretionary stocks. This underweight position dragged on performance relative to the benchmark. The Portfolio did not have a bullish view on the sector as a whole, believing that there was insufficient evidence of improving fundamentals to merit increasing the Portfolio’s consumer discretionary holdings. But investors proved to have a significant appetite for stocks in cyclically sensitive industries. The Portfolio generally did not hold these stocks, so did not benefit from their rally. Stock selection in the financial services sector also weighed on returns relative to the benchmark.*
|
|
* | 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. | |
|
|
46 | HSBC INVESTOR PORTFOLIOS |
|
Portfolio Reviews |
HSBC Investor Value Portfolio |
by Jon D. Bosse, CFA |
Chief Investment Officer |
NWQ Investment Management Company, LLC |
The HSBC Investor Value Portfolio (the “Portfolio”) seeks long-term growth of capital and income. Under normal market conditions, the Portfolio invests 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 Portfolio will fluctuate as the value of the securities in the Portfolio changes.
Past performance does not guarantee future results.
Market Commentary
During the period, global equity markets experienced considerable volatility. During the first half of the period, the U.S. equity markets declined materially due to economic weakness, as well as fears that a number of major money center banks would fail and that the financial system would collapse. The second half saw stabilization within the U.S. and global financial system. Credit spreads tightened dramatically, reflecting lower risk premiums and better-functioning capital markets. These factors, combined with an improvement in the U.S. economy, contributed to a reversal of the U.S. equity market’s first half decline and appreciation.
The Portfolio’s absolute return was enhanced by positive contributions from all sectors except industrials and utilities. The largest contributor to performance came from the Portfolio’s investments in materials, specifically gold and fertilizer stocks. The Portfolio’s overweight position as well as specific holdings contributed to this performance. The second largest contribution came from the Portfolio’s overweight position, relative to the Russell 1000® Value Index1, and stock selection in information technology. Other notable contributors to performance in the Portfolio came from its investments in the energy, financials and consumer staples sectors. Underweight positions, again relative to the Russell 1000® Value Index1, in consumer discretionary and health care shares dragged on relative performance.*
|
|
* | Portfolio composition is subject to change. |
|
|
1 | For additional information, please refer to the Glossary of Terms. |
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 PORTFOLIOS | 47 |
|
Portfolio Reviews |
Franklin Total Return Fund |
The Franklin Total Return Fund (the “Fund”) seeks to provide high, current income consistent with preservation of capital. Capital appreciation over the long term is a secondary goal. It is a multi-sector fixed income fund focused on government and corporate debt securities and mortgage- and asset-backed securities. Some of the Fund’s investments may include securities issued by U.S. government-sponsored entities, such as Fannie Mae and Freddie Mac.
Investment Concerns
Interest rate movements and mortgage prepayments will affect the fund’s share price and yield.
Bond prices generally move in the opposite direction of interest rates. Thus, as the prices of bonds in the fund adjust to a rise in interest rates, the fund’s share price may decline.
The risks associated with higher-yielding, lower-rated securities (commonly called junk bonds) include higher risk of default and loss of principal.
Investing in derivatives, such as financial futures and option contracts, and the use of foreign currency techniques involve special risks and as such may not achieve the anticipated benefits and/or may result in losses to the fund.
Portfolio Performance
The financial markets faced two distinct environments during the 12-month period. Early in the period, the U.S. economy was mired in a recession caused by a credit crunch and a sharp decline in consumer spending. During that time investors sought out relatively safe areas of the financial markets, and particularly favored U.S. Treasury securities. Investors’ flight to safety caused yields on Treasuries to fall to historic lows.
A combination of fiscal and monetary stimulus helped stabilize the economy and the financial markets early in 2009, and investors began seeking out investments with higher return potential. Most fixed-income sectors outperformed Treasuries during the latter half of the period.
During much of the period the Fund benefited from its positions in high-quality corporate bonds and mortgage-backed securities. Such securities performed well as investors sought to capture more yield than Treasuries offered.*
|
|
* | Portfolio composition is subject to change. |
|
|
1 | For additional information, please refer to the Glossary of Terms. |
|
|
48 | HSBC INVESTOR PORTFOLIOS |
|
Portfolio Reviews |
Goldman Sachs High Yield Fund |
The Goldman Sachs High Yield Fund (the “Fund”) seeks strong, consistent performance through a total return investment philosophy across the fixed income markets. We utilize total return and risk measurement to concentrate on investor’s capital accumulation and income objectives.
Investment Concerns
Investing in high yield bonds requires extensive research capabilities and disciplined risk management practices resulting in a comprehensive investment process which seeks to improve risk-adjusted returns by reducing default losses.
Equity securities are more volatile than bonds and subject to greater risks. Small- and mid-sized company stocks involve greater risks than those customarily associated with larger companies.
Bonds are subject to interest rate, price and credit risks. Prices tend to be inversely affected by changes in interest rates.
High yield fixed income securities are considered speculative, involve greater risk of default, and tend to be more volatile than investment grade fixed income securities.
Investments in foreign securities entail special risks such as currency, political, economic, and market risks. These risks are heightened in emerging markets.
An investment in real estate securities is subject to greater price volatility and the special risks associated with direct ownership of real estate.
Investments in commodities may be affected by changes in overall market movements, commodity index volatility, changes in interest rates or factors affecting a particular industry or commodity.
Alternative investments such as hedge funds are subject to less regulation than other types of pooled investment vehicles such as mutual funds, may make speculative investments, may be illiquid and can involve a significant use of leverage, making them substantially riskier than the other investments. An alternative investment fund may incur high fees and expenses which would offset trading profits.
Portfolio Performance
The period was marked by two very different environments for high-yield bonds. It began during a severe economic and financial crisis, which led investors to sell risk assets such as high-yield bonds in favor of Treasury bills and other government-backed securities. This trend caused yields to rise and prices to fall on the type of bonds in which this Fund invests, hurting absolute returns. By early 2009, the spread between yields on high-yield and Treasury bonds reached record levels.
Investors’ appetite for risk returned mid-way through the period, following indications that the economy and financial system had begun to stabilize. High-yield bonds surged as investors sought to capture historically high yields, and Fund returns benefited from the rally.
The Fund’s positions in bonds rated CCC and below boosted performance as the markets rebounded. A stake in European bonds also contributed positively to the Fund’s returns during this time.*
|
|
* | Portfolio composition is subject to change. |
|
|
1 | For additional information, please refer to the Glossary of Terms. |
|
|
HSBC INVESTOR PORTFOLIOS | 49 |
|
Portfolio Reviews |
Portfolio Composition* |
October 31, 2009 |
|
|
|
|
|
HSBC Investor Growth Portfolio |
|
|
|
|
|
|
|
|
|
Investment Allocation |
| Percentage of Investments at Value |
| |
Financial Services |
| 13.1 | % |
|
Internet Related |
| 8.8 | % |
|
Telecommunications |
| 8.6 | % |
|
Computers |
| 8.4 | % |
|
Pharmaceuticals |
| 8.4 | % |
|
Oil & Gas |
| 8.0 | % |
|
Retail |
| 6.5 | % |
|
Computer Services |
| 4.7 | % |
|
Computer Software |
| 4.6 | % |
|
Health Care |
| 3.7 | % |
|
Cash and Equivalents |
| 3.6 | % |
|
Diversified Manufacturing Operations |
| 3.4 | % |
|
Transportation |
| 3.4 | % |
|
Electronic Components & Semiconductors |
| 3.2 | % |
|
Business Services |
| 3.0 | % |
|
Aerospace & Defense |
| 2.3 | % |
|
Metals & Mining |
| 1.7 | % |
|
Biotechnology |
| 1.5 | % |
|
Chemicals |
| 1.2 | % |
|
Consumer Products |
| 1.0 | % |
|
Leisure |
| 0.9 | % |
|
Total |
| 100.0 | % |
|
|
|
|
|
|
HSBC International Equity Portfolio |
|
|
|
|
|
|
|
|
|
Investment Allocation |
| Percentage of Investments at Value |
| |
Europe |
| 71.0 | % |
|
Japan |
| 12.0 | % |
|
Australia & Far East |
| 11.5 | % |
|
Canada |
| 4.0 | % |
|
Cash |
| 0.9 | % |
|
Other |
| 0.6 | % |
|
Total |
| 100.0 | % |
|
|
|
|
|
|
HSBC Investor Opportunity Portfolio |
|
|
|
|
|
|
|
|
|
Investment Allocation |
| Percentage of Investments at Value |
| |
Oil & Gas |
| 12.3 | % |
|
Computer Software |
| 10.7 | % |
|
Pharmaceuticals |
| 10.5 | % |
|
Industrial Manufacturing |
| 6.7 | % |
|
Health Care |
| 6.5 | % |
|
Telecommunications |
| 5.8 | % |
|
Biotechnology |
| 5.6 | % |
|
Consumer Products |
| 5.3 | % |
|
Retail |
| 5.0 | % |
|
Diversified Manufacturing Operations |
| 4.3 | % |
|
Financial Services |
| 3.9 | % |
|
Electronic Components & Semiconductors |
| 3.4 | % |
|
Internet Related |
| 3.4 | % |
|
Business Services |
| 2.6 | % |
|
Cash and Equivalents |
| 2.5 | % |
|
Aerospace & Defense |
| 2.3 | % |
|
Environmental Services |
| 2.1 | % |
|
Chemicals |
| 1.7 | % |
|
Education |
| 1.5 | % |
|
Transportation |
| 1.5 | % |
|
Communications |
| 1.2 | % |
|
Gaming |
| 1.2 | % |
|
Total |
| 100.0 | % |
|
|
|
|
|
|
HSBC Investor Value Portfolio |
|
|
|
|
|
|
|
|
|
Investment Allocation |
| Percentage of Investments at Value |
| |
Oil & Gas |
| 14.8 | % |
|
Pharmaceuticals |
| 11.2 | % |
|
Insurance |
| 10.4 | % |
|
Telecommunications |
| 8.3 | % |
|
Computer Software |
| 7.4 | % |
|
Media |
| 6.9 | % |
|
Metals & Mining |
| 6.8 | % |
|
Aerospace & Defense |
| 5.4 | % |
|
Conglomerates |
| 3.4 | % |
|
Business Services |
| 3.2 | % |
|
Energy |
| 3.2 | % |
|
Consumer Products |
| 2.9 | % |
|
Cash and Equivalents |
| 2.8 | % |
|
Banking |
| 2.6 | % |
|
Financial Services |
| 2.5 | % |
|
Tobacco |
| 2.5 | % |
|
Transportation |
| 1.9 | % |
|
Diversified Manufacturing Operations |
| 1.6 | % |
|
Agricultural Chemicals |
| 1.1 | % |
|
Retail |
| 1.1 | % |
|
Total |
| 100.0 | % |
|
|
|
* | Portfolio composition is subject to change. |
|
|
50 | HSBC INVESTOR PORTFOLIOS |
(This Page Intentionally Left Blank)
|
|
|
|
|
|
|
|
|
|
Common Stocks—96.6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares |
| Value($) |
| ||
|
|
|
| ||||
Aerospace & Defense – 2.3% |
|
|
|
|
|
|
|
United Technologies Corp. |
|
| 33,100 |
|
| 2,033,995 |
|
|
|
|
|
|
| ||
Biotechnology – 1.5% |
|
|
|
|
|
|
|
Gilead Sciences, Inc. (a) |
|
| 31,600 |
|
| 1,344,580 |
|
|
|
|
|
|
| ||
Business Services – 3.0% |
|
|
|
|
|
|
|
Aecom Technology Corp. (a) |
|
| 26,100 |
|
| 658,764 |
|
MasterCard, Inc., Class A |
|
| 9,000 |
|
| 1,971,180 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 2,629,944 |
|
|
|
|
|
|
| ||
Chemicals – 1.2% |
|
|
|
|
|
|
|
Monsanto Co. |
|
| 15,300 |
|
| 1,027,854 |
|
|
|
|
|
|
| ||
Computer Services – 4.7% |
|
|
|
|
|
|
|
Accenture plc, Class A |
|
| 28,700 |
|
| 1,064,196 |
|
Cognizant Technology Solutions Corp. (a) |
|
| 79,000 |
|
| 3,053,350 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 4,117,546 |
|
|
|
|
|
|
| ||
Computer Software – 4.6% |
|
|
|
|
|
|
|
Adobe Systems, Inc. (a) |
|
| 28,700 |
|
| 945,378 |
|
Microsoft Corp. |
|
| 54,800 |
|
| 1,519,604 |
|
Oracle Corp. |
|
| 77,100 |
|
| 1,626,810 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 4,091,792 |
|
|
|
|
|
|
| ||
Computers – 8.4% |
|
|
|
|
|
|
|
Apple, Inc. (a) |
|
| 18,900 |
|
| 3,562,650 |
|
Hewlett-Packard Co. |
|
| 64,301 |
|
| 3,051,725 |
|
International Business Machines Corp. |
|
| 6,800 |
|
| 820,148 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 7,434,523 |
|
|
|
|
|
|
| ||
Consumer Products – 1.0% |
|
|
|
|
|
|
|
Ecolab, Inc. |
|
| 19,100 |
|
| 839,636 |
|
|
|
|
|
|
| ||
Diversified Manufacturing Operations – 3.4% |
|
|
|
|
|
|
|
Danaher Corp. |
|
| 31,200 |
|
| 2,128,776 |
|
Fastenal Co. |
|
| 24,800 |
|
| 855,600 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 2,984,376 |
|
|
|
|
|
|
| ||
Electronic Components & Semiconductors – 3.3% |
|
|
|
|
|
|
|
First Solar, Inc. (a) |
|
| 5,800 |
|
| 707,194 |
|
Lam Research Corp. (a) |
|
| 18,100 |
|
| 610,332 |
|
Linear Technology Corp. |
|
| 27,400 |
|
| 709,112 |
|
Marvell Technology Group Ltd. (a) |
|
| 61,100 |
|
| 838,292 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 2,864,930 |
|
|
|
|
|
|
| ||
Financial Services – 13.1% |
|
|
|
|
|
|
|
BlackRock, Inc. |
|
| 7,350 |
|
| 1,591,202 |
|
Goldman Sachs Group, Inc. |
|
| 10,800 |
|
| 1,837,836 |
|
IntercontinentalExchange, Inc. (a) |
|
| 8,300 |
|
| 831,577 |
|
Invesco Ltd. |
|
| 20,900 |
|
| 442,035 |
|
JP Morgan Chase & Co. |
|
| 58,600 |
|
| 2,447,722 |
|
The Charles Schwab Corp. |
|
| 82,200 |
|
| 1,425,348 |
|
Visa, Inc., Class A |
|
| 39,500 |
|
| 2,992,520 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 11,568,240 |
|
|
|
|
|
|
| ||
Common Stocks, continued |
|
|
|
|
|
|
|
|
|
|
|
| �� | ||
|
| Shares |
| Value($) |
| ||
|
|
|
| ||||
Health Care – 3.7% |
|
|
|
|
|
|
|
Baxter International, Inc. |
|
| 28,700 |
|
| 1,551,522 |
|
Celgene Corp. (a) |
|
| 16,600 |
|
| 847,430 |
|
Mindray Medical International Ltd. ADR |
|
| 28,700 |
|
| 881,951 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 3,280,903 |
|
|
|
|
|
|
| ||
Internet Related – 8.8% |
|
|
|
|
|
|
|
eBay, Inc. (a) |
|
| 27,100 |
|
| 603,517 |
|
Equinix, Inc. (a) |
|
| 16,200 |
|
| 1,382,184 |
|
Google, Inc., Class A (a) |
|
| 6,600 |
|
| 3,538,392 |
|
Priceline.com, Inc. (a) |
|
| 14,000 |
|
| 2,209,060 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 7,733,153 |
|
|
|
|
|
|
| ||
Leisure – 0.9% |
|
|
|
|
|
|
|
Carnival Corp. |
|
| 28,211 |
|
| 821,504 |
|
|
|
|
|
|
| ||
Metals & Mining – 1.7% |
|
|
|
|
|
|
|
Freeport-McMoRan Copper & Gold, Inc. (a) |
|
| 12,000 |
|
| 880,320 |
|
Peabody Energy Corp. |
|
| 15,900 |
|
| 629,481 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 1,509,801 |
|
|
|
|
|
|
| ||
Oil & Gas – 8.0% |
|
|
|
|
|
|
|
FMC Technologies, Inc. (a) |
|
| 14,800 |
|
| 778,480 |
|
Petrohawk Energy Corp. (a) |
|
| 24,800 |
|
| 583,296 |
|
Petroleo Brasileiro SA ADR |
|
| 22,200 |
|
| 1,026,084 |
|
Southwestern Energy Co. (a) |
|
| 54,200 |
|
| 2,362,036 |
|
Suncor Energy, Inc. |
|
| 50,836 |
|
| 1,678,605 |
|
Weatherford International Ltd. (a) |
|
| 37,600 |
|
| 659,128 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 7,087,629 |
|
|
|
|
|
|
| ||
Pharmaceuticals – 8.4% |
|
|
|
|
|
|
|
CVS Caremark Corp. |
|
| 52,900 |
|
| 1,867,370 |
|
Medco Health Solutions, Inc. (a) |
|
| 61,000 |
|
| 3,423,320 |
|
Teva Pharmaceutical Industries Ltd. ADR |
|
| 42,000 |
|
| 2,120,160 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 7,410,850 |
|
|
|
|
|
|
| ||
Retail – 6.6% |
|
|
|
|
|
|
|
Amazon.com, Inc. (a) |
|
| 10,700 |
|
| 1,271,267 |
|
Best Buy Co., Inc. |
|
| 21,000 |
|
| 801,780 |
|
Costco Wholesale Corp. |
|
| 12,400 |
|
| 704,940 |
|
Kohl’s Corp. (a) |
|
| 21,500 |
|
| 1,230,230 |
|
O’Reilly Automotive, Inc. (a) |
|
| 22,900 |
|
| 853,712 |
|
Target Corp. |
|
| 19,100 |
|
| 925,013 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 5,786,942 |
|
|
|
|
|
|
| ||
Telecommunications – 8.6% |
|
|
|
|
|
|
|
American Tower Corp., Class A (a) |
|
| 24,200 |
|
| 891,044 |
|
Cisco Systems, Inc. (a) |
|
| 108,000 |
|
| 2,467,800 |
|
Juniper Networks, Inc. (a) |
|
| 53,200 |
|
| 1,357,132 |
|
QUALCOMM, Inc. |
|
| 70,100 |
|
| 2,902,841 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 7,618,817 |
|
|
|
|
|
|
| ||
Transportation – 3.4% |
|
|
|
|
|
|
|
C.H. Robinson Worldwide, Inc. |
|
| 14,000 |
|
| 771,540 |
|
Union Pacific Corp. |
|
| 40,300 |
|
| 2,222,142 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 2,993,682 |
|
|
|
|
|
|
| ||
TOTAL COMMON STOCKS |
|
|
|
|
| 85,180,697 |
|
|
|
|
|
|
|
|
|
|
52 | HSBC INVESTOR PORTFOLIOS | See notes to financial statements. |
|
HSBC INVESTOR GROWTH PORTFOLIO |
|
Schedule of Portfolio Investments—As of October 31, 2009 (continued) |
|
|
|
|
|
|
|
|
Investment Companies—3.6% |
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
| Shares |
| Value($) |
| ||
|
|
|
| ||||
Northern Institutional Diversified Assets |
|
| 3,185,710 |
|
| 3,185,710 |
|
|
|
|
|
|
| ||
TOTAL INVESTMENT COMPANIES |
|
|
|
|
| 3,185,710 |
|
|
|
|
|
|
| ||
TOTAL INVESTMENTS |
|
|
|
|
| 88,366,407 |
|
|
|
|
|
|
|
|
|
| Percentages indicated are based on net assets of $88,162,884. |
|
|
(a) | Represents non-income producing security. |
|
|
(b) | The rate represents the annualized one-day yield that was in effect on October 31, 2009. |
|
|
ADR — American Depositary Receipt | |
| |
plc — Public Limited Company |
|
|
|
See notes to financial statements. | HSBC INVESTOR PORTFOLIOS | 53 |
|
|
Schedule of Portfolio Investments—As of October 31, 2009 |
|
|
|
|
|
|
|
|
Common Stocks—98.3% |
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
|
|
| ||||
Australia – 5.9% |
|
|
|
|
|
|
|
Australia & New Zealand Banking |
|
| 165,400 |
|
| 3,372,607 |
|
BHP Billiton Ltd. |
|
| 36,500 |
|
| 1,196,754 |
|
Lend Lease Corp., Ltd. |
|
| 80,600 |
|
| 667,922 |
|
Macquarie Group Ltd. |
|
| 18,300 |
|
| 801,246 |
|
National Australia Bank Ltd. |
|
| 113,565 |
|
| 2,999,764 |
|
Qantas Airways Ltd. |
|
| 412,833 |
|
| 1,026,229 |
|
Tabcorp Holdings Ltd. |
|
| 206,100 |
|
| 1,314,370 |
|
Telstra Corp. Ltd. |
|
| 513,500 |
|
| 1,525,516 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 12,904,408 |
|
|
|
|
|
|
| ||
Belgium – 0.2% |
|
|
|
|
|
|
|
Delhaize Group SA |
|
| 7,232 |
|
| 491,232 |
|
|
|
|
|
|
| ||
Brazil – 0.4% |
|
|
|
|
|
|
|
Banco Do Brasil SA |
|
| 60,000 |
|
| 961,213 |
|
|
|
|
|
|
| ||
Canada – 3.9% |
|
|
|
|
|
|
|
Fairfax Financial Holdings Ltd. |
|
| 2,200 |
|
| 787,164 |
|
Industrial Alliance Insurance and Financial |
|
| 26,100 |
|
| 670,233 |
|
National Bank of Canada |
|
| 26,600 |
|
| 1,386,554 |
|
Nexen, Inc. |
|
| 40,662 |
|
| 875,034 |
|
Royal Bank of Canada |
|
| 30,300 |
|
| 1,534,886 |
|
Suncor Energy, Inc. |
|
| 62,428 |
|
| 2,072,854 |
|
TELUS Corp. |
|
| 19,700 |
|
| 587,285 |
|
WestJet Airlines Ltd. |
|
| 59,300 |
|
| 601,880 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 8,515,890 |
|
|
|
|
|
|
| ||
Denmark – 0.9% |
|
|
|
|
|
|
|
Danske Bank A/S (a) |
|
| 84,800 |
|
| 1,947,818 |
|
|
|
|
|
|
| ||
Finland – 1.4% |
|
|
|
|
|
|
|
Nokia Oyj |
|
| 245,900 |
|
| 3,105,698 |
|
|
|
|
|
|
| ||
France – 14.5% |
|
|
|
|
|
|
|
BNP Paribas SA |
|
| 60,698 |
|
| 4,572,160 |
|
Casino Guichard-Perrachon SA |
|
| 17,000 |
|
| 1,350,705 |
|
Compagnie de Saint-Gobain |
|
| 34,600 |
|
| 1,685,875 |
|
Credit Agricole SA |
|
| 192,279 |
|
| 3,682,755 |
|
Electricite de France |
|
| 42,900 |
|
| 2,390,810 |
|
France Telecom SA |
|
| 113,600 |
|
| 2,814,576 |
|
Lagardere S.C.A. |
|
| 46,400 |
|
| 2,096,106 |
|
Renault SA (a) |
|
| 38,800 |
|
| 1,736,150 |
|
Sanofi-Aventis |
|
| 52,700 |
|
| 3,862,624 |
|
Societe Generale |
|
| 57,481 |
|
| 3,817,483 |
|
Vallourec SA |
|
| 4,772 |
|
| 751,267 |
|
Vivendi |
|
| 100,220 |
|
| 2,780,050 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 31,540,561 |
|
|
|
|
|
|
| ||
Germany – 13.6% |
|
|
|
|
|
|
|
Allianz SE |
|
| 27,200 |
|
| 3,115,448 |
|
BASF AG |
|
| 64,800 |
|
| 3,487,389 |
|
Bayer AG |
|
| 45,800 |
|
| 3,165,184 |
|
Bayerische Motoren Werke AG |
|
| 32,200 |
|
| 1,571,934 |
|
Deutsche Bank AG |
|
| 44,700 |
|
| 3,204,262 |
|
Deutsche Post AG |
|
| 132,950 |
|
| 2,230,349 |
|
Deutsche Telekom AG |
|
| 191,900 |
|
| 2,612,238 |
|
E.ON AG |
|
| 91,100 |
|
| 3,480,332 |
|
|
|
|
|
|
|
|
|
Common Stocks, continued |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares |
| Value($) |
| ||
|
|
|
| ||||
Germany, continued |
|
|
|
|
|
|
|
Fresenius Medical Care AG & Co. KGaA |
|
| 18,100 |
|
| 875,395 |
|
Metro AG |
|
| 33,100 |
|
| 1,824,340 |
|
Muenchener Rueckversicherungs- |
|
| 17,600 |
|
| 2,794,864 |
|
RWE AG |
|
| 12,550 |
|
| 1,096,995 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 29,458,730 |
|
|
|
|
|
|
| ||
Hong Kong – 0.7% |
|
|
|
|
|
|
|
New World Development Co. Ltd. |
|
| 711,000 |
|
| 1,530,427 |
|
|
|
|
|
|
| ||
India – 0.7% |
|
|
|
|
|
|
|
State Bank of India GDR |
|
| 17,600 |
|
| 1,607,489 |
|
|
|
|
|
|
| ||
Israel – 0.4% |
|
|
|
|
|
|
|
Israel Chemicals Ltd. |
|
| 64,100 |
|
| 749,465 |
|
|
|
|
|
|
| ||
Italy – 5.7% |
|
|
|
|
|
|
|
Enel SpA |
|
| 377,100 |
|
| 2,243,628 |
|
ENI SpA |
|
| 139,700 |
|
| 3,459,561 |
|
Intesa Sanpaolo SpA (a) |
|
| 228,900 |
|
| 963,222 |
|
Telecom Italia RSP |
|
| 920,000 |
|
| 1,012,344 |
|
Telecom Italia SpA |
|
| 1,289,400 |
|
| 2,048,172 |
|
UniCredit SpA (a) |
|
| 797,400 |
|
| 2,671,179 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 12,398,106 |
|
|
|
|
|
|
| ||
Japan – 11.9% |
|
|
|
|
|
|
|
AEON Co. Ltd. |
|
| 81,200 |
|
| 724,378 |
|
FUJITSU Ltd. |
|
| 9,000 |
|
| 53,008 |
|
KDDI Corp. |
|
| 279 |
|
| 1,481,035 |
|
Kyocera Corp. |
|
| 24,500 |
|
| 2,055,507 |
|
Mitsubishi Chemical Holdings Corp. |
|
| 51,000 |
|
| 189,415 |
|
Mitsubishi Corp. |
|
| 50,900 |
|
| 1,079,278 |
|
Mitsui & Co., Ltd. |
|
| 149,000 |
|
| 1,957,136 |
|
Mitsui Fudosan Co. Ltd. |
|
| 87,000 |
|
| 1,407,896 |
|
NAMCO BANDAI Holdings, Inc. |
|
| 123,800 |
|
| 1,266,047 |
|
Nippon Mining Holdings, Inc. |
|
| 187,000 |
|
| 834,386 |
|
Nippon Telegraph & Telephone Corp. |
|
| 63,000 |
|
| 2,599,963 |
|
Nissan Motor Co., Ltd. (a) |
|
| 371,400 |
|
| 2,687,952 |
|
Sharp Corp. |
|
| 134,000 |
|
| 1,429,936 |
|
Sony Corp. |
|
| 37,910 |
|
| 1,119,624 |
|
Sumitomo Mitsui Financial Group, Inc. |
|
| 67,000 |
|
| 2,277,718 |
|
Sumitomo Realty & Development Co. Ltd. |
|
| 27,000 |
|
| 512,043 |
|
The Furukawa Electric Co. Ltd. |
|
| 123,000 |
|
| 466,554 |
|
The Tokyo Electric Power Co., Inc. |
|
| 28,000 |
|
| 688,383 |
|
Toshiba Corp. |
|
| 543,000 |
|
| 3,103,950 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 25,934,209 |
|
|
|
|
|
|
| ||
Jersey – 1.0% |
|
|
|
|
|
|
|
WPP plc |
|
| 242,600 |
|
| 2,173,839 |
|
|
|
|
|
|
| ||
Kazakhstan – 0.4% |
|
|
|
|
|
|
|
KazMunaiGas Exploration Production GDR |
|
| 31,650 |
|
| 746,546 |
|
|
|
|
|
|
| ||
Netherlands – 2.4% |
|
|
|
|
|
|
|
Koninklijke Ahold NV |
|
| 223,020 |
|
| 2,808,910 |
|
Randstad Holding NV (a) |
|
| 60,700 |
|
| 2,302,866 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 5,111,776 |
|
|
|
|
|
|
| ||
New Zealand – 0.4% |
|
|
|
|
|
|
|
Telecom Corp. of New Zealand Ltd. |
|
| 456,800 |
|
| 830,588 |
|
|
|
|
|
|
|
|
|
|
54 | HSBC INVESTOR PORTFOLIOS | See notes to financial statements. |
|
|
HSBC INVESTOR INTERNATIONAL EQUITY PORTFOLIO | |
Schedule of Portfolio Investments—As of October 31, 2009 (continued) |
|
|
|
|
|
|
|
|
Common Stocks, continued |
|
|
|
|
|
|
|
| |||||||
|
| Shares |
| Value($) |
| ||
|
|
|
| ||||
Norway – 1.2% |
|
|
|
|
|
|
|
StatoilHydro ASA |
|
| 110,400 |
|
| 2,602,669 |
|
|
|
|
|
|
| ||
Russian Federation – 0.9% |
|
|
|
|
|
|
|
JSC MMC Norilsk Nickel ADR (a) |
|
| 67,789 |
|
| 890,512 |
|
LUKOIL ADR |
|
| 16,550 |
|
| 960,093 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 1,850,605 |
|
|
|
|
|
|
| ||
Singapore – 0.2% |
|
|
|
|
|
|
|
Neptune Orient Lines Ltd. |
|
| 427,000 |
|
| 475,353 |
|
|
|
|
|
|
| ||
South Africa – 0.2% |
|
|
|
|
|
|
|
Standard Bank Group Ltd. |
|
| 31,023 |
|
| 387,694 |
|
|
|
|
|
|
| ||
South Korea – 1.6% |
|
|
|
|
|
|
|
Hynix Semiconductor, Inc. (a) |
|
| 40,400 |
|
| 599,978 |
|
KB Financial Group, Inc. ADR (a) |
|
| 35,779 |
|
| 1,697,356 |
|
Samsung Electronics Co., Ltd., Preferred |
|
| 2,900 |
|
| 1,162,058 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 3,459,392 |
|
|
|
|
|
|
| ||
Spain – 4.1% |
|
|
|
|
|
|
|
Banco Santander SA |
|
| 266,200 |
|
| 4,283,317 |
|
Telefonica SA |
|
| 161,400 |
|
| 4,506,871 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 8,790,188 |
|
|
|
|
|
|
| ||
Sweden – 2.3% |
|
|
|
|
|
|
|
Electrolux AB, B Shares (a) |
|
| 35,300 |
|
| 846,372 |
|
Ericsson LM, B Shares |
|
| 153,000 |
|
| 1,599,027 |
|
Svenska Cellusoa AB (SCA), B Shares |
|
| 189,700 |
|
| 2,607,504 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 5,052,903 |
|
|
|
|
|
|
| ||
Switzerland – 2.1% |
|
|
|
|
|
|
|
Adecco SA, Registered |
|
| 28,300 |
|
| 1,264,938 |
|
Novartis AG |
|
| 63,940 |
|
| 3,330,596 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 4,595,534 |
|
|
|
|
|
|
| ||
Taiwan – 0.8% |
|
|
|
|
|
|
|
AU Optronics Corp. |
|
| 1,134,030 |
|
| 1,005,822 |
|
Compal Electronics, Inc. |
|
| 584,804 |
|
| 731,282 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 1,737,104 |
|
|
|
|
|
|
| ||
Thailand – 0.4% |
|
|
|
|
|
|
|
PTT Public Co., Ltd. |
|
| 121,400 |
|
| 859,954 |
|
|
|
|
|
|
| ||
Turkey – 0.5% |
|
|
|
|
|
|
|
Turkiye Garanti Bankasi AS |
|
| 308,700 |
|
| 1,121,542 |
|
|
|
|
|
|
| ||
United Kingdom – 19.6% |
|
|
|
|
|
|
|
Associated British Foods plc |
|
| 155,400 |
|
| 2,103,983 |
|
AstraZeneca plc |
|
| 77,900 |
|
| 3,496,538 |
|
Aviva plc |
|
| 343,791 |
|
| 2,149,466 |
|
Barclays plc (a) |
|
| 366,500 |
|
| 1,920,573 |
|
BP plc |
|
| 658,800 |
|
| 6,172,225 |
|
BT Group plc |
|
| 500,700 |
|
| 1,072,820 |
|
Centrica plc |
|
| 280,200 |
|
| 1,138,140 |
|
Drax Group plc |
|
| 51,100 |
|
| 388,723 |
|
GlaxoSmithKline plc |
|
| 213,800 |
|
| 4,384,974 |
|
Old Mutual plc |
|
| 440,300 |
|
| 764,081 |
|
Rolls-Royce Group plc |
|
| 289,600 |
|
| 2,135,435 |
|
Royal Dutch Shell plc, A Shares |
|
| 200,987 |
|
| 5,958,380 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stocks, continued |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares |
| Value($) |
| ||
|
|
|
| ||||
United Kingdom, continued |
|
|
|
|
|
|
|
RSA Insurance Group plc |
|
| 477,027 |
|
| 945,151 |
|
Thomas Cook Group plc |
|
| 175,500 |
|
| 587,609 |
|
Travis Perkins plc (a) |
|
| 65,900 |
|
| 812,840 |
|
Tui Travel plc |
|
| 208,700 |
|
| 795,087 |
|
Vodafone Group plc |
|
| 2,629,958 |
|
| 5,795,135 |
|
Wolseley plc (a) |
|
| 96,200 |
|
| 1,945,650 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 42,566,810 |
|
|
|
|
|
|
| ||
TOTAL COMMON STOCKS |
|
|
|
|
| 213,507,743 |
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
Rights—0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Belgium – 0.0% |
|
|
|
|
|
|
|
Fortis (a) |
|
| 121,532 |
|
| 0 |
|
|
|
|
|
|
| ||
Spain – 0.0% |
|
|
|
|
|
|
|
Banco Santander SA (a) |
|
| 161,000 |
|
| 28,429 |
|
|
|
|
|
|
| ||
TOTAL RIGHTS |
|
|
|
|
| 28,429 |
|
|
|
|
|
|
| ||
Investment Companies—0.9% |
|
|
|
|
|
|
|
Northern Institutional Diversified Assets |
|
| 1,904,284 |
|
| 1,904,284 |
|
|
|
|
|
|
| ||
TOTAL INVESTMENT COMPANIES |
|
|
|
|
| 1,904,284 |
|
|
|
|
|
|
| ||
TOTAL INVESTMENTS |
|
|
|
|
| 215,440,456 |
|
|
|
|
|
|
|
|
|
| Percentages indicated are based on net assets of $217,148,205. |
|
|
(a) | Represents non-income producing security. |
|
|
(b) | The rate represents the annualized one-day yield that was in effect on October 31, 2009. |
|
|
ADR — American Depositary Receipt | |
GDR — Global Depositary | |
Receipt plc — Public Limited Company | |
|
|
At October 31, 2009 the portfolio’s open foreign currency exchange contracts were as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency |
| Delivery |
| Contract |
| Contract |
| Value |
| Unrealized |
| |||
|
|
|
|
|
| |||||||||
SHORT CONTRACTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Canadian Dollar |
| 11/2/2009 |
| 338,000 |
| 315,122 |
|
| 312,442 |
|
| 2,680 |
|
|
British Sterling Pound |
| 11/3/2009 |
| 189,000 |
| 312,209 |
|
| 310,145 |
|
| 2,064 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| 4,744 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
LONG CONTRACTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
European Euro |
| 11/2/2009 |
| 879,000 |
| 1,303,469 |
|
| 1,293,446 |
|
| (10,023 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| (10,023 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See notes to financial statements. | HSBC INVESTOR PORTFOLIOS | 55 |
|
HSBC INVESTOR INTERNATIONAL EQUITY PORTFOLIO |
|
Schedule of Portfolio Investments—As of October 31, 2009 (continued) |
|
Schedule of Portfolio Investments—October 31, 2009 |
The Portfolio invested, as a percentage of net assets, in the following industries, as of October 31, 2009:
|
|
|
|
|
Industry |
| Percent of Net Assets |
| |
|
| |||
Aerospace/Defense |
| 1.0% |
|
|
Appliances |
| 0.4% |
|
|
Automotive |
| 2.8% |
|
|
Banking & Financial Services |
| 23.6% |
|
|
Building & Construction |
| 2.0% |
|
|
Cash & Cash Equivalents |
| 0.9% |
|
|
Chemicals |
| 1.7% |
|
|
Distribution |
| 0.9% |
|
|
Drugs - Medical |
| 7.3% |
|
|
Electrical |
| 5.4% |
|
|
Electronic Components & Semiconductors |
| 3.1% |
|
|
Food & Beverage |
| 1.2% |
|
|
Gambling and Entertainment |
| 0.6% |
|
|
Human Resources |
| 1.6% |
|
|
Import/Export |
| 0.9% |
|
|
Insurance |
| 3.5% |
|
|
Manufacturing |
| 4.2% |
|
|
Metals & Mining |
| 1.3% |
|
|
Multimedia |
| 2.3% |
|
|
Oil & Gas |
| 11.8% |
|
|
Publishing |
| 1.0% |
|
|
Real Estate |
| 1.9% |
|
|
Retail |
| 3.5% |
|
|
Telecommunications |
| 14.6% |
|
|
Transportation Services |
| 1.7% |
|
|
|
|
| ||
Total Investments |
| 99.2% |
|
|
|
|
|
|
|
|
56 | HSBC INVESTOR PORTFOLIOS | See notes to financial statements. |
|
HSBC INVESTOR OPPORTUNITY PORTFOLIO |
|
|
|
|
|
|
|
|
Common Stocks—97.3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares |
| Value($) |
| ||
|
|
|
| ||||
Aerospace & Defense – 2.3% |
|
|
|
|
|
|
|
BE Aerospace, Inc. (a) |
|
| 165,400 |
|
| 2,932,542 |
|
|
|
|
|
|
| ||
Biotechnology – 5.5% |
|
|
|
|
|
|
|
Charles River Laboratories International, |
|
| 53,900 |
|
| 1,968,428 |
|
Illumina, Inc. (a) |
|
| 83,350 |
|
| 2,675,535 |
|
Life Technologies Corp. (a) |
|
| 54,100 |
|
| 2,551,897 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 7,195,860 |
|
|
|
|
|
|
| ||
Business Services – 2.6% |
|
|
|
|
|
|
|
MSCI, Inc., Class A (a) |
|
| 42,500 |
|
| 1,292,000 |
|
Navigant Consulting, Inc. (a) |
|
| 143,750 |
|
| 2,047,000 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 3,339,000 |
|
|
|
|
|
|
| ||
Chemicals – 1.7% |
|
|
|
|
|
|
|
Celanese Corp., Series A |
|
| 79,100 |
|
| 2,171,295 |
|
|
|
|
|
|
| ||
Communications – 1.2% |
|
|
|
|
|
|
|
Discovery Communications, Inc., Class A (a) |
|
| 57,000 |
|
| 1,567,500 |
|
|
|
|
|
|
| ||
Computer Software – 10.7% |
|
|
|
|
|
|
|
ACI Worldwide, Inc. (a) |
|
| 3,050 |
|
| 49,075 |
|
BMC Software, Inc. (a) |
|
| 40,650 |
|
| 1,510,554 |
|
Check Point Software Technologies Ltd. (a) |
|
| 135,250 |
|
| 4,202,217 |
|
Citrix Systems, Inc. (a) |
|
| 52,800 |
|
| 1,940,928 |
|
Nuance Communications, Inc. (a) |
|
| 229,550 |
|
| 3,009,400 |
|
Salesforce.com, Inc. (a) |
|
| 26,850 |
|
| 1,523,738 |
|
VeriFone Holdings, Inc. (a) |
|
| 122,750 |
|
| 1,632,575 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 13,868,487 |
|
|
|
|
|
|
| ||
Consumer Products – 5.3% |
|
|
|
|
|
|
|
Church & Dwight Co., Inc. |
|
| 38,700 |
|
| 2,201,256 |
|
Crown Holdings, Inc. (a) |
|
| 95,200 |
|
| 2,537,080 |
|
Ralcorp Holdings, Inc. (a) |
|
| 40,400 |
|
| 2,169,480 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 6,907,816 |
|
|
|
|
|
|
| ||
Diversified Manufacturing Operations – 4.3% |
|
|
|
|
|
|
|
AMETEK, Inc. |
|
| 65,100 |
|
| 2,271,339 |
|
Crane Co. |
|
| 50,800 |
|
| 1,414,780 |
|
Joy Global, Inc. |
|
| 38,150 |
|
| 1,923,142 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 5,609,261 |
|
|
|
|
|
|
| ||
Education – 1.5% |
|
|
|
|
|
|
|
DeVry, Inc. |
|
| 35,950 |
|
| 1,987,676 |
|
|
|
|
|
|
| ||
Electronic Components & Semiconductors – 3.4% |
|
|
|
|
|
|
|
Maxim Integrated Products, Inc. |
|
| 144,150 |
|
| 2,402,981 |
|
Novellus Systems, Inc. (a) |
|
| 96,350 |
|
| 1,982,883 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 4,385,864 |
|
|
|
|
|
|
| ||
Environmental Services – 2.1% |
|
|
|
|
|
|
|
Stericycle, Inc. (a) |
|
| 38,700 |
|
| 2,026,719 |
|
Waste Connections, Inc. (a) |
|
| 22,500 |
|
| 707,175 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 2,733,894 |
|
|
|
|
|
|
| ||
Financial Services – 3.8% |
|
|
|
|
|
|
|
First Horizon Natlional Corp. (a) |
|
| 191,193 |
|
| 2,261,808 |
|
Knight Capital Group, Inc., Class A (a) |
|
| 31,400 |
|
| 529,090 |
|
Waddell & Reed Financial, Inc., Class A |
|
| 78,700 |
|
| 2,208,322 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 4,999,220 |
|
|
|
|
|
|
| ||
Gaming – 1.2% |
|
|
|
|
|
|
|
Scientific Games Corp., Class A (a) |
|
| 109,400 |
|
| 1,539,258 |
|
|
|
|
|
|
| ||
Health Care – 6.5% |
|
|
|
|
|
|
|
DaVita, Inc. (a) |
|
| 55,900 |
|
| 2,964,377 |
|
IDEXX Laboratories, Inc. (a) |
|
| 60,400 |
|
| 3,087,648 |
|
MEDNAX, Inc. (a) |
|
| 27,837 |
|
| 1,445,297 |
|
Skilled Healthcare Group, Inc., Class A (a) |
|
| 118,900 |
|
| 955,956 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 8,453,278 |
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
Common Stocks, continued |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares |
| Value($) |
| ||
|
|
|
| ||||
Industrial Manufacturing – 6.7% |
|
|
|
|
|
|
|
IDEX Corp. |
|
| 86,700 |
|
| 2,464,881 |
|
Mettler-Toledo International, Inc. (a) |
|
| 43,350 |
|
| 4,226,625 |
|
WESCO International, Inc. (a) |
|
| 76,100 |
|
| 1,945,116 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 8,636,622 |
|
|
|
|
|
|
| ||
Internet Related – 3.4% |
|
|
|
|
|
|
|
Ctrip.com International Ltd. ADR (a) |
|
| 37,800 |
|
| 2,023,812 |
|
Shanda Games Ltd. ADR (a) |
|
| 74,800 |
|
| 745,008 |
|
VeriSign, Inc. (a) |
|
| 74,000 |
|
| 1,687,940 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 4,456,760 |
|
|
|
|
|
|
| ||
Oil & Gas – 12.3% |
|
|
|
|
|
|
|
Consol Energy, Inc. |
|
| 67,700 |
|
| 2,898,237 |
|
Denbury Resources, Inc. (a) |
|
| 166,700 |
|
| 2,433,820 |
|
ENSCO International, Inc. |
|
| 56,000 |
|
| 2,564,240 |
|
EQT Corp. |
|
| 32,100 |
|
| 1,343,706 |
|
Exterran Holdings, Inc. (a) |
|
| 116,200 |
|
| 2,373,966 |
|
Massey Energy Co. |
|
| 147,650 |
|
| 4,295,138 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 15,909,107 |
|
|
|
|
|
|
| ||
Pharmaceuticals – 10.5% |
|
|
|
|
|
|
|
Alexion Pharmaceuticals, Inc. (a) |
|
| 105,750 |
|
| 4,696,357 |
|
Elan Corp. plc ADR (a) |
|
| 314,200 |
|
| 1,712,390 |
|
OSI Pharmaceuticals, Inc. (a) |
|
| 86,700 |
|
| 2,793,474 |
|
Santarus, Inc. (a) |
|
| 210,100 |
|
| 649,209 |
|
Shire plc ADR |
|
| 70,550 |
|
| 3,760,315 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 13,611,745 |
|
|
|
|
|
|
| ||
Retail – 5.0% |
|
|
|
|
|
|
|
American Eagle Outfitters, Inc. |
|
| 156,650 |
|
| 2,739,808 |
|
Hibbett Sports, Inc. (a) |
|
| 95,350 |
|
| 1,786,859 |
|
O’Reilly Automotive, Inc. (a) |
|
| 51,000 |
|
| 1,901,280 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 6,427,947 |
|
|
|
|
|
|
| ||
Telecommunications – 5.8% |
|
|
|
|
|
|
|
Alcatel-Lucent ADR (a) |
|
| 79,600 |
|
| 293,724 |
|
Comverse Technology, Inc. (a) |
|
| 234,800 |
|
| 1,972,320 |
|
NII Holdings, Inc. (a) |
|
| 106,500 |
|
| 2,868,045 |
|
Polycom, Inc. (a) |
|
| 111,800 |
|
| 2,400,346 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 7,534,435 |
|
|
|
|
|
|
| ||
Transportation – 1.5% |
|
|
|
|
|
|
|
Landstar System, Inc. |
|
| 54,700 |
|
| 1,927,628 |
|
|
|
|
|
|
| ||
TOTAL COMMON STOCKS |
|
|
|
|
| 126,195,195 |
|
|
|
|
|
|
| ||
Investment Companies—2.5% |
|
|
|
|
|
|
|
Northern Institutional Government Select |
|
| 3,270,825 |
|
| 3,270,825 |
|
|
|
|
|
|
| ||
TOTAL INVESTMENT COMPANIES |
|
|
|
|
| 3,270,825 |
|
|
|
|
|
|
| ||
TOTAL INVESTMENTS |
|
|
|
|
| 129,466,020 |
|
|
|
|
|
|
|
|
|
| Percentages indicated are based on net assets of $129,748,321. |
|
|
(a) | Represents non-income producing security. |
|
|
(b) | The rate represents the annualized one-day yield that was in effect on October 31, 2009. |
|
|
ADR | — American Depositary Receipt |
plc | — Public Limited Company |
|
|
|
See notes to financial statements. | HSBC INVESTOR PORTFOLIOS | 57 |
|
HSBC INVESTOR VALUE PORTFOLIO |
|
|
|
|
|
|
|
|
Common Stocks—97.7% | |||||||
| |||||||
|
| Shares |
| Value($) |
| ||
|
|
|
| ||||
Aerospace & Defense – 5.4% |
|
|
|
|
|
|
|
Lockheed Martin Corp. |
|
| 20,300 |
|
| 1,396,437 |
|
Raytheon Co. |
|
| 28,700 |
|
| 1,299,536 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 2,695,973 |
|
|
|
|
|
|
| ||
Agricultural Chemicals – 1.1% |
|
|
|
|
|
|
|
The Mosaic Co. |
|
| 11,500 |
|
| 537,395 |
|
|
|
|
|
|
| ||
Banking – 2.6% |
|
|
|
|
|
|
|
Wells Fargo & Co. |
|
| 47,500 |
|
| 1,307,200 |
|
|
|
|
|
|
| ||
Business Services – 3.2% |
|
|
|
|
|
|
|
Pitney Bowes, Inc. |
|
| 65,700 |
|
| 1,609,650 |
|
|
|
|
|
|
| ||
Computer Software – 7.5% |
|
|
|
|
|
|
|
CA, Inc. |
|
| 115,600 |
|
| 2,418,352 |
|
Microsoft Corp. |
|
| 46,900 |
|
| 1,300,537 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 3,718,889 |
|
|
|
|
|
|
| ||
Conglomerates – 3.4% |
|
|
|
|
|
|
|
Loews Corp. |
|
| 51,240 |
|
| 1,696,044 |
|
|
|
|
|
|
| ||
Consumer Products – 2.9% |
|
|
|
|
|
|
|
Kimberly-Clark Corp. |
|
| 23,400 |
|
| 1,431,144 |
|
|
|
|
|
|
| ||
Diversified Manufacturing Operations – 1.7% |
|
|
|
|
|
|
|
Ingersoll-Rand plc |
|
| 26,100 |
|
| 824,499 |
|
|
|
|
|
|
| ||
Energy – 3.2% |
|
|
|
|
|
|
|
Halliburton Co. |
|
| 28,000 |
|
| 817,880 |
|
NRG Energy, Inc. (a) |
|
| 33,800 |
|
| 777,062 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 1,594,942 |
|
|
|
|
|
|
| ||
Financial Services – 2.5% |
|
|
|
|
|
|
|
JP Morgan Chase & Co. |
|
| 29,650 |
|
| 1,238,481 |
|
|
|
|
|
|
| ||
Insurance – 10.4% |
|
|
|
|
|
|
|
Aetna, Inc. |
|
| 20,800 |
|
| 541,424 |
|
Aon Corp. |
|
| 29,100 |
|
| 1,120,641 |
|
Genworth Financial, Inc., Class A (a) |
|
| 78,200 |
|
| 830,484 |
|
MetLife, Inc. |
|
| 35,200 |
|
| 1,197,856 |
|
The Hartford Financial Services Group, Inc. |
|
| 60,700 |
|
| 1,488,364 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 5,178,769 |
|
|
|
|
|
|
| ||
Media – 6.9% |
|
|
|
|
|
|
|
CBS Corp., Class B |
|
| 34,350 |
|
| 404,299 |
|
Comcast Corp., Class A |
|
| 50,750 |
|
| 711,515 |
|
Viacom, Inc., Class B (a) |
|
| 84,800 |
|
| 2,339,632 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 3,455,446 |
|
|
|
|
|
|
| ||
Metals & Mining – 6.9% |
|
|
|
|
|
|
|
AngloGold Ashanti Ltd. ADR |
|
| 40,727 |
|
| 1,528,892 |
|
Barrick Gold Corp. |
|
| 52,600 |
|
| 1,889,918 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 3,418,810 |
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
Common Stocks, continued |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares |
| Value($) |
| ||
|
|
|
| ||||
Oil & Gas – 14.9% |
|
|
|
|
|
|
|
Apache Corp. |
|
| 23,800 |
|
| 2,240,056 |
|
ConocoPhillips |
|
| 9,571 |
|
| 480,273 |
|
EOG Resources, Inc. |
|
| 9,075 |
|
| 741,064 |
|
Hess Corp. |
|
| 12,100 |
|
| 662,354 |
|
Noble Energy, Inc. |
|
| 35,900 |
|
| 2,356,117 |
|
Talisman Energy, Inc. |
|
| 55,200 |
|
| 936,744 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 7,416,608 |
|
|
|
|
|
|
| ||
Pharmaceuticals – 11.2% |
|
|
|
|
|
|
|
Amgen, Inc. (a) |
|
| 35,500 |
|
| 1,907,415 |
|
CVS Caremark Corp. |
|
| 30,700 |
|
| 1,083,710 |
|
Merck & Co., Inc. |
|
| 40,800 |
|
| 1,261,944 |
|
Sanofi-Aventis ADR |
|
| 36,200 |
|
| 1,336,504 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 5,589,573 |
|
|
|
|
|
|
| ||
Retail – 1.1% |
|
|
|
|
|
|
|
Kroger Co. (The) |
|
| 23,000 |
|
| 531,990 |
|
|
|
|
|
|
| ||
Telecommunications – 8.4% |
|
|
|
|
|
|
|
AT&T, Inc. |
|
| 31,500 |
|
| 808,605 |
|
Motorola, Inc. |
|
| 303,000 |
|
| 2,596,710 |
|
Verizon Communications, Inc. |
|
| 25,800 |
|
| 763,422 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| 4,168,737 |
|
|
|
|
|
|
| ||
Tobacco – 2.5% |
|
|
|
|
|
|
|
Philip Morris International, Inc. |
|
| 25,900 |
|
| 1,226,624 |
|
|
|
|
|
|
| ||
Transportation – 1.9% |
|
|
|
|
|
|
|
Union Pacific Corp. |
|
| 16,800 |
|
| 926,352 |
|
|
|
|
|
|
| ||
TOTAL COMMON STOCKS |
|
|
|
|
| 48,567,126 |
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
Investment Companies—2.9% |
|
|
|
|
|
|
|
Northern Institutional Government Select |
|
| 1,417,909 |
|
| 1,417,909 |
|
|
|
|
|
|
| ||
TOTAL INVESTMENT COMPANIES |
|
|
|
|
| 1,417,909 |
|
|
|
|
|
|
| ||
TOTAL INVESTMENTS |
|
|
|
|
| 49,985,035 |
|
|
|
|
|
|
|
|
|
| Percentages indicated are based on net assets of $49,686,156. |
|
|
(a) | Represents non-income producing security. |
|
|
(b) | The rate represents the annualized one-day yield that was in effect on October 31, 2009. |
|
|
ADR | — American Depositary Receipt |
plc | — Public Limited Company |
|
|
|
58 | HSBC INVESTOR PORTFOLIOS | See notes to financial statements. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Growth |
| International |
| Opportunity |
| Value |
| ||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in non-affiliates, at value |
| $ | 88,366,407 |
| $ | 215,440,456 |
| $ | 129,466,020 |
| $ | 49,985,035 |
|
Cash |
|
| 2,960 |
|
| — |
|
| — |
|
| 1,483 |
|
Foreign currency, at value |
|
| — |
|
| 1,665,361 |
|
| — |
|
| — |
|
Unrealized appreciation on foreign currency exchange contracts |
|
| — |
|
| 4,744 |
|
| — |
|
| — |
|
Dividends receivable |
|
| 42,742 |
|
| 381,813 |
|
| 20,769 |
|
| 49,207 |
|
Receivable for investments sold |
|
| 1,670,744 |
|
| 1,453,006 |
|
| 369,343 |
|
| — |
|
Prepaid expenses and other assets |
|
| 419 |
|
| 15,196 |
|
| 1,614 |
|
| 274 |
|
|
|
|
|
|
| ||||||||
Total Assets |
|
| 90,083,272 |
|
| 218,960,576 |
|
| 129,857,746 |
|
| 50,035,999 |
|
|
|
|
|
|
| ||||||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized depreciation on foreign currency exchange contracts |
|
| — |
|
| 10,023 |
|
| — |
|
| — |
|
Payable for investments purchased |
|
| 1,863,842 |
|
| 1,640,608 |
|
| — |
|
| 320,029 |
|
Accrued expenses and other liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Management |
|
| 44,820 |
|
| 132,653 |
|
| 92,353 |
|
| 23,381 |
|
Administration |
|
| 1,513 |
|
| 3,727 |
|
| 2,231 |
|
| 863 |
|
Compliance Services |
|
| 34 |
|
| 420 |
|
| 52 |
|
| 20 |
|
Trustee |
|
| 172 |
|
| 447 |
|
| 259 |
|
| 95 |
|
Other |
|
| 10,007 |
|
| 24,493 |
|
| 14,530 |
|
| 5,455 |
|
|
|
|
|
|
| ||||||||
Total Liabilities |
|
| 1,920,388 |
|
| 1,812,371 |
|
| 109,425 |
|
| 349,843 |
|
|
|
|
|
|
| ||||||||
Applicable to investors’ beneficial interest |
| $ | 88,162,884 |
| $ | 217,148,205 |
| $ | 129,748,321 |
| $ | 49,686,156 |
|
|
|
|
|
|
| ||||||||
Total Investments, at cost |
| $ | 81,665,692 |
| $ | 227,208,110 |
| $ | 128,283,160 |
| $ | 53,584,038 |
|
|
|
|
|
|
| ||||||||
Foreign currency, at cost |
| $ | — |
| $ | 1,659,697 |
| $ | — |
| $ | — |
|
|
|
|
|
|
|
|
|
|
See notes to financial statements. | HSBC INVESTOR PORTFOLIOS | 59 |
HSBC INVESTOR PORTFOLIOS
Statements of Operations—For the year ended October 31, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Growth |
| International |
| Opportunity |
| Value |
| ||||
Investment Income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends |
| $ | 685,582 |
| $ | 6,577,804 |
| $ | 604,370 |
| $ | 955,557 |
|
Foreign tax withholding |
|
| (284 | ) |
| (914,469 | ) |
| — |
|
| — |
|
|
|
|
|
|
| ||||||||
Total Investment Income (Loss) |
|
| 685,298 |
|
| 5,663,335 |
|
| 604,370 |
|
| 955,557 |
|
|
|
|
|
|
| ||||||||
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Management |
|
| 456,575 |
|
| 1,287,301 |
|
| 916,022 |
|
| 240,377 |
|
Administration |
|
| 15,595 |
|
| 35,816 |
|
| 22,518 |
|
| 9,009 |
|
Accounting |
|
| 45,227 |
|
| 85,202 |
|
| 44,830 |
|
| 44,405 |
|
Compliance Services |
|
| 377 |
|
| 867 |
|
| 524 |
|
| 210 |
|
Custodian |
|
| 7,191 |
|
| 136,502 |
|
| 12,818 |
|
| 2,636 |
|
Printing |
|
| 3,121 |
|
| 2,175 |
|
| 19 |
|
| 2,216 |
|
Professional |
|
| 2,406 |
|
| 3,808 |
|
| 2,406 |
|
| 1,067 |
|
Trustee |
|
| 1,195 |
|
| 2,739 |
|
| 1,722 |
|
| 667 |
|
Other |
|
| 17,325 |
|
| 45,881 |
|
| 27,589 |
|
| 10,426 |
|
|
|
|
|
|
| ||||||||
Total Expenses |
|
| 549,012 |
|
| 1,600,291 |
|
| 1,028,448 |
|
| 311,013 |
|
|
|
|
|
|
| ||||||||
Net Investment Income (Loss) |
|
| 136,286 |
|
| 4,063,044 |
|
| (424,078 | ) |
| 644,544 |
|
|
|
|
|
|
| ||||||||
Net Realized/Unrealized Gains (Losses) from Investments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gains (losses) from investment and foreign currency transactions |
|
| (12,681,042 | ) |
| (72,712,532 | ) |
| (15,580,861 | ) |
| (1,577,886 | ) |
Change in unrealized appreciation/depreciation from investments and foreign currencies |
|
| 26,751,782 |
|
| 109,291,830 |
|
| 31,798,950 |
|
| 9,018,297 |
|
|
|
|
|
|
| ||||||||
Net realized/unrealized gains/(losses) from investments and foreign currency transactions |
|
| 14,070,740 |
|
| 36,579,298 |
|
| 16,218,089 |
|
| 7,440,411 |
|
|
|
|
|
|
| ||||||||
Change In Net Assets Resulting From Operations |
| $ | 14,207,026 |
| $ | 40,642,342 |
| $ | 15,794,011 |
| $ | 8,084,955 |
|
|
|
|
|
|
|
|
|
|
60 | HSBC INVESTOR PORTFOLIOS | See notes to financial statements. |
(This Page Intentionally Left Blank)
HSBC INVESTOR PORTFOLIOS
Statements of Changes in Net Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Growth |
| International Equity |
| ||||||||
|
| For the |
| For the |
| For the |
| For the |
| ||||
Investment Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income (loss) |
| $ | 136,286 |
| $ | 158,253 |
| $ | 4,063,044 |
| $ | 9,312,232 |
|
Net realized gains (losses) from investment transactions |
|
| (12,681,042 | ) |
| (80,608 | ) |
| (72,712,532 | ) |
| 10,348,234 |
|
Change in unrealized appreciation/depreciation from investment and foreign currencies |
|
| 26,751,782 |
|
| (42,269,939 | ) |
| 109,291,830 |
|
| (242,760,619 | ) |
|
|
|
|
|
| ||||||||
Change in net assets resulting from operations |
|
| 14,207,026 |
|
| (42,192,294 | ) |
| 40,642,342 |
|
| (223,100,153 | ) |
|
|
|
|
|
| ||||||||
Proceeds from contributions |
|
| 8,763,453 |
|
| 50,198,227 |
|
| 23,984,676 |
|
| 43,694,202 |
|
Value of withdrawals |
|
| (16,749,107 | ) |
| (15,750,298 | ) |
| (46,787,723 | ) |
| (76,346,748 | ) |
|
|
|
|
|
| ||||||||
Change in net assets resulting from transactions in investors’ beneficial interest |
|
| (7,985,654 | ) |
| 34,447,929 |
|
| (22,803,047 | ) |
| (32,652,546 | ) |
|
|
|
|
|
| ||||||||
Change in net assets |
|
| 6,221,372 |
|
| (7,744,365 | ) |
| 17,839,295 |
|
| (255,752,699 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of period |
|
| 81,941,512 |
|
| 89,685,877 |
|
| 199,308,910 |
|
| 455,061,609 |
|
|
|
|
|
|
| ||||||||
End of period |
| $ | 88,162,884 |
| $ | 81,941,512 |
| $ | 217,148,205 |
| $ | 199,308,910 |
|
|
|
|
|
|
|
|
|
|
62 | HSBC INVESTOR PORTFOLIOS | See notes to financial statements. |
|
HSBC INVESTOR PORTFOLIOS |
|
Statements of Changes in Net Assets (continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Opportunity |
| Value |
| ||||||||
|
| For the |
| For the |
| For the |
| For the |
| ||||
Investment Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income (loss) |
| $ | (424,078 | ) | $ | (854,296 | ) | $ | 644,544 |
| $ | 1,062,396 |
|
Net realized gains (losses) from investment transactions |
|
| (15,580,861 | ) |
| 2,354,698 |
|
| (1,577,886 | ) |
| (7,776,127 | ) |
Change in unrealized appreciation/depreciation from investment and foreign currencies |
|
| 31,798,950 |
|
| (73,360,727 | ) |
| 9,018,297 |
|
| (25,258,253 | ) |
|
|
|
|
|
| ||||||||
Change in net assets resulting from operations |
|
| 15,794,011 |
|
| (71,860,325 | ) |
| 8,084,955 |
|
| (31,971,984 | ) |
|
|
|
|
|
| ||||||||
Proceeds from contributions |
|
| 8,367,302 |
|
| 20,402,348 |
|
| 4,852,585 |
|
| 12,224,588 |
|
Value of withdrawals |
|
| (22,382,631 | ) |
| (44,840,850 | ) |
| (12,914,556 | ) |
| (13,247,672 | ) |
|
|
|
|
|
| ||||||||
Change in net assets resulting from transactions in investors’ beneficial interest |
|
| (14,015,329 | ) |
| (24,438,502 | ) |
| (8,061,971 | ) |
| (1,023,084 | ) |
|
|
|
|
|
| ||||||||
Change in net assets |
|
| 1,778,682 |
|
| (96,298,827 | ) |
| 22,984 |
|
| (32,995,068 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of period |
|
| 127,969,639 |
|
| 224,268,466 |
|
| 49,663,172 |
|
| 82,658,240 |
|
|
|
|
|
|
| ||||||||
End of period |
| $ | 129,748,321 |
| $ | 127,969,639 |
| $ | 49,686,156 |
| $ | 49,663,172 |
|
|
|
|
|
|
|
|
|
|
See notes to financial statements. | HSBC INVESTOR PORTFOLIOS | 63 |
|
HSBC INVESTOR PORTFOLIOS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Ratio/Supplementary Data | ||||||||||||||||
|
|
|
|
| |||||||||||||||||
|
| Total |
| Net Assets |
| Ratio of Net |
| Ratio of Net |
| Ratio of |
| Portfolio |
| ||||||||
GROWTH PORTFOLIO |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Year Ended October 31, 2005 |
| 13.59 | %(b) |
|
| $ | 49,415 |
|
| 0.63 | %(b) |
| 0.77 | %(b) |
| 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 | )%(c) |
|
| $ | 81,942 |
|
| 0.62 | % |
| 0.19 | % |
| 0.62 | % |
| 157.87 | % |
|
Year Ended October 31, 2009 |
| 19.31 | % |
|
| $ | 88,163 |
|
| 0.69 | % |
| 0.17 | % |
| 0.69 | % |
| 65.67 | % |
|
INTERNATIONAL PORTFOLIO |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
| (51.79 | )% |
|
| $ | 199,309 |
|
| 0.76 | % |
| 2.65 | % |
| 0.76 | % |
| 28.98 | % |
|
Year Ended October 31, 2009 |
| 24.16 | % |
|
| $ | 217,148 |
|
| 0.88 | % |
| 2.23 | % |
| 0.88 | % |
| 58.31 | % |
|
OPPORTUNITY PORTFOLIO |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended October 31, 2005 |
| 14.35 | %(b) |
|
| $ | 218,778 |
|
| 0.85 | %(b) |
| (0.45 | )%(b) |
| 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 | % |
|
Year Ended October 31, 2009 |
| 15.41 | % |
|
| $ | 129,748 |
|
| 0.90 | % |
| (0.37 | )% |
| 0.90 | % |
| 64.91 | % |
|
VALUE PORTFOLIO |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended October 31, 2005 |
| 15.23 | %(b) |
|
| $ | 54,150 |
|
| 0.64 | %(b) |
| 1.15 | %(b) |
| 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 | % |
|
Year Ended October 31, 2009 |
| 20.05 | % |
|
| $ | 49,686 |
|
| 0.68 | % |
| 1.41 | % |
| 0.68 | % |
| 19.77 | % |
|
|
|
(a) | During the period, certain fees were reduced. If such fee reductions had not occurred, the ratio would have been as indicated. |
|
|
(b) | 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 0.05%, 0.04% and 0.05% for the Growth Portfolio, Opportunity Portfolio and Value Portfolio, respectively. |
|
|
(c) | During the year ended October 31, 2008, Winslow Capital Management, Inc. reimbursed $64,658 to the Growth Portfolio related to violations of certain investment policies and limitations. The corresponding impact to the total return was 0.08%. |
|
|
|
64 | 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 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 or part of their investable assets in the Portfolios. The Portfolios also receive investments from funds of funds. 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 Portfolio Trust’s 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 Portfolio Trust may enter into contracts with its 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 Portfolio Trust expects 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 certain 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 increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. Management has evaluated events and transactions through December 21, 2009, the date the financial statements were issued, for purposes of recognition or disclosure in these financial statements and there are no subsequent events to report. |
|
|
| Securities Valuation: |
|
|
| The Portfolios record their investments at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The valuation techniques used to determine fair value are further described below. |
|
|
| 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 Portfolio Trust’s 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 pursuant to procedures adopted by the Portfolio Trust’s 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 govern- |
|
|
HSBC INVESTOR PORTFOLIOS | 65 |
|
|
HSBC INVESTOR PORTFOLIOS | |
Notes to Financial Statements—As of October 31, 2009 (continued) | |
|
|
| mental actions, natural 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. |
|
|
| Exchange traded futures contracts are valued at the last sales price as of the close of the primary exchange. Forward foreign currency contracts are generally valued at the foreign currency exchange rate as of the close of the New York Stock Exchange. |
|
|
| 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. |
|
|
| 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. |
|
|
| Management of the Portfolios has reviewed tax positions taken in tax years that remain subject to examination by all major tax jurisdictions, including federal (i.e., the last four tax year ends and the interim tax period since then, as applicable). Management believes that there is no tax liability resulting from unrecognized tax benefits related to uncertain tax positions taken. |
|
|
| New Accounting Pronouncements: |
|
|
| In June 2009, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Codification 105-10, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles - a replacement of FASB Statement No. 162” (“ASC 105-10, formerly “SFAS 168”). ASC 105-10 replaces SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles” and establishes the “FASB Accounting Standards Codification” (“Codification”) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with U.S. GAAP. All guidance contained in the Codification carries an equal level of authority. The Codification supersedes all existing non-SEC accounting and reporting standards. All other non-grandfathered non-SEC accounting literature not included in the Codification |
|
|
66 | HSBC INVESTOR PORTFOLIOS |
|
|
HSBC INVESTOR PORTFOLIOS | |
Notes to Financial Statements—As of October 31, 2009 (continued) | |
|
|
| will become nonauthoritative. ASC 105-10 is effective for financial statements issued for interim and annual periods ending after September 15, 2009. The Portfolios adopted ASC 105-10 in the current reporting period. Management has evaluated this new statement and has determined that it did not have a significant impact on the determination or reporting of the Portfolios’ financial statements. |
|
|
| Derivative Instruments |
|
|
| All open derivative positions at period end are reflected on the Portfolio’s Schedule of Portfolio Investments. The following is a description of the derivative instruments utilized by the Fund, including the primary underlying risk exposures related to each instrument type. |
|
|
| Foreign Currency Exchange Contracts: |
|
|
| During the year, the International Equity Portfolio, entered into foreign currency exchange contracts in connection with planned purchases or sales of securities or to hedge the U.S. dollar value of securities denominated in a particular currency. In addition to the foreign currency risk related to the use of these contracts, the Portfolio 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 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. The volume of foreign currency exchange contracts will generally be representative of the volume of security trades throughout the reporting period that were denominated in foreign currencies. |
|
|
| Futures Contracts: |
|
|
| Each Portfolio may invest in futures contracts for the purpose of hedging its 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. Futures contracts involve, to varying degrees, elements of market risk (generally equity price risk related to stock futures, interest rate risk related to bond futures, and foreign currency risk related to currency futures) and exposure to loss in excess of the variation margin. The primary risks associated with the use of futures contracts are the imperfect correlation between the change in market value of the securities held by the Portfolios and the prices of futures contracts, the possibility of an illiquid market, and the inability of the counterparty to meet the terms of the contract. For the year ended October 31, 2009, the Portfolios did not hold any futures contracts. |
|
|
| Summary of Derivative Instruments: |
|
|
| The following is a summary of the fair value of derivative instruments for the International Equity Portfolio as of October 31, 2009: |
|
|
|
|
|
|
|
|
|
|
|
| Asset Derivatives |
| Liability Derivatives |
| ||||
|
|
|
| ||||||
Primary Risk Exposure |
| Statements of |
| Total Fair Value* |
| Statements of |
| Total Fair Value* |
|
|
|
|
|
| |||||
Foreign Currency Exchange Contracts |
| Unrealized appreciation on foreign currency contracts |
| $4,744 |
| Unrealized depreciation on foreign currency contracts |
| $(10,023) |
|
|
|
* | Total Fair Value is presented by Primary Risk Exposure. For foreign currency contracts, such amounts represent the unrealized gain/appreciation (for asset derivatives) or loss/depreciation (for liability derivatives). |
|
|
HSBC INVESTOR PORTFOLIOS | 67 |
|
HSBC INVESTOR PORTFOLIOS |
Notes to Financial Statements—As of October 31, 2009 (continued) |
|
|
| The derivative instruments had the following impact on the Statements of Operations for the International Equity Portfolio for the year ended October 31, 2009: |
|
|
|
|
|
|
|
|
| Primary Risk Exposure |
| Location of Gain (Loss) |
| Realized Gain |
| Change in Unrealized |
|
|
|
| ||||
|
|
|
|
|
|
|
|
| Foreign Currency Exchange Contracts |
| Net realized gains (losses) from investment and foreign currency transactions/change in unrealized appreciation/depreciation on investments and foreign currencies |
| $(614,669) |
| $(56,257) |
|
|
|
|
3. | Investment Valuation Summary | ||
|
|
|
|
| The valuation techniques employed by the Portfolios, as described in Note 2 above, maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The inputs used for valuing the Portfolios’ investments are summarized in the three broad levels listed below: | ||
|
|
|
|
|
| • | Level 1: quoted prices in active markets for identical assets |
|
|
|
|
|
| • | Level 2: other significant observable inputs (including quoted prices for similar securities, interest rates, prepayments speeds, credit risk, etc.) |
|
|
|
|
|
| • | Level 3: significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments) |
|
|
|
|
| The inputs or methodology used for valuing investments are not necessarily an indication of the risk associated with investing in those investments. For example, short-term debt securities of sufficient credit quality maturing in sixty days or less are generally valued at amortized cost, which approximates fair value. Generally, amortized cost approximates the current fair value of a security, but since the valuation is not obtained from a quoted price in an active market, such securities are reflected as Level 2. | ||
|
|
|
|
| The Schedules of Portfolio Investments includes additional information regarding the investments for the Portfolios. The following is a summary of the valuation inputs used as of October 31, 2009 in valuing the Portfolios’ investments based upon the three levels defined above: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| LEVEL 1 |
| LEVEL 2 |
| TOTAL |
| |||
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
| |||
| Growth Portfolio |
|
|
|
|
|
|
|
|
|
|
| Investments: |
|
|
|
|
|
|
|
|
|
|
| Common Stocks - Domestic |
| $ | 85,180,697 |
| $ | — |
| $ | 85,180,697 |
|
| Investment Companies |
|
| 3,185,710 |
|
| — |
|
| 3,185,710 |
|
|
|
|
|
|
| ||||||
| Total Investments |
| $ | 88,366,407 |
| $ | — |
| $ | 88,366,407 |
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
| International Equity Portfolio |
|
|
|
|
|
|
|
|
|
|
| Investments: |
|
|
|
|
|
|
|
|
|
|
| Common Stocks - Foreign (a): |
|
|
|
|
|
|
|
|
|
|
| Brazil |
| $ | 961,213 |
| $ | — |
| $ | 961,213 |
|
| Canada |
|
| 8,515,890 |
|
| — |
|
| 8,515,890 |
|
| South Korea |
|
| 1,697,356 |
|
| 1,762,036 |
|
| 3,459,392 |
|
| Spain |
|
| 4,506,871 |
|
| 4,283,317 |
|
| 8,790,188 |
|
| All Other Common Stocks - Foreign† |
|
| — |
|
| 191,781,060 |
|
| 191,781,060 |
|
| Rights |
|
| — |
|
| 28,429 |
|
| 28,429 |
|
| Investment Companies |
|
| 1,904,284 |
|
| — |
|
| 1,904,284 |
|
|
|
|
|
|
| ||||||
| Total Investments |
|
| 17,585,614 |
|
| 197,854,842 |
|
| 215,440,456 |
|
|
|
|
|
|
| ||||||
| Other Financial Instruments* |
|
| — |
|
| (5,279 | ) |
| (5,279 | ) |
|
|
|
|
|
| ||||||
| Total Investments |
| $ | 17,585,614 |
| $ | 197,849,563 |
| $ | 215,435,177 |
|
|
|
|
|
|
|
|
|
68 | HSBC INVESTOR PORTFOLIOS |
|
HSBC INVESTOR PORTFOLIOS |
Notes to Financial Statements—As of October 31, 2009 (continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| LEVEL 1 |
| LEVEL 2 |
| Total Investments |
| |||
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
| |||
| Opportunity Portfolio |
|
|
|
|
|
|
|
|
|
|
| Investments: |
|
|
|
|
|
|
|
|
|
|
| Common Stocks - Domestic |
| $ | 126,195,195 |
| $ | — |
| $ | 126,195,195 |
|
| Investment Companies |
|
| 3,270,825 |
|
| — |
|
| 3,270,825 |
|
|
|
|
|
|
| ||||||
| Total Investments |
| $ | 129,466,020 |
| $ | — |
| $ | 129,466,020 |
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
| Value Portfolio |
|
|
|
|
|
|
|
|
|
|
| Investments: |
|
|
|
|
|
|
|
|
|
|
| Common Stocks - Domestic |
| $ | 48,567,126 |
| $ | — |
| $ | 48,567,126 |
|
| Investment Companies |
|
| 1,417,909 |
|
| — |
|
| 1,417,909 |
|
|
|
|
|
|
| ||||||
| Total Investments |
| $ | 49,985,035 |
| $ | — |
| $ | 49,985,035 |
|
|
|
|
|
|
|
|
|
|
|
|
| ||
| * | Other financial instruments would include any derivative instruments, such as foreign currency exchange contracts. These investments are generally recorded in the financial statements at the unrealized gain or loss on the investment. | |
|
|
|
|
| (a) | Based on the domicile of the security issuer. | |
|
|
|
|
| † | For detailed country descriptions, see the accompanying Schedules of Portfolio Investments. |
|
|
4. | Related Party Transactions and Other Agreements: |
|
|
| 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 L.P., Westfield Capital Management Company, L.P. and NWQ Investment Management Company, 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 their services, the Investment Adviser and Winslow Capital Management, Inc. (“Winslow”) 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 all Sub-Adviser serviced funds and separate accounts affiliated with HSBC: |
| Fee Rate* |
|
| ||
| Up to $250 million |
| 0.575% |
| In excess of $250 million but not exceeding $500 million |
| 0.525% |
| In excess of $500 million but not exceeding $750 million |
| 0.475% |
| In excess of $750 million but not exceeding $1 billion |
| 0.425% |
| In excess of $1 billion |
| 0.375% |
|
|
|
|
|
| ||
| * | The investment advisory contract provides that the Growth Portfolio may pay the Investment Adviser an aggregate maximum fee of 0.68%. Currently, the Investment Adviser’s share of the aggregate maximum fee rate is capped at 0.175%. Accordingly, the aggregate maximum fee rate is 0.575%. |
|
|
| For their services, the Investment Adviser and AllianceBernstein L.P. 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 |
| 0.92% |
| 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% |
|
|
| For their services, the Investment Adviser and Westfield Capital Management Company, L.P. 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. |
|
|
HSBC INVESTOR PORTFOLIOS | 69 |
|
HSBC INVESTOR PORTFOLIOS |
Notes to Financial Statements—As of October 31, 2009 (continued) |
|
|
| For their services, the Investment Adviser and NWQ Investment Management Company, 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% |
|
|
| 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 (as well as the other funds in the HSBC Investor Family of Funds) a fee, accrued daily and paid monthly, during the period November 1, 2008 to December 31, 2008, at 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% |
|
|
| Effective January 1, 2009, under the terms of the Administration Agreement, HSBC receives from the Portfolios (as well as the other funds in the HSBC Investor Family of Funds) a fee, accrued daily and paid monthly, at annual rate of: |
|
|
|
|
| Based on Average Daily Net Assets of |
| Fee Rate |
|
| ||
| Up to $10 billion |
| 0.0550% |
| In excess of $10 billion but not exceeding $20 billion |
| 0.0350% |
| In excess of $20 billion but not exceeding $50 billion |
| 0.0275% |
| In excess of $50 billion |
| 0.0250% |
|
|
| 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 HSBC Investor 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 the HSBC Investor Funds, the Portfolios pay half of the administration fee and the other funds pay half of the administration fee, for a combination of the total fee rate set forth above. Certain administrative fees of the Portfolios also may be received by treating them as apportioned in part to other funds makes investments in the Portfolios a master-feeder structure. |
|
|
| 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 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 Portfolio Trust and the other HSBC Investor Funds (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 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 $266,099 for the year ended October 31, 2009, plus reimbursement of certain expenses. Expenses incurred by each Portfolio are reflected on the Statements of Operations as “Compliance Services.” Citi Ohio pays the salary and other compensation earned by individuals performing these services, as employees of Citi Ohio. |
|
|
Fund Accounting and Trustees: | |
|
|
| Citi Ohio provides fund accounting services for the Portfolio Trust. 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. |
|
|
| Each non-interested Trustee is compensated with a $60,000 annual Board retainer for services as a Trustee of the HSBC Investor Family of Funds (or the “Trusts”), as well as a $3,000 annual retainer for each Committee of the Board of the Trusts. Each non-interested Trustee also receives a $5,000 and $3,000 meeting fee for each regular in-person Board |
|
|
70 | HSBC INVESTOR PORTFOLIOS |
|
HSBC INVESTOR PORTFOLIOS |
Notes to Financial Statements—As of October 31, 2009 (continued) |
|
|
| meeting and Committee meeting, respectively. Furthermore, each non-interested Trustee receives compensation for attending special meetings and/or functioning as a Committee or Board Chairperson. In addition, the non-interested Trustees are reimbursed for certain expenses incurred in connection with their Board membership. |
|
|
5. | Investment Transactions: |
|
|
| Purchases and sales of securities (excluding securities maturing less than one year from acquisition) for the year ended October 31, 2009 were as follows: |
|
|
|
|
|
|
|
|
Portfolio Name |
| Purchases |
| Sales |
| ||
|
|
| |||||
Growth Portfolio |
| $ | 51,655,635 |
| $ | 58,934,962 |
|
International Equity Portfolio |
|
| 104,824,970 |
|
| 124,088,899 |
|
Opportunity Portfolio |
|
| 72,783,514 |
|
| 84,100,255 |
|
Value Portfolio |
|
| 8,891,736 |
|
| 13,184,851 |
|
|
|
| There were no long-term U.S. Government securities held during the year ended October 31, 2009. |
|
|
6. | Federal Income Tax Information: |
|
|
| At October 31, 2009, the cost, gross unrealized appreciation and gross unrealized depreciation on securities for federal income tax purposes, were as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund |
| Tax Cost ($) |
| Tax Unrealized |
| Tax Unrealized |
| Net Unrealized |
| ||||
|
|
|
|
| |||||||||
Growth Portfolio |
|
| 79,874,530 |
|
| 10,686,442 |
|
| (2,194,565 | ) |
| 8,491,877 |
|
International Equity Portfolio |
|
| 228,068,719 |
|
| 18,620,686 |
|
| (31,248,949 | ) |
| (12,628,263 | ) |
Opportunity Portfolio |
|
| 131,149,543 |
|
| 16,508,193 |
|
| (18,191,716 | ) |
| (1,683,523 | ) |
Value Portfolio |
|
| 53,335,078 |
|
| 5,357,517 |
|
| (8,707,560 | ) |
| (3,350,043 | ) |
|
|
|
| ||
| * | The difference between book-basis unrealized appreciation (depreciation) is attributable primarily to: tax deferral of losses on wash sales. |
|
|
7. | Legal and Regulatory Matters: |
|
|
| On September 26, 2006, BISYS Fund Services, Inc. (“BISYS”), an affiliate of BISYS Fund Services Ohio, Inc. which provided various services to the Portfolios, 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 Funds or the Portfolios’ financial statements, management does not anticipate a material, adverse impact to the Portfolios or the Portfolios’ financial statements. |
|
|
HSBC INVESTOR PORTFOLIOS | 71 |
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 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, 2009, 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 year 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 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. Our procedures included confirmation of securities owned as of October 31, 2009, by correspondence with custodians and brokers or by 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, 2009, 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 year in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.
Columbus, Ohio
December 21, 2009
|
|
72 | HSBC INVESTOR PORTFOLIOS |
|
HSBC INVESTOR FAMILY OF FUNDS |
Table of Shareholder Expenses (Unaudited)—As of October 31, 2009 |
|
|
| 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, 2009 through October 31, 2009. |
|
|
| 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 Paid |
| Annualized |
| ||||||||||||
|
|
|
|
|
| ||||||||||||||||
Growth Portfolio |
|
| $ | 1,000.00 |
|
|
| $ | 1,169.10 |
|
|
| $ | 3.72 |
|
|
|
| 0.68 | % |
|
International Equity Portfolio |
|
|
| 1,000.00 |
|
|
|
| 1,299.70 |
|
|
|
| 4.87 |
|
|
|
| 0.84 | % |
|
Opportunity Portfolio |
|
|
| 1,000.00 |
|
|
|
| 1,198.30 |
|
|
|
| 4.93 |
|
|
|
| 0.89 | % |
|
Value Portfolio |
|
|
| 1,000.00 |
|
|
|
| 1,258.40 |
|
|
|
| 3.81 |
|
|
|
| 0.67 | % |
|
|
|
* | 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). |
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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Beginning |
| Ending |
| Expenses Paid |
| Annualized |
| ||||||||||||
|
|
|
|
|
| ||||||||||||||||
Growth Portfolio |
|
| $ | 1,000.00 |
|
|
| $ | 1,021.78 |
|
|
| $ | 3.47 |
|
|
|
| 0.68 | % |
|
International Equity Portfolio |
|
|
| 1,000.00 |
|
|
|
| 1,020.97 |
|
|
|
| 4.28 |
|
|
|
| 0.84 | % |
|
Opportunity Portfolio |
|
|
| 1,000.00 |
|
|
|
| 1,020.72 |
|
|
|
| 4.53 |
|
|
|
| 0.89 | % |
|
Value Portfolio |
|
|
| 1,000.00 |
|
|
|
| 1,021.83 |
|
|
|
| 3.41 |
|
|
|
| 0.67 | % |
|
|
|
* | 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 | 73 |
|
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 HSBC Investor Family of Funds. The HSBC Investor Family of Funds’ Statement of Additional Information includes additional information about the Trustees and is available by calling (888) 525-5757.
|
|
|
|
|
|
|
|
|
|
|
Name, Address, |
| Position(s) |
| Term of Office and |
| Principal Occupation(s) |
| Number of |
| Other |
|
|
|
|
|
|
|
|
|
|
|
NON-INTERESTED |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alan S. Parsow |
| Trustee |
| Indefinite: 1987 |
| General Partner of Elkhorn Partners, |
| 36 |
| Penn Treaty |
Larry M. Robbins |
| Trustee |
| Indefinite: 1987 |
| Private Investor (2007-present); Director, |
| 36 |
| None |
Michael Seely |
| Trustee |
| Indefinite: 1987 |
| Private Investor (2003-present); |
| 36 |
| None |
Thomas F. Robards |
| Trustee |
| Indefinite: March 2005 |
| Partner, Robards & Co. LLC (2005- |
| 36 |
| Overseas Shipholding |
Susan S. Huang |
| Trustee |
| Indefinite: June 2008 |
| Investment Consultant, self employed |
| 36 |
| United Church |
Marcia L. Beck |
| Trustee |
| Indefinite: June 2008 |
| Private Investor (June 1999 |
| 36 |
| None |
|
|
|
|
|
|
|
|
|
|
|
INTERESTED TRUSTEES |
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
Stephen J. Baker** |
| Trustee |
| Indefinite: 2004 |
| Chief Executive Officer, HSBC Global |
| 36 |
| None |
|
|
* | Includes the Funds and the underlying Portfolios for the HSBC Investor Family of Funds with a master/feeder structure. |
|
|
** | Mr. Baker is an “interested person” of the the HSBC Investor Family of Funds, as defined by the 1940 Act, due to his employment with the Investment Adviser. |
|
|
74 | 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: March 2004 |
| Senior Vice President, Head of Product Management, HSBC Global Asset Management (USA) Inc. (1998 to present) |
Elba L. Vasquez |
| Vice President |
| Indefinite: March 2006 |
| Vice President of Product Administration, HSBC Global Asset Management (USA) Inc. (2005 to present); Vice President of Client Services, Citi Fund Services Ohio, Inc. (1996 to 2005) |
Martin R. Dean* |
| Treasurer |
| Indefinite: October 2009 |
| Senior Vice President of Citi Fund Services |
Jennifer A. English* |
| Secretary |
| Indefinite: 2008 |
| Senior Vice President, Regulatory Administration, Citi Fund Services (2005 – present); Assistant Vice President and Assistant Counsel, PFPC, Inc. (2002-2005) |
F. Martin Fox* |
| Assistant Secretary |
| Indefinite: 2008 |
| Assistant Vice President, Regulatory Administration, Citi Fund Services (May 2008 – present); Contract Attorney, Update Legal LLC (2002 – 2008) |
Frederick J. Schmidt* |
| Chief |
| Term expires 2009; |
| Senior Vice President and Chief Compliance Officer, CCO Services Group, Global Transaction Services of Citi Fund Services (2004 to present) |
|
|
* | Messrs. Dean, Fox and 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 | 75 |
A description of the policies and procedures that the Funds and Portfolios 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 Funds’ website at www.investor-funds.us.hsbc.com and the Securities and Exchange Commission’s (“Commission”) website at http://www.sec.gov. A copy of the Funds’ and Portfolios’ voting records for the most recent 12 month period ending June 30 are 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 Funds’ 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.
|
|
76 | HSBC INVESTOR PORTFOLIOS |
|
|
HSBC INVESTOR FAMILY OF 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 |
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, Ohio 43230-3202 |
AllianceBernstein L.P. |
|
1345 Avenue of the Americas, 39th Floor | CUSTODIAN |
New York, NY 10105 | The Northern Trust Company |
| 50 South LaSalle Street |
HSBC Investor Opportunity Portfolio | Chicago, IL 60603 |
Westfield Capital Management Company, L.P. |
|
One Financial Center | INDEPENDENT REGISTERED PUBLIC |
Boston, MA 02111 | ACCOUNTING FIRM |
| KPMG LLP |
HSBC Investor Value Portfolio | 191 West Nationwide Blvd., Suite 500 |
NWQ Investment Management Company, LLC | Columbus, OH 43215 |
2049 Century Park East, 16th Floor |
|
Los Angeles, CA 90067 | 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 Investor Family of 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 | 12/09 |
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, | |
| 2008 | $303,300 |
| 2009 | $228,000 |
| ||
| (b) Audit-Related Fees, |
|
|
|
| 2008 | $10,200 |
| 2009 | $10,700 |
|
|
|
| 2008 – Fees of $10,200 relate to the consent of N-1A filing and the consent of the N-14 filing for the HSBC Investor Growth and Income Fund and the HSBC Investor Growth Fund. | |
|
| |
| 2009 – Fees of $10,700 relate to the consent of N-1A filing and the consent of the N-14 filing for the HSBC Investor Core Plus Fixed Income Fund (Advisor), HSBC Investor Core Plus Fixed Income Fund and HSBC Investor Intermediate Duration Fixed Income Fund. | |
|
|
|
| (c) Tax Fees, | |
| 2008 | $161,500 |
| 2009 | $160,805 |
|
|
|
| Fees for both 2008 and 2009 relate to the preparation of federal income and excise tax returns and the review of excise tax distributions. | |
|
|
|
| (d) All Other Fees, | |
|
|
|
| 2008 | $0 |
| 2009 | $0 |
|
|
|
(e)(1) Disclose the audit committee’s pre-approval policies and procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X. | ||
|
|
|
(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. | |
| 2008 | $171,700 |
| 2009 | $171,505 |
|
|
|
(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 22, 2009 |
|
|
|
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 22, 2009 |
|
|
|
|
|
|
By (Signature and Title)* | /s/ Martin R. Dean |
|
|
| |
| Martin R. Dean |
|
| Treasurer |
|
|
|
|
Date | December 22, 2009 |
|
|
|
* Print the name and title of each signing officer under his or her signature.