HSBC GIF Asia ex Japan Equity Smaller Companies
30 April 2017
USD Retail Share Class (AC)
Monthly Report
Fund Objective
The sub-fund aims to provide long term capital growth by investing in a portfolio of Asian
(excluding Japan) smaller company equities.
The sub-fund invests in normal market conditions a minimum of 90% of its net assets in equities
and equity equivalent securities of companies which are domiciled in, based in, or carry out the
larger part of their business activities in Asia (excluding Japan) including both developed markets
such as OECD countries and Emerging Markets.
The sub-fund will invest a minimum of 70% of its net assets in equities and equity equivalent
securities of smaller companies defined as those in the bottom 25% by market capitalisation of the
Asia ex Japan universe (made of the combination of the MSCI AC Asia ex Japan index and the
MSCI AC Asia ex Japan Small Cap index).
For the full investment objective please refer to the prospectus.
Fund Details
Fund domicile
UCITS IV Luxembourg SICAV
Benchmark
MSCI All Country Asia ex Japan Small
Cap Net
Fund size (USD million)
1,286.16
Inception date
21/11/1997. AC share
launched on 09/03/2004.
Performance (%)
class
was
500
Liquidity
Daily
400
350
Ongoing charge*
300
250
1.85%
Minimum initial investment
US$5,000 or equivalent
200
150
ISIN code
AC: LU0164939612
100
50
Apr-17
Jul-16
Oct-15
Dec-14
Mar-14
Jun-13
Sep-12
Nov-11
Feb-11
May-10
Aug-09
Oct-08
Jan-08
Apr-07
Jul-06
Sep-05
Dec-04
0
Mar-04
(Rebased to 100 on 09 Mar 2004)
450
Bloomberg ticker
HSBASAC LX
HSBC GIF Asia ex Japan Equity Smaller Companies AC
MSCI All Country Asia ex Japan Small Cap Net
Rolling time
Fund
30 April 2017
30/04/2012
to
30/04/2013
30/04/2013
to
30/04/2014
30/04/2014
to
30/04/2015
30/04/2015
to
30/04/2016
30/04/2016
to
30/04/2017
29.15%
15.16%
24.18%
-16.08%
30.02%
1M
3M
6M
1Y
3Y ann.
5Y ann.
Fund
2.31%
10.56%
15.70%
30.02%
10.66%
15.05%
Benchmark
1.10%
9.42%
8.64%
12.34%
2.07%
4.86%
Calendar years / YTD
2017 YTD
2016
2015
2014
2013
2012
Fund
19.49%
10.33%
0.65%
9.53%
24.46%
26.41%
Benchmark
14.02%
-2.28%
-3.52%
2.26%
6.89%
22.40%
Past performance is not a reliable indicator for future performance. Returns are shown net of fees. Further fees (if
applicable) are not considered in the statement and will have a negative effect on the investment performance.
The figures are calculated in USD, and changes in the rate of currency exchange may affect the value of your investment.
All return periods longer than 1 year are annualised. Performance returns are based on a NAV per unit basis, net of fees,
with gross income reinvested.
Source: HSBC Global Asset Management. Benchmark source: Rimes.
Data as at 30 April 2017
For professional clients only
* The ongoing charges figure is based on
last year’s expenses for the year ending
31/03/2016. Charges may vary from year to
year.
The ongoing charges figure (OCF), which is
broadly equivalent to the previous Total
Expense Ratio, provides a measure of what
it costs to invest in a fund on an ongoing
basis. The OCF is made up of the Annual
Management Charge (AMC) and other
operating costs. Other operating costs
include the costs for other services paid for
by the fund, such as the fees paid to the
trustee (or depository), custodian, auditor
and regulator.
HSBC GIF Asia ex Japan Equity Smaller Companies
30 April 2017
USD Retail Share Class (AC)
Monthly Report
Market Overview
The MSCI AC Asia ex Japan Smaller Companies index continued its rise in April, posting a 1.1% gain during the month. The inde x is up 14.0% YTD, but
trails the large cap MSCI Asia ex Japan index. India again led the market higher, gaining another 6.7% in April on strong dom estic flows. Malaysia also
performed well during the month as foreign investors chase laggard markets. From a sector perspective, financials registered the best performance
during the month, followed by utilities and real estate. Commodity sectors, including materials and energy, gave back some of their gains from previous
months.
Strategy review
The fund outperformed its benchmark during the month.
Our stock picks in China and India added the most value during the month. TCC International (China), a cement producer, was t he biggest contributor to
performance as the parent company made an offer to privatize the company. Ahluwalia Contracts (India), a civil engineering pl ayer, was another
significant contributor in April as the company saw a re-rating alongside rising interest in the construction sector. Our holdin g in Melco International
(Hong Kong) also did well in April on the back of a corporate restructuring of the company.
From a sector perspective, consumer discretionary and industrials were the key sectors contributing to outperformance during the month. Our
underweight to real estate was a drag on performance. We remain overweight in consumer discretionary and domestic industrials , and have been
adding names in the healthcare, industrials and materials sectors.
Outlook
Asian economies stand to benefit from the reflationary trend in the US and prospects for a pickup in global economic growth. While the Trump
presidency has introduced more uncertainty into markets, in particular on the issue of potential trade barriers, the backdrop of a stronger global
economy has historically been positive for growth in Asia and Asia ex Japan equity markets. Key risks are a stronger than exp ected US$ and a more
aggressive rate hike cycle in the US.
Macro indicators suggest a stable and growing Chinese economy. There are potential positive catalysts on the horizon around e conomic and structural
reforms, while valuations continue to look attractive. In India, the Government’s reform agenda is incrementally adding to th e country’s growth potential
and attractiveness as a destination for capital. The recent passing of the long-awaited GST Bill is evidence of this. The ongoing recovery in the economy
and earnings prospects will be key catalysts going forward in India. Meanwhile, ASEAN’s steady growth momentum should support ongoing interest in
these markets.
Valuations in Asia ex Japan small caps remain attractive on a price-to-book basis. Asia’s small cap universe continues to offer some of the best
opportunities to tap into the region’s rising domestic consumption trends.
HSBC GIF Asia ex Japan Equity Smaller Companies
30 April 2017
USD Retail Share Class (AC)
Monthly Report
Top 10 Holdings
Weight (%)
Xinyi Glass Holdings Ltd
Brilliance China Auto
China Machinery Engineering
Texhong Textile Group Ltd
Bumi Serpong Damai Pt
Bgf Retail Co Ltd
Malee Group Pcl
Gt Capital Holdings Inc
China State Construction Int'L
Lonking Holdings Ltd
TOTAL
1.6
1.6
1.5
1.4
1.4
1.3
1.3
1.3
1.3
1.3
13.9
(*) Stock is not included in Benchmark
Relative Weight (%)
1.6
1.5
1.4
1.4
1.4
-0.4
-0.4
-0.4
-0.3
-0.3
(**) Stock is not held by Portfolio
Sector Weightings versus Benchmark (%)
-0.4 -0.8 -1.0
Energy (1.5)
Cash & Others (5.7)
Information Technology
Utilities (1.7)
-5.8 -6.5
Real Estate
Health Care (4.5)
Health Care
-4.4
Telecommunication
Services
Real Estate (5.9)
Country Weightings (%)
0.1
Utilities
Consumer Staples (6.9)
1.7
Financials
Financials (8.5)
2.4
Energy
Information Technology (11.7)
3.4
Consumer Staples
Materials (12.4)
5.6
Industrials
Industrials (17.2)
8.0
6.0
4.0
2.0
0.0
-2.0
-4.0
-6.0
-8.0
-10.0
Materials
Consumer Discretionary (24.0)
Consumer Discretionary
Sector Weightings (%)
Top 5 and Bottom 5 versus Benchmark
Brilliance China Auto (*)
China Machinery Engineering (*)
Xinyi Glass Holdings Ltd
Bumi Serpong Damai Pt (*)
Texhong Textile Group Ltd
Minth Group Ltd (**)
Hopewell Holdings Ltd (**)
Venture Corp Ltd (**)
Mapletree Commercial Trust (**)
Federal Bank Ltd (**)
Country Weightings versus Benchmark (%)
4.0
3.1
China (24.4)
2.1
1.5
Taiwan (15.9)
India (14.1)
1.0
0.0
Korea (14.1)
-0.7
-1.0
Hong Kong (11.5)
Indonesia (3.5)
-2.1
-4.0
-2.6
-3.3
-3.7
Philippines (3.2)
Singapore (3.2)
Data as at 30 April 2017
Source: HSBC Global Asset Management.
Korea
Taiwan
Singapore
Malaysia
Thailand
India
Indonesia
China
Cash & Others (5.7)
Philippines
Malaysia (1.4)
-8.0
Hong Kong
Thailand (2.8)
ght (%)
HSBC GIF Asia ex Japan Equity Smaller Companies
30 April 2017
USD Retail Share Class (AC)
Monthly Report
Portfolio Management
Elina Fung – Lead Manager; Investment Director, Equities
Elina Fung is a portfolio manager in Asian ex Japan equity team and has been working in the industry since 1995. Prior to joining HSBC in 2007, Elina worked as the
Financial Controller and Company Secretary at Norstar Founders Group Limited, a main-board listed Chinese auto-parts manufacturer. Previously, Elina worked in equity
research for six years. She holds a Bachelor of Business Administration from the Chinese University of Hong Kong. She is also a member of the American Institute of
Certified Public Accountants and a fellow member of the HK Institute of Certified Public Accountants.
Alex Kwan – Co-Manager; Associate Director, Equities
Alex Kwan is an associate director in the Asia ex Japan equity team, specialising in regional small caps. Prior to joining HSBC in 2008, Alex worked as an engineer at EMC
Corp. He holds a Bachelor of Science in Computer Science and a master’s degree in Computer Science & Engineering, both from the University of Michigan – Ann Arbor,
and an MBA from the Hong Kong University of Science & Technology. He is also a CFA Level III candidate.
Fund Information
Maximum initial charge
Up to 5.54%
Settlement date
Trade day + 4 business days
Management company
HSBC Investment Funds (Luxembourg) S.A.
Redemption fees
None
Investment adviser
HSBC Global Asset Management (Hong Kong) Limited
ISIN code
AC: LU0164939612
Depositary bank
HSBC Bank Plc, Luxembourg Branch
Risks
It is important to remember that the value of investments can go down as well as up and you may not get back the amount originally invested. Where overseas investments
are held the rate of currency exchange may cause the value of such investments to go down as well as up. Investments in emerging markets are by their nature higher risk
and potentially more volatile than those inherent in established markets. For a full list of risks, please refer to the prospectus and Key Investor Information Documents.
.
Important Information
This document is produced by HSBC Global Asset Management (UK). This document is designed for sales and marketing purposes for the introduced fund and is not an
offer or invitation to make an application to invest in this fund. All statutory requirements concerning impartiality of financial analysis are unaffected. This document does
not replace a professional investment advice. It is not an offer for subscription. A prohibition of trading concerning mentioned financial products before publishing this
document does not exist. This document is only directed to persons who have a permanent residence in the Federal Republic of Germany. It is not determined to
addressees in any other jurisdictions or to citizens of the USA. This document is only intended for the recipient. The document or parts of it may not be disclosed to any
third party or used for any other purpose without prior written consent. Past performance contained in this document is not a reliable indicator of future performance whilst
any forecasts, projections and simulations contained herein should not be relied upon as an indication of future results.
This fund may invest in financial derivative instruments.
Derivative instruments can lead to a significantly more volatile price than the direct purchase of the underlying instruments.
Due to the composition of the fund prices may fluctuate significantly in the short term to the downside as well as the upside. The fund is denominated in USD currency.
The fund invests in financial assets designated in a different currency than the base currency. An exchange risk results, if the investor’s domestic currency is not USD, a
further exchange risk may occur.
This document is based on information obtained from sources we believe to be reliable but which have not been independently verified; therefore we accept no
responsibility for accuracy and/or completeness. The opinions represented in this document express opinions of the author/ the authors, editors and business partners of
HSBC Global Asset Management (Deutschland) GmbH and are subject to change. The shift of opinion has not to be published. The fund is not suitable for every investor.
It can not be excluded that an investment in the fund could lead to losses for the investor. It is also possible that an investor might lose all of its initial investment.
All information within this document do neither replace the official legal documents for the fund nor the Key Investor Information Documents and the most recent annual
and semi-annual reports. Actual Prospectuses, Key Investor Information Documents and the latest annual and semi-annual reports can be obtained upon request and free
of charge from HSBC Trinkaus & Burkhardt AG, Koenigsallee 21/23, 40212 Duesseldorf, Germany. They are also available on the internet via
www.assetmanagement.hsbc.com/de.
Source: MSCI, the MSCI information may only be used for your internal use, may not be reproduced or redisseminated in any form and may not be used as a basis for or
a component of any financial instruments or products or indices. None of the MSCI information is intended to constitute investment advice or a recommendation to make
(or refrain from making) any kind of investment decision and may not be relied on as such. Historical data and analysis should not be taken as an indication or guarantee
of any future performance analysis, forecast or prediction. The MSCI information is provided on an “as is” basis and the user of this information assumes the entire risk of
any use made of this information. MSCI, each of its affiliates and each other person involved in or related to compiling, computing or creating any MSCI information
(collectively, the “MSCI Parties”) expressly disclaims all warranties (including, without limitation, any warranties of originality, accuracy, completeness, timeliness, noninfringement, merchantability and fitness for a particular purpose) with respect to this information. Without limiting any of the foregoing, in no event shall any MSCI Party
have any liability for any direct, indirect, special, incidental, punitive, consequential (including, without limitation, lost profits) or any other damages. (www.msci.com)