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Fund centre

Fund factsheets, performance data, prices and other information about HSBC funds

 

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Fund Name Category Investment region KID Factsheet Brochure Prospectus Past
Performance
Equity Growth Fund Class B Acc EUR Active Equities Global Download KID Download Factsheet Download Brochure Download Prospectus Download Past Performance
Maltese Assets Fund Accumulator EUR Multi Asset Malta Download KID Download Factsheet Download Brochure Download Prospectus Download Past Performance
Maltese Assets Fund Income EUR Multi Asset Malta Download KID Download Factsheet Download Brochure Download Prospectus Download Past Performance
International Bond Fund Accumulator EUR Fixed Income Global Download KID Download Factsheet Download Brochure Download Prospectus Download Past Performance
International Bond Fund Income EUR Fixed Income Global Download KID Download Factsheet Download Brochure Download Prospectus Download Past Performance
International Bond Fund Accumulator GBP Fixed Income Global Download KID Download Factsheet Download Brochure Download Prospectus Download Past Performance
International Bond Fund Income GBP Fixed Income Global Download KID Download Factsheet Download Brochure Download Prospectus Download Past Performance
Malta Bond Fund Accumulator EUR Fixed Income Malta Download KID Download Factsheet Download Brochure Download Prospectus Download Past Performance
Malta Bond Fund Income EUR Fixed Income Malta Download KID Download Factsheet Download Brochure Download Prospectus Download Past Performance
Malta Government Bond Fund Accumulator EUR Fixed Income Malta Download KID Download Factsheet Download Brochure Download Prospectus Download Past Performance
Malta Government Bond Fund Income EUR Fixed Income Malta Download KID Download Factsheet Download Brochure Download Prospectus Download Past Performance

HSBC Malta Funds SICAV P.L.C. - All Fund Reports

Fund Name Semi Annual Report Annual Report
Equity Growth Fund Class B Acc EUR Download Semi Annual Report Download Annual Report
Maltese Assets Fund Accumulator EUR Download Semi Annual Report Download Annual Report
Maltese Assets Fund Income EUR Download Semi Annual Report Download Annual Report
International Bond Fund Accumulator EUR Download Semi Annual Report Download Annual Report
International Bond Fund Income EUR Download Semi Annual Report Download Annual Report
International Bond Fund Accumulator GBP Download Semi Annual Report Download Annual Report
International Bond Fund Income GBP Download Semi Annual Report Download Annual Report
Malta Bond Fund Accumulator EUR Download Semi Annual Report Download Annual Report
Malta Bond Fund Income EUR Download Semi Annual Report Download Annual Report
Malta Government Bond Fund Accumulator EUR Download Semi Annual Report Download Annual Report
Malta Government Bond Fund Income EUR Download Semi Annual Report Download Annual Report
Fund Name Category Investment region KID Factsheet Brochure Prospectus Past Performance
HSBC Portfolios - World Selection Fund 1 Class ACHEUR Multi Asset Global Download KID Download Factsheet Download Brochure Download Prospectus Download Past Performance
HSBC Portfolios - World Selection Fund 1 Class ACHGBP Multi Asset Global Download KID Download Factsheet Download Brochure Download Prospectus Download Past Performance
HSBC Portfolios - World Selection Fund 1 Class ACUSD Multi Asset Global Download KID Download Factsheet Download Brochure Download Prospectus Download Past Performance
HSBC Portfolios - World Selection Fund 2 Class ACHEUR Multi Asset Global Download KID Download Factsheet Download Brochure Download Prospectus Download Past Performance
HSBC Portfolios - World Selection Fund 2 Class ACHGBP Multi Asset Global Download KID Download Factsheet Download Brochure Download Prospectus Download Past Performance
HSBC Portfolios - World Selection Fund 2 Class ACUSD Multi Asset Global Download KID Download Factsheet Download Brochure Download Prospectus Download Past Performance
HSBC Portfolios - World Selection Fund 3 Class ACHEUR Multi Asset Global Download KID Download Factsheet Download Brochure Download Prospectus Download Past Performance
HSBC Portfolios - World Selection Fund 3 Class ACHGBP Multi Asset Global Download KID Download Factsheet Download Brochure Download Prospectus Download Past Performance
HSBC Portfolios - World Selection Fund 3 Class ACUSD Multi Asset Global Download KID Download Factsheet Download Brochure Download Prospectus Download Past Performance
HSBC Portfolios - World Selection Fund 4 Class ACHEUR Multi Asset Global Download KID Download Factsheet Download Brochure Download Prospectus Download Past Performance
HSBC Portfolios - World Selection Fund 4 Class ACHGBP Multi Asset Global Download KID Download Factsheet Download Brochure Download Prospectus Download Past Performance
HSBC Portfolios - World Selection Fund 4 Class ACUSD Multi Asset Global Download KID Download Factsheet Download Brochure Download Prospectus Download Past Performance
HSBC Portfolios - World Selection Fund 5 Class ACHEUR Multi Asset Global Download KID Download Factsheet Download Brochure Download Prospectus Download Past Performance
HSBC Portfolios - World Selection Fund 5 Class ACHGBP Multi Asset Global Download KID Download Factsheet Download Brochure Download Prospectus Download Past Performance
HSBC Portfolios - World Selection Fund 5 Class ACUSD Multi Asset Global Download KID Download Factsheet Download Brochure Download Prospectus Download Past Performance
Fund Name Category Investment region KID Prospectus Factsheet Brochure Past
Performance
HSBC Select Moderate EUR Multi Asset Global Download KID Download Prospectus Download Factsheet Download Brochure Download Past Performance
HSBC Select Balanced EUR Multi Asset Global Download KID Download Prospectus Download Factsheet Download Brochure Download Past Performance
HSBC Select Dynamic EUR Multi Asset Global Download KID Download Prospectus Download Factsheet Download Brochure Download Past Performance
HSBC Select Equity EUR Multi Asset Global Download KID Download Prospectus Download Factsheet Download Brochure Download Past Performance
HSBC Select Flexible EUR Multi Asset Global Download KID Download Prospectus Download Factsheet Download Brochure Download Past Performance

HSBC Select - All Fund Reports

Fund Name Semi Annual Report Annual Report
HSBC Select Moderate EUR Download Semi Annual Report Download Annual Report
HSBC Select Balanced EUR Download Semi Annual Report Download Annual Report
HSBC Select Dynamic EUR Download Semi Annual Report Download Annual Report
HSBC Select Equity EUR Download Semi Annual Report Download Annual Report
HSBC Select Flexible EUR Download Semi Annual Report Download Annual Report
Fund Name Category Investment region KID Prospectus Factsheet Brochure Past
Performance
HSBC RIF SRI BALANCED Multi Asset Global Download KID Download Prospectus Download Factsheet Download Brochure Download Past Performance
HSBC RIF SRI DYNAMIC Multi Asset Global Download KID Download Prospectus Download Factsheet Download Brochure Download Past Performance
HSBC RIF SRI MODERATE Multi Asset Global Download KID Download Prospectus Download Factsheet Download Brochure Download Past Performance
HSBC RIF SRI EURO BOND AC Multi Asset Global Download KID Download Prospectus
HSBC RIF SRI EURO BOND AD Multi Asset Global Download KID Download Prospectus

HSBC Responsible Investment Funds - All Fund Reports

Fund Name Semi Annual Report Annual Report
HSBC RIF SRI BALANCED Download Semi Annual Report Download Annual Report
HSBC RIF SRI DYNAMIC Download Semi Annual Report Download Annual Report
HSBC RIF SRI MODERATE Download Semi Annual Report Download Annual Report
HSBC RIF SRI EURO BOND AC Download Semi Annual Report Download Annual Report
HSBC RIF SRI EURO BOND AD Download Semi Annual Report Download Annual Report

ESG and Pre-contractual information

Fund Name Precontractual disclosure SFDR periodic report
HSBC RIF SRI BALANCED Download pre-contractual information Download SFDR periodic report
HSBC RIF SRI DYNAMIC Download pre-contractual information Download SFDR periodic report
HSBC RIF SRI MODERATE Download pre-contractual information Download SFDR periodic report
HSBC RIF SRI EURO BOND Download pre-contractual information Download SFDR periodic report

ESG Information

HSBC RIF SRI BALANCED

Summary

This subfund promotes environmental or social characteristics but does not have sustainable investment as its objective.

HSBC Asset Management’s ‘do no significant harm’ (DNSH) assessment of issuers as part of its sustainable investment process includes consideration of principal adverse impacts (PAI). The principle of ‘do no significant harm’ to environmental or social objectives applies only to the underlying sustainable investments of the subfund.

Issuers considered to be in violation of one or more of the 10 principles of the United Nations Global Compact (or at least two alleged violations) and the OECD Guidelines for Multinational Enterprises are excluded. Companies are also assessed according to international standards such as the OECD Guidelines for Multinational Enterprises.

The subfund promotes the following environmental or social characteristics:

  • Selection of issuers with good ESG practices according to a best-in-class approach and selection of countries with a minimum ESG rating according to an ESG selection approach,
  • Exclusion of issuers in violation of the principles of the United Nations Global Compact and the OECD Guidelines for Multinational Enterprises
  • Exclusion of shares of companies involved in the production of controversial weapons or their components, in the defence sector, in tobacco production, or in thermal coal activities
  • Careful consideration of environmental issues through voting and engagement activities

Investment strategy

The investment strategy of this subfund uses the following approaches:

  • ESG integration (inclusion of ESG criteria in financial analysis),
  • Best-in-class approach for listed public or private company issues and ESG selection approach for government issues,
  • Exclusion of shares issued by companies involved in ‘excluded’ activities
  • Engagement and voting activities

Proportion of investments:

  • #1 Aligned with (E/S) characteristics: 70 per cent minimum
  • #2 Others (not aligned with E/S characteristics or not considered sustainable investments): 30 per cent maximum
  • #1 A Sustainable investments: 15 per cent minimum
  • #1 B Other E/S characteristics (aligned with E/S characteristics but not considered sustainable investments): 55 per cent minimum

Monitoring of environmental or social characteristics

Funds are monitored to ensure that the portfolios meet the non-financial criteria and, where applicable, internally established thresholds (such as the portfolio’s average ESG score or exclusions). First-level controls are also performed by independent management teams (investment restrictions team and risk team).

Methods and Data sources and processing

HSBC relies on a proprietary ESG analysis model with data supplied by non-financial rating agencies and the management company’s internal research.

HSBC Asset Management uses data from a number of external providers to ensure that it meets the environmental or social characteristics that it promotes. HSBC Asset Management verifies the data used. For the portfolio’s ESG rating, the data are weighted by coefficients reflecting our analysis of the various business sectors and their respective ESG impacts.

Limitations to methods and data

The management company relies on non-financial data providers. As a result, the company is subject to certain operational and data quality risks associated with reliance on third-party service providers and data sources. Furthermore, data coverage may be limited depending on the type of issuer (small caps, certain high-yield issuers) and by the geographical area of the issuer (particularly for emerging countries). When non-financial data are not available in our suppliers’ databases, we initiate a qualitative analysis and possibly exchanges with the company to supplement our assessment of E/S characteristics. HSBC Asset Management is unaware of any methodological limitations likely to prevent the attainment of the E/S characteristics pursued by the subfund. The subfund uses derivatives. Sustainability risks are therefore more difficult to take into account because the subfund does not invest directly in the underlying asset.

Due diligence

Our monitoring of companies and all other issuers held in actively managed portfolios, by analysts, management teams, investment restrictions, and the risk department, is quantitative and qualitative and includes strategy, financial and nonfinancial performance constraints, risks, capital structure, social and environmental impact, and corporate governance. For this monitoring, we use our own in-house research and the research of brokers and other independent research providers.

Lastly, our teams in charge of voting and shareholder engagement activities can support the investment teams in the ESG assessment of issuers.

Engagement policies

Our approach to shareholder engagement incorporates several levers of action, including 1) direct dialogue with companies, 2) exercising voting rights, and 3) a gradual escalation procedure with companies when the ESG risks or controversies to which they are exposed are not managed.

We prioritise dialogue and interaction with companies in which we have significant positions but also depending on the importance of the environmental or social issues identified. Furthermore, every year, we define engagement themes that we consider to be key.

Important information

This regulatory document is published pursuant to Article 10 of the SFDR.

All information contained in this document may change without notice. The user shall be held liable and may face legal action for any reproduction or use of this document without permission.

This document is not contractual and by no means constitutes a solicitation to buy or sell or a recommendation to buy or sell securities in any jurisdiction in which such an offer is not permitted by law.

Any subscription in the UCI presented in this document must be based on the current prospectus and KID. In addition to the current Key Information Document (KID), potential investors should refer to the prospectus for detailed information on the risks associated with the UCI presented. If you have any doubts as to the suitability of the presented product in relation to your investment objectives and risk profile, please contact your advisor.


No sustainable investment objective

1. This financial product promotes environmental or social characteristics but does not have sustainable investment as its objective.

2. The principle of ‘do no significant harm’ to environmental or social objectives applies only to the underlying sustainable investments of the subfund. This principle is incorporated into the investment decision-making process, which includes consideration of principal adverse impacts.

(a) HSBC Asset Management’s ‘do no significant harm’ (DNSH) assessment of issuers as part of its sustainable investment process includes consideration of principal adverse impacts (PAI). It involves a holistic analysis of the company’s multiple sustainability impacts rather than focusing on a single factor. When an issuer is identified as potentially controversial, it cannot be considered a sustainable investment. All relevant PAIs are thus examined and integrated into the investment process according to an approach that combines exclusions (sectoral, the most severe ESG controversies, norms-based exclusions, etc.) with voting and shareholder engagement activities to instil and maintain a positive change dynamic within companies. Furthermore, a company will be considered not sustainable when it does not comply with the United Nations Global Compact Principles and its associated international standards, conventions, and treaties or if it is involved in weapons banned by international conventions. With the exception of these last two PAIs, we use proxies. In our view, the setting of exclusion thresholds (e.g. GHG emissions) for each PAI is not always relevant and could compromise the fact that many sectors and companies are in a transition strategy. In addition, engagement is essential to ensure that companies with limited disclosure, particularly in emerging economies, are initially excluded from the definition of sustainable investment and allow us to be a catalyst for positive environmental or social change. For example, we use a 10 per cent threshold on revenues from thermal coal mining (and generation of electricity from thermal coal) as an exclusion filter to indirectly address all PAIs related to greenhouse gas emissions. HSBC’s sustainable investment methodology is available on the management company’s website: www.assetmanagement.hsbc.fr/fr/retail-investors/about-us/responsible-investing/policies.

(b) HSBC is committed to applying and promoting international standards. The ten principles of the UN Global Compact are among the priorities of HSBC’s Responsible Investment Policy. These principles include non-financial risks such as human rights, labour standards, the environment, and anti-corruption. HSBC is also a signatory to the United Nations Principles for Responsible Investment. They provide a framework for the identification and management of sustainability risks. In this subfund, companies with a proven violation of one of the 10 principles of the United Nations Global Compact or at least two alleged violations are systematically excluded. Companies are also assessed according to international standards such as the OECD Guidelines for Multinational Enterprises.


Environmental or social characteristics of the financial product

The subfund promotes E, S, and G characteristics by investing in equities of eurozone countries through a selection of corporate securities chosen for their financial qualities and their good environmental, social, and governance practices according to a best-in-class approach. This approach consists of selecting the best companies in each sector based on environmental, social, and governance criteria. For each ESG pillar, several criteria are used, including CO2 emissions for the E pillar, management of personnel for the S pillar, and the level of independence of directors for the G pillar. In addition, the subfund will:

  • Exclude issuers in violation of one or more of the 10 principles of the United Nations Global Compact (or at least two alleged violations) and the OECD Guidelines for Multinational Enterprises
  • Exclude shares of companies involved in the production of controversial weapons or their components. Controversial weapons include, but are not limited to, anti-personnel mines, depleted uranium weapons, and white phosphorus when used for military purposes. This exclusion is in addition to the exclusion policy on weapons prohibited by international treaties
  • Exclude shares of companies in the Defence sector
  • Exclude shares of companies engaged in thermal coal activities. With regard to electricity generation, companies deriving more than 10 per cent of their turnover from electricity generated using thermal coal are partially excluded. With regard to mining: companies are completely excluded
  • Exclude shares of companies involved in tobacco production
  • Carefully consider environmental issues through voting and engagement activities

The subfund is actively managed and does not track a benchmark. The indicator used by the subfund to measure performance is the MSCI EMU (NR). However, it has not been designated to determine whether the subfund is aligned with the environmental or social characteristics it promotes.


Investment strategy

(a) The subfund promotes E, S, and G characteristics by investing in international equity and fixed-income markets with a euro bias by selecting securities issued by companies or countries in a universe of issues that meet Environmental, Social, and Governance (ESG) criteria. The subfund is invested, at its manager’s discretion, either in securities of companies or countries or in UCIs managed by the HSBC Group.

For public or private listed corporate issues: the fund manager uses a best-in-class approach to select within each sector the companies that have the best ESG practices compared with their peers within each sector of the economy. For each ESG pillar, several criteria are used, including CO2 emissions for the E pillar, management of personnel for the S pillar, and level of independence of directors for the G pillar.

For government issues (bonds): euro-denominated issuing countries are ranked according to their overall ‘ESG’ rating, which is based 50 per cent on the Environmental pillar (E) and 50 per cent on the Social/Governance pillar (S/G). The Social and Governance pillar includes the analysis of the political and governance system, human rights and fundamental freedoms, and social conditions. The Environmental pillar includes the analysis of natural resources, climate change and energy, production, and sustainable consumption. The manager uses an ESG Selection approach to select the countries with a minimum ESG rating according to the non-financial rating agency ISS-Oekom from among euro-denominated issuing countries.

In addition, the subfund will:

  • Exclude issuers in violation of one or more of the 10 principles of the United Nations Global Compact (or at least two alleged violations) and the OECD Guidelines for Multinational Enterprises
  • Exclude securities of companies involved in the production of controversial weapons or their components. Controversial weapons include, but are not limited to, anti-personnel mines, depleted uranium weapons, and white phosphorus when used for military purposes. This exclusion is in addition to the exclusion policy on weapons prohibited by international treaties
  • Exclude securities of companies in the Defence sector
  • Exclude securities of companies engaged in thermal coal activities. With regard to electricity generation, companies deriving more than 10 per cent of their turnover from electricity generated using thermal coal are partially excluded. With regard to mining: companies are completely excluded
  • Exclude securities of companies involved in tobacco production
  • Carefully consider environmental issues through voting and engagement activities

The subfund is actively managed and does not track a benchmark. There is no benchmark representative of our management philosophy and therefore of our investment universe or an index designated to determine whether the subfund is aligned with the environmental or social characteristics it promotes.

(b) Quality of governance is assessed on the basis of criteria specified in the investment process that include, but are not limited to, business ethics, corporate culture and values, governance framework, and corruption. We determine the materiality of governance both on an absolute basis, focusing in particular on the governance framework, controversies, and compliance with the principles of the United Nations Global Compact and the OECD Guidelines for Multinational Enterprises, and on a relative basis by comparing the quality of the company’s governance practices with that of its industry peers.

Where significant and/or impactful governance risks are identified, companies are subject to enhanced due diligence, which at minimum requires management teams to perform additional analysis. Dialogue or engagement with the company is then monitored over time and archived. Lastly, we use our voting rights to express our support for positive development initiatives of companies or our disagreement if the directors do not meet our expectations. In addition, issuers in violation of one or more of the 10 principles of the United Nations Global Compact (or at least two alleged violations) and the OECD Guidelines for Multinational Enterprises are excluded.


Proportion of investments

The subfund’s strategic allocation is composed on average of 50 per cent equities and 50 per cent fixed-income investments. The portfolio will be invested in international equity and fixed-income markets with a euro bias by selecting securities issued by companies or countries in a universe of issues that meet Environmental, Social, and Governance (ESG) criteria.

The manager may invest in UCIs managed or distributed by an HSBC Group entity. These UCIs must meet the defined financial and non-financial objectives.

The SRI strategies of the UCIs or investment funds that may be selected by the fund manager (excluding UCIs/investment funds managed by the Management Company) may use ESG indicators and/or different SRI approaches independent of the subfund.

The minimum proportion of investments used to attain the environmental or social characteristics promoted by the subfund is 70 per cent. The remaining 30 per cent is detailed in the section ‘Investments included in category “# 2 Others”’ below. Although the subfund does not have sustainable investments as an objective, it commits to a minimum proportion of 15 per cent of its assets in sustainable investments.

Investments included in category ‘# 2 Others’:

The subfund may hold cash, derivatives, as well as investments for which no non-financial analysis could be performed due to the unavailability of ESG data.The use of derivatives will not contribute to the attainment of the fund’s environmental or social characteristics. Derivatives are used for portfolio risk adjustment (exposure, hedging).


Monitoring of environmental or social characteristics

All subfunds must have strong and/or improving E/S characteristics at the issuer and overall portfolio level.

The management teams conduct ongoing monitoring. Funds are monitored to ensure that the portfolios meet the non-financial criteria and, where applicable, internally established thresholds (such as the portfolio’s average ESG score or exclusions) We also apply an enhanced due diligence process for companies that may be high risk due to violations of international conventions such as the principles of the UN Global Compact and/or not aligned with anti-financial crime standards or due to poor ESG ratings.

First-level controls are also performed by independent management teams:

  • Contractual non-financial investment restrictions are currently set according to the same methodology as the financial ratios,
  • Environmental, Social, and Governance performance indicators identified according to the fund’s strategy are monitored on a monthly basis by the risk department

In addition, the subfund may undergo occasional and periodic fund compliance checks, which will ensure, in particular, that sectoral exclusions are respected.

Lastly, in connection with labels, controls are conducted by auditors outside the management company.


Methodologies

HSBC relies on a proprietary ESG analysis model with data supplied by non-financial rating agencies and the management company’s internal research. HSBC Asset Management verifies the data used.


Data sources and processing

(a) HSBC Asset Management uses data from a number of external providers such as Sustainalytics, ISS ESG, MSCI ESG Research, and S&P Trucost to ensure that it meets the environmental or social characteristics that it promotes.

(b) HSBC Asset Management verifies the data used.

(c) For the portfolio’s ESG rating, the data are weighted by coefficients reflecting our analysis of the various business sectors and their respective ESG impacts.

(d) Such data, if not communicated by companies, are estimated by our external data providers.


Limitations to methodologies and data

(a) The management company relies on non-financial data providers. As a result, the company is subject to certain operational and data quality risks associated with reliance on third-party service providers and data sources. Furthermore, data coverage may be limited depending on the type of issuer (small caps, certain high-yield issuers) and by the geographical area of the issuer (particularly for emerging countries). When non-financial data are not available in our suppliers’ databases, we initiate a qualitative analysis and possibly exchanges with the company to supplement our assessment of E/S characteristics.

(b) HSBC Asset Management is not aware of any methodological limitations likely to prevent the attainment of the E/S characteristics pursued by the subfund. The subfund may invest in derivatives. Sustainability risks are therefore more difficult to take into account because the subfund does not invest directly in the underlying asset. As of the date of the prospectus, no ESG integration methodology can be applied for derivatives.


Due diligence

As part of our investment process, we carefully monitor and analyse all companies and other issuers held in actively managed portfolios before and during the investment period. Our monitoring by the analysts, the management teams, investment restrictions, and the risk department is quantitative and qualitative and includes strategy, financial and non-financial performance and constraints, risks, capital structure, social and environmental impact, and corporate governance. For the purposes of this monitoring, we use our own in-house research and the research of brokers and other independent research providers.

We also apply an enhanced due diligence process for companies that may be high risk due to violations of international conventions such as the principles of the UN Global Compact and/or not aligned with anti-financial crime standards or due to poor ESG ratings.

Lastly, our teams in charge of voting and shareholder engagement activities can support the investment teams in the ESG assessment of issuers. For more details on internal and external controls, please refer to the information provided in the ‘Monitoring of environmental or social characteristics’ section.


Engagement policies

Our approach to shareholder engagement incorporates several levers for action including 1) direct dialogue with companies about their consideration of environmental and social issues to ensure that they are able to face the future and maintain long-term financial viability, 2) the exercising of voting rights by which we express our support for positive development initiatives or, conversely, our disagreement when directors do not meet our expectations, and 3) a gradual escalation procedure with companies when the ESG risks or controversies to which they are exposed are not managed.

Our management and analyst teams meet regularly with the companies in which we invest (or may invest) to better understand their business and strategy, demonstrate our support and/or express our concerns, and promote best practices.

We prioritise dialogue and interaction with companies in which we have significant positions, but also depending on the importance of the environmental or social issues identified. If a company is identified as being at risk on these issues at the end of our ESG analysis, we still favour dialogue over selling the security, but the lack of satisfactory progress or responses by the company in a timely manner that we consider reasonable to implement the desired changes may result in the exclusion of the security from our portfolios.

Lastly, every year, we define engagement themes that we consider to be key. These include climate change, biodiversity conservation, respect for human rights, diversity issues, equity and inclusion, the importance of just transition, and access to healthcare. As signatories to the Net Zero Asset Managers initiative and in keeping with our commitment to contribute to the goal of carbon neutrality for all our assets under management by 2050, we primarily engage in dialogue with companies involved in thermal coal. In concrete terms, we are in contact with companies whose revenues were more than 20 per cent from coal mining as of the end of 2021. As we support a just transition imperative, we engage with companies to assess how their carbon neutrality transition plans take into account impacts on employees, supply chains, communities, and consumers. In terms of diversity, we have set ambitious targets for the number of women of boards of directors. For example, in Continental Europe, we have set a threshold of 40 per cent women in the composition of the boards of directors of large caps, 35 per cent for mid-caps, and 30 per cent for the small caps.

Our priority engagement themes are detailed on our website www.assetmanagement.hsbc.fr/fr/retail-investors/about-us/responsible-investing/stewardship

For our full Engagement Policy and Voting Policy, please visit www.assetmanagement.hsbc.com/about-us/responsible-investing/policies


Designated reference benchmark

Not applicable

HSBC RIF SRI DYNAMIC

Summary

This subfund promotes environmental or social characteristics but does not have sustainable investment as its objective.

HSBC Asset Management’s ‘do no significant harm’ (DNSH) assessment of issuers as part of its sustainable investment process includes consideration of principal adverse impacts (PAI). The principle of ‘do no significant harm’ to environmental or social objectives applies only to the underlying sustainable investments of the subfund.

Issuers considered to be in violation of one or more of the 10 principles of the United Nations Global Compact (or at least two alleged violations) and the OECD Guidelines for Multinational Enterprises are excluded. Companies are also assessed according to international standards such as the OECD Guidelines for Multinational Enterprises.

The subfund promotes the following environmental or social characteristics:

  • Selection of issuers with good ESG practices according to a best-in-class approach and selection of countries with a minimum ESG rating according to an ESG selection approach,
  • Exclusion of issuers in violation of the principles of the United Nations Global Compact and the OECD Guidelines for Multinational Enterprises
  • Exclusion of shares of companies involved in the production of controversial weapons or their components, in the defence sector, in tobacco production, or in thermal coal activities
  • Careful consideration of environmental issues through voting and engagement activities

Investment strategy

The investment strategy of this subfund uses the following approaches:

  • ESG integration (inclusion of ESG criteria in financial analysis),
  • Best-in-class approach for listed public or private company issues and ESG selection approach for government issues,
  • Exclusion of shares issued by companies involved in ‘excluded’ activities
  • Engagement and voting activities

Proportion of investments:

  • #1 Aligned with (E/S) characteristics: 70 per cent minimum
  • #2 Others (not aligned with E/S characteristics or not considered sustainable investments): 30 per cent maximum
  • #1 A Sustainable investments: 15 per cent minimum
  • #1 B Other E/S characteristics (aligned with E/S characteristics but not considered sustainable investments): 55 per cent minimum

Monitoring of environmental or social characteristics

Funds are monitored to ensure that the portfolios meet the non-financial criteria and, where applicable, internally established thresholds (such as the portfolio’s average ESG score or exclusions). First-level controls are also performed by independent management teams (investment restrictions team and risk team).

Methods and Data sources and processing

HSBC relies on a proprietary ESG analysis model with data supplied by non-financial rating agencies and the management company’s internal research.

HSBC Asset Management uses data from a number of external providers to ensure that it meets the environmental or social characteristics that it promotes. HSBC Asset Management verifies the data used. For the portfolio’s ESG rating, the data are weighted by coefficients reflecting our analysis of the various business sectors and their respective ESG impacts.

Limitations to methods and data

The management company relies on non-financial data providers. As a result, the company is subject to certain operational and data quality risks associated with reliance on third-party service providers and data sources. Furthermore, data coverage may be limited depending on the type of issuer (small caps, certain high-yield issuers) and by the geographical area of the issuer (particularly for emerging countries). When non-financial data are not available in our suppliers’ databases, we initiate a qualitative analysis and possibly exchanges with the company to supplement our assessment of E/S characteristics. HSBC Asset Management is unaware of any methodological limitations likely to prevent the attainment of the E/S characteristics pursued by the subfund. The subfund uses derivatives. Sustainability risks are therefore more difficult to take into account because the subfund does not invest directly in the underlying asset.

Due diligence

Our monitoring of companies and all other issuers held in actively managed portfolios, by analysts, management teams, investment restrictions, and the risk department, is quantitative and qualitative and includes strategy, financial and nonfinancial performance constraints, risks, capital structure, social and environmental impact, and corporate governance. For this monitoring, we use our own in-house research and the research of brokers and other independent research providers.

Lastly, our teams in charge of voting and shareholder engagement activities can support the investment teams in the ESG assessment of issuers.

Engagement policies

Our approach to shareholder engagement incorporates several levers of action, including 1) direct dialogue with companies, 2) exercising voting rights, and 3) a gradual escalation procedure with companies when the ESG risks or controversies to which they are exposed are not managed.

We prioritise dialogue and interaction with companies in which we have significant positions but also depending on the importance of the environmental or social issues identified. Furthermore, every year, we define engagement themes that we consider to be key.

Important information

This regulatory document is published pursuant to Article 10 of the SFDR.

All information contained in this document may change without notice. The user shall be held liable and may face legal action for any reproduction or use of this document without permission.

This document is not contractual and by no means constitutes a solicitation to buy or sell or a recommendation to buy or sell securities in any jurisdiction in which such an offer is not permitted by law.

Any subscription in the UCI presented in this document must be based on the current prospectus and KID. In addition to the current Key Information Document (KID), potential investors should refer to the prospectus for detailed information on the risks associated with the UCI presented. If you have any doubts as to the suitability of the presented product in relation to your investment objectives and risk profile, please contact your advisor.


No sustainable investment objective

1. This financial product promotes environmental or social characteristics but does not have sustainable investment as its objective.

2. The principle of ‘do no significant harm’ to environmental or social objectives applies only to the underlying sustainable investments of the subfund. This principle is incorporated into the investment decision-making process, which includes consideration of principal adverse impacts.

(a) HSBC Asset Management’s ‘do no significant harm’ (DNSH) assessment of issuers as part of its sustainable investment process includes consideration of principal adverse impacts (PAI). It involves a holistic analysis of the company’s multiple sustainability impacts rather than focusing on a single factor. When an issuer is identified as potentially controversial, it cannot be considered a sustainable investment. All relevant PAIs are thus examined and integrated into the investment process according to an approach that combines exclusions (sectoral, the most severe ESG controversies, norms-based exclusions, etc.) with voting and shareholder engagement activities to instil and maintain a positive change dynamic within companies. Furthermore, a company will be considered not sustainable when it does not comply with the United Nations Global Compact Principles and its associated international standards, conventions, and treaties or if it is involved in weapons banned by international conventions. With the exception of these last two PAIs, we use proxies. In our view, the setting of exclusion thresholds (e.g. GHG emissions) for each PAI is not always relevant and could compromise the fact that many sectors and companies are in a transition strategy. In addition, engagement is essential to ensure that companies with limited disclosure, particularly in emerging economies, are initially excluded from the definition of sustainable investment and allow us to be a catalyst for positive environmental or social change. For example, we use a 10 per cent threshold on revenues from thermal coal mining (and generation of electricity from thermal coal) as an exclusion filter to indirectly address all PAIs related to greenhouse gas emissions. HSBC’s sustainable investment methodology is available on the management company’s website: www.assetmanagement.hsbc.fr/fr/retail-investors/about-us/responsible-investing/policies.

(b) HSBC is committed to applying and promoting international standards. The ten principles of the UN Global Compact are among the priorities of HSBC’s Responsible Investment Policy. These principles include non-financial risks such as human rights, labour standards, the environment, and anti-corruption. HSBC is also a signatory to the United Nations Principles for Responsible Investment. They provide a framework for the identification and management of sustainability risks. In this subfund, companies with a proven violation of one of the 10 principles of the United Nations Global Compact or at least two alleged violations are systematically excluded. Companies are also assessed according to international standards such as the OECD Guidelines for Multinational Enterprises.


Environmental or social characteristics of the financial product

The subfund promotes E, S, and G characteristics by investing in international equity and fixed-income markets with a euro bias by selecting securities issued by companies or countries in a universe of issues that meet Environmental, Social, and Governance (ESG) criteria. The subfund is invested, at its manager’s discretion, either in securities of companies or countries or in UCIs managed by the HSBC Group.

For public or private listed corporate issues: the fund manager uses a best-in-class approach to select within each sector the companies that have the best ESG practices compared with their peers within each sector of the economy.

For each ESG pillar, several criteria are used, including CO2 emissions for the E pillar, management of personnel for the S pillar, and level of independence of directors for the G pillar.

For government issues (bonds): euro-denominated issuing countries are ranked according to their overall ‘ESG’ rating, which is based 50 per cent on the Environmental pillar (E) and 50 per cent on the Social/Governance pillar (S/G). The Social and Governance pillar includes the analysis of the political and governance system, human rights and fundamental freedoms, and social conditions. The Environmental pillar includes the analysis of natural resources, climate change and energy, production, and sustainable consumption. The manager uses an ESG Selection approach to select the countries with a minimum ESG rating according to the non-financial rating agency ISS-Oekom from among euro-denominated issuing countries.

In addition, the subfund will:

  • Exclude issuers in violation of one or more of the 10 principles of the United Nations Global Compact (or at least two alleged violations) and the OECD Guidelines for Multinational Enterprises
  • Exclude securities of companies involved in the production of controversial weapons or their components. Controversial weapons include, but are not limited to, anti-personnel mines, depleted uranium weapons, and white phosphorus when used for military purposes. This exclusion is in addition to the exclusion policy on weapons prohibited by international treaties
  • Exclude securities of companies in the Defence sector
  • Exclude securities of companies engaged in thermal coal activities. With regard to electricity generation, companies deriving more than 10 per cent of their turnover from electricity generated using thermal coal are partially excluded. With regard to mining: companies are completely excluded
  • Exclude securities of companies involved in tobacco production
  • Carefully consider environmental issues through voting and engagement activities

The subfund is actively managed and does not track a benchmark. There is no benchmark representative of our management philosophy and therefore of our investment universe or an index designated to determine whether the subfund is aligned with the environmental or social characteristics it promotes.


Investment strategy

(a) The subfund’s universe results from:

- a best-in-class approach used to select listed public or private company issues.

The methodology consists of evaluating each company and then classifying them. First, each company is given three scores (E score, S score, and G score) provided by MSCI ESG Research, which focuses on assessing the relevant aspects for the sector to which the rated company belongs. Lastly, these three scores are aggregated to form an ESG score that classifies companies into one of 30 ESG sectors and then classify them in one of the four quartiles within each sector. The selection of securities according to these ESG criteria is based on a proprietary ESG analysis model, supplied by data from non-financial rating agencies and internal research within our company. The SRI universe assessment is updated on a monthly basis.

- an ESG Selection approach implemented to select government issues: euro-denominated issuing countries are ranked according to their overall ‘ESG’ score, which is based 50 per cent on the Environmental pillar (E) and 50 per cent on the Social/Governance pillar (S/G).

The fund manager selects countries with a minimum ESG rating according to the non-financial rating agency ISS-Oekom. The scores, resulting from the analysis by the non-financial rating agency ISS-Oekom, range from A+ to D-. The SRI strategy consists of selecting countries with a minimum ESG rating from among issuing countries. Thus:

  • for countries classified between A+ and B-, there are no investment limits
  • for countries classified as C+, the weight of these States in the portfolio cannot exceed the weight of these countries in the Bloomberg Capital Euro Aggregate 500MM index
  • for countries classified between C and D-, investments are not permitted

The rating of issuing countries is reviewed on an annual basis

- sectoral and norms-based exclusions.

The investment strategy of this subfund thus uses the following approaches:

  • ESG integration (systematic inclusion of ESG criteria in financial analysis),
  • Best-in-class approach (selecting the best companies in each sector according to environmental, social, and governance criteria) and ESG Selection approach (selecting countries with a minimum ESG rating from among euro-denominated issuing countries),
  • Exclusion of securities issued by companies involved in ‘excluded’ activities. The excluded activities are set out below among the binding elements of the investment strategy used to select the investments to attain each of the environmental or social characteristics promoted by the financial product
  • Engagement and voting activities (presence with the companies, through visits in the form of one-on-one meetings and by exercising HSBC’s voting policy). Our engagement objective is to provide companies with the opportunity to explain their ESG approach and to monitor ESG issues

(b) Quality of governance is assessed on the basis of criteria specified in the investment process that include, but are not limited to, business ethics, corporate culture and values, governance framework, and corruption. We determine the materiality of governance both on an absolute basis, focusing in particular on the governance framework, controversies, and compliance with the principles of the United Nations Global Compact and the OECD Guidelines for Multinational Enterprises, and on a relative basis by comparing the quality of the company’s governance practices with that of its industry peers. Where significant and/or impactful governance risks are identified, companies are subject to enhanced due diligence, which at minimum requires management teams to perform additional analysis. Dialogue or engagement with the company is then monitored over time and archived. Lastly, we use our voting rights to express our support for positive development initiatives of companies or our disagreement if the directors do not meet our expectations. In addition, issuers in violation of one or more of the 10 principles of the United Nations Global Compact (or at least two alleged violations) and the OECD Guidelines for Multinational Enterprises are excluded.


Proportion of investments

The subfund’s strategic allocation is composed on average of 80 per cent equities and 20 per cent fixed-income investments. The portfolio will be invested in international equity and fixed-income markets with a euro bias by selecting securities issued by companies or countries in a universe of issues that meet Environmental, Social, and Governance (ESG) criteria.

The manager may invest in UCIs managed or distributed by an HSBC Group entity. These UCIs must meet the defined financial and non-financial objectives.

The SRI strategies of the UCIs or investment funds that may be selected by the fund manager (excluding UCIs/investment funds managed by the Management Company) may use ESG indicators and/or different SRI approaches independent of the subfund.

The minimum proportion of investments used to attain the environmental or social characteristics promoted by the subfund is 75 per cent. The remaining 25 per cent is detailed in the section ‘Investments included in category “# 2 Others”’ below. Although the subfund does not have sustainable investments as an objective, it commits to a minimum proportion of 20 per cent of its assets in sustainable investments.

Investments included in category ‘# 2 Others’:

The subfund may hold cash, derivatives, as well as investments for which no non-financial analysis could be performed due to the unavailability of ESG data.The use of derivatives will not contribute to the attainment of the fund’s environmental or social characteristics. Derivatives are used for portfolio risk adjustment (exposure, hedging).


Monitoring of environmental or social characteristics

All subfunds must have strong and/or improving E/S characteristics at the issuer and overall portfolio level.

The management teams conduct ongoing monitoring. Funds are monitored to ensure that the portfolios meet the non-financial criteria and, where applicable, internally established thresholds (such as the portfolio’s average ESG score or exclusions) We also apply an enhanced due diligence process for companies that may be high risk due to violations of international conventions such as the principles of the UN Global Compact and/or not aligned with anti-financial crime standards or due to poor ESG ratings.

First-level controls are also performed by independent management teams:

  • Contractual non-financial investment restrictions are currently set according to the same methodology as the financial ratios,
  • Environmental, Social, and Governance performance indicators identified according to the fund’s strategy are monitored on a monthly basis by the risk department

In addition, the subfund may undergo occasional and periodic fund compliance checks, which will ensure, in particular, that sectoral exclusions are respected.

Lastly, in connection with labels, controls are conducted by auditors outside the management company.


Methodologies

HSBC relies on a proprietary ESG analysis model with data supplied by non-financial rating agencies and the management company’s internal research. HSBC Asset Management verifies the data used.


Data sources and processing

(a) HSBC Asset Management uses data from a number of external providers such as Sustainalytics, ISS ESG, MSCI ESG Research, and S&P Trucost to ensure that it meets the environmental or social characteristics that it promotes.

(b) HSBC Asset Management verifies the data used.

(c) For the portfolio’s ESG rating, the data are weighted by coefficients reflecting our analysis of the various business sectors and their respective ESG impacts.

(d) Such data, if not communicated by companies, are estimated by our external data providers.


Limitations to methodologies and data

(a) The management company relies on non-financial data providers. As a result, the company is subject to certain operational and data quality risks associated with reliance on third-party service providers and data sources. Furthermore, data coverage may be limited depending on the type of issuer (small caps, certain high-yield issuers) and by the geographical area of the issuer (particularly for emerging countries). When non-financial data are not available in our suppliers’ databases, we initiate a qualitative analysis and possibly exchanges with the company to supplement our assessment of E/S characteristics.

(b) HSBC Asset Management is not aware of any methodological limitations likely to prevent the attainment of the E/S characteristics pursued by the subfund. The subfund may invest in derivatives. Sustainability risks are therefore more difficult to take into account because the subfund does not invest directly in the underlying asset. As of the date of the prospectus, no ESG integration methodology can be applied for derivatives.


Due diligence

As part of our investment process, we carefully monitor and analyse all companies and other issuers held in actively managed portfolios before and during the investment period. Our monitoring by the analysts, the management teams, investment restrictions, and the risk department is quantitative and qualitative and includes strategy, financial and non-financial performance and constraints, risks, capital structure, social and environmental impact, and corporate governance. For the purposes of this monitoring, we use our own in-house research and the research of brokers and other independent research providers.

We also apply an enhanced due diligence process for companies that may be high risk due to violations of international conventions such as the principles of the UN Global Compact and/or not aligned with anti-financial crime standards or due to poor ESG ratings.

Lastly, our teams in charge of voting and shareholder engagement activities can support the investment teams in the ESG assessment of issuers.

For more details on internal and external controls, please refer to the information provided in the ‘Monitoring of environmental or social characteristics’ section.

 


Engagement policies

Our approach to shareholder engagement incorporates several levers for action including 1) direct dialogue with companies about their consideration of environmental and social issues to ensure that they are able to face the future and maintain long-term financial viability, 2) the exercising of voting rights by which we express our support for positive development initiatives or, conversely, our disagreement when directors do not meet our expectations, and 3) a gradual escalation procedure with companies when the ESG risks or controversies to which they are exposed are not managed.

Our management and analyst teams meet regularly with the companies in which we invest (or may invest) to better understand their business and strategy, demonstrate our support and/or express our concerns, and promote best practices.

We prioritise dialogue and interaction with companies in which we have significant positions, but also depending on the importance of the environmental or social issues identified. If a company is identified as being at risk on these issues at the end of our ESG analysis, we still favour dialogue over selling the security, but the lack of satisfactory progress or responses by the company in a timely manner that we consider reasonable to implement the desired changes may result in the exclusion of the security from our portfolios.

Lastly, every year, we define engagement themes that we consider to be key.

These include climate change, biodiversity conservation, respect for human rights, diversity issues, equity and inclusion, the importance of just transition, and access to healthcare. As signatories to the Net Zero Asset Managers initiative and in keeping with our commitment to contribute to the goal of carbon neutrality for all our assets under management by 2050, we primarily engage in dialogue with companies involved in thermal coal. In concrete terms, we are in contact with companies whose revenues were more than 20 per cent from coal mining as of the end of 2021. As we support a just transition imperative, we engage with companies to assess how their carbon neutrality transition plans take into account impacts on employees, supply chains, communities, and consumers. In terms of diversity, we have set ambitious targets for the number of women of boards of directors. For example, in Continental Europe, we have set a threshold of 40 per cent women in the composition of the boards of directors of large caps, 35 per cent for mid-caps, and 30 per cent for the small caps.

Our priority engagement themes are detailed on our website www.assetmanagement.hsbc.fr/fr/retail-investors/about-us/responsible-investing/stewardship

For our full Engagement Policy and Voting Policy, please visit www.assetmanagement.hsbc.com/about-us/responsible-investing/policies


Designated reference benchmark

Not applicable

HSBC RIF SRI MODERATE

Summary

This subfund promotes environmental or social characteristics but does not have sustainable investment as its objective.

HSBC Asset Management’s ‘do no significant harm’ (DNSH) assessment of issuers as part of its sustainable investment process includes consideration of principal adverse impacts (PAI). The principle of ‘do no significant harm’ to environmental or social objectives applies only to the underlying sustainable investments of the subfund.

Issuers considered to be in violation of one or more of the 10 principles of the United Nations Global Compact (or at least two alleged violations) and the OECD Guidelines for Multinational Enterprises are excluded. Companies are also assessed according to international standards such as the OECD Guidelines for Multinational Enterprises.

The subfund promotes the following environmental or social characteristics:

  • Selection of issuers with good ESG practices according to a best-in-class approach and selection of countries with a minimum ESG rating according to an ESG selection approach,
  • Exclusion of issuers in violation of the principles of the United Nations Global Compact and the OECD Guidelines for Multinational Enterprises
  • Exclusion of shares of companies involved in the production of controversial weapons or their components, in the defence sector, in tobacco production, or in thermal coal activities
  • Careful consideration of environmental issues through voting and engagement activities

Investment strategy

The investment strategy of this subfund uses the following approaches:

  • ESG integration (inclusion of ESG criteria in financial analysis),
  • Best-in-class approach for listed public or private company issues and ESG selection approach for government issues,
  • Exclusion of shares issued by companies involved in ‘excluded’ activities
  • Engagement and voting activities

Proportion of investments:

  • #1 Aligned with (E/S) characteristics: 70 per cent minimum
  • #2 Others (not aligned with E/S characteristics or not considered sustainable investments): 30 per cent maximum
  • #1 A Sustainable investments: 10 per cent minimum
  • #1 B Other E/S characteristics (aligned with E/S characteristics but not considered sustainable investments): 60 per cent minimum

Monitoring of environmental or social characteristics

Funds are monitored to ensure that the portfolios meet the non-financial criteria and, where applicable, internally established thresholds (such as the portfolio’s average ESG score or exclusions). First-level controls are also performed by independent management teams (investment restrictions team and risk team).

Methods and Data sources and processing

HSBC relies on a proprietary ESG analysis model with data supplied by non-financial rating agencies and the management company’s internal research.

HSBC Asset Management uses data from a number of external providers to ensure that it meets the environmental or social characteristics that it promotes. HSBC Asset Management verifies the data used. For the portfolio’s ESG rating, the data are weighted by coefficients reflecting our analysis of the various business sectors and their respective ESG impacts.

Limitations to methods and data

The management company relies on non-financial data providers. As a result, the company is subject to certain operational and data quality risks associated with reliance on third-party service providers and data sources. Furthermore, data coverage may be limited depending on the type of issuer (small caps, certain high-yield issuers) and by the geographical area of the issuer (particularly for emerging countries). When non-financial data are not available in our suppliers’ databases, we initiate a qualitative analysis and possibly exchanges with the company to supplement our assessment of E/S characteristics. HSBC Asset Management is unaware of any methodological limitations likely to prevent the attainment of the E/S characteristics pursued by the subfund. The subfund uses derivatives. Sustainability risks are therefore more difficult to take into account because the subfund does not invest directly in the underlying asset.

Due diligence

Our monitoring of companies and all other issuers held in actively managed portfolios, by analysts, management teams, investment restrictions, and the risk department, is quantitative and qualitative and includes strategy, financial and nonfinancial performance constraints, risks, capital structure, social and environmental impact, and corporate governance. For this monitoring, we use our own in-house research and the research of brokers and other independent research providers.

Lastly, our teams in charge of voting and shareholder engagement activities can support the investment teams in the ESG assessment of issuers.

Engagement policies

Our approach to shareholder engagement incorporates several levers of action, including 1) direct dialogue with companies, 2) exercising voting rights, and 3) a gradual escalation procedure with companies when the ESG risks or controversies to which they are exposed are not managed.

We prioritise dialogue and interaction with companies in which we have significant positions but also depending on the importance of the environmental or social issues identified. Furthermore, every year, we define engagement themes that we consider to be key.

Important information

This regulatory document is published pursuant to Article 10 of the SFDR.

All information contained in this document may change without notice. The user shall be held liable and may face legal action for any reproduction or use of this document without permission.

This document is not contractual and by no means constitutes a solicitation to buy or sell or a recommendation to buy or sell securities in any jurisdiction in which such an offer is not permitted by law.

Any subscription in the UCI presented in this document must be based on the current prospectus and KID. In addition to the current Key Information Document (KID), potential investors should refer to the prospectus for detailed information on the risks associated with the UCI presented. If you have any doubts as to the suitability of the presented product in relation to your investment objectives and risk profile, please contact your advisor.


No sustainable investment objective

1. This financial product promotes environmental or social characteristics but does not have sustainable investment as its objective.

2. The principle of ‘do no significant harm’ to environmental or social objectives applies only to the underlying sustainable investments of the subfund. This principle is incorporated into the investment decision-making process, which includes consideration of principal adverse impacts.

(a) HSBC Asset Management’s ‘do no significant harm’ (DNSH) assessment of issuers as part of its sustainable investment process includes consideration of principal adverse impacts (PAI). It involves a holistic analysis of the company’s multiple sustainability impacts rather than focusing on a single factor. When an issuer is identified as potentially controversial, it cannot be considered a sustainable investment. All relevant PAIs are thus examined and integrated into the investment process according to an approach that combines exclusions (sectoral, the most severe ESG controversies, norms-based exclusions, etc.) with voting and shareholder engagement activities to instil and maintain a positive change dynamic within companies. Furthermore, a company will be considered not sustainable when it does not comply with the United Nations Global Compact Principles and its associated international standards, conventions, and treaties or if it is involved in weapons banned by international conventions. With the exception of these last two PAIs, we use proxies. In our view, the setting of exclusion thresholds (e.g. GHG emissions) for each PAI is not always relevant and could compromise the fact that many sectors and companies are in a transition strategy. In addition, engagement is essential to ensure that companies with limited disclosure, particularly in emerging economies, are initially excluded from the definition of sustainable investment and allow us to be a catalyst for positive environmental or social change. For example, we use a 10 per cent threshold on revenues from thermal coal mining (and generation of electricity from thermal coal) as an exclusion filter to indirectly address all PAIs related to greenhouse gas emissions.

HSBC’s sustainable investment methodology is available on the management company’s website: www.assetmanagement.hsbc.fr/fr/retail-investors/about-us/responsible-investing/policies.

(b) HSBC is committed to applying and promoting international standards. The ten principles of the UN Global Compact are among the priorities of HSBC’s Responsible Investment Policy. These principles include non-financial risks such as human rights, labour standards, the environment, and anti-corruption. HSBC is also a signatory to the United Nations Principles for Responsible Investment. They provide a framework for the identification and management of sustainability risks. In this subfund, companies with a proven violation of one of the 10 principles of the United Nations Global Compact or at least two alleged violations are systematically excluded. Companies are also assessed according to international standards such as the OECD Guidelines for Multinational Enterprises.


Environmental or social characteristics of the financial product

The subfund promotes E, S, and G characteristics by investing in international equity and fixed-income markets with a euro bias by selecting securities issued by companies or countries in a universe of issues that meet Environmental, Social, and Governance (ESG) criteria. The subfund is invested, at its manager’s discretion, either in securities of companies or countries or in UCIs managed by the HSBC Group.

For public or private listed corporate issues: the fund manager uses a best-in-class approach to select within each sector the companies that have the best ESG practices compared with their peers within each sector of the economy.

For each ESG pillar, several criteria are used, including CO2 emissions for the E pillar, management of personnel for the S pillar, and level of independence of directors for the G pillar.

For government issues (bonds): euro-denominated issuing countries are ranked according to their overall ‘ESG’ rating, which is based 50 per cent on the Environmental pillar (E) and 50 per cent on the Social/Governance pillar (S/G). The Social and Governance pillar includes the analysis of the political and governance system, human rights and fundamental freedoms, and social conditions. The Environmental pillar includes the analysis of natural resources, climate change and energy, production, and sustainable consumption.

The manager uses an ESG Selection approach to select the countries with a minimum ESG rating according to the non-financial rating agency ISS-Oekom from among euro-denominated issuing countries.

In addition, the subfund will:

  • Exclude issuers in violation of one or more of the 10 principles of the United Nations Global Compact (or at least two alleged violations) and the OECD Guidelines for Multinational Enterprises
  • Exclude securities of companies involved in the production of controversial weapons or their components. Controversial weapons include, but are not limited to, anti-personnel mines, depleted uranium weapons, and white phosphorus when used for military purposes. This exclusion is in addition to the exclusion policy on weapons prohibited by international treaties
  • Exclude securities of companies in the Defence sector
  • Exclude securities of companies engaged in thermal coal activities. With regard to electricity generation, companies deriving more than 10 per cent of their turnover from electricity generated using thermal coal are partially excluded. With regard to mining: companies are completely excluded
  • Exclude securities of companies involved in tobacco production
  • Carefully consider environmental issues through voting and engagement activities.

The subfund is actively managed and does not track a benchmark. There is no benchmark representative of our management philosophy and therefore of our investment universe or an index designated to determine whether the subfund is aligned with the environmental or social characteristics it promotes.


Investment strategy

(a) The subfund’s universe results from:

- a best-in-class approach used to select listed public or private company issues.

The methodology consists of evaluating each company and then classifying them. First, each company is given three scores (E score, S score, and G score) provided by MSCI ESG Research, which focuses on assessing the relevant aspects for the sector to which the rated company belongs. Lastly, these three scores are aggregated to form an ESG score that classifies companies into one of 30 ESG sectors and then classify them in one of the four quartiles within each sector. The selection of securities according to these ESG criteria is based on a proprietary ESG analysis model, supplied by data from non-financial rating agencies and internal research within our company. The SRI universe assessment is updated on a monthly basis.

- an ESG Selection approach implemented to select government issues: euro-denominated issuing countries are ranked according to their overall ‘ESG’ score, which is based 50 per cent on the Environmental pillar (E) and 50 per cent on the Social/Governance pillar (S/G).

The fund manager selects countries with a minimum ESG rating according to the non-financial rating agency ISS-Oekom. The scores, resulting from the analysis by the non-financial rating agency ISS-Oekom, range from A+ to D-. The SRI strategy consists of selecting countries with a minimum ESG rating from among issuing countries. Thus:

  • for countries classified between A+ and B-, there are no investment limits
  • for countries classified as C+, the weight of these States in the portfolio cannot exceed the weight of these countries in the Bloomberg Capital Euro Aggregate 500MM index
  • for countries classified between C and D-, investments are not permitted

The rating of issuing countries is reviewed on an annual basis.

- sectoral and norms-based exclusions.

The investment strategy of this subfund thus uses the following approaches:

  • ESG integration (systematic inclusion of ESG criteria in financial analysis),
  • Best-in-class approach (selecting the best companies in each sector according to environmental, social, and governance criteria) and ESG Selection approach (selecting countries with a minimum ESG rating from among euro-denominated issuing countries),
  • Exclusion of securities issued by companies involved in ‘excluded’ activities. The excluded activities are set out below among the binding elements of the investment strategy used to select the investments to attain each of the environmental or social characteristics promoted by the financial product
  • Engagement and voting activities (presence with the companies, through visits in the form of one-on-one meetings and by exercising HSBC’s voting policy). Our engagement objective is to provide companies with the opportunity to explain their ESG approach and to monitor ESG issues

(b) Quality of governance is assessed on the basis of criteria specified in the investment process that include, but are not limited to, business ethics, corporate culture and values, governance framework, and corruption. We determine the materiality of governance both on an absolute basis, focusing in particular on the governance framework, controversies, and compliance with the principles of the United Nations Global Compact and the OECD Guidelines for Multinational Enterprises, and on a relative basis by comparing the quality of the company’s governance practices with that of its industry peers.

Where significant and/or impactful governance risks are identified, companies are subject to enhanced due diligence, which at minimum requires management teams to perform additional analysis. Dialogue or engagement with the company is then monitored over time and archived. Lastly, we use our voting rights to express our support for positive development initiatives of companies or our disagreement if the directors do not meet our expectations. In addition, issuers in violation of one or more of the 10 principles of the United Nations Global Compact (or at least two alleged violations) and the OECD Guidelines for Multinational Enterprises are excluded.


Proportion of investments

The subfund’s strategic allocation is composed on average of 30 per cent equities and 70 per cent fixed-income investments. The portfolio will be invested in international equity and fixed-income markets with a euro bias by selecting securities issued by companies or countries in a universe of issues that meet Environmental, Social, and Governance (ESG) criteria.

The manager may invest in UCIs managed or distributed by an HSBC Group entity. These UCIs must meet the defined financial and non-financial objectives.

The SRI strategies of the UCIs or investment funds that may be selected by the fund manager (excluding UCIs/investment funds managed by the Management Company) may use ESG indicators and/or different SRI approaches independent of the subfund.

The minimum proportion of investments used to attain the environmental or social characteristics promoted by the subfund is 70 per cent. The remaining 30 per cent is detailed in the section ‘Investments included in category “# 2 Others”’ below.

Although the subfund does not have sustainable investments as an objective, it commits to a minimum proportion of 10 per cent of its assets in sustainable investments.

Investments included in category ‘# 2 Others’:

The subfund may hold cash, derivatives, as well as investments for which no non-financial analysis could be performed due to the unavailability of ESG data.The use of derivatives will not contribute to the attainment of the fund’s environmental or social characteristics. Derivatives are used for portfolio risk adjustment (exposure, hedging).


Monitoring of environmental or social characteristics

All subfunds must have strong and/or improving E/S characteristics at the issuer and overall portfolio level.

The management teams conduct ongoing monitoring. Funds are monitored to ensure that the portfolios meet the non-financial criteria and, where applicable, internally established thresholds (such as the portfolio’s average ESG score or exclusions) We also apply an enhanced due diligence process for companies that may be high risk due to violations of international conventions such as the principles of the UN Global Compact and/or not aligned with anti-financial crime standards or due to poor ESG ratings.

First-level controls are also performed by independent management teams:

  • Contractual non-financial investment restrictions are currently set according to the same methodology as the financial ratios,
  • Environmental, Social, and Governance performance indicators identified according to the fund’s strategy are monitored on a monthly basis by the risk department

In addition, the subfund may undergo occasional and periodic fund compliance checks, which will ensure, in particular, that sectoral exclusions are respected.

Lastly, in connection with labels, controls are conducted by auditors outside the management company.


Methodologies

HSBC relies on a proprietary ESG analysis model with data supplied by non-financial rating agencies and the management company’s internal research. HSBC Asset Management verifies the data used.


Data sources and processing

(a) HSBC Asset Management uses data from a number of external providers such as Sustainalytics, ISS ESG, MSCI ESG Research, and S&P Trucost to ensure that it meets the environmental or social characteristics that it promotes.

(b) HSBC Asset Management verifies the data used.

(c) For the portfolio’s ESG rating, the data are weighted by coefficients reflecting our analysis of the various business sectors and their respective ESG impacts.

(d) Such data, if not communicated by companies, are estimated by our external data providers.


Limitations to methodologies and data

(a) The management company relies on non-financial data providers. As a result, the company is subject to certain operational and data quality risks associated with reliance on third-party service providers and data sources. Furthermore, data coverage may be limited depending on the type of issuer (small caps, certain high-yield issuers) and by the geographical area of the issuer (particularly for emerging countries). When non-financial data are not available in our suppliers’ databases, we initiate a qualitative analysis and possibly exchanges with the company to supplement our assessment of E/S characteristics.

(b) HSBC Asset Management is not aware of any methodological limitations likely to prevent the attainment of the E/S characteristics pursued by the subfund. The subfund may invest in derivatives. Sustainability risks are therefore more difficult to take into account because the subfund does not invest directly in the underlying asset. As of the date of the prospectus, no ESG integration methodology can be applied for derivatives.


Due diligence

As part of our investment process, we carefully monitor and analyse all companies and other issuers held in actively managed portfolios before and during the investment period. Our monitoring by the analysts, the management teams, investment restrictions, and the risk department is quantitative and qualitative and includes strategy, financial and non-financial performance and constraints, risks, capital structure, social and environmental impact, and corporate governance. For the purposes of this monitoring, we use our own in-house research and the research of brokers and other independent research providers.

We also apply an enhanced due diligence process for companies that may be high risk due to violations of international conventions such as the principles of the UN Global Compact and/or not aligned with anti-financial crime standards or due to poor ESG ratings.

Lastly, our teams in charge of voting and shareholder engagement activities can support the investment teams in the ESG assessment of issuers.

For more details on internal and external controls, please refer to the information provided in the ‘Monitoring of environmental or social characteristics’ section.


Engagement policies

Our approach to shareholder engagement incorporates several levers for action including 1) direct dialogue with companies about their consideration of environmental and social issues to ensure that they are able to face the future and maintain long-term financial viability, 2) the exercising of voting rights by which we express our support for positive development initiatives or, conversely, our disagreement when directors do not meet our expectations, and 3) a gradual escalation procedure with companies when the ESG risks or controversies to which they are exposed are not managed.

Our management and analyst teams meet regularly with the companies in which we invest (or may invest) to better understand their business and strategy, demonstrate our support and/or express our concerns, and promote best practices.

We prioritise dialogue and interaction with companies in which we have significant positions, but also depending on the importance of the environmental or social issues identified. If a company is identified as being at risk on these issues at the end of our ESG analysis, we still favour dialogue over selling the security, but the lack of satisfactory progress or responses by the company in a timely manner that we consider reasonable to implement the desired changes may result in the exclusion of the security from our portfolios.

Lastly, every year, we define engagement themes that we consider to be key.

These include climate change, biodiversity conservation, respect for human rights, diversity issues, equity and inclusion, the importance of just transition, and access to healthcare. As signatories to the Net Zero Asset Managers initiative and in keeping with our commitment to contribute to the goal of carbon neutrality for all our assets under management by 2050, we primarily engage in dialogue with companies involved in thermal coal. In concrete terms, we are in contact with companies whose revenues were more than 20 per cent from coal mining as of the end of 2021. As we support a just transition imperative, we engage with companies to assess how their carbon neutrality transition plans take into account impacts on employees, supply chains, communities, and consumers. In terms of diversity, we have set ambitious targets for the number of women of boards of directors. For example, in Continental Europe, we have set a threshold of 40 per cent women in the composition of the boards of directors of large caps, 35 per cent for mid-caps, and 30 per cent for the small caps.

Our priority engagement themes are detailed on our website www.assetmanagement.hsbc.fr/fr/retail-investors/about-us/responsible-investing/stewardship

For our full Engagement Policy and Voting Policy, please visit www.assetmanagement.hsbc.com/about-us/responsible-investing/policies


Designated reference benchmark

Not applicable

HSBC RIF SRI EURO BOND

Summary

This subfund promotes environmental or social characteristics but does not have sustainable investment as its objective.

HSBC Asset Management’s ‘do no significant harm’ (DNSH) assessment of issuers as part of its sustainable investment process includes consideration of principal adverse impacts (PAI). The principle of ‘do no significant harm’ to environmental or social objectives applies only to the underlying sustainable investments of the subfund.

Issuers considered to be in violation of one or more of the 10 principles of the United Nations Global Compact (or at least two alleged violations) and the OECD Guidelines for Multinational Enterprises are excluded. Companies are also assessed according to international standards such as the OECD Guidelines for Multinational Enterprises.

The subfund promotes the following environmental or social characteristics:

  • Selection of issuers with good ESG practices according to a best-in-class approach and selection of countries with a minimum ESG rating according to an ESG selection approach,
  • Exclusion of issuers in violation of the principles of the United Nations Global Compact and the OECD Guidelines for Multinational Enterprises
  • Exclusion of shares of companies involved in the production of controversial weapons or their components, in the defence sector, in tobacco production, or in thermal coal activities
  • Careful consideration of environmental issues through engagement activities

Investment strategy:

The investment strategy of this subfund uses the following approaches:

  • ESG integration (inclusion of ESG criteria in financial analysis),
  • Best-in-class approach for listed public or private company issues and ESG selection approach for government issues,
  • Exclusion of shares issued by companies involved in ‘excluded’ activities
  • Engagement activities

Proportion of investments:

  • #1 Aligned with (E/S) characteristics: 80 per cent minimum
  • #2 Others (not aligned with E/S characteristics or not considered sustainable investments): 20 per cent maximum
  • #1 A Sustainable investments: 5 per cent minimum
  • #1 B Other E/S characteristics (aligned with E/S characteristics but not considered sustainable investments): 75 per cent minimum

Monitoring of environmental or social characteristics

Funds are monitored to ensure that the portfolios meet the non-financial criteria and, where applicable, internally established thresholds (such as the portfolio’s average ESG score or exclusions). First-level controls are also performed by independent management teams (investment restrictions team and risk team).

Methods and Data sources and processing

HSBC relies on a proprietary ESG analysis model with data supplied by non-financial rating agencies and the management company’s internal research.

HSBC Asset Management uses data from a number of external providers to ensure that it meets the environmental or social characteristics that it promotes. HSBC Asset Management verifies the data used. For the portfolio’s ESG rating, the data are weighted by coefficients reflecting our analysis of the various business sectors and their respective ESG impacts.

Limitations to methods and data

The management company relies on non-financial data providers. As a result, the company is subject to certain operational and data quality risks associated with reliance on third-party service providers and data sources. Furthermore, data coverage may be limited depending on the type of issuer (small caps, certain high-yield issuers) and by the geographical area of the issuer (particularly for emerging countries). When non-financial data are not available in our suppliers’ databases, we initiate a qualitative analysis and possibly exchanges with the company to supplement our assessment of E/S characteristics. HSBC Asset Management is unaware of any methodological limitations likely to prevent the attainment of the E/S characteristics pursued by the subfund. The subfund uses derivatives. Sustainability risks are therefore more difficult to take into account because the subfund does not invest directly in the underlying asset.

Due diligence

Our monitoring of companies and all other issuers held in actively managed portfolios, by analysts, management teams, investment restrictions, and the risk department, is quantitative and qualitative and includes strategy, financial and non-financial performance constraints, risks, capital structure, social and environmental impact, and corporate governance. For this monitoring, we use our own in-house research and the research of brokers and other independent research providers.

Lastly, our teams in charge of voting and shareholder engagement activities can support the investment teams in the ESG assessment of issuers.

Engagement policies

Our approach to shareholder engagement incorporates several levers of action, including 1) direct dialogue with companies, 2) exercising voting rights, and 3) a gradual escalation procedure with companies when the ESG risks or controversies to which they are exposed are not managed.

We prioritise dialogue and interaction with companies in which we have significant positions but also depending on the importance of the environmental or social issues identified. Furthermore, every year, we define engagement themes that we consider to be key.

Important information

This regulatory document is published pursuant to Article 10 of the SFDR.

All information contained in this document may change without notice. The user shall be held liable and may face legal action for any reproduction or use of this document without permission.

This document is not contractual and by no means constitutes a solicitation to buy or sell or a recommendation to buy or sell securities in any jurisdiction in which such an offer is not permitted by law.

Any subscription in the UCI presented in this document must be based on the current prospectus and KID. In addition to the current Key Information Document (KID), potential investors should refer to the prospectus for detailed information on the risks associated with the UCI presented. If you have any doubts as to the suitability of the presented product in relation to your investment objectives and risk profile, please contact your advisor.


No sustainable investment objective

1. This financial product promotes environmental or social characteristics but does not have sustainable investment as its objective.

2. The principle of ‘do no significant harm’ to environmental or social objectives applies only to the underlying sustainable investments of the subfund. This principle is incorporated into the investment decision-making process, which includes consideration of principal adverse impacts.

(a) HSBC Asset Management’s ‘do no significant harm’ (DNSH) assessment of issuers as part of its sustainable investment process includes consideration of principal adverse impacts (PAI). It involves a holistic analysis of the company’s multiple sustainability impacts rather than focusing on a single factor. When an issuer is identified as potentially controversial, it cannot be considered a sustainable investment. All relevant PAIs are thus examined and integrated into the investment process according to an approach that combines exclusions (sectoral, the most severe ESG controversies, norms-based exclusions, etc.) with voting and shareholder engagement activities to instil and maintain a positive change dynamic within companies. Furthermore, a company will be considered not sustainable when it does not comply with the United Nations Global Compact Principles and its associated international standards, conventions, and treaties or if it is involved in weapons banned by international conventions. With the exception of these last two PAIs, we use proxies. In our view, the setting of exclusion thresholds (e.g. GHG emissions) for each PAI is not always relevant and could compromise the fact that many sectors and companies are in a transition strategy. In addition, engagement is essential to ensure that companies with limited disclosure, particularly in emerging economies, are initially excluded from the definition of sustainable investment and allow us to be a catalyst for positive environmental or social change. For example, we use a 10 per cent threshold on revenues from thermal coal mining (and generation of electricity from thermal coal) as an exclusion filter to indirectly address all PAIs related to greenhouse gas emissions.

HSBC’s sustainable investment methodology is available on the management company’s website: www.assetmanagement.hsbc.fr/fr/retail-investors/about-us/responsible-investing/policies.

(b) HSBC is committed to applying and promoting international standards. The ten principles of the UN Global Compact are among the priorities of HSBC’s Responsible Investment Policy. These principles include non-financial risks such as human rights, labour standards, the environment, and anti-corruption. HSBC is also a signatory to the United Nations Principles for Responsible Investment. They provide a framework for the identification and management of sustainability risks. In this subfund, companies with a proven violation of one of the 10 principles of the United Nations Global Compact or at least two alleged violations are systematically excluded. Companies are also assessed according to international standards such as the OECD Guidelines for Multinational Enterprises.


Environmental or social characteristics of the financial product

The subfund promotes E, S, and G characteristics by investing in euro-denominated bonds and debt securities across a universe of issues that meets socially responsible economic, environmental, social, and governance criteria.

For issues by listed public or private companies: the fund manager uses a best-in-class approach to select within each sector the companies that have the best ESG practices compared with their peers within each sector of the economy.

For each ESG pillar, several criteria are used, including CO2 emissions for the E pillar, management of personnel for the S pillar, and level of independence of directors for the G pillar.

For government issues (bonds): euro-denominated issuing countries are ranked according to their overall ‘ESG’ rating, which is based 50 per cent on the Environmental pillar (E) and 50 per cent on the Social/Governance pillar (S/G). The Social and Governance pillar includes the analysis of the political and governance system, human rights and fundamental freedoms, and social conditions. The Environmental pillar includes the analysis of natural resources, climate change and energy, production, and sustainable consumption.

The manager uses an ESG Selection approach to select the countries with a minimum ESG rating according to the non-financial rating agency ISS-Oekom from among euro-denominated issuing countries.

In addition, the subfund will:

  • Exclude issuers in violation of one or more of the 10 principles of the United Nations Global Compact (or at least two alleged violations) and the OECD Guidelines for Multinational Enterprises
  • Exclude securities of companies involved in the production of controversial weapons or their components. Controversial weapons include, but are not limited to, anti-personnel mines, depleted uranium weapons, and white phosphorus when used for military purposes. This exclusion is in addition to the exclusion policy on weapons prohibited by international treaties
  • Exclude securities of companies in the Defence sector
  • Exclude securities of companies engaged in thermal coal activities. With regard to electricity generation, companies deriving more than 10 per cent of their turnover from electricity generated using thermal coal are partially excluded With regard to mining: companies are completely excluded
  • Exclude securities of companies involved in tobacco production
  • Carefully consider environmental issues through engagement activities

The subfund is actively managed and does not track a benchmark. The indicator used by the subfund to measure performance is the Bloomberg Capital Euro Aggregate 500MM. However, it has not been designated to determine whether the subfund is aligned with the environmental or social characteristics it promotes.


Investment Strategy

(a) The subfund’s universe results from:

  • a best-in-class approach used to select listed public or private company issues

The methodology consists of evaluating each company and then classifying them. First, each company is given three scores (E score, S score, and G score) provided by MSCI ESG Research, which focuses on assessing the relevant aspects for the sector to which the rated company belongs. Lastly, these three scores are aggregated to form an ESG score that classifies companies into one of 30 ESG sectors and then classify them in one of the four quartiles within each sector. The selection of securities according to these ESG criteria is based on a proprietary ESG analysis model, supplied by data from non-financial rating agencies and internal research within our company. The SRI universe assessment is updated on a monthly basis.

  • an ESG Selection approach implemented to select government issues: euro-denominated issuing countries are ranked according to their overall ‘ESG’ score, which is based 50 per cent on the Environmental pillar (E) and 50 per cent on the Social/Governance pillar (S/G)

The fund manager selects countries with a minimum ESG rating according to the non-financial rating agency ISS-Oekom. The scores, resulting from the analysis by the non-financial rating agency ISS-Oekom, range from A+ to D-. The SRI strategy consists of selecting countries with a minimum ESG rating from among issuing countries. Thus:

  • for countries classified between A+ and B-, there are no investment limits
  • for countries classified as C+, the weight of these States in the portfolio cannot exceed the weight of these countries in the Bloomberg Capital Euro Aggregate 500MM index
  • for countries classified between C and D-, investments are not permitted

The rating of issuing countries is reviewed on an annual basis.

  • sectoral and norms-based exclusions

The investment strategy of this subfund thus uses the following approaches:

  • ESG integration (inclusion of ESG criteria in financial analysis),
  • Best-in-class approach (selecting the best companies in each sector according to environmental, social, and governance criteria) and ESG Selection approach (selecting countries with a minimum ESG rating from among euro-denominated issuing countries),
  • Exclusion of securities issued by companies involved in ‘excluded’ activities. The excluded activities are set out below among the binding elements of the investment strategy used to select the investments to attain each of the environmental or social characteristics promoted by the financial product
  • Engagement activities (presence with the companies, through visits in the form of one-on-one meetings). Our engagement objective is to provide companies with the opportunity to explain their ESG approach and to monitor ESG issues

(b) Quality of governance is assessed on the basis of criteria specified in the investment process that include, but are not limited to, business ethics, corporate culture and values, governance framework, and corruption. We determine the materiality of governance both on an absolute basis, focusing in particular on the governance framework, controversies, and compliance with the principles of the United Nations Global Compact and the OECD Guidelines for Multinational Enterprises, and on a relative basis by comparing the quality of the company’s governance practices with that of its industry peers.

Where significant and/or impactful governance risks are identified, companies are subject to enhanced due diligence, which at minimum requires management teams to perform additional analysis. Dialogue or engagement with the company is then monitored over time and archived. In addition, issuers in violation of one or more of the 10 principles of the United Nations Global Compact (or at least two alleged violations) and the OECD Guidelines for Multinational Enterprises are excluded.


Proportion of investments

The subfund invests in bonds and debt securities through an issue universe that meets socially responsible economic, Environmental, Social, and Governance (ESG) criteria.

The minimum proportion of investments used to attain the environmental or social characteristics promoted by the subfund is 80 per cent. The remaining 20 per cent is detailed in the section ‘Investments included in category “# 2 Others”’ below. Although the subfund does not have sustainable investments as an objective, it commits to a minimum proportion of 5 per cent of its assets in sustainable investments.

Investments included in category ‘# 2 Others’:

The subfund may hold cash, derivatives, as well as investments for which no non-financial analysis could be performed due to the unavailability of ESG data. The use of derivatives will not contribute to the attainment of the fund’s environmental or social characteristics.Derivatives are used for portfolio risk adjustment (exposure, hedging, arbitrage).


Monitoring of environmental or social characteristics

All subfunds must have strong and/or improving E/S characteristics at the issuer and overall portfolio level.

The management teams conduct ongoing monitoring. Funds are monitored to ensure that the portfolios meet the non-financial criteria and, where applicable, internally established thresholds (such as the portfolio’s average ESG score or exclusions) We also apply an enhanced due diligence process for companies that may be high risk due to violations of international conventions such as the principles of the UN Global Compact and/or not aligned with anti-financial crime standards or due to poor ESG ratings.

First-level controls are also performed by independent management teams:

  • Contractual non-financial investment restrictions are currently set according to the same methodology as the financial ratios,
  • Environmental, Social, and Governance performance indicators identified according to the fund’s strategy are monitored on a monthly basis by the risk department

In addition, the subfund may undergo occasional and periodic fund compliance checks, which will ensure, in particular, that sectoral exclusions are respected.

Lastly, in connection with labels, controls are conducted by auditors outside the management company.


Methodologies

HSBC relies on a proprietary ESG analysis model with data supplied by non-financial rating agencies and the management company’s internal research. HSBC Asset Management verifies the data used.


Data sources and processing

(a) HSBC Asset Management uses data from a number of external providers such as Sustainalytics, ISS ESG, MSCI ESG Research, and S&P Trucost to ensure that it meets the environmental or social characteristics that it promotes.

(b) HSBC Asset Management verifies the data used.

(c) For the portfolio’s ESG rating, the data are weighted by coefficients reflecting our analysis of the various business sectors and their respective ESG impacts.

(d) Such data, if not communicated by companies, are estimated by our external data providers.


Limitations to methodologies and data

(a) The management company relies on non-financial data providers. As a result, the company is subject to certain operational and data quality risks associated with reliance on third-party service providers and data sources. Furthermore, data coverage may be limited depending on the type of issuer (small caps, certain high-yield issuers) and by the geographical area of the issuer (particularly for emerging countries). When non-financial data are not available in our suppliers’ databases, we initiate a qualitative analysis and possibly exchanges with the company to supplement our assessment of E/S characteristics.

(b) HSBC Asset Management is not aware of any methodological limitations likely to prevent the attainment of the E/S characteristics pursued by the subfund. In addition, the subfund may invest in derivatives. Sustainability risks are therefore more difficult to take into account because the subfund does not invest directly in the underlying asset. No ESG integration methodology can be applied for these financial instruments.


Due diligence

As part of our investment process, we carefully monitor and analyse all companies and other issuers held in actively managed portfolios before and during the investment period. Our monitoring by the analysts, the management teams, investment restrictions, and the risk department is quantitative and qualitative and includes strategy, financial and non-financial performance and constraints, risks, capital structure, social and environmental impact, and corporate governance. For the purposes of this monitoring, we use our own in-house research and the research of brokers and other independent research providers.

We also apply an enhanced due diligence process for companies that may be high risk due to violations of international conventions such as the principles of the UN Global Compact and/or not aligned with anti-financial crime standards or due to poor ESG ratings.

Lastly, our teams in charge of voting and shareholder engagement activities can support the investment teams in the ESG assessment of issuers.

For more details on internal and external controls, please refer to the information provided in the ‘Monitoring of environmental or social characteristics’ section.


Engagement policies

Our approach to shareholder engagement incorporates several levers for action including 1) direct dialogue with companies about their consideration of environmental and social issues to ensure that they are able to face the future and maintain long-term financial viability, 2) the exercising of voting rights by which we express our support for positive development initiatives or, conversely, our disagreement when directors do not meet our expectations, and 3) a gradual escalation procedure with companies when the ESG risks or controversies to which they are exposed are not managed.

Our management and analyst teams meet regularly with the companies in which we invest (or may invest) to better understand their business and strategy, demonstrate our support and/or express our concerns, and promote best practices.

We prioritise dialogue and interaction with companies in which we have significant positions, but also depending on the importance of the environmental or social issues identified. If a company is identified as being at risk on these issues at the end of our ESG analysis, we still favour dialogue over selling the security, but the lack of satisfactory progress or responses by the company in a timely manner that we consider reasonable to implement the desired changes may result in the exclusion of the security from our portfolios.

Lastly, every year, we define engagement themes that we consider to be key. These include climate change, biodiversity conservation, respect for human rights, diversity issues, equity and inclusion, the importance of just transition, and access to healthcare. As signatories to the Net Zero Asset Managers initiative and in keeping with our commitment to contribute to the goal of carbon neutrality for all our assets under management by 2050, we primarily engage in dialogue with companies involved in thermal coal. In concrete terms, we are in contact with companies whose revenues were more than 20 per cent from coal mining as of the end of 2021. As we support a just transition imperative, we engage with companies to assess how their carbon neutrality transition plans take into account impacts on employees, supply chains, communities, and consumers. In terms of diversity, we have set ambitious targets for the number of women of boards of directors. For example, in Continental Europe, we have set a threshold of 40 per cent women in the composition of the boards of directors of large caps, 35 per cent for mid-caps, and 30 per cent for the small caps.

Our priority engagement themes are detailed on our website www.assetmanagement.hsbc.fr/fr/retail-investors/about-us/responsible-investing/stewardship

For our full Engagement Policy and Voting Policy, please visit www.assetmanagement.hsbc.com/about-us/responsible-investing/policies


Designated reference benchmark

Not applicable

Fund Name Category Investment region KID Factsheet Brochure Prospectus Past
Performance
HGIF Global Lower Carbon Bond ACHEUR Fixed Income Global Download KID Download Factsheet Download Brochure Download Prospectus Download Past Performance
HGIF Global Lower Carbon Equity AC Equity Global Download KID Download Factsheet Download Brochure Download Prospectus Download Past Performance
HGIF Corporate Euro Bond Fixed Term 2027 AC Fixed Income Global Download KID Download Factsheet Download Brochure Download Prospectus
HGIF Corporate Euro Bond Fixed Term 2027 AD Fixed Income Global Download KID Download Factsheet Download Brochure Download Prospectus

ESG and Pre-contractual information

Fund Name Precontractual disclosure SFDR periodic report
HGIF Global Lower Carbon Bond Fund Download pre-contractual information Download SFDR periodic report
HGIF Global Lower Carbon Equity Fund Download pre-contractual information Download SFDR periodic report
HSBC GIF Corporate Euro Bond Fixed Term 2027 AC Download pre-contractual information
HSBC GIF Corporate Euro Bond Fixed Term 2027 AD Download pre-contractual information

ESG Information

HGIF Global Lower Carbon Bond ACHEUR

Summary

This financial product promotes environmental or social characteristics, but does not have as its objective sustainable investment.

Do no significant harm is completed as part of our standard investment process, which will include the consideration of Principal Adverse Impacts.

The Investment Adviser will review all SFDR mandatory Principal Adverse Impacts to assess the relevance to the sub-fund. HSBC's Responsible Investment Policy sets out the approach taken to identify and respond to principal adverse sustainability impacts and how HSBC considers ESG sustainability risks as these can adversely impact the securities the sub-funds invest in. HSBC uses third party screening providers to identify companies and governments with a poor track record in managing ESG risks and, where potential material risks are identified, HSBC also carry out further due diligence. Sustainability impacts, including the relevant Principal Adverse Impacts, identified by screening are a key consideration in the investment decision making process and, in turn, this also supports the advice given to clients.

The approach taken, as set out above, means that among other things the following points are scrutinised:

  • companies’ commitment to lower carbon transition, adoption of sound human rights principles and employees’ fair treatment, implementation of rigorous supply chain management practices aiming, among other things, at alleviating child and forced labour. HSBC also pay a great attention to the robustness of corporate governance and political structures which include the level of board independence, respect of shareholders’ rights, existence and implementation of rigorous anti-corruption and bribery policies as well as audit trails; and
  • governments’ commitment to availability and management of resources (including population trends, human capital, education and health), emerging technologies, government regulations and policies (including climate change, anti-corruption and bribery), political stability and governance.

The sub-fund is aligned with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights, including the principles and rights set out in the eight fundamental conventions identified in the Declaration of the International Labour Organisation on Fundamental Principles and Rights at Work a+D8nd the International Bill of Human Rights.


Environmental or social characteristics of the financial product

The sub-fund will promote the following environmental and social characteristics:

  1. Active consideration of low carbon intensity investments compared to the Reference Benchmark.
  2. Responsible business practices in accordance with UN Global Compact and OECD Principles for businesses.
  3. Minimum environmental standards through exclusion of business activities that are deemed harmful to the environment.
  4. Identification and analysis of a company’s environmental characteristics including, but not limited to, physical risks of climate change and human capital management.
  5. Active consideration of environmental issues through engagement and proxy voting.
  6. Analysis of the share of investment involved in controversial weapons.

Investment strategy

(a) The sub-fund aims to provide long term total return by investing in a portfolio of corporate bonds, while promoting ESG characteristics within the meaning of Article 8 of SFDR. The sub-fund aims to do this with a lower carbon intensity calculated as a weighted average of the carbon intensities of the sub-fund’s investments, than the weighted average of the constituents of the Bloomberg Global Aggregate Corporate Diversified Hedged USD (the “Reference Benchmark”).

The sub-fund invests (normally a minimum of 70% of its net assets) in Investment Grade and Non-Investment Grade rated fixed income and other similar securities issued by issuers meeting certain lower carbon criteria (“Lower Carbon Criteria”). Lower Carbon Criteria are explained below.

The sub-fund will invest in both developed markets and Emerging Markets. Investments will be denominated in developed market and Emerging Market currencies.

After identifying the eligible investment universe, the Investment Adviser aims to construct a portfolio with lower carbon intensity, calculated as a weighted average of the carbon intensities of the sub-fund’s investments, than the weighted average of the constituents of the Reference Benchmark. When assessing issuers’ carbon intensity, the Investment Adviser may rely on expertise, research and information provided by well-established financial data providers.

The sub-fund is actively managed and does not track a benchmark. The Reference Benchmark is used for sub-fund market comparison purposes.

This investment strategy is implemented through HSBC's investment process on a continuous basis by way of ongoing review and compliance monitoring of the binding elements.

(b) Governance is assessed against criteria specified in the investment process which includes, among other things, business ethics, culture and values, corporate governance and bribery and corruption. Controversies and reputational risks are assessed through enhanced due diligence as well as screening which are used to identify companies that are considered to have low governance scores. Those companies will then be subjected to further review, action and/or engagement.


Proportion of investments

The sub-fund invests (normally a minimum of 70% of its net assets) in Investment Grade and Non-Investment Grade rated fixed income and other similar securities issued by issuers meeting certain Lower Carbon Criteria. Lower Carbon Criteria is explained above.

Notwithstanding the above, the sub-fund may hold other investments including cash for the purposes of liquidity management and financial derivative instruments. The sub-fund may use financial derivative instruments for hedging purposes and efficient portfolio management purposes. The sub-fund may also use, but not extensively, financial derivative instruments for investment purposes. The financial derivative instruments the sub-fund is permitted to use include, but are not limited to, futures, options, swaps (such as credit default swaps) and foreign exchange forwards (including non-deliverable forwards). Financial derivative instruments may also be embedded in other instruments in which the sub-fund may invest.

The sub-fund promotes Environmental/Social (E/S) characteristics and while it does not have as its objective a sustainable investment, it will have a minimum proportion of 10% of sustainable investments.


Monitoring of environmental or social characteristics

All Sub-funds shall demonstrate strong and/or improving ESG characteristics at the issuer and overall portfolio level. Such criteria can be quantitative or qualitative and are monitored on an on-going basis. HSBC Asset Management conducts on-going monitoring of sub-funds - both at the issuer and overall portfolio level. Companies with ESG risk scores that require targeted review are assessed within an internal governance forum. Funds are monitored via an ESG dashboard to ensure portfolios align to the internally established thresholds (for example - portfolio average ESG score, exclusions, enhanced due diligence etc.).

Good corporate governance has long been incorporated in our proprietary fundamental company research. HSBC Asset Management's Stewardship team meets with companies regularly to improve our understanding of their business and strategy, signal support or concerns we have with management actions and promote best practice. HSBC Asset Management believes that good corporate governance ensures that companies are managed in line with the long-term interests of their investors.

For our full Stewardship Policy, please go to www.assetmanagement.hsbc.com/about-us/responsible-investing/policies.


Methodologies

HSBC uses its own proprietary systematic investment process to measure how the environmental characteristics promoted by the sub-fund are met. HSBC will use data provided by a number or third parties. All data used will be verified by HSBC Asset Management's extensive research department.


Data sources and processing

(a) HSBC Asset Management uses data from a number of external third parties such as Sustainalytics, ISS, MSCI and Trucost to ensure it attains the environmental characteristics promoted. HSBC Asset Management also use a number of ESG rating agencies for norms-based screening against the UN Global Compact principles.

(b) The data is verified by HSBC Asset management's extensive research department.

(c) The data is processed via HSBC Asset Management's propriety research methodology.

(d) HSBC Asset Management is reliant on third party data and while we verify the data, we cannot comment on limitation to the methodologies of such third-party companies. No data is estimated by HSBC Asset Management.


Limitations to methodologies and data

(a) While HSBC Asset Management use third party data from multiple sources, HSBC Asset Management review and research such data, however there is still limited coverage of the data available. In certain asset classes, ESG data may not be publicly available via third party data providers or not sufficient. In such instances, HSBC leverages proprietary methodologies to support ESG assessments at the security and portfolio level.

(b) HSBC Asset Management is not aware of any limitation in meeting the environmental or social characteristics of the sub-fund.


Due diligence

As an integral part of our investment process, we carefully monitor and analyse all companies and other issuers held in active portfolios both before and during the period of our investment. Our monitoring is quantitative and qualitative and includes; strategy, financial and non-financial performance and risk, capital structure, social and environmental impact and corporate governance. It may include assessment of companies and issuers’ disclosures, consideration of research from brokers and other independent research providers – including ESG & voting research, attending individual & group meetings with management and directors, visiting production sites, talking to competitors, customers and other stakeholders, and our own financial modelling. Companies and other issuers held in active portfolios are discussed regularly within our investment teams, informed by our monitoring and analysis. Lastly, our Stewardship & Engagement teams play a role in supporting investment teams when it comes to assessing issuers against ESG considerations. Our Engagement Policy and Stewardship Plan is available on our website www.assetmanagement.hsbc/responsible-investing/policies.


Engagement policies

HSBC Asset Management uses a number of ESG rating agencies for norms-based screening against the UN Global Compact principles. Good corporate governance has long been incorporated in our proprietary fundamental company research. HSBC meets with investee companies (and potential investee companies) regularly to improve our understanding of their business and strategy, to signal support and/or to highlight concerns we have with management actions and promote best practice. HSBC believes that good corporate governance ensures that companies are managed in line with the long-term interests of their investors.

We meet the management of investee companies (or potential investee companies) and other issuers regularly as part of our active investment process. This engagement is a key element in our stewardship oversight of client assets. It may form part of our monitoring of investee companies (or potential investee companies) and issuers or it may represent a means of escalation of any concerns we identify. We challenge companies and issuers on their delivery of corporate strategy, financial and non-financial performance and risk, allocation of capital and management of environmental, social and governance issues. We engage to understand the approach management is taking and to test how far they are being good stewards. We also encourage investee companies and other issuers held in client portfolios to establish and maintain high levels of transparency, particularly in their management of ESG issues and risks. We raise ESG or other concerns with investee companies and other issuers where we believe that to be in the interest of investors, identifying company specific or systemic risks. We prioritise our engagement on the basis of scale of client holdings, salience of the issues concerned, and our overall exposure to these issues.

For our full Engagement Policy, please go to www.assetmanagement.hsbc.com/about-us/responsible-investing/policies.


Designated reference benchmark

The Bloomberg Global Aggregate Corporate Diversified Hedged USD, will be used to measure the sub-fund's carbon intensity, but has not been designated for the purpose of attaining the environmental or social characteristics of the sub-fund.


Important information

The material contained herein is for marketing purposes and is for your information only. This document is not contractually binding nor are we required to provide this to you by any legislative provision. It does not constitute legal, tax or investment advice or a recommendation to any reader of this material to buy or sell investments. You must not, therefore, rely on the content of this document when making any investment decisions.

This document is distributed in France, Italy, Spain and Sweden by HSBC Asset Management (France) and is only intended for professional investors as defined by MIFID.

The information contained herein is subject to change without notice.

The information provided herein is simplified and therefore incomplete.

The material contained herein is for information purposes only and does not constitute investment advice or a recommendation to any reader of this material to buy or sell investments. Care has been taken to ensure the accuracy of this document, but HSBC Asset Management accepts no responsibility for any errors or omissions contained herein. All non-authorised reproduction or use of this commentary and analysis will be the responsibility of the user and will be likely to lead to legal proceedings. This document has no contractual value and is not by any means intended as a solicitation, nor a recommendation for the purchase or sale of any financial instrument in any jurisdiction in which such an offer is not lawful. The commentary and analysis presented in this document reflect the opinion of HSBC Asset Management on the markets, according to the information available to date. They do not constitute any kind of commitment from HSBC Asset Management. Consequently, HSBC Asset Management will not be held responsible for any investment or disinvestment decision taken on the basis of the commentary and/or analysis in this document. All data from HSBC Asset Management unless otherwise specified. Any third party information has been obtained from sources we believe to be reliable, but which we have not independently verified.

The fund is a sub-fund of HSBC Global Investment Funds, a Luxemburg domiciled SICAV.
Before subscription, investors should refer to Key investor document (KID) of the fund as well as its complete prospectus. For more detailed information on the risks associated with this fund, investors should refer to the complete prospectus of the fund The shares of HSBC Global Investment Funds have not been 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 to United States Persons.

Shares of the Company may not be offered or sold for sale or sold to any "U.S. Person within the meaning of the Articles of Incorporation, i.e. a citizen or resident of the United States of America (the "United States"), a partnership organised or existing under the laws of any state, territory or possession of the United States, or a corporation organised or existing under the laws of the United States or of any state, territory or possession thereof, or any estate or trust, other than an estate or trust the income of which from sources outside the United States is not includible in gross income for purposes of computing United States income tax payable by it.

Please note that funds included in this material may be covered by regulations outside of the European Economic Area (The EEA). Local regulations may vary, and can potentially impact your right to funds.

HSBC Asset Management is the brand name for the asset management business of HSBC Group. The above document has been produced by HSBC Asset Management (France) and has been approved for distribution/issue by the following entities : In France by HSBC Asset Management (France), a Portfolio Management Company authorised by the French regulatory authority AMF (no. GP99026); in Italy and Spain through the Milan and Madrid branches of HSBC Asset Management (France), regulated by Banca d’Italia and Commissione Nazionale per le Società e la Borsa (Consob) in Italy, and the Comisión Nacional del Mercado de Valores (CNMV) in Spain. In Sweden, through the Stockholm branch of HSBC Asset Management (France), regulated by the Swedish Financial Supervisory Authority Finansinspektionen).

HSBC Asset Management (France) - 421 345 489 RCS Nanterre. Portfolio management company authorised by the French regulatory authority AMF (no. GP99026) with capital of 8.050.320 euros. Postal address: 75419 Paris cedex 08, France. Offices: Immeuble Coeur Défense, 110, esplanade du Général Charles de Gaulle, 92400 Courbevoie - La Défense 4 . (Website: www.assetmanagement.hsbc.lu).

Copyright © 2022. HSBC Asset Management (France). All rights reserved

Important information for Luxembourg investors: HSBC entities in Luxembourg are regulated and authorised by the Commission de Surveillance du Secteur Financier (CSSF).

Further Information can be found in the prospectus.
Bloomberg® is a trademark and service mark of Bloomberg Finance L.P. (collectively with its affiliates, “Bloomberg”). Barclays® is a trademark and service mark of Barclays Bank Plc (collectively with its affiliates, “Barclays”), used under license. Bloomberg or Bloomberg’s licensors, including Barclays, own all proprietary rights in the Bloomberg Barclays Indices. Neither Bloomberg nor Barclays approve or endorse this material, or guarantees the accuracy or completeness of any information herein, or makes any warranty, express or implied, as to the results to be obtained therefrom and, to the maximum extent allowed by law, neither shall have any liability or responsibility for injury or damages arising in connection therewith.

HGIF Global Lower Carbon Equity AC

Summary

This financial product promotes environmental or social characteristics, but does not have as its objective sustainable investment.

Do no significant harm is completed as part of our standard investment process, which will include the consideration of Principal Adverse Impacts.

The Investment Adviser will review all SFDR mandatory Principal Adverse Impacts to assess the relevance to the sub-fund. HSBC's Responsible Investment Policy sets out the approach taken to identify and respond to principal adverse sustainability impacts and how HSBC considers ESG sustainability risks as these can adversely impact the securities the sub-funds invest in. HSBC uses third party screening providers to identify companies and governments with a poor track record in managing ESG risks and, where potential material risks are identified, HSBC also carry out further due diligence. Sustainability impacts, including the relevant Principal Adverse Impacts, identified by screening are a key consideration in the investment decision making process and, in turn, this also supports the advice given to clients.

The approach taken, as set out above, means that among other things the following points are scrutinised:

  • companies’ commitment to lower carbon transition, adoption of sound human rights principles and employees’ fair treatment, implementation of rigorous supply chain management practices aiming, among other things, at alleviating child and forced labour. HSBC also pay a great attention to the robustness of corporate governance and political structures which include the level of board independence, respect of shareholders’ rights, existence and implementation of rigorous anti-corruption and bribery policies as well as audit trails; and
  • governments’ commitment to availability and management of resources (including population trends, human capital, education and health), emerging technologies, government regulations and policies (including climate change, anti-corruption and bribery), political stability and governance.

The sub-fund is aligned with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights, including the principles and rights set out in the eight fundamental conventions identified in the Declaration of the International Labour Organisation on Fundamental Principles and Rights at Work and the International Bill of Human Rights.


Environmental or social characteristics of the financial product

The sub-fund will promote the following environmental and social characteristics:

  1. Active consideration of low carbon intensity investments and higher ESG scores compared to the index. The MSCI World Index (the Reference Benchmark), will be used to measure the sub-fund's carbon intensity and ESG scores.
  2. Responsible business practices in accordance with UN Global Compact.
  3. Minimum environmental standards through exclusion of business activities that are deemed harmful to the environment.
  4. Identification and analysis of a company’s environmental and social characteristics including, but not limited to, physical risks of climate change and human capital management.
  5. Active consideration of environmental and social issues through engagement and proxy voting.
  6. Exclusion of share of investment involved in controversial weapons.
  7. Active consideration of environmental issues through engagement and proxy voting.
  8. Analysis of the share of investment involved in controversial weapons.

Investment strategy

(a) The sub-fund invests in normal market conditions a minimum of 90% of its net assets in accordance with the Lower Carbon Strategy as described below, in equities and equity-equivalent securities of companies which are domiciled in, based in, carry out the larger part of their business activities in, or are listed on a Regulated Market in developed markets.

The sub-fund aims for lower exposure to carbon intensive businesses through portfolio construction.

The sub-fund uses a multi-factor investment process, based on five factors (value, quality, momentum, low risk and size), to identify and rank stocks in its investment universe with the aim of maximising the portfolio’s risk-adjusted return. Although the investment process currently uses these five factors, it is subject to ongoing research regarding the current and potential additional factors. In order to lower exposure to carbon intensive businesses and raise the sub-fund’s ESG rating, all holdings in the portfolio are assessed for their individual carbon intensity and ESG scores.

A HSBC proprietary systematic investment process is then used to create a portfolio which:

  1. maximises exposure to higher ranked stocks, and
  2. aims for a lower carbon intensity and higher ESG rating calculated respectively as a weighted average of the carbon intensities and ESG ratings of the sub-fund’s investments, than the weighted average of the constituents of the Reference Benchmark.

(b) Governance is a key pillar (the “G-pillar”) of the ESG process and we aim to improve the G pillar versus the Reference Benchmark.

HSBC's Stewardship team meets with companies regularly to improve our understanding of their business and strategy, signal support or concerns we have with management actions and promote best practice. HSBC believes that good corporate governance ensures that companies are managed in line with the long-term interests of their investors.


Proportion of investments

The sub-fund invests in normal market conditions a minimum of 90% of its net assets in accordance with the Lower Carbon Strategy as described below, in equities and equity-equivalent securities of companies which are domiciled in, based in, carry out the larger part of their business activities in, or are listed on a Regulated Market in developed markets.

The sub-fund uses a multi-factor investment process, based on five factors (value, quality, momentum, low risk and size), to identify and rank stocks in its investment universe with the aim of maximising the portfolio’s risk-adjusted return. Although the investment process currently uses these five factors, it is subject to ongoing research regarding the current and potential additional factors. In order to lower exposure to carbon intensive businesses and raise the sub-fund’s ESG rating, all holdings in the portfolio are assessed for their individual carbon intensity and ESG scores.

The sub-fund may invest up to 10% of its net assets in units or shares of UCITS and/or other Eligible UCIs (including other sub-funds of HSBC Global Investment Funds).

The sub-fund may use financial derivative instruments for hedging and cash flow management (for example, Equitisation). The sub-fund may also use, but not extensively, financial derivative instruments for investment purposes. The financial derivative instruments the sub-fund is permitted to use include, but are not limited to, futures and foreign exchange forwards (including non-deliverable forwards). Financial derivative instruments may also be embedded in other instruments in which the sub-fund may invest. Financial derivative instruments may also be used for efficient portfolio management purposes.

The sub-fund promotes Environmental/Social (E/S) characteristics and while it does not have as its objective a sustainable investment, it will have a minimum proportion of 10% of sustainable investments.


Monitoring of environmental or social characteristics

All Sub-funds shall demonstrate strong and/or improving ESG characteristics at the issuer and overall portfolio level. Such criteria can be quantitative or qualitative and are monitored on an on-going basis. HSBC Asset Management conducts on-going monitoring of sub-funds - both at the issuer and overall portfolio level. Companies with ESG risk scores that require targeted review are assessed within an internal governance forum. Funds are monitored via an ESG dashboard to ensure portfolios align to the internally established thresholds (for example - portfolio average ESG score, exclusions, enhanced due diligence etc.).

Good corporate governance has long been incorporated in our proprietary fundamental company research. HSBC Asset Management's Stewardship team meets with companies regularly to improve our understanding of their business and strategy, signal support or concerns we have with management actions and promote best practice. HSBC Asset Management believes that good corporate governance ensures that companies are managed in line with the long-term interests of their investors.

For our full Stewardship Policy, please go to www.assetmanagement.hsbc.com/about-us/responsible-investing/policies.


Methodologies

HSBC uses its own proprietary systematic investment process to measure how the environmental characteristics promoted by the sub-fund are met. HSBC will use data provided by a number or third parties. All data used will be verified by HSBC Asset Management's extensive research department.


Data sources and processing

(a) HSBC Asset Management uses data from a number of external third parties such as Sustainalytics, ISS, MSCI and Trucost to ensure it attains the environmental characteristics promoted. HSBC Asset Management also use a number of ESG rating agencies for norms-based screening against the UN Global Compact principles.

(b) The data is verified by HSBC Asset management's extensive research department.

(c) The data is processed via HSBC Asset Management's propriety research methodology.

(d) HSBC Asset Management is reliant on third party data and while we verify the data, we cannot comment on limitation to the methodologies of such third-party companies. No data is estimated by HSBC Asset Management.


Limitations to methodologies and data

(a) While HSBC Asset Management use third party data from multiple sources, HSBC Asset Management review and research such data, however there is still limited coverage of the data available. In certain asset classes, ESG data may not be publicly available via third party data providers or not sufficient. In such instances, HSBC leverages proprietary methodologies to support ESG assessments at the security and portfolio level.

(b) HSBC Asset Management is not aware of any limitation in meeting the environmental or social characteristics of the sub-fund.


Due diligence

As an integral part of our investment process, we carefully monitor and analyse all companies and other issuers held in active portfolios both before and during the period of our investment. Our monitoring is quantitative and qualitative and includes; strategy, financial and non-financial performance and risk, capital structure, social and environmental impact and corporate governance. It may include assessment of companies and issuers’ disclosures, consideration of research from brokers and other independent research providers – including ESG & voting research, attending individual & group meetings with management and directors, visiting production sites, talking to competitors, customers and other stakeholders, and our own financial modelling. Companies and other issuers held in active portfolios are discussed regularly within our investment teams, informed by our monitoring and analysis. Lastly, our Stewardship & Engagement teams play a role in supporting investment teams when it comes to assessing issuers against ESG considerations. Our Engagement Policy and Stewardship Plan is available on our website www.assetmanagement.hsbc/responsible-investing/policies.


Engagement policies

HSBC Asset Management uses a number of ESG rating agencies for norms-based screening against the UN Global Compact principles. Good corporate governance has long been incorporated in our proprietary fundamental company research. HSBC meets with investee companies (and potential investee companies) regularly to improve our understanding of their business and strategy, to signal support and/or to highlight concerns we have with management actions and promote best practice. HSBC believes that good corporate governance ensures that companies are managed in line with the long-term interests of their investors.

We meet the management of investee companies (or potential investee companies) and other issuers regularly as part of our active investment process. This engagement is a key element in our stewardship oversight of client assets. It may form part of our monitoring of investee companies (or potential investee companies) and issuers or it may represent a means of escalation of any concerns we identify. We challenge companies and issuers on their delivery of corporate strategy, financial and non-financial performance and risk, allocation of capital and management of environmental, social and governance issues. We engage to understand the approach management is taking and to test how far they are being good stewards. We also encourage investee companies and other issuers held in client portfolios to establish and maintain high levels of transparency, particularly in their management of ESG issues and risks. We raise ESG or other concerns with investee companies and other issuers where we believe that to be in the interest of investors, identifying company specific or systemic risks. We prioritise our engagement on the basis of scale of client holdings, salience of the issues concerned, and our overall exposure to these issues.

For our full Engagement Policy, please go to www.assetmanagement.hsbc.com/about-us/responsible-investing/policies.


Designated reference benchmark

The MSCI World Index will be used to measure the sub-fund's carbon intensity and ESG scores, but has not been designated for the purpose of attaining the environmental or social characteristics of the sub-fund.


Important information

The material contained herein is for marketing purposes and is for your information only. This document is not contractually binding nor are we required to provide this to you by any legislative provision. It does not constitute legal, tax or investment advice or a recommendation to any reader of this material to buy or sell investments. You must not, therefore, rely on the content of this document when making any investment decisions.

This document is distributed in France, Italy, Spain and Sweden by HSBC Asset Management (France) and is only intended for professional investors as defined by MIFID.

The information contained herein is subject to change without notice.

The information provided herein is simplified and therefore incomplete.

The material contained herein is for information purposes only and does not constitute investment advice or a recommendation to any reader of this material to buy or sell investments. Care has been taken to ensure the accuracy of this document, but HSBC Asset Management accepts no responsibility for any errors or omissions contained herein. All non-authorised reproduction or use of this commentary and analysis will be the responsibility of the user and will be likely to lead to legal proceedings. This document has no contractual value and is not by any means intended as a solicitation, nor a recommendation for the purchase or sale of any financial instrument in any jurisdiction in which such an offer is not lawful. The commentary and analysis presented in this document reflect the opinion of HSBC Asset Management on the markets, according to the information available to date. They do not constitute any kind of commitment from HSBC Asset Management. Consequently, HSBC Asset Management will not be held responsible for any investment or disinvestment decision taken on the basis of the commentary and/or analysis in this document. All data from HSBC Asset Management unless otherwise specified. Any third party information has been obtained from sources we believe to be reliable, but which we have not independently verified.

The fund is a sub-fund of HSBC Global Investment Funds, a Luxemburg domiciled SICAV.
Before subscription, investors should refer to Key investor document (KID) of the fund as well as its complete prospectus. For more detailed information on the risks associated with this fund, investors should refer to the complete prospectus of the fund The shares of HSBC Global Investment Funds have not been 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 to United States Persons.

Shares of the Company may not be offered or sold for sale or sold to any "U.S. Person within the meaning of the Articles of Incorporation, i.e. a citizen or resident of the United States of America (the "United States"), a partnership organised or existing under the laws of any state, territory or possession of the United States, or a corporation organised or existing under the laws of the United States or of any state, territory or possession thereof, or any estate or trust, other than an estate or trust the income of which from sources outside the United States is not includible in gross income for purposes of computing United States income tax payable by it.

Please note that funds included in this material may be covered by regulations outside of the European Economic Area (The EEA). Local regulations may vary, and can potentially impact your right to funds.

HSBC Asset Management is the brand name for the asset management business of HSBC Group. The above document has been produced by HSBC Asset Management (France) and has been approved for distribution/issue by the following entities : In France by HSBC Asset Management (France), a Portfolio Management Company authorised by the French regulatory authority AMF (no. GP99026); in Italy and Spain through the Milan and Madrid branches of HSBC Asset Management (France), regulated by Banca d’Italia and Commissione Nazionale per le Società e la Borsa (Consob) in Italy, and the Comisión Nacional del Mercado de Valores (CNMV) in Spain. In Sweden, through the Stockholm branch of HSBC Asset Management (France), regulated by the Swedish Financial Supervisory Authority Finansinspektionen).

HSBC Asset Management (France) - 421 345 489 RCS Nanterre. Portfolio management company authorised by the French regulatory authority AMF (no. GP99026) with capital of 8.050.320 euros. Postal address: 75419 Paris cedex 08, France. Offices: Immeuble Coeur Défense, 110, esplanade du Général Charles de Gaulle, 92400 Courbevoie - La Défense 4 . (Website: www.assetmanagement.hsbc.lu).

Copyright © 2022. HSBC Asset Management (France). All rights reserved

Important information for Luxembourg investors: HSBC entities in Luxembourg are regulated and authorised by the Commission de Surveillance du Secteur Financier (CSSF).

Further Information can be found in the prospectus.
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, non-infringement, 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)

 

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SFDR Entity Report Summary

Entity Name Summary document
HSBC Investments Funds (Luxembourg) S.A. Download summary document
HSBC Global Asset Management (Malta) Limited Download summary document
HSBC Global Asset Management (France) Download summary document

Notice

Should you require further information related to the funds please contact us on: infomalta@hsbc.com


Disclaimer

Approved and issued by HSBC Asset Management (Malta) Ltd, Business Banking Centre, 80, Mill Street, Qormi QRM 3101, Company Reg No C20653 which is authorised to provide investment services by the Malta Financial Services Authority under the Investment Services Act.