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Investment Case

Investment Team

The Fund

Summary

HSBC GIF Indian Equity FundFor Investment Professionals only

http://www.assetmanagement.hsbc.com/

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The investment case

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Investment case

Why invest in the HSBC GIF Indian Equity Strategy ?

One of the fastest growing major economies – even with slowdown this year

One of the fastest falling stock markets

Sentiment swing over – from dream to nightmare scenario – back to reality

Political uncertainty and policy risk have been factored into equity prices

Currency depreciation – positive for revenues and operational earnings

Valuations are attractive again – below 5 and 10 year averages

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The investment team

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Management Team – Over 40 years’ Collective Investment Experience

A large and experienced Asian Equity Team

Sanjiv Duggal – Fund Manager

Sanjiv joined HSBC in April 1996 and is responsible for the management of Indian equities. With 14 years of investment experience, Sanjiv has lead managed the flagship HSBC GIF Indian Equity Fund since the fund's inception. Prior to joining HSBC, Sanjiv worked for the Hill Samuel Group where he spent nearly five years, initially in internal audit and latterly as an Emerging Markets fund manager. Sanjiv is a fully qualified Chartered Accountant.

Manish Srivastava CFA – Fund Manager

Manish is a fund manager in the Indian equity team and has been working in the industry since 1995. Prior to joining the firm in 2006, Manish worked for ABN Amro and Citigroup as an equity analyst. He holds a Bachelor of Technology in Mining Engineering from the Institute of Technology in Varanasi, is a management graduate from the Indian Institute of Management in Ahmedabad and is a CFA charterholder.

Viresh Mehta – Fund Manager

Viresh is a fund manager in the Indian equity team and has been working in the industry since 1992. Prior to joining the firm in 2002, Viresh was the head of dealing and sales trading with UBS Warburg Securities, India. He has also had prior experience in servicing institutional investors at Prabhudas Lilladher Limited and DSP Financial Consultants Limited. He holds a degree in Engineering and an MMS in Finance, both from Bombay University.

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Divya Balakrishnan – Investment Analyst

Divya is an Investment Analyst in the Indian equity team and assists the fund management team in researching sectors and stocks for their portfolio. She has been with HSBC Singapore since July 2005, and worked in institutional banking sales prior to joining Halbis. She holds a bachelor's degree in Electrical and Biomedical Engineering from the National University of Singapore and is currently a level 2 CFA candidate.

Support Team

Nancy Lobo – Business Manager

Nancy Lobo is the Business Manager supporting Halbis Singapore and has been working in the Mutual Fund industry since 2002. Prior to re-joining the firm in 2007, Nancy worked at HSBC AMC India supporting Sanjiv and Viresh and with Lotus India AMC as Sr. Manager - Institutional Sales. She holds a degree in Economics (Honours) and MMS in Marketing, both from Bombay University.

Shelby Doshi – Team Coordinator

Shelby is the Team Coordinator supporting Halbis Singapore. She recently joined the India Equity team but has been with HSBC since 2005. She is currently pursuing a double degree in Marketing & Human Resources from Murdoch University.

A large and experienced Asian Equity Team

Management Team – Over 40 years’ Collective Investment Experience

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Name Title Role

Years of Experience

with the Group

Years of Industry

ExperienceRegional Portfolio ManagementAyaz Ebrahim Chief Executive

OfficerChief Investment Officer

4 20

Robert Tucker CFA

Investment Director

Fund Manager 8 11

Sector AnalystsHugh Lee Senior Investment Analyst Regional Financial 3 13Patrick Crivelli Investment Analyst Regional Consumer 3 7Mathew Lee Investment Analyst Regional Property 3 9Quantitative Analysis & Implementation (QAI) UnitAndrew Lee CFA

Head of Quantitative Analysis & Implementation Unit

Quantitative Analysis and Portfolio Implementation

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DealersFlorench Hsieh Head of Dealing Dealing 15 19Samuel Lai Senior Dealer Dealing 8 20Product SpecialistFrancis Chung Director Product Specialist 2 18

Sami Abouzahr Asia Product Specialist 5 5

A large and experienced Asian Equity TeamAn experienced and dedicated team of research, risk management and portfolio implementation specialists

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The fund: HSBC GIF Indian Equity Fund

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HSBC GIF Indian Equity Fund

Fund facts

Recommended Investment Horizon: 5 years

Investment Universe: Indian equities with no capitalisation constraints.

Benchmark: IFCI India

Stock Weighting: A concentrated portfolio of our preferred stocks (60-100)

Sector Diversification: Broad sector limits

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Investment Philosophy

India has a large, relatively closed economy, but is affected by both global and local business cycles– Indian team integrates with Global Emerging Markets and Asian teams with

analysts in key local markets to gauge impact of both cycles

Regulatory and political reform is often a key driver of value change, given over-regulated and over-protected economy– Political/regulatory focus heightened in the Indian investment process versus

developed markets

– Seek to identify beneficiaries of such change

India has large pool of highly-skilled English speaking labour with relatively low wages. This could lead to global competitive advantage in labour-intensive sectors– We seek to identify such opportunities within our investment process

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Process Highlights

Economic and business cycles are the primary determinants of value change

Top-down sector/theme selection followed by bottom-up stock selection

Blend of growth and/or value at appropriate time in business cycle with valuation checks

Dedicated risk management team, bringing together a range of risk management tools into the investment process

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Investment process

Expectations for the local and global business cycle versus market expectations

Macro sensitivities; currency and interest rate outlook

Macro effect at the sector level

Dynamic time horizon

Assess key positive and negative beneficiaries of changes

Preferred sector weights

Quantitative & qualitative screening

Stocks with a catalysts for change

In house research:

– Management quality

– Competitive advantage

– Earnings and cash flow sustainability

– Valuation

Position size:

– Fair Value Target

– Strength of conviction

– Upside potential

– Market expectations

60 to 100 stocks held

TE range of 4-12%

Client guideline compliance

Multi-faceted risk analysis

Sector Allocation

Formulate Macro Overview

Screen The Universe :

Selected List

Stock Selection

Determine Stock

PositionsPortfolio

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DriverDriver FocusFocus

Management Effective Management

Strategy Defined strategy for earnings growth, cash flows and returns on capital

Advantage Identifiable competitive advantage

Operations/Financials Efficient operations contributing to financial strength

Valuation Compare market price to valuation

Corporate Governance Focus on corporate governance improvements/deterioration

Stock Stock SelectionSelection

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Portfolio Composition (30 June 2009)

Stock Weight

Cairn Energy Plc 9.14%

Jindal Steel & Power Ltd 8.94%

Maruti Udyog Ltd 6.09%

Unitech Ltd 4.64%

HCL Technologies Ltd 4.51%

Wipro Limited 4.04%

Aditya Birla Muvo Ltd Ord INR10 3.37%

DLF Limited 2.98%

Dr Reddy’s Laboratories 2.69%

Tata Iron & Steel Co Ltd 2.68%

Sector Weight

Consumer Goods 15.45%

Industrials 15.37%

Basic Materials 15.22%

Financials 12.59%

Technology 12.44%

Oil & Gas 10.91%

Health Care 6.42%

Telecommunications 3.19%

Utilities 1.32%

Cash 7.08%

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Performances (30 June 2009)

Performance in USD (% Change)*

Rolling time period 30/06/2008 - 30/06/2009

30/06/2007 - 30/06/2008

30/06/2006 - 30/06/2007

30/06/2005 - 30/06/2006

30/06/2004 - 30/06/2005

HSBC GIF Indian Equity -21.5 -0.9 58.8 36.1 49.0

Rolling time period 1 month

3 months

6 months

1 year

3years

5years 2009 2008 2007 2006

Fund -0.2 73.9 68.0 -21.5 23.6 150.7 68.0 -70.3 77.9 46.0

Morningstar mean 0.3 58.8 48.2 -9.5 22.5 169.2 48.2 -63.8 68.6 38.5

Benchmark -1.8 60.5 53.5 -3.1 41.2 204.6 53.5 -63.3 80.4 48.8

Fund rank 35/72 7/72 3/72 53/65 26/48 18/25 3/72 52/59 10/52 9/43

Quartile rank 2 1 1 4 3 3 1 4 1 1* The above performance figures refer to the past and are not a reliable indicator of future returns. The value of investments and any income from them, can go down as well as up. The above performance figures are calculated in USD, and changes in the rate of currency exchange may affect the value of your investment.

Source: Morningstar, bid to bid, gross income reinvested. Performance information is up to 30 June 2009, Morningstar run date 09 July 2009. Morningstar Sector used Offshore and International Funds, Eq India. Benchmark source: Datastream. Prior to 30/09/98, the benchmark of this fund was the India BSE Dollex excluding income. Please note quartile rank is a term widely used in financial services to denote performance of a fund within its sector. For example a ranking of 1 denotes a Fund in the top 25% of its peer group sector, with a ranking of 4 denoting a fund in the bottom 25% of it's peer group sector. Total return, sector median performance and ranks - Data Source - Copyright 2008 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. There are specific risks that apply to each sub-fund within the HSBC Global Investment Funds range. Investors and potential investors should read the relevant simplified prospectusand full prospectus for a full list of risk warnings before choosing to invest. HSBC Global Investment Funds is a Luxembourg domiciled SICAV and UK and Isle of Man based investorsare advised that they may not be afforded some of the protections conveyed by the provisions in the Financial Services and Markets Act 2000 including the UK Financial Services Compensation Scheme.

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Statistics (30 June 2009)

Fund size (in millions USD): 4,135.13Portfolio Turnover*: 0.42Volatility**: 41.18Tracking error**: 13.24Information Ratio**: -0.33

* Source : HSBC, calculation uses the lesser of sales and purchases over the past year** Source : HSBC, based on monthly returns over the past three years where available

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This presentation should be viewed in conjunction with the relevant simplified prospectus and full prospectus for a full list of risk warnings prior to making an investment in a fund. 17

HSBC GIF Indian Equity Fund Fund Description and Manager Profile

Sanjiv DuggalInvestment Director, Indian equities, Halbis Capital Management (Singapore)

Sanjiv Duggal has been working in the industry since 1996. Prior to joining Halbis in 1996, Sanjiv worked for the Hill Samuel Group where he spent nearly five years, initially in internal audit and latterly as an Emerging Markets fund manager. Sanjiv is a fully qualified Chartered Accountant.

The fund offers investors access to one of the largest and fastest-growing economies in the world through a well-diversified portfolio of Indian equities The portfolio - which currently ranks among the largest Indian equity funds globally - is a blend of growth and value styles with an emphasis on business cycle and valuation checksIt is managed by a team with over 40 years of collective experience who seek to deliver performance through top-down sector/theme selection, coupled with fundamental research

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HSBC GIF Indian Equity FundFund Details

Redemption fees NONE

Dealing Daily before 10:00 (CET)

Valuation Daily

Settlement Trade day + 4 business days

Management company

HSBC Investment Funds (Luxembourg) SA

Investment advisor

HSBC Global Asset Management (Singapore) Limited

Custodian RBC Dexia Investor Services Bank S.A.

Fund Manager Sanjiv Duggal

Legal form

Sub-fund of Luxembourg UCITS HSBC Global Investment Funds

Base currency US$Launch date 04 March 1996

ISIN code LU0066902890

Management fees 1.50% tax included

Performance fees NONE

Subscription fees

5.54% maximum, tax included

Benchmark IFCI India

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Summary

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Summary

A recognised leader in the management of Asian financial assets

37 investment professionals based in Hong Kong and Singapore

Opportunity to invest in the fastest growing economy through diversified portfolio

Over US$4bn in funds under management of Indian equities (as at end of December 2008)

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What kind of investor should consider the HSBC GIF Indian Equity Fund?

Experienced investors with a long term investment horizon

Investors seeking lower-beta and relatively uncorrelated investments in more nascent areas of growth

Investors comfortable with Exposure to emerging markets and smaller capitalisation companies that can increase the volatility of returns and may restrict liquidity

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Important informationThis presentation is intended for investment professionals only and not for distribution to Retail Clients.The contents of this presentation are confidential and may not be reproduced or further distributed to any person or entity, whether in whole or in part, for any purpose. The material contained in this presentation is for information only and does not constitute investment advice or a recommendation to any reader of this material to buy or sell investments. The HSBC Global Investment Fund (‘GIF’) range is a Luxembourg domiciled SICAV and is regulated by the CSSF. The funds mentioned in this document may not be registered for sale or available in all jurisdictions. For available funds please contact your local HSBC office. HSBC Global Investment Funds range cannot be sold by anyone in any jurisdiction in which such offer or solicitation is not lawful or in which the person making such an offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make such offer or solicitation. All applications are made on the basis of the current HSBC Global Investment Funds Prospectus, simplified prospectus and most recent annual and semi-annual reports. These can be obtained on request and free of charge from HSBC Global Asset Management (UK) Limited or the local distributors. The value of investments may go down as well as up and you may not get back the full amount you invested. Where overseas investments are held the rate of exchange may cause the value of investments to go down as well as up. Markets in some countries can be described as ‘emerging markets’. Some of these may involve a higher risk than where an investment is within a more established market. Where a sub-fund invests predominately in one geographical area, any decline in economic conditions may affect prices and the value of underlying investments. The securities representing interests in the HSBC Global Investment Funds range have not been and will not be registered under the US Securities Act of 1933 and will not be offered for sale or sold in the United States of America, its territories or possessions and all areas subject to its jurisdiction, or United States person, except in a transaction which does not violate the Securities Law of the United States of America.This document is issued by HSBC Global Asset Management (UK) Limited, 8 Canada Square, Canary Wharf, London, E14 5HQ, UK. Authorised and regulated by the Financial Services Authority and registered as number 122335. © Copyright. HSBC Global Asset Management 2009. All Rights Reserved.This product is marketed in a sub-distributing capacity on a principal – to – principal basis by the HSBC Global Asset Management MENA, a unit that is part of HSBC Bank Middle East Limited, PO Box 66, Dubai, UAE, which is incorporated and regulated by the Jersey Financial Services Commission. Services are subject to the Bank’s terms and conditions. HSBC Bank Middle East Limited is a member of the HSBC Group. The information provided has not been prepared taking into account the particular investment objectives, financial situation and needs of any particular investor. As a result, investors using this information should assess whether it is appropriate in the light of their own individual circumstances before acting on it. The information in this document is derived from sources believed to be reliable, but which have not been independently verified. However, HSBC Bank Middle East Limited makes no guarantee of its accuracy and completeness and is not responsible for errors of transmission of factual or analytical data, nor shall HSBC Bank Middle East Limited be liable for damages arising out of any person’s reliance upon this information. All charts and graphs are from publicly available sources or proprietary data. The opinions in this document constitute the present judgment of the issuer, which is subject to change without notice.This document is neither an offer to sell, purchase or subscribe for any investment nor a solicitation of such an offer. This document is intended for the use of institutional and professional customers and is not intended for the use of private customers. This document is intended to be distributed in its entirety. No consideration has been given to the particular investment objectives, financial situation or particular needs of any recipient. Any transaction will be subject to HSBC Bank’s Terms of Business. 17070/ME/0709

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