HSBC Canadian Money Market Fund - HSBC Canada

HSBC Canadian Money Market Fund Annual Management Report of Fund Performance for the year ended December 31, 2017

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HSBC Canadian Money Market Fund Management Discussion of Fund Performance In this document, you and your refer to the unitholder of the Fund; we, us and our refer to HSBC Global Asset Management (Canada) Limited; and the Fund refers to the HSBC Canadian Money Market Fund.

Results of Operations

We are the manager, trustee and primary investment advisor of the Fund.

As of December 31, 2017, the Fund’s net assets decreased by 2% to $193.6 million from $197.5 million at the end of 2016. Of this decrease, a $0.9 million gain was attributable to investment performance and $4.8 million was attributable to net withdrawals from the Fund.

Introduction

Investment Performance The HSBC Canadian Money Market Fund (Investor Series) rose 0.26% for the 12-month period ending December 31, 2017, while the benchmark rose 0.62% over the same period. The benchmark is a weighted composite consisting of the FTSE TMX Canada 30 Day T-Bill Index (50%) and the FTSE TMX Canada 60 Day T-Bill Index (50%).

This Annual Management Report of Fund Performance contains financial highlights but does not contain the complete annual financial statements of the investment fund. You may obtain a copy of the Fund’s annual financial statements at your request, at no cost, by calling us toll-free at 1-888-390-3333, by visiting our website at www.hsbc.ca/investment-resources, by visiting the SEDAR website at www.sedar.com or by writing to us at:

The marginal improvement in portfolio and market returns compared to 2016 reflects the slightly higher investable rate environment following two Bank of Canada policy rate increases in 2017.

Corporate Secretary HSBC Global Asset Management (Canada) Limited 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8

We took a defensive position to the corporate debt sector in 2017, focusing on high-quality issues to minimize credit and liquidity risk. The return from the defensive corporate position compared to that from alternative government notes was modest over the year, but generally commensurate with the reduced level of risk. An allocation to corporate notes is usually positive for performance due to the higher yields they can offer over government-backed alternatives. However, these notes come with additional risks that may be unsuitable for the Fund at any level of compensation.

You may also contact us using one of these methods to request a copy of the Fund’s interim financial report, proxy voting policies and procedures, proxy voting disclosure record or quarterly statement of investment portfolio.

Investment Objective and Strategies The fundamental investment objective of this Fund is to provide a high level of monthly interest income while preserving capital. To achieve its objectives, the Fund invests primarily in high-quality, short-term Canadian fixed income securities denominated in Canadian dollars such as treasury bills and other fixed income securities issued or guaranteed by the Government of Canada or a province of Canada, a foreign government or related foreign government agency, or a Canadian or foreign corporation. The Fund may invest up to 33% of its assets in Canadian-dollar-denominated foreign securities. All of the Fund’s securities will have a term to maturity of 365 days or less, with an average term to maturity of no more than 60 days.

We work within an extensive network of global credit research analysts to ensure that a prudent security selection process is in place. We also look to add value by adjusting the weighted average maturity (or duration) of the portfolio holdings relative to its benchmark. Over the year, the Fund’s duration was targeted close to its blended 45-day benchmark, mitigating any relative interest rate risk.

Recent Developments The Bank of Canada raised its policy rate twice in the second half of 2017 to 1.00%, but has indicated that it will proceed cautiously with normalizing policy further and will be guided by incoming data.

Risk The risks of investing in this Fund remain as discussed in the Simplified Prospectus. During the year, there were no material changes to the Fund that affected the overall risk level of the Fund.

Supportive financial conditions, along with strong employment growth and improving US demand, suggest an improving outlook for the Canadian economy and a reduction of the output gap. Core inflation and wage pressures show signs of firming and inflation expectations are marginally higher. While recent data has evolved fairly constructively and reduced the need for a record-low level of policy rate support, the Bank of Canada remains focused on the risks to its inflation outlook.

This Fund is suitable for investors who want to earn interest income and preserve their capital, have a short-term investment time horizon and have a low tolerance for risk.

1

HSBC Canadian Money Market Fund down due to the increase/decrease in net assets from operations being based on average units outstanding during the year and all other numbers being based on actual units outstanding at the relevant point in time.

We expect the next rate hike in the first quarter of 2018, but believe that uncertainty around the durability of the household and export sectors, and ongoing financial stability risks (particularly from the housing sector), will warrant the Bank of Canada to be cautious in the pace at which it removes its monetary policy support.

HSBC Canadian Money Market Fund – Investor Series – Net Assets per Unit(1)

The Fund remains focused on high-quality government and corporate issues where liquidity risk and credit risk are minimized.

Years ended December 31 2017

Related Party Transactions

Net assets per unit, beginning of year (2)

We, on behalf of the Fund, or the Fund Manager, may, from time to time, enter into transactions or arrangements with or involving other members of the HSBC Group or other people or companies related or connected to us or the Fund. To proceed with the transactions, the Fund relies on the positive recommendation of the Fund’s Independent Review Committee. A condition of this positive recommendation is that the transactions are performed in accordance with our policy on Related Party Transactions. For more general information on persons related to the Fund and the types of potential transactions, see the Fund’s Simplified Prospectus. The following is a summary of current transactions and arrangements with entities that are related to us or the Fund.

Manager, Trustee and Investment Advisor We are the manager, trustee and primary investment advisor of the Fund. As manager, we manage the overall business and operations of the Fund. As trustee, we hold legal title to the property of the Fund on your behalf. As primary investment advisor, we provide investment advice and portfolio management services to the Fund. We receive a fee from the Fund for these services based on assets under management, calculated daily and paid monthly.

2016

2015

2014

2013

$10.00 $10.00 $10.00 $10.00 $10.00

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.09 (0.07) – –

0.07 (0.06) – –

0.08 (0.07) – –

0.10 (0.10) – 0.01

0.11 (0.10) – –

Total increase (decrease) from operations (2)

$0.02

$0.01

$0.01

$0.01

$0.01

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

(0.02) – – –

(0.01) – – –

(0.01) – – –

(0.01) – – –

(0.01) – – –

Total annual distributions (2,3)

$(0.02) $(0.01) $(0.01) $(0.01) $(0.01)

Net assets per unit at December 31 of year shown (2)

$10.00 $10.00 $10.00 $10.00 $10.00

Ratios and Supplemental Data Years ended December 31 2017 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Net Asset Value per unit (4)

Distribution Services The Fund is distributed through us, HSBC Investment Funds (Canada) Inc. (our wholly owned subsidiary and affiliate) and HSBC Securities (Canada) Inc. (an affiliate) directly or through its division, HSBC InvestDirect. We pay distribution and servicing fees to them based on the amount of assets held in the investor’s account, and additionally, in some cases, on the amount of the initial purchase. If you hold units of this Fund and/or other HSBC Mutual Funds in a registered plan with HSBC Investment Funds (Canada) Inc., they may charge you an annual fee to cover the annual administration costs of the plan. We permit HSBC Investment Funds (Canada) Inc. to collect these fees by redeeming sufficient units of the Fund with the highest market value in your registered plan.

Financial Highlights The following tables show selected key financial information about the Fund and are intended to help you understand the Fund’s financial performance for the past five years. This information is derived from the Fund’s audited annual financial statements. The information in the following tables is based on prescribed regulations, and, as a result, is not expected to add 2

2016

2015

2014

2013

$80,968 $94,686 $105,687 $121,931 $144,603 8,097

9,469

10,569

12,193

14,460

0.61%

0.56%

0.73%

0.98%

1.03%

1.00% n/a $10.00

0.98% n/a $10.00

0.98% n/a $10.00

0.98% n/a $10.00

1.03% n/a $10.00

HSBC Canadian Money Market Fund HSBC Canadian Money Market Fund – Advisor Series – Net Assets per Unit(1)

Ratios and Supplemental Data Years ended December 31

Years ended December 31

2017 2017

Net assets per unit, beginning of year (2)

2016

2015

2014

2013

$10.00 $10.00 $10.00 $10.00 $10.00

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.09 (0.06) – –

0.07 (0.06) – –

0.08 (0.07) – –

0.10 (0.10) – –

0.11 (0.10) – –

Total increase (decrease) from operations (2)

$0.03

$0.01

$0.01

$–

$0.01

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Net Asset Value per unit (4)

– – – –

(0.01) – – –

Total annual distributions (2,3)

$(0.03) $(0.01) $(0.01)

$–

$(0.01)

Net assets per unit at December 31 of year shown (2)

$10.00 $10.00 $10.00 $10.00 $10.00

(0.03) – – –

(0.01) – – –

2014

2013

3,806

3,905

3,091

3,712

4,361

0.47%

0.43%

0.42%

0.43%

0.48%

0.47% n/a $10.00

0.43% n/a $10.00

0.42% n/a $10.00

0.43% n/a $10.00

0.48% n/a $10.00

Years ended December 31 2017 Net assets per unit, beginning of year (2)

Ratios and Supplemental Data Years ended December 31 2017

2016

2015

2014

2013

$139

$286

$140

$123

$445

14 29 14 12 44 0.61% 0.56% 0.72% 1.02% 1.03% 1.39% 1.81% 2.07% 1.02% 1.05% n/a n/a n/a n/a n/a $10.00 $10.00 $10.00 $10.00 $10.00

HSBC Canadian Money Market Fund – Premium Series – Net Assets per Unit(1) 2017

2016

2015

2014

0.07 (0.04) – –

0.08 (0.04) – –

0.10 (0.04) – 0.01

0.11 (0.05) – –

Total increase (decrease) from operations (2)

$0.04

$0.03

$0.04

$0.07

$0.06

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

(0.04) – – –

(0.03) – – –

(0.04) – – –

(0.07) – – –

(0.06) – – –

Total annual distributions (2,3)

$(0.04) $(0.03) $(0.04) $(0.07) $(0.06)

Net assets per unit at December 31 of year shown (2)

$10.00 $10.00 $10.00 $10.00 $10.00

2014

2013

$10.00 $10.00 $10.00 $10.00 $10.00

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.08 (0.05) – –

0.07 (0.05) – –

0.08 (0.07) – –

0.10 (0.07) – 0.01

0.11 (0.07) – –

Total increase (decrease) from operations (2)

$0.03

$0.02

$0.01

$0.04

$0.04

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

(0.03) – – –

(0.02) – – –

(0.01) – – –

(0.04) – – –

(0.04) – – –

Total annual distributions (2,3)

$(0.03) $(0.02) $(0.01) $(0.04) $(0.04)

Net assets per unit at December 31 of year shown (2)

$10.00 $10.00 $10.00 $10.00 $10.00

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Net Asset Value per unit (4)

$10.00 $10.00 $10.00 $10.00 $10.00 0.09 (0.05) – –

2015

Years ended December 31

2013

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

2016

Ratios and Supplemental Data

Years ended December 31 Net assets per unit, beginning of year (2)

2015

HSBC Canadian Money Market Fund – Manager Series – Net Assets per Unit(1) (0.01) – – –

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Net Asset Value per unit (4)

2016

$38,060 $39,046 $30,914 $37,120 $43,608

3

2017

2016

2015

2014

2013

$74

$747

$871 $1,161 $1,398

7 75 87 116 140 0.50% 0.51% 0.68% 0.70% 0.74% 0.85% 0.78% 0.74% 0.70% 0.74% n/a n/a n/a n/a n/a $10.00 $10.00 $10.00 $10.00 $10.00

HSBC Canadian Money Market Fund Management Fees

HSBC Canadian Money Market Fund – Institutional Series – Net Assets per Unit(1)

For the year ended December 31, 2017, the Fund paid us management fees of $868,975. The management fee for each series is calculated as a percentage of the daily net asset value for that series. The fees are reduced, where required, so that these fees do not duplicate fees payable by mutual funds in which the Fund invests for the same service.

Years ended December 31 2017 Net assets per unit, beginning of year (2)

2016

2015

2014

2013

$10.00 $10.00 $10.00 $10.00 $10.00

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.09 (0.01) – –

0.07 – – –

0.08 – – –

0.09 (0.01) – 0.01

0.11 (0.01) – –

Total increase (decrease) from operations (2)

$0.08

$0.07

$0.08

$0.09

$0.10

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

(0.08) – – –

(0.07) – – –

(0.08) – – –

(0.09) – – –

(0.10) – – –

Total annual distributions (2,3)

$(0.08) $(0.07) $(0.08) $(0.09) $(0.10)

Net assets per unit at December 31 of year shown (2)

$10.00 $10.00 $10.00 $10.00 $10.00

The Fund’s management fees were used by us to pay costs for managing the investment portfolio, providing investment analysis and recommendations, making investment decisions, making brokerage arrangements for the purchase and sale of the investment portfolio and providing other services. The management fees also funded commission payments and other compensation to sales representatives and registered dealers and brokers (collectively “distribution costs”), including HSBC Investment Funds (Canada) Inc., for units of the Fund bought and held by unitholders. Finally, we used management fees to pay for additional marketing and distribution services to the Fund. For the year ended December 31, 2017, approximately 46% of the total management fees collected from all HSBC Mutual Funds were used to fund distribution costs. In comparison, for the Fund, such distribution costs represented 40% of the management fees collected. This may vary by series depending on the assets invested in each of the series.

Ratios and Supplemental Data Years ended December 31 2017 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Net Asset Value per unit (4)

2016

2015

2014

2013

$74,387 $62,727 $58,187 $55,543 $51,187 7,439

6,273

5,819

5,554

5,119

0.08%

0.04%

0.05%

0.06%

0.10%

0.08% n/a $10.00

0.04% n/a $10.00

0.05% n/a $10.00

0.06% n/a $10.00

0.10% n/a $10.00

Past Performance The performance information shown assumes that all distributions made by the Fund in the years shown were reinvested in additional securities of the Fund. The performance information does not take into account sales, redemption, distribution, optional charges or expenses you may be charged outside of the Fund or the effect of any income tax you may have to pay as a result of your investment in the Fund that would have reduced returns or performance. The performance of different fund series may vary for a number of reasons, including differences in management fees and expenses. The Fund’s past performance does not necessarily indicate how it will perform in the future.

(1) This information is derived from the Fund’s audited annual financial statements. 2017, 2016, 2015, 2014 and 2013 balances are stated in IFRS. Under IFRS, the net asset per unit presented in the financial statements is the same as the net asset value calculated for fund pricing purposes. (2) Net assets per unit and distributions per unit are based on the actual number of units outstanding for the relevant series at the relevant time. The increase/decrease in net assets from operations per unit is based on the weighted average number of units outstanding for the relevant series over the fiscal year.

Year-by-Year Returns Years ended December 31

(3) Distributions are automatically reinvested in additional units of the Fund, unless the unitholder withdraws from the automatic reinvestment plan by providing written notice to us.

The following bar charts show the Fund’s performance for each of the years shown, and illustrate how the Fund’s performance changed from year to year. In percentage terms, the bar charts show how much an investment made on the first day of each financial year would have grown or decreased by the last day of each financial year.

(4) This information is provided as at December 31 of the year shown. (5) MER is based on total expenses (excluding distributions, commissions and other portfolio transaction costs) for the stated period and is expressed as an annualized percentage of daily average net asset value during the year. The MER may vary from one mutual fund to another and from one series of units to another. In the year, we waived certain fees and expenses otherwise payable by this Fund. We will continue to waive management and operating fees until such time as market yields rise above the MER of the Fund. (6) The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the year. 4

HSBC Canadian Money Market Fund Annual Returns – Investor Series

Annual Returns – Institutional Series

10%

10%

5%

5% 3.2% 2.3%

0%

0.1%

0.0%

0.1%

0.1%

0.1%

0.1%

0.1%

0.2%

0.6%

0.3% 0%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

0.6%

1.0%

1.0%

1.0%

1.0%

0.7%

0.7%

0.8%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Summary of Investment Portfolio

Annual Returns – Advisor Series

As at December 31, 2017

10%

Asset Mix Percentage of NAV

5% Corporate Bonds Government Bonds Cash & Equivalents Total

2.3%

0%

0.1%

0.0%

0.1%

0.1%

0.1%

0.1%

0.0%

0.2%

0.3%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

66.20% 33.69% 0.11% 100.00%

Top 25 Holdings Percentage of NAV

Annual Returns – Premium Series 10% Royal Bank of Canada, 0.95% 01/02/18 Federation des caisses Desjardins du Quebec, 0.12% 02/01/18 Government of Canada, 0.85% 01/25/18 Canada Housing Trust No. 1, 1.51% 03/15/18 Ontario Teachers’ Finance Trust, 1.38% 04/26/18 Province of Nova Scotia, 1.06% 02/21/18 Canada Housing Trust No 1, 1.40% 09/15/18 Imperial Oil Ltd., 1.10% 01/11/18 Bank of Nova Scotia, 0.95% 01/02/18 Province of Ontario, 1.53% 05/30/18 Bank of China, 1.62% 03/21/18 Ontario Teachers’ Finance Trust, 1.32% 02/02/18 Sumitomo Mitsui Banking Corporation, 1.44% 03/06/18 Bank of Montreal, 1.27% 01/18/18 Mizuho Bank, Ltd., 1.27% 01/03/18 BNP Paribas, 1.28% 01/18/18 Municipal Finance Authority of British Columbia, 4.60% 04/23/18 Bank of Nova Scotia, 1.10% 01/04/18 National Bank of Canada, 1.04% 01/04/18 OMERS Finance Trust, 1.23% 01/08/18 Province of Alberta, 1.08% 01/16/18 Province of Manitoba, 1.06% 03/07/18 Manulife Bank of Canada, 1.61% 04/23/18 Province of Quebec, 1.26% 04/20/18 Province of Ontario, 2.10% 09/08/18 Total of Top 25 Holdings

5%

0.3% 0%

0.2%

0.7%

0.6%

0.6%

0.6%

0.3%

0.3%

0.4%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2009 2010 2011 2012 2013 2014 2015 2016 2017

Annual Returns – Manager Series 10%

5% 2.6% 0.2% 0%

0.1%

0.4%

0.4%

0.3%

0.4%

0.1%

0.2%

0.3%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

The Summary of Investment Portfolio may change due to ongoing portfolio transactions of the Fund, and is available quarterly.

5

4.89% 3.87% 3.43% 2.58% 2.57% 2.06% 1.97% 1.91% 1.81% 1.81% 1.80% 1.80% 1.80% 1.68% 1.68% 1.60% 1.57% 1.55% 1.55% 1.55% 1.55% 1.55% 1.54% 1.54% 1.48% 51.14%

For more information

How to reach us

You can find more information about HSBC Mutual Funds in the Fund’s Simplified Prospectus, Annual Information Form, Annual and Semi-Annual Report and Fund Facts. You can get a copy of these documents, as well as the Fund’s Financial Statements, at no cost by calling 1-888-390-3333, by contacting your authorized dealer or by visiting our website at www.hsbc.ca/investment-resources.

HSBC Global Asset Management (Canada) Limited

These documents and other information about the Fund, such as information circulars and material contracts, are also available at www.sedar.com. Copies of the Annual Report and Semi-Annual Report, Simplified Prospectus, Annual Information Form, Annual and Interim Management Report of Fund Performance and Fund Facts are available on our website at www.hsbc.ca/investment-resources.

Vancouver 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8 Toronto Suite 300, 70 York Street Toronto, ON M5J 1S9 Toll-free: 1-888-390-3333 Fax: 604-669-2756 Email: [email protected] Website: www.hsbc.ca/investment-resources

A NOTE ON FORWARD-LOOKING STATEMENTS This report may contain forward-looking statements about the Fund, including its strategy, expected performance and condition. Forward-looking statements include statements that are predictive in nature that depend upon or refer to future events or conditions, or that include words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates” or negative versions thereof and similar expressions. In addition, any statement that may be made concerning future performance, strategies or prospects, and possible future Fund action, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the Fund and economic factors. Forward-looking statements are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied in any forward-looking statements made by the Fund. Any number of important factors could contribute to these digressions, including, but not limited to, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, and catastrophic events. We stress that the above-mentioned list of important factors is not exhaustive. We encourage you to consider these and other factors carefully before making any investment decisions and we urge you to avoid placing undue reliance on forward-looking statements. Further, you should be aware of the fact that the Fund has no specific intention of updating any forward-looking statements, whether as a result of new information, future events or otherwise. Sources: HSBC Global Asset Management (Canada) Limited, FTSE TMX Global Debt Capital Markets Inc. FTSE TMX Global Debt Capital Markets Inc. (“FTDCM”), FTSE International Limited (“FTSE”), the London Stock Exchange Group companies (the “Exchange”) or TSX Inc. (“TSX” and together with FTDCM, FTSE and the Exchange, the “Licensor Parties”). The Licensor Parties make no warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the FTSE TMX Canada Index and/or the figure at which the said Index stands at any particular time on any particular day or otherwise. The Index is compiled and calculated by FTDCM and all copyright in the Index values and constituent lists vests in FTDCM. The Licensor Parties shall not be liable (whether in negligence or otherwise) to any person for any error in the Index and the Licensor Parties shall not be under any obligation to advise any person of any error therein. “TMX” is a trade mark of TSX Inc. and is used under licence. “FTSE®” is a trade mark of FTSE International Limited and is used by FTDCM under licence.

Issued by HSBC Global Asset Management (Canada) Limited

(2018-03) DFS

Unauthorized reproduction, distribution, transmission or publication without our prior written consent is strictly prohibited.

HSBC U.S. Dollar Money Market Fund Annual Management Report of Fund Performance for the year ended December 31, 2017

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HSBC U.S. Dollar Money Market Fund Management Discussion of Fund Performance In this document, you and your refer to the unitholder of the Fund; we, us and our refer to HSBC Global Asset Management (Canada) Limited; and the Fund refers to the HSBC U.S. Dollar Money Market Fund.

Investment Performance The HSBC U.S. Dollar Money Market Fund (Investor Series) rose 0.29% for the 12-month period ending December 31, 2017, while its benchmark, the Citigroup 1-Month Treasury Bill Index (75%) and Citigroup 3-Month Treasury Bill Index (25%), rose 0.81% over the same period.

We are the manager, trustee and primary investment advisor of the Fund.

The marginal improvement in portfolio and market returns compared to 2016 largely reflects the higher investable rate environment following three policy rate increases from the US Federal Reserve in 2017.

Introduction This Annual Management Report of Fund Performance contains financial highlights but does not contain the complete annual financial statements of the investment fund. You may obtain a copy of the Fund’s annual financial statements at your request, at no cost, by calling us toll-free at 1-888-390-3333, by visiting our website at www.hsbc.ca/investment-resources, by visiting the SEDAR website at www.sedar.com or by writing to us at:

We took a defensive position to the corporate debt sector over the period, focusing on high-quality issues to minimize credit and liquidity risk. The return from the defensive corporate position above alternative government notes was modest over the year, but generally commensurate with the reduced level of risk. An allocation to corporate notes is usually positive for performance due to the higher yields they can offer over government-backed alternatives. However, these notes come with additional risks that may be unsuitable for the Fund at any level of compensation.

Corporate Secretary HSBC Global Asset Management (Canada) Limited 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8

We work within an extensive network of global credit research analysts to ensure that a prudent security selection process is in place. We also look to add value by adjusting the weighted average maturity (or duration) of the portfolio holdings relative to its benchmark. Over 2017, the Fund’s duration was targeted close to its blended 45-day benchmark, mitigating any relative interest rate risk.

You may also contact us using one of these methods to request a copy of the Fund’s interim financial report, proxy voting policies and procedures, proxy voting disclosure record or quarterly statement of investment portfolio.

Investment Objective and Strategies The fundamental investment objective of this Fund is to provide interest income while preserving capital.

Recent Developments The Federal Open Market Committee (FOMC) continued gradually removing monetary policy support by raising its target range for the federal funds rate three times in 2017 by 0.25% to end the year at 1.25%-1.50%. While no longer at historic lows, the current target range remains supportive of continued progress towards full employment and stable inflation. Although the labour market continues to improve and wage pressures are showing some signs of firming, labour force participation and wage growth are still low, indicating an underutilization of labour resources that require continued monetary policy support.

To achieve its objectives, the Fund invests primarily in US-dollar-denominated treasury bills and other short-term fixed income securities. All of the Fund’s securities will have a term to maturity of 365 days or less, with an average term to maturity of no more than 60 days.

Risk The risks of investing in the Fund remain as discussed in the Simplified Prospectus. During the year, there were no material changes to the Fund that affected the overall risk level of the Fund.

Inflation readings remain generally muted, but FOMC members continue to expect downward pressures to be transitory and economic conditions to continue to evolve in a manner that will warrant gradual increases in the federal funds rate.

This Fund is suitable for investors who want to earn interest income in US dollars and preserve their US dollar capital, have a short-term investment time horizon and have a low tolerance for risk in their returns.

We expect improving growth and wage trends to keep the FOMC’s tightening bias intact, which should see another 25 basis point hike in the first quarter of 2018.

Results of Operations As of December 31, 2017, the Fund’s net assets decreased by 25.9% to $24.3 million from $32.8 million at the end of 2016. Of this decrease, a $0.1 million gain was attributable to investment performance and $8.6 million was attributable to net withdrawals from the Fund.

Related Party Transactions We, on behalf of the Fund, or the Fund Manager, may, from time to time, enter into transactions or arrangements with or involving other members of the HSBC Group or other people or companies related or connected to us or the Fund. To proceed with the transactions, the Fund relies on the positive recommendation of the 1

HSBC U.S. Dollar Money Market Fund Fund’s Independent Review Committee. A condition of this positive recommendation is that the transactions are performed in accordance with our policy on Related Party Transactions. For more general information on persons related to the Fund and the types of potential transactions, see the Fund’s Simplified Prospectus.

All figures are stated in US dollars.

The following is a summary of current transactions and arrangements with entities that are related to us or the Fund.

2017

HSBC U.S. Dollar Money Market Fund – Investor Series – Net Assets per Unit(1) Years ended December 31 Net assets per unit, beginning of year (2)

Manager, Trustee and Investment Advisor We are the manager, trustee and primary investment advisor of the Fund. As manager, we manage the overall business and operations of the Fund. As trustee, we hold legal title to the property of the Fund on your behalf. As primary investment advisor, we provide investment advice and portfolio management services to the Fund. We receive a fee from the Fund for these services based on assets under management, calculated daily and paid monthly.

Distribution Services The Fund is distributed through us, HSBC Investment Funds (Canada) Inc. (our wholly owned subsidiary and affiliate) and HSBC Securities (Canada) Inc. (an affiliate) directly or through its division, HSBC InvestDirect. We pay distribution and servicing fees to them based on the amount of assets held in the investor’s account, and additionally, in some cases, on the amount of the initial purchase. If you hold units of this Fund and/or other HSBC Mutual Funds in a registered plan with HSBC Investment Funds (Canada) Inc., they may charge you an annual fee to cover the annual administration costs of the plan. We permit HSBC Investment Funds (Canada) Inc. to collect these fees by redeeming sufficient units of the Fund with the highest market value in your registered plan.

2016

2015

2014

2013

$10.00 $10.00 $10.00 $10.00 $10.00

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.11 (0.08) – –

0.05 (0.04) – –

0.02 (0.01) – –

0.01 (0.01) – –

– – – –

Total increase (decrease) from operations (2)

$0.03

$0.01

$0.01

$–

$–

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

(0.03) – – –

(0.01) – – –

(0.01) – – –

– – – –

– – – –

Total annual distributions (2,3)

$(0.03) $(0.01) $(0.01)

$–

$–

Net assets per unit at December 31 of year shown (2)

$10.00 $10.00 $10.00 $10.00 $10.00

Ratios and Supplemental Data Years ended December 31 2017 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Net Asset Value per unit (4)

Financial Highlights The following tables show selected key financial information about the Fund and are intended to help you understand the Fund’s financial performance for the past five years. This information is derived from the Fund’s audited annual financial statements. The information in the following tables is based on prescribed regulations, and, as a result, is not expected to add down due to the increase/decrease in net assets from operations being based on average units outstanding during the year and all other numbers being based on actual units outstanding at the relevant point in time.

2

2016

2015

2014

2013

$15,852 $21,759 $39,480 $41,155 $40,566 1,585

2,176

3,948

4,115

4,057

0.76%

0.41%

0.13%

0.11%

0.12%

1.39% n/a $10.00

1.18% n/a $10.00

1.18% n/a $10.00

1.23% n/a $10.00

1.24% n/a $10.00

HSBC U.S. Dollar Money Market Fund HSBC U.S. Dollar Money Market Fund – Advisor Series – Net Assets per Unit(1)

Ratios and Supplemental Data Years ended December 31

Years ended December 31

2017 2017 2016 2015

Net assets per unit, beginning of year (2)

$–

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses) Total increase (decrease) from operations (2) Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital Total annual distributions (2,3) Net assets per unit at December 31 of year shown (2)

$–

2014*

2013

$– $10.00 $10.00

– – – –

– – – –

– – – –

0.01 (0.01) – –

– – – –

$–

$–

$–

$–

$–

– – – –

– – – –

– – – –

– – – –

– – – –

$–

$–

$–

$–

$–

$–

$–

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Net Asset Value per unit (4)

$–

*

$– – – – n/a $–

1,077

0.67%

0.38% 0.13%

0.10%

0.12%

0.73% n/a $10.00

0.56% 0.58% n/a n/a $10.00 $10.00

0.58% n/a $10.00

0.56% n/a $10.00

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

2013

$–

2014

2013

$– $10.00 $10.00 $10.00 – – – –

– – – –

0.01 (0.01) – –

0.01 (0.01) – –

$–

$–

$–

$–

$–

– – – –

– – – –

– – – –

– – – –

– – – –

Total annual distributions (2,3)

$–

$–

$–

$–

$–

Net assets per unit at December 31 of year shown (2)

$–

$–

$– $10.00 $10.00

Ratios and Supplemental Data Years ended December 31

Years ended December 31 2015

1,103

– – – –

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

$– $– $220 – – 22 – 0.10% 0.12% – 1.36% 1.26% n/a n/a n/a $– $– $10.00

HSBC U.S. Dollar Money Market Fund – Premium Series – Net Assets per Unit(1)

Net assets per unit, beginning of year (2)

1,128

Net assets per unit, beginning of year (2)

The Advisor Series was fully redeemed during 2014; however, it remains in offer as at period-end.

2016

2013

877

Total increase (decrease) from operations (2)

$– – – – – $–

2017

846

2017 2016 2015**

Years ended December 31 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Net Asset Value per unit (4)

2014

Years ended December 31

$– $10.00

2014*

2015

HSBC U.S. Dollar Money Market Fund – Manager Series – Net Assets per Unit(1)

Ratios and Supplemental Data 2017 2016 2015

2016

$8,456 $11,028 $8,772 $11,277 $10,774

2014

2017 2016 2015**

2013 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Net Asset Value per unit (4)

$10.00 $10.00 $10.00 $10.00 $10.00

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.11 (0.07) – –

0.06 (0.04) – –

0.02 (0.01) – –

0.01 (0.01) – –

0.01 (0.01) – –

Total increase (decrease) from operations (2)

$0.04

$0.02

$0.01

$–

$–

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

(0.04) – – –

(0.02) – – –

(0.01) – – –

– – – –

– – – –

Total annual distributions (2,3)

$(0.04) $(0.02) $(0.01)

$–

$–

Net assets per unit at December 31 of year shown (2)

$10.00 $10.00 $10.00 $10.00 $10.00

$– – – – – $–

2014

2013

$– $– $32 $327 – – 3 33 – 0.09% 0.10% 0.13% – 2.95% 0.91% 0.92% n/a n/a n/a n/a $– $– $10.00 $10.00

** The Manager Series was fully redeemed during 2015; however, it remains in offer as at period-end.

3

HSBC U.S. Dollar Money Market Fund Management Fees

HSBC U.S. Dollar Money Market Fund – Institutional Series – Net Assets per Unit(1)

For the year ended December 31, 2017, the Fund paid us management fees of $227,054. The management fee for each series is calculated as a percentage of the daily net asset value for that series. The fees are reduced, where required, so that these fees do not duplicate fees payable by mutual funds in which the Fund invests for the same service.

Years ended December 31 2017 Net assets per unit, beginning of year (2)

2016

2015

2014

2013

$10.00 $10.00 $10.00 $10.00 $10.00

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.11 (0.03) – –

0.05 (0.02) – –

0.01 – – –

0.01 – – –

0.01 – – –

Total increase (decrease) from operations (2)

$0.08

$0.03

$0.01

$0.01

$0.01

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

(0.08) – – –

(0.03) – – –

(0.01) – – –

(0.01) – – –

(0.01) – – –

Total annual distributions (2,3)

$(0.08) $(0.03) $(0.01) $(0.01) $(0.01)

Net assets per unit at December 31 of year shown (2)

$10.00 $10.00 $10.00 $10.00 $10.00

The Fund’s management fees were used by us to pay costs for managing the investment portfolio, providing investment analysis and recommendations, making investment decisions, making brokerage arrangements for the purchase and sale of the investment portfolio and providing other services. The management fees also funded commission payments and other compensation to sales representatives and registered dealers and brokers (collectively “distribution costs”), including HSBC Investment Funds (Canada) Inc., for units of the Fund bought and held by unitholders. Finally, we used management fees to pay for additional marketing and distribution services to the Fund. For the year ended December 31, 2017, approximately 46% of the total management fees collected from all HSBC Mutual Funds were used to fund distribution costs. In comparison, for the Fund, such distribution costs represented 35% of the management fees collected. This may vary by series depending on the assets invested in each of the series.

Ratios and Supplemental Data Years ended December 31 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Net Asset Value per unit (4)

2017

2016

$37

$36

2015

2014

2013

$201 $6,757 $6,103

Past Performance

4 4 20 676 610 0.31% 0.22% (0.03)% (0.01)% (0.02)% 0.87% 0.29% 0.18% 0.17% 0.14% n/a n/a n/a n/a n/a $10.00 $10.00 $10.00 $10.00 $10.00

(1) This information is derived from the Fund’s audited annual financial statements. 2017, 2016, 2015, 2014 and 2013 balances are stated in IFRS. Under IFRS, the net asset per unit presented in the financial statements is the same as the net asset value calculated for fund pricing purposes. (2) Net assets per unit and distributions per unit are based on the actual number of units outstanding for the relevant series at the relevant time. The increase/decrease in net assets from operations per unit is based on the weighted average number of units outstanding for the relevant series over the fiscal year.

The performance information shown assumes that all distributions made by the Fund in the years shown were reinvested in additional securities of the Fund. The performance information does not take into account sales, redemption, distribution, optional charges or expenses you may be charged outside of the Fund or the effect of any income tax you may have to pay as a result of your investment in the Fund that would have reduced returns or performance. The performance of different fund series may vary for a number of reasons, including differences in management fees and expenses. The Fund’s past performance does not necessarily indicate how it will perform in the future.

Year-by-Year Returns

(3) Distributions are automatically reinvested in additional units of the Fund; cash distributions are not available.

Years ended December 31 The following bar charts show the Fund’s performance for each of the years shown, and illustrate how the Fund’s performance changed from year to year. In percentage terms, the bar charts show how much an investment made on the first day of each financial year would have grown or decreased by the last day of each financial year.

(4) This information is provided as at December 31 of the year shown. (5) MER is based on total expenses (excluding distributions, commissions and other portfolio transaction costs) for the stated period and is expressed as an annualized percentage of daily average net asset value during the year. The MER may vary from one mutual fund to another and from one series of units to another. In the year, we waived certain fees and expenses otherwise payable by this Fund. We will continue to waive management and operating fees until such time as market yields rise above the MER of the Fund. (6) The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the year.

4

HSBC U.S. Dollar Money Market Fund Annual Returns – Investor Series

Annual Returns – Manager Series

10%

10%

5%

5% 1.9%

1.6% 0%

0.1%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.1%

0.3% 0%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

*

Annual Returns – Advisor Series 10%

5%

1.6% 0%

*

0.1%

0.0%

0.0%

0.0%

0.0%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014* 2015* 2016* 2017*

The Advisor Series was fully redeemed during 2014. There were no unitholders for the full calendar year since 2015; however, the series remains in offer at period-end.

Annual Returns – Premium Series 10%

5%

0.2% 0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.1%

0.4%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2009 2010 2011 2012 2013 2014 2015 2016 2017

5

0.1%

0.0%

0.0%

0.0%

0.0%

0.0%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015* 2016* 2017*

The Manager Series was fully redeemed during 2015. There were no unitholders for the full calendar year since 2016; however, the series remains in offer at period-end.

HSBC U.S. Dollar Money Market Fund Annual Returns – Institutional Series 10%

5% 2.7% 0.4% 0%

0.2%

0.2%

0.2%

0.1%

0.1%

0.2%

0.3%

0.8%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Summary of Investment Portfolio As at December 31, 2017

Asset Mix Percentage of NAV Corporate Bonds Government Bonds Cash & Equivalents Total

93.73% 5.74% 0.53% 100.00%

Top 25 Holdings Percentage of NAV Fannie Mae Discount Notes, 1.15% 01/31/18 Royal Bank of Canada, 1.35% 01/02/18 Bank of Nova Scotia, 1.40% 01/02/18 KfW International Finance Inc., 1.34% 02/02/18 NRW Bank, 1.37% 02/09/18 Farm Credit Canada, 1.43% 01/18/18 Export Development Corp., 1.19% 01/04/18 Toronto-Dominion Bank, 1.82% 03/20/18 Royal Bank of Canada, 1.58% 01/05/18 Wells Fargo & Co., 1.50% 01/16/18 BNP Paribas SA, 2.70% 08/20/18 Nordea Bank AB, 2.16% 09/17/18 Toyota Motor Credit Corp., 1.68% 01/12/18 Australia & New Zealand Banking Group Ltd./New York NY, 1.98% 05/15/18 BPCE SA, 1.63% 01/26/18 Canadian National Railway Company, 1.45% 01/11/18 Danske Corp., 1.45% 02/20/18 Export Development Corp., 1.22% 02/06/18 Federal Home Loan Bank, 0.47% 03/01/18 Metropolitan Life Global Funding I, 1.50% 01/10/18 Mizuho Bank, Ltd., 1.42% 01/26/18 NRW Bank, 1.43% 01/17/18 PACCAR Financial Ltd., 1.60% 01/25/18 Province of Alberta, 1.34% 01/08/18 Province of Quebec, 1.23% 01/04/18 Total of Top 25 Holdings

6.15% 5.40% 5.34% 4.08% 3.27% 2.87% 2.46% 2.46% 2.26% 2.14% 2.07% 2.07% 2.07% 2.06% 2.05% 2.05% 2.05% 2.05% 2.05% 2.05% 2.05% 2.05% 2.05% 2.05% 2.05% 67.25%

The Summary of Investment Portfolio may change due to ongoing portfolio transactions of the Fund, and is available quarterly.

6

For more information

How to reach us

You can find more information about HSBC Mutual Funds in the Fund’s Simplified Prospectus, Annual Information Form, Annual and Semi-Annual Report and Fund Facts. You can get a copy of these documents, as well as the Fund’s Financial Statements, at no cost by calling 1-888-390-3333, by contacting your authorized dealer or by visiting our website at www.hsbc.ca/investment-resources.

HSBC Global Asset Management (Canada) Limited

These documents and other information about the Fund, such as information circulars and material contracts, are also available at www.sedar.com. Copies of the Annual Report and Semi-Annual Report, Simplified Prospectus, Annual Information Form, Annual and Interim Management Report of Fund Performance and Fund Facts are available on our website at www.hsbc.ca/investment-resources.

Vancouver 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8 Toronto Suite 300, 70 York Street Toronto, ON M5J 1S9 Toll-free: 1-888-390-3333 Fax: 604-669-2756 Email: [email protected] Website: www.hsbc.ca/investment-resources

A NOTE ON FORWARD-LOOKING STATEMENTS This report may contain forward-looking statements about the Fund, including its strategy, expected performance and condition. Forward-looking statements include statements that are predictive in nature that depend upon or refer to future events or conditions, or that include words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates” or negative versions thereof and similar expressions. In addition, any statement that may be made concerning future performance, strategies or prospects, and possible future Fund action, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the Fund and economic factors. Forward-looking statements are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied in any forward-looking statements made by the Fund. Any number of important factors could contribute to these digressions, including, but not limited to, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, and catastrophic events. We stress that the above-mentioned list of important factors is not exhaustive. We encourage you to consider these and other factors carefully before making any investment decisions and we urge you to avoid placing undue reliance on forward-looking statements. Further, you should be aware of the fact that the Fund has no specific intention of updating any forward-looking statements, whether as a result of new information, future events or otherwise. Sources: HSBC Global Asset Management (Canada) Limited, Bloomberg.

Issued by HSBC Global Asset Management (Canada) Limited

(2018-03) DFS

Unauthorized reproduction, distribution, transmission or publication without our prior written consent is strictly prohibited.

HSBC Mortgage Fund Annual Management Report of Fund Performance for the year ended December 31, 2017

◆

HSBC Mortgage Fund Management Discussion of Fund Performance In this document, you and your refer to the unitholder of the Fund; we, us and our refer to HSBC Global Asset Management (Canada) Limited; and the Fund refers to the HSBC Mortgage Fund.

Investment Performance The HSBC Mortgage Fund (Investor Series) fell 0.40% for the 12-month period ending December 31, 2017, while the benchmark gained 1.60% over the same period. The benchmark is a weighted composite consisting of the FTSE TMX Canada 1-Year Mortgage Index (40%), FTSE TMX Canada 3-Year Mortgage Index (20%), FTSE TMX Canada 5-Year Mortgage Index (10%), FTSE TMX Canada Short Term Bond Index (20%) and FTSE TMX Canada 91 Day T-Bill Index (10%), with a discount factor.

We are the manager, trustee and primary investment advisor of the Fund.

Introduction This Annual Management Report of Fund Performance contains financial highlights but does not contain the complete annual financial statements of the investment fund. You may obtain a copy of the Fund’s annual financial statements at your request, at no cost, by calling us toll-free at 1-888-390-3333, by visiting our website at www.hsbc.ca/investment-resources, by visiting the SEDAR website at www.sedar.com or by writing to us at:

Global growth gained momentum in 2017. In Canada, while the labour market continued to be healthy, overall economic activity slowed from the very strong pace shown early in the year. The five-year Government of Canada bond yield, commonly looked at as a proxy for the broad short-term market, rose by 76 basis points to 1.87% in 2017 and broad posted mortgage rates were also higher on the year. The yield differential between five-year fixed mortgage rates and five-year Government of Canada bonds narrowed in 2017 and mortgages outperformed short-term government bonds due to their higher running yield and the narrowing of mortgage yield spreads.

Corporate Secretary HSBC Global Asset Management (Canada) Limited 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8 You may also contact us using one of these methods to request a copy of the Fund’s interim financial report, proxy voting policies and procedures, proxy voting disclosure record or quarterly statement of investment portfolio.

We believe that mortgage rates still represent attractive value at current levels. While the yield spread is now slightly tighter than its long-term average, the incremental yield advantage is still considerable given the historically low interest rate environment.

Investment Objective and Strategies The fundamental investment objective of this Fund is to provide interest income while protecting invested capital.

The Fund’s relatively high running yield continues to be a positive for returns and will help offset some of the negative impacts if mortgage rates move higher. Portfolio duration is conservatively positioned below two years.

To achieve its objectives, the Fund invests primarily in uninsured Canadian-dollar-denominated mortgages. The Fund intends to purchase mortgages from HSBC Bank Canada (the “Bank”) or its subsidiaries. If any mortgage purchased from the Bank or its subsidiaries is in default for 90 days or more, the Bank will repurchase those mortgages from the Fund.

Recent Developments Pro-growth policy initiatives in the US are expected to boost US and global growth in the next few years. Expansionary fiscal policy should also support many economies and co-ordinated global growth is expected to gain momentum in 2018.

Risk The risks of investing in the Fund remain as discussed in the Simplified Prospectus. During the year, there were no material changes to the Fund or to the Fund’s sensitivity to interest rate changes, changes to the shape of the yield curve, credit risk, market risk or currency risk that affected the overall risk level of the Fund. The magnitude of the Fund’s active strategy positions remains consistent with its long-term risk profile.

The Bank of Canada is expected to further tighten monetary policy in 2018, and the market is currently discounting two additional rate hikes by the end of the year. With longer-term yields expected to rise modestly over 2018, our objective is to maintain the Fund’s interest rate exposure below the benchmark. Potential risks to our central outlook include disappointing global growth and a longer than anticipated road to recovery in the domestic economy.

This Fund is suitable for investors who want to earn interest income and protect their capital, have a short-term investment time horizon and have a low tolerance for risk in their returns.

In the short term, we feel that valuations in the mortgage market are attractive, particularly when compared with money market securities, and we will continue to invest excess cash in opportunities. The average term of the Fund remains conservative at less than two years.

Results of Operations As of December 31, 2017, the Fund’s net assets decreased by 2.9% to $2,412.8 million from $2,484.7 million at the end of 2016. Of this decrease, an $18.1 million gain was attributable to investment performance and $90.0 million was attributable to net withdrawals from the Fund. 1

HSBC Mortgage Fund division, HSBC InvestDirect. We pay distribution and servicing fees to them based on the amount of assets held in the investor’s account, and additionally, in some cases, on the amount of the initial purchase. If you hold units of this Fund and/or other HSBC Mutual Funds in a registered plan with HSBC Investment Funds (Canada) Inc., they may charge you an annual fee to cover the annual administration costs of the plan. We permit HSBC Investment Funds (Canada) Inc. to collect these fees by redeeming sufficient units of the Fund with the highest market value in your registered plan.

Related Party Transactions We, on behalf of the Fund, or the Fund Manager, may, from time to time, enter into transactions or arrangements with or involving other members of the HSBC Group or other people or companies related or connected to us or the Fund. To proceed with the transactions, the Fund relies on the positive recommendation of the Fund’s Independent Review Committee. A condition of this positive recommendation is that the transactions are performed in accordance with our policy on Related Party Transactions. For more general information on persons related to the Fund and the types of potential transactions, see the Fund’s Simplified Prospectus.

Financial Highlights

The following is a summary of current transactions and arrangements with entities that are related to us or the Fund.

The following tables show selected key financial information about the Fund and are intended to help you understand the Fund’s financial performance for the past five years. This information is derived from the Fund’s audited annual financial statements. The information in the following tables is based on prescribed regulations, and, as a result, is not expected to add down due to the increase/decrease in net assets from operations being based on average units outstanding during the year and all other numbers being based on actual units outstanding at the relevant point in time.

Manager, Trustee and Investment Advisor We are the manager, trustee and primary investment advisor of the Fund. As manager, we manage the overall business and operations of the Fund. As trustee, we hold legal title to the property of the Fund on your behalf. As primary investment advisor, we provide investment advice and portfolio management services to the Fund. We receive a fee from the Fund for these services based on assets under management, calculated daily and paid monthly.

HSBC Mortgage Fund – Investor Series – Net Assets per Unit(1)

Mortgage Sale and Administration Services The HSBC Mortgage Fund purchases its mortgages from HSBC Bank Canada (“the Bank”) (of which we are a wholly owned subsidiary) at an amount that will produce a yield to the HSBC Mortgage Fund of not more than 1/4 of 1% less than the interest rate at which the Bank is making a similar commitment at the time of purchase. The lesser yield of 1/4 of 1% is in consideration of the agreement by the Bank to repurchase the mortgages under certain circumstances. This fee amounted to $4,161,833 for the year ended December 31, 2017 (December 31, 2016, $4,087,391).

Years ended December 31 2017 Net assets per unit, beginning of year (2) Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

To proceed with the transactions, the Fund relied on the approval of the Fund’s Independent Review Committee by way of Standing Instruction. A condition of this approval was that the transactions were performed in accordance with National Policy No. 29 and in accordance with all requirements of various relief orders that have been granted to us by the regulators in relation to these kinds of transactions. In addition, pursuant to an agreement between us, the Bank and the Fund, the Fund will pay the Bank a fee for the administration of the mortgages purchased from the Bank, which will be accrued and paid daily as an expense to the Fund. The administration fee is equal to 0.10% annually of the value of the mortgages purchased from the Bank. During the year ended December 31, 2017, the Fund paid $1,747,547 in administration fees to the Bank ( December 31, 2016, $1,716,569).

Distribution Services The Fund is distributed through us, HSBC Investment Funds (Canada) Inc. (our wholly owned subsidiary and affiliate) and HSBC Securities (Canada) Inc. (an affiliate) directly or through its 2

2016

2015

2014

2013

$11.62 $11.57 $11.59 $11.60 $11.60 0.29 (0.18) (0.02) (0.14)

0.32 (0.18) (0.01) 0.06

0.33 (0.18) – (0.02)

0.32 (0.17) – (0.01)

0.32 (0.18) 0.01 (0.01)

Total increase (decrease) from operations (2)

$(0.05)

$0.19

$0.13

$0.14

$0.14

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

(0.11) – – –

(0.14) – – –

(0.15) – – –

(0.15) – – –

(0.15) – – –

Total annual distributions (2,3)

$(0.11) $(0.14) $(0.15) $(0.15) $(0.15)

Net assets per unit at December 31 of year shown (2)

$11.46 $11.62 $11.57 $11.59 $11.60

HSBC Mortgage Fund Ratios and Supplemental Data

HSBC Mortgage Fund – Premium Series – Net Assets per Unit(1)

Years ended December 31 2017

2016

2015

2014

Years ended December 31

2013

2017

Net Asset Value (in 000s) (4) $172,501 $211,105 $219,732 $274,087 $340,029 Number of units outstanding (in 000s) (4) 15,056 18,170 18,997 23,647 29,309 Management expense ratio (⬙MER⬙) (5) 1.56% 1.57% 1.53% 1.50% 1.52% MER before waivers or absoptions (5) 1.56% 1.57% 1.53% 1.50% 1.52% Trading expense ratio (6) n/a n/a n/a n/a n/a Portfolio turnover rate (7) 32.90% 36.57% 40.94% 27.10% 32.89% Net Asset Value per unit (4) $11.46 $11.62 $11.57 $11.59 $11.60

Net assets per unit, beginning of year (2)

HSBC Mortgage Fund – Advisor Series – Net Assets per Unit(1) Years ended December 31 2017 Net assets per unit, beginning of year (2)

2016

2015

2014

2013

$10.22 $10.18 $10.20 $10.20 $10.20

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.26 (0.16) (0.02) (0.12)

0.28 (0.16) (0.01) 0.05

0.29 (0.16) – (0.02)

0.28 (0.15) – (0.01)

0.28 (0.15) 0.01 (0.01)

Total increase (decrease) from operations (2)

$(0.04)

$0.16

$0.11

$0.12

$0.13

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

(0.10) – – –

(0.12) – – –

(0.14) – – –

(0.13) – – –

(0.13) – – –

$(0.10) $(0.12) $(0.14) $(0.13) $(0.13)

Net assets per unit at December 31 of year shown (2)

$10.07 $10.22 $10.18 $10.20 $10.20

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2015

2014

2013

$2,297

$2,644

$4,096

$6,300

$8,486

228

259

403

618

832

1.60%

1.59%

1.52%

1.48%

1.51%

2013

$10.28 $10.24 $10.26 $10.28 $10.28 0.26 (0.10) (0.02) (0.13)

0.28 (0.10) (0.01) 0.07

0.29 (0.10) – (0.02)

0.28 (0.10) – (0.01)

0.29 (0.10) 0.01 –

Total increase (decrease) from operations (2)

$0.01

$0.24

$0.17

$0.17

$0.20

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

(0.16) – – –

(0.18) – – –

(0.20) – – –

(0.19) – – –

(0.19) – – –

Total annual distributions (2,3)

$(0.16) $(0.18) $(0.20) $(0.19) $(0.19)

Net assets per unit at December 31 of year shown (2)

$10.13 $10.28 $10.24 $10.26 $10.28

Years ended December 31 2016

2015

2014

2013

Net Asset Value (in 000s) (4) $469,694 $586,292 $397,616 $489,394 $634,044 Number of units outstanding (in 000s) (4) 46,375 57,049 38,842 47,685 61,689 Management expense ratio (⬙MER⬙) (5) 1.03% 1.02% 0.98% 0.95% 0.97% MER before waivers or absoptions (5) 1.03% 1.02% 0.98% 0.95% 0.97% Trading expense ratio (6) n/a n/a n/a n/a n/a Portfolio turnover rate (7) 32.90% 36.57% 40.94% 27.10% 32.89% Net Asset Value per unit (4) $10.13 $10.28 $10.24 $10.26 $10.28

Years ended December 31 2016

2014

Ratios and Supplemental Data

Ratios and Supplemental Data 2017

2015

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

2017

Total annual distributions (2,3)

2016

1.60% 1.59% 1.52% 1.48% 1.51% n/a n/a n/a n/a n/a 32.90% 36.57% 40.94% 27.10% 32.89% $10.07 $10.22 $10.18 $10.20 $10.20

3

HSBC Mortgage Fund HSBC Mortgage Fund – Manager Series – Net Assets per Unit(1)

HSBC Mortgage Fund – Institutional Series – Net Assets per Unit(1)

Years ended December 31

Years ended December 31 2017

Net assets per unit, beginning of year (2)

2016

2015

2014

2013

2017 Net assets per unit, beginning of year (2)

$10.35 $10.30 $10.32 $10.33 $10.33

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

2016

2015

2014

2013

$10.72 $10.67 $10.68 $10.69 $10.69

0.26 (0.11) (0.02) (0.14)

0.28 (0.11) (0.01) 0.05

0.29 (0.10) – (0.02)

0.29 (0.10) – (0.01)

0.29 (0.10) 0.01 –

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

$(0.01)

$0.21

$0.17

$0.18

$0.20

Total increase (decrease) from operations (2)

$0.11

$0.33

$0.27

$0.29

$0.30

(0.19) – – –

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

(0.26) – – –

(0.28) – – –

(0.30) – – –

(0.29) – – –

(0.29) – – –

Total annual distributions (2,3)

$(0.15) $(0.17) $(0.19) $(0.19) $(0.19)

Total annual distributions (2,3)

$(0.26) $(0.28) $(0.30) $(0.29) $(0.29)

Net assets per unit at December 31 of year shown (2)

$10.21 $10.35 $10.30 $10.32 $10.33

Net assets per unit at December 31 of year shown (2)

$10.57 $10.72 $10.67 $10.68 $10.69

Total increase (decrease) from operations (2) Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

(0.15) – – –

(0.17) – – –

(0.19) – – –

(0.19) – – –

0.27 (0.01) (0.02) (0.13)

0.29 (0.01) (0.01) 0.06

0.30 (0.01) – (0.02)

0.30 – – (0.01)

0.30 (0.01) 0.01 –

Ratios and Supplemental Data

Ratios and Supplemental Data

Years ended December 31

Years ended December 31

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2017

2016

2015

2014

2013

$2,633

$2,197

$3,492

$3,771

$4,070

258

212

339

366

394

1.08%

1.06%

1.01%

0.97%

0.98%

2017 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

1.08% 1.06% 1.01% 0.97% 0.98% n/a n/a n/a n/a n/a 32.90% 36.57% 40.94% 27.10% 32.89% $10.21 $10.35 $10.30 $10.32 $10.33

2016

2015

2014

2013

$1,765,690 $1,682,482 $1,721,170 $1,653,831 $1,383,765

167,067

157,014

161,375

154,790

129,416

0.10%

0.10%

0.07%

0.04%

0.05%

0.10%

0.10%

0.07%

0.04%

0.05%

n/a

n/a

n/a

n/a

n/a

32.90%

36.57%

40.94%

27.10%

32.89%

$10.57

$10.72

$10.67

$10.68

$10.69

(1) This information is derived from the Fund’s audited annual financial statements. 2017, 2016, 2015, 2014 and 2013 balances are stated in IFRS. Under IFRS, the net asset per unit presented in the financial statements is the same as the net asset value calculated for fund pricing purposes. (2) Net assets per unit and distributions per unit are based on the actual number of units outstanding for the relevant series at the relevant time. The increase/decrease in net assets from operations per unit is based on the weighted average number of units outstanding for the relevant series over the fiscal year. (3) Distributions are automatically reinvested in additional units of the Fund, unless the unitholder withdraws from the automatic reinvestment plan by providing written notice to us. (4) This information is provided as at December 31 of the year shown. (5) MER is based on total expenses (excluding distributions, commissions and other portfolio transaction costs) for the stated 4

HSBC Mortgage Fund period and is expressed as an annualized percentage of daily average net asset value during the year. The MER may vary from one mutual fund to another and from one series of units to another.

Year-by-Year Returns Years ended December 31 The following bar charts show the Fund’s performance for each of the years shown, and illustrate how the Fund’s performance changed from year to year. In percentage terms, the bar charts show how much an investment made on the first day of each financial year would have grown or decreased by the last day of each financial year.

(6) The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the year. (7) The Fund’s portfolio turnover rate indicates how actively the Fund’s portfolio advisor manages its portfolio investments. A portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the year. The higher the Fund’s portfolio turnover rate in a year, the greater the trading costs payable by the Fund in the year, and the greater the chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high turnover rate and the performance of the Fund. The rate is calculated based on the lesser of purchases or sales of securities divided by the average weighted market value of the portfolio securities, excluding short-term securities.

Annual Returns – Investor Series 10% 6.1% 4.8%

5%

2.1%

1.6%

1.3%

1.3%

1.2%

1.1%

1.7%

0%

Management Fees

-0.4%

For the year ended December 31, 2017, the Fund paid us management fees of $7,791,395. The management fee for each series is calculated as a percentage of the daily net asset value for that series. The fees are reduced, where required, so that these fees do not duplicate fees payable by mutual funds in which the Fund invests for the same service.

-5%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Annual Returns – Advisor Series 10%

The Fund’s management fees were used by us to pay costs for managing the investment portfolio, providing investment analysis and recommendations, making investment decisions, making brokerage arrangements for the purchase and sale of the investment portfolio and providing other services. The management fees also funded commission payments and other compensation to sales representatives and registered dealers and brokers (collectively “distribution costs”), including HSBC Investment Funds (Canada) Inc., for units of the Fund bought and held by unitholders. Finally, we used management fees to pay for additional marketing and distribution services to the Fund.

6.3% 4.8%

5%

2.1%

1.6%

1.3%

1.3%

1.2%

1.1%

1.6%

0% -0.4% -5%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Annual Returns – Premium Series

For the year ended December 31, 2017, approximately 46% of the total management fees collected from all HSBC Mutual Funds were used to fund distribution costs. In comparison, for the Fund, such distribution costs represented 49% of the management fees collected. This may vary by series depending on the assets invested in each of the series.

10%

5.3% 5% 2.7%

Past Performance The performance information shown assumes that all distributions made by the Fund in the years shown were reinvested in additional securities of the Fund. The performance information does not take into account sales, redemption, distribution, optional charges or expenses you may be charged outside of the Fund or the effect of any income tax you may have to pay as a result of your investment in the Fund that would have reduced returns or performance. The performance of different fund series may vary for a number of reasons, including differences in management fees and expenses. The Fund’s past performance does not necessarily indicate how it will perform in the future.

0%

5

2.2%

1.9%

1.9%

1.7%

1.7%

2.2% 0.1%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2009 2010 2011 2012 2013 2014 2015 2016 2017

HSBC Mortgage Fund Annual Returns – Manager Series

Investor Series

10%

1 Year

5.3% 5% 2.7%

0%

2.2%

1.9%

1.8%

1.7%

1.7%

2.2% 0.1%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2009 2010 2011 2012 2013 2014 2015 2016 2017

7.7% 6.3% 5% 2.9%

2.8%

2.7%

2.6%

3.2% 1.1%

0%

2.07%

40% FTSE TMX Canada 1 Yr Mortgage Index, 20% FTSE TMX Canada 3 Yr Mortgage Index, 10% FTSE TMX Canada 5 Yr Mortgage Index, 20% FTSE TMX Canada Short Term Bond Index, 10% FTSE TMX Canada 91 Day T-Bill Index, with a discount factor

1.60% 2.01% 2.24%

3.24%

FTSE TMX Canada Short-Term Bond Index

0.08% 1.23% 1.70%

3.16%

1 Year

10%

3.2%

5 Year 10 Year

-0.40% 0.79% 0.97%

Advisor Series

Annual Returns – Institutional Series

3.6%

3 Year

HSBC Mortgage Fund

3 Year

5 Year 10 Year

HSBC Mortgage Fund

-0.44% 0.77% 0.96%

2.09%

40% FTSE TMX Canada 1 Yr Mortgage Index, 20% FTSE TMX Canada 3 Yr Mortgage Index, 10% FTSE TMX Canada 5 Yr Mortgage Index, 20% FTSE TMX Canada Short Term Bond Index, 10% FTSE TMX Canada 91 Day T-Bill Index, with a discount factor

1.60% 2.01% 2.24%

3.24%

FTSE TMX Canada Short-Term Bond Index

0.08% 1.23% 1.70%

3.16%

Manager Series 1 Year

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

HSBC Mortgage Fund

Annual Compound Returns Year ended December 31, 2017 The following tables show the Fund’s historical annual compound total returns for the years indicated, compared with the FTSE TMX Canada Short Term Bond Index, as well as the Fund’s composite benchmark index, 40% FTSE TMX Canada Residential Mortgage 1-Year Index, 20% FTSE TMX Canada Residential Mortgage 3-Year Index, 10% FTSE TMX Canada Residential Mortgage 5-Year Index, 10% FTSE TMX Canada 91-Day T-Bill Index and 20% FTSE TMX Canada Short Term Bond Index, discounted by an appropriate amount to reflect actual prevailing mortgage rates over the same period.

3 Year

5 Year 10 Year

0.08% 1.30% 1.49%

2.56%

40% FTSE TMX Canada 1 Yr Mortgage Index, 20% FTSE TMX Canada 3 Yr Mortgage Index, 10% FTSE TMX Canada 5 Yr Mortgage Index, 20% FTSE TMX Canada Short Term Bond Index, 10% FTSE TMX Canada 91 Day T-Bill Index, with a discount factor 1.60% 2.01% 2.24%

3.24%

FTSE TMX Canada Short-Term Bond Index

3.16%

0.08% 1.23% 1.70%

InstitutionalSeries 1 Year HSBC Mortgage Fund

The FTSE TMX Canada Short Term Bond Index is a broad measure of the total return for the Canadian short-term bond market, covering marketable Canadian bonds with a term to maturity between one and five years. We believe the investments contained in the weighted composite index are more representative of the investments held in the Fund than those in the FTSE TMX Canada Short Term Bond Index. The FTSE TMX Canada Conventional Residential Mortgage Market Index assumes a three-year term and a 25-year amortization period. Month-end yields are obtained from a representative sample of major Canadian chartered banks. The FTSE TMX Canada 91-Day T-Bill Index is a measure of the total return of Canadian Treasury Bills with a term to maturity of three months.

6

3 Year

5 Year 10 Year

1.06% 2.28% 2.46%

3.57%

40% FTSE TMX Canada 1 Yr Mortgage Index, 20% FTSE TMX Canada 3 Yr Mortgage Index, 10% FTSE TMX Canada 5 Yr Mortgage Index, 20% FTSE TMX Canada Short Term Bond Index, 10% FTSE TMX Canada 91 Day T-Bill Index, with a discount factor 1.60% 2.01% 2.24%

3.24%

FTSE TMX Canada Short-Term Bond Index

3.16%

0.08% 1.23% 1.70%

HSBC Mortgage Fund Premium Series

Top 25 Holdings 1 Year

HSBC Mortgage Fund

3 Year

Percentage of NAV

Since 5 Year Inception

0.13% 1.34% 1.52%

2.48%

40% FTSE TMX Canada 1 Yr Mortgage Index, 20% FTSE TMX Canada 3 Yr Mortgage Index, 10% FTSE TMX Canada 5 Yr Mortgage Index, 20% FTSE TMX Canada Short Term Bond Index, 10% FTSE TMX Canada 91 Day T-Bill Index, with a discount factor 1.60% 2.01% 2.24%

3.19%

FTSE TMX Canada Short-Term Bond Index

2.92%

0.08% 1.23% 1.70%

Residential Mortgages MCAP RMBS Issuer Corp., 2.17% 04/15/19 Aviva PLC, 4.50% 05/10/21 Province of Ontario, 4.00% 06/02/21 Citigroup Inc., 3.39% 11/18/21 Morgan Stanley, 3.13% 08/05/21 Wells Fargo & Co., 2.22% 03/15/21 Royal Bank of Canada, 3.31% 01/20/26 Canada Government Real Return Bond, 6.70% 12/01/21 Sun Life Financial Inc., 5.59% 01/30/23 Genworth MI Canada Inc., 5.68% 06/15/20 Canadian Natural Resources Ltd., 3.31% 02/11/22 Intact Financial Corp., 5.41% 09/03/19 Merrill Lynch & Co., Inc., 2.33% 05/30/22 BP Capital Markets PLC, 3.50% 11/09/20 Canada Housing Trust No. 1, 1.15% 12/15/21 Ford Credit Canada Ltd., 3.70% 08/02/18 Husky Energy Inc., 1.41% 02/01/18 Ford Credit Canada Ltd., 2.58% 05/10/21 Nova Scotia Power Inc., 1.30% 01/08/18 Pembina Pipeline Corp., 4.89% 03/29/21 Sydney Airport Finance Co. Pty Ltd., 4.60% 07/27/18 bcIMC Realty Corp., 2.79% 08/02/18 Toyota Credit Canada Inc., 2.05% 05/20/20 Empire Life Insurance Co., 3.38% 12/16/26 Total of Top 25 Holdings

(1) Due to the fact that several benchmark indices are only available on a monthly basis, the performance data for the HSBC Funds and the benchmark indices are calculated using values from the first month-end date each Fund was in operation. (2) For investment commentary and relative performance of the Fund compared to its benchmark, please refer to the Results of Operations section of this report.

Summary of Investment Portfolio As at December 31, 2017

Asset Mix Percentage of NAV Residential Mortgages Corporate Bonds Government Bonds Cash & Equivalents Total

69.21% 21.00% 1.94% 7.85% 100.00%

The Summary of Investment Portfolio may change due to ongoing portfolio transactions of the Fund, and is available quarterly.

7

69.21% 0.49% 0.44% 0.44% 0.43% 0.42% 0.41% 0.39% 0.38% 0.37% 0.36% 0.35% 0.35% 0.35% 0.34% 0.34% 0.34% 0.33% 0.32% 0.31% 0.31% 0.31% 0.29% 0.29% 0.28% 77.85%

For more information

How to reach us

You can find more information about HSBC Mutual Funds in the Fund’s Simplified Prospectus, Annual Information Form, Annual and Semi-Annual Report and Fund Facts. You can get a copy of these documents, as well as the Fund’s Financial Statements, at no cost by calling 1-888-390-3333, by contacting your authorized dealer or by visiting our website at www.hsbc.ca/investment-resources.

HSBC Global Asset Management (Canada) Limited

These documents and other information about the Fund, such as information circulars and material contracts, are also available at www.sedar.com. Copies of the Annual Report and Semi-Annual Report, Simplified Prospectus, Annual Information Form, Annual and Interim Management Report of Fund Performance and Fund Facts are available on our website at www.hsbc.ca/investment-resources.

Vancouver 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8 Toronto Suite 300, 70 York Street Toronto, ON M5J 1S9 Toll-free: 1-888-390-3333 Fax: 604-669-2756 Email: [email protected] Website: www.hsbc.ca/investment-resources

A NOTE ON FORWARD-LOOKING STATEMENTS This report may contain forward-looking statements about the Fund, including its strategy, expected performance and condition. Forward-looking statements include statements that are predictive in nature that depend upon or refer to future events or conditions, or that include words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates” or negative versions thereof and similar expressions. In addition, any statement that may be made concerning future performance, strategies or prospects, and possible future Fund action, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the Fund and economic factors. Forward-looking statements are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied in any forward-looking statements made by the Fund. Any number of important factors could contribute to these digressions, including, but not limited to, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, and catastrophic events. We stress that the above-mentioned list of important factors is not exhaustive. We encourage you to consider these and other factors carefully before making any investment decisions and we urge you to avoid placing undue reliance on forward-looking statements. Further, you should be aware of the fact that the Fund has no specific intention of updating any forward-looking statements, whether as a result of new information, future events or otherwise. Sources: HSBC Global Asset Management (Canada) Limited, FTSE TMX Global Debt Capital Markets Inc. FTSE TMX Global Debt Capital Markets Inc. (“FTDCM”), FTSE International Limited (“FTSE”), the London Stock Exchange Group companies (the “Exchange”) or TSX Inc. (“TSX” and together with FTDCM, FTSE and the Exchange, the “Licensor Parties”). The Licensor Parties make no warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the FTSE TMX Canada Index and/or the figure at which the said Index stands at any particular time on any particular day or otherwise. The Index is compiled and calculated by FTDCM and all copyright in the Index values and constituent lists vests in FTDCM. The Licensor Parties shall not be liable (whether in negligence or otherwise) to any person for any error in the Index and the Licensor Parties shall not be under any obligation to advise any person of any error therein. “TMX” is a trade mark of TSX Inc. and is used under licence. “FTSE®” is a trade mark of FTSE International Limited and is used by FTDCM under licence.

Issued by HSBC Global Asset Management (Canada) Limited

(2018-03) DFS

Unauthorized reproduction, distribution, transmission or publication without our prior written consent is strictly prohibited.

HSBC Canadian Bond Fund Annual Management Report of Fund Performance for the year ended December 31, 2017

◆

HSBC Canadian Bond Fund Management Discussion of Fund Performance In this document, you and your refer to the unitholder of the Fund; we, us and our refer to HSBC Global Asset Management (Canada) Limited; and the Fund refers to the HSBC Canadian Bond Fund.

Results of Operations

We are the manager, trustee and primary investment advisor of the Fund.

As of December 31, 2017, the Fund’s net assets decreased by 6.5% to $791.3 million from $846.3 million at the end of 2016. Of this decrease, a $26.9 million gain was attributable to investment performance and $81.9 million was attributable to net withdrawals from the Fund.

Introduction

Investment Performance The HSBC Canadian Bond Fund (Investor Series) rose 2.70% for the 12-month period ending December 31, 2017, while the benchmark FTSE TMX Canada Universe Bond Index rose 2.52% over the same period.

This Annual Management Report of Fund Performance contains financial highlights but does not contain the complete annual financial statements of the investment fund. You may obtain a copy of the Fund’s annual financial statements at your request, at no cost, by calling us toll-free at 1-888-390-3333, by visiting our website at www.hsbc.ca/investment-resources, by visiting the SEDAR website at www.sedar.com or by writing to us at:

The Fund’s overweight position in corporate bonds, including small exposures to high yield and emerging market debt, was a source of outperformance. Security selection within the Fund’s corporate holdings and the Fund’s higher running yield also had a positive impact on relative returns, as did yield curve positioning. The Fund’s lower duration, or interest rate risk, had a small negative impact on relative performance.

Corporate Secretary HSBC Global Asset Management (Canada) Limited 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8

Global growth continued to gain momentum in Q4. Improving fundamentals prompted many key central banks to signal that global policy rates are likely to be moving higher in concert following years of aggressive, co-ordinated monetary stimulus. The increasing evidence of a more universal global expansion provides a positive backdrop for equity markets and a challenging outlook for fixed income assets.

You may also contact us using one of these methods to request a copy of the Fund’s interim financial report, proxy voting policies and procedures, proxy voting disclosure record or quarterly statement of investment portfolio.

Investment Objective and Strategies The fundamental investment objective of this Fund is to provide regular income and long-term capital growth. To achieve its objectives, the Fund invests primarily in Canadian investment-grade bonds, debentures, commercial and residential mortgage-backed securities, asset-backed securities and other fixed income securities either issued or guaranteed by the Government of Canada, a province or municipality of Canada, Canadian corporations or Canadian trusts that issue asset-backed securities.

The 10-year Government of Canada bond yield, commonly looked at as a proxy for the broad market, finished Q4 at 2.05% after ending the first half of 2017 at 1.76% and trading as low as 1.39% in early June. There continued to be significant divergence in the performance of the different sectors of the market over the year, with provincial bonds the best-performing sector (up 4.33%), followed by corporate bonds (up 3.38%) and Government of Canada bonds (up 0.13%).

Risk

Recent Developments

The risks of investing in the Fund remain as discussed in the Simplified Prospectus. During the year, there were no material changes to the Fund or the Fund’s sensitivity to interest rate changes, changes to the shape of the yield curve, credit risk, market risk or currency risk that affected the overall risk level of the Fund. The magnitude of the Fund’s active strategy positions remains consistent with its long-term risk profile.

Pro-growth policy initiatives in the US are expected to boost US and global growth in the next few years. Expansionary fiscal policy should also support many economies and co-ordinated global growth is expected to gain momentum in 2018.

This Fund is suitable for investors who want to earn interest income and grow their capital, have a medium-term investment time horizon and have a low to medium tolerance for risk in their returns.

With longer-term yields expected to rise modestly over the next year, we aim to maintain the Fund’s interest rate exposure at or slightly below the benchmark in the near term. Yields at the short end of the yield curve are now discounting two rate hikes, and we expect that upward pressure on longer-term yields will lead to a steepening of the yield curve.

The Bank of Canada is expected to further tighten monetary policy in 2018, and the market is currently discounting two additional rate hikes by the end of the year.

1

HSBC Canadian Bond Fund We believe the corporate sector remains fundamentally sound, with improving earnings growth and defensively positioned balance sheets. Despite deteriorating valuations in credit markets over the past few quarters, we continue to prefer provincial and corporate bonds over Government of Canada bonds and will look to remain overweight in these sectors.

Purchases of Securities Underwritten by a Related Party During the year, the Fund invested in certain securities that were underwritten, in whole or in part, by entities that are a related party to us. To proceed with the transactions, the Fund relied on the approval of the Fund’s Independent Review Committee by way of Standing Instruction. A condition of this approval was that the transactions were performed in accordance with our policy on Purchases of Securities Underwritten by a Related Party.

Related Party Transactions We, on behalf of the Fund, or the Fund Manager, may, from time to time, enter into transactions or arrangements with or involving other members of the HSBC Group or other people or companies related or connected to us or the Fund. To proceed with the transactions, the Fund relies on the positive recommendation of the Fund’s Independent Review Committee. A condition of this positive recommendation is that the transactions are performed in accordance with our policy on Related Party Transactions. For more general information on persons related to the Fund and the types of potential transactions, see the Fund’s Simplified Prospectus.

Financial Highlights The following tables show selected key financial information about the Fund and are intended to help you understand the Fund’s financial performance for the past five years. This information is derived from the Fund’s audited annual financial statements. The information in the following tables is based on prescribed regulations, and, as a result, is not expected to add down due to the increase/decrease in net assets from operations being based on average units outstanding during the year and all other numbers being based on actual units outstanding at the relevant point in time.

The following is a summary of current transactions and arrangements with entities that are related to us or the Fund.

Manager, Trustee and Investment Advisor

HSBC Canadian Bond Fund – Investor Series – Net Assets per Unit(1)

We are the manager, trustee and primary investment advisor of the Fund. As manager, we manage the overall business and operations of the Fund. As trustee, we hold legal title to the property of the Fund on your behalf. As primary investment advisor, we provide investment advice and portfolio management services to the Fund. We receive a fee from the Fund for these services based on assets under management, calculated daily and paid monthly.

Years ended December 31 2017 Net assets per unit, beginning of year (2)

Distribution Services The Fund is distributed through us, HSBC Investment Funds (Canada) Inc. (our wholly owned subsidiary and affiliate) and HSBC Securities (Canada) Inc. (an affiliate) directly or through its division, HSBC InvestDirect. We pay distribution and servicing fees to them based on the amount of assets held in the investor’s account, and additionally, in some cases, on the amount of the initial purchase. If you hold units of this Fund and/or other HSBC Mutual Funds in a registered plan with HSBC Investment Funds (Canada) Inc., they may charge you an annual fee to cover the annual administration costs of the plan. We permit HSBC Investment Funds (Canada) Inc. to collect these fees by redeeming sufficient units of the Fund with the highest market value in your registered plan.

Fund on Fund Investing During the year, the Fund invested in units of other HSBC Mutual Funds, which are also managed by us. To proceed with the transactions, the Fund relied on the positive recommendation of the Fund’s Independent Review Committee by way of Standing Instruction. A condition of this positive recommendation was that the transactions were performed in accordance with our policy on fund on fund investing. 2

2016

2015

2014

2013

$13.46 $13.72 $13.79 $13.19 $13.65

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.46 (0.15) – 0.06

0.49 (0.16) 0.13 (0.27)

0.51 (0.16) 0.03 (0.08)

0.64 (0.22) (0.01) 0.60

0.46 (0.15) (0.01) (0.49)

Total increase (decrease) from operations (2)

$0.37

$0.19

$0.30

$1.01

$(0.19)

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

(0.31) – – –

(0.34) – (0.11) –

(0.36) – – –

(0.37) – – –

(0.31) – – –

Total annual distributions (2,3)

$(0.31) $(0.45) $(0.36) $(0.37) $(0.31)

Net assets per unit at December 31 of year shown (2)

$13.51 $13.46 $13.72 $13.79 $13.17

HSBC Canadian Bond Fund Ratios and Supplemental Data

HSBC Canadian Bond Fund – Premium Series – Net Assets per Unit(1)

Years ended December 31 2017

2016

2015

2014

Years ended December 31

2013

2017

Net Asset Value (in 000s) (4) $219,455 $261,792 $277,246 $314,236 $387,742 Number of units outstanding (in 000s) (4) 16,241 19,448 20,209 22,780 29,400 Management expense ratio (⬙MER⬙) (5) 1.14% 1.13% 1.13% 1.14% 1.15% MER before waivers or absoptions (5) 1.14% 1.13% 1.13% 1.14% 1.15% Trading expense ratio (6) n/a n/a n/a n/a n/a Portfolio turnover rate (7) 35.58% 34.38% 23.54% 18.01% 30.38% Net Asset Value per unit (4) $13.51 $13.46 $13.72 $13.79 $13.19

Net assets per unit, beginning of year (2)

HSBC Canadian Bond Fund – Advisor Series – Net Assets per Unit(1) Years ended December 31 2017 Net assets per unit, beginning of year (2)

2016

2015

2014

2013

$10.78 $11.04 $11.16 $10.67 $11.02

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.37 (0.16) – 0.04

0.39 (0.18) 0.10 (0.19)

0.41 (0.18) 0.02 (0.18)

0.62 (0.20) – 0.35

0.40 (0.13) – (0.34)

Total increase (decrease) from operations (2)

$0.25

$0.12

$0.07

$0.77

$(0.07)

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

(0.25) – – –

(0.28) – (0.08) –

(0.29) – – –

(0.30) – – –

(0.25) – – –

$(0.25) $(0.36) $(0.29) $(0.30) $(0.25)

Net assets per unit at December 31 of year shown (2)

$10.77 $10.78 $11.04 $11.16 $10.65

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2015

2014

2013

$276

$287

$332

$229

$205

26

27

30

21

19

1.54%

1.66%

1.64%

1.15%

1.15%

2013

$10.99 $11.19 $11.25 $10.75 $11.12 0.38 (0.09) – 0.06

0.40 (0.10) 0.10 (0.27)

0.42 (0.09) 0.02 (0.08)

0.69 (0.18) (0.01) 0.35

0.37 (0.10) – (0.42)

Total increase (decrease) from operations (2)

$0.35

$0.13

$0.27

$0.85

$(0.15)

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

(0.29) – – –

(0.30) – (0.09) –

(0.32) – – –

(0.33) – – –

(0.28) – – –

Total annual distributions (2,3)

$(0.29) $(0.39) $(0.32) $(0.33) $(0.28)

Net assets per unit at December 31 of year shown (2)

$11.02 $10.99 $11.19 $11.25 $10.74

Years ended December 31 2016

2015

2014

2013

Net Asset Value (in 000s) (4) $204,973 $266,895 $241,111 $257,095 $333,005 Number of units outstanding (in 000s) (4) 18,604 24,295 21,541 22,854 30,973 Management expense ratio (⬙MER⬙) (5) 0.87% 0.86% 0.84% 0.87% 0.88% MER before waivers or absoptions (5) 0.87% 0.86% 0.84% 0.87% 0.88% Trading expense ratio (6) n/a n/a n/a n/a n/a Portfolio turnover rate (7) 35.58% 34.38% 23.54% 18.01% 30.38% Net Asset Value per unit (4) $11.02 $10.99 $11.19 $11.25 $10.75

Years ended December 31 2016

2014

Ratios and Supplemental Data

Ratios and Supplemental Data 2017

2015

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

2017

Total annual distributions (2,3)

2016

1.75% 1.73% 1.71% 1.15% 1.15% n/a n/a n/a n/a n/a 35.58% 34.38% 23.54% 18.01% 30.38% $10.77 $10.78 $11.04 $11.16 $10.67

3

HSBC Canadian Bond Fund HSBC Canadian Bond Fund – Manager Series – Net Assets per Unit(1)

HSBC Canadian Bond Fund – Institutional Series – Net Assets per Unit(1)

Years ended December 31

Years ended December 31 2017

Net assets per unit, beginning of year (2)

2016

2015

0.35 (0.09) – 0.02

0.37 (0.10) 0.08 (0.26)

Total increase (decrease) from operations (2)

$0.28

$0.09

2013

2017

$9.98 $10.34

Net assets per unit, beginning of year (2)

0.38 (0.09) 0.01 (0.02)

0.78 (0.14) 0.01 0.17

0.34 (0.06) – (0.50)

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

$0.28

$0.82

$(0.22)

$10.10 $10.34 $10.44

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

2014

2016

2015

2014

2013

$11.45 $11.67 $11.74 $11.22 $11.61 0.39 – – 0.04

0.41 – 0.11 (0.22)

0.43 – 0.02 (0.11)

0.30 (0.01) (0.01) 0.63

0.39 (0.01) (0.01) (0.38)

Total increase (decrease) from operations (2)

$0.43

$0.30

$0.34

$0.91

$(0.01)

(0.29) – – –

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

(0.39) – – –

(0.41) – (0.10) –

(0.43) – – –

(0.44) – – –

(0.38) – – –

Total annual distributions (2,3)

$(0.29) $(0.40) $(0.33) $(0.34) $(0.29)

Total annual distributions (2,3)

$(0.39) $(0.51) $(0.43) $(0.44) $(0.38)

Net assets per unit at December 31 of year shown (2)

$10.09 $10.10 $10.34 $10.44

Net assets per unit at December 31 of year shown (2)

$11.50 $11.45 $11.67 $11.74 $11.20

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

(0.29) – – –

(0.32) – (0.08) –

(0.33) – – –

(0.34) – – –

$9.97

Ratios and Supplemental Data

Ratios and Supplemental Data

Years ended December 31

Years ended December 31

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2017

2016

2015

2014

2013

$226

$298

$373

$125

$151

22

29

36

12

15

0.94%

0.93%

0.93%

0.59%

0.59%

2017

2016

2015

2014

2013

Net Asset Value (in 000s) (4) $366,375 $317,001 $304,750 $269,154 $175,707 Number of units outstanding (in 000s) (4) 31,863 27,675 26,109 22,934 15,661 Management expense ratio (⬙MER⬙) (5) 0.05% 0.04% 0.04% 0.06% 0.06% MER before waivers or absoptions (5) 0.05% 0.04% 0.04% 0.06% 0.06% Trading expense ratio (6) n/a n/a n/a n/a n/a Portfolio turnover rate (7) 35.58% 34.38% 23.54% 18.01% 30.38% Net Asset Value per unit (4) $11.50 $11.45 $11.67 $11.74 $11.22

0.94% 0.93% 0.93% 0.59% 0.59% n/a n/a n/a n/a n/a 35.58% 34.38% 23.54% 18.01% 30.38% $10.09 $10.10 $10.34 $10.44 $9.98

(1) This information is derived from the Fund’s audited annual financial statements. 2017, 2016, 2015, 2014 and 2013 balances are stated in IFRS. Under IFRS, the net asset per unit presented in the financial statements is the same as the net asset value calculated for fund pricing purposes. (2) Net assets per unit and distributions per unit are based on the actual number of units outstanding for the relevant series at the relevant time. The increase/decrease in net assets from operations per unit is based on the weighted average number of units outstanding for the relevant series over the fiscal year. (3) Distributions are automatically reinvested in additional units of the Fund, unless the unitholder withdraws from the automatic reinvestment plan by providing written notice to us. (4) This information is provided as at December 31 of the year shown. (5) MER is based on total expenses (excluding distributions, commissions and other portfolio transaction costs) for the stated period and is expressed as an annualized percentage of daily average net asset value during the year. The MER may vary from one mutual fund to another and from one series of units to another. We have

4

HSBC Canadian Bond Fund waived or absorbed certain fees and expenses otherwise payable by the Fund. The amount of expenses absorbed or waived is at the discretion of and can be terminated at any time by us.

Year-by-Year Returns Years ended December 31 The following bar charts show the Fund’s performance for each of the years shown, and illustrate how the Fund’s performance changed from year to year. In percentage terms, the bar charts show how much an investment made on the first day of each financial year would have grown or decreased by the last day of each financial year.

(6) The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the year. (7) The Fund’s portfolio turnover rate indicates how actively the Fund’s portfolio advisor manages its portfolio investments. A portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the year. The higher the Fund’s portfolio turnover rate in a year, the greater the trading costs payable by the Fund in the year, and the greater the chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high turnover rate and the performance of the Fund. The rate is calculated based on the lesser of purchases or sales of securities divided by the average weighted market value of the portfolio securities, excluding short-term securities.

Annual Returns – Investor Series 10% 7.5%

7.5% 6.4% 5%

6.2% 4.0%

3.4%

2.0%

2.7% 1.4%

0%

Management Fees

-1.3%

For the year ended December 31, 2017, the Fund paid us management fees of $4,154,815. The management fee for each series is calculated as a percentage of the daily net asset value for that series. The fees are reduced, where required, so that these fees do not duplicate fees payable by mutual funds in which the Fund invests for the same service.

-5%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Annual Returns – Advisor Series 10% 7.5%

The Fund’s management fees were used by us to pay costs for managing the investment portfolio, providing investment analysis and recommendations, making investment decisions, making brokerage arrangements for the purchase and sale of the investment portfolio and providing other services. The management fees also funded commission payments and other compensation to sales representatives and registered dealers and brokers (collectively “distribution costs”), including HSBC Investment Funds (Canada) Inc., for units of the Fund bought and held by unitholders. Finally, we used management fees to pay for additional marketing and distribution services to the Fund.

6.4% 5%

7.4%

6.1% 4.0%

3.4%

1.5%

2.3% 0.8%

0% -1.1% -5%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Annual Returns – Premium Series

For the year ended December 31, 2017, approximately 46% of the total management fees collected from all HSBC Mutual Funds were used to fund distribution costs. In comparison, for the Fund, such distribution costs represented 50% of the management fees collected. This may vary by series depending on the assets invested in each of the series.

10% 6.7% 5%

7.7%

7.7%

6.4% 4.3% 2.3%

3.0% 1.6%

0%

Past Performance

-1.0%

The performance information shown assumes that all distributions made by the Fund in the years shown were reinvested in additional securities of the Fund. The performance information does not take into account sales, redemption, distribution, optional charges or expenses you may be charged outside of the Fund or the effect of any income tax you may have to pay as a result of your investment in the Fund that would have reduced returns or performance. The performance of different fund series may vary for a number of reasons, including differences in management fees and expenses. The Fund’s past performance does not necessarily indicate how it will perform in the future.

-5%

5

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2009 2010 2011 2012 2013 2014 2015 2016 2017

HSBC Canadian Bond Fund Annual Returns – Manager Series 10% 6.9% 5%

Premium Series

8.1%

8.0%

6.7%

1 Year

4.6%

4.0%

2.2%

2.9% 1.5%

-0.7%

8.6%

5%

4.20%

2.52% 2.56% 3.01%

4.57%

As at December 31, 2017

8.6%

7.3%

4.5%

5.2% 3.2%

Asset Mix

3.8%

Percentage of NAV

2.5% Government Bonds Corporate Bonds Mutual Funds Cash & Equivalents Total

0% -0.2% -5%

2.97% 2.31% 2.70%

FTSE TMX Canada Universe Bond Index

Summary of Investment Portfolio

Annual Returns – Institutional Series 7.5%

HSBC Canadian Bond Fund

(2) For investment commentary and relative performance of the Fund compared to its benchmark, please refer to the Results of Operations section of this report.

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

10%

Since 5 Year Inception

(1) Due to the fact that several benchmark indices are only available on a monthly basis, the performance data for the HSBC Funds and the benchmark indices are calculated using values from the first month-end date each Fund was in operation.

0%

-5%

3 Year

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

44.94% 44.23% 10.05% 0.78% 100.00%

Top 25 Holdings

Annual Compound Returns

Percentage of NAV

Year ended December 31, 2017 The following tables show the Fund’s historical annual compound total returns for the years indicated, compared with the benchmark index, the FTSE TMX Canada Universe Bond Index, over the same period. This index is a broad measure of the total return for the Canadian bond market, covering marketable Canadian bonds with a term to maturity of more than one year.

Province of Ontario, 5.60% 06/02/35 HSBC Mortgage Fund - Institutional Series Government of Canada, 4.00% 06/01/41 Province of Ontario, 3.45% 06/02/45 Province of British Columbia, 4.70% 06/18/37 Province of Saskatchewan, 5.00% 03/05/37 HSBC Emerging Markets Debt Fund - Institutional Series Province of New Brunswick, 3.55% 06/03/43 Province of British Columbia, 5.70% 06/18/29 Canada Housing Trust No 1, 2.40% 12/15/22 TransCanada Trust, 4.65% 05/18/77 Commonwealth Bank of Australia, 5.15% 04/09/20 Suncor Energy Inc., 3.10% 11/26/21 AT&T Inc., 3.83% 11/25/20 BP Capital Markets PLC, 3.50% 11/09/20 BHP Billiton Finance Ltd., 3.23% 05/15/23 Province of Manitoba, 4.05% 09/05/45 Wells Fargo & Co., 2.98% 05/19/26 Province of Manitoba, 3.25% 09/05/29 City of Toronto, 3.80% 12/13/42 Heathrow Funding Ltd., 4.00% 07/03/19 Aviva PLC, 4.50% 05/10/21 Pembina Pipeline Corp., 3.71% 08/11/26 Brookfield Asset Management Inc., 5.30% 03/01/21 Royal Bank of Canada, 3.31% 01/20/26 Total of Top 25 Holdings

Investor Series 1 Year

3 Year

5 Year 10 Year

HSBC Canadian Bond Fund

2.70% 2.02% 2.41%

3.93%

FTSE TMX Canada Universe Bond Index

2.52% 2.56% 3.01%

4.67%

Advisor Series 1 Year

3 Year

5 Year 10 Year

HSBC Canadian Bond Fund

2.29% 1.54% 2.16%

3.80%

FTSE TMX Canada Universe Bond Index

2.52% 2.56% 3.01%

4.67%

Manager Series 1 Year

3 Year

5 Year 10 Year

HSBC Canadian Bond Fund

2.90% 2.20% 2.75%

4.38%

FTSE TMX Canada Universe Bond Index

2.52% 2.56% 3.01%

4.67%

InstitutionalSeries 1 Year

3 Year

5 Year 10 Year

HSBC Canadian Bond Fund

3.81% 3.14% 3.53%

5.06%

FTSE TMX Canada Universe Bond Index

2.52% 2.56% 3.01%

4.67%

The Summary of Investment Portfolio may change due to ongoing portfolio transactions of the Fund, and is available quarterly. 6

7.41% 7.15% 4.13% 4.00% 3.61% 2.22% 1.87% 1.87% 1.64% 1.34% 1.31% 1.29% 1.26% 1.25% 1.24% 1.22% 1.22% 1.20% 1.16% 1.14% 1.14% 1.10% 1.08% 1.06% 1.06% 52.97%

HSBC Canadian Bond Fund The Fund invests in other mutual funds, and the prospectus and other information about the underlying funds are available on SEDAR at www.sedar.com.

7

For more information

How to reach us

You can find more information about HSBC Mutual Funds in the Fund’s Simplified Prospectus, Annual Information Form, Annual and Semi-Annual Report and Fund Facts. You can get a copy of these documents, as well as the Fund’s Financial Statements, at no cost by calling 1-888-390-3333, by contacting your authorized dealer or by visiting our website at www.hsbc.ca/investment-resources.

HSBC Global Asset Management (Canada) Limited

These documents and other information about the Fund, such as information circulars and material contracts, are also available at www.sedar.com. Copies of the Annual Report and Semi-Annual Report, Simplified Prospectus, Annual Information Form, Annual and Interim Management Report of Fund Performance and Fund Facts are available on our website at www.hsbc.ca/investment-resources.

Vancouver 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8 Toronto Suite 300, 70 York Street Toronto, ON M5J 1S9 Toll-free: 1-888-390-3333 Fax: 604-669-2756 Email: [email protected] Website: www.hsbc.ca/investment-resources

A NOTE ON FORWARD-LOOKING STATEMENTS This report may contain forward-looking statements about the Fund, including its strategy, expected performance and condition. Forward-looking statements include statements that are predictive in nature that depend upon or refer to future events or conditions, or that include words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates” or negative versions thereof and similar expressions. In addition, any statement that may be made concerning future performance, strategies or prospects, and possible future Fund action, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the Fund and economic factors. Forward-looking statements are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied in any forward-looking statements made by the Fund. Any number of important factors could contribute to these digressions, including, but not limited to, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, and catastrophic events. We stress that the above-mentioned list of important factors is not exhaustive. We encourage you to consider these and other factors carefully before making any investment decisions and we urge you to avoid placing undue reliance on forward-looking statements. Further, you should be aware of the fact that the Fund has no specific intention of updating any forward-looking statements, whether as a result of new information, future events or otherwise. Sources: HSBC Global Asset Management (Canada) Limited, FTSE TMX Global Debt Capital Markets Inc. FTSE TMX Global Debt Capital Markets Inc. (“FTDCM”), FTSE International Limited (“FTSE”), the London Stock Exchange Group companies (the “Exchange”) or TSX Inc. (“TSX” and together with FTDCM, FTSE and the Exchange, the “Licensor Parties”). The Licensor Parties make no warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the FTSE TMX Canada Index and/or the figure at which the said Index stands at any particular time on any particular day or otherwise. The Index is compiled and calculated by FTDCM and all copyright in the Index values and constituent lists vests in FTDCM. The Licensor Parties shall not be liable (whether in negligence or otherwise) to any person for any error in the Index and the Licensor Parties shall not be under any obligation to advise any person of any error therein. “TMX” is a trade mark of TSX Inc. and is used under licence. “FTSE®” is a trade mark of FTSE International Limited and is used by FTDCM under licence.

Issued by HSBC Global Asset Management (Canada) Limited

(2018-03) DFS

Unauthorized reproduction, distribution, transmission or publication without our prior written consent is strictly prohibited.

HSBC Global Corporate Bond Fund Annual Management Report of Fund Performance for the year ended December 31, 2017

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HSBC Global Corporate Bond Fund Management Discussion of Fund Performance In this document, you and your refer to the unitholder of the Fund; we, us and our refer to HSBC Global Asset Management (Canada) Limited; and the Fund refers to the HSBC Global Corporate Bond Fund.

Results of Operations As of December 31, 2017, the Fund’s net assets increased by 5.4% to $48.5 million from $46.0 million at the end of 2016. Of this increase, a $2.4 million gain was attributable to investment performance and $0.1 million was attributable to net contributions to the Fund.

We are the manager, trustee and primary investment advisor of the Fund. We have entered into a sub-advisory agreement with HSBC Global Asset Management (USA) Inc. and HSBC Global Asset Management (France), under which HSBC Global Asset Management (USA) Inc. and HSBC Global Asset Management (France) provide investment advice and portfolio management services to the Fund. For an explanation of the relationship between us and the sub-advisors, see the section Selection of Sub-Advisors in the Fund’s Simplified Prospectus.

Investment Performance The HSBC Global Corporate Bond Fund (Investor Series) rose 3.79% for the 12-month period ending December 31, 2017, while the benchmark Bloomberg Barclays Global Aggregate Corporates AWS Hedged US Dollar Index rose 5.51% over the same period. The Fund delivered positive performance over the year. Overall, issue selection was positive, driven mainly by the performance of the US and euro components of the portfolio compared to their respective benchmarks, as well as by the performance of specific UK bond issues. Allocation had a negative impact on Fund performance overall, mainly due to the underweight position in UK assets. An overweight position in the US was positive for performance, as this was the best-performing region. Being underweight in the euro component was also positive for performance as this was the worst-performing region.

Introduction This Annual Management Report of Fund Performance contains financial highlights but does not contain the complete annual financial statements of the investment fund. You may obtain a copy of the Fund’s annual financial statements at your request, at no cost, by calling us toll-free at 1-888-390-3333, by visiting our website at www.hsbc.ca/investment-resources, by visiting the SEDAR website at www.sedar.com or by writing to us at: Corporate Secretary HSBC Global Asset Management (Canada) Limited 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8

Global credit markets delivered positive total returns in 2017 as a general rally in risk was supported by a favourable global growth scenario and continued strong economic data releases. Credit fundamentals have been stable to improving, and except for some idiosyncratic name and sector-specific issues, this trend is expected to continue in 2018. Default rates have fallen back to historic lows and are expected to remain at low levels.

You may also contact us using one of these methods to request a copy of the Fund’s interim financial report, proxy voting policies and procedures, proxy voting disclosure record or quarterly statement of investment portfolio.

The US Treasury curve flattened over the year with two-year and five-year yields increasing 67 basis points (bps) and 27 bps respectively, while 10-year and 30-year yields fell 3 bps and 31 bps. Spreads on global high yield bonds tightened by 87 bps, driven by emerging markets (which saw spreads widen by 176 bps), while global investment grade spreads tightened by 32 bps.

Investment Objective and Strategies The fundamental investment objective of this Fund is to earn income while providing the potential for long-term capital growth. To achieve its objectives, the Fund invests primarily in a broad range of corporate fixed income securities from issuers around the world. Units of the Fund are only available in US dollars.

Recent Developments Over the period, the Fund held overweight positions in US-dollar bonds and was underweight in sterling and euro bonds as US bonds were more attractive from a valuation perspective. In credit quality, the Fund is in line with the reference index. Within this rating, the Fund is overweight in AAs, BBBs and BBs and is underweight in As.

Risk The risks of investing in the Fund remain as discussed in the Simplified Prospectus. During the year, there were no material changes to the Fund that affected the overall risk level of the Fund.

By sector, the Fund’s largest overweight position is in financials and its largest underweight position is in consumer non-cyclicals. The Fund’s energy exposure is slightly overweight compared to the benchmark, and within this sector the Fund is overweight in pipelines and refining and underweight in exploration and production and services. The Fund continues to be underweight

This Fund is suitable for investors who want to earn interest income and achieve modest long-term capital growth, have a medium-term investment time horizon and have a low to medium tolerance for risk in their returns.

1

HSBC Global Corporate Bond Fund in communications, where merger and acquisition activity and stretched valuations make the sector relatively less attractive. The Fund is also underweight in technology, largely on valuation grounds.

annual administration costs of the plan. We permit HSBC Investment Funds (Canada) Inc. to collect these fees by redeeming sufficient units of the Fund with the highest market value in your registered plan.

Related Party Transactions

Purchases of Securities Underwritten by a Related Party

We, on behalf of the Fund, or the Fund Manager, may, from time to time, enter into transactions or arrangements with or involving other members of the HSBC Group or other people or companies related or connected to us or the Fund. To proceed with the transactions, the Fund relies on the positive recommendation of the Fund’s Independent Review Committee. A condition of this positive recommendation is that the transactions are performed in accordance with our policy on Related Party Transactions. For more general information on persons related to the Fund and the types of potential transactions, see the Fund’s Simplified Prospectus.

During the year, the Fund invested in certain securities that were underwritten, in whole or in part, by entities that are a related party to us. To proceed with the transactions, the Fund relied on the approval of the Fund’s Independent Review Committee by way of Standing Instruction. A condition of this approval was that the transactions were performed in accordance with our policy on Purchases of Securities Underwritten by a Related Party.

Financial Highlights The following tables show selected key financial information about the Fund and are intended to help you understand the Fund’s financial performance for the years shown. This information is derived from the Fund’s audited annual financial statements. The information in the following tables is based on prescribed regulations, and as a result, is not expected to add down due to the increase/decrease in net assets from operations being based on average units outstanding during the year and all other numbers being based on actual units outstanding at the relevant point in time.

The following is a summary of current transactions and arrangements with entities that are related to us or the Fund.

Manager, Trustee and Investment Advisor We are the manager, trustee and primary investment advisor of the Fund. As manager, we manage the overall business and operations of the Fund. HSBC Bank Canada has provided seed capital to the Fund and has received units of the Fund in exchange. During the period, this seed capital investment was redeemed and none remains outstanding at period-end. As trustee, we hold legal title to the property of the Fund on your behalf. As primary investment advisor, we provide investment advice and portfolio management services to the Fund. We receive a fee from the Fund for these services based on assets under management, calculated daily and paid monthly.

All figures are stated in US dollars.

HSBC Global Corporate Bond Fund – Investor Series – Net Assets per Unit(1) Years ended December 31 2017

We have entered into a sub-advisory agreement with HSBC Global Asset Management (USA) Inc. (an affiliate) and HSBC Global Asset Management (France) (an affiliate), under which HSBC Global Asset Management (USA) Inc. and HSBC Global Asset Management (France) provide investment advice and portfolio management services to the Fund. We pay HSBC Global Asset Management (USA) Inc. and HSBC Global Asset Management (France) an investment advisory fee from the Fund based on assets under management, calculated daily and paid quarterly. For more information on our ability to hire sub-advisors, see the section Organization and Management of the HSBC Mutual Funds in the Fund’s Simplified Prospectus.

Net assets per unit, beginning of year (2)

Distribution Services The Fund is distributed through us, HSBC Investment Funds (Canada) Inc. (our wholly owned subsidiary and affiliate) and HSBC Securities (Canada) Inc. (an affiliate) directly or through its division, HSBC InvestDirect. We pay distribution and servicing fees to them based on the amount of assets held in the investor’s account, and additionally, in some cases, on the amount of the initial purchase. If you hold units of this Fund and/or other HSBC Mutual Funds in a registered plan with HSBC Investment Funds (Canada) Inc., they may charge you an annual fee to cover the 2

$10.16

2016

2015

$9.86 $10.00

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.29 (0.19) (0.01) 0.29

0.28 (0.18) 0.05 0.01

0.06 (0.04) 0.08 (0.17)

Total increase (decrease) from operations (2)

$0.38

$0.16

$(0.07)

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

(0.09) – – –

(0.09) – – –

(0.01) – (0.07) –

Total annual distributions (2,3)

$(0.09) $(0.09) $(0.08)

Net assets per unit at December 31 of year shown (2)

$10.45 $10.16

$9.86

HSBC Global Corporate Bond Fund Ratios and Supplemental Data

HSBC Global Corporate Bond Fund – Premium Series – Net Assets per Unit(1)

Years ended December 31 2017 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2016

Years ended December 31

2015

2017

$3,961 $3,316 $529 379 327 54 1.88% 1.80% 2.02% 1.90% 1.85% 2.35% n/a n/a n/a 104.11% 81.94% 40.29% $10.45 $10.16 $9.86

Net assets per unit, beginning of year (2)

HSBC Global Corporate Bond Fund – Advisor Series – Net Assets per Unit(1) Years ended December 31 2017 Net assets per unit, beginning of year (2)

$10.30

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses) Total increase (decrease) from operations (2) Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

2016

2015

$9.84 $10.00

(0.01) – (0.09) 0.10

(0.01) – – 1.00

– – 0.05 0.01

$–

$0.99

$0.06

(0.10) – – –

(0.11) – – –

$(0.10) $(0.11) $(0.08)

Net assets per unit at December 31 of year shown (2)

$10.73 $10.30

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.29 (0.16) 0.01 0.29

0.28 (0.15) 0.04 (0.07)

0.06 (0.04) 0.09 (0.17)

Total increase (decrease) from operations (2)

$0.43

$0.10

$(0.06)

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

(0.12) – – –

(0.12) – – –

(0.02) – (0.08) –

Total annual distributions (2,3)

$(0.12) $(0.12) $(0.10)

Net assets per unit at December 31 of year shown (2)

$10.45 $10.16

$9.86

2017

2015

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

$9.84

2016

$23,063 $14,336 $1,713 2,206 1,411 174 1.53% 1.46% 1.84% 1.54% 1.50% 1.84% n/a n/a n/a 104.11% 81.94% 40.29% $10.45 $10.16 $9.86

HSBC Global Corporate Bond Fund – Manager Series – Net Assets per Unit(1)

Years ended December 31

*

2015

Years ended December 31

Ratios and Supplemental Data

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2016

$9.86 $10.00

Ratios and Supplemental Data

(0.01) – (0.07) –

Total annual distributions (2,3)

$10.16

2017

2016

2015

*

*

*

Years ended December 31 2017

$– $– $– –* –* –* 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% n/a n/a n/a 104.11% 81.94% 40.29% $10.73 $10.30 $9.84

Net assets per unit, beginning of year (2) Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

Amount less than one thousand.

Total increase (decrease) from operations (2) Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

3

$10.24

2016

2015

$9.82 $10.00

(0.01) – (0.09) 0.10

(0.01) – – 0.99

– – 0.05 0.02

$–

$0.98

$0.07

(0.15) – – –

(0.15) – – –

(0.02) – (0.08) –

Total annual distributions (2,3)

$(0.15) $(0.15) $(0.10)

Net assets per unit at December 31 of year shown (2)

$10.62 $10.24

$9.82

HSBC Global Corporate Bond Fund fund to another and from one series of units to another. We have waived or absorbed certain fees and expenses otherwise payable by the Fund. The amount of expenses absorbed or waived is at the discretion of and can be terminated at any time by us.

Ratios and Supplemental Data Years ended December 31 2017 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

*

2016

2015

$–* $–* $–* * * – – –* 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% n/a n/a n/a 104.11% 81.94% 40.29% $10.62 $10.24 $9.82

(6) The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the year. (7) The Fund’s portfolio turnover rate indicates how actively the Fund’s portfolio advisor manages its portfolio investments. A portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the year. The higher the Fund’s portfolio turnover rate in a year, the greater the trading costs payable by the Fund in the year, and the greater the chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high turnover rate and the performance of the Fund. The rate is calculated based on the lesser of purchases or sales of securities divided by the average weighted market value of the portfolio securities, excluding short-term securities.

Amount less than one thousand.

HSBC Global Corporate Bond Fund – Institutional Series – Net Assets per Unit(1) Years ended December 31 2017 Net assets per unit, beginning of year (2)

$10.13

2016

2015

$9.84 $10.00

Management Fees

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.28 (0.02) (0.03) 0.32

0.28 (0.02) 0.04 0.26

0.05 (0.01) 0.07 (0.16)

Total increase (decrease) from operations (2)

$0.55

$0.56

$(0.05)

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

(0.26) – – –

(0.26) – – –

(0.03) – (0.08) –

Total annual distributions (2,3)

$(0.26) $(0.26) $(0.11)

Net assets per unit at December 31 of year shown (2)

$10.42 $10.13

$9.84

2017

2015

For the year ended December 31, 2017, the Fund paid us management fees of $311,196. The management fee for each series is calculated as a percentage of the daily net asset value for that series. The fees are reduced, where required, so that these fees do not duplicate fees payable by mutual funds in which the Fund invests for the same service. The Fund’s management fees were used by us to pay costs for managing the investment portfolio, providing investment analysis and recommendations, making investment decisions, making brokerage arrangements for the purchase and sale of the investment portfolio and providing other services. The management fees also funded commission payments and other compensation to sales representatives and registered dealers and brokers (collectively “distribution costs”), including HSBC Investment Funds (Canada) Inc., for units of the Fund bought and held by unitholders. Finally, we used management fees to pay for additional marketing and distribution services to the Fund.

Ratios and Supplemental Data Years ended December 31 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2016

$21,427 $28,376 $24,663 2,057 2,802 2,507 0.23% 0.19% 0.47% 0.23% 0.22% 0.47% n/a n/a n/a 104.11% 81.94% 40.29% $10.42 $10.13 $9.84

For the year ended December 31, 2017, approximately 46% of the total management fees collected from all HSBC Mutual Funds were used to fund distribution costs. In comparison, for the Fund, such distribution costs represented 35% of the management fees collected. This may vary by series depending on the assets invested in each of the series.

(1) This information is derived from the Fund’s audited annual financial statements. 2017, 2016 and 2015 balances are stated in IFRS. Under IFRS, the net assets per unit presented in the financial statements differ from the net asset value calculated for Fund pricing purposes.

Past Performance The performance information shown assumes that all distributions made by the Fund in the years shown were reinvested in additional securities of the Fund. The performance information does not take into account sales, redemption, distribution, optional charges or expenses you may be charged outside of the Fund or the effect of any income tax you may have to pay as a result of your investment in the Fund that would have reduced returns or performance. The performance of different fund series may vary for a number of reasons, including differences in management fees and expenses. The Fund’s past performance does not necessarily indicate how it will perform in the future.

(2) Net assets per unit and distributions per unit are based on the actual number of units outstanding for the relevant series at the relevant time. The increase/decrease in net assets from operations per unit is based on the weighted average number of units outstanding for the relevant series over the fiscal year. (3) Distributions are automatically reinvested in additional units of the Fund, unless the unitholder withdraws from the automatic reinvestment plan by providing written notice to us. (4) This information is provided as at year-end. (5) MER is based on total expenses (excluding distributions, commissions and other portfolio transaction costs) for the stated period and is expressed as an annualized percentage of daily average net asset value during the year. The MER may vary from one mutual 4

HSBC Global Corporate Bond Fund Annual Returns – Manager Series

Year-by-Year Returns Years ended December 31

10%

The following bar charts show the Fund’s performance for each of the years shown, and illustrate how the Fund’s performance changed from year to year. In percentage terms, the bar charts show how much an investment made on the first day of each financial year would have grown or decreased by the last day of each financial year.

5.8% 5%

Annual Returns – Investor Series

0%

10%

5.1%

Dec. 31 Dec. 31 2016 2017

Annual Returns – Institutional Series 5%

10% 3.9%

3.8%

5.6% 0%

Dec. 31 Dec. 31 2016 2017

Annual Returns – Advisor Series

0%

10%

5.8% 5%

0%

5.5%

5%

Dec. 31 Dec. 31 2016 2017

Annual Compound Returns Year ended December 31, 2017

5.1%

The following tables show the Fund’s historical annual compound total returns for the years indicated, compared with the benchmark index. The Fund’s benchmark is the Bloomberg Barclays Global Aggregate Corporates AWS (Hedged USD) Index. The Bloomberg Barclays Global Aggregate Corporates AWS Index is a flagship measure of global investment grade corporate debts from twenty four local currency markets.

Dec. 31 Dec. 31 2016 2017

Annual Returns – Premium Series

Investor Series

10%

Since 1 Year Inception

5%

4.2%

4.1%

HSBC Global Corporate Bond Fund

3.79%

3.21%

Bloomberg Barclays Global Aggregate Corporates AWS Index (Hedged USD)

5.51%

5.47%

Advisor Series 0%

Since 1 Year Inception

Dec. 31 Dec. 31 2016 2017

HSBC Global Corporate Bond Fund

5.09%

4.73%

Bloomberg Barclays Global Aggregate Corporates AWS Index (Hedged USD)

5.51%

5.47%

Manager Series Since 1 Year Inception

5

HSBC Global Corporate Bond Fund

5.08%

4.72%

Bloomberg Barclays Global Aggregate Corporates AWS Index (Hedged USD)

5.51%

5.47%

HSBC Global Corporate Bond Fund InstitutionalSeries

Geographic Mix Percentage of NAV

Since 1 Year Inception HSBC Global Corporate Bond Fund

5.49%

4.90%

Bloomberg Barclays Global Aggregate Corporates AWS Index (Hedged USD)

5.51%

5.47%

United States of America Netherlands France United Kingdom Germany Canada Australia Italy Ireland Luxembourg Spain Cayman Islands Belgium Switzerland British Virgin Islands Jersey Denmark Mexico Hong Kong Sweden Norway Austria Singapore South Korea Cash & Equivalents Total

Premium Series Since 1 Year Inception HSBC Global Corporate Bond Fund

4.15%

3.55%

Bloomberg Barclays Global Aggregate Corporates AWS Index (Hedged USD)

5.51%

5.47%

(1) Due to the fact that several benchmark indices are only available on a monthly basis, the performance data for the HSBC Funds and the benchmark indices are calculated using values from the first month-end date each fund was in operation. (2) For investment commentary and relative performance of the Fund compared to its benchmark, please refer to the Results of Operations section of this report.

Summary of Investment Portfolio As at December 31, 2017

Asset Mix Percentage of NAV Corporate Bonds Government Bonds Cash & Equivalents Total

97.75% 1.92% 0.33% 100.00%

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38.98% 12.54% 12.14% 8.52% 3.98% 3.74% 3.53% 2.85% 2.22% 2.05% 1.62% 1.28% 1.27% 0.95% 0.72% 0.72% 0.66% 0.65% 0.41% 0.29% 0.28% 0.27% 0.00% 0.00% 0.33% 100.00%

HSBC Global Corporate Bond Fund Top 25 Holdings Percentage of NAV Barclays PLC, 3.25% 02/12/27 Cooperatieve Rabobank UA, 2.25% 03/23/22 LafargeHolcim Sterling Finance (Netherlands) BV, 3.00% 05/12/32 Electricite de France SA, 6.00% 12/29/49 Omega Healthcare Investors Inc., 4.38% 08/01/23 United Kingdom Gilt, 4.25% 12/07/27 Microsoft Corp., 4.20% 11/03/35 AerCap Ireland Capital DAC / AerCap Global Aviation Trust, 3.50% 01/15/25 Kinder Morgan Inc., 3.15% 01/15/23 Sinopec Group Overseas Development (2016) Ltd., 1.75% 09/29/19 EnLink Midstream Partners LP, 5.45% 06/01/47 Realty Income Corp., 4.13% 10/15/26 Bank of Montreal, 1.79% 09/11/19 Macquarie Group Ltd., 3.19% 11/28/23 Federation des Caisses Desjardins du Quebec, 1.71% 10/30/20 AutoZone Inc., 3.75% 06/01/27 Citigroup Inc., 4.45% 09/29/27 Orange SA, 4.00% 10/29/49 Credit Agricole SA, 4.13% 01/10/27 Accor SA, 2.63% 02/05/21 BNP Paribas SA, 2.88% 03/20/26 Lunar Funding V for Swisscom AG, 1.88% 09/08/21 Anheuser-Busch InBev SA, 1.50% 03/17/25 Australia & New Zealand Banking Group Ltd., 1.94% 08/19/20 EPR Properties, 4.75% 12/15/26 Total of Top 25 Holdings

2.19% 2.17% 1.39% 1.19% 1.09% 1.08% 0.94% 0.76% 0.73% 0.72% 0.65% 0.64% 0.63% 0.62% 0.60% 0.56% 0.55% 0.55% 0.54% 0.53% 0.53% 0.53% 0.52% 0.52% 0.52% 20.75%

The Summary of Investment Portfolio may change due to ongoing portfolio transactions of the Fund, and is available quarterly.

7

For more information

How to reach us

You can find more information about HSBC Mutual Funds in the Fund’s Simplified Prospectus, Annual Information Form, Annual and Semi-Annual Report and Fund Facts. You can get a copy of these documents, as well as the Fund’s Financial Statements, at no cost by calling 1-888-390-3333, by contacting your authorized dealer or by visiting our website at www.hsbc.ca/investment-resources.

HSBC Global Asset Management (Canada) Limited

These documents and other information about the Fund, such as information circulars and material contracts, are also available at www.sedar.com. Copies of the Annual Report and Semi-Annual Report, Simplified Prospectus, Annual Information Form, Annual and Interim Management Report of Fund Performance and Fund Facts are available on our website at www.hsbc.ca/investment-resources.

Vancouver 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8 Toronto Suite 300, 70 York Street Toronto, ON M5J 1S9 Toll-free: 1-888-390-3333 Fax: 604-669-2756 Email: [email protected] Website: www.hsbc.ca/investment-resources

A NOTE ON FORWARD-LOOKING STATEMENTS This report may contain forward-looking statements about the Fund, including its strategy, expected performance and condition. Forward-looking statements include statements that are predictive in nature that depend upon or refer to future events or conditions, or that include words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates” or negative versions thereof and similar expressions. In addition, any statement that may be made concerning future performance, strategies or prospects, and possible future Fund action, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the Fund and economic factors. Forward-looking statements are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied in any forward-looking statements made by the Fund. Any number of important factors could contribute to these digressions, including, but not limited to, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, and catastrophic events. We stress that the above-mentioned list of important factors is not exhaustive. We encourage you to consider these and other factors carefully before making any investment decisions and we urge you to avoid placing undue reliance on forward-looking statements. Further, you should be aware of the fact that the Fund has no specific intention of updating any forward-looking statements, whether as a result of new information, future events or otherwise. Sources: HSBC Global Asset Management (Canada) Limited, Bloomberg.

Issued by HSBC Global Asset Management (Canada) Limited

(2018-03) DFS

Unauthorized reproduction, distribution, transmission or publication without our prior written consent is strictly prohibited.

HSBC Emerging Markets Debt Fund Annual Management Report of Fund Performance for the year ended December 31, 2017

◆

HSBC Emerging Markets Debt Fund Management Discussion of Fund Performance In this document, you and your refer to the unitholder of the Fund; we, us and our refer to HSBC Global Asset Management (Canada) Limited; and the Fund refers to the HSBC Emerging Markets Debt Fund.

This Fund is suitable for investors who want to earn interest income and achieve modest long-term capital growth, have a long-term investment time horizon and have a low to medium tolerance for risk in their returns.

We are the manager, trustee and primary investment advisor of the Fund. We have entered into a sub-advisory agreement with HSBC Global Asset Management (USA) Inc., under which HSBC Global Asset Management (USA) Inc. provides investment advice and portfolio management services to the Fund. For an explanation of the relationship between us and the sub-advisor, see the section Selection of Sub-Advisors in the Fund’s Simplified Prospectus.

Results of Operations As of December 31, 2017, the Fund’s net assets increased by 38.7% to $463.7 million from $334.3 million at the end of 2016. Of this increase, a $27.3 million gain was attributable to investment performance and $102.1 million was attributable to net contributions to the Fund.

Investment Performance The HSBC Emerging Markets Debt Fund (Investor Series) rose 5.27% for the 12-month period ending December 31, 2017, while the benchmark rose 7.44% over the same period. The benchmark is a weighted composite consisting of the JP Morgan Emerging Markets Bond Index-Global (C$) (50%), JP Morgan Government Bond Index-Emerging Markets Global Diversified Unhedged (C$) (25%) and JP Morgan Emerging Local Markets Index Plus (C$) (25%).

Introduction This Annual Management Report of Fund Performance contains financial highlights but does not contain the complete annual financial statements of the investment fund. You may obtain a copy of the Fund’s annual financial statements at your request, at no cost, by calling us toll-free at 1-888-390-3333, by visiting our website at www.hsbc.ca/investment-resources, by visiting the SEDAR website at www.sedar.com or by writing to us at:

Emerging market debt assets posted positive performance in 2017 as strong investor flows were driven by global demand for yield and low volatility across the asset class. US Treasury yields remained range-bound throughout the year, and the US dollar weakened as inflationary expectations were tempered by the Trump administration’s struggle to pass meaningful reform.

Corporate Secretary HSBC Global Asset Management (Canada) Limited 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8 You may also contact us using one of these methods to request a copy of the Fund’s interim financial report, proxy voting policies and procedures, proxy voting disclosure record or quarterly statement of investment portfolio.

During this risk-on environment, expensive low-beta, lower-yielding countries underperformed, and underweight positioning in China, the Philippines and Poland within the hard currency space contributed to performance. Off-benchmark exposure to corporate issues, particularly in the mining sector, contributed to returns. Some of these gains were offset by positions in the high-yield segment.

Investment Objective and Strategies The fundamental investment objective of this Fund is to provide income and long-term capital growth.

In local debt, the largest contributor to performance was an overweight position to Mexico local rates and currency. Further gains came from positioning in Chile and an overweight exposure to the Colombian peso. However, some of these gains were tempered by underperformance from an overweight exposure to Turkish local rates and currency, which struggled throughout the year from heightened geopolitical risks and high inflation.

To achieve its objectives, the Fund, directly or indirectly, invests primarily in a diversified portfolio of investment-grade and noninvestment-grade debt instruments issued by governments in emerging market countries and corporations or other issuers either based in or that have a significant business or investment link with emerging market countries. Such debt instruments may be denominated in US dollars or other foreign currencies, including the local currency of emerging market countries. The Fund may also use derivatives to gain or reduce its exposure to fixed income securities or emerging market currencies or for hedging purposes.

Recent Developments As the year progressed, valuations across all emerging market assets grew tighter while the risk of increases to the US Federal Reserve rate and European Central Bank hawkishness remained. In this environment, the Fund was positioned with a slightly defensive tilt, with a small underweight to hard and local duration.

Risk The risks of investing in the Fund remain as discussed in the Simplified Prospectus. During the year, there were no material changes to the Fund that affected the overall risk level of the Fund.

In December, slight adjustments were made to the Fund’s positioning in hard currency by adding duration in higher-yielding Argentina and Costa Rica and trimming positions in lower-yielding Hungary and Kazakhstan. The Fund’s underweight to duration at 1

HSBC Emerging Markets Debt Fund annual administration costs of the plan. We permit HSBC Investment Funds (Canada) Inc. to collect these fees by redeeming sufficient units of the Fund with the highest market value in your registered plan.

-0.04 years was maintained and the underweight to spread duration was increased to -0.13 years versus the benchmark. In local currency, the portfolio management team moved to an overweight position in the Chilean peso, removed the underweight position to the Mexican peso and increased the underweight position to the South African rand. At the end of December, the Fund remained flat in emerging market currencies.

Purchases of Securities Underwritten by a Related Party During the year, the Fund invested in certain securities that were underwritten, in whole or in part, by entities that are a related party to us. To proceed with the transactions, the Fund relied on the approval of the Fund’s Independent Review Committee by way of Standing Instruction. A condition of this approval was that the transactions were performed in accordance with our policy on Purchases of Securities Underwritten by a Related Party.

Related Party Transactions We, on behalf of the Fund, or the Fund Manager, may, from time to time, enter into transactions or arrangements with or involving other members of the HSBC Group or other people or companies related or connected to us or the Fund. To proceed with the transactions, the Fund relies on the positive recommendation of the Fund’s Independent Review Committee. A condition of this positive recommendation is that the transactions are performed in accordance with our policy on Related Party Transactions. For more general information on persons related to the Fund and the types of potential transactions, see the Fund’s Simplified Prospectus.

Financial Highlights The following tables show selected key financial information about the Fund and are intended to help you understand the Fund’s financial performance for the past five years. This information is derived from the Fund’s audited annual financial statements. The information in the following tables is based on prescribed regulations, and, as a result, is not expected to add down due to the increase/decrease in net assets from operations being based on average units outstanding during the year and all other numbers being based on actual units outstanding at the relevant point in time.

The following is a summary of current transactions and arrangements with entities that are related to us or the Fund.

Manager, Trustee and Investment Advisor We are the manager, trustee and primary investment advisor of the Fund. As manager, we manage the overall business and operations of the Fund. As trustee, we hold legal title to the property of the Fund on your behalf. As primary investment advisor, we provide investment advice and portfolio management services to the Fund. We receive a fee from the Fund for these services based on assets under management, calculated daily and paid monthly.

HSBC Emerging Markets Debt Fund – Investor Series – Net Assets per Unit(1) Years ended December 31 2017 Net assets per unit, beginning of year (2)

We have entered into a sub-advisory agreement with HSBC Global Asset Management (USA) Inc. (an affiliate), under which HSBC Global Asset Management (USA) Inc. provides investment advice and portfolio management services to the Fund. We pay HSBC Global Asset Management (USA) Inc. a fee based on assets under management, calculated daily and paid quarterly. For more information on our ability to hire sub-advisors, see the section Organization and Management of the HSBC Mutual Funds in the Fund’s Simplified Prospectus.

Distribution Services The Fund is distributed through us, HSBC Investment Funds (Canada) Inc. (our wholly owned subsidiary and affiliate) and HSBC Securities (Canada) Inc. (an affiliate) directly or through its division, HSBC InvestDirect. We pay distribution and servicing fees to them based on the amount of assets held in the investor’s account, and additionally, in some cases, on the amount of the initial purchase. If you hold units of this Fund and/or other HSBC Mutual Funds in a registered plan with HSBC Investment Funds (Canada) Inc., they may charge you an annual fee to cover the

2

2016

2015

2014

2013

$10.12 $10.05 $10.16 $10.11 $10.73

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.45 (0.18) 0.32 (0.02)

0.48 (0.18) 0.16 (0.09)

0.52 (0.18) (0.43) 0.38

0.46 (0.19) 0.09 0.09

0.41 (0.18) (0.23) (0.55)

Total increase (decrease) from operations (2)

$0.57

$0.37

$0.29

$0.45

$(0.55)

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

(0.27) – – –

(0.29) – – –

(0.33) – – –

(0.27) – – –

(0.21) – – –

Total annual distributions (2,3)

$(0.27) $(0.29) $(0.33) $(0.27) $(0.21)

Net assets per unit at December 31 of year shown (2)

$10.38 $10.12 $10.05 $10.16 $10.09

HSBC Emerging Markets Debt Fund Ratios and Supplemental Data

HSBC Emerging Markets Debt Fund – Premium Series – Net Assets per Unit(1)

Years ended December 31 2017 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2016

2015

2014

Years ended December 31

2013

2017

$14,598 $17,924 $21,126 $29,038 $44,786 1,406 1.78%

1,771 1.78%

2,102 1.76%

2,858 1.80%

Net assets per unit, beginning of year (2)

4,430 1.77%

1.78% 1.78% 1.76% 1.80% 1.77% n/a n/a n/a n/a n/a 51.34% 79.90% 61.87% 75.75% 62.80% $10.38 $10.12 $10.05 $10.16 $10.11

HSBC Emerging Markets Debt Fund – Advisor Series – Net Assets per Unit(1) Years ended December 31 2017 Net assets per unit, beginning of year (2)

$10.00

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

2016

2015

2014

2013

$9.98 $10.11 $10.06 $10.68

0.44 (0.25) 0.30 (0.04)

0.48 (0.25) 0.17 (0.13)

0.51 (0.25) (0.41) 0.38

0.46 (0.19) 0.04 0.20

0.40 (0.19) (0.21) (0.61)

2015

2014

2013

$10.07 $10.00 $10.11 $10.06 $10.67

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.44 (0.15) 0.31 (0.04)

0.48 (0.15) 0.15 (0.04)

0.52 (0.14) (0.41) 0.40

0.46 (0.15) 0.07 0.25

0.40 (0.15) (0.21) (0.66)

Total increase (decrease) from operations (2)

$0.56

$0.44

$0.37

$0.63

$(0.62)

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

(0.30) – – –

(0.32) – – –

(0.37) – – –

(0.31) – – –

(0.24) – – –

Total annual distributions (2,3)

$(0.30) $(0.32) $(0.37) $(0.31) $(0.24)

Net assets per unit at December 31 of year shown (2)

$10.33 $10.07 $10.00 $10.11 $10.04

Ratios and Supplemental Data Years ended December 31

Total increase (decrease) from operations (2)

$0.45

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

$0.27

(0.26) – – –

$0.23

(0.29) – – –

(0.33) – – –

$0.51

(0.27) – – –

$(0.61) Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

(0.21) – – –

Total annual distributions (2,3)

$(0.26) $(0.29) $(0.33) $(0.27) $(0.21)

Net assets per unit at December 31 of year shown (2)

$10.19 $10.00

$9.98 $10.11 $10.04

Ratios and Supplemental Data Years ended December 31 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2016

2017

2016

2015

2014

2013

$12

$12

$22

$34

$65

1

1

2

3

6

2.46%

2.45%

2.45%

1.79%

1.78%

9.30% 8.11% 5.57% 1.79% 1.78% n/a n/a n/a n/a n/a 51.34% 79.90% 61.87% 75.75% 62.80% $10.19 $10.00 $9.98 $10.11 $10.06

3

2017

2016

$6,327

$6,790

2015

2014

2013

612

674

874

1,382

3,247

1.43%

1.43%

1.39%

1.44%

1.40%

$8,741 $13,972 $32,669

1.43% 1.43% 1.39% 1.44% 1.40% n/a n/a n/a n/a n/a 51.34% 79.90% 61.87% 75.75% 62.80% $10.33 $10.07 $10.00 $10.11 $10.06

HSBC Emerging Markets Debt Fund HSBC Emerging Markets Debt Fund – Manager Series – Net Assets per Unit(1)

HSBC Emerging Markets Debt Fund – Institutional Series – Net Assets per Unit(1)

Years ended December 31

Years ended December 31 2017

Net assets per unit, beginning of year (2)

2016

2015

2014

2013

2017

2016

2015

2014

2013

$9.79 $10.16 $10.10 $10.72

Net assets per unit, beginning of year (2)

0.43 (0.18) 0.29 (0.03)

0.47 (0.19) 0.14 (0.07)

0.50 (0.37) (0.44) 0.32

0.46 (0.12) 0.14 (0.10)

0.41 (0.12) (0.21) (0.45)

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.44 (0.01) 0.29 (0.05)

0.48 (0.01) 0.14 (0.08)

0.52 (0.01) (0.49) 0.30

0.46 (0.02) 0.15 (0.14)

0.42 (0.02) (0.25) (0.48)

$0.51

$0.35

$0.01

$0.38

$(0.37)

Total increase (decrease) from operations (2)

$0.67

$0.53

$0.32

$0.45

$(0.33)

(0.27) – – –

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

(0.44) – – –

(0.46) – – –

(0.50) – – –

(0.45) – – –

(0.37) – – –

Total annual distributions (2,3)

$(0.32) $(0.34) $(0.38) $(0.34) $(0.27)

Total annual distributions (2,3)

$(0.44) $(0.46) $(0.50) $(0.45) $(0.37)

Net assets per unit at December 31 of year shown (2)

$9.99

Net assets per unit at December 31 of year shown (2)

$10.40 $10.15 $10.08 $10.19 $10.13

$9.79

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses) Total increase (decrease) from operations (2) Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

(0.32) – – –

(0.34) – – –

$9.79

(0.38) – – –

(0.34) – – –

$9.79 $10.16 $10.08

$10.15 $10.08 $10.19 $10.15 $10.76

Ratios and Supplemental Data

Ratios and Supplemental Data

Years ended December 31

Years ended December 31

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

*

2017

2016

2015

2014

2013

$3

$3

$3

$3

$3

–*

–*

–*

–*

–*

1.82%

1.88%

3.72%

1.15%

1.12%

2017

2016

2015

2014

2013

Net Asset Value (in 000s) (4) $442,807 $309,614 $297,099 $229,849 $221,486 Number of units outstanding (in 000s) (4) 42,561 30,514 29,475 22,554 21,831 Management expense ratio (⬙MER⬙) (5) 0.13% 0.14% 0.11% 0.17% 0.14% MER before waivers or absoptions (5) 0.13% 0.14% 0.11% 0.17% 0.14% Trading expense ratio (6) n/a n/a n/a n/a n/a Portfolio turnover rate (7) 51.34% 79.90% 61.87% 75.75% 62.80% Net Asset Value per unit (4) $10.40 $10.15 $10.08 $10.19 $10.15

28.67% 27.06% 20.04% 1.15% 1.12% n/a n/a n/a n/a n/a 51.34% 79.90% 61.87% 75.75% 62.80% $9.99 $9.79 $9.79 $10.16 $10.10

Amount less than one thousand.

(1) This information is derived from the Fund’s audited annual financial statements. 2017, 2016, 2015, 2014 and 2013 balances are stated in IFRS. Under IFRS, the net asset per unit presented in the financial statements is the same as the net asset value calculated for fund pricing purposes. (2) Net assets per unit and distributions per unit are based on the actual number of units outstanding for the relevant series at the relevant time. The increase/decrease in net assets from operations per unit is based on the weighted average number of units outstanding for the relevant series over the fiscal year. (3) Distributions are automatically reinvested in additional units of the Fund, unless the unitholder withdraws from the automatic reinvestment plan by providing written notice to us. (4) This information is provided as at December 31 of the year shown. (5) MER is based on total expenses (excluding distributions, commissions and other portfolio transaction costs) for the stated period and is expressed as an annualized percentage of daily average net asset value during the year. The MER may vary from one mutual fund to another and from one series of units to another. We have

4

HSBC Emerging Markets Debt Fund waived or absorbed certain fees and expenses otherwise payable by the Fund. The amount of expenses absorbed or waived is at the discretion of and can be terminated at any time by us.

Year-by-Year Returns Years ended December 31 The following bar charts show the Fund’s performance for each of the years shown, and illustrate how the Fund’s performance changed from year to year. In percentage terms, the bar charts show how much an investment made on the first day of each financial year would have grown or decreased by the last day of each financial year.

(6) The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the year. (7) The Fund’s portfolio turnover rate indicates how actively the Fund’s portfolio advisor manages its portfolio investments. A portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the year. The higher the Fund’s portfolio turnover rate in a year, the greater the trading costs payable by the Fund in the year, and the greater the chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high turnover rate and the performance of the Fund. The rate is calculated based on the lesser of purchases or sales of securities divided by the average weighted market value of the portfolio securities, excluding short-term securities.

Annual Returns – Investor Series 15%

12.7%

10% 5%

3.2%

2.1%

3.6%

5.3%

0%

Management Fees

-5%

For the year ended December 31, 2017, the Fund paid us management fees of $322,583. The management fee for each series is calculated as a percentage of the daily net asset value for that series. The fees are reduced, where required, so that these fees do not duplicate fees payable by mutual funds in which the Fund invests for the same service.

-10%

-4.1% Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2012 2013 2014 2015 2016 2017

Annual Returns – Advisor Series 15%

The Fund’s management fees were used by us to pay costs for managing the investment portfolio, providing investment analysis and recommendations, making investment decisions, making brokerage arrangements for the purchase and sale of the investment portfolio and providing other services. The management fees also funded commission payments and other compensation to sales representatives and registered dealers and brokers (collectively “distribution costs”), including HSBC Investment Funds (Canada) Inc., for units of the Fund bought and held by unitholders. Finally, we used management fees to pay for additional marketing and distribution services to the Fund.

12.7%

10% 5%

3.2%

1.9%

3.0%

4.6%

0% -5% -10%

-4.1% Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2012 2013 2014 2015 2016 2017

Annual Returns – Premium Series

For the year ended December 31, 2017, approximately 46% of the total management fees collected from all HSBC Mutual Funds were used to fund distribution costs. In comparison, for the Fund, such distribution costs represented 37% of the management fees collected. This may vary by series depending on the assets invested in each of the series.

20% 15%

13.2%

10% 3.5%

5%

Past Performance

0%

The performance information shown assumes that all distributions made by the Fund in the years shown were reinvested in additional securities of the Fund. The performance information does not take into account sales, redemption, distribution, optional charges or expenses you may be charged outside of the Fund or the effect of any income tax you may have to pay as a result of your investment in the Fund that would have reduced returns or performance. The performance of different fund series may vary for a number of reasons, including differences in management fees and expenses. The Fund’s past performance does not necessarily indicate how it will perform in the future.

-5% -10%

5

2.5%

3.9%

5.6%

-3.7% Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2012 2013 2014 2015 2016 2017

HSBC Emerging Markets Debt Fund Annual Returns – Manager Series

Advisor Series

20% 15%

1 Year

14.0%

10% 3.8%

5%

0.1%

0% -5% -10%

5.3%

3.5%

4.58% 3.18% 1.68%

3.35%

50% JPM EM Bond Index-Global Hedged (C$), 25% JPM GBI - EM Global Diversified Unhedged (C$) & 25% JPM Emerging Local Markets Index Plus (C$)

7.44% 5.90% 4.42%

3.61%

1 Year

14.7%

3 Year

Since 5 Year Inception

HSBC Emerging Markets Debt Fund

5.29% 2.95% 1.79%

3.65%

50% JPM EM Bond Index-Global Hedged (C$), 25% JPM GBI - EM Global Diversified Unhedged (C$) & 25% JPM Emerging Local Markets Index Plus (C$)

7.44% 5.90% 4.42%

3.61%

InstitutionalSeries

10% 4.9%

3.8%

7.0%

5.3%

1 Year

0% -5%

HSBC Emerging Markets Debt Fund

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2012 2013 2014 2015 2016 2017

20%

5%

Since 5 Year Inception

Manager Series

-3.5%

Annual Returns – Institutional Series

15%

3 Year

-2.5% Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2012 2013 2014 2015 2016 2017

3 Year

Since 5 Year Inception

HSBC Emerging Markets Debt Fund

7.00% 5.37% 3.65%

5.10%

50% JPM EM Bond Index-Global Hedged (C$), 25% JPM GBI - EM Global Diversified Unhedged (C$) & 25% JPM Emerging Local Markets Index Plus (C$)

7.44% 5.90% 4.42%

3.57%

Premium Series

Annual Compound Returns Year ended December 31, 2017

1 Year

The following tables show the Fund’s historical annual compound total returns for the years indicated, compared with the benchmark index. The Fund’s benchmark is a weighted composite consisting of the JP Morgan Emerging Markets Bond Index – Global (in Canadian dollars) (50%), JP Morgan Government Bond Index – Emerging Markets Global Diversified Unhedged (in Canadian dollars) (25%) and JP Morgan Emerging Local Markets Index Plus (in Canadian dollars) (25%).

Since 5 Year Inception

HSBC Emerging Markets Debt Fund

5.27% 3.65% 1.96%

3.38%

50% JPM EM Bond Index-Global Hedged (C$), 25% JPM GBI - EM Global Diversified Unhedged (C$) & 25% JPM Emerging Local Markets Index Plus (C$)

7.44% 5.90% 4.42%

3.57%

HSBC Emerging Markets Debt Fund

5.64% 4.03% 2.33%

3.96%

50% JPM EM Bond Index-Global Hedged (C$), 25% JPM GBI - EM Global Diversified Unhedged (C$) & 25% JPM Emerging Local Markets Index Plus (C$)

7.44% 5.90% 4.42%

3.61%

(2) For investment commentary and relative performance of the Fund compared to its benchmark, please refer to the Results of Operations section of this report.

Investor Series 3 Year

Since 5 Year Inception

(1) Due to the fact that several benchmark indices are only available on a monthly basis, the performance data for the HSBC Funds and the benchmark indices are calculated using values from the first month-end date each Fund was in operation.

The JP Morgan Emerging Markets Bond Index – Global (in Canadian dollars) tracks total returns for traded external debt instruments in the emerging markets. The JP Morgan Government Bond Index – Emerging Markets Global Diversified Unhedged (in Canadian dollars) is a comprehensive global local emerging markets index, and consists of liquid, fixed rate, domestic currency government bonds. The JP Morgan Emerging Local Markets Index Plus (in Canadian dollars) tracks total returns for local-currency-denominated money-market instruments in emerging markets.

1 Year

3 Year

6

HSBC Emerging Markets Debt Fund Summary of Investment Portfolio

Geographic Mix Percentage of NAV

As at December 31, 2017 Indonesia Turkey Mexico Brazil Colombia South Africa Russia Argentina Malaysia Hungary Poland Peru China Chile United States of America Philippines Ecuador Sri Lanka Dominican Republic Ukraine Kazakhstan Romania Cayman Islands Jamaica Thailand Costa Rica Serbia Egypt British Virgin Islands India Nigeria Panama Netherlands Ivory Coast Croatia Venezuela Ghana El Salvador Lebanon Oman Mongolia Morocco Zambia Senegal Iraq Pakistan Luxembourg United Kingdom Uruguay Gabon Paraguay Jordan Kenya Vietnam Bahamas Lithuania Cash & Equivalents Total

Sector Mix Percentage of NAV Government Bonds Energy Financials Utilities Materials Information Technology Real Estate Industrials Consumer Discretionary Cash & Equivalents Total

61.78% 7.06% 2.83% 1.82% 1.51% 0.46% 0.40% 0.26% 0.15% 23.73% 100.00%

7

7.66% 7.62% 7.44% 5.91% 5.28% 3.59% 3.28% 3.14% 3.05% 2.35% 2.03% 1.92% 1.68% 1.35% 1.35% 1.03% 1.00% 1.00% 0.97% 0.94% 0.93% 0.85% 0.84% 0.77% 0.75% 0.66% 0.61% 0.60% 0.57% 0.54% 0.49% 0.45% 0.44% 0.43% 0.38% 0.37% 0.35% 0.33% 0.33% 0.32% 0.29% 0.29% 0.27% 0.26% 0.25% 0.22% 0.20% 0.19% 0.18% 0.17% 0.12% 0.07% 0.06% 0.06% 0.04% 0.00% 23.73% 100.00%

HSBC Emerging Markets Debt Fund Top 25 Holdings Percentage of NAV Colombian TES, 11.00% 07/24/20 Brazil Letras do Tesouro Nacional, 0.00% 04/01/18 Malaysia Government Bond, 3.26% 03/01/18 Argentine Republic Government International Bond, 7.50% 04/22/26 Brazil Notas do Tesouro Nacional, Serie F, 0.00% 01/01/21 South Africa Government Bond, 7.00% 02/28/31 Indonesia Government International Bond, 3.38% 04/15/23 Republic of Turkey, 4.88% 10/09/26 Turkey Government Bond, 8.00% 03/12/25 Mexican Bonos, 6.50% 06/09/22 Turkey Government Bond, 9.50% 01/12/22 Government of United States, 1.43% 03/29/18 Mexican Bonos, 6.50% 06/10/21 United States Treasury Note/Bond, 2.25% 11/15/27 Poland Government Bond, 2.50% 07/25/26 Hungary Government International Bond, 6.25% 01/29/20 Mexican Bonos, 5.75% 03/05/26 Poland Government Bond, 5.75% 09/23/22 Colombia Government International Bond, 3.88% 04/25/27 Republic of South Africa, 10.50% 12/21/26 Russian Foreign Bond - Eurobond, 4.88% 09/16/23 Turkey Government International Bond, 6.75% 04/03/18 Petroleos Mexicanos, 6.88% 08/04/26 Peru Government International Bond, 8.20% 08/12/26 Ukraine Government International Bond, 7.38% 09/25/32 Total of Top 25 Holdings

2.59% 2.42% 2.29% 1.57% 1.57% 1.30% 1.10% 1.01% 0.99% 0.97% 0.97% 0.96% 0.89% 0.89% 0.87% 0.84% 0.83% 0.77% 0.76% 0.76% 0.76% 0.75% 0.71% 0.70% 0.69% 27.96%

The Summary of Investment Portfolio may change due to ongoing portfolio transactions of the Fund, and is available quarterly.

8

For more information

How to reach us

You can find more information about HSBC Mutual Funds in the Fund’s Simplified Prospectus, Annual Information Form, Annual and Semi-Annual Report and Fund Facts. You can get a copy of these documents, as well as the Fund’s Financial Statements, at no cost by calling 1-888-390-3333, by contacting your authorized dealer or by visiting our website at www.hsbc.ca/investment-resources.

HSBC Global Asset Management (Canada) Limited

These documents and other information about the Fund, such as information circulars and material contracts, are also available at www.sedar.com. Copies of the Annual Report and Semi-Annual Report, Simplified Prospectus, Annual Information Form, Annual and Interim Management Report of Fund Performance and Fund Facts are available on our website at www.hsbc.ca/investment-resources.

Vancouver 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8 Toronto Suite 300, 70 York Street Toronto, ON M5J 1S9 Toll-free: 1-888-390-3333 Fax: 604-669-2756 Email: [email protected] Website: www.hsbc.ca/investment-resources

A NOTE ON FORWARD-LOOKING STATEMENTS This report may contain forward-looking statements about the Fund, including its strategy, expected performance and condition. Forward-looking statements include statements that are predictive in nature that depend upon or refer to future events or conditions, or that include words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates” or negative versions thereof and similar expressions. In addition, any statement that may be made concerning future performance, strategies or prospects, and possible future Fund action, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the Fund and economic factors. Forward-looking statements are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied in any forward-looking statements made by the Fund. Any number of important factors could contribute to these digressions, including, but not limited to, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, and catastrophic events. We stress that the above-mentioned list of important factors is not exhaustive. We encourage you to consider these and other factors carefully before making any investment decisions and we urge you to avoid placing undue reliance on forward-looking statements. Further, you should be aware of the fact that the Fund has no specific intention of updating any forward-looking statements, whether as a result of new information, future events or otherwise. Sources: HSBC Global Asset Management (Canada) Limited, J.P. Morgan, Bloomberg, Bank of Canada. Information has been obtained from sources believed to be reliable but J.P. Morgan does not warrant its completeness or accuracy. The Index is used with permission. The Index may not be copied, used, or distributed without J.P. Morgan’s prior written approval. Copyright 2017, J.P. Morgan Chase & Co. All rights reserved.

Issued by HSBC Global Asset Management (Canada) Limited

(2018-03) DFS

Unauthorized reproduction, distribution, transmission or publication without our prior written consent is strictly prohibited.

HSBC Monthly Income Fund Annual Management Report of Fund Performance for the year ended December 31, 2017

◆

HSBC Monthly Income Fund Management Discussion of Fund Performance In this document, you and your refer to the unitholder of the Fund; we, us and our refer to HSBC Global Asset Management (Canada) Limited; and the Fund refers to the HSBC Monthly Income Fund.

Results of Operations

We are the manager, trustee and primary investment advisor of the Fund.

As of December 31, 2017, the Fund’s net assets increased by 5.1% to $994.4 million from $946.3 million at the end of 2016. Of this increase, a $47.2 million gain was attributable to investment performance and $0.9 million was attributable to net contributions to the Fund.

Introduction

Investment Performance The HSBC Monthly Income Fund (Investor Series) rose 4.55% for the 12-month period ending December 31, 2017, while the benchmark rose 4.46% over the same period. The benchmark is a weighted composite consisting of the FTSE TMX Canada Short-Term Bond Index (15%), FTSE TMX Canada Mid-Term Bond Index (15%), HSBC Mortgage Fund Benchmark (30%), S&P/TSX Capped Composite Index (35%) and S&P/TSX Preferred Share Index (5%).

This Annual Management Report of Fund Performance contains financial highlights but does not contain the complete annual financial statements of the investment fund. You may obtain a copy of the Fund’s annual financial statements at your request, at no cost, by calling us toll-free at 1-888-390-3333, by visiting our website at www.hsbc.ca/investment-resources, by visiting the SEDAR website at www.sedar.com or by writing to us at: Corporate Secretary HSBC Global Asset Management (Canada) Limited 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8

The Fund’s overweight positions in corporate bonds and residential mortgages contributed to positive performance in 2017. An overweight position in common equities also added value, while a small underweight in preferred shares was a drag on relative returns.

You may also contact us using one of these methods to request a copy of the Fund’s interim financial report, proxy voting policies and procedures, proxy voting disclosure record or quarterly statement of investment portfolio.

Synchronized global growth was a key story this year and should be an important narrative in 2018. The increasing evidence of a more universal global expansion provides a positive backdrop for equity markets and a challenging outlook for fixed income assets.

Investment Objective and Strategies The fundamental investment objective of this Fund is to provide a reasonably consistent level of monthly income while aiming to preserve capital over the medium to long term.

Global fixed income markets had mixed returns in 2017. The Canadian short-term bond market returned 0.08%, with federal government, provincial government and corporate bonds returning -0.60%, +0.15% and +1.03% respectively. In Q4, mortgages outperformed short-term government bonds thanks to their higher running yield and the narrowing of mortgage yield spreads. We believe that mortgage rates still represent attractive value at current levels.

To achieve its objectives, the Fund invests primarily in a diversified portfolio of debt and equity instruments. The investment strategy is to position the Fund to maximize income and protect capital while providing potential for long-term capital appreciation.

Domestic equities enjoyed a solid quarter following minor challenges earlier in the year from downward pressure on energy prices. The S&P/TSX Composite Index was up 9.1% in 2017.

Risk The risks of investing in the Fund remain as discussed in the Simplified Prospectus. During the year, there were no material changes to the Fund or to the Fund’s sensitivity to interest rate changes, changes to the shape of the yield curve, credit risk, equity market risk or currency risk that affected the overall risk level of the Fund.

Recent Developments Pro-growth policy initiatives in the US are expected to boost US and global growth in the next few years. Expansionary fiscal policy should also support many economies and co-ordinated global growth is expected to gain momentum in 2018. Canada should continue to be one of the strongest developed economies, although tensions surrounding trade policies, particularly in North America, remain a key risk.

This Fund is suitable for investors who want to earn reasonable levels of monthly income and who are seeking higher returns while preserving the value of their capital over the medium to long term. Investors in this Fund should have a medium investment time horizon and a low to medium tolerance for risk in their returns.

The Bank of Canada is expected to further tighten monetary policy in 2018 and the market is currently discounting two additional rate hikes by the end of 2018.

1

HSBC Monthly Income Fund With longer-term yields expected to rise modestly over the next year, our objective is to maintain the Fund’s interest rate exposure at or below the benchmark. We continue to prefer residential mortgages and corporate bonds over Government of Canada bonds and will remain overweight in these sectors.

Fund on Fund Investing During the year, the Fund invested in units of other HSBC Mutual Funds, which are also managed by us. To proceed with the transactions, the Fund relied on the positive recommendation of the Fund’s Independent Review Committee by way of Standing Instruction. A condition of this positive recommendation was that the transactions were performed in accordance with our policy on fund on fund investing.

We see better return prospects for corporate assets (both equity and debt) based on strong fundamentals and reasonable valuations, and we believe the corporate sector remains fundamentally sound, with improving earnings growth and defensively positioned balance sheets.

Purchases of Securities Underwritten by a Related Party During the year, the Fund invested in certain securities that were underwritten, in whole or in part, by entities that are a related party to us. To proceed with the transactions, the Fund relied on the approval of the Fund’s Independent Review Committee by way of Standing Instruction. A condition of this approval was that the transactions were performed in accordance with our policy on Purchases of Securities Underwritten by a Related Party.

The Fund has a small overweight position in equities relative to fixed income. Equity investments will focus on high-dividend-paying preferred shares and common equities, while fixed income investments will focus on residential mortgages and corporate bonds.

Related Party Transactions

Financial Highlights

We, on behalf of the Fund, or the Fund Manager, may, from time to time, enter into transactions or arrangements with or involving other members of the HSBC Group or other people or companies related or connected to us or the Fund. To proceed with the transactions, the Fund relies on the positive recommendation of the Fund’s Independent Review Committee. A condition of this positive recommendation is that the transactions are performed in accordance with our policy on Related Party Transactions. For more general information on persons related to the Fund and the types of potential transactions, see the Fund’s Simplified Prospectus.

The following tables show selected key financial information about the Fund and are intended to help you understand the Fund’s financial performance for the past five years. This information is derived from the Fund’s audited annual financial statements. The information in the following tables is based on prescribed regulations, and, as a result, is not expected to add down due to the increase/decrease in net assets from operations being based on average units outstanding during the year and all other numbers being based on actual units outstanding at the relevant point in time.

The following is a summary of current transactions and arrangements with entities that are related to us or the Fund.

HSBC Monthly Income Fund – Investor Series – Net Assets per Unit(1)

Manager, Trustee and Investment Advisor We are the manager, trustee and primary investment advisor of the Fund. As manager, we manage the overall business and operations of the Fund. As trustee, we hold legal title to the property of the Fund on your behalf. As primary investment advisor, we provide investment advice and portfolio management services to the Fund. We receive a fee from the Fund for these services based on assets under management, calculated daily and paid monthly.

Years ended December 31 2017 Net assets per unit, beginning of year (2)

Distribution Services The Fund is distributed through us, HSBC Investment Funds (Canada) Inc. (our wholly owned subsidiary and affiliate) and HSBC Securities (Canada) Inc. (an affiliate) directly or through its division, HSBC InvestDirect. We pay distribution and servicing fees to them based on the amount of assets held in the investor’s account, and additionally, in some cases, on the amount of the initial purchase. If you hold units of this Fund and/or other HSBC Mutual Funds in a registered plan with HSBC Investment Funds (Canada) Inc., they may charge you an annual fee to cover the annual administration costs of the plan. We permit HSBC Investment Funds (Canada) Inc. to collect these fees by redeeming sufficient units of the Fund with the highest market value in your registered plan.

$10.42

2016

2015

2014

2013

$9.71 $10.20

$9.85

$9.53

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.31 (0.15) 0.15 0.15

0.32 (0.14) 0.19 0.57

0.34 (0.14) 0.02 (0.46)

0.34 (0.14) (0.02) 0.41

0.32 (0.14) (0.01) 0.38

Total increase (decrease) from operations (2)

$0.46

$0.94

$(0.24)

$0.59

$0.55

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

(0.18) – – (0.06)

(0.04) (0.16) – (0.04)

(0.09) (0.11) – (0.04)

(0.10) (0.10) – (0.04)

(0.09) (0.10) – (0.05)

Total annual distributions (2,3)

$(0.24) $(0.24) $(0.24) $(0.24) $(0.24)

Net assets per unit at December 31 of year shown (2) $10.65 $10.42

2

$9.71 $10.20

$9.84

HSBC Monthly Income Fund Ratios and Supplemental Data

HSBC Monthly Income Fund – Premium Series – Net Assets per Unit(1)

Years ended December 31 2017

2016

2015

2014

Years ended December 31

2013

2017

Net Asset Value (in 000s) (4) $368,703 $372,673 $372,980 $429,542 $397,061 Number of units outstanding (in 000s) (4) 34,635 35,774 38,419 42,122 40,303 Management expense ratio (⬙MER⬙) (5) 1.43% 1.43% 1.42% 1.41% 1.43% MER before waivers or absoptions (5) 1.43% 1.43% 1.42% 1.41% 1.43% Trading expense ratio (6) 0.01% 0.02% 0.01% 0.01% 0.01% Portfolio turnover rate (7) 19.49% 25.63% 12.83% 13.25% 19.17% Net Asset Value per unit (4) $10.65 $10.42 $9.71 $10.20 $9.85

Net assets per unit, beginning of year (2)

HSBC Monthly Income Fund – Advisor Series – Net Assets per Unit(1) Years ended December 31 2017 Net assets per unit, beginning of year (2)

2016

$10.22

2015

2014

$9.56 $10.10

$9.76

2013 $9.44

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.30 (0.19) 0.13 0.19

0.32 (0.18) 0.19 0.57

0.34 (0.19) 0.01 (0.46)

0.33 (0.14) – 0.46

0.32 (0.14) (0.02) 0.40

Total increase (decrease) from operations (2)

$0.43

$0.90

$(0.30)

$0.65

$0.56

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

(0.18) – – (0.06)

(0.04) (0.16) – (0.04)

(0.09) (0.11) – (0.04)

(0.10) (0.10) – (0.04)

(0.09) (0.10) – (0.05)

Total annual distributions (2,3)

Years ended December 31 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2015

2014

2013

$46

$96

$63

$67

$232

4

9

7

7

24

1.85%

1.82%

1.93%

1.43%

1.45%

$10.77 $10.03 $10.53 $10.17

$9.83

0.32 (0.09) 0.16 0.15

0.33 (0.09) 0.20 0.60

0.35 (0.09) 0.02 (0.48)

0.35 (0.09) (0.02) 0.41

0.34 (0.09) (0.01) 0.39

Total increase (decrease) from operations (2)

$0.54

$1.04

$(0.20)

$0.65

$0.63

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

(0.22) – – (0.08)

(0.05) (0.19) – (0.06)

(0.12) (0.14) – (0.04)

(0.12) (0.13) – (0.05)

(0.11) (0.13) – (0.06)

Total annual distributions (2,3)

$(0.30) $(0.30) $(0.30) $(0.30) $(0.30)

Net assets per unit at December 31 of year shown (2)

$11.02 $10.77 $10.03 $10.53 $10.16

2016

2015

2014

2013

Net Asset Value (in 000s) (4) $625,091 $572,749 $541,541 $603,600 $516,113 Number of units outstanding (in 000s) (4) 56,748 53,171 53,967 57,300 50,740 Management expense ratio (⬙MER⬙) (5) 0.88% 0.88% 0.86% 0.87% 0.88% MER before waivers or absoptions (5) 0.88% 0.88% 0.86% 0.87% 0.88% Trading expense ratio (6) 0.01% 0.02% 0.01% 0.01% 0.01% Portfolio turnover rate (7) 19.49% 25.63% 12.83% 13.25% 19.17% Net Asset Value per unit (4) $11.02 $10.77 $10.03 $10.53 $10.17

Ratios and Supplemental Data 2016

2013

Years ended December 31

$9.75

2017

2014

Ratios and Supplemental Data

$(0.24) $(0.24) $(0.24) $(0.24) $(0.24) $9.56 $10.10

2015

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

2017

Net assets per unit at December 31 of year shown (2) $10.39 $10.22

2016

2.70% 3.15% 3.07% 1.43% 1.45% 0.01% 0.02% 0.01% 0.01% 0.01% 19.49% 25.63% 12.83% 13.25% 19.17% $10.39 $10.22 $9.56 $10.10 $9.76

3

HSBC Monthly Income Fund HSBC Monthly Income Fund – Manager Series – Net Assets per Unit(1)

HSBC Monthly Income Fund – Institutional Series – Net Assets per Unit(1)

Years ended December 31

Years ended December 31 2017

Net assets per unit, beginning of year (2)

2016

2015

2014

2013

$10.90 $10.19 $10.76 $10.39 $10.05

2017

2016

2015

2014

2013

Net assets per unit, beginning of year (2)

$9.21

$8.60

$9.13

$8.82

$8.52

0.27 (0.04) 0.13 0.18

0.28 (0.02) 0.16 0.44

0.35 (0.03) (0.04) (0.34)

0.29 – (0.04) 0.46

0.31 – (0.01) (0.12)

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.33 (0.12) 0.17 0.11

0.33 (0.13) 0.20 0.61

0.36 (0.14) 0.01 (0.38)

0.36 (0.10) (0.02) 0.44

0.34 (0.09) (0.01) 0.35

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

Total increase (decrease) from operations (2)

$0.49

$1.01

$(0.15)

$0.68

$0.59

Total increase (decrease) from operations (2)

$0.54

$0.86 $(0.06) $0.71

$0.18

(0.11) (0.14) – (0.06)

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

(0.24) – – (0.09)

(0.05) (0.22) – (0.06)

(0.12) (0.15) – (0.06)

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

(0.23) – – (0.08)

(0.05) (0.20) – (0.06)

(0.12) (0.14) – (0.04)

(0.12) (0.14) – (0.05)

(0.13) (0.15) – (0.05)

(0.13) (0.15) – (0.05)

Total annual distributions (2,3)

$(0.31) $(0.31) $(0.30) $(0.31) $(0.31)

Total annual distributions (2,3)

$(0.33) $(0.33) $(0.33) $(0.33) $(0.33)

Net assets per unit at December 31 of year shown (2)

$11.11 $10.90 $10.19 $10.76 $10.38

Net assets per unit at December 31 of year shown (2)

$9.27

Ratios and Supplemental Data

Ratios and Supplemental Data

Years ended December 31

Years ended December 31

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2017

2016

2015

2014

2013

$477

$248

$251

$110

$103

43

23

25

10

10

1.17%

1.28%

1.39%

0.90%

0.90%

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

1.17% 1.28% 1.47% 0.90% 0.90% 0.01% 0.02% 0.01% 0.01% 0.01% 19.49% 25.63% 12.83% 13.25% 19.17% $11.11 $10.90 $10.19 $10.76 $10.39

$9.21

$8.60

$9.13

$8.81

2017

2016

2015

2014

2013

$115

$491

$758

$111

$1,683

12

53

88

12

191

0.44%

0.21%

0.32%

0.06%

0.02%

0.44% 0.21% 0.32% 0.06% 0.02% 0.01% 0.02% 0.01% 0.01% 0.01% 19.49% 25.63% 12.83% 13.25% 19.17% $9.27 $9.21 $8.60 $9.13 $8.82

(1) This information is derived from the Fund’s audited annual financial statements. 2017, 2016, 2015, 2014 and 2013 balances are stated in IFRS. Under IFRS, the net asset per unit presented in the financial statements is the same as the net asset value calculated for fund pricing purposes. (2) Net assets per unit and distributions per unit are based on the actual number of units outstanding for the relevant series at the relevant time. The increase/decrease in net assets from operations per unit is based on the weighted average number of units outstanding for the relevant series over the fiscal year. (3) Distributions are automatically reinvested in additional units of the Fund, unless the unitholder withdraws from the automatic reinvestment plan by providing written notice to us. (4) This information is provided as at December 31 of the year shown. (5) MER is based on total expenses (excluding distributions, commissions and other portfolio transaction costs) for the stated period and is expressed as an annualized percentage of daily average net asset value during the year. The MER may vary from one mutual fund to another and from one series of units to another. We have

4

HSBC Monthly Income Fund waived or absorbed certain fees and expenses otherwise payable by the Fund. The amount of expenses absorbed or waived is at the discretion of and can be terminated at any time by us.

Year-by-Year Returns Years ended December 31 The following bar charts show the Fund’s performance for each of the years shown, and illustrate how the Fund’s performance changed from year to year. In percentage terms, the bar charts show how much an investment made on the first day of each financial year would have grown or decreased by the last day of each financial year.

(6) The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the year. (7) The Fund’s portfolio turnover rate indicates how actively the Fund’s portfolio advisor manages its portfolio investments. A portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the year. The higher the Fund’s portfolio turnover rate in a year, the greater the trading costs payable by the Fund in the year, and the greater the chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high turnover rate and the performance of the Fund. The rate is calculated based on the lesser of purchases or sales of securities divided by the average weighted market value of the portfolio securities, excluding short-term securities.

Annual Returns – Investor Series 20%

16.1%

15% 10%

9.9%

7.9%

6.0%

5.9%

6.0%

4.5%

5% 0% -1.6%

-5%

Management Fees

-10%

For the year ended December 31, 2017, the Fund paid us management fees of $9,293,213. The management fee for each series is calculated as a percentage of the daily net asset value for that series. The fees are reduced, where required, so that these fees do not duplicate fees payable by mutual funds in which the Fund invests for the same service.

-15%

-2.5%

-9.8% Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Annual Returns – Advisor Series 20%

The Fund’s management fees were used by us to pay costs for managing the investment portfolio, providing investment analysis and recommendations, making investment decisions, making brokerage arrangements for the purchase and sale of the investment portfolio and providing other services. The management fees also funded commission payments and other compensation to sales representatives and registered dealers and brokers (collectively “distribution costs”), including HSBC Investment Funds (Canada) Inc., for units of the Fund bought and held by unitholders. Finally, we used management fees to pay for additional marketing and distribution services to the Fund.

16.2%

15% 9.5%

8.1%

10%

6.0%

5.9%

6.0%

4.1%

5% 0% -1.5%

-5% -10% -15%

-3.0%

-9.6% Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Annual Returns – Premium Series

For the year ended December 31, 2017, approximately 46% of the total management fees collected from all HSBC Mutual Funds were used to fund distribution costs. In comparison, for the Fund, such distribution costs represented 50% of the management fees collected. This may vary by series depending on the assets invested in each of the series.

20% 16.7% 15% 10.5% 10%

8.5% 6.6%

6.5%

6.6%

5.1%

5%

Past Performance 0%

The performance information shown assumes that all distributions made by the Fund in the years shown were reinvested in additional securities of the Fund. The performance information does not take into account sales, redemption, distribution, optional charges or expenses you may be charged outside of the Fund or the effect of any income tax you may have to pay as a result of your investment in the Fund that would have reduced returns or performance. The performance of different fund series may vary for a number of reasons, including differences in management fees and expenses. The Fund’s past performance does not necessarily indicate how it will perform in the future.

-1.0% -5%

5

-1.9%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2009 2010 2011 2012 2013 2014 2015 2016 2017

HSBC Monthly Income Fund Annual Returns – Manager Series

Investor Series

15%

1 Year

10.1%

10% 6.5%

6.5% 4.8%

5% 0% -5%

25% 17.4%

15%

11.2%

9.4%

7.5%

7.4%

7.4%

4.34%

0%

-0.2%

-5%

3 Year

5 Year 10 Year

HSBC Monthly Income Fund

4.07% 3.39% 4.40%

3.92%

15% FTSE TMX Canada Short-Term Bond Index, 15% FTSE TMX Canada Mid-Term Bond Index,30% HSBC Mortgage Fund Benchmark, 35% S&P/TSX Capped Composite Index, 5% S&P/TSX Preferred Index

4.46% 3.59% 4.53%

4.34%

Manager Series

4.3%

5%

-15%

4.46% 3.59% 4.53%

1 Year

Annual Returns – Institutional Series

-10%

4.02%

15% FTSE TMX Canada Short-Term Bond Index, 15% FTSE TMX Canada Mid-Term Bond Index,30% HSBC Mortgage Fund Benchmark, 35% S&P/TSX Capped Composite Index, 5% S&P/TSX Preferred Index

Advisor Series

-2.5%

10%

5 Year 10 Year

4.55% 3.86% 4.69%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2013 2014 2015 2016 2017

20%

3 Year

HSBC Monthly Income Fund

1 Year

-2.4%

-8.6% Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Annual Compound Returns Year ended December 31, 2017 The following tables show the Fund’s historical annual compound total returns for the years indicated, compared with the benchmark index. The benchmark is a weighted composite of the FTSE TMX Canada Short-Term Bond Index (15%), HSBC Mortgage Fund Benchmark (30%), FTSE TMX Canada Mid-Term Bond Index (15%), S&P/TSX Capped Composite Index (35%), and S&P/TSX Preferred Shared Index (5%).

3 Year

Since 5 Year Inception

HSBC Monthly Income Fund

4.80% 4.01% 5.00%

5.06%

15% FTSE TMX Canada Short-Term Bond Index, 15% FTSE TMX Canada Mid-Term Bond Index,30% HSBC Mortgage Fund Benchmark, 35% S&P/TSX Capped Composite Index, 5% S&P/TSX Preferred Index

4.46% 3.59% 4.53%

4.50%

InstitutionalSeries 1 Year

The FTSE TMX Canada Mid-Term Bond Index is a broad measure of the total return for the Canadian bond market, covering marketable Canadian bonds with a term to maturity between five and ten years. The FTSE TMX Canada Short-Term Bond Index is a broad measure of the total return for a segment of the Canadian bond market, covering marketable Canadian bonds with a term to maturity between one and five years. The S&P/TSX Preferred Share Index is designed to track the Canadian preferred share market. The S&P/TSX Capped Composite Index tracks changes in the share price of the largest companies listed on the Toronto Stock Exchange, representing a broad range of industries. The HSBC Mortgage Fund Benchmark is a blend of the FTSE TMX Canada Residential Mortgage 1-Year Index (40%), FTSE TMX Canada Residential Mortgage 3-Year Index (20%), FTSE TMX Canada Residential Mortgage 5-Year Index (10%), FTSE TMX Canada 91-Day T-Bill Index (10%) and FTSE TMX Canada Short-Term Bond Index (20%), discounted by an appropriate amount to reflect actual prevailing mortgage rates over the same period.

3 Year

5 Year 10 Year

HSBC Monthly Income Fund

4.25% 4.23% 5.49%

5.10%

15% FTSE TMX Canada Short-Term Bond Index, 15% FTSE TMX Canada Mid-Term Bond Index,30% HSBC Mortgage Fund Benchmark, 35% S&P/TSX Capped Composite Index, 5% S&P/TSX Preferred Index

4.46% 3.59% 4.53%

4.34%

Premium Series 1 Year

3 Year

Since 5 Year Inception

HSBC Monthly Income Fund

5.12% 4.43% 5.26%

4.70%

15% FTSE TMX Canada Short-Term Bond Index, 15% FTSE TMX Canada Mid-Term Bond Index,30% HSBC Mortgage Fund Benchmark, 35% S&P/TSX Capped Composite Index, 5% S&P/TSX Preferred Index

4.46% 3.59% 4.53%

4.22%

(1) Due to the fact that several benchmark indices are only available on a monthly basis, the performance data for the HSBC Funds and the benchmark indices are calculated using values from the first month-end date each Fund was in operation. (2) For investment commentary and relative performance of the Fund compared to its benchmark, please refer to the Results of Operations section of this report.

6

HSBC Monthly Income Fund Summary of Investment Portfolio

Top 25 Holdings

As at December 31, 2017

Percentage of NAV HSBC Mortgage Fund - Institutional Series Royal Bank of Canada Toronto-Dominion Bank Bank of Nova Scotia Government of Canada, 5.75% 06/01/33 Canadian National Railway Company Enbridge Inc. SPDR Barclays Capital High Yield Bond ETF Suncor Energy Inc. Bank of Montreal Manulife Financial Corp. Canadian Imperial Bank of Commerce Brookfield Asset Management Inc., Class A Canadian Natural Resources Ltd. Dollarama Inc. Alimentation Couche-Tard Inc., Class B Brookfield Infrastructure Partners LP TransCanada Corp. Aviva PLC, 4.50% 05/10/21 Canada Government Bond, 6.33% 12/01/26 Imperial Oil Limited CGI Group Inc. Sun Life Financial Inc. BCE Inc. Intact Financial Corp. Total of Top 25 Holdings

Asset Mix Percentage of NAV Canadian Equities Mutual Funds Corporate Bonds Government Bonds Cash & Equivalents Total

40.88% 30.11% 23.30% 4.88% 0.83% 100.00%

Sector Mix Percentage of NAV Mutual Funds Financials Energy Government Bonds Industrials Consumer Discretionary Materials Consumer Staples Asset Backed Telecommunication Services Utilities Real Estate Information Technology Cash & Equivalents Total

30.11% 29.80% 11.71% 4.88% 4.65% 3.45% 2.75% 2.66% 2.63% 2.46% 2.28% 1.11% 0.68% 0.83% 100.00%

28.01% 2.57% 2.55% 2.07% 1.88% 1.68% 1.43% 1.43% 1.26% 1.24% 1.15% 1.11% 1.10% 1.07% 0.98% 0.96% 0.96% 0.87% 0.86% 0.80% 0.73% 0.68% 0.68% 0.66% 0.64% 57.37%

The Summary of Investment Portfolio may change due to ongoing portfolio transactions of the Fund, and is available quarterly. The Fund invests in other mutual funds, and the prospectus and other information about the underlying funds are available on SEDAR at www.sedar.com.

7

For more information

How to reach us

You can find more information about HSBC Mutual Funds in the Fund’s Simplified Prospectus, Annual Information Form, Annual and Semi-Annual Report and Fund Facts. You can get a copy of these documents, as well as the Fund’s Financial Statements, at no cost by calling 1-888-390-3333, by contacting your authorized dealer or by visiting our website at www.hsbc.ca/investment-resources.

HSBC Global Asset Management (Canada) Limited

These documents and other information about the Fund, such as information circulars and material contracts, are also available at www.sedar.com. Copies of the Annual Report and Semi-Annual Report, Simplified Prospectus, Annual Information Form, Annual and Interim Management Report of Fund Performance and Fund Facts are available on our website at www.hsbc.ca/investment-resources.

Vancouver 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8 Toronto Suite 300, 70 York Street Toronto, ON M5J 1S9 Toll-free: 1-888-390-3333 Fax: 604-669-2756 Email: [email protected] Website: www.hsbc.ca/investment-resources

A NOTE ON FORWARD-LOOKING STATEMENTS This report may contain forward-looking statements about the Fund, including its strategy, expected performance and condition. Forward-looking statements include statements that are predictive in nature that depend upon or refer to future events or conditions, or that include words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates” or negative versions thereof and similar expressions. In addition, any statement that may be made concerning future performance, strategies or prospects, and possible future Fund action, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the Fund and economic factors. Forward-looking statements are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied in any forward-looking statements made by the Fund. Any number of important factors could contribute to these digressions, including, but not limited to, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, and catastrophic events. We stress that the above-mentioned list of important factors is not exhaustive. We encourage you to consider these and other factors carefully before making any investment decisions and we urge you to avoid placing undue reliance on forward-looking statements. Further, you should be aware of the fact that the Fund has no specific intention of updating any forward-looking statements, whether as a result of new information, future events or otherwise. Sources: HSBC Global Asset Management (Canada) Limited, Bloomberg, BMO Capital Markets, FTSE TMX Global Debt Capital Markets Inc. FTSE TMX Global Debt Capital Markets Inc. (“FTDCM”), FTSE International Limited (“FTSE”), the London Stock Exchange Group companies (the “Exchange”) or TSX Inc. (“TSX” and together with FTDCM, FTSE and the Exchange, the “Licensor Parties”). The Licensor Parties make no warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the FTSE TMX Canada Index and/or the figure at which the said Index stands at any particular time on any particular day or otherwise. The Index is compiled and calculated by FTDCM and all copyright in the Index values and constituent lists vests in FTDCM. The Licensor Parties shall not be liable (whether in negligence or otherwise) to any person for any error in the Index and the Licensor Parties shall not be under any obligation to advise any person of any error therein. “TMX” is a trade mark of TSX Inc. and is used under licence. “FTSE®” is a trade mark of FTSE International Limited and is used by FTDCM under licence.

Issued by HSBC Global Asset Management (Canada) Limited

(2018-03) DFS

Unauthorized reproduction, distribution, transmission or publication without our prior written consent is strictly prohibited.

HSBC U.S. Dollar Monthly Income Fund Annual Management Report of Fund Performance for the year ended December 31, 2017

◆

HSBC U.S. Dollar Monthly Income Fund Management Discussion of Fund Performance This Fund is suitable for investors seeking reasonably consistent levels of monthly income in US dollar and higher returns while wanting to preserve the value of their US dollar capital over the medium to long term. Investors in this Fund should have a medium investment time horizon and a low to medium tolerance for risk in their returns.

In this document, you and your refer to the unitholder of the Fund; we, us and our refer to HSBC Global Asset Management (Canada) Limited; and the Fund refers to the HSBC U.S. Dollar Monthly Income Fund. We are the manager, trustee and primary investment advisor of the Fund. We have entered into a sub-advisory agreement with HSBC Global Asset Management (USA) Inc. and Federated Investment Counseling Inc., under which HSBC Global Asset Management (USA) Inc. and Federated Investment Counseling Inc. provide investment advice and portfolio management services to the Fund. For an explanation of the relationship between us and the sub-advisors, see the section Selection of Sub-Advisors in the Fund’s Simplified Prospectus.

Results of Operations As of December 31, 2017, the Fund’s net assets increased by 1.6% to $950.5 million from $935.1 million at the end of 2016. Of this increase, a $55.0 million gain was attributable to investment performance and $39.6 million was attributable to net withdrawals from the Fund.

Investment Performance

Introduction

The HSBC U.S. Dollar Monthly Income Fund (Investor Series) rose 5.61% for the 12-month period ending December 31, 2017, while its benchmark rose 6.65% over the same period. The benchmark is a weighted composite consisting of the Merrill Lynch US Corporate, A Rated 1-10 Year Index (US$) (70%) and Dow Jones US Select Dividend Net Index (30%).

This Annual Management Report of Fund Performance contains financial highlights but does not contain the complete annual financial statements of the investment fund. You may obtain a copy of the Fund’s annual financial statements at your request, at no cost, by calling us toll-free at 1-888-390-3333, by visiting our website at www.hsbc.ca/investment-resources, by visiting the SEDAR website at www.sedar.com or by writing to us at:

Global credit markets delivered positive total returns in 2017 as a general rally in risk was supported by a favourable global growth scenario and continued strong economic data releases. Credit fundamentals were stable to improving, and, except for some idiosyncratic name and sector-specific issues, this trend is expected to continue in 2018. Default rates have fallen back to historic lows and are expected to remain at low levels.

Corporate Secretary HSBC Global Asset Management (Canada) Limited 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8 You may also contact us using one of these methods to request a copy of the Fund’s interim financial report, proxy voting policies and procedures, proxy voting disclosure record or quarterly statement of investment portfolio.

In the fixed income component of the portfolio, allocation effects were positive, driven mainly by an overweight position in financials, which outperformed over the period. Issue selection also contributed to performance thanks to strong selection in the healthcare and consumer goods sectors, while issue selection in financials and telecom was negative.

Investment Objective and Strategies The fundamental investment objective of this Fund is to provide a reasonably consistent level of monthly income while aiming to preserve capital over the medium to long term.

In the equity component of the portfolio, the Fund continued to provide investors with a stable, high and rising income stream from high-quality investments.

To achieve its objectives, the Fund invests primarily in government and corporate bonds, mortgages, high-dividend-paying common and preferred shares, income trust units and other high-yielding securities denominated in US dollars. When investing in fixed income securities, the Fund will invest primarily in investment-grade securities, and when investing in common shares the Fund will invest primarily in high quality, stable companies with the ability to grow dividends or distributable income over time and whose securities generally have a higher yield than the overall market.

Twenty-nine of the Fund’s holdings raised their dividend payments over the year. Healthcare was the top sector contributor, followed by consumer staples. High-quality, high-yield and low-beta stocks underperformed in 2017, providing a challenge to a high-yield dividend strategy.

Recent Developments On the fixed income side, the Fund’s average credit rating is in line with the benchmark and remains overweight in AA and BBB credits and underweight in As. It remains overweight in financials and underweight in technology and capital goods. Portfolio duration is about 0.3 years short of the benchmark, reflecting an anticipated rise in government yields. Along the yield curve, the portfolio holds overweight positions in the 0-1 year and 7-10 year segments.

Risk The risks of investing in the Fund remain as discussed in the Simplified Prospectus. During the year, there were no material changes to the Fund that affected the overall risk level of the Fund. 1

HSBC U.S. Dollar Monthly Income Fund On the equity side, all major US indexes reached new highs in 2017. December data has fuelled expectations for 2018, as revised annualized GDP growth stayed above 3%, manufacturing, housing and consumer spending were all solid, and consumer and business confidence hovered around multi-decade highs. The US Federal Reserve acknowledged the improvement, raising the target rate for a third time in 2017 and significantly boosting its growth forecast for the year ahead.

annual administration costs of the plan. We permit HSBC Investment Funds (Canada) Inc. to collect these fees by redeeming sufficient units of the Fund with the highest market value in your registered plan.

Purchases of Securities Underwritten by a Related Party During the year, the Fund invested in certain securities that were underwritten, in whole or in part, by entities that are a related party to us. To proceed with the transactions, the Fund relied on the approval of the Fund’s Independent Review Committee by way of Standing Instruction. A condition of this approval was that the transactions were performed in accordance with our policy on Purchases of Securities Underwritten by a Related Party.

The equity component of the portfolio remains concentrated in sectors with dividend-friendly stocks to provide investors with a high-dividend yield complemented by dividend growth.

Related Party Transactions We, on behalf of the Fund, or the Fund Manager, may, from time to time, enter into transactions or arrangements with or involving other members of the HSBC Group or other people or companies related or connected to us or the Fund. To proceed with the transactions, the Fund relies on the positive recommendation of the Fund’s Independent Review Committee. A condition of this positive recommendation is that the transactions are performed in accordance with our policy on Related Party Transactions. For more general information on persons related to the Fund and the types of potential transactions, see the Fund’s Simplified Prospectus.

Financial Highlights The following tables show selected key financial information about the Fund and are intended to help you understand the Fund’s financial performance for the past five years. This information is derived from the Fund’s audited annual financial statements. The information in the following tables is based on prescribed regulations, and, as a result, is not expected to add down due to the increase/decrease in net assets from operations being based on average units outstanding during the year and all other numbers being based on actual units outstanding at the relevant point in time.

The following is a summary of current transactions and arrangements with entities that are related to us or the Fund.

All figures are stated in US dollars.

Manager, Trustee and Investment Advisor We are the manager, trustee and primary investment advisor of the Fund. As manager, we manage the overall business and operations of the Fund. As trustee, we hold legal title to the property of the Fund on your behalf. As primary investment advisor, we provide investment advice and portfolio management services to the Fund. We receive a fee from the Fund for these services based on assets under management, calculated daily and paid monthly.

HSBC U.S. Dollar Monthly Income Fund – Investor Series – Net Assets per Unit(1) Years ended December 31 2017 Net assets per unit, beginning of year (2)

We have entered into a sub-advisory agreement with HSBC Global Asset Management (USA) Inc. (an affiliate), under which HSBC Global Asset Management (USA) Inc. provides investment advice and portfolio management services to the Fund. We pay HSBC Global Asset Management (USA) Inc. a fee based on assets under management, calculated daily and paid quarterly. For more information on our ability to hire sub-advisors, see the section Organization and Management of the HSBC Mutual Funds in the Fund’s Simplified Prospectus.

Distribution Services The Fund is distributed through us, HSBC Investment Funds (Canada) Inc. (our wholly owned subsidiary and affiliate) and HSBC Securities (Canada) Inc. (an affiliate) directly or through its division, HSBC InvestDirect. We pay distribution and servicing fees to them based on the amount of assets held in the investor’s account, and additionally, in some cases, on the amount of the initial purchase. If you hold units of this Fund and/or other HSBC Mutual Funds in a registered plan with HSBC Investment Funds (Canada) Inc., they may charge you an annual fee to cover the 2

2016

2015

2014

2013

$10.89 $11.09 $11.30 $11.22 $10.82

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.37 (0.19) 0.28 0.16

0.35 (0.20) 0.28 0.06

0.34 (0.20) 0.15 (0.26)

0.37 (0.20) 0.33 0.05

0.34 (0.20) 0.15 0.27

Total increase (decrease) from operations (2)

$0.62

$0.49

$0.03

$0.55

$0.56

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

(0.18) – (0.36) –

(0.09) (0.07) (0.51) (0.01)

(0.09) (0.08) (0.08) (0.01)

(0.12) (0.11) (0.24) –

(0.08) (0.07) – (0.04)

Total annual distributions (2,3)

$(0.54) $(0.68) $(0.26) $(0.47) $(0.19)

Net assets per unit at December 31 of year shown (2)

$10.95 $10.89 $11.09 $11.30 $11.21

HSBC U.S. Dollar Monthly Income Fund Ratios and Supplemental Data

HSBC U.S. Dollar Monthly Income Fund – Premium Series – Net Assets per Unit(1)

Years ended December 31 2017

2016

2015

2014

Years ended December 31

2013

2017

Net Asset Value (in 000s) (4) $179,931 $183,231 $198,858 $231,522 $224,884 Number of units outstanding (in 000s) (4) 16,431 16,826 17,935 20,482 20,049 Management expense ratio (⬙MER⬙) (5) 1.73% 1.72% 1.73% 1.74% 1.76% MER before waivers or absoptions (5) 1.73% 1.72% 1.73% 1.74% 1.76% Trading expense ratio (6) 0.02% 0.03% 0.02% 0.03% 0.02% Portfolio turnover rate (7) 63.98% 45.54% 43.16% 64.99% 58.37% Net Asset Value per unit (4) $10.95 $10.89 $11.09 $11.30 $11.22

Net assets per unit, beginning of year (2)

HSBC U.S. Dollar Monthly Income Fund – Advisor Series – Net Assets per Unit(1) Years ended December 31 2017 Net assets per unit, beginning of year (2)

2016

2015

2014

2013

$10.34 $10.57 $10.82 $10.74 $10.37

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.35 (0.22) 0.26 0.14

0.33 (0.22) 0.27 0.03

0.32 (0.22) 0.11 (0.07)

0.35 (0.19) 0.30 (0.08)

0.32 (0.19) 0.14 0.22

Total increase (decrease) from operations (2)

$0.53

$0.41

$0.14

$0.38

$0.49

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

(0.18) – (0.34) –

(0.09) (0.07) (0.48) (0.01)

(0.09) (0.08) (0.07) (0.01)

(0.12) (0.11) (0.23) –

(0.08) (0.07) – (0.04)

$(0.52) $(0.65) $(0.25) $(0.46) $(0.19)

Net assets per unit at December 31 of year shown (2)

$10.35 $10.34 $10.57 $10.82 $10.73

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2015

2014

2013

$147

$202

$194

$362

$171

14

20

18

33

16

2.14%

2.03%

2.02%

1.76%

1.81%

2013

$10.92 $11.12 $11.33 $11.23 $10.83 0.37 (0.16) 0.28 0.16

0.35 (0.16) 0.29 0.04

0.34 (0.16) 0.15 (0.28)

0.37 (0.16) 0.33 0.03

0.34 (0.16) 0.15 0.26

Total increase (decrease) from operations (2)

$0.65

$0.52

$0.05

$0.57

$0.59

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

(0.21) – (0.37) –

(0.11) (0.08) (0.51) (0.01)

(0.10) (0.09) (0.08) (0.01)

(0.13) (0.13) (0.25) –

(0.09) (0.08) – (0.05)

Total annual distributions (2,3)

$(0.58) $(0.71) $(0.28) $(0.51) $(0.22)

Net assets per unit at December 31 of year shown (2)

$10.99 $10.92 $11.12 $11.33 $11.23

Years ended December 31 2016

2015

2014

2013

Net Asset Value (in 000s) (4) $758,240 $749,694 $769,081 $809,303 $675,480 Number of units outstanding (in 000s) (4) 68,985 68,629 69,184 71,454 60,126 Management expense ratio (⬙MER⬙) (5) 1.39% 1.39% 1.38% 1.40% 1.42% MER before waivers or absoptions (5) 1.39% 1.39% 1.38% 1.40% 1.42% Trading expense ratio (6) 0.02% 0.03% 0.02% 0.03% 0.02% Portfolio turnover rate (7) 63.98% 45.54% 43.16% 64.99% 58.37% Net Asset Value per unit (4) $10.99 $10.92 $11.12 $11.33 $11.23

Years ended December 31 2016

2014

Ratios and Supplemental Data

Ratios and Supplemental Data 2017

2015

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

2017

Total annual distributions (2,3)

2016

2.14% 2.03% 2.02% 1.76% 1.81% 0.02% 0.03% 0.02% 0.03% 0.02% 63.98% 45.54% 43.16% 64.99% 58.37% $10.35 $10.34 $10.57 $10.82 $10.74

3

HSBC U.S. Dollar Monthly Income Fund HSBC U.S. Dollar Monthly Income Fund – Manager Series – Net Assets per Unit(1)

HSBC U.S. Dollar Monthly Income Fund – Institutional Series – Net Assets per Unit(1)

Years ended December 31

Years ended December 31 2017

Net assets per unit, beginning of year (2)

2016

2015

2014

2013

2017 Net assets per unit, beginning of year (2)

$10.24 $10.48 $10.76 $10.68 $10.29

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.33 (0.14) 0.22 0.09

0.33 (0.19) 0.20 0.57

0.33 (0.17) 0.15 (0.36)

0.37 (0.14) 0.38 0.32

Total increase (decrease) from operations (2)

$0.50

$0.91

$(0.05)

$0.93

2016

2015

2014

2013

$11.15 $11.32 $11.52 $11.40 $10.97

0.32 (0.13) 0.15 0.27

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.38 (0.01) 0.19 0.51

0.36 (0.01) 0.28 0.26

0.35 (0.01) 0.15 (0.28)

0.37 (0.01) 0.33 (0.02)

0.34 (0.01) 0.16 0.18

$0.61

Total increase (decrease) from operations (2)

$1.07

$0.89

$0.21

$0.67

$0.67

(0.09) (0.09) – (0.05)

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

(0.34) – (0.39) –

(0.18) (0.14) (0.53) (0.01)

(0.17) (0.14) (0.10) (0.01)

(0.20) (0.19) (0.26) –

(0.14) (0.14) – (0.08)

Total annual distributions (2,3)

$(0.56) $(0.69) $(0.29) $(0.50) $(0.23)

Total annual distributions (2,3)

$(0.73) $(0.86) $(0.42) $(0.65) $(0.36)

Net assets per unit at December 31 of year shown (2)

$10.29 $10.24 $10.48 $10.76 $10.67

Net assets per unit at December 31 of year shown (2)

$11.23 $11.15 $11.32 $11.52 $11.39

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

(0.22) – (0.34) –

(0.11) (0.09) (0.48) (0.01)

(0.11) (0.09) (0.08) (0.01)

(0.13) (0.13) (0.24) –

Ratios and Supplemental Data

Ratios and Supplemental Data

Years ended December 31

Years ended December 31

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2017

2016

2015

2014

2013

$755

$104

$83

$21

$130

73

10

8

2

12

1.33%

1.76%

1.64%

1.23%

1.24%

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

1.40% 2.73% 2.11% 1.23% 1.24% 0.02% 0.03% 0.02% 0.03% 0.02% 63.98% 45.54% 43.16% 64.99% 58.37% $10.29 $10.24 $10.48 $10.76 $10.68

2017

2016

2015

2014

2013

$11,399

$1,827

$3,490

$7,087

$5,882

1,015

164

308

615

516

0.07%

0.05%

0.04%

0.05%

0.06%

0.07% 0.05% 0.04% 0.05% 0.06% 0.02% 0.03% 0.02% 0.03% 0.02% 63.98% 45.54% 43.16% 64.99% 58.37% $11.23 $11.15 $11.32 $11.52 $11.40

(1) This information is derived from the Fund’s audited annual financial statements. 2017, 2016, 2015, 2014 and 2013 balances are stated in IFRS. Under IFRS, the net asset per unit presented in the financial statements is the same as the net asset value calculated for fund pricing purposes. (2) Net assets per unit and distributions per unit are based on the actual number of units outstanding for the relevant series at the relevant time. The increase/decrease in net assets from operations per unit is based on the weighted average number of units outstanding for the relevant series over the fiscal year. (3) Distributions are automatically reinvested in additional units of the Fund; cash distributions are not available. (4) This information is provided as at December 31 of the year shown. (5) MER is based on total expenses (excluding distributions, commissions and other portfolio transaction costs) for the stated period and is expressed as an annualized percentage of daily average net asset value during the year. The MER may vary from one mutual fund to another and from one series of units to another. We have

4

HSBC U.S. Dollar Monthly Income Fund waived or absorbed certain fees and expenses otherwise payable by the Fund. The amount of expenses absorbed or waived is at the discretion of and can be terminated at any time by us.

Year-by-Year Returns Years ended December 31 The following bar charts show the Fund’s performance for each of the years shown, and illustrate how the Fund’s performance changed from year to year. In percentage terms, the bar charts show how much an investment made on the first day of each financial year would have grown or decreased by the last day of each financial year.

(6) The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the year. (7) The Fund’s portfolio turnover rate indicates how actively the Fund’s portfolio advisor manages its portfolio investments. A portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the year. The higher the Fund’s portfolio turnover rate in a year, the greater the trading costs payable by the Fund in the year, and the greater the chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high turnover rate and the performance of the Fund. The rate is calculated based on the lesser of purchases or sales of securities divided by the average weighted market value of the portfolio securities, excluding short-term securities.

Annual Returns – Investor Series 10% 6.8% 5.4% 5%

5.6%

5.0%

4.3%

Management Fees For the year ended December 31, 2017, the Fund paid us management fees of $12,453,382. The management fee for each series is calculated as a percentage of the daily net asset value for that series. The fees are reduced, where required, so that these fees do not duplicate fees payable by mutual funds in which the Fund invests for the same service.

0.3% 0%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2012 2013 2014 2015 2016 2017

Annual Returns – Advisor Series 10%

The Fund’s management fees were used by us to pay costs for managing the investment portfolio, providing investment analysis and recommendations, making investment decisions, making brokerage arrangements for the purchase and sale of the investment portfolio and providing other services. The management fees also funded commission payments and other compensation to sales representatives and registered dealers and brokers (collectively “distribution costs”), including HSBC Investment Funds (Canada) Inc., for units of the Fund bought and held by unitholders. Finally, we used management fees to pay for additional marketing and distribution services to the Fund.

5.3% 5%

0%

5.2%

5.0% 4.0%

0.0% Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2013 2014 2015 2016 2017

Annual Returns – Premium Series

For the year ended December 31, 2017, approximately 46% of the total management fees collected from all HSBC Mutual Funds were used to fund distribution costs. In comparison, for the Fund, such distribution costs represented 40% of the management fees collected. This may vary by series depending on the assets invested in each of the series.

10% 7.2% 5.7%

6.0%

5.4%

4.7%

5%

Past Performance The performance information shown assumes that all distributions made by the Fund in the years shown were reinvested in additional securities of the Fund. The performance information does not take into account sales, redemption, distribution, optional charges or expenses you may be charged outside of the Fund or the effect of any income tax you may have to pay as a result of your investment in the Fund that would have reduced returns or performance. The performance of different fund series may vary for a number of reasons, including differences in management fees and expenses. The Fund’s past performance does not necessarily indicate how it will perform in the future.

0.7% 0%

5

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2012 2013 2014 2015 2016 2017

HSBC U.S. Dollar Monthly Income Fund Annual Returns – Manager Series

Advisor Series

10% 1 Year

5.9%

6.0%

5.5%

5%

4.3%

3 Year

Since 5 Year Inception

HSBC U.S. Dollar Monthly Income Fund

5.17% 3.03% 3.88%

4.15%

70% Merrill Lynch US Corp A Rated 1-10 Yr Index (U$), 30% Dow Jones U.S. Select Dividend Index (U$)

6.65% 5.03% 6.00%

6.20%

Manager Series 0%

0.1%

1 Year

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2013 2014 2015 2016 2017

Annual Returns – Institutional Series 10%

Since 5 Year Inception

HSBC U.S. Dollar Monthly Income Fund

6.02% 3.42% 4.34%

4.69%

70% Merrill Lynch US Corp A Rated 1-10 Yr Index (U$), 30% Dow Jones U.S. Select Dividend Index (U$)

6.65% 5.03% 6.00%

6.20%

InstitutionalSeries

8.7% 7.2%

7.3%

6.8%

6.1%

1 Year

5% 2.0% 0%

3 Year

3 Year

Since 5 Year Inception

HSBC U.S. Dollar Monthly Income Fund

7.34% 5.13% 5.87%

6.49%

70% Merrill Lynch US Corp A Rated 1-10 Yr Index (U$), 30% Dow Jones U.S. Select Dividend Index (U$)

6.65% 5.03% 6.00%

6.46%

Premium Series Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2012 2013 2014 2015 2016 2017

1 Year

Annual Compound Returns Year ended December 31, 2017 The following tables show the Fund’s historical annual compound total returns for the years indicated, compared with the benchmark indices, the Merrill Lynch US Corporate A Rated 1-10 Year Index (in US dollars) (70%) and the Dow Jones US Select Dividend Net Index (in US dollars) (30%), over the same period.

5.61% 3.39% 4.11%

4.79%

70% Merrill Lynch US Corp A Rated 1-10 Yr Index (U$), 30% Dow Jones U.S. Select Dividend Index (U$)

6.65% 5.03% 6.00%

6.56%

5.96% 3.75% 4.46%

5.15%

70% Merrill Lynch US Corp A Rated 1-10 Yr Index (U$), 30% Dow Jones U.S. Select Dividend Index (U$)

6.65% 5.03% 6.00%

6.56%

Summary of Investment Portfolio As at December 31, 2017

Asset Mix Percentage of NAV Corporate Bonds US Equities International Equities Government Bonds Mutual Funds Cash & Equivalents Total

Since 5 Year Inception

HSBC U.S. Dollar Monthly Income Fund

HSBC U.S. Dollar Monthly Income Fund

(2) For investment commentary and relative performance of the Fund compared to its benchmark, please refer to the Results of Operations section of this report.

Investor Series 3 Year

Since 5 Year Inception

(1) Due to the fact that several benchmark indices are only available on a monthly basis, the performance data for the HSBC Funds and the benchmark indices are calculated using values from the first month-end date each Fund was in operation.

The Merrill Lynch US Corporate A Rated 1-10 Year Index (in US dollars) tracks the performance of US-dollar-denominated investment-grade corporate debt publicly issued in the US domestic market, with a remaining term to final maturity of less than 10 years and rated A1 through A3, inclusive. The Dow Jones US Select Dividend Index (in US dollars) measures the performance of a select group of equity securities issued by companies that have provided relatively high dividend yields on a consistent basis over time.

1 Year

3 Year

6

64.20% 22.80% 8.10% 2.31% 1.11% 1.48% 100.00%

HSBC U.S. Dollar Monthly Income Fund Sector Mix Percentage of NAV Financials Energy Consumer Staples Healthcare Utilities Telecommunication Services Government Bonds Consumer Discretionary Real Estate Industrials Materials Mutual Funds Information Technology Cash & Equivalents Total

48.80% 9.96% 9.85% 7.22% 6.79% 5.34% 2.31% 2.05% 1.61% 1.35% 1.13% 1.11% 1.00% 1.48% 100.00%

Top 25 Holdings Percentage of NAV Verizon Communications Inc. Vodafone Group PLC AT&T Inc. Altria Group Inc. BP Capital Markets PLC, 3.22% 04/14/24 The Coca-Cola Co. Philip Morris International Inc. Duke Energy Corp. Government of the United States, 1.51% 07/31/19 Bank of Nova Scotia, 2.45% 09/19/22 Crown Castle International Corp. Chevron Corp. Dominion Resources Inc. Exxon Mobil Corp. SPDR Barclays Capital High Yield Bond ETF Occidental Petroleum Corp. National Grid PLC The Huntington National Bank, 1.70% 02/26/18 AstraZeneca PLC AbbVie Inc. BP PLC GlaxoSmithKline PLC Morgan Stanley, 2.13% 04/25/18 Citigroup Inc., 3.52% 10/27/28 United States Treasury Note/Bond, 2.13% 11/30/24 Total of Top 25 Holdings

1.70% 1.66% 1.63% 1.58% 1.46% 1.45% 1.35% 1.33% 1.28% 1.23% 1.22% 1.19% 1.18% 1.18% 1.11% 1.04% 0.95% 0.95% 0.89% 0.86% 0.85% 0.84% 0.84% 0.79% 0.79% 29.35%

The Summary of Investment Portfolio may change due to ongoing portfolio transactions of the Fund, and is available quarterly.

7

For more information

How to reach us

You can find more information about HSBC Mutual Funds in the Fund’s Simplified Prospectus, Annual Information Form, Annual and Semi-Annual Report and Fund Facts. You can get a copy of these documents, as well as the Fund’s Financial Statements, at no cost by calling 1-888-390-3333, by contacting your authorized dealer or by visiting our website at www.hsbc.ca/investment-resources.

HSBC Global Asset Management (Canada) Limited

These documents and other information about the Fund, such as information circulars and material contracts, are also available at www.sedar.com. Copies of the Annual Report and Semi-Annual Report, Simplified Prospectus, Annual Information Form, Annual and Interim Management Report of Fund Performance and Fund Facts are available on our website at www.hsbc.ca/investment-resources.

Vancouver 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8 Toronto Suite 300, 70 York Street Toronto, ON M5J 1S9 Toll-free: 1-888-390-3333 Fax: 604-669-2756 Email: [email protected] Website: www.hsbc.ca/investment-resources

A NOTE ON FORWARD-LOOKING STATEMENTS This report may contain forward-looking statements about the Fund, including its strategy, expected performance and condition. Forward-looking statements include statements that are predictive in nature that depend upon or refer to future events or conditions, or that include words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates” or negative versions thereof and similar expressions. In addition, any statement that may be made concerning future performance, strategies or prospects, and possible future Fund action, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the Fund and economic factors. Forward-looking statements are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied in any forward-looking statements made by the Fund. Any number of important factors could contribute to these digressions, including, but not limited to, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, and catastrophic events. We stress that the above-mentioned list of important factors is not exhaustive. We encourage you to consider these and other factors carefully before making any investment decisions and we urge you to avoid placing undue reliance on forward-looking statements. Further, you should be aware of the fact that the Fund has no specific intention of updating any forward-looking statements, whether as a result of new information, future events or otherwise. Sources: HSBC Global Asset Management (Canada) Limited, Bloomberg.

Issued by HSBC Global Asset Management (Canada) Limited

(2018-03) DFS

Unauthorized reproduction, distribution, transmission or publication without our prior written consent is strictly prohibited.

HSBC Canadian Balanced Fund Annual Management Report of Fund Performance for the year ended December 31, 2017

◆

HSBC Canadian Balanced Fund Management Discussion of Fund Performance In this document, you and your refer to the unitholder of the Fund; we, us and our refer to HSBC Global Asset Management (Canada) Limited; and the Fund refers to the HSBC Canadian Balanced Fund.

Investment Performance The HSBC Canadian Balanced Fund (Investor Series) rose 7.04% for the 12-month period ending December 31, 2017, while the benchmark rose 7.66% over the same period. The benchmark is a weighted composite consisting of the FTSE TMX Canada Universe Bond Index (35%), S&P/TSX Capped Composite Index (35%), MSCI World Index (C$) (25%) and FTSE TMX Canada 91 Day T-Bill Index (5%).

We are the manager, trustee and primary investment advisor of the Fund.

Introduction This Annual Management Report of Fund Performance contains financial highlights but does not contain the complete annual financial statements of the investment fund. You may obtain a copy of the Fund’s annual financial statements at your request, at no cost, by calling us toll-free at 1-888-390-3333, by visiting our website at www.hsbc.ca/investment-resources, by visiting the SEDAR website at www.sedar.com or by writing to us at:

In 2017, the Fund was neutral or modestly overweight in Canadian and global equities and underweight in fixed income (although within this segment it was overweight in corporate bonds). While asset class positioning benefited performance, security selection within each asset class was the strongest contributor to performance. Security selection within Canadian equities and fixed income added to performance, and global equity selection was a small positive.

Corporate Secretary HSBC Global Asset Management (Canada) Limited 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8

From a Canadian investor’s perspective, global equities were the best-performing major asset class in 2017, returning 14.4%. Canadian equities posted a respectable 9.1% return, while the domestic bond market gained a modest 2.5%. Following weakness early in the year, oil prices rallied and ended the year at $60 per barrel, up approximately 12% in 2017. The Canadian dollar appreciated 7% during the year, benefiting from strength in commodity prices and Bank of Canada rate hikes.

You may also contact us using one of these methods to request a copy of the Fund’s interim financial report, proxy voting policies and procedures, proxy voting disclosure record or quarterly statement of investment portfolio.

Investment Objective and Strategies

The market rally has been well supported by improving fundamentals, including strong earnings growth. Additionally, the relative attractiveness of equities compared to cash or government bonds remains compelling. The Fund therefore remains tilted towards corporate assets (both equities and bonds).

The fundamental investment objective of this Fund is to provide a balance between income and long-term capital growth. To achieve its objectives, the Fund invests primarily in Canadian equities, bonds, mortgage-backed securities and money market securities. A portion of the Fund may also be invested in nonCanadian equities and fixed income securities of issuers. When investing in fixed income securities, the Fund will invest primarily in investment-grade securities, and when investing in Canadian equities the Fund will invest primarily in companies listed on the Toronto Stock Exchange.

Recent Developments The global economy continues to accelerate. Consumer spending remains solid, supported by an increase in household net worth and a healthy labour market. Both business investment and manufacturing activity are also trending higher.

Risk

Looking ahead, while central banks will gradually remove stimulus, rates are likely to remain much lower than historic norms. On fiscal spending, the path is less clear, but the bias seems somewhat expansionary. Canadian economic growth remains healthy, although it was slower in the second half of 2017 than in the robust first half of the year. Employment remains strong and the unemployment rate has dipped to its lowest reading in four decades.

The risks of investing in the Fund remain as discussed in the Simplified Prospectus. During the year, there were no material changes to the Fund that affected the overall risk level of the Fund. This Fund is suitable for investors who want to earn income and grow their capital, have a medium-term investment time horizon and have a low to medium tolerance for risk in their returns.

The US Federal Reserve raised its target rate three times in 2017 and we expect three more increases in 2018. The Bank of Canada surprised markets with two hikes mid-year, taking the target rate to 1%. Three additional hikes are expected in 2018.

Results of Operations As of December 31, 2017, the Fund’s net assets increased by 1.9% to $586.4 million from $575.4 million at the end of 2016. Of this increase, a $41.4 million gain was attributable to investment performance and $30.4 million was attributable to net withdrawals from the Fund. 1

HSBC Canadian Balanced Fund Related Party Transactions

Financial Highlights

We, on behalf of the Fund, or the Fund Manager, may, from time to time, enter into transactions or arrangements with or involving other members of the HSBC Group or other people or companies related or connected to us or the Fund. To proceed with the transactions, the Fund relies on the positive recommendation of the Fund’s Independent Review Committee. A condition of this positive recommendation is that the transactions are performed in accordance with our policy on Related Party Transactions. For more general information on persons related to the Fund and the types of potential transactions, see the Fund’s Simplified Prospectus.

The following tables show selected key financial information about the Fund and are intended to help you understand the Fund’s financial performance for the past five years. This information is derived from the Fund’s audited annual financial statements. The information in the following tables is based on prescribed regulations, and, as a result, is not expected to add down due to the increase/decrease in net assets from operations being based on average units outstanding during the year and all other numbers being based on actual units outstanding at the relevant point in time.

The following is a summary of current transactions and arrangements with entities that are related to us or the Fund.

HSBC Canadian Balanced Fund – Investor Series – Net Assets per Unit(1)

Manager, Trustee and Investment Advisor

Years ended December 31

We are the manager, trustee and primary investment advisor of the Fund. As manager, we manage the overall business and operations of the Fund. As trustee, we hold legal title to the property of the Fund on your behalf. As primary investment advisor, we provide investment advice and portfolio management services to the Fund. We receive a fee from the Fund for these services based on assets under management, calculated daily and paid monthly.

2017 Net assets per unit, beginning of year (2)

Distribution Services The Fund is distributed through us, HSBC Investment Funds (Canada) Inc. (our wholly owned subsidiary and affiliate) and HSBC Securities (Canada) Inc. (an affiliate) directly or through its division, HSBC InvestDirect. We pay distribution and servicing fees to them based on the amount of assets held in the investor’s account, and additionally, in some cases, on the amount of the initial purchase. If you hold units of this Fund and/or other HSBC Mutual Funds in a registered plan with HSBC Investment Funds (Canada) Inc., they may charge you an annual fee to cover the annual administration costs of the plan. We permit HSBC Investment Funds (Canada) Inc. to collect these fees by redeeming sufficient units of the Fund with the highest market value in your registered plan.

2016

2015

2014

2013

$28.05 $26.14 $26.04 $23.87 $21.75

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.89 (0.56) 1.05 0.58

0.75 (0.52) 0.86 1.17

1.25 (0.52) 0.50 (0.77)

0.79 (0.49) 0.35 1.82

0.75 (0.45) 1.05 1.68

Total increase (decrease) from operations (2)

$1.96

$2.26

$0.46

$2.47

$3.03

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

(0.07) (0.18) – –

(0.06) (0.19) (0.17) –

(0.10) (0.18) (0.05) –

(0.12) (0.19) – –

– (0.35) (0.56) –

Total annual distributions (2,3)

$(0.25) $(0.42) $(0.33) $(0.31) $(0.91)

Net assets per unit at December 31 of year shown (2)

$29.77 $28.05 $26.14 $26.04 $23.86

Ratios and Supplemental Data Years ended December 31 2017

2016

2015

2014

2013

Net Asset Value (in 000s) (4) $381,244 $375,211 $380,633 $407,513 $376,591 Number of units outstanding (in 000s) (4) 12,807 13,379 14,560 15,652 15,776 Management expense ratio (⬙MER⬙) (5) 1.98% 1.96% 1.97% 1.98% 2.01% MER before waivers or absoptions (5) 1.98% 1.96% 1.97% 1.98% 2.01% Trading expense ratio (6) 0.02% 0.04% 0.05% 0.07% 0.10% Portfolio turnover rate (7) 19.95% 23.99% 32.21% 19.66% 66.77% Net Asset Value per unit (4) $29.77 $28.04 $26.14 $26.04 $23.87

Fund on Fund Investing During the year, the Fund invested in units of other HSBC Mutual Funds, which are also managed by us. To proceed with the transactions, the Fund relied on the positive recommendation of the Fund’s Independent Review Committee by way of Standing Instruction. A condition of this positive recommendation was that the transactions were performed in accordance with our policy on fund on fund investing.

Purchases of Securities Underwritten by a Related Party During the year, the Fund invested in certain securities that were underwritten, in whole or in part, by entities that are a related party to us. To proceed with the transactions, the Fund relied on the approval of the Fund’s Independent Review Committee by way of Standing Instruction. A condition of this approval was that the transactions were performed in accordance with our policy on Purchases of Securities Underwritten by a Related Party. 2

HSBC Canadian Balanced Fund HSBC Canadian Balanced Fund – Advisor Series – Net Assets per Unit(1)

HSBC Canadian Balanced Fund – Premium Series – Net Assets per Unit(1)

Years ended December 31

Years ended December 31 2017

Net assets per unit, beginning of year (2)

2016

2015

2014

2013

2017 Net assets per unit, beginning of year (2)

$14.70 $13.55 $13.51 $12.39 $11.29

2016

2015

2014

2013

$13.98 $13.03 $12.96 $11.88 $10.82

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.53 (0.36) 0.51 0.44

0.44 (0.32) 0.51 0.66

0.46 (0.40) 0.18 (0.36)

0.32 (0.25) 0.22 0.83

0.50 (0.23) 0.46 0.97

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

Total increase (decrease) from operations (2)

$1.12

$1.29

$(0.12)

$1.12

$1.70

– – – 1.05

0.38 (0.19) 0.43 0.63

0.65 (0.18) 0.25 (0.53)

0.41 (0.18) 0.16 0.84

0.43 (0.16) 0.40 1.00

Total increase (decrease) from operations (2)

$1.05

$1.25

$0.19

$1.23

$1.67

– (0.19) (0.29) –

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

(0.04) (0.17) – –

(0.03) (0.16) (0.10) –

(0.07) (0.13) (0.02) –

(0.07) (0.15) – –

– (0.22) (0.29) –

Total annual distributions (2,3)

$(0.14) $(0.23) $(0.17) $(0.16) $(0.48)

Total annual distributions (2,3)

$(0.21) $(0.29) $(0.22) $(0.22) $(0.51)

Net assets per unit at December 31 of year shown (2)

$15.54 $14.70 $13.55 $13.51 $12.38

Net assets per unit at December 31 of year shown (2)

$14.83 $13.98 $13.03 $12.96 $11.87

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

(0.04) (0.10) – –

(0.03) (0.11) (0.09) –

(0.05) (0.10) (0.02) –

(0.06) (0.10) – –

Ratios and Supplemental Data

Ratios and Supplemental Data

Years ended December 31

Years ended December 31

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2017

2016

2015

2014

2013

$60

$31

$13

$26

$95

4

2

1

2

8

2.46%

2.34%

2.96%

1.96%

1.93%

2017 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

5.41% 12.42% 7.63% 1.96% 1.93% 0.02% 0.04% 0.05% 0.07% 0.10% 19.95% 23.99% 32.21% 19.66% 66.77% $15.54 $14.70 $13.55 $13.51 $12.39

3

2016

2015

2014

2013

$131,371 $95,003 $81,593 $64,138 $34,052 8,859

6,799

6,263

4,949

2,866

1.44%

1.42%

1.42%

1.44%

1.46%

1.44% 1.42% 1.42% 1.44% 1.46% 0.02% 0.04% 0.05% 0.07% 0.10% 19.95% 23.99% 32.21% 19.66% 66.77% $14.83 $13.97 $13.03 $12.96 $11.88

HSBC Canadian Balanced Fund HSBC Canadian Balanced Fund – Manager Series – Net Assets per Unit(1)

HSBC Canadian Balanced Fund – Institutional Series – Net Assets per Unit(1)

Years ended December 31

Years ended December 31 2017

Net assets per unit, beginning of year (2)

2016 2015

$10.73 $10.00

2014

0.39 (0.10) 0.30 0.26

0.31 (0.09) 0.32 0.56

– – – –

0.16 (0.06) 0.16 0.74

Total increase (decrease) from operations (2)

$0.85

$1.10

$–

$1.00

(0.04) (0.17) – –

2017 Net assets per unit, beginning of year (2)

$– $13.12 $11.95

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

2013

– (0.08) – –

2016

2014

2013

$15.55 $14.49 $14.42 $13.21 $12.04

0.41 (0.11) 0.57 0.93

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.49 (0.01) 0.56 0.46

0.42 (0.01) 0.48 0.68

0.71 (0.01) 0.28 (0.46)

0.45 (0.01) 0.19 1.00

0.42 (0.01) 0.56 0.95

$1.80

Total increase (decrease) from operations (2)

$1.50

$1.57

$0.52

$1.63

$1.92

– (0.31) (0.33) –

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

(0.06) (0.39) – –

(0.04) (0.35) (0.13) –

(0.14) (0.27) (0.03) –

(0.09) (0.34) – –

– (0.40) (0.35) –

Total annual distributions (2,3)

$(0.45) $(0.52) $(0.44) $(0.43) $(0.75)

Net assets per unit at December 31 of year shown (2)

$16.50 $15.55 $14.49 $14.42 $13.20

(0.03) (0.14) (0.08) –

– – – –

Total annual distributions (2,3)

$(0.21) $(0.25)

$–

$(0.08) $(0.64)

Net assets per unit at December 31 of year shown (2)

$11.40 $10.73

$–

$– $13.11

Ratios and Supplemental Data

Ratios and Supplemental Data

Years ended December 31

Years ended December 31

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2015

2017

2016

2015

2014

2013

$777

$139

$–

$–

$87

68

13

–

–

7

0.94%

1.27%

–

0.90%

0.89%

2017 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

0.94% 3.74% – 0.90% 0.89% 0.02% 0.04% 0.05% 0.07% 0.10% 19.95% 23.99% 32.21% 19.66% 66.77% $11.40 $10.73 $– $– $13.12

2016

2015

2014

2013

$72,958 $105,033 $95,585 $93,659 $82,877 4,422

6,755

6,596

6,497

6,273

0.08%

0.06%

0.07%

0.09%

0.11%

0.08% 0.02% 19.95% $16.50

0.06% 0.07% 0.09% 0.11% 0.04% 0.05% 0.07% 0.10% 23.99% 32.21% 19.66% 66.77% $15.55 $14.49 $14.42 $13.21

(1) This information is derived from the Fund’s audited annual financial statements. 2017, 2016, 2015, 2014 and 2013 balances are stated in IFRS. Under IFRS, the net asset per unit presented in the financial statements is the same as the net asset value calculated for fund pricing purposes. (2) Net assets per unit and distributions per unit are based on the actual number of units outstanding for the relevant series at the relevant time. The increase/decrease in net assets from operations per unit is based on the weighted average number of units outstanding for the relevant series over the fiscal year. (3) Distributions are automatically reinvested in additional units of the Fund, unless the unitholder withdraws from the automatic reinvestment plan by providing written notice to us. (4) This information is provided as at December 31 of the year shown. (5) MER is based on total expenses (excluding distributions, commissions and other portfolio transaction costs) for the stated period and is expressed as an annualized percentage of daily average net asset value during the year. The MER may vary from one mutual fund to another and from one series of units to another. We have

4

HSBC Canadian Balanced Fund waived or absorbed certain fees and expenses otherwise payable by the Fund. The amount of expenses absorbed or waived is at the discretion of and can be terminated at any time by us.

Year-by-Year Returns Years ended December 31 The following bar charts show the Fund’s performance for each of the years shown, and illustrate how the Fund’s performance changed from year to year. In percentage terms, the bar charts show how much an investment made on the first day of each financial year would have grown or decreased by the last day of each financial year.

(6) The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the year. (7) The Fund’s portfolio turnover rate indicates how actively the Fund’s portfolio advisor manages its portfolio investments. A portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the year. The higher the Fund’s portfolio turnover rate in a year, the greater the trading costs payable by the Fund in the year, and the greater the chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high turnover rate and the performance of the Fund. The rate is calculated based on the lesser of purchases or sales of securities divided by the average weighted market value of the portfolio securities, excluding short-term securities.

Annual Returns – Investor Series 20% 15%

13.9%

12.5%

10%

10.4% 7.2%

8.9%

6.8%

5%

7.0%

1.7%

0% -5%

Management Fees

-10%

For the year ended December 31, 2017, the Fund paid us management fees of $8,078,493. The management fee for each series is calculated as a percentage of the daily net asset value for that series. The fees are reduced, where required, so that these fees do not duplicate fees payable by mutual funds in which the Fund invests for the same service.

-15% -20%

-3.6%

-15.5% Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Annual Returns – Advisor Series 20%

The Fund’s management fees were used by us to pay costs for managing the investment portfolio, providing investment analysis and recommendations, making investment decisions, making brokerage arrangements for the purchase and sale of the investment portfolio and providing other services. The management fees also funded commission payments and other compensation to sales representatives and registered dealers and brokers (collectively “distribution costs”), including HSBC Investment Funds (Canada) Inc., for units of the Fund bought and held by unitholders. Finally, we used management fees to pay for additional marketing and distribution services to the Fund.

14.0%

15%

10.4%

10%

7.2%

10.1%

6.9%

6.6%

5%

1.6%

0% -5%

-3.6%

-10% -15% -20%

*

For the year ended December 31, 2017, approximately 46% of the total management fees collected from all HSBC Mutual Funds were used to fund distribution costs. In comparison, for the Fund, such distribution costs represented 49% of the management fees collected. This may vary by series depending on the assets invested in each of the series.

-15.6% Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009* 2010 2011 2012 2013 2014 2015 2016 2017

The Advisor Series was fully redeemed during 2009.

Annual Returns – Premium Series 20% 14.5%

15%

11.0% 10% 5%

Past Performance

9.5%

7.4%

7.6%

2.2%

0%

The performance information shown assumes that all distributions made by the Fund in the years shown were reinvested in additional securities of the Fund. The performance information does not take into account sales, redemption, distribution, optional charges or expenses you may be charged outside of the Fund or the effect of any income tax you may have to pay as a result of your investment in the Fund that would have reduced returns or performance. The performance of different fund series may vary for a number of reasons, including differences in management fees and expenses. The Fund’s past performance does not necessarily indicate how it will perform in the future.

-5% -10%

5

-3.1% Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2011 2012 2013 2014 2015 2016 2017

HSBC Canadian Balanced Fund Annual Returns – Manager Series 20%

HSBC Canadian Balanced Fund

8.4%

10%

1 Year

15.2%

13.7%

15%

Investor Series 8.2%

8.1%

5% 0% -2.5%

-5%

-20%

*

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014* 2015* 2016* 2017

20%

HSBC Canadian Balanced Fund

3 Year

6.63% 6.05% 8.45%

6.81%

7.71%

Manager Series 12.5%

9.3%

Since 5 Year Inception

35% FTSE TMX Canada Universe Bond Index, 35% S&P/TSX Capped Composite Index, 25% MSCI World Net Index (C$), 5% FTSE TMX Canada 91 Day T-Bill Index 7.66% 6.36% 8.33%

16.1%

14.6%

11.0%

8.9%

Since 1 Year Inception

9.1% HSBC Canadian Balanced Fund

3.6%

5% 0% -5%

5.46%

1 Year

Annual Returns – Institutional Series

10%

4.57%

35% FTSE TMX Canada Universe Bond Index, 35% S&P/TSX Capped Composite Index, 25% MSCI World Net Index (C$), 5% FTSE TMX Canada 91 Day T-Bill Index 7.66% 6.36% 8.33%

-14.6%

The Manager Series was fully redeemed during 2014. There were no unitholders for the full calendar year during 2015 and 2016.

15%

5 Year 10 Year

Advisor Series

-10% -15%

3 Year

7.04% 5.82% 8.30%

-1.7%

-10%

8.17%

10.03%

35% FTSE TMX Canada Universe Bond Index, 35% S&P/TSX Capped Composite Index, 25% MSCI World Net Index (C$), 5% FTSE TMX Canada 91 Day T-Bill Index 7.66%

9.18%

InstitutionalSeries

-15% -14.0% -20% Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

1 Year

Annual Compound Returns Year ended December 31, 2017 The following tables show the Fund’s historical annual compound total returns for the years indicated, compared with the benchmark index. The benchmark of the Fund is a weighted composite consisting of the FTSE TMX Canada Universe Bond Index (35%), S&P/TSX Capped Composite Index (35%), MSCI World Net Index (in Canadian dollars) (25%) and FTSE TMX Canada 91-Day T-Bill Index (5%).

3 Year

5 Year 10 Year

HSBC Canadian Balanced Fund

9.08% 7.84% 10.37%

6.56%

35% FTSE TMX Canada Universe Bond Index, 35% S&P/TSX Capped Composite Index, 25% MSCI World Net Index (C$), 5% FTSE TMX Canada 91 Day T-Bill Index

7.66% 6.36%

5.46%

8.33%

Premium Series 1 Year HSBC Canadian Balanced Fund

The FTSE TMX Canada Universe Bond Index is a broad measure of the total return for the Canadian bond market, covering marketable Canadian bonds with a term to maturity of more than one year. The S&P/TSX Capped Composite Index tracks changes in the share price of the largest companies listed on the Toronto Stock Exchange, representing a broad range of industries. The MSCI World Index is an international index that measures the performance of stocks traded in Europe, Australia, the Far East, the US, Canada and South Africa. This index is tracked in US dollars and was converted to Canadian dollars. The FTSE TMX Canada 91-Day T-Bill Index is a broad measure of the total return for the Canadian 91-day treasury bill market, covering marketable Canadian treasury bills with a term to maturity of 91 days or less.

3 Year

Since 5 Year Inception

7.62% 6.39% 8.89%

7.52%

35% FTSE TMX Canada Universe Bond Index, 35% S&P/TSX Capped Composite Index, 25% MSCI World Net Index (C$), 5% FTSE TMX Canada 91 Day T-Bill Index 7.66% 6.36% 8.33%

7.73%

(1) Due to the fact that several benchmark indices are only available on a monthly basis, the performance data for the HSBC Funds and the benchmark indices are calculated using values from the first month-end date each Fund was in operation. (2) For investment commentary and relative performance of the Fund compared to its benchmark, please refer to the Results of Operations section of this report.

6

HSBC Canadian Balanced Fund Summary of Investment Portfolio

Top 25 Holdings

As at December 31, 2017

Percentage of NAV HSBC Global Equity Fund - Institutional Series HSBC Mortgage Fund - Institutional Series HSBC Small Cap Growth Fund - Institutional Series Toronto-Dominion Bank Royal Bank of Canada Bank of Nova Scotia Government of Canada, 4.00% 06/01/41 Province of Ontario, 5.60% 06/02/35 Canadian National Railway Company Enbridge Inc. Suncor Energy Inc. Province of Quebec, 4.25% 12/01/21 Canadian Natural Resources Ltd. Province of Ontario, 3.50% 06/02/24 Canadian Imperial Bank of Commerce Brookfield Asset Management Inc., Class A Imperial Oil Limited Bank of Montreal Dollarama Inc. SPDR Barclays Capital High Yield Bond ETF Manulife Financial Corp. Alimentation Couche-Tard Inc., Class B TransCanada Corp. Province of British Columbia, 5.70% 06/18/29 Province of Saskatchewan, 5.00% 03/05/37 Total of Top 25 Holdings

Asset Mix Percentage of NAV Mutual Funds Canadian Equities Corporate Bonds Government Bonds Cash & Equivalents Total

34.16% 33.41% 16.07% 15.46% 0.90% 100.00%

Sector Mix Percentage of NAV Mutual Funds Financials Government Bonds Energy Industrials Materials Consumer Discretionary Consumer Staples Information Technology Asset Backed Telecommunication Services Utilities Real Estate Cash & Equivalents Total

34.16% 22.09% 15.46% 9.06% 3.89% 3.55% 2.81% 2.48% 1.54% 1.41% 1.35% 0.87% 0.43% 0.90% 100.00%

25.57% 4.16% 2.47% 2.33% 2.32% 1.91% 1.70% 1.54% 1.53% 1.33% 1.17% 1.10% 1.06% 1.06% 1.03% 1.01% 0.99% 0.98% 0.97% 0.96% 0.94% 0.89% 0.82% 0.80% 0.79% 59.43%

The Summary of Investment Portfolio may change due to ongoing portfolio transactions of the Fund, and is available quarterly. The Fund invests in other mutual funds, and the prospectus and other information about the underlying funds are available on SEDAR at www.sedar.com.

7

For more information

How to reach us

You can find more information about HSBC Mutual Funds in the Fund’s Simplified Prospectus, Annual Information Form, Annual and Semi-Annual Report and Fund Facts. You can get a copy of these documents, as well as the Fund’s Financial Statements, at no cost by calling 1-888-390-3333, by contacting your authorized dealer or by visiting our website at www.hsbc.ca/investment-resources.

HSBC Global Asset Management (Canada) Limited

These documents and other information about the Fund, such as information circulars and material contracts, are also available at www.sedar.com. Copies of the Annual Report and Semi-Annual Report, Simplified Prospectus, Annual Information Form, Annual and Interim Management Report of Fund Performance and Fund Facts are available on our website at www.hsbc.ca/investment-resources.

Vancouver 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8 Toronto Suite 300, 70 York Street Toronto, ON M5J 1S9 Toll-free: 1-888-390-3333 Fax: 604-669-2756 Email: [email protected] Website: www.hsbc.ca/investment-resources

A NOTE ON FORWARD-LOOKING STATEMENTS This report may contain forward-looking statements about the Fund, including its strategy, expected performance and condition. Forward-looking statements include statements that are predictive in nature that depend upon or refer to future events or conditions, or that include words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates” or negative versions thereof and similar expressions. In addition, any statement that may be made concerning future performance, strategies or prospects, and possible future Fund action, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the Fund and economic factors. Forward-looking statements are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied in any forward-looking statements made by the Fund. Any number of important factors could contribute to these digressions, including, but not limited to, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, and catastrophic events. We stress that the above-mentioned list of important factors is not exhaustive. We encourage you to consider these and other factors carefully before making any investment decisions and we urge you to avoid placing undue reliance on forward-looking statements. Further, you should be aware of the fact that the Fund has no specific intention of updating any forward-looking statements, whether as a result of new information, future events or otherwise. Sources: HSBC Global Asset Management (Canada) Limited, Bloomberg, MSCI, FTSE TMX Global Debt Capital Markets Inc., Bank of Canada. Neither MSCI nor any other party involved in or related to compiling, computing or creating the MSCI data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any of such data. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in or related to compiling, computing or creating the data have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages. No further distribution or dissemination of the MSCI data is permitted without MSCI’s express written consent. FTSE TMX Global Debt Capital Markets Inc. (“FTDCM”), FTSE International Limited (“FTSE”), the London Stock Exchange Group companies (the “Exchange”) or TSX Inc. (“TSX” and together with FTDCM, FTSE and the Exchange, the “Licensor Parties”). The Licensor Parties make no warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the FTSE TMX Canada Index and/or the figure at which the said Index stands at any particular time on any particular day or otherwise. The Index is compiled and calculated by FTDCM and all copyright in the Index values and constituent lists vests in FTDCM. The Licensor Parties shall not be liable (whether in negligence or otherwise) to any person for any error in the Index and the Licensor Parties shall not be under any obligation to advise any person of any error therein. “TMX” is a trade mark of TSX Inc. and is used under licence. “FTSE®” is a trade mark of FTSE International Limited and is used by FTDCM under licence.

Issued by HSBC Global Asset Management (Canada) Limited

(2018-03) DFS

Unauthorized reproduction, distribution, transmission or publication without our prior written consent is strictly prohibited.

HSBC Dividend Fund Annual Management Report of Fund Performance for the year ended December 31, 2017

◆

HSBC Dividend Fund Management Discussion of Fund Performance In this document, you and your refer to the unitholder of the Fund; we, us and our refer to HSBC Global Asset Management (Canada) Limited; and the Fund refers to the HSBC Dividend Fund.

Investment Performance The HSBC Dividend Fund (Investor Series) rose 9.64% for the 12-month period ending December 31, 2017, while the benchmark S&P/TSX Capped Composite Index rose 9.10% over the same period.

We are the manager, trustee and primary investment advisor of the Fund.

The Fund provided a strong absolute return and outperformed its benchmark in 2017. We held overweight positions in consumer discretionary, consumer staples and financials, and held underweight positions in energy, materials, industrials and technology. While sector positioning was modestly positive for Fund performance, security selection contributed to positive returns, particularly in energy, consumer discretionary and materials. Security selection in real estate and consumer staples was modestly negative.

Introduction This Annual Management Report of Fund Performance contains financial highlights but does not contain the complete annual financial statements of the investment fund. You may obtain a copy of the Fund’s annual financial statements at your request, at no cost, by calling us toll-free at 1-888-390-3333, by visiting our website at www.hsbc.ca/investment-resources, by visiting the SEDAR website at www.sedar.com or by writing to us at:

The global equity market gained 14.4% in 2017 compared to Canadian equity market returns of 9.1%. From a sector perspective, ten of the 11 sectors in the domestic market posted gains in 2017, led by healthcare (34.2%), consumer discretionary (22.8%) and industrials (19.7%). Energy was the only negative sector, declining 7.0%. Following weakness early in the year, oil prices rallied and ended the year at $60 per barrel, up approximately 12% in 2017.

Corporate Secretary HSBC Global Asset Management (Canada) Limited 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8 You may also contact us using one of these methods to request a copy of the Fund’s interim financial report, proxy voting policies and procedures, proxy voting disclosure record or quarterly statement of investment portfolio.

Canadian equities continue to look reasonably attractive. While the market has rallied quite strongly, this has been well supported by improving fundamentals, including strong earnings growth. In 2017, earnings grew by approximately 20%; a more modest positive gain is expected in 2018.

Investment Objective and Strategies The fundamental investment objective of this Fund is to provide dividend income and medium- to long-term capital growth.

Recent Developments

To achieve its objectives, the Fund invests primarily in a diversified portfolio of Canadian common equities, preferred equities, income trust units and fixed income securities. When investing in fixed income securities, the Fund will invest primarily in investment-grade securities, and when investing in common shares the Fund will invest primarily in high-dividend-paying companies listed on the Toronto Stock Exchange.

The global economy continues to accelerate. Consumer spending remains solid, supported by an increase in household net worth and a healthy labour market. Both business investment and manufacturing activity are also trending higher.

The risks of investing in this Fund remain as discussed in the Simplified Prospectus. During the year, there were no material changes to the Fund that affected the overall risk level of the Fund.

Looking ahead, while central banks will gradually remove stimulus, rates are likely to remain much lower than historic norms. On fiscal spending, the path is less clear but the bias seems somewhat expansionary. Canadian economic growth remains healthy, although it was slower in the second half of 2017 than in the robust first half of the year. Employment remains strong and the unemployment rate has dipped to the lowest reading in four decades.

This Fund is suitable for investors who want to earn income in the form of dividends and grow their capital, have a medium-term investment time horizon and have a medium tolerance for risk in their returns.

The US Federal Reserve raised its target rate three times in 2017 and we expect three more increases in 2018. The Bank of Canada surprised markets with two hikes mid-year, taking the target rate to 1%. Three additional hikes are expected in 2018.

Results of Operations

Related Party Transactions

As of December 31, 2017, the Fund’s net assets increased by 6.6% to $781.3 million from $732.9 million at the end of 2016. Of this increase, a $72.3 million gain was attributable to investment performance and $23.9 million was attributable to net withdrawals from the Fund.

We, on behalf of the Fund, or the Fund Manager, may, from time to time, enter into transactions or arrangements with or involving other members of the HSBC Group or other people or companies related or connected to us or the Fund. To proceed with the transactions, the Fund relies on the positive recommendation of the

Risk

1

HSBC Dividend Fund Fund’s Independent Review Committee. A condition of this positive recommendation is that the transactions are performed in accordance with our policy on Related Party Transactions. For more general information on persons related to the Fund and the types of potential transactions, see the Fund’s Simplified Prospectus.

HSBC Dividend Fund – Investor Series – Net Assets per Unit(1) Years ended December 31 2017 Net assets per unit, beginning of year (2)

The following is a summary of current transactions and arrangements with entities that are related to us or the Fund.

Manager, Trustee and Investment Advisor We are the manager, trustee and primary investment advisor of the Fund. As manager, we manage the overall business and operations of the Fund. As trustee, we hold legal title to the property of the Fund on your behalf. As primary investment advisor, we provide investment advice and portfolio management services to the Fund. We receive a fee from the Fund for these services based on assets under management, calculated daily and paid monthly.

Distribution Services The Fund is distributed through us, HSBC Investment Funds (Canada) Inc. (our wholly owned subsidiary and affiliate) and HSBC Securities (Canada) Inc. (an affiliate) directly or through its division, HSBC InvestDirect. We pay distribution and servicing fees to them based on the amount of assets held in the investor’s account, and additionally, in some cases, on the amount of the initial purchase. If you hold units of this Fund and/or other HSBC Mutual Funds in a registered plan with HSBC Investment Funds (Canada) Inc., they may charge you an annual fee to cover the annual administration costs of the plan. We permit HSBC Investment Funds (Canada) Inc. to collect these fees by redeeming sufficient units of the Fund with the highest market value in your registered plan.

2016

2015

2014

2013

$39.81 $33.04 $35.86 $32.68 $28.06

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

1.19 (0.79) 1.31 2.06

1.09 (0.69) 0.69 6.00

1.10 (0.69) 0.42 (3.16)

1.03 (0.68) 0.31 2.83

0.93 (0.59) 0.59 3.96

Total increase (decrease) from operations (2)

$3.77

$7.09

$(2.33)

$3.49

$4.89

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– (0.37) – –

– (0.43) – –

– (0.40) – –

– (0.30) – –

– (0.31) – –

Total annual distributions (2,3)

$(0.37) $(0.43) $(0.40) $(0.30) $(0.31)

Net assets per unit at December 31 of year shown (2)

$43.26 $39.81 $33.04 $35.86 $32.66

Ratios and Supplemental Data Years ended December 31 2017

2016

2015

2014

2013

Net Asset Value (in 000s) (4) $497,698 $499,381 $464,478 $566,018 $528,676 Number of units outstanding (in 000s) (4) 11,505 12,543 14,059 15,785 16,179 Management expense ratio (⬙MER⬙) (5) 1.95% 1.95% 1.95% 1.95% 1.97% MER before waivers or absoptions (5) 1.95% 1.95% 1.95% 1.95% 1.97% Trading expense ratio (6) 0.03% 0.03% 0.03% 0.03% 0.03% Portfolio turnover rate (7) 11.35% 8.90% 11.73% 12.85% 13.77% Net Asset Value per unit (4) $43.26 $39.81 $33.04 $35.86 $32.68

Fund on Fund Investing During the year, the Fund invested in units of other HSBC Mutual Funds, which are also managed by us. To proceed with the transactions, the Fund relied on the positive recommendation of the Fund’s Independent Review Committee by way of Standing Instruction. A condition of this positive recommendation was that the transactions were performed in accordance with our policy on fund on fund investing.

Financial Highlights The following tables show selected key financial information about the Fund and are intended to help you understand the Fund’s financial performance for the past five years. This information is derived from the Fund’s audited annual financial statements. The information in the following tables is based on prescribed regulations, and, as a result, is not expected to add down due to the increase/decrease in net assets from operations being based on average units outstanding during the year and all other numbers being based on actual units outstanding at the relevant point in time.

2

HSBC Dividend Fund HSBC Dividend Fund – Advisor Series – Net Assets per Unit(1)

HSBC Dividend Fund – Premium Series – Net Assets per Unit(1)

Years ended December 31

Years ended December 31 2017

Net assets per unit, beginning of year (2)

2016

2015

2014

2013

2017 Net assets per unit, beginning of year (2)

$19.75 $16.43 $17.90 $16.30 $14.00

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.58 (0.48) 0.57 0.91

0.54 (0.40) 0.37 3.00

0.55 (0.40) 0.19 (1.65)

0.51 (0.34) 0.17 1.52

Total increase (decrease) from operations (2)

$1.58

$3.51

$(1.31)

$1.86

2016

2015

2014

2013

$15.89 $13.19 $14.31 $13.04 $11.20

0.46 (0.30) 0.29 2.01

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.48 (0.23) 0.54 0.82

0.44 (0.20) 0.28 2.48

0.44 (0.20) 0.16 (1.32)

0.41 (0.19) 0.13 1.01

0.37 (0.17) 0.25 1.58

$2.46

Total increase (decrease) from operations (2)

$1.61

$3.00

$(0.92)

$1.36

$2.03

– (0.15) – –

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– (0.24) – –

– (0.25) – –

– (0.23) – –

– (0.20) – –

– (0.19) – –

Total annual distributions (2,3)

$(0.18) $(0.21) $(0.20) $(0.14) $(0.15)

Total annual distributions (2,3)

$(0.24) $(0.25) $(0.23) $(0.20) $(0.19)

Net assets per unit at December 31 of year shown (2)

$21.38 $19.75 $16.43 $17.90 $16.30

Net assets per unit at December 31 of year shown (2)

$17.27 $15.89 $13.19 $14.31 $13.04

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– (0.18) – –

– (0.21) – –

– (0.20) – –

– (0.14) – –

Ratios and Supplemental Data

Ratios and Supplemental Data

Years ended December 31

Years ended December 31

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2017

2016

2015

2014

2013

$400

$686

$555

$564

$477

19

35

34

32

29

2.37% 2.26%

2.28%

1.96%

1.97%

2.37% 0.03% 11.35% $21.38

2017 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2.26% 2.28% 1.96% 1.97% 0.03% 0.03% 0.03% 0.03% 8.90% 11.73% 12.85% 13.77% $19.75 $16.43 $17.90 $16.30

3

2016

2015

2014

2013

$179,263 $146,297 $105,557 $101,578 $66,835 10,381

9,207

8,004

7,098

5,125

1.40%

1.40%

1.39%

1.40%

1.41%

1.40% 0.03% 11.35% $17.27

1.40% 0.03% 8.90% $15.89

1.39% 0.03% 11.73% $13.19

1.40% 1.41% 0.03% 0.03% 12.85% 13.77% $14.31 $13.04

HSBC Dividend Fund HSBC Dividend Fund – Manager Series – Net Assets per Unit(1)

HSBC Dividend Fund – Institutional Series – Net Assets per Unit(1)

Years ended December 31

Years ended December 31 2017

Net assets per unit, beginning of year (2)

2016

2015

2014

2013

2017 Net assets per unit, beginning of year (2)

$20.73 $17.27 $18.79 $17.12 $14.70

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.63 (0.21) 0.84 1.48

0.57 (0.23) 0.40 3.07

0.59 (0.21) 0.15 (1.86)

0.54 (0.16) 0.16 1.50

Total increase (decrease) from operations (2)

$2.74

$3.81

$(1.33)

$2.04

2016

2015

2014

2013

$16.03 $13.30 $14.44 $13.16 $11.29

0.48 (0.14) 0.25 2.22

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.48 (0.01) 0.55 0.85

0.44 (0.01) 0.28 2.53

0.45 (0.01) 0.15 (1.37)

0.42 (0.01) 0.12 1.12

0.37 (0.01) 0.28 1.61

$2.81

Total increase (decrease) from operations (2)

$1.87

$3.24

$(0.78)

$1.65

$2.25

– (0.33) – –

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– (0.47) – –

– (0.46) – –

– (0.43) – –

– (0.39) – –

– (0.35) – –

Total annual distributions (2,3)

$(0.38) $(0.43) $(0.40) $(0.36) $(0.33)

Total annual distributions (2,3)

$(0.47) $(0.46) $(0.43) $(0.39) $(0.35)

Net assets per unit at December 31 of year shown (2)

$22.55 $20.73 $17.27 $18.79 $17.11

Net assets per unit at December 31 of year shown (2)

$17.42 $16.03 $13.30 $14.44 $13.15

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– (0.38) – –

– (0.43) – –

– (0.40) – –

– (0.36) – –

Ratios and Supplemental Data

Ratios and Supplemental Data

Years ended December 31

Years ended December 31

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2017

2016

2015

2014

2013

$1,461

$453

$284

$191

$180

65

22

16

10

11

0.97% 1.21%

1.12%

0.87%

0.88%

0.97% 0.03% 11.35% $22.55

2017 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

1.21% 1.12% 0.87% 0.88% 0.03% 0.03% 0.03% 0.03% 8.90% 11.73% 12.85% 13.77% $20.73 $17.27 $18.79 $17.12

2016

2015

2014

2013

$102,459 $86,051 $72,064 $61,881 $40,897 5,883

5,369

5,417

4,286

3,109

0.04%

0.04%

0.04%

0.05%

0.05%

0.04% 0.03% 11.35% $17.42

0.04% 0.04% 0.05% 0.05% 0.03% 0.03% 0.03% 0.03% 8.90% 11.73% 12.85% 13.77% $16.03 $13.30 $14.44 $13.16

(1) This information is derived from the Fund’s audited annual financial statements. 2017, 2016, 2015, 2014 and 2013 balances are stated in IFRS. Under IFRS, the net asset per unit presented in the financial statements is the same as the net asset value calculated for fund pricing purposes. (2) Net assets per unit and distributions per unit are based on the actual number of units outstanding for the relevant series at the relevant time. The increase/decrease in net assets from operations per unit is based on the weighted average number of units outstanding for the relevant series over the fiscal year. (3) Distributions are automatically reinvested in additional units of the Fund, unless the unitholder withdraws from the automatic reinvestment plan by providing written notice to us. (4) This information is provided as at December 31 of the year shown. (5) MER is based on total expenses (excluding distributions, commissions and other portfolio transaction costs) for the stated period and is expressed as an annualized percentage of daily average net asset value during the year. The MER may vary from one mutual fund to another and from one series of units to another. (6) The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the year. (7) The Fund’s portfolio turnover rate indicates how actively the Fund’s portfolio advisor manages its portfolio investments. A portfolio 4

HSBC Dividend Fund turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the year. The higher the Fund’s portfolio turnover rate in a year, the greater the trading costs payable by the Fund in the year, and the greater the chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high turnover rate and the performance of the Fund. The rate is calculated based on the lesser of purchases or sales of securities divided by the average weighted market value of the portfolio securities, excluding short-term securities.

Year-by-Year Returns Years ended December 31 The following bar charts show the Fund’s performance for each of the years shown, and illustrate how the Fund’s performance changed from year to year. In percentage terms, the bar charts show how much an investment made on the first day of each financial year would have grown or decreased by the last day of each financial year. Annual Returns – Investor Series

Management Fees For the year ended December 31, 2017, the Fund paid us management fees of $10,655,839. The management fee for each series is calculated as a percentage of the daily net asset value for that series. The fees are reduced, where required, so that these fees do not duplicate fees payable by mutual funds in which the Fund invests for the same service.

40% 28.1%

30%

21.9%

17.5%

20%

10.1%

10%

10.7%

8.5%

9.6%

0% -10%

-6.8%

-7.5%

-20%

The Fund’s management fees were used by us to pay costs for managing the investment portfolio, providing investment analysis and recommendations, making investment decisions, making brokerage arrangements for the purchase and sale of the investment portfolio and providing other services. The management fees also funded commission payments and other compensation to sales representatives and registered dealers and brokers (collectively “distribution costs”), including HSBC Investment Funds (Canada) Inc., for units of the Fund bought and held by unitholders. Finally, we used management fees to pay for additional marketing and distribution services to the Fund.

-30% -40%

-29.9% Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Annual Returns – Advisor Series 40% 28.1%

30%

21.6%

17.5%

20%

10.1%

10%

10.7%

8.5%

9.1%

0%

For the year ended December 31, 2017, approximately 46% of the total management fees collected from all HSBC Mutual Funds were used to fund distribution costs. In comparison, for the Fund, such distribution costs represented 50% of the management fees collected. This may vary by series depending on the assets invested in each of the series.

-10%

-7.1%

-7.4%

-20% -30% -40%

-29.9% Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Annual Returns – Premium Series

Past Performance

30%

The performance information shown assumes that all distributions made by the Fund in the years shown were reinvested in additional securities of the Fund. The performance information does not take into account sales, redemption, distribution, optional charges or expenses you may be charged outside of the Fund or the effect of any income tax you may have to pay as a result of your investment in the Fund that would have reduced returns or performance. The performance of different fund series may vary for a number of reasons, including differences in management fees and expenses. The Fund’s past performance does not necessarily indicate how it will perform in the future.

22.6% 18.2%

20% 9.1%

10%

11.3%

10.2%

0% -10% -20%

5

-6.9%

-6.3%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2011 2012 2013 2014 2015 2016 2017

HSBC Dividend Fund Annual Returns – Manager Series

Premium Series

40% 29.4%

30%

18.8%

20%

11.3%

11.9%

9.7%

10%

1 Year

22.8% HSBC Dividend Fund

10.7%

S&P/TSX Capped Composite Index

-6.0%

-6.4%

-20% -30% -40%

10.23% 8.20% 10.75% 9.10% 6.59%

8.63%

8.63% 7.41%

(2) For investment commentary and relative performance of the Fund compared to its benchmark, please refer to the Results of Operations section of this report.

-29.1% Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Summary of Investment Portfolio

Annual Returns – Institutional Series 40%

Since 5 Year Inception

(1) Due to the fact that several benchmark indices are only available on a monthly basis, the performance data for the HSBC Funds and the benchmark indices are calculated using values from the first month-end date each Fund was in operation.

0% -10%

3 Year

As at December 31, 2017

30.4%

30%

24.3%

19.8%

20%

12.2%

12.8%

10.6%

10%

Asset Mix

11.7%

Percentage of NAV

0% -10%

Canadian Equities Mutual Funds Cash & Equivalents Total

-5.0%

-5.6%

-20% -30% -40%

-28.6% Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Sector Mix Percentage of NAV

Annual Compound Returns Year ended December 31, 2017

Financials Energy Industrials Consumer Discretionary Materials Consumer Staples Telecommunication Services Utilities Information Technology Mutual Funds Real Estate Cash & Equivalents Total

The following tables show the Fund’s historical annual compound total returns for the years indicated, compared with the benchmark index, the S&P/TSX Capped Composite Index, over the same period. This index tracks changes in the share price of the largest companies listed on the Toronto Stock Exchange, representing a broad range of industries.

Investor Series 1 Year

3 Year

5 Year 10 Year

HSBC Dividend Fund

9.64% 7.61% 10.14%

4.87%

S&P/TSX Capped Composite Index

9.10% 6.59%

4.65%

8.63%

Advisor Series 1 Year

3 Year

5 Year 10 Year

HSBC Dividend Fund

9.15% 7.23% 9.91%

4.76%

S&P/TSX Capped Composite Index

9.10% 6.59% 8.63%

4.65%

Manager Series 1 Year HSBC Dividend Fund S&P/TSX Capped Composite Index

3 Year

5 Year 10 Year

10.68% 8.50% 11.17%

5.92%

9.10% 6.59%

8.63%

4.65%

1 Year

5 Year 10 Year

InstitutionalSeries HSBC Dividend Fund S&P/TSX Capped Composite Index

96.73% 1.36% 1.91% 100.00%

3 Year

11.74% 9.67% 12.26% 9.10% 6.59%

8.63%

6.87% 4.65%

6

40.31% 18.57% 8.59% 6.98% 6.26% 5.11% 4.28% 3.59% 1.80% 1.36% 1.24% 1.91% 100.00%

HSBC Dividend Fund Top 25 Holdings Percentage of NAV Royal Bank of Canada Toronto-Dominion Bank Bank of Nova Scotia Canadian National Railway Company Enbridge Inc. Suncor Energy Inc. Bank of Montreal Canadian Natural Resources Ltd. Manulife Financial Corp. Canadian Imperial Bank of Commerce Brookfield Asset Management Inc., Class A Dollarama Inc. Alimentation Couche-Tard Inc., Class B Brookfield Infrastructure Partners LP TransCanada Corp. Imperial Oil Limited CGI Group Inc. Sun Life Financial Inc. BCE Inc. Intact Financial Corp. Canadian Tire Corp., Ltd., Class A, Non-Voting Shares Canadian Pacific Railway Ltd. Magna International Inc., Class A Methanex Corp. Encana Corp. Total of Top 25 Holdings

6.78% 6.72% 5.45% 4.44% 3.78% 3.31% 3.26% 3.11% 3.03% 2.94% 2.89% 2.59% 2.54% 2.52% 2.28% 1.93% 1.80% 1.79% 1.75% 1.71% 1.60% 1.54% 1.48% 1.41% 1.38% 72.03%

The Summary of Investment Portfolio may change due to ongoing portfolio transactions of the Fund, and is available quarterly. The Fund invests in other mutual funds, and the prospectus and other information about the underlying funds are available on SEDAR at www.sedar.com.

7

For more information

How to reach us

You can find more information about HSBC Mutual Funds in the Fund’s Simplified Prospectus, Annual Information Form, Annual and Semi-Annual Report and Fund Facts. You can get a copy of these documents, as well as the Fund’s Financial Statements, at no cost by calling 1-888-390-3333, by contacting your authorized dealer or by visiting our website at www.hsbc.ca/investment-resources.

HSBC Global Asset Management (Canada) Limited

These documents and other information about the Fund, such as information circulars and material contracts, are also available at www.sedar.com. Copies of the Annual Report and Semi-Annual Report, Simplified Prospectus, Annual Information Form, Annual and Interim Management Report of Fund Performance and Fund Facts are available on our website at www.hsbc.ca/investment-resources.

Vancouver 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8 Toronto Suite 300, 70 York Street Toronto, ON M5J 1S9 Toll-free: 1-888-390-3333 Fax: 604-669-2756 Email: [email protected] Website: www.hsbc.ca/investment-resources

A NOTE ON FORWARD-LOOKING STATEMENTS This report may contain forward-looking statements about the Fund, including its strategy, expected performance and condition. Forward-looking statements include statements that are predictive in nature that depend upon or refer to future events or conditions, or that include words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates” or negative versions thereof and similar expressions. In addition, any statement that may be made concerning future performance, strategies or prospects, and possible future Fund action, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the Fund and economic factors. Forward-looking statements are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied in any forward-looking statements made by the Fund. Any number of important factors could contribute to these digressions, including, but not limited to, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, and catastrophic events. We stress that the above-mentioned list of important factors is not exhaustive. We encourage you to consider these and other factors carefully before making any investment decisions and we urge you to avoid placing undue reliance on forward-looking statements. Further, you should be aware of the fact that the Fund has no specific intention of updating any forward-looking statements, whether as a result of new information, future events or otherwise. Sources: HSBC Global Asset Management (Canada) Limited, Bloomberg. FTSE TMX Global Debt Capital Markets Inc. (“FTDCM”), FTSE International Limited (“FTSE”), the London Stock Exchange Group companies (the “Exchange”) or TSX Inc. (“TSX” and together with FTDCM, FTSE and the Exchange, the “Licensor Parties”). The Licensor Parties make no warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the FTSE TMX Canada Index and/or the figure at which the said Index stands at any particular time on any particular day or otherwise. The Index is compiled and calculated by FTDCM and all copyright in the Index values and constituent lists vests in FTDCM. The Licensor Parties shall not be liable (whether in negligence or otherwise) to any person for any error in the Index and the Licensor Parties shall not be under any obligation to advise any person of any error therein. “TMX” is a trade mark of TSX Inc. and is used under licence. “FTSE®” is a trade mark of FTSE International Limited and is used by FTDCM under licence.

Issued by HSBC Global Asset Management (Canada) Limited

(2018-03) DFS

Unauthorized reproduction, distribution, transmission or publication without our prior written consent is strictly prohibited.

HSBC Equity Fund Annual Management Report of Fund Performance for the year ended December 31, 2017

◆

HSBC Equity Fund Management Discussion of Fund Performance In this document, you and your refer to the unitholder of the Fund; we, us and our refer to HSBC Global Asset Management (Canada) Limited; and the Fund refers to the HSBC Equity Fund.

Investment Performance The HSBC Equity Fund (Investor Series) rose 9.52% for the 12-month period ending December 31, 2017, while the benchmark S&P/TSX Capped Composite Index rose 9.10% over the same period.

We are the manager, trustee and primary investment advisor of the Fund.

The Fund provided a strong absolute return in 2017 and outperformed its benchmark. We maintained overweight positions in consumer discretionary, consumer staples and technology stocks and held underweight positions in materials, utilities and real estate. Over the year we increased our position in energy equities from underweight to neutral. Sector positioning contributed modestly to Fund performance. The Fund also benefited from security selection, particularly in energy, materials and consumer discretionary, although security selection in technology detracted from performance.

Introduction This Annual Management Report of Fund Performance contains financial highlights but does not contain the complete annual financial statements of the investment fund. You may obtain a copy of the Fund’s annual financial statements at your request, at no cost, by calling us toll-free at 1-888-390-3333, by visiting our website at www.hsbc.ca/investment-resources, by visiting the SEDAR website at www.sedar.com or by writing to us at: Corporate Secretary HSBC Global Asset Management (Canada) Limited 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8

Canadian equities posted a respectable 9.1% gain in 2017, lagging global equities, which gained 14.4% over the year. Ten of the 11 sectors in the Canadian market posted gains in 2017, led by healthcare (34.2%), consumer discretionary (22.8%) and industrials (19.7%). Energy was the only negative sector, declining 7.0%. Following weakness early in the year, oil prices rallied and ended the year at $60 per barrel, up approximately 12% in 2017.

You may also contact us using one of these methods to request a copy of the Fund’s interim financial report, proxy voting policies and procedures, proxy voting disclosure record or quarterly statement of investment portfolio.

Investment Objective and Strategies

Canadian equities continue to look reasonably attractive. The market rally has been supported by improving fundamentals, including strong earnings growth. In 2017, earnings grew by approximately 20%; a more modest positive gain is expected in 2018. Additionally, the relative attractiveness of equities compared to cash or government bonds remains compelling for investors.

The fundamental investment objective of this Fund is to achieve long-term capital growth. To achieve its objectives, the Fund invests primarily in publicly traded common shares, preferred shares, rights, special warrants and convertible securities. A portion of the Fund may be in the form of cash or cash equivalents. When investing in common shares the Fund will invest primarily in large cap companies listed on the Toronto Stock Exchange.

Recent Developments The global economy continues to accelerate. Consumer spending remains solid, supported by an increase in household net worth and a healthy labour market. Both business investment and manufacturing activity are also trending higher.

Risk The risks of investing in the Fund remain as discussed in the Simplified Prospectus. During the year, there were no material changes to the Fund that affected the overall risk level of the Fund.

Looking ahead, while central banks will gradually remove stimulus, rates are likely to remain much lower than historic norms. On fiscal spending, the path is less clear but the bias seems somewhat expansionary. Canadian economic growth remains healthy, although it was slower in the second half of 2017 than in the robust first half of the year. Employment remains strong and the unemployment rate has dipped to its lowest reading in four decades.

This Fund is suitable for investors who want to achieve long-term capital growth, have a long-term investment time horizon and have a medium tolerance for risk in their returns.

Results of Operations As of December 31, 2017, the Fund’s net assets increased by 10.4% to $540.4 million from $489.3 million at the end of 2016. Of this increase, a $52.8 million gain was attributable to investment performance and $1.7 million was attributable to net withdrawals from the Fund.

The US Federal Reserve raised its target rate three times in 2017 and we expect three more increases in 2018. The Bank of Canada surprised markets with two hikes mid-year, taking the target rate to 1%. Three additional hikes are expected in 2018.

1

HSBC Equity Fund being based on average units outstanding during the year and all other numbers being based on actual units outstanding at the relevant point in time.

Related Party Transactions We, on behalf of the Fund, or the Fund Manager, may, from time to time, enter into transactions or arrangements with or involving other members of the HSBC Group or other people or companies related or connected to us or the Fund. To proceed with the transactions, the Fund relies on the positive recommendation of the Fund’s Independent Review Committee. A condition of this positive recommendation is that the transactions are performed in accordance with our policy on Related Party Transactions. For more general information on persons related to the Fund and the types of potential transactions, see the Fund’s Simplified Prospectus.

HSBC Equity Fund – Investor Series – Net Assets per Unit(1) Years ended December 31 2017 Net assets per unit, beginning of year (2)

The following is a summary of current transactions and arrangements with entities that are related to us or the Fund.

Manager, Trustee and Investment Advisor We are the manager, trustee and primary investment advisor of the Fund. As manager, we manage the overall business and operations of the Fund. As trustee, we hold legal title to the property of the Fund on your behalf. As primary investment advisor, we provide investment advice and portfolio management services to the Fund. We receive a fee from the Fund for these services based on assets under management, calculated daily and paid monthly.

Distribution Services The Fund is distributed through us, HSBC Investment Funds (Canada) Inc. (our wholly owned subsidiary and affiliate) and HSBC Securities (Canada) Inc. (an affiliate) directly or through its division, HSBC InvestDirect. We pay distribution and servicing fees to them based on the amount of assets held in the investor’s account, and additionally, in some cases, on the amount of the initial purchase. If you hold units of this Fund and/or other HSBC Mutual Funds in a registered plan with HSBC Investment Funds (Canada) Inc., they may charge you an annual fee to cover the annual administration costs of the plan. We permit HSBC Investment Funds (Canada) Inc. to collect these fees by redeeming sufficient units of the Fund with the highest market value in your registered plan.

2016

2015

2014

2013

$51.29 $42.56 $45.80 $40.79 $35.19

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

1.36 (1.03) 1.19 3.29

1.25 (0.89) 1.01 7.38

1.29 (0.89) 0.63 (4.05)

1.19 (0.86) 0.63 4.16

1.06 (0.74) 1.03 4.20

Total increase (decrease) from operations (2)

$4.81

$8.75

$(3.02)

$5.12

$5.55

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– (0.15) – –

– (0.16) – –

– (0.10) – –

– (0.06) – –

– (0.02) – –

Total annual distributions (2,3)

$(0.15) $(0.16) $(0.10) $(0.06) $(0.02)

Net assets per unit at December 31 of year shown (2)

$56.01 $51.29 $42.56 $45.80 $40.77

Ratios and Supplemental Data Years ended December 31 2017

2016

2015

2014

2013

Net Asset Value (in 000s) (4) $178,143 $182,643 $169,326 $205,048 $199,552 Number of units outstanding (in 000s) (4) 3,181 3,561 3,978 4,477 4,892 Management expense ratio (⬙MER⬙) (5) 1.96% 1.95% 1.96% 1.96% 1.98% MER before waivers or absoptions (5) 1.96% 1.95% 1.96% 1.96% 1.98% Trading expense ratio (6) 0.03% 0.04% 0.03% 0.03% 0.02% Portfolio turnover rate (7) 13.59% 11.22% 9.57% 13.66% 11.39% Net Asset Value per unit (4) $56.01 $51.29 $42.56 $45.80 $40.79

Purchases of Securities Underwritten by a Related Party During the year, the Fund invested in certain securities that were underwritten, in whole or in part, by entities that are a related party to us. To proceed with the transactions, the Fund relied on the approval of the Fund’s Independent Review Committee by way of Standing Instruction. A condition of this approval was that the transactions were performed in accordance with our policy on Purchases of Securities Underwritten by a Related Party.

Financial Highlights The following tables show selected key financial information about the Fund and are intended to help you understand the Fund’s financial performance for the past five years. This information is derived from the Fund’s audited annual financial statements. The information in the following tables is based on prescribed regulations, and, as a result, is not expected to add down due to the increase/decrease in net assets from operations 2

HSBC Equity Fund HSBC Equity Fund – Advisor Series – Net Assets per Unit(1)

HSBC Equity Fund – Premium Series – Net Assets per Unit(1)

Years ended December 31

Years ended December 31 2017

Net assets per unit, beginning of year (2)

2016

2015

2014

2013

2017 Net assets per unit, beginning of year (2)

$21.21 $16.92 $18.41 $16.39 $14.14

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.56 (0.53) 0.44 0.88

0.50 (0.13) 0.43 3.09

0.54 (0.39) (0.01) (1.24)

0.48 (0.33) 0.36 1.60

Total increase (decrease) from operations (2)

$1.35

$3.89

$(1.10)

$2.11

2016

2015

2014

2013

$15.60 $12.95 $13.92 $12.37 $10.66

0.43 (0.29) 0.42 1.72

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.42 (0.23) 0.38 1.01

0.77 (0.39) 0.62 1.86

0.40 (0.19) 0.17 (1.33)

0.36 (0.19) 0.15 1.11

0.32 (0.16) 0.32 1.34

$2.28

Total increase (decrease) from operations (2)

$1.58

$2.86

$(0.95)

$1.43

$1.82

– (0.01) – –

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– (0.14) – –

– (0.13) – –

– (0.09) – –

– (0.07) – –

– (0.05) – –

Total annual distributions (2,3)

$(0.06) $(0.07) $(0.05) $(0.03) $(0.01)

Total annual distributions (2,3)

$(0.14) $(0.13) $(0.09) $(0.07) $(0.05)

Net assets per unit at December 31 of year shown (2)

$23.04 $21.21 $16.92 $18.41 $16.39

Net assets per unit at December 31 of year shown (2)

$17.03 $15.60 $12.95 $13.92 $12.37

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– (0.06) – –

– (0.07) – –

– (0.05) – –

– (0.03) – –

Ratios and Supplemental Data

Ratios and Supplemental Data

Years ended December 31

Years ended December 31

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2017

2016

2015

2014

2013

$190

$122

$73

$25

$108

8

6

4

1

7

0.71% 2.19%

1.89%

1.92%

2.45%

2017 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2.80% 4.87% 7.68% 1.89% 1.92% 0.03% 0.04% 0.03% 0.03% 0.02% 13.59% 11.22% 9.57% 13.66% 11.39% $23.04 $21.21 $16.92 $18.41 $16.39

3

2014

2013

$35,706 $28,393 $20,472 $17,915

2016

2015

$9,618

2,097

1,820

1,581

1,287

777

1.41%

1.40%

1.40%

1.42%

1.42%

1.41% 1.40% 0.03% 0.04% 13.59% 11.22% $17.03 $15.60

1.40% 1.42% 1.42% 0.03% 0.03% 0.02% 9.57% 13.66% 11.39% $12.95 $13.92 $12.37

HSBC Equity Fund HSBC Equity Fund – Manager Series – Net Assets per Unit(1)

HSBC Equity Fund – Institutional Series – Net Assets per Unit(1)

Years ended December 31

Years ended December 31 2017

Net assets per unit, beginning of year (2)

2016

2015

2014

2013

2017 Net assets per unit, beginning of year (2)

$22.93 $19.12 $20.64 $18.32 $15.78

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.62 (0.25) 0.69 1.94

0.56 (0.27) 0.46 3.38

0.58 (0.25) 0.24 (1.84)

0.54 (0.17) 0.27 1.86

Total increase (decrease) from operations (2)

$3.00

$4.13

$(1.27)

$2.50

2016

2015

2014

2013

$23.40 $19.41 $20.86 $18.48 $15.92

0.48 (0.14) 0.47 1.91

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.63 (0.01) 0.56 1.52

0.58 (0.01) 0.48 3.45

0.59 (0.01) 0.24 (2.12)

0.54 (0.01) 0.26 1.87

0.48 (0.01) 0.48 1.96

$2.72

Total increase (decrease) from operations (2)

$2.70

$4.50

$(1.30)

$2.66

$2.91

– (0.17) – –

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– (0.54) – –

– (0.48) – –

– (0.41) – –

– (0.31) – –

– (0.31) – –

Total annual distributions (2,3)

$(0.31) $(0.31) $(0.25) $(0.19) $(0.17)

Total annual distributions (2,3)

$(0.54) $(0.48) $(0.41) $(0.31) $(0.31)

Net assets per unit at December 31 of year shown (2)

$25.02 $22.93 $19.12 $20.64 $18.31

Net assets per unit at December 31 of year shown (2)

$25.54 $23.40 $19.41 $20.86 $18.48

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– (0.31) – –

– (0.31) – –

– (0.25) – –

– (0.19) – –

Ratios and Supplemental Data

Ratios and Supplemental Data

Years ended December 31

Years ended December 31

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2017

2016

2015

2014

2013

$412

$176

$157

$141

$124

16

8

8

7

7

1.31% 1.24%

0.85%

0.85%

1.04%

2017 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

1.16% 1.38% 1.24% 0.85% 0.85% 0.03% 0.04% 0.03% 0.03% 0.02% 13.59% 11.22% 9.57% 13.66% 11.39% $25.02 $22.93 $19.12 $20.64 $18.32

2016

2015

2014

2013

$325,917 $277,954 $111,747 $92,400 $67,734 12,760

11,879

5,756

4,429

3,665

0.05%

0.05%

0.05%

0.06%

0.07%

0.05% 0.03% 13.59% $25.54

0.05% 0.04% 11.22% $23.40

0.05% 0.06% 0.07% 0.03% 0.03% 0.02% 9.57% 13.66% 11.39% $19.41 $20.86 $18.48

(1) This information is derived from the Fund’s audited annual financial statements. 2017, 2016, 2015, 2014 and 2013 balances are stated in IFRS. Under IFRS, the net asset per unit presented in the financial statements is the same as the net asset value calculated for fund pricing purposes. (2) Net assets per unit and distributions per unit are based on the actual number of units outstanding for the relevant series at the relevant time. The increase/decrease in net assets from operations per unit is based on the weighted average number of units outstanding for the relevant series over the fiscal year. (3) Distributions are automatically reinvested in additional units of the Fund, unless the unitholder withdraws from the automatic reinvestment plan by providing written notice to us. (4) This information is provided as at December 31 of the year shown. (5) MER is based on total expenses (excluding distributions, commissions and other portfolio transaction costs) for the stated period and is expressed as an annualized percentage of daily average net asset value during the year. The MER may vary from one mutual fund to another and from one series of units to another. We have

4

HSBC Equity Fund waived or absorbed certain fees and expenses otherwise payable by the Fund. The amount of expenses absorbed or waived is at the discretion of and can be terminated at any time by us.

Year-by-Year Returns Years ended December 31 The following bar charts show the Fund’s performance for each of the years shown, and illustrate how the Fund’s performance changed from year to year. In percentage terms, the bar charts show how much an investment made on the first day of each financial year would have grown or decreased by the last day of each financial year.

(6) The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the year. (7) The Fund’s portfolio turnover rate indicates how actively the Fund’s portfolio advisor manages its portfolio investments. A portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the year. The higher the Fund’s portfolio turnover rate in a year, the greater the trading costs payable by the Fund in the year, and the greater the chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high turnover rate and the performance of the Fund. The rate is calculated based on the lesser of purchases or sales of securities divided by the average weighted market value of the portfolio securities, excluding short-term securities.

Annual Returns – Investor Series 40% 26.2%

30% 20%

15.8%

11.3%

7.3%

10%

20.9% 12.4%

9.5%

0% -10%

Management Fees

-20%

For the year ended December 31, 2017, the Fund paid us management fees of $3,516,973. The management fee for each series is calculated as a percentage of the daily net asset value for that series. The fees are reduced, where required, so that these fees do not duplicate fees payable by mutual funds in which the Fund invests for the same service.

-30% -40%

-6.9%

-11.4% -29.8%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Annual Returns – Advisor Series 40%

The Fund’s management fees were used by us to pay costs for managing the investment portfolio, providing investment analysis and recommendations, making investment decisions, making brokerage arrangements for the purchase and sale of the investment portfolio and providing other services. The management fees also funded commission payments and other compensation to sales representatives and registered dealers and brokers (collectively “distribution costs”), including HSBC Investment Funds (Canada) Inc., for units of the Fund bought and held by unitholders. Finally, we used management fees to pay for additional marketing and distribution services to the Fund.

26.2%

30% 20%

25.8% 15.9%

11.3%

7.3%

10%

12.5%

9.0%

0% -10% -30% -40%

-7.8%

-11.4%

-20% -29.8%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Annual Returns – Premium Series

For the year ended December 31, 2017, approximately 46% of the total management fees collected from all HSBC Mutual Funds were used to fund distribution costs. In comparison, for the Fund, such distribution costs represented 50% of the management fees collected. This may vary by series depending on the assets invested in each of the series.

30% 21.6% 20%

16.5%

13.0%

10.1%

7.9%

10% 0%

Past Performance -6.3%

-10%

The performance information shown assumes that all distributions made by the Fund in the years shown were reinvested in additional securities of the Fund. The performance information does not take into account sales, redemption, distribution, optional charges or expenses you may be charged outside of the Fund or the effect of any income tax you may have to pay as a result of your investment in the Fund that would have reduced returns or performance. The performance of different fund series may vary for a number of reasons, including differences in management fees and expenses. The Fund’s past performance does not necessarily indicate how it will perform in the future.

-10.9% -20%

5

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2011 2012 2013 2014 2015 2016 2017

HSBC Equity Fund Annual Returns – Manager Series

Premium Series

40% 27.5%

30% 20%

17.2%

12.5%

8.5%

10%

1 Year

21.7% 13.7%

HSBC Equity Fund

10.5%

S&P/TSX Capped Composite Index

-30% -40%

-6.2%

-10.4%

-20%

Since 5 Year Inception

10.11% 7.84% 10.55% 9.10% 6.59%

8.63%

8.74% 8.03%

(1) Due to the fact that several benchmark indices are only available on a monthly basis, the performance data for the HSBC Funds and the benchmark indices are calculated using values from the first month-end date each Fund was in operation.

0% -10%

3 Year

(2) For investment commentary and relative performance of the Fund compared to its benchmark, please refer to the Results of Operations section of this report.

-29.1% Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Summary of Investment Portfolio

Annual Returns – Institutional Series

As at December 31, 2017

40% 28.5%

30% 20%

18.1%

13.4%

9.4%

10%

23.2% 14.6%

Sector Mix

11.6%

Percentage of NAV

0% -10% -20% -30% -40%

Financials Energy Industrials Materials Consumer Discretionary Consumer Staples Information Technology Telecommunication Services Utilities Real Estate Mutual Funds Cash & Equivalents Total

-5.1%

-9.7% -28.5%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Annual Compound Returns Year ended December 31, 2017 The following tables show the Fund’s historical annual compound total returns for the years indicated, compared with the benchmark index, the S&P/TSX Capped Composite Index, over the same period. This index tracks changes in the share price of the largest companies listed on the Toronto Stock Exchange, representing a broad range of industries.

Investor Series 1 Year

3 Year

5 Year 10 Year

HSBC Equity Fund

9.52% 7.24% 9.94%

4.17%

S&P/TSX Capped Composite Index

9.10% 6.59% 8.63%

4.65%

Advisor Series 1 Year

3 Year

5 Year 10 Year

HSBC Equity Fund

8.95% 8.12% 10.50%

4.44%

S&P/TSX Capped Composite Index

9.10% 6.59%

8.63%

4.65%

1 Year

5 Year 10 Year

Manager Series HSBC Equity Fund S&P/TSX Capped Composite Index

3 Year

10.55% 8.06% 10.94%

5.22%

9.10% 6.59%

8.63%

4.65%

1 Year

5 Year 10 Year

InstitutionalSeries HSBC Equity Fund S&P/TSX Capped Composite Index

3 Year

11.62% 9.30% 12.06% 9.10% 6.59%

8.63%

6.16% 4.65%

6

36.56% 19.69% 9.19% 9.09% 7.48% 5.07% 4.44% 3.94% 1.00% 0.26% 0.25% 3.03% 100.00%

HSBC Equity Fund Top 25 Holdings Percentage of NAV Toronto-Dominion Bank Royal Bank of Canada Bank of Nova Scotia Canadian National Railway Company Enbridge Inc. Suncor Energy Inc. Canadian Natural Resources Ltd. Canadian Imperial Bank of Commerce Brookfield Asset Management Inc., Class A Government of Canada, 0.86% 01/25/18 Imperial Oil Limited Bank of Montreal Dollarama Inc. Manulife Financial Corp. Alimentation Couche-Tard Inc., Class B TransCanada Corp. CGI Group Inc. Open Text Corp. Canadian Tire Corp., Ltd., Class A, Non-Voting Shares Methanex Corp. Intact Financial Corp. Canadian Pacific Railway Ltd. Magna International Inc., Class A Stantec Inc. Encana Corp. Total of Top 25 Holdings

6.75% 6.71% 5.53% 4.43% 3.86% 3.39% 3.07% 2.98% 2.89% 2.88% 2.87% 2.85% 2.80% 2.72% 2.58% 2.38% 2.22% 2.22% 1.90% 1.88% 1.68% 1.63% 1.57% 1.51% 1.50% 74.80%

The Summary of Investment Portfolio may change due to ongoing portfolio transactions of the Fund, and is available quarterly.

7

For more information

How to reach us

You can find more information about HSBC Mutual Funds in the Fund’s Simplified Prospectus, Annual Information Form, Annual and Semi-Annual Report and Fund Facts. You can get a copy of these documents, as well as the Fund’s Financial Statements, at no cost by calling 1-888-390-3333, by contacting your authorized dealer or by visiting our website at www.hsbc.ca/investment-resources.

HSBC Global Asset Management (Canada) Limited

These documents and other information about the Fund, such as information circulars and material contracts, are also available at www.sedar.com. Copies of the Annual Report and Semi-Annual Report, Simplified Prospectus, Annual Information Form, Annual and Interim Management Report of Fund Performance and Fund Facts are available on our website at www.hsbc.ca/investment-resources.

Vancouver 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8 Toronto Suite 300, 70 York Street Toronto, ON M5J 1S9 Toll-free: 1-888-390-3333 Fax: 604-669-2756 Email: [email protected] Website: www.hsbc.ca/investment-resources

A NOTE ON FORWARD-LOOKING STATEMENTS This report may contain forward-looking statements about the Fund, including its strategy, expected performance and condition. Forward-looking statements include statements that are predictive in nature that depend upon or refer to future events or conditions, or that include words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates” or negative versions thereof and similar expressions. In addition, any statement that may be made concerning future performance, strategies or prospects, and possible future Fund action, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the Fund and economic factors. Forward-looking statements are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied in any forward-looking statements made by the Fund. Any number of important factors could contribute to these digressions, including, but not limited to, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, and catastrophic events. We stress that the above-mentioned list of important factors is not exhaustive. We encourage you to consider these and other factors carefully before making any investment decisions and we urge you to avoid placing undue reliance on forward-looking statements. Further, you should be aware of the fact that the Fund has no specific intention of updating any forward-looking statements, whether as a result of new information, future events or otherwise. Sources: HSBC Global Asset Management (Canada) Limited, Bloomberg.

Issued by HSBC Global Asset Management (Canada) Limited

(2018-03) DFS

Unauthorized reproduction, distribution, transmission or publication without our prior written consent is strictly prohibited.

HSBC Small Cap Growth Fund Annual Management Report of Fund Performance for the year ended December 31, 2017

◆

HSBC Small Cap Growth Fund Management Discussion of Fund Performance In this document, you and your refer to the unitholder of the Fund; we, us and our refer to HSBC Global Asset Management (Canada) Limited; and the Fund refers to the HSBC Small Cap Growth Fund.

Results of Operations As of December 31, 2017, the Fund’s net assets decreased by 2.5% to $234.9 million from $240.8 million at the end of 2016. Of this decrease, a $12.1 million gain was attributable to investment performance and $18.0 million was attributable to net withdrawals from the Fund.

We are the manager, trustee and primary investment advisor of the Fund. We have entered into a sub-advisory agreement with Mawer Investment Management Limited and Triasima Portfolio Management Inc. to provide portfolio management and investment advisory services to the Fund. For an explanation of the relationship between us and the sub-advisors, see the section Selection of Sub-Advisors in the Fund’s Simplified Prospectus.

Investment Performance The HSBC Small Cap Growth Fund (Investor Series) rose 4.86% for the 12-month period ending December 31, 2017, while the benchmark BMO Small Cap Index (C$) rose 6.38% over the same period. The Fund’s stock selection contributed to performance, while its sector positioning detracted. An underweight position to the healthcare and materials sectors was responsible for the majority of the allocation lag. Notably, the Fund had no exposure to the strong performance of medical marijuana producers within the pharmaceutical industry. This was only partially offset by an underweight position in the energy sector and an overweight position in industrials.

Introduction This Annual Management Report of Fund Performance contains financial highlights but does not contain the complete annual financial statements of the investment fund. You may obtain a copy of the Fund’s annual financial statements at your request, at no cost, by calling us toll-free at 1-888-390-3333, by visiting our website at www.hsbc.ca/investment-resources, by visiting the SEDAR website at www.sedar.com or by writing to us at:

Stock selection was solid, particularly in the energy, consumer discretionary and industrials sectors. The Fund’s oil and gas industry positions declined less than their benchmark counterparts within the energy sector, while stock selection decisions in the financials and materials sectors detracted from relative returns.

Corporate Secretary HSBC Global Asset Management (Canada) Limited 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8 You may also contact us using one of these methods to request a copy of the Fund’s interim financial report, proxy voting policies and procedures, proxy voting disclosure record or quarterly statement of investment portfolio.

Although 2017 was a strong year for global equity markets, small-cap Canadian stocks did not keep up with their larger-cap peers. Thanks to heightened global economic activity and upbeat investor sentiment, the better-performing sectors were cyclical segments such as industrials, materials and technology. Energy was the only major small-cap sector that posted negative returns.

Investment Objective and Strategies The fundamental investment objective of this Fund is to achieve long-term capital growth. To achieve its objectives, the Fund invests primarily in smaller Canadian publicly traded common shares, preferred shares, rights, special warrants and convertible securities. A portion of the Fund’s holdings may be in the form of cash or cash equivalents. When investing in common shares the Fund will invest primarily in a broad range of smaller Canadian companies.

Recent Developments The Canadian economy continues to grow, although it is likely doing so at a slower pace than in the first half of 2017. This is reflected in the labour market, where jobs are being created at a spectacular pace; in December 2017, the unemployment rate fell to its lowest reading in four decades. Domestic concerns continue to centre on the high level of indebtedness of Canadians and elevated residential prices in Vancouver and Toronto, and on the outcome of negotiations with the United States and Mexico over NAFTA. Overall, the “Goldilocks” backdrop of slow inflation combined with low but gradually rising interest rates should be supportive of corporate profits.

Risk The risks of investing in the Fund remain as discussed in the Simplified Prospectus. During the year, there were no material changes to the Fund that affected the overall risk level of the Fund. This Fund is suitable for investors seeking long-term, above-average growth who can tolerate significant volatility. Although measures are taken to mitigate and manage risk, this Fund should be considered a higher risk due to its focus on a higher-risk asset class. Investors in this Fund should have a long-term investment time horizon and a medium to high tolerance for risk in their returns.

At year-end, the Fund had a higher exposure to the industrials, information technology and consumer discretionary sectors, and it was underweight in materials, healthcare and energy.

1

HSBC Small Cap Growth Fund A condition of this approval was that the transactions were performed in accordance with our policy on trades between funds and other managed accounts.

Related Party Transactions We, on behalf of the Fund, or the Fund Manager, may, from time to time, enter into transactions or arrangements with or involving other members of the HSBC Group or other people or companies related or connected to us or the Fund. To proceed with the transactions, the Fund relies on the positive recommendation of the Fund’s Independent Review Committee. A condition of this positive recommendation is that the transactions are performed in accordance with our policy on Related Party Transactions. For more general information on persons related to the Fund and the types of potential transactions, see the Fund’s Simplified Prospectus.

Financial Highlights The following tables show selected key financial information about the Fund and are intended to help you understand the Fund’s financial performance for the past five years. This information is derived from the Fund’s audited annual financial statements. The information in the following tables is based on prescribed regulations, and, as a result, is not expected to add down due to the increase/decrease in net assets from operations being based on average units outstanding during the year and all other numbers being based on actual units outstanding at the relevant point in time.

The following is a summary of current transactions and arrangements with entities that are related to us or the Fund.

Manager, Trustee and Investment Advisor We are the manager, trustee and primary investment advisor of the Fund. As manager, we manage the overall business and operations of the Fund. As trustee, we hold legal title to the property of the Fund on your behalf. As primary investment advisor, we provide investment advice and portfolio management services to the Fund. We receive a fee from the Fund for these services based on assets under management, calculated daily and paid monthly.

HSBC Small Cap Growth Fund – Investor Series – Net Assets per Unit(1) Years ended December 31 2017 Net assets per unit, beginning of year (2)

Distribution Services The Fund is distributed through us, HSBC Investment Funds (Canada) Inc. (our wholly owned subsidiary and affiliate) and HSBC Securities (Canada) Inc. (an affiliate) directly or through its division, HSBC InvestDirect. We pay distribution and servicing fees to them based on the amount of assets held in the investor’s account, and additionally, in some cases, on the amount of the initial purchase. If you hold units of this Fund and/or other HSBC Mutual Funds in a registered plan with HSBC Investment Funds (Canada) Inc., they may charge you an annual fee to cover the annual administration costs of the plan. We permit HSBC Investment Funds (Canada) Inc. to collect these fees by redeeming sufficient units of the Fund with the highest market value in your registered plan.

2016

2015

2014

2013

$59.96 $50.51 $49.22 $46.91 $31.96

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

1.20 (1.35) 3.25 (0.34)

1.08 (1.23) 3.74 5.81

1.14 (1.14) 5.07 (3.75)

1.03 (1.15) 2.91 (0.91)

Total increase (decrease) from operations (2)

$2.76

$9.40

$1.32

$1.88 $15.13

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– – – –

– – – –

– – – –

– – – –

– – – –

Total annual distributions (2,3)

$–

$–

$–

$–

$–

Net assets per unit at December 31 of year shown (2)

0.84 (0.87) 2.83 12.33

$62.88 $59.96 $50.51 $49.22 $46.81

Ratios and Supplemental Data Inter-Fund Trades

Years ended December 31

During the year, the Fund purchased from or sold securities to other funds managed by us or our sub-advisors. To proceed with the transactions, the Fund relied on the approval of the Fund’s Independent Review Committee by way of Standing Instruction. A condition of this approval was that the transactions were performed in accordance with our policy on inter-fund trading.

2017

2016

2015

2014

2013

Net Asset Value (in 000s) (4) $150,496 $157,535 $139,976 $167,617 $140,699 Number of units outstanding (in 000s) (4) 2,394 2,627 2,771 3,405 2,999 Management expense ratio (⬙MER⬙) (5) 2.26% 2.24% 2.26% 2.25% 2.27% MER before waivers or absoptions (5) 2.26% 2.24% 2.26% 2.25% 2.27% Trading expense ratio (6) 0.17% 0.16% 0.15% 0.19% 0.11% Portfolio turnover rate (7) 39.30% 39.70% 31.36% 41.09% 31.80% Net Asset Value per unit (4) $62.88 $59.96 $50.51 $49.22 $46.91

Trades between the Fund and Other Managed Accounts During the year, the Fund purchased from or sold securities to other accounts managed by us or our sub-advisors. We have received exemptive relief from the securities regulators to allow the Fund to enter into such transactions. To proceed with the transactions, the Fund relied on the approval of the Fund’s Independent Review Committee by way of Standing Instruction. 2

HSBC Small Cap Growth Fund HSBC Small Cap Growth Fund – Advisor Series – Net Assets per Unit(1)

HSBC Small Cap Growth Fund – Premium Series – Net Assets per Unit(1)

Years ended December 31

Years ended December 31 2017

Net assets per unit, beginning of year (2)

2016

2015

2014

2013

2017 Net assets per unit, beginning of year (2)

$23.72 $20.08 $19.66 $18.75 $12.78

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.46 (0.65) 1.33 (0.25)

0.43 (0.59) 1.48 2.09

0.44 (0.54) 2.05 (1.83)

0.40 (0.47) 1.08 (0.73)

Total increase (decrease) from operations (2)

$0.89

$3.41

$0.12

$0.28

2014

2013

$26.84 $22.49 $21.80 $20.66 $14.00

0.34 (0.36) 1.37 4.91

0.54 (0.46) 1.44 (0.21)

0.49 (0.42) 1.69 2.56

0.51 (0.38) 2.28 (1.70)

0.46 (0.39) 1.26 (0.77)

0.38 (0.29) 1.92 5.44

$6.26

Total increase (decrease) from operations (2)

$1.31

$4.32

$0.71

$0.56

$7.45

– – – –

– – – –

– – – –

– – – –

– – – –

$–

$–

$–

$–

$–

– – – –

– – – –

– – – –

– – – –

– – – –

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

Total annual distributions (2,3)

$–

$–

$–

$–

$–

Total annual distributions (2,3) Net assets per unit at December 31 of year shown (2)

$24.75 $23.72 $20.08 $19.66 $18.71

$28.30 $26.84 $22.49 $21.80 $20.61

Ratios and Supplemental Data

Ratios and Supplemental Data

Years ended December 31

Years ended December 31

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2015

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

Net assets per unit at December 31 of year shown (2)

2016

2017

2016

2015

2014

2013

$260

$407

$308

$636

$699

10

17

15

32

37

2.74%

2.71%

2.71%

2.30%

2.32%

2017 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2.74% 2.93% 2.71% 2.30% 2.37% 0.17% 0.16% 0.15% 0.19% 0.11% 39.30% 39.70% 31.36% 41.09% 31.80% $24.75 $23.72 $20.08 $19.66 $18.75

3

2016

2015

2014

2013

$37,144 $37,066 $27,162 $32,905 $23,358 1,312

1,381

1,208

1,510

1,131

1.71%

1.69%

1.70%

1.71%

1.71%

1.71% 1.69% 1.70% 1.71% 1.71% 0.17% 0.16% 0.15% 0.19% 0.11% 39.30% 39.70% 31.36% 41.09% 31.80% $28.30 $26.84 $22.49 $21.80 $20.66

HSBC Small Cap Growth Fund HSBC Small Cap Growth Fund – Manager Series – Net Assets per Unit(1)

HSBC Small Cap Growth Fund – Institutional Series – Net Assets per Unit(1)

Years ended December 31

Years ended December 31 2017

Net assets per unit, beginning of year (2)

2016

2015

2014

2013

2017 Net assets per unit, beginning of year (2)

$29.11 $24.26 $23.39 $22.05 $14.85

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.59 (0.34) 1.55 (0.33)

0.53 (0.31) 1.83 2.79

0.55 (0.29) 2.44 (1.76)

0.48 (0.27) 1.34 (0.28)

Total increase (decrease) from operations (2)

$1.47

$4.84

$0.94

$1.27

2014

2013

$28.81 $23.94 $22.83 $21.29 $14.19

0.41 (0.21) 1.68 5.69

0.58 (0.02) 1.59 (0.01)

0.52 (0.02) 1.75 2.99

0.55 (0.02) 2.30 (2.03)

0.47 (0.02) 1.36 (0.16)

0.37 (0.02) 1.09 5.56

$7.57

Total increase (decrease) from operations (2)

$2.14

$5.24

$0.80

$1.65

$7.00

– – – –

– – (0.24) –

– – – –

– – – –

– – – –

$–

$(0.24)

$–

$–

$–

– – – –

– – – –

– – – –

– – – –

– – – –

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

Total annual distributions (2,3)

$–

$–

$–

$–

$–

Total annual distributions (2,3) Net assets per unit at December 31 of year shown (2)

$30.86 $29.11 $24.26 $23.39 $22.00

$30.88 $28.81 $23.94 $22.83 $21.24

Ratios and Supplemental Data

Ratios and Supplemental Data

Years ended December 31

Years ended December 31

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2015

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

Net assets per unit at December 31 of year shown (2)

2016

2017

2016

2015

2014

2013

$1,678

$1,822

$1,398

$1,708

$1,988

54

63

58

73

90

1.18%

1.16%

1.19%

1.13%

1.17%

2017 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

1.18% 1.16% 1.19% 1.13% 1.17% 0.17% 0.16% 0.15% 0.19% 0.11% 39.30% 39.70% 31.36% 41.09% 31.80% $30.86 $29.11 $24.26 $23.39 $22.05

2016

2015

2014

2013

$45,283 $43,930 $43,273 $35,048 $33,245 1,467

1,525

1,807

1,535

1,562

0.07%

0.06%

0.07%

0.08%

0.10%

0.07% 0.06% 0.07% 0.08% 0.10% 0.17% 0.16% 0.15% 0.19% 0.11% 39.30% 39.70% 31.36% 41.09% 31.80% $30.88 $28.81 $23.94 $22.83 $21.29

(1) This information is derived from the Fund’s audited annual financial statements. 2017, 2016, 2015, 2014 and 2013 balances are stated in IFRS. Under IFRS, the net asset per unit presented in the financial statements is the same as the net asset value calculated for fund pricing purposes. (2) Net assets per unit and distributions per unit are based on the actual number of units outstanding for the relevant series at the relevant time. The increase/decrease in net assets from operations per unit is based on the weighted average number of units outstanding for the relevant series over the fiscal year. (3) Distributions are automatically reinvested in additional units of the Fund, unless the unitholder withdraws from the automatic reinvestment plan by providing written notice to us. (4) This information is provided as at December 31 of the year shown. (5) MER is based on total expenses (excluding distributions, commissions and other portfolio transaction costs) for the stated period and is expressed as an annualized percentage of daily average net asset value during the year. The MER may vary from one mutual fund to another and from one series of units to another. We have

4

HSBC Small Cap Growth Fund waived or absorbed certain fees and expenses otherwise payable by the Fund. The amount of expenses absorbed or waived is at the discretion of and can be terminated at any time by us.

Year-by-Year Returns Years ended December 31 The following bar charts show the Fund’s performance for each of the years shown, and illustrate how the Fund’s performance changed from year to year. In percentage terms, the bar charts show how much an investment made on the first day of each financial year would have grown or decreased by the last day of each financial year.

(6) The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the year. (7) The Fund’s portfolio turnover rate indicates how actively the Fund’s portfolio advisor manages its portfolio investments. A portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the year. The higher the Fund’s portfolio turnover rate in a year, the greater the trading costs payable by the Fund in the year, and the greater the chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high turnover rate and the performance of the Fund. The rate is calculated based on the lesser of purchases or sales of securities divided by the average weighted market value of the portfolio securities, excluding short-term securities.

Annual Returns – Investor Series 80% 60%

50.7%

40%

45.9% 24.7%

4.9%

0%

Management Fees

-20%

For the year ended December 31, 2017, the Fund paid us management fees of $3,623,752. The management fee for each series is calculated as a percentage of the daily net asset value for that series. The fees are reduced, where required, so that these fees do not duplicate fees payable by mutual funds in which the Fund invests for the same service.

-40% -60%

18.7%

15.4%

20%

4.9%

2.6%

-0.8%

-38.7% Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Annual Returns – Advisor Series 80%

The Fund’s management fees were used by us to pay costs for managing the investment portfolio, providing investment analysis and recommendations, making investment decisions, making brokerage arrangements for the purchase and sale of the investment portfolio and providing other services. The management fees also funded commission payments and other compensation to sales representatives and registered dealers and brokers (collectively “distribution costs”), including HSBC Investment Funds (Canada) Inc., for units of the Fund bought and held by unitholders. Finally, we used management fees to pay for additional marketing and distribution services to the Fund.

60%

50.7%

40%

45.9% 24.6%

18.1%

15.3%

20%

4.9%

0%

2.1%

4.3%

-0.8%

-20% -40% -60%

-38.0% Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Annual Returns – Premium Series

For the year ended December 31, 2017, approximately 46% of the total management fees collected from all HSBC Mutual Funds were used to fund distribution costs. In comparison, for the Fund, such distribution costs represented 39% of the management fees collected. This may vary by series depending on the assets invested in each of the series.

60% 46.7%

50% 40% 30%

Past Performance

10%

The performance information shown assumes that all distributions made by the Fund in the years shown were reinvested in additional securities of the Fund. The performance information does not take into account sales, redemption, distribution, optional charges or expenses you may be charged outside of the Fund or the effect of any income tax you may have to pay as a result of your investment in the Fund that would have reduced returns or performance. The performance of different fund series may vary for a number of reasons, including differences in management fees and expenses. The Fund’s past performance does not necessarily indicate how it will perform in the future.

0% -10%

5

19.4%

16.0%

20%

5.5%

3.2%

5.4%

-0.2% Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2011 2012 2013 2014 2015 2016 2017

HSBC Small Cap Growth Fund Annual Returns – Manager Series

InstitutionalSeries

60%

1 Year

47.6%

50%

3 Year

5 Year

10 Year

HSBC Small Cap Growth Fund

7.16% 10.89% 16.88% 12.34%

BMO Small Cap Weighted Index

6.38%

7.50%

5.99%

4.30%

40% 30%

Premium Series

26.0% 20.0%

16.6%

20%

1 Year

10% 0%

*

6.1% 0.3%

0.0%

6.0%

3.7%

The Manager Series was fully redeemed during 2009.

80%

40%

49.1% 27.4%

7.2%

1.4%

0%

-60%

6.38% 7.50%

5.99%

15.35% 6.54%

As at December 31, 2017 7.2%

4.9%

Sector Mix

-20% -40%

5.43% 9.10% 14.98%

BMO Small Cap Weighted Index

Summary of Investment Portfolio 21.3%

17.9%

20%

HSBC Small Cap Growth Fund

(2) For investment commentary and relative performance of the Fund compared to its benchmark, please refer to the Results of Operations section of this report.

Annual Returns – Institutional Series 53.8%

Since 5 Year Inception

(1) Due to the fact that several benchmark indices are only available on a monthly basis, the performance data for the HSBC Funds and the benchmark indices are calculated using values from the first month-end date each Fund was in operation.

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009* 2010 2011 2012 2013 2014 2015 2016 2017

60%

3 Year

Percentage of NAV

-37.4% Industrials Financials Materials Energy Consumer Discretionary Information Technology Real Estate Healthcare Consumer Staples Utilities Cash & Equivalents Total

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Annual Compound Returns Year ended December 31, 2017 The following tables show the Fund’s historical annual compound total returns for the years indicated, compared with the benchmark index, the BMO Small Cap Weighted Index, over the same period. This index includes common shares of all Canadian companies trading on the Toronto Stock Exchange with a total capitalization at the beginning of each month that is less than 0.1% of the total capitalization of the S&P/TSX Composite Index.

Investor Series 1 Year

3 Year

5 Year 10 Year

HSBC Small Cap Growth Fund

4.86% 8.50% 14.36%

9.93%

BMO Small Cap Weighted Index

6.38% 7.50%

5.99%

4.30%

1 Year

5 Year 10 Year

Advisor Series 3 Year

HSBC Small Cap Growth Fund

4.33% 7.97% 14.00%

9.87%

BMO Small Cap Weighted Index

6.38% 7.50%

4.30%

5.99%

Manager Series 1 Year

3 Year

Since 5 Year Inception

HSBC Small Cap Growth Fund

5.99% 9.67% 15.61%

BMO Small Cap Weighted Index

6.38% 7.50%

5.99%

14.92% 6.29%

6

20.83% 18.61% 16.09% 14.16% 12.82% 10.08% 3.33% 1.31% 1.00% 0.03% 1.74% 100.00%

HSBC Small Cap Growth Fund Top 25 Holdings Percentage of NAV Richelieu Hardware Ltd. Boyd Group Income Fund Altus Group Ltd. Canadian Western Bank New Flyer Industries Inc. Winpak Ltd. Stella-Jones Inc. Enghouse Systems Ltd. Morneau Shepell Inc. CES Energy Solutions Corp. The Descartes Systems Group Inc. Stantec Inc. Sleep Country Canada Holdings Inc. Equitable Group Inc. MTY Food Group Inc. AltaGas Ltd., Subscription Receipt Solium Capital Inc. Enercare Inc. Parkland Fuel Corp. Yangarra Resources Ltd. Imvescor Restaurant Group Inc. Intertape Polymer Group Inc. Cara Operations Ltd. People Corp. Mainstreet Equity Corp. Total of Top 25 Holdings

3.57% 3.49% 3.42% 3.05% 3.03% 2.86% 2.81% 2.71% 2.69% 2.65% 2.65% 2.63% 2.51% 2.27% 2.02% 2.01% 1.91% 1.90% 1.80% 1.66% 1.59% 1.54% 1.44% 1.36% 1.34% 58.91%

The Summary of Investment Portfolio may change due to ongoing portfolio transactions of the Fund, and is available quarterly.

7

For more information

How to reach us

You can find more information about HSBC Mutual Funds in the Fund’s Simplified Prospectus, Annual Information Form, Annual and Semi-Annual Report and Fund Facts. You can get a copy of these documents, as well as the Fund’s Financial Statements, at no cost by calling 1-888-390-3333, by contacting your authorized dealer or by visiting our website at www.hsbc.ca/investment-resources.

HSBC Global Asset Management (Canada) Limited

These documents and other information about the Fund, such as information circulars and material contracts, are also available at www.sedar.com. Copies of the Annual Report and Semi-Annual Report, Simplified Prospectus, Annual Information Form, Annual and Interim Management Report of Fund Performance and Fund Facts are available on our website at www.hsbc.ca/investment-resources.

Vancouver 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8 Toronto Suite 300, 70 York Street Toronto, ON M5J 1S9 Toll-free: 1-888-390-3333 Fax: 604-669-2756 Email: [email protected] Website: www.hsbc.ca/investment-resources

A NOTE ON FORWARD-LOOKING STATEMENTS This report may contain forward-looking statements about the Fund, including its strategy, expected performance and condition. Forward-looking statements include statements that are predictive in nature that depend upon or refer to future events or conditions, or that include words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates” or negative versions thereof and similar expressions. In addition, any statement that may be made concerning future performance, strategies or prospects, and possible future Fund action, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the Fund and economic factors. Forward-looking statements are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied in any forward-looking statements made by the Fund. Any number of important factors could contribute to these digressions, including, but not limited to, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, and catastrophic events. We stress that the above-mentioned list of important factors is not exhaustive. We encourage you to consider these and other factors carefully before making any investment decisions and we urge you to avoid placing undue reliance on forward-looking statements. Further, you should be aware of the fact that the Fund has no specific intention of updating any forward-looking statements, whether as a result of new information, future events or otherwise. Sources: HSBC Global Asset Management (Canada) Limited, BMO Capital Markets.

Issued by HSBC Global Asset Management (Canada) Limited

(2018-03) DFS

Unauthorized reproduction, distribution, transmission or publication without our prior written consent is strictly prohibited.

HSBC Global Equity Fund Annual Management Report of Fund Performance for the year ended December 31, 2017

◆

HSBC Global Equity Fund Management Discussion of Fund Performance In this document, you and your refer to the unitholder of the Fund; we, us and our refer to HSBC Global Asset Management (Canada) Limited; and the Fund refers to the HSBC Global Equity Fund.

Results of Operations As of December 31, 2017, the Fund’s net assets increased by 9.8% to $681.9 million from $621.0 million at the end of 2016. Of this increase, an $87.5 million gain was attributable to investment performance and $26.6 million was attributable to net withdrawals from the Fund.

We are the manager, trustee and primary investment advisor of the Fund. We have entered into a sub-advisory agreement with HSBC Global Asset Management (UK) Limited, under which HSBC Global Asset Management (UK) Limited provides investment advice and portfolio management services to the Fund. For an explanation of the relationship between us and the sub-advisor, see the section Selection of Sub-Advisors in the Fund’s Simplified Prospectus.

Investment Performance The HSBC Global Equity Fund (Investor Series) rose 12.99% for the 12-month period ending December 31, 2017, while the benchmark MSCI World Net Index (C$) rose 14.36% over the same period. On a sector basis, the Fund’s overweight allocation to industrials and underweight exposure to healthcare contributed to performance. Conversely, overweight allocations to telecommunication services, utilities and energy weighed on performance.

Introduction This Annual Management Report of Fund Performance contains financial highlights but does not contain the complete annual financial statements of the investment fund. You may obtain a copy of the Fund’s annual financial statements at your request, at no cost, by calling us toll-free at 1-888-390-3333, by visiting our website at www.hsbc.ca/investment-resources, by visiting the SEDAR website at www.sedar.com or by writing to us at:

On a country basis, overweight allocations to Spain and Japan and underweight exposures to the UK and Australia contributed to performance, while overweight positions in Germany, France and Italy and an underweight exposure to Switzerland detracted.

Corporate Secretary HSBC Global Asset Management (Canada) Limited 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8

Global equity markets performed strongly in 2017. In the first quarter, global equities edged higher, supported by a continuation of upbeat economic data releases and the US Federal Reserve decision to raise base rates by 0.25% in March. The market continued its outperformance in the second quarter due to a strong corporate earnings season, further signs of an improving economic landscape and the easing of political risk in Europe.

You may also contact us using one of these methods to request a copy of the Fund’s interim financial report, proxy voting policies and procedures, proxy voting disclosure record or quarterly statement of investment portfolio.

In the second half of 2017, global equities continued to make solid gains amid easing geopolitical concerns, strong economic data releases and corporate earnings growth.

Investment Objective and Strategies The fundamental investment objective of this Fund is to provide long-term capital growth.

Recent Developments

To achieve its objectives, the Fund invests primarily in equities and equity-related securities issued by large, established companies from around the world. To maintain a diversified portfolio of holdings, the Fund will invest in companies from a broad range of industries. A portion of the Fund may be in the form of cash or cash equivalents.

Global economic growth momentum remains solid, driving global equity markets to deliver positive returns over the long term. Episodic volatility may be triggered by concerns surrounding Chinese growth, US economic policy and/or a potentially more rapid than expected tightening cycle from the US Federal Reserve or European Central Bank, coupled with political risks.

Risk

No changes have been made in terms of portfolio construction. The Fund employs a systematic rebalancing process that re-evaluates stock weights and adjusts allocations in June and rebalances the portfolio to those weights again in December. In the June 2017 rebalance, there were 129 additions and 128 deletions whereby each constituent was reweighted based on their contribution to Gross National Product (GNP). The strategy aims to take advantage of excess volatility in market prices to add excess return while delivering the equity market premium.

The risks of investing in this Fund remain as discussed in the Simplified Prospectus. During the year, there were no material changes to the Fund that affected the overall risk level of the Fund. This Fund is suitable for investors seeking long-term capital growth from equity securities issued in markets around the world. Investors in this Fund should have a long-term investment time horizon and a medium tolerance for risk in their returns.

1

HSBC Global Equity Fund Fund held, purchased or sold shares in HSBC Holdings plc (our ultimate parent company) and Hang Seng Bank, which represented 0.41% and 0.05% of the Fund’s assets, respectively, as at December 31, 2017.

Related Party Transactions We, on behalf of the Fund, or the Fund Manager, may, from time to time, enter into transactions or arrangements with or involving other members of the HSBC Group or other people or companies related or connected to us or the Fund. To proceed with the transactions, the Fund relies on the positive recommendation of the Fund’s Independent Review Committee. A condition of this positive recommendation is that the transactions are performed in accordance with our policy on Related Party Transactions. For more general information on persons related to the Fund and the types of potential transactions, see the Fund’s Simplified Prospectus.

Financial Highlights The following tables show selected key financial information about the Fund and are intended to help you understand the Fund’s financial performance for the past five years. This information is derived from the Fund’s audited annual financial statements. The information in the following tables is based on prescribed regulations, and, as a result, is not expected to add down due to the increase/decrease in net assets from operations being based on average units outstanding during the year and all other numbers being based on actual units outstanding at the relevant point in time.

The following is a summary of current transactions and arrangements with entities that are related to us or the Fund.

Manager, Trustee and Investment Advisor We are the manager, trustee and primary investment advisor of the Fund. As manager, we manage the overall business and operations of the Fund. As trustee, we hold legal title to the property of the Fund on your behalf. As primary investment advisor, we provide investment advice and portfolio management services to the Fund. We receive a fee from the Fund for these services based on assets under management, calculated daily and paid monthly.

HSBC Global Equity Fund – Investor Series – Net Assets per Unit(1) Years ended December 31 2017 Net assets per unit, beginning of year (2)

We have entered into a sub-advisory agreement with HSBC Global Asset Management (UK) Limited (an affiliate), under which HSBC Global Asset Management (UK) Limited provides investment advice and portfolio management services to the Fund. We pay HSBC Global Asset Management (UK) Limited an investment advisory fee from the Fund based on assets under management, calculated daily and paid quarterly. For more information on our ability to hire sub-advisors, see the section Organization and Management of the HSBC Mutual Funds in the Fund’s Simplified Prospectus.

2016

2015

2014

2013

$13.78 $13.20 $12.58 $11.13

$8.52

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.38 (0.21) 0.54 1.08

0.31 (0.18) 0.10 0.41

0.32 (0.22) 2.79 (1.25)

0.26 (0.30) 1.44 0.16

0.22 (0.25) 1.24 1.49

Total increase (decrease) from operations (2)

$1.79

$0.64

$1.64

$1.56

$2.70

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– (0.25) (0.12) –

– (0.11) – –

– (0.31) (0.78) –

(0.03) (0.09) – –

(0.03) (0.05) – –

Distribution Services

Total annual distributions (2,3)

$(0.37) $(0.11) $(1.09) $(0.12) $(0.08)

The Fund is distributed through us, HSBC Investment Funds (Canada) Inc. (our wholly owned subsidiary and affiliate) and HSBC Securities (Canada) Inc. (an affiliate) directly or through its division, HSBC InvestDirect. We pay distribution and servicing fees to them based on the amount of assets held in the investor’s account, and additionally, in some cases, on the amount of the initial purchase. If you hold units of this Fund and/or other HSBC Mutual Funds in a registered plan with HSBC Investment Funds (Canada) Inc., they may charge you an annual fee to cover the annual administration costs of the plan. We permit HSBC Investment Funds (Canada) Inc. to collect these fees by redeeming sufficient units of the Fund with the highest market value in your registered plan.

Net assets per unit at December 31 of year shown (2)

$15.21 $13.78 $13.20 $12.58 $11.12

Ratios and Supplemental Data Years ended December 31 2017 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

Investments in Securities of Related Parties In accordance with Canadian securities legislation and policies set out by our Independent Review Committee, the Fund may invest its assets in the securities of companies related to the Fund’s investment advisor or sub-advisor. During the period, the 2

2016

2015

2014

2013

$41,687 $39,123

$39,718

$32,537

$29,258

2,741

2,839

3,008

2,585

2,628

1.46%

1.44%

1.60%

2.56%

2.58%

1.46% 1.44% 1.60% 2.56% 2.58% 0.02% 0.06% 0.12% 0.22% 0.26% 22.34% 30.23% 122.23% 102.60% 163.55% $15.21 $13.78 $13.20 $12.58 $11.13

HSBC Global Equity Fund HSBC Global Equity Fund – Advisor Series – Net Assets per Unit(1)

HSBC Global Equity Fund – Premium Series – Net Assets per Unit(1)

Years ended December 31

Years ended December 31 2017

Net assets per unit, beginning of year (2)

2016

2015

2014

2013

2017

2016

2015

2014

2013

$8.17

Net assets per unit, beginning of year (2)

0.28 (0.28) 1.45 (0.53)

0.22 (0.24) 1.20 1.40

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.49 (0.21) 0.76 1.19

0.41 (0.18) 0.12 0.62

0.40 (0.21) 2.35 (1.00)

0.34 (0.31) 1.86 (0.17)

0.28 (0.27) 1.50 2.05

$0.92

$2.58

Total increase (decrease) from operations (2)

$2.23

$0.97

$1.54

$1.72

$3.56

(0.03) (0.05) – –

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– (0.37) (0.18) –

– (0.21) – –

– (0.43) (1.08) –

(0.08) (0.19) – –

(0.07) (0.11) – –

Total annual distributions (2,3)

$(0.43) $(0.13) $(1.02) $(0.11) $(0.08)

Total annual distributions (2,3)

$(0.55) $(0.21) $(1.51) $(0.27) $(0.18)

Net assets per unit at December 31 of year shown (2)

$17.96 $16.35 $12.47 $12.06 $10.67

Net assets per unit at December 31 of year shown (2)

$19.47 $17.65 $16.92 $16.17 $14.32

$16.35 $12.47 $12.06 $10.68

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.46 (0.34) 0.62 1.30

0.30 (0.14) 0.65 0.72

0.30 (0.39) 2.57 (1.12)

Total increase (decrease) from operations (2)

$2.04

$1.53

$1.36

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– (0.29) (0.14) –

– (0.13) – –

– (0.29) (0.73) –

(0.03) (0.08) – –

$17.65 $16.92 $16.17 $14.34 $10.97

Ratios and Supplemental Data

Ratios and Supplemental Data

Years ended December 31

Years ended December 31

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2017

2016

2015

2014

2013

$165

$128

$31

$25

$73

9

8

2

2

7

1.97%

0.95%

3.02%

2.50%

2.56%

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2.32% 6.63% 7.23% 2.50% 2.56% 0.02% 0.06% 0.12% 0.22% 0.26% 22.34% 30.23% 122.23% 102.60% 163.55% $17.96 $16.35 $12.47 $12.06 $10.68

3

2017

2016

2015

2014

2013

$11,329

$6,305

$5,930

$1,682

$1,535

582

357

351

104

107

1.15%

1.12%

1.20%

2.03%

2.10%

1.15% 1.12% 1.20% 2.03% 2.10% 0.02% 0.06% 0.12% 0.22% 0.26% 22.34% 30.23% 122.23% 102.60% 163.55% $19.47 $17.65 $16.92 $16.17 $14.34

HSBC Global Equity Fund HSBC Global Equity Fund – Manager Series – Net Assets per Unit(1)

HSBC Global Equity Fund – Institutional Series – Net Assets per Unit(1)

Years ended December 31

Years ended December 31 2017

Net assets per unit, beginning of year (2)

2016

2015

2014

2013

2017

2016

2015

2014

2013

$8.96

Net assets per unit, beginning of year (2)

0.27 (0.18) 1.52 0.18

0.24 (0.15) 1.30 1.57

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.46 (0.02) 0.65 1.35

0.38 (0.01) 0.15 1.12

0.39 (0.01) 3.31 (1.48)

0.31 (0.02) 1.74 0.21

0.29 (0.01) 1.41 1.73

$1.79

$2.96

Total increase (decrease) from operations (2)

$2.44

$1.64

$2.21

$2.24

$3.42

– (0.23) – –

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– (0.47) (0.23) –

– (0.36) – –

– (0.45) (1.14) –

(0.15) (0.37) – –

(0.17) (0.26) – –

Total annual distributions (2,3)

$(0.47) $(0.20) $(1.22) $(0.27) $(0.23)

Total annual distributions (2,3)

$(0.70) $(0.36) $(1.59) $(0.52) $(0.43)

Net assets per unit at December 31 of year shown (2)

$15.68 $14.26 $13.76 $13.23 $11.69

Net assets per unit at December 31 of year shown (2)

$18.25 $16.54 $15.85 $15.12 $13.36

$14.26 $13.76 $13.23 $11.70

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.40 (0.20) 0.64 0.67

0.32 (0.20) 0.14 0.51

0.34 (0.27) 3.00 (1.33)

Total increase (decrease) from operations (2)

$1.51

$0.77

$1.74

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– (0.32) (0.15) –

– (0.20) – –

– (0.35) (0.87) –

– (0.27) – –

$16.54 $15.85 $15.12 $13.37 $10.24

Ratios and Supplemental Data

Ratios and Supplemental Data

Years ended December 31

Years ended December 31

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2017

2016

2015

2014

2013

$63

$36

$30

$27

$23

4

2

2

2

2

1.32%

1.50%

1.87%

1.41%

1.41%

2017

2016

2015

2014

2013

Net Asset Value (in 000s) (4) $628,673 $575,413 $304,747 $251,894 $226,010 Number of units outstanding (in 000s) (4) 34,441 34,781 19,229 16,658 16,899 Management expense ratio (⬙MER⬙) (5) 0.09% 0.07% 0.07% 0.11% 0.11% MER before waivers or absoptions (5) 0.09% 0.07% 0.07% 0.11% 0.11% Trading expense ratio (6) 0.02% 0.06% 0.12% 0.22% 0.26% Portfolio turnover rate (7) 22.34% 30.23% 122.23% 102.60% 163.55% Net Asset Value per unit (4) $18.25 $16.54 $15.85 $15.12 $13.37

2.70% 3.67% 2.97% 1.41% 1.41% 0.02% 0.06% 0.12% 0.22% 0.26% 22.34% 30.23% 122.23% 102.60% 163.55% $15.68 $14.26 $13.76 $13.23 $11.70

(1) This information is derived from the Fund’s audited annual financial statements. 2017, 2016, 2015, 2014 and 2013 balances are stated in IFRS. Under IFRS, the net asset per unit presented in the financial statements is the same as the net asset value calculated for fund pricing purposes. (2) Net assets per unit and distributions per unit are based on the actual number of units outstanding for the relevant series at the relevant time. The increase/decrease in net assets from operations per unit is based on the weighted average number of units outstanding for the relevant series over the fiscal year. (3) Distributions are automatically reinvested in additional units of the Fund, unless the unitholder withdraws from the automatic reinvestment plan by providing written notice to us. (4) This information is provided as at December 31 of the year shown. (5) MER is based on total expenses (excluding distributions, commissions and other portfolio transaction costs) for the stated period and is expressed as an annualized percentage of daily average net asset value during the year. The MER may vary from one mutual fund to another and from one series of units to another. We have

4

HSBC Global Equity Fund waived or absorbed certain fees and expenses otherwise payable by the Fund. The amount of expenses absorbed or waived is at the discretion of and can be terminated at any time by us.

Year-by-Year Returns Years ended December 31 The following bar charts show the Fund’s performance for each of the years shown, and illustrate how the Fund’s performance changed from year to year. In percentage terms, the bar charts show how much an investment made on the first day of each financial year would have grown or decreased by the last day of each financial year.

(6) The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the year. (7) The Fund’s portfolio turnover rate indicates how actively the Fund’s portfolio advisor manages its portfolio investments. A portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the year. The higher the Fund’s portfolio turnover rate in a year, the greater the trading costs payable by the Fund in the year, and the greater the chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high turnover rate and the performance of the Fund. The rate is calculated based on the lesser of purchases or sales of securities divided by the average weighted market value of the portfolio securities, excluding short-term securities.

Annual Returns – Investor Series 40%

31.6%

30% 20%

-10% -20%

For the year ended December 31, 2017, the Fund paid us management fees of $577,727. The management fee for each series is calculated as a percentage of the daily net asset value for that series. The fees are reduced, where required, so that these fees do not duplicate fees payable by mutual funds in which the Fund invests for the same service.

-30% -40%

13.0% 5.2%

0.5%

0%

Management Fees

14.1% 13.5%

9.8%

6.7%

10%

-6.6%

-28.7% Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Annual Returns – Advisor Series 40%

The Fund’s management fees were used by us to pay costs for managing the investment portfolio, providing investment analysis and recommendations, making investment decisions, making brokerage arrangements for the purchase and sale of the investment portfolio and providing other services. The management fees also funded commission payments and other compensation to sales representatives and registered dealers and brokers (collectively “distribution costs”), including HSBC Investment Funds (Canada) Inc., for units of the Fund bought and held by unitholders. Finally, we used management fees to pay for additional marketing and distribution services to the Fund.

32.2%

31.6%

30% 20%

14.1% 11.8%

9.9%

6.7%

10%

12.4%

0.6%

0% -10%

-6.5%

-20% -30% -40%

-28.6% Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Annual Returns – Premium Series

For the year ended December 31, 2017, approximately 46% of the total management fees collected from all HSBC Mutual Funds were used to fund distribution costs. In comparison, for the Fund, such distribution costs represented 43% of the management fees collected. This may vary by series depending on the assets invested in each of the series.

40%

32.3%

30% 20% 10.4%

10%

14.7% 13.9%

13.3% 5.5%

0%

Past Performance The performance information shown assumes that all distributions made by the Fund in the years shown were reinvested in additional securities of the Fund. The performance information does not take into account sales, redemption, distribution, optional charges or expenses you may be charged outside of the Fund or the effect of any income tax you may have to pay as a result of your investment in the Fund that would have reduced returns or performance. The performance of different fund series may vary for a number of reasons, including differences in management fees and expenses. The Fund’s past performance does not necessarily indicate how it will perform in the future.

-10% -20%

5

-6.1% Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2011 2012 2013 2014 2015 2016 2017

HSBC Global Equity Fund Annual Returns – Manager Series 40%

Premium Series 33.1%

30%

1 Year

20%

15.4% 13.2%

11.1%

7.8%

10%

13.2% 5.1%

1.7%

3 Year

Since 5 Year Inception

HSBC Global Equity Fund

13.34% 10.87% 15.63%

12.09%

MSCI World Net Index (C$)

14.36% 12.16% 16.89%

14.01%

-20%

(1) Due to the fact that several benchmark indices are only available on a monthly basis, the performance data for the HSBC Funds and the benchmark indices are calculated using values from the first month-end date each Fund was in operation.

-30% -27.9% -40% Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

(2) For investment commentary and relative performance of the Fund compared to its benchmark, please refer to the Results of Operations section of this report.

0% -10%

-5.5%

Summary of Investment Portfolio

Annual Returns – Institutional Series

As at December 31, 2017

60% 34.9%

40% 20%

9.2%

Sector Mix 16.9% 15.3%

12.6%

Percentage of NAV

14.5% 6.6%

3.0%

Financials Industrials Consumer Discretionary Consumer Staples Information Technology Healthcare Energy Materials Telecommunication Services Utilities Mutual Funds Real Estate Cash & Equivalents Total

0% -4.2% -20% -40%

-27.0% Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Annual Compound Returns Year ended December 31, 2017 The following tables show the Fund’s historical annual compound total returns for the years indicated, compared with the benchmark index, the MSCI World Net Index (in Canadian dollars), over the same period. The MSCI World Net Index is an international index that measures the performance of stocks traded in developed markets including Europe, Australia, the Far East, the US, Canada and South Africa. This index is tracked in US dollars and was converted to Canadian dollars.

Investor Series 1 Year

3 Year

5 Year 10 Year

HSBC Global Equity Fund

12.99% 10.51% 15.17%

4.75%

MSCI World Net Index (C$)

14.36% 12.16% 16.89%

7.57%

Advisor Series 1 Year

3 Year

5 Year 10 Year

HSBC Global Equity Fund

12.45% 18.44% 20.07%

6.99%

MSCI World Net Index (C$)

14.36% 12.16% 16.89%

7.57%

Manager Series 1 Year

3 Year

5 Year 10 Year

HSBC Global Equity Fund

13.24% 10.43% 15.65%

5.56%

MSCI World Net Index (C$)

14.36% 12.16% 16.89%

7.57%

InstitutionalSeries 1 Year

3 Year

5 Year 10 Year

HSBC Global Equity Fund

14.54% 12.09% 17.30%

7.01%

MSCI World Net Index (C$)

14.36% 12.16% 16.89%

7.57%

6

17.73% 17.04% 15.05% 9.52% 8.56% 7.35% 6.49% 5.54% 5.50% 3.92% 2.50% 0.18% 0.62% 100.00%

HSBC Global Equity Fund Geographic Mix

Top 25 Holdings Percentage of NAV

United States of America Japan United Kingdom Germany France Canada Switzerland Netherlands Australia Spain Italy Sweden Ireland Hong Kong Singapore Denmark Norway Belgium Finland Luxembourg Austria Israel Portugal Bermuda Cayman Islands New Zealand Taiwan China Jersey Papua New Guinea South Africa Mutual Funds Cash & Equivalents Total

Percentage of NAV

42.50% 12.52% 7.82% 6.55% 6.21% 2.63% 2.61% 2.49% 2.29% 2.14% 1.54% 1.28% 1.24% 0.98% 0.93% 0.64% 0.49% 0.46% 0.42% 0.32% 0.22% 0.14% 0.13% 0.11% 0.05% 0.05% 0.05% 0.03% 0.02% 0.01% 0.01% 2.50% 0.62% 100.00%

Wal-Mart Stores Inc. iShares Core S&P 500 ETF General Electric Co. iShares MSCI EAFE ETF AT&T Inc. Exxon Mobil Corp. Volkswagen AG Royal Dutch Shell PLC Wells Fargo & Co. Apple Inc. JPMorgan Chase & Co. Bank of America Corp. Nippon Telegraph & Telephone Corp. Siemens AG United Parcel Service Inc., Class B Toyota Motor Corp. Chevron Corp. Verizon Communications Inc. Berkshire Hathaway Inc., Class B BP PLC Comcast Corp., Class A Microsoft Corp. The Home Depot Inc. Eni SpA HSBC Holdings PLC Total of Top 25 Holdings

The Summary of Investment Portfolio may change due to ongoing portfolio transactions of the Fund, and is available quarterly.

7

1.77% 1.46% 1.08% 1.03% 0.90% 0.81% 0.79% 0.77% 0.72% 0.66% 0.66% 0.58% 0.56% 0.56% 0.56% 0.55% 0.52% 0.51% 0.50% 0.46% 0.45% 0.43% 0.43% 0.41% 0.41% 17.58%

For more information

How to reach us

You can find more information about HSBC Mutual Funds in the Fund’s Simplified Prospectus, Annual Information Form, Annual and Semi-Annual Report and Fund Facts. You can get a copy of these documents, as well as the Fund’s Financial Statements, at no cost by calling 1-888-390-3333, by contacting your authorized dealer or by visiting our website at www.hsbc.ca/investment-resources.

HSBC Global Asset Management (Canada) Limited

These documents and other information about the Fund, such as information circulars and material contracts, are also available at www.sedar.com. Copies of the Annual Report and Semi-Annual Report, Simplified Prospectus, Annual Information Form, Annual and Interim Management Report of Fund Performance and Fund Facts are available on our website at www.hsbc.ca/investment-resources.

Vancouver 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8 Toronto Suite 300, 70 York Street Toronto, ON M5J 1S9 Toll-free: 1-888-390-3333 Fax: 604-669-2756 Email: [email protected] Website: www.hsbc.ca/investment-resources

A NOTE ON FORWARD-LOOKING STATEMENTS This report may contain forward-looking statements about the Fund, including its strategy, expected performance and condition. Forward-looking statements include statements that are predictive in nature that depend upon or refer to future events or conditions, or that include words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates” or negative versions thereof and similar expressions. In addition, any statement that may be made concerning future performance, strategies or prospects, and possible future Fund action, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the Fund and economic factors. Forward-looking statements are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied in any forward-looking statements made by the Fund. Any number of important factors could contribute to these digressions, including, but not limited to, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, and catastrophic events. We stress that the above-mentioned list of important factors is not exhaustive. We encourage you to consider these and other factors carefully before making any investment decisions and we urge you to avoid placing undue reliance on forward-looking statements. Further, you should be aware of the fact that the Fund has no specific intention of updating any forward-looking statements, whether as a result of new information, future events or otherwise. Sources: HSBC Global Asset Management (Canada) Limited, Bloomberg, MSCI, Bank of Canada. Neither MSCI nor any other party involved in or related to compiling, computing or creating the MSCI data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any of such data. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in or related to compiling, computing or creating the data have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages. No further distribution or dissemination of the MSCI data is permitted without MSCI’s express written consent.

Issued by HSBC Global Asset Management (Canada) Limited

(2018-03) DFS

Unauthorized reproduction, distribution, transmission or publication without our prior written consent is strictly prohibited.

HSBC Global Equity Volatility Focused Fund Annual Management Report of Fund Performance for the year ended December 31, 2017

◆

HSBC Global Equity Volatility Focused Fund Management Discussion of Fund Performance In this document, you and your refer to the unitholder of the Fund; we, us and our refer to HSBC Global Asset Management (Canada) Limited; and the Fund refers to the HSBC Global Equity Volatility Focused Fund.

Investment Performance The HSBC Global Equity Volatility Focused Fund (Investor Series) rose 15.48% for the 12-month period ending December 31, 2017, while the benchmark MSCI All Country World Net Index (US$) rose 23.97% over the same period.

We are the manager, trustee and primary investment advisor of the Fund. We have entered into a sub-advisory agreement with HSBC Global Asset Management (UK) Limited, under which HSBC Global Asset Management (UK) Limited provides investment advice and portfolio management services to the Fund. For an explanation of the relationship between us and the sub-advisor, see the section Selection of Sub-Advisors in the Fund’s Simplified Prospectus.

Although stock selection contributed to underperformance in 2017, the Fund also underperformed by virtue of its aim to provide global equity exposure with less risk than its benchmark index. Equity markets experienced relatively narrow leadership, particularly in technology and Internet names. As these equities typically do not rank highly from a profitability-valuation perspective, the Fund would generally not invest in such names. Country and sector allocation effects were residual to the stock selection process. Sector allocation contributed negatively to performance due to an overweight position in telecommunication services and an underweight position in information technology. Offsetting some of these losses were underweight positions in energy and utilities. Country allocation was also negative due to the Fund’s overweight position in the UK, although this was partially offset by contributions from an overweight position in Hong Kong.

Introduction This Annual Management Report of Fund Performance contains financial highlights but does not contain the complete annual financial statements of the investment fund. You may obtain a copy of the Fund’s annual financial statements at your request, at no cost, by calling us toll-free at 1-888-390-3333, by visiting our website at www.hsbc.ca/investment-resources, by visiting the SEDAR website at www.sedar.com or by writing to us at: Corporate Secretary HSBC Global Asset Management (Canada) Limited 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8

Recent Developments Global economic growth momentum remains solid, driving global equity markets to deliver positive returns over the long term. The 12-month period under review was marked by uncertainty surrounding Brexit negotiations and elections in France and the UK.

You may also contact us using one of these methods to request a copy of the Fund’s interim financial report, proxy voting policies and procedures, proxy voting disclosure record or quarterly statement of investment portfolio.

Overall, support from still loose accommodative monetary policy and an increased willingness for looser fiscal policy may, in the medium and longer term, outweigh any headwinds from more modest Chinese growth, tighter US and eurozone monetary policy, and political uncertainty in many regions.

Investment Objective and Strategies The fundamental investment objective of this Fund is to earn income while providing the potential for long-term capital growth. To achieve its objectives, the Fund invests primarily in equities and equity-related securities of companies located around the world. Units of the Fund are only available in US dollars.

There were no changes to the investment process or strategic position of the Fund in 2017. While market volatility appears benign, episodic volatility could be triggered by market and economic uncertainties. It is in this type of environment that an active investment strategy combining low volatility and quality can be advantageous in capturing long-term investment returns while navigating short-term uncertainties.

Risk The risks of investing in the Fund remain as discussed in the Simplified Prospectus. During the year, there were no material changes to the Fund that affected the overall risk level of the Fund.

Related Party Transactions We, on behalf of the Fund, or the Fund Manager, may, from time to time, enter into transactions or arrangements with or involving other members of the HSBC Group or other people or companies related or connected to us or the Fund. To proceed with the transactions, the Fund relies on the positive recommendation of the Fund’s Independent Review Committee. A condition of this positive recommendation is that the transactions are performed in accordance with our policy on Related Party Transactions. For more general information on persons related to the Fund and the types of potential transactions, see the Fund’s Simplified Prospectus.

This Fund is suitable for investors who want to achieve long-term capital growth, have a long-term investment time horizon and have a medium tolerance for risk in their returns.

Results of Operations As of December 31, 2017, the Fund’s net assets increased by 185% to $57.0 million from $20.0 million at the end of 2016. Of this increase, a $6.0 million gain was attributable to investment performance and $31.0 million was attributable to net contributions to the Fund. 1

HSBC Global Equity Volatility Focused Fund All figures are stated in US dollars.

The following is a summary of current transactions and arrangements with entities that are related to us or the Fund.

HSBC Global Equity Volatility Focused Fund – Investor Series – Net Assets per Unit(1)

Manager, Trustee and Investment Advisor We are the manager, trustee and primary investment advisor of the Fund. As manager, we manage the overall business and operations of the Fund. HSBC Bank Canada has provided seed capital to the Fund and has received units of the Fund in exchange. During the period, this seed capital investment was redeemed and none remains outstanding at period-end. As trustee, we hold legal title to the property of the Fund on your behalf. As primary investment advisor, we provide investment advice and portfolio management services to the Fund. We receive a fee from the Fund for these services based on assets under management, calculated daily and paid monthly.

Years ended December 31 2017 Net assets per unit, beginning of year (2)

$10.37

2015

$9.94 $10.00

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.27 (0.27) 0.48 1.13

0.25 (0.24) (0.10) 0.70

0.04 (0.05) (0.02) (0.10)

Total increase (decrease) from operations (2)

$1.61

$0.61

$(0.13)

– – – –

– – – –

– – – –

$–

$–

$–

$11.97 $10.37

$9.94

2017

2015

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

We have entered into a sub-advisory agreement with HSBC Global Asset Management (UK) Limited (an affiliate), under which HSBC Global Asset Management (UK) Limited provides investment advice and portfolio management services to the Fund. We pay HSBC Global Asset Management (UK) Limited an investment advisory fee from the Fund based on assets under management, calculated daily and paid quarterly. For more information on our ability to hire sub-advisors, see the section Organization and Management of the HSBC Mutual Funds in the Fund’s Simplified Prospectus.

2016

Total annual distributions (2,3) Net assets per unit at December 31 of year shown (2)

Ratios and Supplemental Data Years ended December 31 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

Distribution Services The Fund is distributed through us, HSBC Investment Funds (Canada) Inc. (our wholly owned subsidiary and affiliate) and HSBC Securities (Canada) Inc. (an affiliate) directly or through its division, HSBC InvestDirect. We pay distribution and servicing fees to them based on the amount of assets held in the investor’s account, and additionally, in some cases, on the amount of the initial purchase. If you hold units of this Fund and/or other HSBC Mutual Funds in a registered plan with HSBC Investment Funds (Canada) Inc., they may charge you an annual fee to cover the annual administration costs of the plan. We permit HSBC Investment Funds (Canada) Inc. to collect these fees by redeeming sufficient units of the Fund with the highest market value in your registered plan.

2016

$8,314 $3,648 $1,092 695 352 110 2.43% 2.37% 2.48% 2.49% 2.60% 3.01% 0.26% 0.23% 0.13% 102.98% 85.90% 13.89% $11.97 $10.37 $9.94

HSBC Global Equity Volatility Focused Fund – Advisor Series – Net Assets per Unit(1) Years ended December 31 2017 Net assets per unit, beginning of year (2)

Financial Highlights The following tables show selected key financial information about the Fund and are intended to help you understand the Fund’s financial performance for the years shown. This information is derived from the Fund’s audited annual financial statements. The information in the following tables is based on prescribed regulations, and as a result, is not expected to add down due to the increase/decrease in net assets from operations being based on average units outstanding during the year and all other numbers being based on actual units outstanding at the relevant point in time.

2016

2015

$9.84 $10.00

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.21 (0.26) 0.27 2.95

0.08 – (0.11) 0.03

– – (0.01) 0.01

Total increase (decrease) from operations (2)

$3.17

$–

$–

– – – –

– (0.01) – –

– – – –

$–

$(0.01)

$–

$12.20 $10.42

$9.84

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital Total annual distributions (2,3) Net assets per unit at December 31 of year shown (2)

2

$10.42

HSBC Global Equity Volatility Focused Fund Ratios and Supplemental Data

HSBC Global Equity Volatility Focused Fund – Manager Series – Net Assets per Unit(1)

Years ended December 31 2017 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

*

2016

2015

*

*

Years ended December 31 2017

$– $10 $– 1 –* –* 2.36% 0.00% 0.00% 2.42% 0.00% 0.00% 0.26% 0.23% 0.13% 102.98% 85.90% 13.89% $12.20 $10.42 $9.84

Net assets per unit, beginning of year (2) Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

Amount less than one thousand.

HSBC Global Equity Volatility Focused Fund – Premium Series – Net Assets per Unit(1) Years ended December 31 2017 Net assets per unit, beginning of year (2)

$10.36

2016

2015

$9.94 $10.00

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.26 (0.21) 0.45 1.25

0.24 (0.18) (0.10) 0.64

0.04 (0.04) (0.03) (0.14)

Total increase (decrease) from operations (2)

$1.75

$0.60

$(0.17)

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– (0.03) – –

– (0.06) – –

$(0.03) $(0.06)

$–

Net assets per unit at December 31 of year shown (2)

$12.00 $10.36

$9.94

2015

0.11 – 0.44 1.42

0.08 – (0.11) 0.03

– – (0.01) 0.01

Total increase (decrease) from operations (2)

$1.97

$–

$–

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– (0.10) – –

– (0.12) – –

– – – –

Total annual distributions (2,3)

$(0.10) $(0.12)

$–

Net assets per unit at December 31 of year shown (2)

$11.98 $10.31

$9.84

2017

2015

Years ended December 31 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

*

Ratios and Supplemental Data

2016

$–* $–* $–* –* –* –* 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.26% 0.23% 0.13% 102.98% 85.90% 13.89% $11.98 $10.31 $9.84

Amount less than one thousand.

HSBC Global Equity Volatility Focused Fund – Institutional Series – Net Assets per Unit(1)

Years ended December 31 2017 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2016

$9.84 $10.00

Ratios and Supplemental Data

– – – –

Total annual distributions (2,3)

$10.31

2016

Years ended December 31

2015

2017

$43,618 $9,236 $2,610 3,635 892 263 1.85% 1.80% 2.06% 1.89% 2.01% 2.36% 0.26% 0.23% 0.13% 102.98% 85.90% 13.89% $12.00 $10.36 $9.94

Net assets per unit, beginning of year (2)

3

$10.41

2016

2015

$9.98 $10.00

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.26 (0.02) 0.38 1.36

0.25 (0.02) (0.14) 0.72

0.03 (0.01) (0.02) (0.03)

Total increase (decrease) from operations (2)

$1.98

$0.81

$(0.03)

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– (0.30) – –

– (0.23) – –

– – – –

Total annual distributions (2,3)

$(0.30) $(0.23)

$–

Net assets per unit at December 31 of year shown (2)

$11.98 $10.41

$9.98

HSBC Global Equity Volatility Focused Fund and brokers (collectively “distribution costs”), including HSBC Investment Funds (Canada) Inc., for units of the Fund bought and held by unitholders. Finally, we used management fees to pay for additional marketing and distribution services to the Fund.

Ratios and Supplemental Data Years ended December 31 2017 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2016

2015

$5,093 $7,146 $10,193 425 687 1,021 0.21% 0.22% 0.57% 0.29% 0.42% 0.70% 0.26% 0.23% 0.13% 102.98% 85.90% 13.89% $11.98 $10.41 $9.98

For the year ended December 31, 2017, approximately 46% of the total management fees collected from all HSBC Mutual Funds were used to fund distribution costs. In comparison, for the Fund, such distribution costs represented 40% of the management fees collected. This may vary by series depending on the assets invested in each of the series.

(1) This information is derived from the Fund’s audited annual financial statements. 2017, 2016 and 2015 balances are stated in IFRS. Under IFRS, the net assets per unit presented in the financial statements differ from the net asset value calculated for Fund pricing purposes.

Past Performance The performance information shown assumes that all distributions made by the Fund in the years shown were reinvested in additional securities of the Fund. The performance information does not take into account sales, redemption, distribution, optional charges or expenses you may be charged outside of the Fund or the effect of any income tax you may have to pay as a result of your investment in the Fund that would have reduced returns or performance. The performance of different fund series may vary for a number of reasons, including differences in management fees and expenses. The Fund’s past performance does not necessarily indicate how it will perform in the future.

(2) Net assets per unit and distributions per unit are based on the actual number of units outstanding for the relevant series at the relevant time. The increase/decrease in net assets from operations per unit is based on the weighted average number of units outstanding for the relevant series over the fiscal year. (3) Distributions are automatically reinvested in additional units of the Fund, unless the unitholder withdraws from the automatic reinvestment plan by providing written notice to us. (4) This information is provided as at year-end. (5) MER is based on total expenses (excluding distributions, commissions and other portfolio transaction costs) for the stated period and is expressed as an annualized percentage of daily average net asset value during the year. The MER may vary from one mutual fund to another and from one series of units to another. We have waived or absorbed certain fees and expenses otherwise payable by the Fund. The amount of expenses absorbed or waived is at the discretion of and can be terminated at any time by us.

Year-by-Year Returns Years ended December 31 The following bar charts show the Fund’s performance for each of the years shown, and illustrate how the Fund’s performance changed from year to year. In percentage terms, the bar charts show how much an investment made on the first day of each financial year would have grown or decreased by the last day of each financial year.

(6) The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the year. (7) The Fund’s portfolio turnover rate indicates how actively the Fund’s portfolio advisor manages its portfolio investments. A portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the year. The higher the Fund’s portfolio turnover rate in a year, the greater the trading costs payable by the Fund in the year, and the greater the chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high turnover rate and the performance of the Fund. The rate is calculated based on the lesser of purchases or sales of securities divided by the average weighted market value of the portfolio securities, excluding short-term securities.

Annual Returns – Investor Series 20% 15.5% 15% 10%

Management Fees For the year ended December 31, 2017, the Fund paid us management fees of $495,777. The management fee for each series is calculated as a percentage of the daily net asset value for that series. The fees are reduced, where required, so that these fees do not duplicate fees payable by mutual funds in which the Fund invests for the same service.

5% 0%

The Fund’s management fees were used by us to pay costs for managing the investment portfolio, providing investment analysis and recommendations, making investment decisions, making brokerage arrangements for the purchase and sale of the investment portfolio and providing other services. The management fees also funded commission payments and other compensation to sales representatives and registered dealers 4

4.3%

Dec. 31 Dec. 31 2016 2017

HSBC Global Equity Volatility Focused Fund Annual Returns – Advisor Series

Annual Compound Returns Year ended December 31, 2017

20% 17.1%

The following tables show the Fund’s historical annual compound total returns for the years indicated, compared with the benchmark index. The Fund’s benchmark is the MSCI All Country World Net Index (ACWI) (in US dollars). The MSCI ACWI captures large and mid cap representation across developed markets and emerging markets countries.

15% 10% 6.0% 5%

Investor Series 0%

Dec. 31 Dec. 31 2016 2017

Since 1 Year Inception

Annual Returns – Premium Series 20%

HSBC Global Equity Volatility Focused Fund

15.48%

8.00%

MSCI ACWI Net (USD)

23.97%

12.94%

Advisor Series 16.2% Since 1 Year Inception

15% 10% 5% 0%

HSBC Global Equity Volatility Focused Fund

17.11%

9.55%

MSCI ACWI Net (USD)

23.97%

12.94%

Manager Series

4.9%

Since 1 Year Inception

Dec. 31 Dec. 31 2016 2017

HSBC Global Equity Volatility Focused Fund

17.20%

9.58%

MSCI ACWI Net (USD)

23.97%

12.94%

InstitutionalSeries

Annual Returns – Manager Series 20%

Since 1 Year Inception

17.2% 15%

HSBC Global Equity Volatility Focused Fund

18.05%

10.37%

MSCI ACWI Net (USD)

23.97%

12.94%

Premium Series

10% 6.0%

Since 1 Year Inception

5% 0%

Dec. 31 Dec. 31 2016 2017

8.59%

23.97%

12.94%

(2) For investment commentary and relative performance of the Fund compared to its benchmark, please refer to the Results of Operations section of this report.

18.0%

15% 10% 6.6% 5% 0%

16.15%

MSCI ACWI Net (USD)

(1) Due to the fact that several benchmark indices are only available on a monthly basis, the performance data for the HSBC Funds and the benchmark indices are calculated using values from the first month-end date each fund was in operation.

Annual Returns – Institutional Series 20%

HSBC Global Equity Volatility Focused Fund

Dec. 31 Dec. 31 2016 2017

5

HSBC Global Equity Volatility Focused Fund Summary of Investment Portfolio

Top 25 Holdings

As at December 31, 2017

Percentage of NAV The Home Depot Inc. Compass Group PLC Kao Corp. 3M Co. Mitsubishi UFJ Financial Group Inc. Bank of America Corp. Apple Inc. Cisco Systems Inc. Johnson & Johnson Phillips 66 Prudential PLC United Technologies Corp. Citigroup Inc. IQVIA Holdings Inc. BAE Systems PLC Nestle SA BP PLC Masco Corp. Altria Group Inc. Dr. Pepper Snapple Group Inc. Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen Microsoft Corp. China Mobile Ltd. The Walt Disney Co. Eni SpA Total of Top 25 Holdings

Sector Mix Percentage of NAV Financials Information Technology Industrials Healthcare Consumer Discretionary Consumer Staples Energy Materials Telecommunication Services Utilities Mutual Funds Cash & Equivalents Total

22.16% 17.44% 13.86% 10.58% 10.41% 10.38% 5.76% 3.32% 2.72% 1.79% 0.00% 1.58% 100.00%

Geographic Mix Percentage of NAV United States of America United Kingdom Japan France Germany China Hong Kong Switzerland Italy Netherlands Indonesia South Korea Singapore Thailand Denmark Canada Mutual Funds Cash & Equivalents Total

41.87% 13.39% 12.82% 4.63% 4.52% 3.37% 3.25% 2.99% 2.65% 2.35% 1.69% 1.39% 1.15% 1.03% 0.84% 0.48% 0.00% 1.58% 100.00%

The Summary of Investment Portfolio may change due to ongoing portfolio transactions of the Fund, and is available quarterly.

6

2.35% 2.27% 2.24% 2.22% 2.22% 2.20% 2.18% 2.14% 2.14% 2.13% 2.10% 2.05% 2.02% 2.01% 1.98% 1.94% 1.91% 1.89% 1.85% 1.79% 1.79% 1.77% 1.76% 1.74% 1.72% 50.41%

For more information

How to reach us

You can find more information about HSBC Mutual Funds in the Fund’s Simplified Prospectus, Annual Information Form, Annual and Semi-Annual Report and Fund Facts. You can get a copy of these documents, as well as the Fund’s Financial Statements, at no cost by calling 1-888-390-3333, by contacting your authorized dealer or by visiting our website at www.hsbc.ca/investment-resources.

HSBC Global Asset Management (Canada) Limited

These documents and other information about the Fund, such as information circulars and material contracts, are also available at www.sedar.com. Copies of the Annual Report and Semi-Annual Report, Simplified Prospectus, Annual Information Form, Annual and Interim Management Report of Fund Performance and Fund Facts are available on our website at www.hsbc.ca/investment-resources.

Vancouver 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8 Toronto Suite 300, 70 York Street Toronto, ON M5J 1S9 Toll-free: 1-888-390-3333 Fax: 604-669-2756 Email: [email protected] Website: www.hsbc.ca/investment-resources

A NOTE ON FORWARD-LOOKING STATEMENTS This report may contain forward-looking statements about the Fund, including its strategy, expected performance and condition. Forward-looking statements include statements that are predictive in nature that depend upon or refer to future events or conditions, or that include words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates” or negative versions thereof and similar expressions. In addition, any statement that may be made concerning future performance, strategies or prospects, and possible future Fund action, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the Fund and economic factors. Forward-looking statements are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied in any forward-looking statements made by the Fund. Any number of important factors could contribute to these digressions, including, but not limited to, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, and catastrophic events. We stress that the above-mentioned list of important factors is not exhaustive. We encourage you to consider these and other factors carefully before making any investment decisions and we urge you to avoid placing undue reliance on forward-looking statements. Further, you should be aware of the fact that the Fund has no specific intention of updating any forward-looking statements, whether as a result of new information, future events or otherwise. Sources: HSBC Global Asset Management (Canada) Limited, MSCI, Bloomberg. Neither MSCI nor any other party involved in or related to compiling, computing or creating the MSCI data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any of such data. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in or related to compiling, computing or creating the data have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages. No further distribution or dissemination of the MSCI data is permitted without MSCI’s express written consent.

Issued by HSBC Global Asset Management (Canada) Limited

(2018-03) DFS

Unauthorized reproduction, distribution, transmission or publication without our prior written consent is strictly prohibited.

HSBC U.S. Equity Fund Annual Management Report of Fund Performance for the year ended December 31, 2017

◆

HSBC U.S. Equity Fund Management Discussion of Fund Performance In this document, you and your refer to the unitholder of the Fund; we, us and our refer to HSBC Global Asset Management (Canada) Limited; and the Fund refers to the HSBC U.S. Equity Fund.

Results of Operations As of December 31, 2017, the Fund’s net assets increased by 1.5% to $204.8 million from $201.7 million at the end of 2016. Of this increase, a $12.6 million gain was attributable to investment performance and $9.5 million was attributable to net withdrawals from the Fund.

We are the manager, trustee and primary investment advisor of the Fund. We have entered into a sub-advisory agreement with Los Angeles Capital Management and Equity Research, Inc., under which Los Angeles Capital Management and Equity Research, Inc. provides investment advice and portfolio management services to the Fund. For an explanation of the relationship between us and the sub-advisor, see the section Selection of Sub-Advisors in the Fund’s Simplified Prospectus.

Investment Performance The HSBC U.S. Equity Fund (Investor Series) rose 6.20% for the 12-month period ending December 31, 2017, while the benchmark Russell 1000 Index (C$) rose 13.69% over the same period. In 2017, sector tilts and fundamental factor bets detracted from return. The portfolio’s overweight positions in technology-related sectors (such as technology hardware and equipment and semiconductors) contributed to performance, as did overweight positions in consumer services, insurance and utilities. Underweight positions in transportation, retail and capital goods detracted from returns. The most significant detractor from returns for the year came from the portfolio’s tilt towards companies with sources of foreign revenue. The portfolio was also hurt by its tilt towards value metrics rather than more growth-oriented factors.

Introduction This Annual Management Report of Fund Performance contains financial highlights but does not contain the complete annual financial statements of the investment fund. You may obtain a copy of the Fund’s annual financial statements at your request, at no cost, by calling us toll-free at 1-888-390-3333, by visiting our website at www.hsbc.ca/investment-resources, by visiting the SEDAR website at www.sedar.com or by writing to us at: Corporate Secretary HSBC Global Asset Management (Canada) Limited 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8

The market ended 2017 in strong positive territory with the S&P 500 Index gaining 21.83% (USD) and global equities rising 24% (USD), their best annual return since the 2009 market rebound. While an improving economic outlook continued to be a positive force for value equities in 2017, political discord threatened the prospects for higher infrastructure spending, healthcare reform and other pro-growth economic policies favourable to value. Growth stocks looked past these uncertainties, with earnings in the technology sector surging approximately 15% in 2017.

You may also contact us using one of these methods to request a copy of the Fund’s interim financial report, proxy voting policies and procedures, proxy voting disclosure record or quarterly statement of investment portfolio.

Investment Objective and Strategies The fundamental investment objective of this Fund is to achieve long-term capital growth.

Recent Developments

To achieve its objectives, the Fund invests primarily in wellestablished US companies diversified across industry sectors. The Fund also invests in companies based outside of the US if their securities are listed on a US exchange (including depositary receipts or other equity-linked securities) and they are owned or controlled by US interests, or where a significant portion of the earnings, production facilities, turnover, assets or investments of such companies are based in or derived from the US. A portion of the Fund may be in the form of cash or cash equivalents.

In terms of shifts in fundamental positioning throughout the year, the portfolio generally moved out of valuation characteristics (e.g., appraisal value, book-to-price and dividend yield), and riskier factors (e.g., volatility, leverage, distress and pension risk). The portfolio generally shifted into growth and quality metrics (e.g., one- and three-year momentum, high expected earnings growth, analyst insight and earnings quality), and also shifted into larger market cap stocks.

Risk

Significant sector shifts included moves out of basic materials, real estate, technology and utilities, and moves into capital goods, healthcare, Internet and retail.

The risks of investing in the Fund remain as discussed in the Simplified Prospectus. During the year, there were no material changes to the Fund that affected the overall risk level of the Fund.

At year-end, the largest positive sector tilts were towards basic materials, finance and technology. The largest negative sector tilts were towards consumer staples and transportation.

This Fund is suitable for investors who want to achieve long-term capital growth, have a long-term investment time horizon and have a medium tolerance for risk in their returns. 1

HSBC U.S. Equity Fund Related Party Transactions

HSBC U.S. Equity Fund – Investor Series – Net Assets per Unit(1)

We, on behalf of the Fund, or the Fund Manager, may, from time to time, enter into transactions or arrangements with or involving other members of the HSBC Group or other people or companies related or connected to us or the Fund. To proceed with the transactions, the Fund relies on the positive recommendation of the Fund’s Independent Review Committee. A condition of this positive recommendation is that the transactions are performed in accordance with our policy on Related Party Transactions. For more general information on persons related to the Fund and the types of potential transactions, see the Fund’s Simplified Prospectus.

Years ended December 31 2017 Net assets per unit, beginning of year (2)

The following is a summary of current transactions and arrangements with entities that are related to us or the Fund.

Manager, Trustee and Investment Advisor We are the manager, trustee and primary investment advisor of the Fund. As manager, we manage the overall business and operations of the Fund. As trustee, we hold legal title to the property of the Fund on your behalf. As primary investment advisor, we provide investment advice and portfolio management services to the Fund. We receive a fee from the Fund for these services based on assets under management, calculated daily and paid monthly.

2016

2015

2014

2013

$31.43 $29.96 $24.96 $20.84 $14.48

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.67 (0.73) 1.66 0.33

0.80 (0.66) 3.24 (1.27)

0.49 (0.63) 2.96 1.98

0.42 (0.51) 3.24 0.95

0.27 (0.41) 2.56 3.92

Total increase (decrease) from operations (2)

$1.93

$2.11

$4.80

$4.10

$6.34

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– (0.08) (0.58) –

– (0.21) (0.56) –

– – – –

– – – –

– – – –

Total annual distributions (2,3)

$(0.66) $(0.77)

$–

$–

$–

Net assets per unit at December 31 of year shown (2)

$32.73 $31.43 $29.96 $24.96 $20.84

Ratios and Supplemental Data Years ended December 31 2017

Distribution Services The Fund is distributed through us, HSBC Investment Funds (Canada) Inc. (our wholly owned subsidiary and affiliate) and HSBC Securities (Canada) Inc. (an affiliate) directly or through its division, HSBC InvestDirect. We pay distribution and servicing fees to them based on the amount of assets held in the investor’s account, and additionally, in some cases, on the amount of the initial purchase. If you hold units of this Fund and/or other HSBC Mutual Funds in a registered plan with HSBC Investment Funds (Canada) Inc., they may charge you an annual fee to cover the annual administration costs of the plan. We permit HSBC Investment Funds (Canada) Inc. to collect these fees by redeeming sufficient units of the Fund with the highest market value in your registered plan.

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

Financial Highlights The following tables show selected key financial information about the Fund and are intended to help you understand the Fund’s financial performance for the past five years. This information is derived from the Fund’s audited annual financial statements. The information in the following tables is based on prescribed regulations, and, as a result, is not expected to add down due to the increase/decrease in net assets from operations being based on average units outstanding during the year and all other numbers being based on actual units outstanding at the relevant point in time.

2

2016

2015

2014

2013

$136,364 $140,326 $141,048 $103,949 $69,643 4,166

4,465

4,708

4,165

3,342

2.26%

2.25%

2.26%

2.29%

2.34%

2.26% 0.04% 94.02% $32.73

2.25% 2.26% 2.29% 2.34% 0.05% 0.07% 0.10% 0.09% 90.70% 111.86% 136.44% 84.43% $31.43 $29.96 $24.96 $20.84

HSBC U.S. Equity Fund HSBC U.S. Equity Fund – Advisor Series – Net Assets per Unit(1)

HSBC U.S. Equity Fund – Premium Series – Net Assets per Unit(1)

Years ended December 31

Years ended December 31 2017

Net assets per unit, beginning of year (2)

2016

2015

0.29 (0.38) 0.72 0.19

0.35 (0.34) 1.37 (1.57)

Total increase (decrease) from operations (2)

$0.82

$(0.19)

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

2013

2017

2016

2015

2014

2013

$9.09 $6.32

Net assets per unit, beginning of year (2)

0.21 (0.34) 1.32 0.95

0.18 0.12 (0.23) (0.18) 1.46 1.11 0.10 1.78

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.54 (0.44) 1.33 0.21

0.65 (0.40) 2.61 (0.99)

0.39 (0.38) 2.37 1.10

0.33 (0.31) 2.53 0.88

0.22 (0.25) 2.08 3.13

$2.14

$1.51 $2.83

Total increase (decrease) from operations (2)

$1.64

$1.87

$3.48

$3.43

$5.18

– (0.14) (0.50) –

– (0.25) (0.49) –

– (0.03) – –

– – – –

– – – –

$–

$–

$13.61 $13.00 $10.89

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

2014

$25.27 $24.06 $19.96 $16.57 $11.45

– (0.09) (0.24) –

– – – –

– – – –

– – – –

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

Total annual distributions (2,3)

$(0.31) $(0.33)

$–

$–

$–

Total annual distributions (2,3)

$(0.64) $(0.74) $(0.03)

Net assets per unit at December 31 of year shown (2)

$14.09 $13.61 $13.00 $10.89 $9.09

Net assets per unit at December 31 of year shown (2)

$26.36 $25.27 $24.06 $19.96 $16.57

– (0.03) (0.28) –

Ratios and Supplemental Data

Ratios and Supplemental Data

Years ended December 31

Years ended December 31

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2017

2016

2015

2014

2013

$65

$68

$363

$318

$202

5

5

28

29

22

2.70%

2.75%

2.80%

2.33%

2.36%

2017 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

4.48% 3.21% 2.80% 2.33% 2.36% 0.04% 0.05% 0.07% 0.10% 0.09% 94.02% 90.70% 111.86% 136.44% 84.43% $14.09 $13.61 $13.00 $10.89 $9.09

3

2016

2015

$66,660 $59,431

$54,416

2014

2013

$27,171 $12,803

2,529

2,351

2,261

1,361

773

1.70%

1.69%

1.69%

1.74%

1.77%

1.70% 1.69% 1.69% 1.74% 1.77% 0.04% 0.05% 0.07% 0.10% 0.09% 94.02% 90.70% 111.86% 136.44% 84.43% $26.36 $25.27 $24.06 $19.96 $16.57

HSBC U.S. Equity Fund HSBC U.S. Equity Fund – Manager Series – Net Assets per Unit(1)

HSBC U.S. Equity Fund – Institutional Series – Net Assets per Unit(1)

Years ended December 31

Years ended December 31 2017

Net assets per unit, beginning of year (2)

2016

2015

2014

0.44 (0.31) 1.09 0.22

0.52 (0.30) 2.13 (0.99)

0.32 (0.27) 1.95 1.28

Total increase (decrease) from operations (2)

$1.44

$1.36

$3.28

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

2017

2016

2015

2014

2013

$14.86 $14.15 $11.61

$–

$– 0.01 – 0.23 0.13

$9.22

Net assets per unit, beginning of year (2)

0.27 (0.17) 2.13 0.47

0.18 (0.14) 1.61 2.53

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.32 (0.02) 0.78 0.14

0.38 (0.02) 1.54 (0.21)

0.23 (0.02) 1.29 0.63

0.13 (0.01) 0.73 1.24

$2.70

$4.18

Total increase (decrease) from operations (2)

$1.22

$1.69

$2.13

$2.09 $0.37

– (0.20) (0.36) –

– (0.33) (0.33) –

– (0.07) – –

– – – –

– – – –

$20.50 $19.60 $16.25 $13.42

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

2013

–– (0.05) – –

– – – –

– – – –

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

Total annual distributions (2,3)

$(0.61) $(0.69) $(0.05)

$–

$–

Total annual distributions (2,3)

$(0.56) $(0.66) $(0.07)

$–

$–

Net assets per unit at December 31 of year shown (2)

$21.33 $20.50 $19.60 $16.25 $13.42

Net assets per unit at December 31 of year shown (2)

$15.55 $14.86 $14.15 $11.61

$–

– (0.17) (0.44) –

– (0.28) (0.41) –

Ratios and Supplemental Data

Ratios and Supplemental Data

Years ended December 31

Years ended December 31

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2017

2016

2015

2014

2013

$161

$151

$170

$122

$95

8

7

9

7

7

1.49%

1.59%

1.50%

1.17%

1.22%

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

1.71% 1.72% 1.50% 1.17% 1.22% 0.04% 0.05% 0.07% 0.10% 0.09% 94.02% 90.70% 111.86% 136.44% 84.43% $21.33 $20.50 $19.60 $16.25 $13.42

2017

2016

2015

2014

2013

$1,569

$1,719

$1,183

$335

$–

101

116

84

29

–

0.13%

0.13%

0.15%

0.13%

0.23%

0.13% 0.13% 0.15% 0.13% 0.23% 0.04% 0.05% 0.07% 0.10% 0.09% 94.02% 90.70% 111.86% 136.44% 84.43% $15.55 $14.86 $14.15 $11.61 $–

(1) This information is derived from the Fund’s audited annual financial statements. 2017, 2016, 2015, 2014 and 2013 balances are stated in IFRS. Under IFRS, the net asset per unit presented in the financial statements is the same as the net asset value calculated for fund pricing purposes. (2) Net assets per unit and distributions per unit are based on the actual number of units outstanding for the relevant series at the relevant time. The increase/decrease in net assets from operations per unit is based on the weighted average number of units outstanding for the relevant series over the fiscal year. (3) Distributions are automatically reinvested in additional units of the Fund, unless the unitholder withdraws from the automatic reinvestment plan by providing written notice to us. (4) This information is provided as at December 31 of the year shown. (5) MER is based on total expenses (excluding distributions, commissions and other portfolio transaction costs) for the stated period and is expressed as an annualized percentage of daily average net asset value during the year. The MER may vary from one mutual fund to another and from one series of units to another. We have

4

HSBC U.S. Equity Fund waived or absorbed certain fees and expenses otherwise payable by the Fund. The amount of expenses absorbed or waived is at the discretion of and can be terminated at any time by us.

Year-by-Year Returns Years ended December 31 The following bar charts show the Fund’s performance for each of the years shown, and illustrate how the Fund’s performance changed from year to year. In percentage terms, the bar charts show how much an investment made on the first day of each financial year would have grown or decreased by the last day of each financial year.

(6) The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the year. (7) The Fund’s portfolio turnover rate indicates how actively the Fund’s portfolio advisor manages its portfolio investments. A portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the year. The higher the Fund’s portfolio turnover rate in a year, the greater the trading costs payable by the Fund in the year, and the greater the chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high turnover rate and the performance of the Fund. The rate is calculated based on the lesser of purchases or sales of securities divided by the average weighted market value of the portfolio securities, excluding short-term securities.

Annual Returns – Investor Series 60% 43.9% 40% 19.8% 20.0%

20%

9.1%

8.7%

7.5%

7.1%

6.2%

0% -1.7% -20%

Management Fees

-40% -30.0%

For the year ended December 31, 2017, the Fund paid us management fees of $3,747,868. The management fee for each series is calculated as a percentage of the daily net asset value for that series. The fees are reduced, where required, so that these fees do not duplicate fees payable by mutual funds in which the Fund invests for the same service.

-60%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Annual Returns – Advisor Series 60% 43.9%

The Fund’s management fees were used by us to pay costs for managing the investment portfolio, providing investment analysis and recommendations, making investment decisions, making brokerage arrangements for the purchase and sale of the investment portfolio and providing other services. The management fees also funded commission payments and other compensation to sales representatives and registered dealers and brokers (collectively “distribution costs”), including HSBC Investment Funds (Canada) Inc., for units of the Fund bought and held by unitholders. Finally, we used management fees to pay for additional marketing and distribution services to the Fund.

40% 19.7% 19.4%

20%

9.1%

8.7%

7.3%

7.1%

5.7%

0% -1.7% -20% -40% -30.0% -60%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Annual Returns – Premium Series

For the year ended December 31, 2017, approximately 46% of the total management fees collected from all HSBC Mutual Funds were used to fund distribution costs. In comparison, for the Fund, such distribution costs represented 41% of the management fees collected. This may vary by series depending on the assets invested in each of the series.

60% 50%

44.7%

40% 30% 20.4% 20.7%

20%

Past Performance

7.7%

10%

The performance information shown assumes that all distributions made by the Fund in the years shown were reinvested in additional securities of the Fund. The performance information does not take into account sales, redemption, distribution, optional charges or expenses you may be charged outside of the Fund or the effect of any income tax you may have to pay as a result of your investment in the Fund that would have reduced returns or performance. The performance of different fund series may vary for a number of reasons, including differences in management fees and expenses. The Fund’s past performance does not necessarily indicate how it will perform in the future.

8.1%

6.8%

0% -10%

5

-1.2% Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2011 2012 2013 2014 2015 2016 2017

HSBC U.S. Equity Fund Annual Returns – Manager Series

InstitutionalSeries

60%

45.5% 1 Year

40% 21.1% 20.9%

20%

10.3%

9.9%

0%

8.4%

8.2%

7.0%

HSBC U.S. Equity Fund

8.47% 13.43%

15.79%

Russell 1000 Index (C$)

13.69% 14.18%

16.20%

Premium Series

-0.6%

-20% 1 Year

-40% -29.3% -60%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

30%

22.6% 11.4%

9.8%

10%

3 Year

Since 5 Year Inception

HSBC U.S. Equity Fund

6.80% 11.70% 19.42%

15.30%

Russell 1000 Index (C$)

13.69% 14.18% 21.15%

18.02%

(1) Due to the fact that several benchmark indices are only available on a monthly basis, the performance data for the HSBC Funds and the benchmark indices are calculated using values from the first month-end date each fund was in operation.

Annual Returns – Institutional Series 20%

Since 3 Year Inception

(2) For investment commentary and relative performance of the Fund compared to its benchmark, please refer to the Results of Operations section of this report.

8.5%

0%

Summary of Investment Portfolio

-10%

As at December 31, 2017

-20% -30% -40%

*

Sector Mix

-28.5%

Percentage of NAV

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010* 2011* 2012* 2013* 2014* 2015 2016 2017 Information Technology Financials Healthcare Consumer Discretionary Industrials Consumer Staples Materials Energy Utilities Telecommunication Services Real Estate Cash & Equivalents Total

The Institutional Series was fully redeemed during 2010. There were no unitholders during the years of 2011 to 2014; however, the series remains in offer at period-end.

Annual Compound Returns Year ended December 31, 2017 The following tables shows the Fund’s historical annual compound total returns for the years indicated, compared with the benchmark index, the Russell 1000 Index (in Canadian dollars), over the same period. This index measures the performance of large-cap stocks of the US equity universe, representing a broad range of industries. This index is tracked in US dollars and was converted to Canadian dollars.

Investor Series 1 Year HSBC U.S. Equity Fund Russell 1000 Index (C$)

5 Year

10 Year

6.20% 11.07% 18.75%

3 Year

7.51%

13.69% 14.18% 21.15% 11.22%

Advisor Series 1 Year HSBC U.S. Equity Fund Russell 1000 Index (C$)

5 Year

10 Year

5.75% 10.65% 18.46%

3 Year

7.39%

13.69% 14.18% 21.15% 11.22%

Manager Series 1 Year HSBC U.S. Equity Fund Russell 1000 Index (C$)

5 Year

10 Year

7.02% 11.88% 19.80%

3 Year

8.59%

13.69% 14.18% 21.15% 11.22%

6

25.75% 22.71% 12.27% 10.70% 8.39% 6.81% 5.12% 5.07% 1.71% 0.68% 0.57% 0.22% 100.00%

HSBC U.S. Equity Fund Top 25 Holdings Percentage of NAV Apple Inc. Microsoft Corp. Facebook Inc. McDonald’s Corp. CVS Health Corp. Johnson & Johnson Popular Inc. The Hanover Insurance Group Inc. Amazon.com Inc. Exxon Mobil Corp. Alphabet Inc., Class A Alphabet Inc. Capital One Financial Corp. Franklin Resources Inc. Assured Guaranty Ltd. Philip Morris International Inc. Merck & Co., Inc. JPMorgan Chase & Co. FMC Corp. Honeywell International Inc. Vail Resorts Inc. PepsiCo Inc. AXIS Capital Holdings Ltd. Chevron Corp. Becton Dickinson and Co. Total of Top 25 Holdings

4.80% 2.92% 2.53% 1.94% 1.51% 1.46% 1.43% 1.43% 1.42% 1.34% 1.28% 1.27% 1.22% 1.10% 1.03% 1.02% 1.00% 0.99% 0.98% 0.96% 0.92% 0.88% 0.86% 0.82% 0.80% 35.91%

The Summary of Investment Portfolio may change due to ongoing portfolio transactions of the Fund, and is available quarterly.

7

For more information

How to reach us

You can find more information about HSBC Mutual Funds in the Fund’s Simplified Prospectus, Annual Information Form, Annual and Semi-Annual Report and Fund Facts. You can get a copy of these documents, as well as the Fund’s Financial Statements, at no cost by calling 1-888-390-3333, by contacting your authorized dealer or by visiting our website at www.hsbc.ca/investment-resources.

HSBC Global Asset Management (Canada) Limited

These documents and other information about the Fund, such as information circulars and material contracts, are also available at www.sedar.com. Copies of the Annual Report and Semi-Annual Report, Simplified Prospectus, Annual Information Form, Annual and Interim Management Report of Fund Performance and Fund Facts are available on our website at www.hsbc.ca/investment-resources.

Vancouver 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8 Toronto Suite 300, 70 York Street Toronto, ON M5J 1S9 Toll-free: 1-888-390-3333 Fax: 604-669-2756 Email: [email protected] Website: www.hsbc.ca/investment-resources

A NOTE ON FORWARD-LOOKING STATEMENTS This report may contain forward-looking statements about the Fund, including its strategy, expected performance and condition. Forward-looking statements include statements that are predictive in nature that depend upon or refer to future events or conditions, or that include words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates” or negative versions thereof and similar expressions. In addition, any statement that may be made concerning future performance, strategies or prospects, and possible future Fund action, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the Fund and economic factors. Forward-looking statements are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied in any forward-looking statements made by the Fund. Any number of important factors could contribute to these digressions, including, but not limited to, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, and catastrophic events. We stress that the above-mentioned list of important factors is not exhaustive. We encourage you to consider these and other factors carefully before making any investment decisions and we urge you to avoid placing undue reliance on forward-looking statements. Further, you should be aware of the fact that the Fund has no specific intention of updating any forward-looking statements, whether as a result of new information, future events or otherwise. Sources: HSBC Global Asset Management (Canada) Limited, Bloomberg, Bank of Canada.

Issued by HSBC Global Asset Management (Canada) Limited

(2018-03) DFS

Unauthorized reproduction, distribution, transmission or publication without our prior written consent is strictly prohibited.

HSBC European Fund Annual Management Report of Fund Performance for the year ended December 31, 2017

◆

HSBC European Fund Management Discussion of Fund Performance In this document, you and your refer to the unitholder of the Fund; we, us and our refer to HSBC Global Asset Management (Canada) Limited; and the Fund refers to the HSBC European Fund.

This Fund is suitable for long-term investors who want to add the growth potential of European companies to their portfolios. Investors in this Fund should have a long-term investment time horizon and a medium tolerance for risk in their returns.

We are the manager, trustee and primary investment advisor of the Fund. We have entered into a sub-advisory agreement with HSBC Global Asset Management (France), under which HSBC Global Asset Management (France) provides investment advice and portfolio management services to the Fund. For an explanation of the relationship between us and the sub-advisor, see the section Selection of Sub-Advisors in the Fund’s Simplified Prospectus.

Results of Operations As of December 31, 2017, the Fund’s net assets increased by 4.4% to $42.5 million from $40.7 million at the end of 2016. Of this increase, a $6.1 million gain was attributable to investment performance and $4.3 million was attributable to net withdrawals from the Fund.

Investment Performance The HSBC European Fund (Investor Series) rose 16.42% for the 12-month period ending December 31, 2017, while the benchmark MSCI Europe Net Index (C$) rose 17.26% over the same period.

Introduction This Annual Management Report of Fund Performance contains financial highlights but does not contain the complete annual financial statements of the investment fund. You may obtain a copy of the Fund’s annual financial statements at your request, at no cost, by calling us toll-free at 1-888-390-3333, by visiting our website at www.hsbc.ca/investment-resources, by visiting the SEDAR website at www.sedar.com or by writing to us at:

The Fund’s overweight positions in commercial and professional services, materials and transportation had the strongest positive impact on performance. Underweight positions in sectors with high valuations (such as consumer durables and semiconductors) and overweight positions in telecommunications and media weighed heavily on performance. Overall, the Fund’s sector allocation was detrimental to relative performance.

Corporate Secretary HSBC Global Asset Management (Canada) Limited 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8

Globally, the Fund’s stock selection was positive and more than compensated for sector allocation. In terms of stock selection, positive contributions came from cyclicals, including DSM, Smurfit Kappa, Volvo and Rio Tinto. The Fund also held a position in Atkins, which was bought out by SNC-Lavalin at a premium of 40%. Stock selection in the energy sector (Tullow Oil) and in media (WPP and Technicolor) detracted from performance.

You may also contact us using one of these methods to request a copy of the Fund’s interim financial report, proxy voting policies and procedures, proxy voting disclosure record or quarterly statement of investment portfolio.

Investment Objective and Strategies The fundamental investment objective of this Fund is to achieve long-term capital growth.

Recent Developments

To achieve its objectives, the Fund invests primarily in equities and equity-related securities issued by large, established companies domiciled in Europe. These companies are primarily from the United Kingdom, France, Germany, Italy and other European Union member nations. The Fund is broadly diversified across industries and countries in the region. To maintain a diversified portfolio of holdings, the Fund will invest in companies from a broad range of industries through common shares, preferred shares, rights, special warrants, American depositary receipts and global depositary receipts. The Fund may also invest in large, established companies domiciled in emerging market countries in Europe. A portion of the Fund may be in the form of cash or cash equivalents.

The portfolio management team has maintained a disciplined investment process, investing in liquid names with an attractive combination of profitability and valuation. Proprietary fundamental research is used to confirm investment attractiveness. The Fund remains overweight in cyclical sectors (such as industrials and materials), financials and telecoms, and is underweight in utilities, real estate, consumer staples and consumer discretionary (mainly consumer durables). From an asset-class perspective, equities are seen as more attractive than bonds or cash. However, heightened volatility is expected in equity markets given uncertainties in the global economy, divergence of monetary policy, currency and commodity price volatility and geopolitical tensions. The events and uncertainties following the UK’s European Union referendum will continue to contribute to this volatility.

Risk The risks of investing in this Fund remain as discussed in the Simplified Prospectus. During the year, there were no material changes to the Fund that affected the overall risk level of the Fund. 1

HSBC European Fund down due to the increase/decrease in net assets from operations being based on average units outstanding during the year and all other numbers being based on actual units outstanding at the relevant point in time.

Related Party Transactions We, on behalf of the Fund, or the Fund Manager, may, from time to time, enter into transactions or arrangements with or involving other members of the HSBC Group or other people or companies related or connected to us or the Fund. To proceed with the transactions, the Fund relies on the positive recommendation of the Fund’s Independent Review Committee. A condition of this positive recommendation is that the transactions are performed in accordance with our policy on Related Party Transactions. For more general information on persons related to the Fund and the types of potential transactions, see the Fund’s Simplified Prospectus.

HSBC European Fund – Investor Series – Net Assets per Unit(1) Years ended December 31 2017 Net assets per unit, beginning of year (2)

The following is a summary of current transactions and arrangements with entities that are related to us or the Fund.

Manager, Trustee and Investment Advisor We are the manager, trustee and primary investment advisor of the Fund. As manager, we manage the overall business and operations of the Fund. As trustee, we hold legal title to the property of the Fund on your behalf. As primary investment advisor, we provide investment advice and portfolio management services to the Fund. We receive a fee from the Fund for these services based on assets under management, calculated daily and paid monthly. We have entered into a sub-advisory agreement with HSBC Global Asset Management (France), a related sub-advisor, under which HSBC Global Asset Management (France) provides investment advice and portfolio management services to the Fund. We pay HSBC Global Asset Management (France) a fee based on assets under management, calculated daily and paid quarterly. For more information on our ability to hire sub-advisors, see the section Organization and Management of the HSBC Mutual Funds in the Fund’s Simplified Prospectus.

2016

2015

2014

2013

$25.98 $28.61 $24.50 $24.79 $18.72

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.79 (0.71) 1.95 2.29

0.72 (0.62) 2.37 (5.15)

0.74 (0.68) 1.30 2.92

0.77 (0.60) 2.25 (2.63)

0.58 (0.52) 1.16 4.84

Total increase (decrease) from operations (2)

$4.32

$(2.68)

$4.28

$(0.21)

$6.06

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– (0.06) – –

– (0.14) – –

– (0.11) – –

– (0.17) – –

– (0.04) – –

Total annual distributions (2,3)

$(0.06) $(0.14) $(0.11) $(0.17) $(0.04)

Net assets per unit at December 31 of year shown (2)

$30.19 $25.98 $28.61 $24.50 $24.76

Ratios and Supplemental Data Years ended December 31 2017 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

Distribution Services The Fund is distributed through us, HSBC Investment Funds (Canada) Inc. (our wholly owned subsidiary and affiliate) and HSBC Securities (Canada) Inc. (an affiliate) directly or through its division, HSBC InvestDirect. We pay distribution and servicing fees to them based on the amount of assets held in the investor’s account, and additionally, in some cases, on the amount of the initial purchase. If you hold units of this Fund and/or other HSBC Mutual Funds in a registered plan with HSBC Investment Funds (Canada) Inc., they may charge you an annual fee to cover the annual administration costs of the plan. We permit HSBC Investment Funds (Canada) Inc. to collect these fees by redeeming sufficient units of the Fund with the highest market value in your registered plan.

Financial Highlights The following tables show selected key financial information about the Fund and are intended to help you understand the Fund’s financial performance for the past five years. This information is derived from the Fund’s audited annual financial statements. The information in the following tables is based on prescribed regulations, and, as a result, is not expected to add 2

$35,634

2016

2015

2014

2013

$34,746 $42,693 $39,841 $40,624

1,181

1,337

1,492

1,626

1,639

2.47%

2.41%

2.44%

2.40%

2.43%

2.47% 2.41% 2.44% 2.40% 2.43% 0.22% 0.36% 0.14% 0.17% 0.12% 44.82% 105.18% 45.64% 50.18% 27.61% $30.19 $25.98 $28.61 $24.50 $24.79

HSBC European Fund HSBC European Fund – Advisor Series – Net Assets per Unit(1)

HSBC European Fund – Premium Series – Net Assets per Unit(1)

Years ended December 31

Years ended December 31 2017

Net assets per unit, beginning of year (2)

2016

2015

2014

2013

2017

2016

2015

2014

2013

$9.31

Net assets per unit, beginning of year (2)

0.39 (0.30) 1.07 (1.49)

0.27 (0.26) 0.58 2.53

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.43 (0.33) 1.04 1.34

0.45 (0.29) 1.46 (3.16)

0.46 (0.31) 0.70 1.48

0.47 (0.27) 1.42 (1.97)

0.35 (0.24) 0.70 3.01

$(0.33)

$3.12

Total increase (decrease) from operations (2)

$2.48

$(1.54)

$2.33

$(0.35)

$3.82

– (0.03) – –

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– (0.14) – –

– (0.17) – –

– (0.16) – –

– (0.19) – –

– (0.09) – –

Total annual distributions (2,3)

$(0.03) $(0.08) $(0.06) $(0.08) $(0.03)

Total annual distributions (2,3)

$(0.14) $(0.17) $(0.16) $(0.19) $(0.09)

Net assets per unit at December 31 of year shown (2)

$15.55 $13.42 $14.19 $12.19 $12.32

Net assets per unit at December 31 of year shown (2)

$18.02 $15.50 $17.08 $14.62 $14.77

$13.42 $14.19 $12.19 $12.33

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.42 (0.40) 1.05 1.20

0.43 (0.04) 1.08 (2.81)

0.37 (0.37) 0.63 1.37

Total increase (decrease) from operations (2)

$2.27

$(1.34)

$2.00

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– (0.03) – –

– (0.08) – –

– (0.06) – –

– (0.08) – –

$15.50 $17.08 $14.62 $14.79 $11.15

Ratios and Supplemental Data

Ratios and Supplemental Data

Years ended December 31

Years ended December 31

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2017

2016

2015

2014

2013

$28

$41

$103

$80

$142

2

3

7

7

11

2.73%

0.30%

2.70%

2.40%

2.40%

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

6.38% 5.29% 4.03% 2.40% 2.40% 0.22% 0.36% 0.14% 0.17% 0.12% 44.82% 105.18% 45.64% 50.18% 27.61% $15.55 $13.42 $14.19 $12.19 $12.33

3

2017

2016

2015

2014

2013

$6,596

$5,616

$7,248

$4,809

$1,919

366

362

424

329

130

1.94%

1.86%

1.87%

1.82%

1.85%

1.94% 1.86% 1.87% 1.82% 1.85% 0.22% 0.36% 0.14% 0.17% 0.12% 44.82% 105.18% 45.64% 50.18% 27.61% $18.02 $15.50 $17.08 $14.62 $14.79

HSBC European Fund HSBC European Fund – Manager Series – Net Assets per Unit(1)

HSBC European Fund – Institutional Series – Net Assets per Unit(1)

Years ended December 31

Years ended December 31 2017

Net assets per unit, beginning of year (2)

*

2016

$9.87 $10.76

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses) Total increase (decrease) from operations (2)

2015

2014 2013

$9.24 $10.00

2017 Net assets per unit, beginning of year (2)

$–

2016

$10.27 $11.33

2015

2014 2013

$9.71 $10.00

$–

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.32 (0.06) 0.80 0.90

0.32 (0.04) 1.03 (2.33)

0.25 (0.04) 0.50 1.04

0.30 (0.02) 0.96 (1.41)

– – – –

0.03 0.03 0.14 0.02

0.26 (0.16) 0.66 (3.34)

0.28 (0.17) 0.46 1.02

0.10 (0.07) 0.66 (1.17)

– – – –

$0.22

$(2.58)

$1.59

$(0.48)

$–

Total increase (decrease) from operations (2)

$1.96

$(1.02)

$1.75

$(0.17)

$–

– (0.17) – –

– – – –

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– (0.29) – –

– (0.28) – –

– (0.29) – –

– (0.28) – –

– – – –

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– – – –

Total annual distributions (2,3)

$–

$(0.16) $(0.16) $(0.17)

$–

Total annual distributions (2,3)

$(0.29) $(0.28) $(0.29) $(0.28)

$–

Net assets per unit at December 31 of year shown (2)

$–

$9.87 $10.76

$–

Net assets per unit at December 31 of year shown (2)

$11.90 $10.27 $11.33

$–

– (0.16) – –

– (0.16) – –

$9.24

Ratios and Supplemental Data

Ratios and Supplemental Data

Years ended December 31

Years ended December 31 *

2016

2015

2014

2013

$–

$11

$51

$39

$–

–

1

5

4

–

0.00%

1.62%

1.61%

1.32%

n/a

2017 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

*

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

8.78% 6.00% 2.51% 1.32% n/a 0.22% 0.36% 0.14% 0.17% 0.12% 44.82% 105.18% 45.64% 50.18% 27.61% $– $9.87 $10.76 $9.24 $–

$9.71

2017

2016

2015

2014

2013

$287

$328

$761

$385

$–

24

32

67

40

–

0.54%

0.39%

0.39%

0.22%

–

0.56% 0.39% 0.39% 0.22% – 0.22% 0.36% 0.14% 0.17% 0.12% 44.82% 105.18% 45.64% 50.18% 27.61% $11.90 $10.27 $11.33 $9.71 $–

(1) This information is derived from the Fund’s audited annual financial statements. 2017, 2016, 2015, 2014 and 2013 balances are stated in IFRS. Under IFRS, the net asset per unit presented in the financial statements is the same as the net asset value calculated for fund pricing purposes.

The Manager Series was fully redeemed during 2017; however, it remains in offer as at period-end.

(2) Net assets per unit and distributions per unit are based on the actual number of units outstanding for the relevant series at the relevant time. The increase/decrease in net assets from operations per unit is based on the weighted average number of units outstanding for the relevant series over the fiscal year. (3) Distributions are automatically reinvested in additional units of the Fund, unless the unitholder withdraws from the automatic reinvestment plan by providing written notice to us. (4) This information is provided as at December 31 of the year shown. (5) MER is based on total expenses (excluding distributions, commissions and other portfolio transaction costs) for the stated period and is expressed as an annualized percentage of daily average net asset value during the year. The MER may vary from one mutual fund to another and from one series of units to another. We have

4

HSBC European Fund waived or absorbed certain fees and expenses otherwise payable by the Fund. The amount of expenses absorbed or waived is at the discretion of and can be terminated at any time by us.

Year-by-Year Returns Years ended December 31 The following bar charts show the Fund’s performance for each of the years shown, and illustrate how the Fund’s performance changed from year to year. In percentage terms, the bar charts show how much an investment made on the first day of each financial year would have grown or decreased by the last day of each financial year.

(6) The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the year. (7) The Fund’s portfolio turnover rate indicates how actively the Fund’s portfolio advisor manages its portfolio investments. A portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the year. The higher the Fund’s portfolio turnover rate in a year, the greater the trading costs payable by the Fund in the year, and the greater the chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high turnover rate and the performance of the Fund. The rate is calculated based on the lesser of purchases or sales of securities divided by the average weighted market value of the portfolio securities, excluding short-term securities.

Annual Returns – Investor Series 40% 32.6% 30% 17.3% 16.9% 16.4% 15.3% 20% 10% 0% -0.5% -3.8% -10% -8.7% -13.0% -20% -30% -40% -37.0% -50% Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Management Fees For the year ended December 31, 2017, the Fund paid us management fees of $782,286. The management fee for each series is calculated as a percentage of the daily net asset value for that series. The fees are reduced, where required, so that these fees do not duplicate fees payable by mutual funds in which the Fund invests for the same service.

Annual Returns – Advisor Series 40% 32.6% 30% 16.9% 16.9% 16.1% 15.3% 20% 10% 0% -0.5% -3.8% -10% -4.9% -13.0% -20% -30% -40% -37.1% -50% Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

The Fund’s management fees were used by us to pay costs for managing the investment portfolio, providing investment analysis and recommendations, making investment decisions, making brokerage arrangements for the purchase and sale of the investment portfolio and providing other services. The management fees also funded commission payments and other compensation to sales representatives and registered dealers and brokers (collectively “distribution costs”), including HSBC Investment Funds (Canada) Inc., for units of the Fund bought and held by unitholders. Finally, we used management fees to pay for additional marketing and distribution services to the Fund.

Annual Returns – Premium Series

For the year ended December 31, 2017, approximately 46% of the total management fees collected from all HSBC Mutual Funds were used to fund distribution costs. In comparison, for the Fund, such distribution costs represented 40% of the management fees collected. This may vary by series depending on the assets invested in each of the series.

40%

33.4%

30% 18.0%

20%

17.9%

17.1%

10% 0.1%

0%

Past Performance The performance information shown assumes that all distributions made by the Fund in the years shown were reinvested in additional securities of the Fund. The performance information does not take into account sales, redemption, distribution, optional charges or expenses you may be charged outside of the Fund or the effect of any income tax you may have to pay as a result of your investment in the Fund that would have reduced returns or performance. The performance of different fund series may vary for a number of reasons, including differences in management fees and expenses. The Fund’s past performance does not necessarily indicate how it will perform in the future.

-10% -20%

5

-12.4%

-8.2%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2011 2012 2013 2014 2015 2016 2017

HSBC European Fund Annual Returns – Manager Series

Premium Series

30% 18.2%

16.5%

20%

1 Year

10% 0% -2.8%

HSBC European Fund

17.10% 8.22% 11.09%

9.95%

MSCI Europe Net Index (C$)

17.26% 9.52% 12.42%

11.23%

-30% -40% -36.3% -50% Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012* 2013* 2014* 2015 2016 2017*

(2) For investment commentary and relative performance of the Fund compared to its benchmark, please refer to the Results of Operations section of this report.

-6.8%

-12.0%

-20%

Summary of Investment Portfolio

The Manager Series was fully redeemed during 2012. There were no unitholders during the years of 2013 and 2014. This series was fully redeemed during the first half of 2017; however, the series remains in offer as at period-end.

As at December 31, 2017

Sector Mix

Annual Returns – Institutional Series

Percentage of NAV

30%

19.7%

17.8%

20%

18.7%

Financials Industrials Materials Healthcare Consumer Staples Energy Consumer Discretionary Telecommunication Services Information Technology Utilities Cash & Equivalents Total

10% 0% -10%

-6.9%

-20% -30% -40% -35.6% -50%

*

Since 5 Year Inception

(1) Due to the fact that several benchmark indices are only available on a monthly basis, the performance data for the HSBC Funds and the benchmark indices are calculated using values from the first month-end date each fund was in operation.

-10%

*

3 Year

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010* 2011* 2012* 2013* 2014* 2015 2016 2017

The Institutional Series was fully redeemed during 2010. There were no unitholders during the years of 2011 to 2014.

22.58% 16.88% 11.33% 10.77% 9.68% 7.71% 6.50% 6.18% 3.82% 2.36% 2.19% 100.00%

Geographic Mix

Annual Compound Returns

Percentage of NAV

Year ended December 31, 2017 The following tables show the Fund’s historical annual compound total returns for the years indicated, compared with the benchmark index, the MSCI Europe Net Index (in Canadian dollars), over the same period. This index measures the performance of stocks traded in European markets. This index is tracked in US dollars and was converted to Canadian dollars.

United Kingdom France Netherlands Germany Switzerland Ireland Denmark Italy Spain Luxembourg Belgium Sweden Cash & Equivalents Total

Investor Series 1 Year

3 Year

5 Year 10 Year

HSBC European Fund

16.42% 7.61% 10.45%

1.57%

MSCI Europe Net Index (C$)

17.26% 9.52% 12.42%

3.79%

Advisor Series 1 Year

3 Year

5 Year 10 Year

HSBC European Fund

16.08% 8.88% 11.24%

1.92%

MSCI Europe Net Index (C$)

17.26% 9.52% 12.42%

3.79%

InstitutionalSeries 1 Year

Since 3 Year Inception

HSBC European Fund

18.68% 9.77%

7.80%

MSCI Europe Net Index (C$)

17.26% 9.52%

7.59%

6

23.90% 23.65% 11.94% 11.45% 10.05% 4.27% 3.84% 3.75% 2.00% 1.04% 1.01% 0.91% 2.19% 100.00%

HSBC European Fund Top 25 Holdings Percentage of NAV Royal Dutch Shell PLC, Class A Novartis AG Enel SpA Société Générale SA Koninklijke DSM NV AstraZeneca PLC ING Groep NV AXA SA Cap Gemini SA British American Tobacco PLC Banco Santander SA Smurfit Kappa Group PLC Deutsche Post AG HeidelbergCement AG Prudential PLC BP PLC Vodafone Group PLC Heineken NV Allianz SE Rio Tinto PLC Cie de Saint-Gobain Danske Bank A/S Atos Teleperformance Total SA Total of Top 25 Holdings

2.93% 2.50% 2.36% 2.27% 2.26% 2.23% 2.17% 2.10% 2.10% 2.07% 2.00% 2.00% 1.97% 1.92% 1.90% 1.88% 1.86% 1.85% 1.83% 1.81% 1.79% 1.73% 1.72% 1.69% 1.66% 50.60%

The Summary of Investment Portfolio may change due to ongoing portfolio transactions of the Fund, and is available quarterly.

7

For more information

How to reach us

You can find more information about HSBC Mutual Funds in the Fund’s Simplified Prospectus, Annual Information Form, Annual and Semi-Annual Report and Fund Facts. You can get a copy of these documents, as well as the Fund’s Financial Statements, at no cost by calling 1-888-390-3333, by contacting your authorized dealer or by visiting our website at www.hsbc.ca/investment-resources.

HSBC Global Asset Management (Canada) Limited

These documents and other information about the Fund, such as information circulars and material contracts, are also available at www.sedar.com. Copies of the Annual Report and Semi-Annual Report, Simplified Prospectus, Annual Information Form, Annual and Interim Management Report of Fund Performance and Fund Facts are available on our website at www.hsbc.ca/investment-resources.

Vancouver 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8 Toronto Suite 300, 70 York Street Toronto, ON M5J 1S9 Toll-free: 1-888-390-3333 Fax: 604-669-2756 Email: [email protected] Website: www.hsbc.ca/investment-resources

A NOTE ON FORWARD-LOOKING STATEMENTS This report may contain forward-looking statements about the Fund, including its strategy, expected performance and condition. Forward-looking statements include statements that are predictive in nature that depend upon or refer to future events or conditions, or that include words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates” or negative versions thereof and similar expressions. In addition, any statement that may be made concerning future performance, strategies or prospects, and possible future Fund action, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the Fund and economic factors. Forward-looking statements are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied in any forward-looking statements made by the Fund. Any number of important factors could contribute to these digressions, including, but not limited to, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, and catastrophic events. We stress that the above-mentioned list of important factors is not exhaustive. We encourage you to consider these and other factors carefully before making any investment decisions and we urge you to avoid placing undue reliance on forward-looking statements. Further, you should be aware of the fact that the Fund has no specific intention of updating any forward-looking statements, whether as a result of new information, future events or otherwise. Sources: HSBC Global Asset Management (Canada) Limited, Bloomberg, MSCI, Bank of Canada. Neither MSCI nor any other party involved in or related to compiling, computing or creating the MSCI data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any of such data. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in or related to compiling, computing or creating the data have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages. No further distribution or dissemination of the MSCI data is permitted without MSCI’s express written consent.

Issued by HSBC Global Asset Management (Canada) Limited

(2018-03) DFS

Unauthorized reproduction, distribution, transmission or publication without our prior written consent is strictly prohibited.

HSBC AsiaPacific Fund Annual Management Report of Fund Performance for the year ended December 31, 2017

◆

HSBC AsiaPacific Fund Management Discussion of Fund Performance This Fund is suitable for investors seeking long-term capital appreciation from equity securities issued in non-North American markets. Investors in this Fund should have a long-term investment time horizon and a medium to high tolerance for risk in their returns.

In this document, you and your refer to the unitholder of the Fund; we, us and our refer to HSBC Global Asset Management (Canada) Limited; and the Fund refers to the HSBC AsiaPacific Fund. We are the manager, trustee and primary investment advisor of the Fund. We have entered into a sub-advisory agreement with HSBC Global Asset Management (Hong Kong) Limited, under which HSBC Global Asset Management (Hong Kong) Limited provides investment advice and portfolio management services to the Fund. For an explanation of the relationship between us and the sub-advisor, see the section Selection of Sub-Advisors in the Fund’s Simplified Prospectus.

Results of Operations As of December 31, 2017, the Fund’s net assets increased by 20.9% to $42.8 million from $35.4 million at the end of 2016. Of this increase, a $9.5 million gain was attributable to investment performance and $2.1 million was attributable to net withdrawals from the Fund.

Investment Performance

Introduction

The HSBC AsiaPacific Fund (Investor Series) rose 27.48% for the 12-month period ending December 31, 2017, while the benchmark MSCI All Country Asia Pacific ex-Japan Net Index (C$) rose 27.99% over the same period.

This Annual Management Report of Fund Performance contains financial highlights but does not contain the complete annual financial statements of the investment fund. You may obtain a copy of the Fund’s annual financial statements at your request, at no cost, by calling us toll-free at 1-888-390-3333, by visiting our website at www.hsbc.ca/investment-resources, by visiting the SEDAR website at www.sedar.com or by writing to us at:

Strong stock selection in Taiwan, India, Indonesia and Korea contributed to the Fund’s performance, and country and sector allocation effects were broadly neutral. Asia Pacific equity markets had a strong year, with all markets except Pakistan’s ending the year higher. The region was buoyed by solid economic data from China, an earnings recovery and synchronized global growth. Korea and China were the best-performing markets. Korea shrugged off the region’s geopolitical concerns and performed strongly on the back of rises in the IT sector, with prices and demand for semiconductor and display upgrades helping in particular. India was boosted by the success of the incumbent government in various state elections, a credible Union budget and a state bank recapitalization announcement. In China, the 19th Party Congress in October re-emphasized a focus on quality and balanced economic growth, with policymakers focused on reducing overcapacity and leverage in the economy.

Corporate Secretary HSBC Global Asset Management (Canada) Limited 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8 You may also contact us using one of these methods to request a copy of the Fund’s interim financial report, proxy voting policies and procedures, proxy voting disclosure record or quarterly statement of investment portfolio.

Investment Objective and Strategies The fundamental investment objective of this Fund is to provide long-term capital growth. To achieve its objectives, the Fund invests primarily in equities and equity-related securities issued by large, established companies domiciled in Asia and the Pacific Rim, but excluding Japan. To maintain a diversified portfolio of holdings, the Fund invests in companies from a broad range of industries through common shares, preferred shares, rights, special warrants, American depositary receipts and global depositary receipts. A portion of the Fund may be in the form of cash or cash equivalents.

Recent Developments Asian economies stand to benefit from a synchronized pickup in global economic growth. While there is still uncertainty around issues like potential trade barriers, we expect earnings growth to remain strong against the backdrop of a stronger global economy. Prospects for a continued re-rating of Asian equity markets remain positive. Key risks are local currency volatility and a more aggressive rate-hike cycle in the US. Macro indicators suggest a stable Chinese economy that continues to grow at a solid pace. Potential positive catalysts on the horizon relating to ongoing economic and structural reforms should help support economic growth. In India, the government’s reform agenda is incrementally adding to the country’s growth potential and attractiveness as a destination for capital. The ongoing economic recovery will be a key catalyst going forward. Subsiding macro concerns in Korea will help it attract capital over the long term, while Taiwan continues to benefit from the strong

Risk The risks of investing in this Fund remain as discussed in the Simplified Prospectus. During the year, there were no material changes to the Fund that affected the overall risk level of the Fund.

1

HSBC AsiaPacific Fund tech cycle. ASEAN’s steady growth momentum should support ongoing interest in these markets. Although the market has rallied, valuations in the region remain reasonable.

or other instruments with The Hongkong & Shanghai Banking Corporation Limited, HSBC Securities (Asia) Ltd. or other dealers that are members of the HSBC Group (“Related Brokers”). These Related Brokers may earn commissions or spreads provided that such trades are made on terms and conditions comparable to those offered by or to unrelated parties. During the year, the Fund paid commissions to Related Brokers amounting to $582 (December 31, 2016 – $992).

Related Party Transactions We, on behalf of the Fund, or the Fund Manager, may, from time to time, enter into transactions or arrangements with or involving other members of the HSBC Group or other people or companies related or connected to us or the Fund. To proceed with the transactions, the Fund relies on the positive recommendation of the Fund’s Independent Review Committee. A condition of this positive recommendation is that the transactions are performed in accordance with our policy on Related Party Transactions. For more general information on persons related to the Fund and the types of potential transactions, see the Fund’s Simplified Prospectus.

Financial Highlights The following tables show selected key financial information about the Fund and are intended to help you understand the Fund’s financial performance for the past five years. This information is derived from the Fund’s audited annual financial statements. The information in the following tables is based on prescribed regulations, and, as a result, is not expected to add down due to the increase/decrease in net assets from operations being based on average units outstanding during the year and all other numbers being based on actual units outstanding at the relevant point in time.

The following is a summary of current transactions and arrangements with entities that are related to us or the Fund.

Manager, Trustee and Investment Advisor We are the manager, trustee and primary investment advisor of the Fund. As manager, we manage the overall business and operations of the Fund. As trustee, we hold legal title to the property of the Fund on your behalf. As primary investment advisor, we provide investment advice and portfolio management services to the Fund. We receive a fee from the Fund for these services based on assets under management, calculated daily and paid monthly.

HSBC AsiaPacific Fund – Investor Series – Net Assets per Unit(1) Years ended December 31 2017 Net assets per unit, beginning of year (2)

We have entered into a sub-advisory agreement with HSBC Global Asset Management (Hong Kong) Limited (an affiliate), under which HSBC Global Asset Management (Hong Kong) Limited provides investment advice and portfolio management services to the Fund. We pay HSBC Global Asset Management (Hong Kong) Limited a fee from the Fund based on assets under management, calculated daily and paid quarterly. For more information on our ability to hire sub-advisors, see the section Organization and Management of the HSBC Mutual Funds in the Fund’s Simplified Prospectus.

Distribution Services The Fund is distributed through us, HSBC Investment Funds (Canada) Inc. (our wholly owned subsidiary and affiliate) and HSBC Securities (Canada) Inc. (an affiliate) directly or through its division, HSBC InvestDirect. We pay distribution and servicing fees to them based on the amount of assets held in the investor’s account, and additionally, in some cases, on the amount of the initial purchase. If you hold units of this Fund and/or other HSBC Mutual Funds in a registered plan with HSBC Investment Funds (Canada) Inc., they may charge you an annual fee to cover the annual administration costs of the plan. We permit HSBC Investment Funds (Canada) Inc. to collect these fees by redeeming sufficient units of the Fund with the highest market value in your registered plan.

2016

2015

2014

2013

$14.50 $14.08 $13.60 $12.36 $11.72

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.42 (0.44) 1.90 2.12

0.37 (0.34) 0.66 (0.25)

0.45 (0.37) 1.24 (0.46)

0.44 (0.33) 1.44 (0.15)

0.39 (0.30) 0.31 0.28

Total increase (decrease) from operations (2)

$4.00

$0.44

$0.86

$1.40

$0.68

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– – – –

– (0.05) – –

– (0.33) – –

– (0.11) – –

– (0.07) – –

Total annual distributions (2,3)

$–

Net assets per unit at December 31 of year shown (2)

$(0.05) $(0.33) $(0.11) $(0.07)

$18.49 $14.50 $14.08 $13.60 $12.35

Ratios and Supplemental Data Years ended December 31 2017 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

Related Brokerage Commissions From time to time, the Fund may enter into purchases and sales of securities, derivative instruments, foreign exchange contracts 2

2016

2015

2014

2013

$36,527 $31,259 $33,791 $34,685 $38,102 1,975

2,155

2,400

2,550

3,083

2.60%

2.49%

2.51%

2.49%

2.47%

2.60% 2.49% 2.51% 2.49% 2.47% 0.24% 0.28% 0.21% 0.25% 0.24% 60.27% 64.98% 47.80% 56.07% 58.75% $18.49 $14.50 $14.08 $13.60 $12.36

HSBC AsiaPacific Fund HSBC AsiaPacific Fund – Advisor Series – Net Assets per Unit(1)

HSBC AsiaPacific Fund – Premium Series – Net Assets per Unit(1)

Years ended December 31

Years ended December 31 2017

Net assets per unit, beginning of year (2)

2016

2015

2014

2013

2017 Net assets per unit, beginning of year (2)

$20.41 $18.67 $17.54 $15.85 $15.02

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.60 (0.68) 2.63 2.28

0.93 (0.53) 0.78 (2.70)

0.60 (0.53) 1.77 3.97

0.76 (0.44) 1.88 –

Total increase (decrease) from operations (2)

$4.83

$(1.52)

$5.81

$2.20

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– – – –

Total annual distributions (2,3)

$–

Net assets per unit at December 31 of year shown (2)

2016

2014

2013

$12.74 $12.36 $11.94 $10.85 $10.28

0.45 (0.39) 0.47 0.51

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.37 (0.32) 1.74 1.62

0.32 (0.23) 0.63 (0.16)

0.40 (0.25) 1.15 (0.31)

0.37 (0.23) 1.30 (0.34)

0.33 (0.20) 0.21 0.25

$1.04

Total increase (decrease) from operations (2)

$3.41

$0.56

$0.99

$1.10

$0.59

– (0.07) – –

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– – – –

– (0.11) – –

– (0.35) – –

– (0.16) – –

– (0.12) – –

$(0.05) $(0.13) $(0.07) $(0.07)

Total annual distributions (2,3)

$–

– (0.05) – –

– (0.13) – –

– (0.07) – –

Net assets per unit at December 31 of year shown (2)

$25.97 $20.41 $18.67 $17.54 $15.83

$(0.11) $(0.35) $(0.16) $(0.12)

$16.32 $12.74 $12.36 $11.94 $10.84

Ratios and Supplemental Data

Ratios and Supplemental Data

Years ended December 31

Years ended December 31

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2015

2017

2016

2015

2014

2013

$249

$61

$95

$80

$210

10

3

5

5

13

2.84%

2.80%

2.79%

2.56%

2.53%

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

3.39% 8.86% 5.30% 2.56% 2.53% 0.24% 0.28% 0.21% 0.25% 0.24% 60.27% 64.98% 47.80% 56.07% 58.75% $25.97 $20.41 $18.67 $17.54 $15.85

3

2017

2016

2015

2014

2013

$4,548

$2,781

$2,428

$2,570

$1,838

279

218

196

215

169

2.14%

1.90%

1.95%

1.93%

1.92%

2.14% 1.99% 1.95% 1.93% 1.92% 0.24% 0.28% 0.21% 0.25% 0.24% 60.27% 64.98% 47.80% 56.07% 58.75% $16.32 $12.74 $12.36 $11.94 $10.85

HSBC AsiaPacific Fund HSBC AsiaPacific Fund – Manager Series – Net Assets per Unit(1)

HSBC AsiaPacific Fund – Institutional Series – Net Assets per Unit(1)

Years ended December 31

Years ended December 31 2017

Net assets per unit, beginning of year (2)

2016

2015

2014

2013

2017 Net assets per unit, beginning of year (2)

$22.49 $21.56 $20.87 $18.97 $17.99

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.66 (0.43) 2.99 3.07

0.53 (0.04) 1.11 (0.68)

0.69 (0.36) 1.89 (0.79)

0.67 (0.29) 2.23 (0.22)

Total increase (decrease) from operations (2)

$6.29

$0.92

$1.43

$2.39

2016

2015

2014

2013

$20.28 $19.70 $19.03 $17.30 $16.41

0.60 (0.25) 0.45 0.45

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.60 (0.12) 2.67 3.09

0.53 (0.07) 0.94 (0.13)

0.61 (0.07) 1.64 (0.37)

0.63 (0.06) 2.05 (0.36)

0.60 (0.05) 0.35 0.38

$1.25

Total increase (decrease) from operations (2)

$6.24

$1.27

$1.81

$2.26

$1.28

– (0.32) – –

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– (0.43) – –

– (0.53) – –

– (0.90) – –

– (0.57) – –

– (0.48) – –

Total annual distributions (2,3)

$(0.16) $(0.33) $(0.74) $(0.39) $(0.32)

Total annual distributions (2,3)

$(0.43) $(0.53) $(0.90) $(0.57) $(0.48)

Net assets per unit at December 31 of year shown (2)

$28.79 $22.49 $21.56 $20.87 $18.95

Net assets per unit at December 31 of year shown (2)

$25.97 $20.28 $19.70 $19.03 $17.28

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– (0.16) – –

– (0.33) – –

– (0.74) – –

– (0.39) – –

Ratios and Supplemental Data

Ratios and Supplemental Data

Years ended December 31

Years ended December 31

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2017

2016

2015

2014

2013

$82

$62

$32

$30

$30

3

3

1

1

2

1.64%

0.21%

1.63%

1.39%

1.36%

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2.79% 3.97% 3.35% 1.39% 1.36% 0.24% 0.28% 0.21% 0.25% 0.24% 60.27% 64.98% 47.80% 56.07% 58.75% $28.79 $22.49 $21.56 $20.87 $18.97

2017

2016

2015

2014

2013

$1,387

$1,247

$1,539

$1,303

$1,360

53

62

78

68

79

0.48%

0.36%

0.35%

0.31%

0.28%

0.48% 0.36% 0.35% 0.31% 0.28% 0.24% 0.28% 0.21% 0.25% 0.24% 60.27% 64.98% 47.80% 56.07% 58.75% $25.97 $20.28 $19.70 $19.03 $17.30

(1) This information is derived from the Fund’s audited annual financial statements. 2017, 2016, 2015, 2014 and 2013 balances are stated in IFRS. Under IFRS, the net asset per unit presented in the financial statements is the same as the net asset value calculated for fund pricing purposes. (2) Net assets per unit and distributions per unit are based on the actual number of units outstanding for the relevant series at the relevant time. The increase/decrease in net assets from operations per unit is based on the weighted average number of units outstanding for the relevant series over the fiscal year. (3) Distributions are automatically reinvested in additional units of the Fund, unless the unitholder withdraws from the automatic reinvestment plan by providing written notice to us. (4) This information is provided as at December 31 of the year shown. (5) MER is based on total expenses (excluding distributions, commissions and other portfolio transaction costs) for the stated period and is expressed as an annualized percentage of daily average net asset value during the year. The MER may vary from one mutual fund to another and from one series of units to another. We have

4

HSBC AsiaPacific Fund waived or absorbed certain fees and expenses otherwise payable by the Fund. The amount of expenses absorbed or waived is at the discretion of and can be terminated at any time by us.

Year-by-Year Returns Years ended December 31 The following bar charts show the Fund’s performance for each of the years shown, and illustrate how the Fund’s performance changed from year to year. In percentage terms, the bar charts show how much an investment made on the first day of each financial year would have grown or decreased by the last day of each financial year.

(6) The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the year. (7) The Fund’s portfolio turnover rate indicates how actively the Fund’s portfolio advisor manages its portfolio investments. A portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the year. The higher the Fund’s portfolio turnover rate in a year, the greater the trading costs payable by the Fund in the year, and the greater the chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high turnover rate and the performance of the Fund. The rate is calculated based on the lesser of purchases or sales of securities divided by the average weighted market value of the portfolio securities, excluding short-term securities.

Annual Returns – Investor Series 60% 42.3% 40%

27.5%

20%

11.9%

10.5%

5.6%

10.9%

5.9%

3.4%

0% -20%

Management Fees

-40%

For the year ended December 31, 2017, the Fund paid us management fees of $760,604. The management fee for each series is calculated as a percentage of the daily net asset value for that series. The fees are reduced, where required, so that these fees do not duplicate fees payable by mutual funds in which the Fund invests for the same service.

-60%

-20.2% -39.7% Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Annual Returns – Advisor Series 60% 42.2%

The Fund’s management fees were used by us to pay costs for managing the investment portfolio, providing investment analysis and recommendations, making investment decisions, making brokerage arrangements for the purchase and sale of the investment portfolio and providing other services. The management fees also funded commission payments and other compensation to sales representatives and registered dealers and brokers (collectively “distribution costs”), including HSBC Investment Funds (Canada) Inc., for units of the Fund bought and held by unitholders. Finally, we used management fees to pay for additional marketing and distribution services to the Fund.

40%

27.3%

20%

11.9%

10.5%

5.5%

11.1%

7.2%

9.6%

0% -20% -40% -60%

-19.4% -39.7% Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Annual Returns – Premium Series

For the year ended December 31, 2017, approximately 46% of the total management fees collected from all HSBC Mutual Funds were used to fund distribution costs. In comparison, for the Fund, such distribution costs represented 44% of the management fees collected. This may vary by series depending on the assets invested in each of the series.

40% 28.1%

30% 20%

12.5%

11.5% 6.2%

10%

6.5%

4.0%

0%

Past Performance

-10%

The performance information shown assumes that all distributions made by the Fund in the years shown were reinvested in additional securities of the Fund. The performance information does not take into account sales, redemption, distribution, optional charges or expenses you may be charged outside of the Fund or the effect of any income tax you may have to pay as a result of your investment in the Fund that would have reduced returns or performance. The performance of different fund series may vary for a number of reasons, including differences in management fees and expenses. The Fund’s past performance does not necessarily indicate how it will perform in the future.

-20% -30%

5

-19.3% Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2011 2012 2013 2014 2015 2016 2017

HSBC AsiaPacific Fund Annual Returns – Manager Series

InstitutionalSeries

60%

1 Year

43.7% 40%

28.7%

20%

13.2%

11.9%

6.8%

12.1%

6.8%

5.8%

0%

-60%

27.99% 12.76% 12.14%

6.15%

1 Year

3 Year

Since 5 Year Inception

-39.0%

HSBC AsiaPacific Fund

28.08% 12.35% 10.93%

8.34%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

MSCI AC AsiaPacific ex-Japan Net Index (C$)

27.99% 12.76% 12.14%

10.93%

60%

(1) Due to the fact that several benchmark indices are only available on a monthly basis, the performance data for the HSBC Funds and the benchmark indices are calculated using values from the first month-end date each Fund was in operation.

45.2%

40%

(2) For investment commentary and relative performance of the Fund compared to its benchmark, please refer to the Results of Operations section of this report.

30.2%

20%

14.4%

12.9%

7.9%

13.3%

8.2%

5.6%

0%

Summary of Investment Portfolio

-20%

-60%

5.55%

MSCI AC AsiaPacific ex-Japan Net Index (C$)

-19.4%

Annual Returns – Institutional Series

-40%

5 Year 10 Year

30.18% 14.16% 12.73%

Premium Series

-20% -40%

3 Year

HSBC AsiaPacific Fund

As at December 31, 2017

-18.5% -38.4%

Sector Mix Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Percentage of NAV Information Technology Financials Consumer Discretionary Industrials Materials Telecommunication Services Energy Healthcare Consumer Staples Utilities Cash & Equivalents Total

Annual Compound Returns Year ended December 31, 2017 The following tables show the Fund’s historical annual compound total returns for the years indicated, compared with the benchmark index, the MSCI All Country Asia Pacific ex-Japan Net Index (in Canadian dollars), over the same period. This index measures the performance of a broad range of stocks traded in Asia Pacific markets, excluding Japan. This index is tracked in US dollars and was converted to Canadian dollars.

Investor Series 1 Year

3 Year

5 Year 10 Year

HSBC AsiaPacific Fund

27.48% 11.76% 10.33%

3.31%

MSCI AC AsiaPacific ex-Japan Net Index (C$)

27.99% 12.76% 12.14%

6.15%

Geographic Mix Percentage of NAV China South Korea India Australia Taiwan Hong Kong Cayman Islands Indonesia Singapore Papua New Guinea Luxembourg United States of America Cash & Equivalents Total

Advisor Series 1 Year

3 Year

5 Year 10 Year

HSBC AsiaPacific Fund

27.26% 14.33% 11.88%

4.13%

MSCI AC AsiaPacific ex-Japan Net Index (C$)

27.99% 12.76% 12.14%

6.15%

Manager Series 1 Year

3 Year

5 Year 10 Year

HSBC AsiaPacific Fund

28.70% 13.32% 11.75%

4.54%

MSCI AC AsiaPacific ex-Japan Net Index (C$)

27.99% 12.76% 12.14%

6.15%

28.86% 27.02% 11.02% 7.18% 5.52% 4.95% 4.93% 4.73% 3.84% 2.19% -0.24% 100.00%

6

24.23% 14.45% 12.49% 12.29% 9.70% 9.33% 5.41% 4.06% 3.58% 2.14% 1.49% 1.07% -0.24% 100.00%

HSBC AsiaPacific Fund Top 25 Holdings Percentage of NAV Tencent Holdings Ltd. Samsung Electronics Co., Ltd. AIA Group Ltd. Commonwealth Bank of Australia Taiwan Semiconductor Manufacturing Co., Ltd., ADR Vipshop Holdings Ltd. Glenmark Pharmaceuticals Ltd. Delta Electronics Inc. BOC Hong Kong (Holdings) Ltd. BHP Billiton Ltd. China Life Insurance Co., Ltd., Class H Oil Search Ltd. Alibaba Group Holding Ltd., ADR China Construction Bank Corp., Class H SK Hynix Inc. China Mobile Ltd. Vedanta Ltd. Infosys Ltd. Tata Motors Ltd., ADR BNK Financial Group Inc. Doosan Bobcat Inc. Taiwan Semiconductor Manufacturing Co., Ltd. Challenger Ltd. ICICI Bank Ltd., ADR Woolworths Ltd. Total of Top 25 Holdings

6.13% 4.88% 3.54% 3.53% 2.73% 2.64% 2.58% 2.56% 2.54% 2.33% 2.18% 2.14% 2.13% 2.04% 1.84% 1.76% 1.74% 1.69% 1.69% 1.56% 1.54% 1.54% 1.52% 1.52% 1.51% 59.86%

The Summary of Investment Portfolio may change due to ongoing portfolio transactions of the Fund, and is available quarterly.

7

For more information

How to reach us

You can find more information about HSBC Mutual Funds in the Fund’s Simplified Prospectus, Annual Information Form, Annual and Semi-Annual Report and Fund Facts. You can get a copy of these documents, as well as the Fund’s Financial Statements, at no cost by calling 1-888-390-3333, by contacting your authorized dealer or by visiting our website at www.hsbc.ca/investment-resources.

HSBC Global Asset Management (Canada) Limited

These documents and other information about the Fund, such as information circulars and material contracts, are also available at www.sedar.com. Copies of the Annual Report and Semi-Annual Report, Simplified Prospectus, Annual Information Form, Annual and Interim Management Report of Fund Performance and Fund Facts are available on our website at www.hsbc.ca/investment-resources.

Vancouver 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8 Toronto Suite 300, 70 York Street Toronto, ON M5J 1S9 Toll-free: 1-888-390-3333 Fax: 604-669-2756 Email: [email protected] Website: www.hsbc.ca/investment-resources

A NOTE ON FORWARD-LOOKING STATEMENTS This report may contain forward-looking statements about the Fund, including its strategy, expected performance and condition. Forward-looking statements include statements that are predictive in nature that depend upon or refer to future events or conditions, or that include words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates” or negative versions thereof and similar expressions. In addition, any statement that may be made concerning future performance, strategies or prospects, and possible future Fund action, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the Fund and economic factors. Forward-looking statements are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied in any forward-looking statements made by the Fund. Any number of important factors could contribute to these digressions, including, but not limited to, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, and catastrophic events. We stress that the above-mentioned list of important factors is not exhaustive. We encourage you to consider these and other factors carefully before making any investment decisions and we urge you to avoid placing undue reliance on forward-looking statements. Further, you should be aware of the fact that the Fund has no specific intention of updating any forward-looking statements, whether as a result of new information, future events or otherwise. Sources: HSBC Global Asset Management (Canada) Limited, Bloomberg, MSCI, Bank of Canada. Neither MSCI nor any other party involved in or related to compiling, computing or creating the MSCI data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any of such data. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in or related to compiling, computing or creating the data have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages. No further distribution or dissemination of the MSCI data is permitted without MSCI’s express written consent.

Issued by HSBC Global Asset Management (Canada) Limited

(2018-03) DFS

Unauthorized reproduction, distribution, transmission or publication without our prior written consent is strictly prohibited.

HSBC Chinese Equity Fund Annual Management Report of Fund Performance for the year ended December 31, 2017

◆

HSBC Chinese Equity Fund Management Discussion of Fund Performance In this document, you and your refer to the unitholder of the Fund; we, us and our refer to HSBC Global Asset Management (Canada) Limited; and the Fund refers to the HSBC Chinese Equity Fund.

This Fund is suitable for investors who seek long-term capital growth, have a long-term investment time horizon and have a high tolerance for risk in their returns.

We are the manager, trustee and primary investment advisor of the Fund. We have entered into a sub-advisory agreement with HSBC Global Asset Management (Hong Kong) Limited, under which HSBC Global Asset Management (Hong Kong) Limited provides investment advice and portfolio management services to the Fund. For an explanation of the relationship between us and the sub-advisor, see the section Selection of Sub-Advisors in the Fund’s Simplified Prospectus.

As of December 31, 2017, the Fund’s net assets increased by 23.2% to $197.8 million from $160.6 million at the end of 2016. Of this increase, a $60.9 million gain was attributable to investment performance and $23.7 million was attributable to net withdrawals from the Fund.

Results of Operations

Investment Performance The HSBC Chinese Equity Fund (Investor Series) rose 40.29% for the 12-month period ending December 31, 2017, while the benchmark MSCI China 10/40 Net Index (C$) rose 39.52% over the same period.

Introduction This Annual Management Report of Fund Performance contains financial highlights but does not contain the complete annual financial statements of the investment fund. You may obtain a copy of the Fund’s annual financial statements at your request, at no cost, by calling us toll-free at 1-888-390-3333, by visiting our website at www.hsbc.ca/investment-resources, by visiting the SEDAR website at www.sedar.com or by writing to us at:

The Fund outperformed its benchmark in 2017, primarily due to successful stock selection in the technology, consumer discretionary and financials sectors. Stock selection in the real estate and materials sectors detracted from performance. In 2017, offshore Chinese equities outperformed both developed and emerging markets, with MSCI China being the year’s best-performing country index. The stellar performance of offshore Chinese equities was driven by continued improvement in the Chinese economy. Economic data held up well, with GDP coming in at 6.8%-6.9% in the first three quarters. Investment, production and consumption data readings continued to be solid, and this economic momentum successfully translated into better corporate earnings. Low valuations also boosted market performance.

Corporate Secretary HSBC Global Asset Management (Canada) Limited 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8 You may also contact us using one of these methods to request a copy of the Fund’s interim financial report, proxy voting policies and procedures, proxy voting disclosure record or quarterly statement of investment portfolio.

Technical support for offshore Chinese equities was also strong in 2017, with robust southbound buying through the Stock Connect programs between Shanghai/Shenzhen and Hong Kong. China’s foreign reserves rose steadily in 2017, reaching USD3.14 trillion in December. The moderated fears on CNY depreciation and less capital outflow were backed by solid domestic growth, contained financial risks and improving market sentiment as a result of anticipated progress on reforms.

Investment Objective and Strategies The fundamental investment objective of this Fund is to provide long-term capital growth. To achieve its objectives, the Fund invests primarily in equity and equity-related securities of publicly traded companies registered, or with an official listing, on a stock exchange in the People’s Republic of China (“China”) as well as investing in securities of public companies that have a significant business or investment link with China. To maintain a diversified portfolio of holdings, the Fund invests in companies from a broad range of industries through common shares, preferred shares, rights, special warrants, American depositary receipts and global depositary receipts. A portion of the Fund may be in the form of cash or cash equivalents.

Recent Developments Looking ahead, the macro and liquidity backdrop remains favourable for Hong Kong-listed Chinese equities. On the macro side, supply-side reform is now translating into better corporate earnings (especially for upstream industrial players). State-owned enterprise reforms are also picking up pace and new economy sectors will continue to benefit from China’s long-term economic rebalancing. The consensus is for 15% earnings growth for Chinese equities in 2018, on top of more than 20% growth in 2017.

Risk The risks of investing in this Fund remain as discussed in the Simplified Prospectus. During the year, there were no material changes to the Fund that affected the overall risk level of the Fund.

On the liquidity front, the offshore Chinese market will continue to attract inflow from overseas funds as well as southbound money given its attractive valuation and growth profile. The latest capital market developments also bode well for the offshore 1

HSBC Chinese Equity Fund Chinese market, and the recently announced full circulation of H shares is also considered positive as it will boost liquidity in Hong Kong.

annual administration costs of the plan. We permit HSBC Investment Funds (Canada) Inc. to collect these fees by redeeming sufficient units of the Fund with the highest market value in your registered plan.

The Fund is overweight in consumer discretionary names, notably education companies and the auto sector. In financials, the Fund favours the insurance sector, which should benefit from rising rates, but remains underweight in banks. The Fund is also underweight in utilities because of pricing concerns and is selective in industrials.

Related Brokerage Commissions From time to time, the Fund may enter into purchases and sales of securities, derivative instruments, foreign exchange contracts or other instruments with The Hongkong & Shanghai Banking Corporation Limited, HSBC Securities (Asia) Ltd. or other dealers that are members of the HSBC Group (“Related Brokers”). These Related Brokers may earn commissions or spreads provided that such trades are made on terms and conditions comparable to those offered by or to unrelated parties. During the year, the Fund paid commissions to Related Brokers amounting to $18,473 (December 31, 2016 – $13,830).

Related Party Transactions We, on behalf of the Fund, or the Fund Manager, may, from time to time, enter into transactions or arrangements with or involving other members of the HSBC Group or other people or companies related or connected to us or the Fund. To proceed with the transactions, the Fund relies on the positive recommendation of the Fund’s Independent Review Committee. A condition of this positive recommendation is that the transactions are performed in accordance with our policy on Related Party Transactions. For more general information on persons related to the Fund and the types of potential transactions, see the Fund’s Simplified Prospectus.

Financial Highlights The following tables show selected key financial information about the Fund and are intended to help you understand the Fund’s financial performance for the past five years. This information is derived from the Fund’s audited annual financial statements. The information in the following tables is based on prescribed regulations, and, as a result, is not expected to add down due to the increase/decrease in net assets from operations being based on average units outstanding during the year and all other numbers being based on actual units outstanding at the relevant point in time.

The following is a summary of current transactions and arrangements with entities that are related to us or the Fund.

Manager, Trustee and Investment Advisor We are the manager, trustee and primary investment advisor of the Fund. As manager, we manage the overall business and operations of the Fund. As trustee, we hold legal title to the property of the Fund on your behalf. As primary investment advisor, we provide investment advice and portfolio management services to the Fund. We receive a fee from the Fund for these services based on assets under management, calculated daily and paid monthly.

HSBC Chinese Equity Fund – Investor Series – Net Assets per Unit(1) Years ended December 31 2017 Net assets per unit, beginning of year (2)

We have entered into a sub-advisory agreement with HSBC Global Asset Management (Hong Kong) Limited (an affiliate), under which HSBC Global Asset Management (Hong Kong) Limited provides investment advice and portfolio management services to the Fund. We pay HSBC Global Asset Management (Hong Kong) Limited a fee from the Fund based on assets under management, calculated daily and paid quarterly. For more information on our ability to hire sub-advisors, see the section Organization and Management of the HSBC Mutual Funds in the Fund’s Simplified Prospectus.

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

Distribution Services The Fund is distributed through us, HSBC Investment Funds (Canada) Inc. (our wholly owned subsidiary and affiliate) and HSBC Securities (Canada) Inc. (an affiliate) directly or through its division, HSBC InvestDirect. We pay distribution and servicing fees to them based on the amount of assets held in the investor’s account, and additionally, in some cases, on the amount of the initial purchase. If you hold units of this Fund and/or other HSBC Mutual Funds in a registered plan with HSBC Investment Funds (Canada) Inc., they may charge you an annual fee to cover the

2015

2014

2013

$24.66 $26.24 $24.10 $20.39 $18.27 0.57 (0.78) 4.42 5.83

0.60 (0.62) (0.14) (1.54)

0.77 (0.70) 4.40 (1.75)

0.57 (0.54) 2.27 1.14

0.54 (0.49) 1.22 0.81

Total increase (decrease) from operations (2)

$10.04

$(1.70)

$2.72

$3.44

$2.08

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– – – –

– – – –

– (0.09) – –

– (0.03) – –

– (0.05) – –

Total annual distributions (2,3)

$–

$–

Net assets per unit at December 31 of year shown (2)

2

2016

$(0.09) $(0.03) $(0.05)

$34.59 $24.66 $26.24 $24.10 $20.36

HSBC Chinese Equity Fund Ratios and Supplemental Data

HSBC Chinese Equity Fund – Premium Series – Net Assets per Unit(1)

Years ended December 31 2017

2016

2015

2014

Years ended December 31

2013

2017

Net Asset Value (in 000s) (4) $158,292 $128,747 $156,131 $170,790 $178,885 Number of units outstanding (in 000s) (4) 4,576 5,221 5,950 7,086 8,771 Management expense ratio (⬙MER⬙) (5) 2.61% 2.59% 2.57% 2.62% 2.63% MER before waivers or absoptions (5) 2.61% 2.59% 2.57% 2.62% 2.63% Trading expense ratio (6) 0.36% 0.33% 0.42% 0.57% 0.41% Portfolio turnover rate (7) 88.19% 79.53% 112.64% 99.24% 89.01% Net Asset Value per unit (4) $34.59 $24.66 $26.24 $24.10 $20.39

Net assets per unit, beginning of year (2)

HSBC Chinese Equity Fund – Advisor Series – Net Assets per Unit(1) Years ended December 31 2017 Net assets per unit, beginning of year (2)

2016

2015

2014

2013

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.53 (0.84) 4.74 5.83

0.68 (0.66) (0.17) (1.01)

0.83 (0.75) 4.63 (1.33)

0.65 (0.56) 2.33 0.20

0.54 (0.51) 1.31 0.70

Total increase (decrease) from operations (2)

$10.26

$(1.16)

$3.38

$2.62

$2.04

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– – – –

– – – –

– (0.08) – –

– (0.02) – –

– (0.04) – –

Total annual distributions (2,3)

$–

$–

0.35 (0.27) (0.03) (0.70)

0.49 (0.31) 2.20 (2.19)

0.36 (0.24) 1.27 0.84

0.32 (0.22) 0.67 0.33

Total increase (decrease) from operations (2)

$5.82

$(0.65)

$0.19

$2.23

$1.10

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– – – –

– (0.08) – –

– (0.13) – –

– (0.09) – –

– (0.10) – –

Total annual distributions (2,3)

$–

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

Ratios and Supplemental Data Years ended December 31 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

0.33 (0.34) 2.48 3.35

2015

2014

2013

$2,236

$1,369

$1,842

$2,312

$4,252

64

55

69

95

206

2.74%

2.73%

2.71%

2.67%

2.66%

$(0.08) $(0.13) $(0.09) $(0.10)

$19.63 $13.91 $14.80 $13.59 $11.48

Years ended December 31

$35.04 $25.01 $26.57 $24.41 $20.61

2016

2013

Ratios and Supplemental Data

$(0.08) $(0.02) $(0.04)

2017

2014

$13.91 $14.80 $13.59 $11.50 $10.31

2017

Net assets per unit at December 31 of year shown (2)

2015

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

Net assets per unit at December 31 of year shown (2)

$25.01 $26.57 $24.41 $20.64 $18.49

2016

2.74% 2.73% 2.71% 2.67% 2.66% 0.36% 0.33% 0.42% 0.57% 0.41% 88.19% 79.53% 112.64% 99.24% 89.01% $35.04 $25.01 $26.57 $24.41 $20.64

3

2016

$32,853 $27,880

2015

2014

2013

$29,793 $15,980 $13,174

1,673

2,004

2,012

1,176

1,145

2.04%

2.02%

2.00%

2.04%

2.06%

2.04% 2.02% 2.00% 2.04% 2.06% 0.36% 0.33% 0.42% 0.57% 0.41% 88.19% 79.53% 112.64% 99.24% 89.01% $19.63 $13.91 $14.80 $13.59 $11.50

HSBC Chinese Equity Fund HSBC Chinese Equity Fund – Manager Series – Net Assets per Unit(1)

HSBC Chinese Equity Fund – Institutional Series – Net Assets per Unit(1)

Years ended December 31

Years ended December 31 2017

Net assets per unit, beginning of year (2)

2016

2015

2014

2013

2017 Net assets per unit, beginning of year (2)

$26.71 $28.56 $26.30 $22.26 $19.96

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses) Total increase (decrease) from operations (2)

0.58 (0.62) 5.18 5.07

0.67 (0.52) – (1.41)

0.87 (0.54) 5.36 (1.89)

0.66 (0.35) 2.50 0.78

0.59 (0.32) 1.37 0.79

$10.21

$(1.26)

$3.80

$3.59

$2.43

– – – –

Total annual distributions (2,3)

$–

Net assets per unit at December 31 of year shown (2)

2014

2013

0.67 (0.06) 5.51 6.73

0.73 (0.05) (0.19) (2.18)

0.94 (0.04) 5.06 (2.79)

0.69 (0.04) 2.74 1.74

0.67 (0.04) 1.41 1.20

Total increase (decrease) from operations (2)

$12.85

$(1.69)

$3.17

$5.13

$3.24

– (0.31) – –

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– – – –

– (0.73) – –

– (0.87) – –

– (0.72) – –

– (0.67) – –

$(0.28) $(0.39) $(0.30) $(0.31)

Total annual distributions (2,3)

$–

– (0.28) – –

– (0.39) – –

– (0.30) – –

Net assets per unit at December 31 of year shown (2)

$37.74 $26.71 $28.56 $26.30 $22.22

$(0.73) $(0.87) $(0.72) $(0.67)

$42.05 $29.26 $31.16 $28.60 $24.15

Ratios and Supplemental Data

Ratios and Supplemental Data

Years ended December 31

Years ended December 31

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2015

$29.26 $31.16 $28.60 $24.20 $21.70

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

2016

2017

2016

2015

2014

2013

$594

$166

$168

$290

$437

16

6

6

11

20

1.86%

2.00%

1.79%

1.56%

1.56%

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

1.86% 2.09% 1.79% 1.56% 1.56% 0.36% 0.33% 0.42% 0.57% 0.41% 88.19% 79.53% 112.64% 99.24% 89.01% $37.74 $26.71 $28.56 $26.30 $22.26

2017

2016

2015

2014

2013

$3,808

$2,450

$3,292

$2,789

$2,226

91

84

106

98

92

0.17%

0.17%

0.13%

0.17%

0.16%

0.17% 0.17% 0.13% 0.17% 0.16% 0.36% 0.33% 0.42% 0.57% 0.41% 88.19% 79.53% 112.64% 99.24% 89.01% $42.05 $29.26 $31.16 $28.60 $24.20

(1) This information is derived from the Fund’s audited annual financial statements. 2017, 2016, 2015, 2014 and 2013 balances are stated in IFRS. Under IFRS, the net asset per unit presented in the financial statements is the same as the net asset value calculated for fund pricing purposes. (2) Net assets per unit and distributions per unit are based on the actual number of units outstanding for the relevant series at the relevant time. The increase/decrease in net assets from operations per unit is based on the weighted average number of units outstanding for the relevant series over the fiscal year. (3) Distributions are automatically reinvested in additional units of the Fund, unless the unitholder withdraws from the automatic reinvestment plan by providing written notice to us. (4) This information is provided as at December 31 of the year shown. (5) MER is based on total expenses (excluding distributions, commissions and other portfolio transaction costs) for the stated period and is expressed as an annualized percentage of daily average net asset value during the year. The MER may vary from one mutual fund to another and from one series of units to another. We have

4

HSBC Chinese Equity Fund waived or absorbed certain fees and expenses otherwise payable by the Fund. The amount of expenses absorbed or waived is at the discretion of and can be terminated at any time by us.

Year-by-Year Returns Years ended December 31 The following bar charts show the Fund’s performance for each of the years shown, and illustrate how the Fund’s performance changed from year to year. In percentage terms, the bar charts show how much an investment made on the first day of each financial year would have grown or decreased by the last day of each financial year.

(6) The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the year. (7) The Fund’s portfolio turnover rate indicates how actively the Fund’s portfolio advisor manages its portfolio investments. A portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the year. The higher the Fund’s portfolio turnover rate in a year, the greater the trading costs payable by the Fund in the year, and the greater the chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high turnover rate and the performance of the Fund. The rate is calculated based on the lesser of purchases or sales of securities divided by the average weighted market value of the portfolio securities, excluding short-term securities.

Annual Returns – Investor Series 60% 40.3%

36.9%

40%

16.5%

20%

11.8%

18.3% 9.2%

0%

Management Fees

-6.0%

-6.2%

-20%

-19.3%

-40%

For the year ended December 31, 2017, the Fund paid us management fees of $3,837,230. The management fee for each series is calculated as a percentage of the daily net asset value for that series. The fees are reduced, where required, so that these fees do not duplicate fees payable by mutual funds in which the Fund invests for the same service.

-43.4% -60%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Annual Returns – Advisor Series 60%

The Fund’s management fees were used by us to pay costs for managing the investment portfolio, providing investment analysis and recommendations, making investment decisions, making brokerage arrangements for the purchase and sale of the investment portfolio and providing other services. The management fees also funded commission payments and other compensation to sales representatives and registered dealers and brokers (collectively “distribution costs”), including HSBC Investment Funds (Canada) Inc., for units of the Fund bought and held by unitholders. Finally, we used management fees to pay for additional marketing and distribution services to the Fund.

40.1%

36.8%

40%

16.5%

20%

11.7%

18.3% 9.2%

0% -5.9%

-6.2%

-20%

-19.3%

-40% -43.5% -60%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Annual Returns – Premium Series

For the year ended December 31, 2017, approximately 46% of the total management fees collected from all HSBC Mutual Funds were used to fund distribution costs. In comparison, for the Fund, such distribution costs represented 43% of the management fees collected. This may vary by series depending on the assets invested in each of the series.

50%

41.1%

40% 30% 17.1%

20% 10%

19.0% 12.3%

9.9%

0%

Past Performance

-10%

The performance information shown assumes that all distributions made by the Fund in the years shown were reinvested in additional securities of the Fund. The performance information does not take into account sales, redemption, distribution, optional charges or expenses you may be charged outside of the Fund or the effect of any income tax you may have to pay as a result of your investment in the Fund that would have reduced returns or performance. The performance of different fund series may vary for a number of reasons, including differences in management fees and expenses. The Fund’s past performance does not necessarily indicate how it will perform in the future.

-20% -30%

5

-5.5% -18.9% Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2011 2012 2013 2014 2015 2016 2017

HSBC Chinese Equity Fund Annual Returns – Manager Series

InstitutionalSeries

60% 40%

1 Year

41.3%

38.2% 17.8%

20%

13.0%

19.6% 10.0%

-5.2%

5.18%

MSCI China 10/40 Net Index (C$)

39.52% 14.28% 14.31%

6.55%

-5.5% 1 Year

-18.4%

Since 5 Year Inception

HSBC Chinese Equity Fund

41.11% 13.58% 14.39%

9.49%

MSCI China 10/40 Net Index (C$)

39.52% 14.28% 14.31%

8.71%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

(1) Due to the fact that several benchmark indices are only available on a monthly basis, the performance data for the HSBC Funds and the benchmark indices are calculated using values from the first month-end date each Fund was in operation.

Annual Returns – Institutional Series

(2) For investment commentary and relative performance of the Fund compared to its benchmark, please refer to the Results of Operations section of this report.

60% 43.7%

40.0%

40%

19.4%

20%

14.6%

21.2%

Summary of Investment Portfolio

11.9%

As at December 31, 2017

0% -3.7%

-3.9% -20%

-17.3%

Sector Mix

-40%

Percentage of NAV

-42.0% -60%

3 Year

-42.8%

-40% -60%

5 Year 10 Year

43.73% 15.70% 16.56%

Premium Series

0% -20%

3 Year

HSBC Chinese Equity Fund

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Financials Information Technology Consumer Discretionary Healthcare Energy Consumer Staples Telecommunication Services Materials Utilities Industrials Cash & Equivalents Total

Annual Compound Returns Year ended December 31, 2017 The following tables show the Fund’s historical annual compound total returns for the years indicated, compared with the benchmark index, the MSCI China 10/40 Net Index (in Canadian dollars), over the same period. The MSCI China 10/40 Net Index measures the performance of a broad range of stocks traded in China and Hong Kong. This index is tracked in US dollars and was converted to Canadian dollars. The MSCI 10/40 Indexes constrain the weight of any single group entity at 10%, and the sum of the weights of all group entities representing more than 5% weight at 40%, with a buffer of 10% applied on these limits at each index rebalancing.

Investor Series 1 Year

3 Year

5 Year 10 Year

HSBC Chinese Equity Fund

40.29% 12.92% 13.75%

2.65%

MSCI China 10/40 Net Index (C$)

39.52% 14.28% 14.31%

6.55%

Advisor Series 1 Year

3 Year

5 Year 10 Year

HSBC Chinese Equity Fund

40.11% 12.91% 13.74%

2.65%

MSCI China 10/40 Net Index (C$)

39.52% 14.28% 14.31%

6.55%

Manager Series 1 Year

3 Year

5 Year 10 Year

HSBC Chinese Equity Fund

41.29% 13.69% 14.69%

3.64%

MSCI China 10/40 Net Index (C$)

39.52% 14.28% 14.31%

6.55%

6

34.80% 26.78% 14.96% 5.68% 4.35% 3.69% 3.29% 1.74% 1.56% 1.19% 1.96% 100.00%

HSBC Chinese Equity Fund Top 25 Holdings Percentage of NAV Tencent Holdings Ltd. Alibaba Group Holding Ltd., ADR Ping An Insurance (Group) Co. of China Ltd., Class H China Construction Bank Corp., Class H Industrial & Commercial Bank of China Ltd., Class H Bank of China Ltd. AAC Technologies Holdings Inc. Baidu Inc., ADR Brilliance China Automotive Holdings Ltd. China Mobile Ltd. Sino Biopharmaceutical Ltd. TAL Education Group CNOOC Ltd. Guangzhou Automobile Group Co., Ltd., Class H Hong Kong Exchanges and Clearing Ltd. CSPC Pharmaceutical Group Ltd. China Mengniu Dairy Co., Ltd. New China Life Insurance Co., Ltd., Class H Geely Automobile Holdings Ltd. China Life Insurance Co., Ltd., Class H New Oriental Education & Technology Group Inc. China Merchants Bank Co., Ltd., Class H China Everbright Ltd. China Resources Enterprise Ltd. MGM China Holdings Ltd. Total of Top 25 Holdings

9.75% 9.30% 7.60% 6.29% 3.90% 3.87% 3.01% 2.53% 2.33% 2.31% 2.28% 2.05% 1.87% 1.84% 1.83% 1.80% 1.72% 1.69% 1.65% 1.24% 1.22% 1.18% 1.04% 0.98% 0.98% 74.26%

The Summary of Investment Portfolio may change due to ongoing portfolio transactions of the Fund, and is available quarterly.

7

For more information

How to reach us

You can find more information about HSBC Mutual Funds in the Fund’s Simplified Prospectus, Annual Information Form, Annual and Semi-Annual Report and Fund Facts. You can get a copy of these documents, as well as the Fund’s Financial Statements, at no cost by calling 1-888-390-3333, by contacting your authorized dealer or by visiting our website at www.hsbc.ca/investment-resources.

HSBC Global Asset Management (Canada) Limited

These documents and other information about the Fund, such as information circulars and material contracts, are also available at www.sedar.com. Copies of the Annual Report and Semi-Annual Report, Simplified Prospectus, Annual Information Form, Annual and Interim Management Report of Fund Performance and Fund Facts are available on our website at www.hsbc.ca/investment-resources.

Vancouver 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8 Toronto Suite 300, 70 York Street Toronto, ON M5J 1S9 Toll-free: 1-888-390-3333 Fax: 604-669-2756 Email: [email protected] Website: www.hsbc.ca/investment-resources

A NOTE ON FORWARD-LOOKING STATEMENTS This report may contain forward-looking statements about the Fund, including its strategy, expected performance and condition. Forward-looking statements include statements that are predictive in nature that depend upon or refer to future events or conditions, or that include words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates” or negative versions thereof and similar expressions. In addition, any statement that may be made concerning future performance, strategies or prospects, and possible future Fund action, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the Fund and economic factors. Forward-looking statements are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied in any forward-looking statements made by the Fund. Any number of important factors could contribute to these digressions, including, but not limited to, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, and catastrophic events. We stress that the above-mentioned list of important factors is not exhaustive. We encourage you to consider these and other factors carefully before making any investment decisions and we urge you to avoid placing undue reliance on forward-looking statements. Further, you should be aware of the fact that the Fund has no specific intention of updating any forward-looking statements, whether as a result of new information, future events or otherwise. Sources: HSBC Global Asset Management (Canada) Limited, Bloomberg, MSCI, Bank of Canada. Neither MSCI nor any other party involved in or related to compiling, computing or creating the MSCI data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any of such data. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in or related to compiling, computing or creating the data have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages. No further distribution or dissemination of the MSCI data is permitted without MSCI’s express written consent.

Issued by HSBC Global Asset Management (Canada) Limited

(2018-03) DFS

Unauthorized reproduction, distribution, transmission or publication without our prior written consent is strictly prohibited.

HSBC Indian Equity Fund Annual Management Report of Fund Performance for the year ended December 31, 2017

◆

HSBC Indian Equity Fund Management Discussion of Fund Performance In this document, you and your refer to the unitholder of the Fund; we, us and our refer to HSBC Global Asset Management (Canada) Limited; and the Fund refers to the HSBC Indian Equity Fund.

Results of Operations As of December 31, 2017, the Fund’s net assets increased by 6.7% to $22.3 million from $20.9 million at the end of 2016. Of this increase, a $6.0 million gain was attributable to investment performance and $4.6 million was attributable to net withdrawals from the Fund.

We are the manager, trustee and primary investment advisor of the Fund. We have entered into a sub-advisory agreement with HSBC Global Asset Management (Hong Kong) Limited, under which HSBC Global Asset Management (Hong Kong) Limited provides investment advice and portfolio management services to the Fund. For an explanation of the relationship between us and the sub-advisor, see the section Selection of Sub-Advisors in the Fund’s Simplified Prospectus.

Investment Performance The HSBC Indian Equity Fund (Investor Series) rose 31.20% for the 12-month period ending December 31, 2017, while the benchmark S&P/IFCI India Investable Index (C$) rose 35.78% over the same period. Sector allocation effects were positive in healthcare, where the Fund was underweight, and consumer discretionary, where it was overweight. Strong stock selection in materials, industrials and financials was offset by selections in technology, consumer staples and health care.

Introduction This Annual Management Report of Fund Performance contains financial highlights but does not contain the complete annual financial statements of the investment fund. You may obtain a copy of the Fund’s annual financial statements at your request, at no cost, by calling us toll-free at 1-888-390-3333, by visiting our website at www.hsbc.ca/investment-resources, by visiting the SEDAR website at www.sedar.com or by writing to us at:

You may also contact us using one of these methods to request a copy of the Fund’s interim financial report, proxy voting policies and procedures, proxy voting disclosure record or quarterly statement of investment portfolio.

The Union budget for FY18, announced in February, was well received and appears to be a well-balanced act on the fiscal front that solidifies the government’s reform agenda in the longer term. The size of the long-awaited recapitalization plan for Indian public-sector banks surprised on the upside, and in another key announcement, the government unveiled a mega road construction project with the outlay pegged at USD59 billion. In November, Moody’s moved India’s local and foreign currency issuer ratings a notch higher to Baa2 with a stable outlook. Year-end market performance was surprisingly resilient given concerns over rising inflation and fiscal slippage brought on by lower than expected revenues from the newly implemented Goods and Services Tax.

Investment Objective and Strategies

Recent Developments

Corporate Secretary HSBC Global Asset Management (Canada) Limited 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8

The fundamental investment objective of this Fund is to provide long-term capital growth.

The Fund’s strategy remains broadly unchanged and is backed by the thesis that the Indian economy is on a cyclical upturn path. The recovery process will get a big boost from falling interest rates, the benefits of which are yet to percolate through the economy. The government’s actions have been supportive and decisive, although not always implemented as expected, and this has been built into the base case analysis.

To achieve its objectives, the Fund will invest primarily in equity and equity-related securities of publicly traded companies registered, or with an official listing, on a stock exchange in India, as well as securities of public companies that have a significant business or investment link with India. To maintain a diversified portfolio of holdings, the Fund invests in companies from a broad range of industries through common shares, preferred shares, rights, special warrants, American depositary receipts, global depositary receipts and participation notes. A portion of the Fund may be in the form of cash or cash equivalents.

The Fund continues to hold an overweight position in consumer discretionary names that will benefit from falling interest rates and improving urban incomes. In financials, the Fund favours private banks with exposure to the infrastructure sector, well-capitalized public-sector banks and housing finance companies that are likely beneficiaries of this year’s budget focus on affordable housing. Overweight holdings in sectors such as consumer discretionary are likely to directly benefit from the elimination of cascading taxes, removal of supply-chain inefficiencies, reduced logistic costs and import substitution. Indirect beneficiaries from the GST rollout also include the Fund’s holdings in financials and real estate, where the longer-term trend of the formalization of the unorganized economy should benefit relevant companies.

Risk The risks of investing in the Fund remain as discussed in the Simplified Prospectus. During the year, there were no material changes to the Fund that affected the overall risk level of the Fund. This Fund is suitable for investors seeking long-term capital growth and who have a long-term investment time horizon and a high tolerance for risk in their returns. 1

HSBC Indian Equity Fund Related Brokers may earn commissions or spreads provided that such trades are made on terms and conditions comparable to those offered by or to unrelated parties. During the year, the Fund paid commissions to Related Brokers amounting to $nil (December 31, 2016 – $622).

Related Party Transactions We, on behalf of the Fund, or the Fund Manager, may, from time to time, enter into transactions or arrangements with or involving other members of the HSBC Group or other people or companies related or connected to us or the Fund. To proceed with the transactions, the Fund relies on the positive recommendation of the Fund’s Independent Review Committee. A condition of this positive recommendation is that the transactions are performed in accordance with our policy on Related Party Transactions. For more general information on persons related to the Fund and the types of potential transactions, see the Fund’s Simplified Prospectus.

Financial Highlights The following tables show selected key financial information about the Fund and are intended to help you understand the Fund’s financial performance for the past five years. This information is derived from the Fund’s audited annual financial statements. The information in the following tables is based on prescribed regulations, and, as a result, is not expected to add down due to the increase/decrease in net assets from operations being based on average units outstanding during the year and all other numbers being based on actual units outstanding at the relevant point in time.

The following is a summary of current transactions and arrangements with entities that are related to us or the Fund.

Manager, Trustee and Investment Advisor We are the manager, trustee and primary investment advisor of the Fund. As manager, we manage the overall business and operations of the Fund. As trustee, we hold legal title to the property of the Fund on your behalf. As primary investment advisor, we provide investment advice and portfolio management services to the Fund. We receive a fee from the Fund for these services based on assets under management, calculated daily and paid monthly.

HSBC Indian Equity Fund – Investor Series – Net Assets per Unit(1) Years ended December 31 2017

We have entered into a sub-advisory agreement with HSBC Global Asset Management (Hong Kong) Limited (an affiliate), under which HSBC Global Asset Management (Hong Kong) Limited provides investment advice and portfolio management services to the Fund. We pay HSBC Global Asset Management (Hong Kong) Limited a fee from the Fund based on assets under management, calculated daily and paid quarterly. For more information on our ability to hire sub-advisors, see the section Organization and Management of the HSBC Mutual Funds in the Fund’s Simplified Prospectus.

Distribution Services The Fund is distributed through us, HSBC Investment Funds (Canada) Inc. (our wholly owned subsidiary and affiliate) and HSBC Securities (Canada) Inc. (an affiliate) directly or through its division, HSBC InvestDirect. We pay distribution and servicing fees to them based on the amount of assets held in the investor’s account, and additionally, in some cases, on the amount of the initial purchase. If you hold units of this Fund and/or other HSBC Mutual Funds in a registered plan with HSBC Investment Funds (Canada) Inc., they may charge you an annual fee to cover the annual administration costs of the plan. We permit HSBC Investment Funds (Canada) Inc. to collect these fees by redeeming sufficient units of the Fund with the highest market value in your registered plan.

2015

2014

2013

Net assets per unit, beginning of year (2)

2016

$9.88 $10.52 $10.10

$7.05

$7.78

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.26 (0.38) 1.46 1.86

0.16 (0.31) (0.24) (0.32)

0.56 (0.33) 0.84 (0.59)

0.18 (0.27) 0.04 3.11

0.23 (0.21) (0.76) (0.02)

Total increase (decrease) from operations (2)

$3.20

$(0.71)

$0.48

$3.06 $(0.76)

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– – – –

– – – –

– – – –

– – – –

– – – –

Total annual distributions (2,3)

$–

$–

$–

$–

$–

$9.88 $10.52 $10.10

$7.04

Net assets per unit at December 31 of year shown (2) $12.96

Ratios and Supplemental Data Years ended December 31 2017 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

Related Brokerage Commissions From time to time, the Fund may enter into purchases and sales of securities, derivative instruments, foreign exchange contracts or other instruments with The Hongkong & Shanghai Banking Corporation Limited, HSBC Securities (Asia) Ltd. or other dealers that are members of the HSBC Group (“Related Brokers”). These 2

2016

2015

2014

2013

$19,000 $18,881 $23,951 $26,220 $24,301 1,466

1,911

2,276

2,597

3,449

3.27%

3.26%

3.11%

3.07%

3.00%

4.17% 3.43% 3.11% 3.07% 3.20% 0.14% 0.16% 0.11% 0.14% 0.86% 26.40% 22.06% 19.77% 17.18% 52.31% $12.96 $9.88 $10.52 $10.10 $7.05

HSBC Indian Equity Fund HSBC Indian Equity Fund – Advisor Series – Net Assets per Unit(1)

HSBC Indian Equity Fund – Premium Series – Net Assets per Unit(1)

Years ended December 31

Years ended December 31 2017

Net assets per unit, beginning of year (2)

2016

2015

2014

$10.38 $11.00 $10.58

$7.39

2013

2017

2015

2014

2013

$8.16

$9.48 $10.03

$9.57 $6.65 $7.28

0.24 (0.22) (0.80) (0.13)

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.26 (0.31) 1.29 1.74

0.16 (0.24) (0.21) (0.15)

0.52 0.16 0.21 (0.27) (0.21) (0.16) 0.77 0.06 (0.64) (0.57) 2.83 1.12

Total increase (decrease) from operations (2)

$2.98

$(0.44)

$0.45 $2.84 $0.53

– – – –

– – – –

– – – –

– – – –

– – – –

$–

$–

$–

$–

$–

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.27 (0.41) 1.53 1.98

0.18 (0.33) (0.67) (0.17)

0.54 (0.37) 0.94 (0.85)

0.19 (0.29) 0.10 2.88

Total increase (decrease) from operations (2)

$3.37

$(0.99)

$0.26

$2.88 $(0.91)

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– – – –

– – – –

– – – –

– – – –

– – – –

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

Total annual distributions (2,3)

$–

$–

$–

$–

$–

Total annual distributions (2,3)

Net assets per unit at December 31 of year shown (2) $13.62 $10.38 $11.00 $10.58

$7.38

Net assets per unit at December 31 of year shown (2)

$12.50

Ratios and Supplemental Data

Ratios and Supplemental Data

Years ended December 31

Years ended December 31

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2016

Net assets per unit, beginning of year (2)

2017

2016

2015

2014

2013

$88

$123

$784

$795

$897

6

12

71

75

121

3.36%

3.32%

3.32%

3.09%

3.03%

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

5.79% 3.75% 3.32% 3.09% 3.23% 0.14% 0.16% 0.11% 0.14% 0.86% 26.40% 22.06% 19.77% 17.18% 52.31% $13.62 $10.38 $11.00 $10.58 $7.39

3

$9.48 $10.03 $9.57 $6.65

2017

2016

2015

2014

2013

$3,097

$1,822

$2,360

$2,061

$1,851

248

192

235

215

278

2.76%

2.57%

2.63%

2.58%

2.49%

3.75% 2.93% 2.63% 2.58% 2.69% 0.14% 0.16% 0.11% 0.14% 0.86% 26.40% 22.06% 19.77% 17.18% 52.31% $12.50 $9.48 $10.03 $9.57 $6.65

HSBC Indian Equity Fund HSBC Indian Equity Fund – Manager Series – Net Assets per Unit(1)

HSBC Indian Equity Fund – Institutional Series – Net Assets per Unit(1)

Years ended December 31

Years ended December 31 2017

Net assets per unit, beginning of year (2)

2016

2015

2014

$10.61 $11.18 $10.63

$7.35

2013

2017

2016

2015

2014

2013

$11.16 $11.60 $10.88

$7.41

$7.99 0.24 (0.03) (0.75) (1.49)

$8.03

Net assets per unit, beginning of year (2)

0.25 (0.14) (0.85) 0.36

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.29 (0.12) 1.84 1.75

0.18 (0.09) (0.26) (0.11)

0.60 (0.10) 0.88 (0.66)

0.19 (0.06) 0.12 3.50

Total increase (decrease) from operations (2)

$3.76

$(0.28)

$0.72

$3.75 $(2.03)

– – – –

– – – –

– – – –

– – – –

– – – –

$–

$–

$–

$–

$–

Net assets per unit at December 31 of year shown (2) $15.02 $11.16 $11.60 $10.88

$7.41

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.28 (0.28) 1.52 2.03

0.17 (0.23) (0.23) (0.33)

0.60 (0.25) 0.90 (0.66)

0.17 (0.19) 0.22 2.98

Total increase (decrease) from operations (2)

$3.55

$(0.62)

$0.59

$3.18 $(0.38)

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– – – –

– – – –

– – – –

– – – –

– – – –

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

Total annual distributions (2,3)

$–

$–

$–

$–

$–

Total annual distributions (2,3)

Net assets per unit at December 31 of year shown (2) $14.06 $10.61 $11.18 $10.63

$7.34

Ratios and Supplemental Data

Ratios and Supplemental Data

Years ended December 31

Years ended December 31

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2017

2016

2015

2014

2013

$70

$83

$95

$111

$51

5

8

8

10

7

2.24%

2.25%

2.25%

2.04%

2.02%

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

4.57% 3.46% 2.66% 2.04% 2.21% 0.14% 0.16% 0.11% 0.14% 0.86% 26.40% 22.06% 19.77% 17.18% 52.31% $14.06 $10.61 $11.18 $10.63 $7.35

2017

2016

2015

2014

2013

$70

$36

$47

$44

$30

5

3

4

4

4

0.87%

0.85%

0.87%

0.64%

0.41%

3.55% 3.18% 2.18% 0.64% 0.60% 0.14% 0.16% 0.11% 0.14% 0.86% 26.40% 22.06% 19.77% 17.18% 52.31% $15.02 $11.16 $11.60 $10.88 $7.41

(1) This information is derived from the Fund’s audited annual financial statements. 2017, 2016, 2015, 2014 and 2013 balances are stated in IFRS. Under IFRS, the net asset per unit presented in the financial statements is the same as the net asset value calculated for fund pricing purposes. (2) Net assets per unit and distributions per unit are based on the actual number of units outstanding for the relevant series at the relevant time. The increase/decrease in net assets from operations per unit is based on the weighted average number of units outstanding for the relevant series over the fiscal year. (3) Distributions are automatically reinvested in additional units of the Fund, unless the unitholder withdraws from the automatic reinvestment plan by providing written notice to us. (4) This information is provided as at December 31 of the year shown. (5) MER is based on total expenses (excluding distributions, commissions and other portfolio transaction costs) for the stated period and is expressed as an annualized percentage of daily average net asset value during the year. The MER may vary from one mutual fund to another and from one series of units to another. We have

4

HSBC Indian Equity Fund waived or absorbed certain fees and expenses otherwise payable by the Fund. The amount of expenses absorbed or waived is at the discretion of and can be terminated at any time by us.

Year-by-Year Returns Years ended December 31 The following bar charts show the Fund’s performance for each of the years shown, and illustrate how the Fund’s performance changed from year to year. In percentage terms, the bar charts show how much an investment made on the first day of each financial year would have grown or decreased by the last day of each financial year.

(6) The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the year. (7) The Fund’s portfolio turnover rate indicates how actively the Fund’s portfolio advisor manages its portfolio investments. A portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the year. The higher the Fund’s portfolio turnover rate in a year, the greater the trading costs payable by the Fund in the year, and the greater the chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high turnover rate and the performance of the Fund. The rate is calculated based on the lesser of purchases or sales of securities divided by the average weighted market value of the portfolio securities, excluding short-term securities.

Annual Returns – Investor Series 60%

20%

43.3%

34.3%

40%

31.2%

11.4%

4.2%

0%

Management Fees

-40%

For the year ended December 31, 2017, the Fund paid us management fees of $478,466. The management fee for each series is calculated as a percentage of the daily net asset value for that series. The fees are reduced, where required, so that these fees do not duplicate fees payable by mutual funds in which the Fund invests for the same service.

-60% -80%

-6.1%

-9.6%

-20% -47.5%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2010 2011 2012 2013 2014 2015 2016 2017

Annual Returns – Advisor Series 60%

The Fund’s management fees were used by us to pay costs for managing the investment portfolio, providing investment analysis and recommendations, making investment decisions, making brokerage arrangements for the purchase and sale of the investment portfolio and providing other services. The management fees also funded commission payments and other compensation to sales representatives and registered dealers and brokers (collectively “distribution costs”), including HSBC Investment Funds (Canada) Inc., for units of the Fund bought and held by unitholders. Finally, we used management fees to pay for additional marketing and distribution services to the Fund.

20%

43.2%

34.4%

40%

31.2%

11.4%

4.0%

0% -5.7%

-9.6%

-20% -40% -47.5%

-60% -80%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2010 2011 2012 2013 2014 2015 2016 2017

Annual Returns – Premium Series

For the year ended December 31, 2017, approximately 46% of the total management fees collected from all HSBC Mutual Funds were used to fund distribution costs. In comparison, for the Fund, such distribution costs represented 38% of the management fees collected. This may vary by series depending on the assets invested in each of the series.

60%

44.0%

35.0%

40%

31.9%

20%

4.7%

0% -8.8%

-20%

Past Performance

-40%

The performance information shown assumes that all distributions made by the Fund in the years shown were reinvested in additional securities of the Fund. The performance information does not take into account sales, redemption, distribution, optional charges or expenses you may be charged outside of the Fund or the effect of any income tax you may have to pay as a result of your investment in the Fund that would have reduced returns or performance. The performance of different fund series may vary for a number of reasons, including differences in management fees and expenses. The Fund’s past performance does not necessarily indicate how it will perform in the future.

-60% -47.3% -80%

5

-5.5%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2011 2012 2013 2014 2015 2016 2017

HSBC Indian Equity Fund Annual Returns – Manager Series 60%

20%

44.7%

35.8%

40%

InstitutionalSeries 1 Year

32.5%

12.6%

5.2%

0%

HSBC Indian Equity Fund

34.61% 11.34% 13.43%

6.97%

S&P/IFCI India Investable Index (C$)

35.78% 15.66% 17.79%

10.16%

-40%

-80%

1 Year

-47.0%

-60%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2010 2011 2012 2013 2014 2015 2016 2017

80%

20%

34.6%

14.1%

6.6%

31.87%

9.30% 11.39%

3.76%

S&P/IFCI India Investable Index (C$)

35.78% 15.66% 17.79%

9.53%

As at December 31, 2017

-3.8%

-7.3%

HSBC Indian Equity Fund

Summary of Investment Portfolio

0% -20%

Since 5 Year Inception

(2) For investment commentary and relative performance of the Fund compared to its benchmark, please refer to the Results of Operations section of this report.

46.8%

37.7%

40%

3 Year

(1) Due to the fact that several benchmark indices are only available on a monthly basis, the performance data for the HSBC Funds and the benchmark indices are calculated using values from the first month-end date each Fund was in operation.

Annual Returns – Institutional Series 60%

Since 5 Year Inception

Premium Series

-5.1%

-8.6%

-20%

3 Year

-40% -60% -80%

-46.2%

Sector Mix Percentage of NAV

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2010 2011 2012 2013 2014 2015 2016 2017 Financials Consumer Discretionary Materials Information Technology Industrials Energy Consumer Staples Utilities Healthcare Real Estate Telecommunication Services Cash & Equivalents Total

Annual Compound Returns Year ended December 31, 2017 The following tables show the Fund’s historical annual compound total returns for the years indicated, compared with the benchmark index, the S&P/IFCI India Investable Index (in Canadian dollars), over the same period. This index measures the performance of stocks traded in India. It is tracked in US dollars and was converted to Canadian dollars.

Investor Series 1 Year

3 Year

Since 5 Year Inception

HSBC Indian Equity Fund

31.20%

8.69% 10.71%

4.41%

S&P/IFCI India Investable Index (C$)

35.78% 15.66% 17.79%

10.16%

Advisor Series 1 Year

3 Year

Since 5 Year Inception

HSBC Indian Equity Fund

31.18%

8.77% 10.76%

3.78%

S&P/IFCI India Investable Index (C$)

35.78% 15.66% 17.79%

9.51%

Manager Series 1 Year

3 Year

Since 5 Year Inception

HSBC Indian Equity Fund

32.51%

9.74% 11.82%

5.47%

S&P/IFCI India Investable Index (C$)

35.78% 15.66% 17.79%

10.16%

6

33.86% 18.09% 12.66% 9.57% 7.85% 6.70% 5.01% 3.42% 2.98% 0.39% 0.15% -0.68% 100.00%

HSBC Indian Equity Fund Top 25 Holdings Percentage of NAV HDFC Bank Ltd. ICICI Bank Ltd. Maruti Suzuki India Ltd. Axis Bank Ltd. Housing Development Finance Corp., Ltd. Reliance Industries Ltd. Infosys Ltd., ADR ITC Ltd. Vedanta Ltd. HCL Technologies Ltd. Tata Motors Ltd.-A-DVR Infosys Ltd. Grasim Industries Ltd. Larsen & Toubro Ltd. Indian Bank Sun TV Network Ltd. LIC Housing Finance Ltd. Jindal Steel & Power Ltd. Oil and Natural Gas Corp., Ltd. Indiabulls Housing Finance Ltd. UltraTech Cement Ltd. State Bank of India Tata Steel Ltd. NTPC Ltd. Crompton Greaves Consumer Electricals Ltd. Total of Top 25 Holdings

6.85% 5.63% 5.63% 4.84% 3.93% 3.79% 3.55% 3.54% 3.52% 3.32% 2.76% 2.70% 2.54% 2.45% 2.30% 2.17% 2.14% 2.11% 1.89% 1.88% 1.85% 1.84% 1.70% 1.63% 1.58% 76.14%

The Summary of Investment Portfolio may change due to ongoing portfolio transactions of the Fund, and is available quarterly.

7

For more information

How to reach us

You can find more information about HSBC Mutual Funds in the Fund’s Simplified Prospectus, Annual Information Form, Annual and Semi-Annual Report and Fund Facts. You can get a copy of these documents, as well as the Fund’s Financial Statements, at no cost by calling 1-888-390-3333, by contacting your authorized dealer or by visiting our website at www.hsbc.ca/investment-resources.

HSBC Global Asset Management (Canada) Limited

These documents and other information about the Fund, such as information circulars and material contracts, are also available at www.sedar.com. Copies of the Annual Report and Semi-Annual Report, Simplified Prospectus, Annual Information Form, Annual and Interim Management Report of Fund Performance and Fund Facts are available on our website at www.hsbc.ca/investment-resources.

Vancouver 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8 Toronto Suite 300, 70 York Street Toronto, ON M5J 1S9 Toll-free: 1-888-390-3333 Fax: 604-669-2756 Email: [email protected] Website: www.hsbc.ca/investment-resources

A NOTE ON FORWARD-LOOKING STATEMENTS This report may contain forward-looking statements about the Fund, including its strategy, expected performance and condition. Forward-looking statements include statements that are predictive in nature that depend upon or refer to future events or conditions, or that include words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates” or negative versions thereof and similar expressions. In addition, any statement that may be made concerning future performance, strategies or prospects, and possible future Fund action, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the Fund and economic factors. Forward-looking statements are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied in any forward-looking statements made by the Fund. Any number of important factors could contribute to these digressions, including, but not limited to, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, and catastrophic events. We stress that the above-mentioned list of important factors is not exhaustive. We encourage you to consider these and other factors carefully before making any investment decisions and we urge you to avoid placing undue reliance on forward-looking statements. Further, you should be aware of the fact that the Fund has no specific intention of updating any forward-looking statements, whether as a result of new information, future events or otherwise. Sources: HSBC Global Asset Management (Canada) Limited, Bloomberg, Bank of Canada.

Issued by HSBC Global Asset Management (Canada) Limited

(2018-03) DFS

Unauthorized reproduction, distribution, transmission or publication without our prior written consent is strictly prohibited.

HSBC Emerging Markets Fund Annual Management Report of Fund Performance for the year ended December 31, 2017

◆

HSBC Emerging Markets Fund Management Discussion of Fund Performance In this document, you and your refer to the unitholder of the Fund; we, us and our refer to HSBC Global Asset Management (Canada) Limited; and the Fund refers to the HSBC Emerging Markets Fund.

This Fund is suitable for investors seeking long-term capital appreciation from equity securities issued in emerging markets. Investors in this Fund should have a long-term investment time horizon and a high tolerance for risk in their returns.

We are the manager, trustee and primary investment advisor of the Fund. We have entered into a sub-advisory agreement with HSBC Global Asset Management (UK) Limited, under which HSBC Global Asset Management (UK) Limited provides investment advice and portfolio management services to the Fund. For an explanation of the relationship between us and the sub-advisor, see the section Selection of Sub-Advisors in the Fund’s Simplified Prospectus.

Results of Operations As of December 31, 2017, the Fund’s net assets increased by 15% to $71.4 million from $62.1 million at the end of 2016. Of this increase, a $17.5 million gain was attributable to investment performance and $8.2 million was attributable to net withdrawals from the Fund.

Investment Performance The HSBC Emerging Markets Fund (Investor Series) returned 26.34% for the 12-month period ending December 31, 2017, while the benchmark MSCI Emerging Markets Net Index (C$) rose 28.26% over the same period.

Introduction This Annual Management Report of Fund Performance contains financial highlights but does not contain the complete annual financial statements of the investment fund. You may obtain a copy of the Fund’s annual financial statements at your request, at no cost, by calling us toll-free at 1-888-390-3333, by visiting our website at www.hsbc.ca/investment-resources, by visiting the SEDAR website at www.sedar.com or by writing to us at:

The Fund’s performance was driven by strong stock selection, with holdings in Taiwan, South Africa and Kazakhstan making a notable contribution. An underweight allocation to holdings in Mexico also supported performance. Stock selection in China and Korea partially offset some of the gains, and an overweight position in Russia also detracted from relative returns.

Corporate Secretary HSBC Global Asset Management (Canada) Limited 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8

At a sector level, selections within financials, energy and materials were positive, while selections within technology, industrials and real estate detracted from relative performance.

You may also contact us using one of these methods to request a copy of the Fund’s interim financial report, proxy voting policies and procedures, proxy voting disclosure record or quarterly statement of investment portfolio.

Recent Developments The portfolio management team is positive on emerging market equities based on supportive global economic conditions and continued improvements in fundamentals. A lower inflation environment in many emerging economies (such as Russia, Brazil and India) has allowed for accommodative monetary policies and is helping to drive economic growth. The portfolio management team expects to see a continuation of this economic acceleration across emerging market countries, which should allow for further gains in corporate earnings.

Investment Objective and Strategies The fundamental investment objective of this Fund is to provide long-term capital growth. To achieve its objectives, the Fund invests primarily in equities and equity-related securities of well-established, publicly traded companies whose main operations are located in emerging markets around the world. This includes securities of companies domiciled or listed on stock exchanges in developed countries but which have a significant business or investment link with an emerging country. To maintain a diversified portfolio of holdings, the Fund invests in companies from a broad range of industries through common shares, preferred shares, rights, special warrants, American depositary receipts and global depositary receipts. A portion of the Fund may be in the form of cash or cash equivalents.

Following the strong performance of emerging equities in 2017, valuations have continued to rise and still look attractive relative to their own historical levels as well as developed market equities. In the short term, market volatility may rise on concerns over future tightening by the US Federal Reserve, a slowdown in China’s growth and geopolitical risks. The Fund continues to focus on companies with an attractive combination of profitability and valuation, and the portfolio management team uses proprietary fundamental research to confirm investment opportunities. The portfolio management team is also working with CRISIL, an India-based research company that has 28 analysts dedicated to supporting the Fund with company-specific data and bespoke research.

Risk The risks of investing in the Fund remain as discussed in the Simplified Prospectus. During the year, there were no material changes to the Fund that affected the overall risk level of the Fund. 1

HSBC Emerging Markets Fund Fund’s financial performance for the past five years. This information is derived from the Fund’s audited annual financial statements. The information in the following tables is based on prescribed regulations, and, as a result, is not expected to add down due to the increase/decrease in net assets from operations being based on average units outstanding during the year and all other numbers being based on actual units outstanding at the relevant point in time.

The use of quantitative portfolio construction tools has improved the visibility and management of risk exposures, and this should continue to help improve performance outcomes.

Related Party Transactions We, on behalf of the Fund, or the Fund Manager, may, from time to time, enter into transactions or arrangements with or involving other members of the HSBC Group or other people or companies related or connected to us or the Fund. To proceed with the transactions, the Fund relies on the positive recommendation of the Fund’s Independent Review Committee. A condition of this positive recommendation is that the transactions are performed in accordance with our policy on Related Party Transactions. For more general information on persons related to the Fund and the types of potential transactions, see the Fund’s Simplified Prospectus.

HSBC Emerging Markets Fund – Investor Series – Net Assets per Unit(1) Years ended December 31 2017

The following is a summary of current transactions and arrangements with entities that are related to us or the Fund.

Manager, Trustee and Investment Advisor We are the manager, trustee and primary investment advisor of the Fund. As manager, we manage the overall business and operations of the Fund. As trustee, we hold legal title to the property of the Fund on your behalf. As primary investment advisor, we provide investment advice and portfolio management services to the Fund. We receive a fee from the Fund for these services based on assets under management, calculated daily and paid monthly.

2015

2014

2013

Net assets per unit, beginning of year (2)

$8.73 $8.04

$8.40 $7.86

$8.22

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.28 0.25 (0.29) (0.23) 0.82 (0.34) 1.53 0.98

0.28 0.28 (0.25) (0.23) 0.22 0.07 (0.49) 0.41

0.26 (0.22) (0.17) (0.31)

Total increase (decrease) from operations (2)

$2.34 $0.66 $(0.24) $0.53 $(0.44)

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital Total annual distributions (2,3)

We have entered into a sub-advisory agreement with HSBC Global Asset Management (UK) Limited (an affiliate), under which HSBC Global Asset Management (UK) Limited provides investment advice and portfolio management services to the Fund. We pay HSBC Global Asset Management (UK) Limited an investment advisory fee from the Fund based on assets under management, calculated daily and paid quarterly. For more information on our ability to hire sub-advisors, see the section Organization and Management of the HSBC Mutual Funds in the Fund’s Simplified Prospectus.

2016

– – – – $–

Net assets per unit at December 31 of year shown (2)

– – – –

– (0.05) – –

– – – –

– – – –

$– $(0.05)

$–

$–

$8.04 $8.40

$7.79

$11.03 $8.73

Ratios and Supplemental Data Years ended December 31 2017

2016

2015

2014

2013

Net Asset Value (in 000s) (4) $7,390 $7,063 $7,250 $9,009 $10,313 Number of units outstanding (in 000s) (4) 670 809 901 1,073 1,311 Management expense ratio (⬙MER⬙) (5) 2.87% 2.77% 2.83% 2.76% 2.87% MER before waivers or absoptions (5) 2.87% 2.77% 2.83% 2.76% 2.87% Trading expense ratio (6) 0.21% 0.40% 0.41% 0.33% 0.31% Portfolio turnover rate (7) 49.42% 102.19% 103.59% 79.06% 58.00% Net Asset Value per unit (4) $11.03 $8.73 $8.04 $8.40 $7.86

Distribution Services The Fund is distributed through us, HSBC Investment Funds (Canada) Inc. (our wholly owned subsidiary and affiliate) and HSBC Securities (Canada) Inc. (an affiliate) directly or through its division, HSBC InvestDirect. We pay distribution and servicing fees to them based on the amount of assets held in the investor’s account, and additionally, in some cases, on the amount of the initial purchase. If you hold units of this Fund and/or other HSBC Mutual Funds in a registered plan with HSBC Investment Funds (Canada) Inc., they may charge you an annual fee to cover the annual administration costs of the plan. We permit HSBC Investment Funds (Canada) Inc. to collect these fees by redeeming sufficient units of the Fund with the highest market value in your registered plan.

Financial Highlights The following tables show selected key financial information about the Fund and are intended to help you understand the 2

HSBC Emerging Markets Fund HSBC Emerging Markets Fund – Advisor Series – Net Assets per Unit(1)

HSBC Emerging Markets Fund – Premium Series – Net Assets per Unit(1)

Years ended December 31

Years ended December 31 2017 2016 2015

Net assets per unit, beginning of year (2) Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses) Total increase (decrease) from operations (2) Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital Total annual distributions (2,3) Net assets per unit at December 31 of year shown (2)

*

2014

2013

$–

$–

$– $12.97 $13.56

– – – –

– – – –

– – – –

0.49 (0.34) (0.01) 0.80

0.43 (0.37) (0.28) (0.50)

$–

$–

$–

$0.94

$(0.72)

– – – –

– – – –

– – – –

– – – –

– – – –

$–

$–

$–

$–

$–

$–

$–

$–

$– $12.85

Ratios and Supplemental Data

*

2016

2015

2014

2013

$9.27

$8.52

$8.93 $8.32

$8.62

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.29 (0.27) 0.85 1.68

0.26 (0.21) (0.46) 1.15

0.30 0.28 (0.22) (0.19) 0.13 0.03 (0.39) 0.53

0.29 (0.19) (0.19) (0.30)

Total increase (decrease) from operations (2)

$2.55

$0.74 $(0.18) $0.65 $(0.39)

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– (0.06) – –

– (0.02) – –

– (0.10) – –

– – – –

– – – –

Total annual distributions (2,3)

$(0.06) $(0.02) $(0.10)

$–

$–

Net assets per unit at December 31 of year shown (2)

$11.69

$8.52 $8.93

$8.24

$9.27

Ratios and Supplemental Data

Years ended December 31 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2017 Net assets per unit, beginning of year (2)

2017

2016

2015

2014*

2013

$–

$–

$–

$–

$97

–

–

–

–

7

–

–

–

2.77%

2.88%

Years ended December 31 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

– – – 2.77% 2.88% – 0.40% 0.41% 0.33% 0.31% – 102.19% 103.59% 79.06% 58.00% $– $– $– $– $12.97

The Advisor Series was fully redeemed during 2014; however, the series remains in offer as at period-end.

3

2017

2016

2015

2014

2013

$716

$579

$707

$754

$1,433

61

62

83

84

172

2.54%

2.43%

2.35%

2.20%

2.31%

2.54% 2.43% 2.35% 2.20% 2.31% 0.21% 0.40% 0.41% 0.33% 0.31% 49.42% 102.19% 103.59% 79.06% 58.00% $11.69 $9.27 $8.52 $8.93 $8.32

HSBC Emerging Markets Fund HSBC Emerging Markets Fund – Manager Series – Net Assets per Unit(1)

HSBC Emerging Markets Fund – Institutional Series – Net Assets per Unit(1)

Years ended December 31

Years ended December 31 **

2017 2016 2015 2014 2013 Net assets per unit, beginning of year (2)

Net assets per unit at December 31 of year shown (2)

2014

2013

$–

$7.13

Net assets per unit, beginning of year (2)

– – – –

– – – –

– – – –

– – – –

0.13 (0.06) (0.06) (0.80)

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.55 (0.08) 1.58 2.98

0.48 (0.05) (0.63) 2.00

0.56 (0.06) 0.21 (1.03)

0.54 (0.05) 0.18 0.79

0.47 (0.06) (0.31) (0.85)

$–

$–

$–

$–

$(0.79)

Total increase (decrease) from operations (2)

$5.03

$1.80

$(0.32)

$1.46

$(0.75)

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– (0.50) – –

– (0.36) – –

– (0.48) – –

– (0.29) – –

– (0.21) – –

– – – –

– – – –

– – – –

– – – –

– – – –

$–

$–

$–

$–

$–

$–

$–

$–

$–

$–

Ratios and Supplemental Data

$16.81 $15.43 $16.10 $14.98 $15.51

Total annual distributions (2,3)

$(0.50) $(0.36) $(0.48) $(0.29) $(0.21)

Net assets per unit at December 31 of year shown (2)

$21.26 $16.81 $15.43 $16.10 $14.84

Ratios and Supplemental Data

Years ended December 31 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2015

$–

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital Total annual distributions (2,3)

2016

$–

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses) Total increase (decrease) from operations (2)

2017

$–

2017

2016

2015

2014

2013**

$–

$–

$–

$–

$–

–

–

–

–

–

–

–

–

–

1.59%

Years ended December 31 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

– – – – 1.59% – 0.40% 0.41% 0.33% 0.31% – 102.19% 103.59% 79.06% 58.00% $– $– $– $– $–

** The Manager Series was fully redeemed during 2013; however, the series remains in offer as at period-end.

2017

2016

$63,318

$54,411

2015

2014

2013

2,978

3,237

3,154

2,851

2,247

0.42%

0.30%

0.35%

0.31%

0.43%

$48,661 $45,895 $33,663

0.42% 0.30% 0.35% 0.31% 0.43% 0.21% 0.40% 0.41% 0.33% 0.31% 49.42% 102.19% 103.59% 79.06% 58.00% $21.26 $16.81 $15.43 $16.10 $14.98

(1) This information is derived from the Fund’s audited annual financial statements. 2017, 2016, 2015, 2014 and 2013 balances are stated in IFRS. Under IFRS, the net asset per unit presented in the financial statements is the same as the net asset value calculated for fund pricing purposes. (2) Net assets per unit and distributions per unit are based on the actual number of units outstanding for the relevant series at the relevant time. The increase/decrease in net assets from operations per unit is based on the weighted average number of units outstanding for the relevant series over the fiscal year. (3) Distributions are automatically reinvested in additional units of the Fund, unless the unitholder withdraws from the automatic reinvestment plan by providing written notice to us. (4) This information is provided as at December 31 of the year shown. (5) MER is based on total expenses (excluding distributions, commissions and other portfolio transaction costs) for the stated period and is expressed as an annualized percentage of daily average net asset value during the year. The MER may vary from one mutual fund to another and from one series of units to another. (6) The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the year. (7) The Fund’s portfolio turnover rate indicates how actively the Fund’s portfolio advisor manages its portfolio investments. A portfolio 4

HSBC Emerging Markets Fund turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the year. The higher the Fund’s portfolio turnover rate in a year, the greater the trading costs payable by the Fund in the year, and the greater the chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high turnover rate and the performance of the Fund. The rate is calculated based on the lesser of purchases or sales of securities divided by the average weighted market value of the portfolio securities, excluding short-term securities.

Year-by-Year Returns Years ended December 31 The following bar charts show the Fund’s performance for each of the years shown, and illustrate how the Fund’s performance changed from year to year. In percentage terms, the bar charts show how much an investment made on the first day of each financial year would have grown or decreased by the last day of each financial year. Annual Returns – Investor Series

Management Fees For the year ended December 31, 2017, the Fund paid us management fees of $175,980. The management fee for each series is calculated as a percentage of the daily net asset value for that series. The fees are reduced, where required, so that these fees do not duplicate fees payable by mutual funds in which the Fund invests for the same service.

60%

43.8%

40%

26.3%

20%

16.1%

6.2%

8.6%

6.8%

0% -26.7%

-40%

The Fund’s management fees were used by us to pay costs for managing the investment portfolio, providing investment analysis and recommendations, making investment decisions, making brokerage arrangements for the purchase and sale of the investment portfolio and providing other services. The management fees also funded commission payments and other compensation to sales representatives and registered dealers and brokers (collectively “distribution costs”), including HSBC Investment Funds (Canada) Inc., for units of the Fund bought and held by unitholders. Finally, we used management fees to pay for additional marketing and distribution services to the Fund.

-3.6%

-4.8%

-20%

-60% -48.8% -80%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Annual Returns – Advisor Series 60%

43.8%

40% 20%

16.1%

6.2%

0% -4.9%

-20%

For the year ended December 31, 2017, approximately 46% of the total management fees collected from all HSBC Mutual Funds were used to fund distribution costs. In comparison, for the Fund, such distribution costs represented 43% of the management fees collected. This may vary by series depending on the assets invested in each of the series.

-26.7%

-40% -60% -48.8% -80%

*

Past Performance The performance information shown assumes that all distributions made by the Fund in the years shown were reinvested in additional securities of the Fund. The performance information does not take into account sales, redemption, distribution, optional charges or expenses you may be charged outside of the Fund or the effect of any income tax you may have to pay as a result of your investment in the Fund that would have reduced returns or performance. The performance of different fund series may vary for a number of reasons, including differences in management fees and expenses. The Fund’s past performance does not necessarily indicate how it will perform in the future.

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014* 2015* 2016* 2017*

The Advisor Series was fully redeemed during 2014; however, it remains in offer as at period-end.

Annual Returns – Premium Series 40% 26.8%

30% 20%

16.8% 9.0%

7.4%

10% 0% -10%

-4.0%

-3.4%

-20% -30% -26.3% -40% Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2011 2012 2013 2014 2015 2016 2017

5

HSBC Emerging Markets Fund Annual Returns – Manager Series 60%

Premium Series

45.4% 1 Year

40% 17.5%

20%

7.4%

0% -20%

-60% -48.3% -80%

*

Since 5 Year Inception

HSBC Emerging Markets Fund

26.76% 10.09% 6.57%

2.59%

MSCI Emerging Markets Net Index (C$)

28.26% 12.00% 9.26%

6.13%

(1) Due to the fact that several benchmark indices are only available on a monthly basis, the performance data for the HSBC Funds and the benchmark indices are calculated using values from the first month-end date each Fund was in operation.

-25.7%

-40%

3 Year

(2) For investment commentary and relative performance of the Fund compared to its benchmark, please refer to the Results of Operations section of this report.

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013* 2014* 2015* 2016* 2017*

The Manager Series was fully redeemed during 2013; however, it remains in offer as at period-end.

Summary of Investment Portfolio As at December 31, 2017

Annual Returns – Institutional Series 80%

Sector Mix

60%

Percentage of NAV

47.3%

40% 20%

29.5%

19.1%

8.8%

11.3%

9.4%

0% -2.5%

-20%

Financials Information Technology Consumer Discretionary Materials Energy Telecommunication Services Industrials Utilities Consumer Staples Healthcare Mutual Funds Cash & Equivalents Total

-1.2%

-24.8%

-40% -60% -47.6% -80%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Annual Compound Returns Year ended December 31, 2017 The following table shows the Fund’s historical annual compound total returns for the years indicated, compared with the benchmark index, the MSCI Emerging Markets Net Index (in Canadian dollars), over the same period. This index measures the performance of stocks traded in emerging markets such as Brazil, Mexico, Indonesia and Malaysia. This index is tracked in US dollars and was converted to Canadian dollars.

Geographic Mix Percentage of NAV China South Korea Taiwan India Russia South Africa Brazil Malaysia Thailand Indonesia Hong Kong Cayman Islands Turkey United Kingdom Mexico Egypt Hungary United Arab Emirates Philippines Mutual Funds Cash & Equivalents Total

Investor Series 1 Year

3 Year

5 Year 10 Year

HSBC Emerging Markets Fund

26.34%

MSCI Emerging Markets Net Index (C$)

28.26% 12.00% 9.26%

9.76% 6.08% -1.12% 4.14%

InstitutionalSeries 1 Year

3 Year

5 Year 10 Year

HSBC Emerging Markets Fund

29.46% 12.48% 8.71%

1.32%

MSCI Emerging Markets Net Index (C$)

28.26% 12.00% 9.26%

4.14%

32.02% 25.64% 10.50% 7.89% 6.92% 5.39% 4.16% 2.90% 2.39% 0.74% 0.00% 1.45% 100.00%

6

23.14% 16.29% 11.22% 8.16% 7.09% 6.41% 6.29% 3.55% 3.14% 2.84% 1.90% 1.51% 1.38% 1.18% 1.16% 1.13% 1.00% 0.71% 0.45% 0.00% 1.45% 100.00%

HSBC Emerging Markets Fund Top 25 Holdings Percentage of NAV Samsung Electronics Co., Ltd. Tencent Holdings Ltd. Taiwan Semiconductor Manufacturing Co., Ltd. Alibaba Group Holding Ltd., ADR China Construction Bank Corp., Class H Industrial & Commercial Bank of China Ltd., Class H FirstRand Ltd. Tenaga Nasional Bhd. Kasikornbank PCL Naspers Ltd. China Mobile Ltd. Sberbank of Russia Hyundai Motor Co. Itau Unibanco Holding SA, Preferred Reliance Industries Ltd. China Conch Venture Holdings Ltd. Malayan Banking Bhd. Bank Rakyat Indonesia (Persero) Tbk PT Hon Hai Precision Industry Co., Ltd. China Life Insurance Co., Ltd., Class H Chunghwa Telecom Co., Ltd. Tata Motors Ltd. KAZ Minerals PLC Fomento Economico Mexicano SAB de CV Commercial International Bank Egypt SAE, GDR Total of Top 25 Holdings

5.93% 5.43% 4.46% 3.56% 2.97% 2.49% 2.29% 2.13% 2.07% 2.03% 1.98% 1.87% 1.74% 1.68% 1.56% 1.51% 1.42% 1.39% 1.39% 1.36% 1.33% 1.30% 1.18% 1.16% 1.13% 55.36%

The Summary of Investment Portfolio may change due to ongoing portfolio transactions of the Fund, and is available quarterly.

7

For more information

How to reach us

You can find more information about HSBC Mutual Funds in the Fund’s Simplified Prospectus, Annual Information Form, Annual and Semi-Annual Report and Fund Facts. You can get a copy of these documents, as well as the Fund’s Financial Statements, at no cost by calling 1-888-390-3333, by contacting your authorized dealer or by visiting our website at www.hsbc.ca/investment-resources.

HSBC Global Asset Management (Canada) Limited

These documents and other information about the Fund, such as information circulars and material contracts, are also available at www.sedar.com. Copies of the Annual Report and Semi-Annual Report, Simplified Prospectus, Annual Information Form, Annual and Interim Management Report of Fund Performance and Fund Facts are available on our website at www.hsbc.ca/investment-resources.

Vancouver 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8 Toronto Suite 300, 70 York Street Toronto, ON M5J 1S9 Toll-free: 1-888-390-3333 Fax: 604-669-2756 Email: [email protected] Website: www.hsbc.ca/investment-resources

A NOTE ON FORWARD-LOOKING STATEMENTS This report may contain forward-looking statements about the Fund, including its strategy, expected performance and condition. Forward-looking statements include statements that are predictive in nature that depend upon or refer to future events or conditions, or that include words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates” or negative versions thereof and similar expressions. In addition, any statement that may be made concerning future performance, strategies or prospects, and possible future Fund action, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the Fund and economic factors. Forward-looking statements are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied in any forward-looking statements made by the Fund. Any number of important factors could contribute to these digressions, including, but not limited to, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, and catastrophic events. We stress that the above-mentioned list of important factors is not exhaustive. We encourage you to consider these and other factors carefully before making any investment decisions and we urge you to avoid placing undue reliance on forward-looking statements. Further, you should be aware of the fact that the Fund has no specific intention of updating any forward-looking statements, whether as a result of new information, future events or otherwise. Sources: HSBC Global Asset Management (Canada) Limited, Bloomberg, MSCI, Bank of Canada. Neither MSCI nor any other party involved in or related to compiling, computing or creating the MSCI data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any of such data. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in or related to compiling, computing or creating the data have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages. No further distribution or dissemination of the MSCI data is permitted without MSCI’s express written consent.

Issued by HSBC Global Asset Management (Canada) Limited

(2018-03) DFS

Unauthorized reproduction, distribution, transmission or publication without our prior written consent is strictly prohibited.

HSBC BRIC Equity Fund Annual Management Report of Fund Performance for the year ended December 31, 2017

◆

HSBC BRIC Equity Fund Management Discussion of Fund Performance In this document, you and your refer to the unitholder of the Fund; we, us and our refer to HSBC Global Asset Management (Canada) Limited; and the Fund refers to the HSBC BRIC Equity Fund.

Risk The risks of investing in this Fund remain as discussed in the Simplified Prospectus. During the year, there were no material changes to the Fund that affected the overall risk level of the Fund.

We are the manager, trustee and primary investment advisor of the Fund. We have entered into a sub-advisory agreement with HSBC Global Asset Management (UK) Limited, under which HSBC Global Asset Management (UK) Limited provides investment advice and portfolio management services to the Fund. For an explanation of the relationship between us and the sub-advisor, see the section Selection of Sub-Advisors in the Fund’s Simplified Prospectus.

This Fund is suitable for investors who want to achieve long-term capital appreciation from equity securities issued in non-North American markets. Investors should have a long-term investment time horizon and a high tolerance for risk in their returns.

Results of Operations As of December 31, 2017, the Fund’s net assets decreased by 1.1% to $37.3 million from $37.7 million at the end of 2016. Of this decrease, a $7.4 million gain was attributable to investment performance and $7.8 million was attributable to net withdrawals from the Fund.

Introduction This Annual Management Report of Fund Performance contains financial highlights but does not contain the complete annual financial statements of the investment fund. You may obtain a copy of the Fund’s annual financial statements at your request, at no cost, by calling us toll-free at 1-888-390-3333, by visiting our website at www.hsbc.ca/investment-resources, by visiting the SEDAR website at www.sedar.com or by writing to us at:

Investment Performance The HSBC BRIC Equity Fund (Investor Series) returned 21.23% for the 12-month period ending December 31, 2017, while the benchmark rose 21.57% over the same period. The benchmark is a weighted composite consisting of the MSCI Brazil Net Index (C$) (25%), MSCI Russia Net Index (C$) (25%), MSCI India Net Index (C$) (25%) and MSCI China Net Index (C$) (25%).

Corporate Secretary HSBC Global Asset Management (Canada) Limited 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8

The Fund’s performance was driven by strong stock selection, with holdings in India, Russia and China making a notable contribution. Stock selection of holdings in Brazil detracted from relative performance.

You may also contact us using one of these methods to request a copy of the Fund’s interim financial report, proxy voting policies and procedures, proxy voting disclosure record or quarterly statement of investment portfolio.

At a sector level, selection within the financials, consumer discretionary and energy sectors made a positive contribution, while selection within consumer staples, utilities and industrials detracted from relative performance.

Investment Objective and Strategies The fundamental investment objective of this Fund is to provide long-term capital growth.

Recent Developments

To achieve its objectives, the Fund invests primarily in equities and equity-related securities issued by large, actively traded companies located in BRIC (“Emerging Giant”) countries. The list of Emerging Giant countries may change from time to time; the Fund’s investment advisor currently considers Brazil, Russia, India and China to be Emerging Giant countries. The Fund invests directly in securities listed on major stock exchanges or other registered markets in the Emerging Giant countries that have been established and approved by applicable regulatory authorities. The Fund may also invest in securities of companies listed on stock exchanges outside of Emerging Giant countries but which have a significant business or investment link with Emerging Giant countries. To maintain a diversified portfolio of holdings, the Fund invests in companies from a broad range of industries through common shares, preferred shares, rights, special warrants, American depositary receipts and global depositary receipts. A portion of the Fund may be in the form of cash or cash equivalents.

The portfolio management team is positive on emerging market and BRIC equities based on supportive global economic conditions and continued improvements in fundamentals. A lower inflation environment in many emerging economies (including Russia and Brazil) has allowed for accommodative monetary policies and is helping drive economic growth. The portfolio management team expects to see a continuation of this economic acceleration across emerging markets, which should allow for further gains in corporate earnings. In the short term, market volatility may rise on concerns over future tightening by the US Federal Reserve, a slowdown in China’s growth and geopolitical risks. The Fund continues to focus on companies with an attractive combination of profitability and valuation, and the portfolio management team uses proprietary fundamental research to

1

HSBC BRIC Equity Fund confirm investment opportunities. The portfolio management team is also working with an India-based research company dedicated to supporting the Fund with company-specific data and bespoke research.

annual administration costs of the plan. We permit HSBC Investment Funds (Canada) Inc. to collect these fees by redeeming sufficient units of the Fund with the highest market value in your registered plan.

The use of quantitative portfolio construction tools has improved the visibility and management of risk exposures, and this should continue to help improve performance outcomes.

Related Brokerage Commissions From time to time, the Fund may enter into purchases and sales of securities, derivative instruments, foreign exchange contracts or other instruments with dealers that are members of the HSBC Group (“Related Brokers”). These Related Brokers may earn commissions or spreads provided that such trades are made on terms and conditions comparable to those offered by or to unrelated parties. During the year, the Fund paid commissions to Related Brokers amounting to $nil (December 31, 2016, $98).

Related Party Transactions We, on behalf of the Fund, or the Fund Manager, may, from time to time, enter into transactions or arrangements with or involving other members of the HSBC Group or other people or companies related or connected to us or the Fund. To proceed with the transactions, the Fund relies on the positive recommendation of the Fund’s Independent Review Committee. A condition of this positive recommendation is that the transactions are performed in accordance with our policy on Related Party Transactions. For more general information on persons related to the Fund and the types of potential transactions, see the Fund’s Simplified Prospectus.

Financial Highlights The following tables show selected key financial information about the Fund and are intended to help you understand the Fund’s financial performance for the past five years. This information is derived from the Fund’s audited annual financial statements. The information in the following tables is based on prescribed regulations, and, as a result, is not expected to add down due to the increase/decrease in net assets from operations being based on average units outstanding during the year and all other numbers being based on actual units outstanding at the relevant point in time.

The following is a summary of current transactions and arrangements with entities that are related to us or the Fund.

Manager, Trustee and Investment Advisor We are the manager, trustee and primary investment advisor of the Fund. As manager, we manage the overall business and operations of the Fund. As trustee, we hold legal title to the property of the Fund on your behalf. As primary investment advisor, we provide investment advice and portfolio management services to the Fund. We receive a fee from the Fund for these services based on assets under management, calculated daily and paid monthly.

HSBC BRIC Equity Fund – Investor Series – Net Assets per Unit(1) Years ended December 31 2017

2016

2015

2014

$10.95

$8.62

$9.13

$8.84 $8.77

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.43 (0.40) 1.05 1.29

0.35 (0.27) (0.49) 2.70

0.43 (0.27) 0.95 (1.32)

0.39 0.27 (0.26) (0.24) 0.03 (0.08) 0.17 0.09

Total increase (decrease) from operations (2)

$2.37

$2.29 $(0.21) $0.33 $0.04

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– (0.03) – –

– (0.01) – –

Net assets per unit, beginning of year (2)

We have entered into a sub-advisory agreement with HSBC Global Asset Management (UK) Limited (an affiliate), under which HSBC Global Asset Management (UK) Limited provides investment advice and portfolio management services to the Fund. We pay HSBC Global Asset Management (UK) Limited an investment advisory fee from the Fund based on assets under management, calculated daily and paid quarterly. For more information on our ability to hire sub-advisors, see the section Organization and Management of the HSBC Mutual Funds in the Fund’s Simplified Prospectus.

Distribution Services The Fund is distributed through us, HSBC Investment Funds (Canada) Inc. (our wholly owned subsidiary and affiliate) and HSBC Securities (Canada) Inc. (an affiliate) directly or through its division, HSBC InvestDirect. We pay distribution and servicing fees to them based on the amount of assets held in the investor’s account, and additionally, in some cases, on the amount of the initial purchase. If you hold units of this Fund and/or other HSBC Mutual Funds in a registered plan with HSBC Investment Funds (Canada) Inc., they may charge you an annual fee to cover the

2

– (0.09) – –

2013

– (0.06) – –

– – – –

Total annual distributions (2,3)

$(0.03) $(0.01) $(0.09) $(0.06)

$–

Net assets per unit at December 31 of year shown (2)

$13.25 $10.95

$8.62

$9.13 $8.84

HSBC BRIC Equity Fund Ratios and Supplemental Data

HSBC BRIC Equity Fund – Premium Series – Net Assets per Unit(1)

Years ended December 31 2017 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2016

2015

2014

Years ended December 31

2013

2017

$31,612 $31,494 $31,150 $42,463 $56,507 2,386

2,876

3.26%

3,615

2.91%

2.85%

4,652 2.90%

Net assets per unit, beginning of year (2)

6,390 2.84%

3.38% 2.91% 2.85% 2.90% 2.84% 0.14% 0.30% 0.34% 0.19% 0.17% 31.81% 55.60% 99.62% 41.89% 44.58% $13.25 $10.95 $8.62 $9.13 $8.84

HSBC BRIC Equity Fund – Advisor Series – Net Assets per Unit(1) Years ended December 31 Net assets per unit, beginning of year (2)

2017

2016

2015

2014

2013

$10.94

$8.64

$9.20

$8.91

$8.83

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.44 (0.39) 1.06 1.17

0.34 (0.30) (0.58) 2.69

0.43 (0.32) 0.98 (1.32)

0.42 (0.27) (0.09) 0.18

0.27 (0.25) (0.06) 0.03

2015

2014

2013

$9.51 $10.07

$9.76 $9.62

0.49 (0.37) 1.18 1.29

0.39 (0.26) (0.51) 3.09

0.47 (0.26) 1.17 (1.47)

0.42 0.29 (0.24) (0.22) – (0.08) 0.22 0.11

Total increase (decrease) from operations (2)

$2.59

$2.71

$(0.09)

$0.40 $0.10

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– (0.10) – –

– (0.07) – –

– (0.14) – –

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

– (0.11) – –

– – – –

Total annual distributions (2,3)

$(0.10) $(0.07) $(0.14) $(0.11)

$–

Net assets per unit at December 31 of year shown (2)

$14.61 $12.07

$9.51 $10.07 $9.75

Ratios and Supplemental Data Years ended December 31

Total increase (decrease) from operations (2)

$2.28

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– (0.03) – –

$2.15 $(0.23) $0.24 $(0.01)

– (0.05) – –

– – – –

Total annual distributions (2,3)

$(0.03) $(0.01) $(0.08) $(0.05)

$–

Net assets per unit at December 31 of year shown (2)

$13.24 $10.94

– (0.01) – –

– (0.08) – –

$8.64

$9.20

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

$8.90

Ratios and Supplemental Data Years ended December 31 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

$12.07

2016

2017

2016

2015

2014

2013

$413

$321

$391

$525

$2,254

31

29

45

57

253

3.20%

3.22%

3.33%

2.96%

2.85%

3.73% 3.43% 3.33% 2.96% 2.85% 0.14% 0.30% 0.34% 0.19% 0.17% 31.81% 55.60% 99.62% 41.89% 44.58% $13.24 $10.94 $8.64 $9.20 $8.91

3

2017

2016

2015

2014

2013

$863

$796

$947

$1,195

$1,605

59

66

100

119

165

2.74%

2.46%

2.45%

2.37%

2.30%

3.06% 2.53% 2.45% 2.37% 2.30% 0.14% 0.30% 0.34% 0.19% 0.17% 31.81% 55.60% 99.62% 41.89% 44.58% $14.61 $12.07 $9.51 $10.07 $9.76

HSBC BRIC Equity Fund HSBC BRIC Equity Fund – Manager Series – Net Assets per Unit(1)

HSBC BRIC Equity Fund – Institutional Series – Net Assets per Unit(1)

Years ended December 31

Years ended December 31 2017

Net assets per unit, beginning of year (2)

2016

2015

2014

2013

2017

2016

2015

2014

2013

$9.94 $10.53 $10.19

$9.86

$9.28 $9.10

Net assets per unit, beginning of year (2)

0.45 (0.23) 1.22 (1.26)

0.41 0.28 (0.18) (0.16) – (0.07) 0.07 0.03

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.49 (0.12) 1.20 1.62

0.41 (0.05) (0.57) 3.05

0.50 (0.04) 1.01 (1.75)

0.45 (0.05) 0.08 0.14

0.32 (0.04) (0.07) 0.25

$0.18

$0.30 $0.08

Total increase (decrease) from operations (2)

$3.19

$2.84

$(0.28)

$0.62

$0.46

– (0.16) – –

– – – –

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– (0.41) – –

– (0.32) – –

– (0.35) – –

– (0.32) – –

– – – –

Total annual distributions (2,3)

$(0.17) $(0.13) $(0.18) $(0.16)

$–

Total annual distributions (2,3)

$(0.41) $(0.32) $(0.35) $(0.32)

$–

Net assets per unit at December 31 of year shown (2)

$13.79 $11.40

Net assets per unit at December 31 of year shown (2)

$15.27 $12.62

$11.40

$9.01

$9.58

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.46 (0.29) 1.11 1.23

0.38 (0.22) (0.43) 2.86

Total increase (decrease) from operations (2)

$2.51

$2.59

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– (0.17) – –

– (0.13) – –

– (0.18) – –

$9.01

$9.58 $9.27

$12.62

Ratios and Supplemental Data

Ratios and Supplemental Data

Years ended December 31

Years ended December 31

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2017

2016

2015

2014

2013

$88

$72

$58

$118

$204

6

6

6

12

22

2.26%

2.26%

2.29%

1.88%

1.77%

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

3.59% 3.30% 2.60% 1.88% 1.77% 0.14% 0.30% 0.34% 0.19% 0.17% 31.81% 55.60% 99.62% 41.89% 44.58% $13.79 $11.40 $9.01 $9.58 $9.28

$9.94 $10.53 $10.19

2017

2016

2015

2014

2013

$4,306

$4,980

$6,138

$6,932

$7,384

282

395

618

659

724

0.81%

0.47%

0.40%

0.45%

0.38%

0.94% 0.47% 0.40% 0.45% 0.38% 0.14% 0.30% 0.34% 0.19% 0.17% 31.81% 55.60% 99.62% 41.89% 44.58% $15.27 $12.62 $9.94 $10.53 $10.19

(1) This information is derived from the Fund’s audited annual financial statements. 2017, 2016, 2015, 2014 and 2013 balances are stated in IFRS. Under IFRS, the net asset per unit presented in the financial statements is the same as the net asset value calculated for fund pricing purposes. (2) Net assets per unit and distributions per unit are based on the actual number of units outstanding for the relevant series at the relevant time. The increase/decrease in net assets from operations per unit is based on the weighted average number of units outstanding for the relevant series over the fiscal year. (3) Distributions are automatically reinvested in additional units of the Fund, unless the unitholder withdraws from the automatic reinvestment plan by providing written notice to us. (4) This information is provided as at December 31 of the year shown. (5) MER is based on total expenses (excluding distributions, commissions and other portfolio transaction costs) for the stated period and is expressed as an annualized percentage of daily average net asset value during the year. The MER may vary from one mutual fund to another and from one series of units to another. We have

4

HSBC BRIC Equity Fund waived or absorbed certain fees and expenses otherwise payable by the Fund. The amount of expenses absorbed or waived is at the discretion of and can be terminated at any time by us.

Year-by-Year Returns Years ended December 31 The following bar charts show the Fund’s performance for each of the years shown, and illustrate how the Fund’s performance changed from year to year. In percentage terms, the bar charts show how much an investment made on the first day of each financial year would have grown or decreased by the last day of each financial year.

(6) The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the year. (7) The Fund’s portfolio turnover rate indicates how actively the Fund’s portfolio advisor manages its portfolio investments. A portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the year. The higher the Fund’s portfolio turnover rate in a year, the greater the trading costs payable by the Fund in the year, and the greater the chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high turnover rate and the performance of the Fund. The rate is calculated based on the lesser of purchases or sales of securities divided by the average weighted market value of the portfolio securities, excluding short-term securities.

Annual Returns – Investor Series 80% 59.0%

60% 40%

27.2% 21.2%

20%

9.4%

0.0%

0%

0.8%

3.9% -4.7%

-20% -22.3%

Management Fees

-40%

For the year ended December 31, 2017, the Fund paid us management fees of $735,744. The management fee for each series is calculated as a percentage of the daily net asset value for that series. The fees are reduced, where required, so that these fees do not duplicate fees payable by mutual funds in which the Fund invests for the same service.

-60% -48.6% -80%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Annual Returns – Advisor Series 80%

The Fund’s management fees were used by us to pay costs for managing the investment portfolio, providing investment analysis and recommendations, making investment decisions, making brokerage arrangements for the purchase and sale of the investment portfolio and providing other services. The management fees also funded commission payments and other compensation to sales representatives and registered dealers and brokers (collectively “distribution costs”), including HSBC Investment Funds (Canada) Inc., for units of the Fund bought and held by unitholders. Finally, we used management fees to pay for additional marketing and distribution services to the Fund.

58.9%

60% 40%

26.8% 21.3%

20%

9.5%

0.0%

0%

0.8%

3.8% -5.2%

-20% -22.2%

-40% -60% -48.6% -80%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Annual Returns – Premium Series

For the year ended December 31, 2017, approximately 46% of the total management fees collected from all HSBC Mutual Funds were used to fund distribution costs. In comparison, for the Fund, such distribution costs represented 38% of the management fees collected. This may vary by series depending on the assets invested in each of the series.

40% 27.7%

30%

21.9%

20% 10.0%

10%

1.3%

4.4%

0%

Past Performance

-4.3%

-10%

The performance information shown assumes that all distributions made by the Fund in the years shown were reinvested in additional securities of the Fund. The performance information does not take into account sales, redemption, distribution, optional charges or expenses you may be charged outside of the Fund or the effect of any income tax you may have to pay as a result of your investment in the Fund that would have reduced returns or performance. The performance of different fund series may vary for a number of reasons, including differences in management fees and expenses. The Fund’s past performance does not necessarily indicate how it will perform in the future.

-20% -30%

5

-21.8% Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2011 2012 2013 2014 2015 2016 2017

HSBC BRIC Equity Fund Annual Returns – Manager Series 80%

Advisor Series 1 Year

60.6%

60% 40%

28.0% 22.4%

20%

10.7%

1.1%

0%

1.8%

4.9% -4.1%

-20%

-21.4%

-40%

0.61%

25% MSCI Brazil Net Index (C$), 25% MSCI Russia Net Index (C$), 25% MSCI India Net Index (C$) and 25% MSCI China Net Index (C$)

21.57% 16.24% 9.68%

2.13%

Manager Series 1 Year

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Annual Returns – Institutional Series 80%

62.7%

40%

5 Year 10 Year

22.44% 14.54% 9.94%

1.67%

25% MSCI Brazil Net Index (C$), 25% MSCI Russia Net Index (C$), 25% MSCI India Net Index (C$) and 25% MSCI China Net Index (C$)

21.57% 16.24% 9.68%

2.13%

1 Year

30.3% 24.2% 12.2%

2.4%

3.3%

HSBC BRIC Equity Fund

6.5% -2.3%

-20%

-20.3%

-40%

3 Year

-60% -47.4%

5 Year 10 Year

24.21% 16.51% 11.70%

25% MSCI Brazil Net Index (C$), 25% MSCI Russia Net Index (C$), 25% MSCI India Net Index (C$) and 25% MSCI China Net Index (C$) 21.57% 16.24%

0%

-80%

3 Year

HSBC BRIC Equity Fund

InstitutionalSeries

60% 20%

5 Year 10 Year

21.31% 13.41% 8.82%

-60% -48.0% -80%

3 Year

HSBC BRIC Equity Fund

9.68%

3.15%

2.13%

Premium Series

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

1 Year

Annual Compound Returns Year ended December 31, 2017 The following tables show the Fund’s historical annual compound total returns for the years indicated, compared with the benchmark index. The benchmark is a weighted composite consisting of the MSCI Brazil Net Index (C$) (25%), MSCI Russia Net Index (C$) (25%), MSCI India Net Index (C$) (25%) and MSCI China Net Index (C$) (25%).

1 Year

3 Year

0.67%

21.57% 16.24% 9.68%

2.13%

21.90% 14.22% 9.53%

5.64%

25% MSCI Brazil Net Index (C$), 25% MSCI Russia Net Index (C$), 25% MSCI India Net Index (C$) and 25% MSCI China Net Index (C$)

21.57% 16.24% 9.68%

6.45%

Summary of Investment Portfolio As at December 31, 2017

Sector Mix Percentage of NAV Financials Energy Information Technology Materials Consumer Discretionary Telecommunication Services Consumer Staples Utilities Industrials Healthcare Cash & Equivalents Total

5 Year 10 Year

25% MSCI Brazil Net Index (C$), 25% MSCI Russia Net Index (C$), 25% MSCI India Net Index (C$) and 25% MSCI China Net Index (C$)

HSBC BRIC Equity Fund

(2) For investment commentary and relative performance of the Fund compared to its benchmark, please refer to the Results of Operations section of this report.

Investor Series 21.23% 13.70% 9.00%

Since 5 Year Inception

(1) Due to the fact that several benchmark indices are only available on a monthly basis, the performance data for the HSBC Funds and the benchmark indices are calculated using values from the first month-end date each Fund was in operation.

The MSCI Brazil Net Index is designed to measure the performance of the large and mid cap segments of the Brazilian market. The MSCI Russia Net Index is designed to measure the performance of the large and mid cap segments of the Russian market. The MSCI India Net Index is designed to measure the performance of the large and mid cap segments of the Indian market. The MSCI China Net Index captures large and mid cap representation across China H shares, B shares, Red chips and P chips.

HSBC BRIC Equity Fund

3 Year

6

32.81% 17.93% 13.46% 10.58% 10.13% 4.41% 3.23% 2.94% 2.36% 1.13% 1.02% 100.00%

HSBC BRIC Equity Fund Geographic Mix Percentage of NAV Russia India China Brazil Hong Kong Cyprus Cayman Islands Cash & Equivalents Total

26.34% 24.42% 22.56% 20.68% 4.03% 0.95% 0.00% 1.02% 100.00%

Top 25 Holdings Percentage of NAV Tencent Holdings Ltd. Sberbank of Russia, ADR Itau Unibanco Holding SA, Preferred Lukoil PJSC, ADR Alibaba Group Holding Ltd., ADR Infosys Ltd. Sberbank of Russia, GDR Reliance Industries Ltd. Gazprom OAO Novatek OAO Vale SA China Construction Bank Corp., Class H Vedanta Ltd. Xinyi Glass Holdings Ltd. Maruti Suzuki India Ltd. Mobile TeleSystems OJSC Rosneft Oil Co., GDR Banco Bradesco SA, Preferred Magnit PJSC New China Life Insurance Co., Ltd., Class H ICICI Bank Ltd. Kroton Educacional SA Industrial & Commercial Bank of China Ltd., Class H HCL Technologies Ltd. Axis Bank Ltd. Total of Top 25 Holdings

5.69% 4.89% 4.86% 4.24% 3.54% 2.61% 2.57% 2.55% 2.51% 2.48% 2.47% 2.34% 2.33% 1.97% 1.96% 1.93% 1.92% 1.90% 1.90% 1.83% 1.80% 1.77% 1.74% 1.62% 1.57% 64.99%

The Summary of Investment Portfolio may change due to ongoing portfolio transactions of the Fund, and is available quarterly.

7

For more information

How to reach us

You can find more information about HSBC Mutual Funds in the Fund’s Simplified Prospectus, Annual Information Form, Annual and Semi-Annual Report and Fund Facts. You can get a copy of these documents, as well as the Fund’s Financial Statements, at no cost by calling 1-888-390-3333, by contacting your authorized dealer or by visiting our website at www.hsbc.ca/investment-resources.

HSBC Global Asset Management (Canada) Limited

These documents and other information about the Fund, such as information circulars and material contracts, are also available at www.sedar.com. Copies of the Annual Report and Semi-Annual Report, Simplified Prospectus, Annual Information Form, Annual and Interim Management Report of Fund Performance and Fund Facts are available on our website at www.hsbc.ca/investment-resources.

Vancouver 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8 Toronto Suite 300, 70 York Street Toronto, ON M5J 1S9 Toll-free: 1-888-390-3333 Fax: 604-669-2756 Email: [email protected] Website: www.hsbc.ca/investment-resources

A NOTE ON FORWARD-LOOKING STATEMENTS This report may contain forward-looking statements about the Fund, including its strategy, expected performance and condition. Forward-looking statements include statements that are predictive in nature that depend upon or refer to future events or conditions, or that include words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates” or negative versions thereof and similar expressions. In addition, any statement that may be made concerning future performance, strategies or prospects, and possible future Fund action, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the Fund and economic factors. Forward-looking statements are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied in any forward-looking statements made by the Fund. Any number of important factors could contribute to these digressions, including, but not limited to, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, and catastrophic events. We stress that the above-mentioned list of important factors is not exhaustive. We encourage you to consider these and other factors carefully before making any investment decisions and we urge you to avoid placing undue reliance on forward-looking statements. Further, you should be aware of the fact that the Fund has no specific intention of updating any forward-looking statements, whether as a result of new information, future events or otherwise. Sources: HSBC Global Asset Management (Canada) Limited, Bloomberg, MSCI, Bank of Canada. Neither MSCI nor any other party involved in or related to compiling, computing or creating the MSCI data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any of such data. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in or related to compiling, computing or creating the data have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages. No further distribution or dissemination of the MSCI data is permitted without MSCI’s express written consent.

Issued by HSBC Global Asset Management (Canada) Limited

(2018-03) DFS

Unauthorized reproduction, distribution, transmission or publication without our prior written consent is strictly prohibited.

HSBC World Selection® Diversified Conservative Fund Annual Management Report of Fund Performance for the year ended December 31, 2017

®

World Selection is a registered trademark of HSBC Bank Canada.

◆

HSBC World Selection Diversified Conservative Fund Management Discussion of Fund Performance In this document, you and your refer to the unitholder of the Fund; we, us and our refer to HSBC Global Asset Management (Canada) Limited; and the Fund refers to the HSBC World Selection Diversified Conservative Fund.

Results of Operations

We are the manager, trustee and primary investment advisor of the Fund.

As of December 31, 2017, the Fund’s net assets increased by 15.9% to $217.6 million from $187.7 million at the end of 2016. Of this increase, an $8.8 million gain was attributable to investment performance and $21.1 million was attributable to net contributions to the Fund.

Introduction

Investment Performance

This Annual Management Report of Fund Performance contains financial highlights but does not contain the complete annual financial statements of the investment fund. You may obtain a copy of the Fund’s annual financial statements at your request, at no cost, by calling us toll-free at 1-888-390-3333, by visiting our website at www.hsbc.ca/investment-resources, by visiting the SEDAR website at www.sedar.com or by writing to us at:

The HSBC World Selection Diversified Conservative Fund (investor Series) rose 4.36% over the 12-month period ending December 31, 2017, while its benchmark rose 4.82% over the same period. The benchmark is a weighted composite consisting of the FTSE TMX Canada 91 Day T-Bill Index (7%), FTSE TMX Canada Universe Bond Index (65%), S&P/TSX Capped Composite Index (16%) and MSCI World Net Index (C$) (12%).

Corporate Secretary HSBC Global Asset Management (Canada) Limited 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8

In 2017, the Fund was neutral or modestly overweight in Canadian and global equities and underweight in fixed income (although within this segment it was overweight in corporate bonds). Returns from the Fund’s three main asset classes were the biggest contributors to performance. Security selection within Canadian equities and fixed income added to performance, and global equity selection was a small positive.

You may also contact us using one of these methods to request a copy of the Fund’s interim financial report, proxy voting policies and procedures, proxy voting disclosure record or quarterly statement of investment portfolio.

From a Canadian investor’s perspective, global equities were the best-performing major asset class in 2017, returning 14.4%. Canadian equities posted a respectable 9.1% return, while the domestic bond market gained a modest 2.5%. Following weakness early in the year, oil prices rallied and ended the year at $60 per barrel, up approximately 12% in 2017. The Canadian dollar appreciated 7% during the year, benefiting from strength in commodity prices and Bank of Canada rate hikes.

Investment Objective and Strategies The fundamental investment objective of this Fund is to provide investors with primarily capital preservation and interest income with some potential for low to moderate long-term capital growth through a diversified portfolio of investments across several asset classes.

The market rally has been well supported by improving fundamentals, including strong earnings growth. Additionally, the relative attractiveness of equities compared to cash or government bonds remains compelling. The Fund therefore remains tilted towards corporate assets (both equities and bonds).

To achieve its objectives, the Fund invests in other mutual funds and uses strategic asset allocation as the principal investment strategy. The Fund has an established policy asset mix, based on its stated objectives. In addition to adjusting the Fund’s asset mix depending on economic conditions and the relative value of securities in the Fund, the Fund may also use tactical asset allocation to take advantage of current and expected future market conditions.

Recent Developments The global economy continues to accelerate. Consumer spending remains solid, supported by an increase in household net worth and a healthy labour market. Both business investment and manufacturing activity are also trending higher.

Risk The risks of investing in the Fund remain as discussed in the Simplified Prospectus. During the year, there were no material changes to the Fund that affected the overall risk level of the Fund.

Looking ahead, while central banks will gradually remove stimulus, rates are likely to remain much lower than historic norms. On fiscal spending, the path is less clear, but the bias seems somewhat expansionary. Canadian economic growth remains healthy, although it was slower in the second half of 2017 than in the robust first half of the year. Employment remains strong and the unemployment rate has dipped to its lowest reading in four decades.

This Fund is suitable for investors who want to earn interest income with some potential for low to moderate long-term growth of their capital. Investors in this Fund should have a medium-term investment time horizon and a low to medium tolerance for investment risk.

1

HSBC World Selection Diversified Conservative Fund The US Federal Reserve raised its target rate three times in 2017 and we expect three more in 2018. The Bank of Canada surprised markets with two hikes mid-year, taking the target rate to 1%. Three additional hikes are expected in 2018.

Fund on Fund Investing During the year, the Fund invested in units of other HSBC Mutual Funds, which are also managed by us. To proceed with the transactions, the Fund relied on the positive recommendation of the Fund’s Independent Review Committee by way of Standing Instruction. A condition of this positive recommendation was that the transactions were performed in accordance with our policy on fund on fund investing.

Effective June 20, 2017, the management fee charged to the Investor Series and Advisor Series of the Fund was reduced from 1.50% to 1.40%, and the trailer fee was reduced from 0.75% to 0.70% effective September 22, 2017.

Financial Highlights

Related Party Transactions

The following tables show selected key financial information about the Fund and are intended to help you understand the Fund’s financial performance for the past five years. This information is derived from the Fund’s audited annual financial statements. The information in the following tables is based on prescribed regulations, and, as a result, is not expected to add down due to the increase/decrease in net assets from operations being based on average units outstanding during the year and all other numbers being based on actual units outstanding at the relevant point in time.

We, on behalf of the Fund, or the Fund Manager, may, from time to time, enter into transactions or arrangements with or involving other members of the HSBC Group or other people or companies related or connected to us or the Fund. To proceed with the transactions, the Fund relies on the positive recommendation of the Fund’s Independent Review Committee. A condition of this positive recommendation is that the transactions are performed in accordance with our policy on Related Party Transactions. For more general information on persons related to the Fund and the types of potential transactions, see the Fund’s Simplified Prospectus.

HSBC World Selection Diversified Conservative Fund – Investor Series – Net Assets per Unit(1)

The following is a summary of current transactions and arrangements with entities that are related to us or the Fund.

Years ended December 31 Manager, Trustee and Investment Advisor

2017

We are the manager, trustee and primary investment advisor of the Fund. As manager, we manage the overall business and operations of the Fund. As trustee, we hold legal title to the property of the Fund on your behalf. As primary investment advisor, we provide investment advice and portfolio management services to the Fund. We receive a fee from the Fund for these services based on assets under management, calculated daily and paid monthly.

Net assets per unit, beginning of year (2)

Custodial Services HSBC Bank Canada (“the Bank”) (of which we are a wholly owned subsidiary) was the custodian of the Fund from January 1, 2017 to September 30, 2017. For the years ended December 31, 2017, and December 31, 2016, all fees for these services were waived by the Bank. Effective October 1, 2017, Northern Trust Company, Canada took over as custodian for the Fund.

2016

2015

2014

2013

$12.40 $12.16 $12.24 $11.63 $11.24

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.38 (0.21) 0.10 0.27

0.41 (0.21) 0.26 0.13

0.42 (0.21) 0.14 (0.23)

0.38 (0.21) 0.08 0.48

0.34 (0.20) 0.12 0.28

Total increase (decrease) from operations (2)

$0.54

$0.59

$0.12

$0.73

$0.54

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

(0.10) (0.05) – –

(0.09) (0.06) (0.20) –

(0.11) (0.06) (0.08) –

(0.11) (0.05) – –

(0.08) (0.05) (0.03) –

Total annual distributions (2,3)

$(0.15) $(0.35) $(0.25) $(0.16) $(0.16)

Net assets per unit at December 31 of year shown (2)

$12.79 $12.40 $12.16 $12.24 $11.63

Distribution Services The Fund is distributed through us, HSBC Investment Funds (Canada) Inc. (our wholly owned subsidiary and affiliate) and HSBC Securities (Canada) Inc. (an affiliate) directly or through its division, HSBC InvestDirect. We pay distribution and servicing fees to them based on the amount of assets held in the investor’s account, and additionally, in some cases, on the amount of the initial purchase. If you hold units of this Fund and/or other HSBC Mutual Funds in a registered plan with HSBC Investment Funds (Canada) Inc., they may charge you an annual fee to cover the annual administration costs of the plan. We permit HSBC Investment Funds (Canada) Inc. to collect these fees by redeeming sufficient units of the Fund with the highest market value in your registered plan.

Ratios and Supplemental Data Years ended December 31 2017 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2

2016

2015

2014

2013

$217,577 $187,633 $167,462 $146,307 $97,139 17,017

15,136

13,777

11,958

8,356

1.70%

1.75%

1.74%

1.78%

1.81%

1.70% 0.01% 8.64% $12.79

1.75% 0.02% 17.79% $12.40

1.74% 0.02% 12.42% $12.16

1.78% 1.81% 0.01% 0.01% 7.85% 21.04% $12.24 $11.63

HSBC World Selection Diversified Conservative Fund HSBC World Selection Diversified Conservative Fund – Advisor Series – Net Assets per Unit(1)

HSBC World Selection Diversified Conservative Fund – Institutional Series – Net Assets per Unit(1)

Years ended December 31 2017 Net assets per unit, beginning of year (2)

2016*

2015

2014

Years ended December 31

2013

$– $11.57 $11.69 $11.11 $10.74

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses) Total increase (decrease) from operations (2)

Net assets per unit, beginning of year (2)

2017**

2016

2015

2014

2013

$10.54

$9.50 $10.00

$9.70

$–

– – – 0.13

0.31 (0.04) 0.23 0.11

0.08 – 0.01 (0.07)

– – – (0.02)

0.02 – – (0.04)

– – – –

0.09 (0.08) 0.05 0.01

0.39 (0.27) 0.13 (0.15)

0.34 (0.21) 0.08 0.54

0.31 (0.19) 0.10 0.28

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

$–

$0.07

$0.10

$0.75

$0.50

Total increase (decrease) from operations (2)

$0.13

$0.61

$0.02 $(0.02) $(0.02)

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– – – –

(0.03) (0.02) (0.07) –

(0.19) (0.10) (0.22) –

Total annual distributions (2,3)

$–

Net assets per unit at December 31 of year shown (2)

$– $10.54

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– – – –

– – – –

Total annual distributions (2,3)

$–

$–

Net assets per unit at December 31 of year shown (2)

$–

$– $11.57 $11.69 $11.11

(0.09) (0.05) (0.06) –

(0.09) (0.04) – –

(0.07) (0.04) (0.03) –

$(0.20) $(0.13) $(0.14)

$(0.12) $(0.51) $9.50

– – – –

(0.17) (0.11) (0.07) –

$– $(0.35) $–

$9.70

Ratios and Supplemental Data Ratios and Supplemental Data

Years ended December 31 2017 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

*

$– –

*

2015

2014

2013

$–

$143

$163

$194

2016

–

12

14

Years ended December 31 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

17

– 2.40% 2.30% 1.87% 1.84% – 2.86% 2.60% 1.87% 1.84% – 0.02% 0.02% 0.01% 0.01% – 17.79% 12.42% 7.85% 21.04% $– $– $11.57 $11.69 $11.11

The Advisor Series was fully redeemed during 2016; however, it remains in offer as at period-end.

2017**

2016

2015

2014

2013

$–

$40

$9

$–

$16

–

4

1

–

2

0.97%

0.52%

0.07% 0.09%

0.35%

1.30% 0.81% 0.07% 0.09% 0.35% 0.01% 0.02% 0.02% 0.01% 0.01% 8.64% 17.79% 12.42% 7.85% 21.04% $– $10.54 $9.50 $– $9.70

** The Institutional Series was fully redeemed during 2017; however, it remains in offer as at period-end. (1) This information is derived from the Fund’s audited annual financial statements. 2017, 2016, 2015, 2014 and 2013 balances are stated in IFRS. Under IFRS, the net asset per unit presented in the financial statements is the same as the net asset value calculated for fund pricing purposes. (2) Net assets per unit and distributions per unit are based on the actual number of units outstanding for the relevant series at the relevant time. The increase/decrease in net assets from operations per unit is based on the weighted average number of units outstanding for the relevant series over the fiscal year. (3) Distributions are automatically reinvested in additional units of the Fund, unless the unitholder withdraws from the automatic reinvestment plan by providing written notice to us. (4) This information is provided as at December 31 of the year shown. (5) MER is based on total expenses (excluding distributions, commissions and other portfolio transaction costs) for the stated period and is expressed as an annualized percentage of daily average net asset value during the year. The MER may vary from one mutual fund to another and from one series of units to another. We have

3

HSBC World Selection Diversified Conservative Fund waived or absorbed certain fees and expenses otherwise payable by the Fund. The amount of expenses absorbed or waived is at the discretion of and can be terminated at any time by us.

Year-by-Year Returns Years ended December 31 The following bar charts show the Fund’s performance for each of the years shown, and illustrate how the Fund’s performance changed from year to year. In percentage terms, the bar charts show how much an investment made on the first day of each financial year would have grown or decreased by the last day of each financial year.

(6) The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the year. (7) The Fund’s portfolio turnover rate indicates how actively the Fund’s portfolio advisor manages its portfolio investments. A portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the year. The higher the Fund’s portfolio turnover rate in a year, the greater the trading costs payable by the Fund in the year, and the greater the chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high turnover rate and the performance of the Fund. The rate is calculated based on the lesser of purchases or sales of securities divided by the average weighted market value of the portfolio securities, excluding short-term securities.

Annual Returns – Investor Series 15% 10%

8.3% 5.3%

4.8%

5%

6.6%

4.9%

4.8%

1.4%

4.4%

1.3%

0%

Management Fees

-5%

For the year ended December 31, 2017, the Fund paid us management fees of $2,973,320. The management fee for each series is calculated as a percentage of the daily net asset value for that series. The fees are reduced, where required, so that these fees do not duplicate fees payable by mutual funds in which the Fund invests for the same service.

-5.5% -10%

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Annual Returns – Advisor Series 15%

The Fund’s management fees were used by us to pay costs for managing the investment portfolio, providing investment analysis and recommendations, making investment decisions, making brokerage arrangements for the purchase and sale of the investment portfolio and providing other services. The management fees also funded commission payments and other compensation to sales representatives and registered dealers and brokers (collectively “distribution costs”), including HSBC Investment Funds (Canada) Inc., for units of the Fund bought and held by unitholders. Finally, we used management fees to pay for additional marketing and distribution services to the Fund.

8.8%

10%

5.4%

4.8%

5%

1.5%

4.8%

6.5% 0.7%

0% -5% -6.0% -10%

*

For the year ended December 31, 2017, approximately 46% of the total management fees collected from all HSBC Mutual Funds were used to fund distribution costs. In comparison, for the Fund, such distribution costs represented 49% of the management fees collected. This may vary by series depending on the assets invested in each of the series.

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016* 2017*

The Advisor Series was fully redeemed during 2016; however, the series remains in offer as at period-end.

Annual Compound Returns Year ended December 31, 2017 The following tables show the Fund’s historical annual compound total returns for the years indicated, compared with the benchmark index. The benchmark of this Fund is a weighted composite consisting of the FTSE TMX Canada 91-Day T-Bill Index (7%), FTSE TMX Canada Universe Bond Index (65%), S&P/TSX Capped Composite Index (16%) and MSCI World Net Index (in Canadian dollars) (12%).

Past Performance The performance information shown assumes that all distributions made by the Fund in the years shown were reinvested in additional securities of the Fund. The performance information does not take into account sales, redemption, distribution, optional charges or expenses you may be charged outside of the Fund or the effect of any income tax you may have to pay as a result of your investment in the Fund that would have reduced returns or performance. The performance of different fund series may vary for a number of reasons, including differences in management fees and expenses. The Fund’s past performance does not necessarily indicate how it will perform in the future.

The FTSE TMX Canada 91-Day T-Bill Index is a measure of the total return of Canadian Treasury Bills with a term to maturity of three months. The FTSE TMX Canada Universe Bond Index is a broad measure of the total return for the Canadian bond market, covering marketable Canadian bonds with a term to maturity of more than one year. The S&P/TSX Capped Composite Index tracks the changes in the share prices of the largest companies listed on the Toronto Stock Exchange, representing a broad range of industries. The MSCI World Net Index is an international index 4

HSBC World Selection Diversified Conservative Fund that measures the performance of stocks traded in Europe, Australia, the Far East, the US, Canada and South Africa. This index is tracked in US dollars and was converted to Canadian dollars.

Top 25 Holdings* Percentage of NAV HSBC Canadian Bond Fund - Institutional Series HSBC Mortgage Fund - Institutional Series HSBC Global Equity Fund - Institutional Series HSBC Dividend Fund - Institutional Series HSBC Canadian Money Market Fund - Institutional Series HSBC Equity Fund - Institutional Series HSBC Emerging Markets Debt Fund - Institutional Series HSBC Emerging Markets Fund - Institutional Series Remaining Holdings Total of Top 25 Holdings

Investor Series 1 Year HSBC World Selection Diversified Conservative Fund

3 Year

5 Year 10 Year

4.36% 3.49% 4.36%

3.54%

7% FTSE TMX Canada 91 Days Treasury Bill Index, 65% FTSE TMX Canada Universe Bond Index, 16% S&P/TSX Capped Composite Index, 12% MSCI World Net Index (C$) 4.82% 4.27% 5.40%

4.94%

*

41.25% 16.63% 10.99% 10.59% 7.13% 6.29% 5.47% 1.53% 0.12% 100.00%

The Fund had less than 25 holdings as at December 31, 2017.

(1) Due to the fact that several benchmark indices are only available on a monthly basis, the performance data for the HSBC Funds and the benchmark indices are calculated using values from the first month-end date each Fund was in operation. (2) For investment commentary and relative performance of the Fund compared to its benchmark, please refer to the Results of Operations section of this report.

Summary of Investment Portfolio As at December 31, 2017

Asset Mix Percentage of NAV Bonds Canadian Equities International Equities Cash & Equivalents Total

63.35% 16.88% 12.52% 7.25% 100.00%

The Summary of Investment Portfolio may change due to ongoing portfolio transactions of the Fund, and is available quarterly. The Fund invests in other mutual funds, and the prospectus and other information about the underlying funds are available on SEDAR at www.sedar.com.

5

For more information

How to reach us

You can find more information about HSBC Mutual Funds in the Fund’s Simplified Prospectus, Annual Information Form, Annual and Semi-Annual Report and Fund Facts. You can get a copy of these documents, as well as the Fund’s Financial Statements, at no cost by calling 1-888-390-3333, by contacting your authorized dealer or by visiting our website at www.hsbc.ca/investment-resources.

HSBC Global Asset Management (Canada) Limited

These documents and other information about the Fund, such as information circulars and material contracts, are also available at www.sedar.com. Copies of the Annual Report and Semi-Annual Report, Simplified Prospectus, Annual Information Form, Annual and Interim Management Report of Fund Performance and Fund Facts are available on our website at www.hsbc.ca/investment-resources.

Vancouver 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8 Toronto Suite 300, 70 York Street Toronto, ON M5J 1S9 Toll-free: 1-888-390-3333 Fax: 604-669-2756 Email: [email protected] Website: www.hsbc.ca/investment-resources

A NOTE ON FORWARD-LOOKING STATEMENTS This report may contain forward-looking statements about the Fund, including its strategy, expected performance and condition. Forward-looking statements include statements that are predictive in nature that depend upon or refer to future events or conditions, or that include words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates” or negative versions thereof and similar expressions. In addition, any statement that may be made concerning future performance, strategies or prospects, and possible future Fund action, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the Fund and economic factors. Forward-looking statements are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied in any forward-looking statements made by the Fund. Any number of important factors could contribute to these digressions, including, but not limited to, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, and catastrophic events. We stress that the above-mentioned list of important factors is not exhaustive. We encourage you to consider these and other factors carefully before making any investment decisions and we urge you to avoid placing undue reliance on forward-looking statements. Further, you should be aware of the fact that the Fund has no specific intention of updating any forward-looking statements, whether as a result of new information, future events or otherwise. Sources: HSBC Global Asset Management (Canada) Limited, Bloomberg, MSCI, FTSE TMX Global Debt Capital Markets Inc., Bank of Canada. Neither MSCI nor any other party involved in or related to compiling, computing or creating the MSCI data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any of such data. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in or related to compiling, computing or creating the data have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages. No further distribution or dissemination of the MSCI data is permitted without MSCI’s express written consent. FTSE TMX Global Debt Capital Markets Inc. (“FTDCM”), FTSE International Limited (“FTSE”), the London Stock Exchange Group companies (the “Exchange”) or TSX Inc. (“TSX” and together with FTDCM, FTSE and the Exchange, the “Licensor Parties”). The Licensor Parties make no warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the FTSE TMX Canada Index and/or the figure at which the said Index stands at any particular time on any particular day or otherwise. The Index is compiled and calculated by FTDCM and all copyright in the Index values and constituent lists vests in FTDCM. The Licensor Parties shall not be liable (whether in negligence or otherwise) to any person for any error in the Index and the Licensor Parties shall not be under any obligation to advise any person of any error therein. “TMX” is a trade mark of TSX Inc. and is used under licence. “FTSE®” is a trade mark of FTSE International Limited and is used by FTDCM under licence.

Issued by HSBC Global Asset Management (Canada) Limited

(2018-03) DFS

Unauthorized reproduction, distribution, transmission or publication without our prior written consent is strictly prohibited.

HSBC World Selection® Diversified Moderate Conservative Fund Annual Management Report of Fund Performance for the year ended December 31, 2017

®

World Selection is a registered trademark of HSBC Bank Canada.

◆

HSBC World Selection Diversified Moderate Conservative Fund Management Discussion of Fund Performance In this document, you and your refer to the unitholder of the Fund; we, us and our refer to HSBC Global Asset Management (Canada) Limited; and the Fund refers to the HSBC World Selection Diversified Moderate Conservative Fund.

Results of Operations

We are the manager, trustee and primary investment advisor of the Fund.

As of December 31, 2017, the Fund’s net assets increased by 18.9% to $342.3 million from $287.8 million at the end of 2016. Of this increase, an $18.7 million gain was attributable to investment performance and $35.8 million was attributable to net contributions to the Fund.

Introduction

Investment Performance The HSBC World Selection Diversified Moderate Conservative Fund (Investor Series) rose 6.06% over the 12-month period ending December 31, 2017, while its benchmark rose 6.29% over the same period. The benchmark is a weighted composite consisting of the FTSE TMX Canada 91 Day T-Bill Index (5%), FTSE TMX Canada Universe Bond Index (52%), S&P/TSX Capped Composite Index (22.5%) and MSCI World Net Index (C$) (20.5%).

This Annual Management Report of Fund Performance contains financial highlights but does not contain the complete annual financial statements of the investment fund. You may obtain a copy of the Fund’s annual financial statements at your request, at no cost, by calling us toll-free at 1-888-390-3333, by visiting our website at www.hsbc.ca/investment-resources, by visiting the SEDAR website at www.sedar.com or by writing to us at: Corporate Secretary HSBC Global Asset Management (Canada) Limited 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8

In 2017, the Fund was neutral or modestly overweight in Canadian and global equities and underweight in fixed income (although within this segment it was overweight in corporate bonds). Returns from the Fund’s three main asset classes were the biggest contributors to performance. Security selection within Canadian equities and fixed income added to performance, and global equity selection was a small positive.

You may also contact us using one of these methods to request a copy of the Fund’s interim financial report, proxy voting policies and procedures, proxy voting disclosure record or quarterly statement of investment portfolio.

From a Canadian investor’s perspective, global equities were the best-performing major asset class in 2017, returning 14.4%. Canadian equities posted a respectable 9.1% return, while the domestic bond market gained a modest 2.5%. Following weakness early in the year, oil prices rallied and ended the year at $60 per barrel, up approximately 12% in 2017. The Canadian dollar appreciated 7% during the year, benefiting from strength in commodity prices and Bank of Canada rate hikes.

Investment Objective and Strategies The fundamental investment objective of this Fund is to provide investors with moderate capital preservation and interest income with some potential moderate long-term capital growth through a diversified portfolio of investments across several asset classes. To achieve its objectives, the Fund invests in other mutual funds and uses strategic asset allocation as the principal investment strategy. The Fund has an established policy asset mix, based on its stated objectives. In addition to adjusting the Fund’s asset mix depending on economic conditions and the relative value of securities in the Fund, the Fund may also use tactical asset allocation to take advantage of current and expected future market conditions.

The market rally has been well supported by improving fundamentals, including strong earnings growth. Additionally, the relative attractiveness of equities compared to cash or government bonds remains compelling. The Fund therefore remains tilted towards corporate assets (both equities and bonds).

Risk

Recent Developments

The risks of investing in the Fund remain as discussed in the Simplified Prospectus. During the year, there were no material changes to the Fund that affected the overall risk level of the Fund.

The global economy continues to accelerate. Consumer spending remains solid, supported by an increase in household net worth and a healthy labour market. Both business investment and manufacturing activity are also trending higher.

This Fund is suitable for investors who want to earn interest income with some potential for low to moderate long-term growth of their capital. Investors in this Fund should have a medium-term investment time horizon and a low to medium tolerance for investment risk.

Looking ahead, while central banks will gradually remove stimulus, rates are likely to remain much lower than historic norms. On fiscal spending, the path is less clear, but the bias seems somewhat expansionary. Canadian economic growth remains healthy, although it was slower in the second half of 2017 than in the robust first half of the year. Employment remains strong and the unemployment rate has dipped to its lowest reading in four decades. 1

HSBC World Selection Diversified Moderate Conservative Fund The US Federal Reserve raised its target rate three times in 2017 and we expect three more in 2018. The Bank of Canada surprised markets with two hikes mid-year, taking the target rate to 1%. Three additional hikes are expected in 2018.

Fund on Fund Investing During the year, the Fund invested in units of other HSBC Mutual Funds, which are also managed by us. To proceed with the transactions, the Fund relied on the positive recommendation of the Fund’s Independent Review Committee by way of Standing Instruction. A condition of this positive recommendation was that the transactions were performed in accordance with our policy on fund on fund investing.

Effective June 20, 2017, the management fee charged to the Investor Series and Advisor Series of the Fund was reduced from 1.50% to 1.40%, and the trailer fee was reduced from 0.75% to 0.70% effective September 22, 2017.

Financial Highlights

Related Party Transactions

The following tables show selected key financial information about the Fund and are intended to help you understand the Fund’s financial performance for the years shown. This information is derived from the Fund’s audited annual financial statements. The information in the following tables is based on prescribed regulations, and as a result, is not expected to add down due to the increase/decrease in net assets from operations being based on average units outstanding during the year and all other numbers being based on actual units outstanding at the relevant point in time.

We, on behalf of the Fund, or the Fund Manager, may, from time to time, enter into transactions or arrangements with or involving other members of the HSBC Group or other people or companies related or connected to us or the Fund. To proceed with the transactions, the Fund relies on the positive recommendation of the Fund’s Independent Review Committee. A condition of this positive recommendation is that the transactions are performed in accordance with our policy on Related Party Transactions. For more general information on persons related to the Fund and the types of potential transactions, see the Fund’s Simplified Prospectus. The following is a summary of current transactions and arrangements with entities that are related to us or the Fund.

HSBC World Selection Diversified Moderate Conservative Fund – Investor Series – Net Assets per Unit(1)

Manager, Trustee and Investment Advisor

Years ended December 31

We are the manager, trustee and primary investment advisor of the Fund. As manager, we manage the overall business and operations of the Fund. As trustee, we hold legal title to the property of the Fund on your behalf. As primary investment advisor, we provide investment advice and portfolio management services to the Fund. We receive a fee from the Fund for these services based on assets under management, calculated daily and paid monthly.

2017 Net assets per unit, beginning of year (2)

Custodial Services HSBC Bank Canada (“the Bank”) (of which we are a wholly owned subsidiary) was the custodian of the Fund from January 1, 2017 to September 30, 2017. For the years ended December 31, 2017, and December 31, 2016, all fees for these services were waived by the Bank. Effective October 1, 2017, Northern Trust Company, Canada took over as custodian for the Fund.

Distribution Services The Fund is distributed through us, HSBC Investment Funds (Canada) Inc. (our wholly owned subsidiary and affiliate) and HSBC Securities (Canada) Inc. (an affiliate) directly or through its division, HSBC InvestDirect. We pay distribution and servicing fees to them based on the amount of assets held in the investor’s account, and additionally, in some cases, on the amount of the initial purchase. If you hold units of this Fund and/or other HSBC Mutual Funds in a registered plan with HSBC Investment Funds (Canada) Inc., they may charge you an annual fee to cover the annual administration costs of the plan. We permit HSBC Investment Funds (Canada) Inc. to collect these fees by redeeming sufficient units of the Fund with the highest market value in your registered plan. 2

2016

2015

2014

2013

$13.07 $12.87 $12.76 $12.01 $11.26

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.41 (0.22) 0.11 0.49

0.43 (0.22) 0.46 0.06

0.46 (0.22) 0.16 (0.13)

0.35 (0.21) 0.11 0.57

0.32 (0.20) 0.12 0.66

Total increase (decrease) from operations (2)

$0.79

$0.73

$0.27

$0.82

$0.90

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

(0.08) (0.08) – –

(0.08) (0.08) (0.37) –

(0.07) (0.06) (0.09) –

(0.09) (0.04) – –

(0.07) (0.03) (0.02) –

Total annual distributions (2,3)

$(0.16) $(0.53) $(0.22) $(0.13) $(0.12)

Net assets per unit at December 31 of year shown (2)

$13.70 $13.07 $12.87 $12.76 $12.01

HSBC World Selection Diversified Moderate Conservative Fund Ratios and Supplemental Data

HSBC World Selection Diversified Moderate Conservative Fund – Institutional Series – Net Assets per Unit(1)

Years ended December 31 2017

2016

2015

2014

2013

Years ended December 31

Net Asset Value (in 000s) (4) $342,013 $287,724 $260,684 $211,245 $131,612 Number of units outstanding (in 000s) (4) 24,964 22,021 20,259 16,561 10,957 Management expense ratio (⬙MER⬙) (5) 1.69% 1.73% 1.73% 1.76% 1.77% MER before waivers or absoptions (5) 1.69% 1.73% 1.73% 1.76% 1.77% Trading expense ratio (6) 0.01% 0.03% 0.05% 0.04% 0.02% Portfolio turnover rate (7) 7.85% 31.67% 11.35% 11.29% 23.24% Net Asset Value per unit (4) $13.70 $13.07 $12.87 $12.76 $12.01

2017**

2015

2014

Net assets per unit, beginning of year (2)

$9.48

$9.81 $10.00

$–

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.05 (0.01) 0.04 0.34

0.02 – – (0.50)

Total increase (decrease) from operations (2)

$0.42 $(0.48)

HSBC World Selection Diversified Moderate Conservative Fund – Advisor Series – Net Assets per Unit(1)

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

Years ended December 31 2017 2016 2015 2014 Net assets per unit, beginning of year (2) Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

$10.00

$–

$–

0.19 (0.03) 0.02 0.03

– – – –

– – – –

2013*

$– $10.40 – – – –

– – – 0.03

Total increase (decrease) from operations (2)

$0.21

$–

$–

$–

$0.03

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

(0.05) (0.05) – –

– – – –

– – – –

– – – –

– – – –

$(0.10)

$–

$–

$–

$–

Net assets per unit at December 31 of year shown (2) $10.16

$–

$–

$–

$–

Total annual distributions (2,3)

*

2016

2015

2014

$–

$–

$–

$–

26

–

–

–

–

1.62%

––

–

–

1.56%

$0.16 $(0.11)

(0.11) (0.09) (0.14) –

– – – –

Total annual distributions (2,3)

$– $(0.55) $(0.34)

$–

Net assets per unit at December 31 of year shown (2)

$–

$–

2017** Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

$9.48

$9.81

2016

2015

2014

$– $58 $544 $– – 6 56 – 0.58% 0.32% 0.09% 0.16% 0.61% 0.32% 0.09% 0.16% 0.01% 0.03% 0.05% 0.04% 7.85% 31.67% 11.35% 11.29% $– $9.48 $9.81 $–

** The Institutional Series was fully redeemed during 2017; however, it remains in offer as at period-end. (1) This information is derived from the Fund’s audited annual financial statements. 2017, 2016, 2015, 2014 and 2013 balances are stated in IFRS. Under IFRS, the net asset per unit presented in the financial statements is the same as the net asset value calculated for fund pricing purposes. (2) Net assets per unit and distributions per unit are based on the actual number of units outstanding for the relevant series at the relevant time. The increase/decrease in net assets from operations per unit is based on the weighted average number of units outstanding for the relevant series over the fiscal year.

*

$263

0.02 – – (0.13)

Years ended December 31

Years ended December 31 2017

(0.07) (0.09) (0.39) –

0.20 – 0.02 (0.06)

Ratios and Supplemental Data

Ratios and Supplemental Data

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

– – – –

2016

2013

(3) Distributions are automatically reinvested in additional units of the Fund, unless the unitholder withdraws from the automatic reinvestment plan by providing written notice to us. (4) This information is provided as at December 31 of the year shown.

– – 1.56% 1.62% –– 0.01% 0.03% 0.05% 0.04% 0.02% 7.85% 31.67% 11.35% 11.29% 23.24% $10.16 $– $– $– $–

(5) MER is based on total expenses (excluding distributions, commissions and other portfolio transaction costs) for the stated period and is expressed as an annualized percentage of daily average net asset value during the year. The MER may vary from one mutual fund to another and from one series of units to another.

The Advisor Series was fully redeemed during 2013; however, it remains in offer as at period-end.

(6) The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the year. (7) The Fund’s portfolio turnover rate indicates how actively the Fund’s portfolio advisor manages its portfolio investments. A portfolio turnover rate of 100% is equivalent to the Fund buying and selling all 3

HSBC World Selection Diversified Moderate Conservative Fund of the securities in its portfolio once in the course of the year. The higher the Fund’s portfolio turnover rate in a year, the greater the trading costs payable by the Fund in the year, and the greater the chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high turnover rate and the performance of the Fund. The rate is calculated based on the lesser of purchases or sales of securities divided by the average weighted market value of the portfolio securities, excluding short-term securities.

Annual Returns – Investor Series 15% 9.5%

10%

6.1%

5.1%

5%

7.7%

7.2%

5.6%

6.1%

2.6% 0.2%

0% -5%

Management Fees

-10%

For the year ended December 31, 2017, the Fund paid us management fees of $4,590,279. The management fee for each series is calculated as a percentage of the daily net asset value for that series. The fees are reduced, where required, so that these fees do not duplicate fees payable by mutual funds in which the Fund invests for the same service.

-15%

-8.7% Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Annual Returns – Advisor Series 10%

The Fund’s management fees were used by us to pay costs for managing the investment portfolio, providing investment analysis and recommendations, making investment decisions, making brokerage arrangements for the purchase and sale of the investment portfolio and providing other services. The management fees also funded commission payments and other compensation to sales representatives and registered dealers and brokers (collectively “distribution costs”), including HSBC Investment Funds (Canada) Inc., for units of the Fund bought and held by unitholders. Finally, we used management fees to pay for additional marketing and distribution services to the Fund.

6.2% 5%

0.2% 0%

*

For the year ended December 31, 2017, approximately 46% of the total management fees collected from all HSBC Mutual Funds were used to fund distribution costs. In comparison, for the Fund, such distribution costs represented 48% of the management fees collected. This may vary by series depending on the assets invested in each of the series.

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2011 2012 2013* 2014* 2015* 2016* 2017*

The Advisor Series was fully redeemed during 2013; however, the series emains in offer as at period-end.

Annual Compound Returns Year ended December 31, 2017 The following tables show the Fund’s historical annual compound total returns for the years indicated, compared with benchmark index. The benchmark of this Fund is a weighted composite consisting of the FTSE TMX Canada 91-Day T-Bill Index (5%), FTSE TMX Canada Universe Bond Index (52%), S&P/TSX Capped Composite Index (22.5%) and MSCI World Net Index (in Canadian dollars) (20.5%).

Past Performance The performance information shown assumes that all distributions made by the Fund in the years shown were reinvested in additional securities of the Fund. The performance information does not take into account sales, redemption, distribution, optional charges or expenses you may be charged outside of the Fund or the effect of any income tax you may have to pay as a result of your investment in the Fund that would have reduced returns or performance. The performance of different fund series may vary for a number of reasons, including differences in management fees and expenses. The Fund’s past performance does not necessarily indicate how it will perform in the future.

The FTSE TMX Canada 91-Day T-Bills Index is a measure of the total return of Canadian T-Bill with a term to maturity of three months. The FTSE TMX Canada Universe Bond Index is a broad measure of the total return for the Canadian bond market, covering marketable Canadian bonds with a term to maturity of more than one year. The S&P/TSX Capped Composite Index tracks changes in the share prices of the largest companies listed on the Toronto Stock Exchange, representing a broad range of industries. The MSCI World Net Index is an international index that measures the performance of stocks traded in Europe, Australia, the Far East, the US, Canada and South Africa. This index is tracked in US dollars and was converted to Canadian dollars.

Year-by-Year Returns Years ended December 31 The following bar charts show the Fund’s performance for each of the years shown, and illustrate how the Fund’s performance changed from year to year. In percentage terms, the bar charts show how much an investment made on the first day of each financial year would have grown or decreased by the last day of each financial year. 4

HSBC World Selection Diversified Moderate Conservative Fund Investor Series

Top 25 Holdings* 1 Year

HSBC World Selection Diversified Moderate Conservative Fund

3 Year

Percentage of NAV

5 Year 10 Year

6.06% 4.76% 5.83%

4.01%

5% FTSE TMX Canada 91 Days Treasury Bill Index, 52% FTSE TMX Canada Universe Bond Index, 22.5% S&P/TSX Capped Composite Index, 20.5% MSCI World Net Index (C$) 6.29% 5.40% 6.99%

5.31%

HSBC Canadian Bond Fund - Institutional Series HSBC Global Equity Fund - Institutional Series HSBC Mortgage Fund - Institutional Series HSBC Equity Fund - Institutional Series HSBC Dividend Fund - Institutional Series HSBC Emerging Markets Debt Fund - Institutional Series HSBC Canadian Money Market Fund - Institutional Series HSBC Emerging Markets Fund - Institutional Series Remaining Holdings Total of Top 25 Holdings

(1) Due to the fact that several benchmark indices are only available on a monthly basis, the performance data for the HSBC Funds and the benchmark indices are calculated using values from the first month-end date each fund was in operation.

*

(2) For investment commentary and relative performance of the Fund compared to its benchmark, please refer to the Results of Operations section of this report.

30.99% 18.53% 13.86% 11.83% 11.66% 5.49% 5.20% 2.57% -0.13% 100.00%

The Fund had less than 25 holdings as at December 31, 2017.

Summary of Investment Portfolio As at December 31, 2017

Asset Mix Percentage of NAV Bonds Canadian Equities International Equities Cash & Equivalents Total

50.34% 23.49% 21.10% 5.07% 100.00%

The Summary of Investment Portfolio may change due to ongoing portfolio transactions of the Fund, and is available quarterly. The Fund invests in other mutual funds, and the prospectus and other information about the underlying funds are available on SEDAR at www.sedar.com.

5

For more information

How to reach us

You can find more information about HSBC Mutual Funds in the Fund’s Simplified Prospectus, Annual Information Form, Annual and Semi-Annual Report and Fund Facts. You can get a copy of these documents, as well as the Fund’s Financial Statements, at no cost by calling 1-888-390-3333, by contacting your authorized dealer or by visiting our website at www.hsbc.ca/investment-resources.

HSBC Global Asset Management (Canada) Limited

These documents and other information about the Fund, such as information circulars and material contracts, are also available at www.sedar.com. Copies of the Annual Report and Semi-Annual Report, Simplified Prospectus, Annual Information Form, Annual and Interim Management Report of Fund Performance and Fund Facts are available on our website at www.hsbc.ca/investment-resources.

Vancouver 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8 Toronto Suite 300, 70 York Street Toronto, ON M5J 1S9 Toll-free: 1-888-390-3333 Fax: 604-669-2756 Email: [email protected] Website: www.hsbc.ca/investment-resources

A NOTE ON FORWARD-LOOKING STATEMENTS This report may contain forward-looking statements about the Fund, including its strategy, expected performance and condition. Forward-looking statements include statements that are predictive in nature that depend upon or refer to future events or conditions, or that include words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates” or negative versions thereof and similar expressions. In addition, any statement that may be made concerning future performance, strategies or prospects, and possible future Fund action, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the Fund and economic factors. Forward-looking statements are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied in any forward-looking statements made by the Fund. Any number of important factors could contribute to these digressions, including, but not limited to, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, and catastrophic events. We stress that the above-mentioned list of important factors is not exhaustive. We encourage you to consider these and other factors carefully before making any investment decisions and we urge you to avoid placing undue reliance on forward-looking statements. Further, you should be aware of the fact that the Fund has no specific intention of updating any forward-looking statements, whether as a result of new information, future events or otherwise. Sources: HSBC Global Asset Management (Canada) Limited, Bloomberg, MSCI, FTSE TMX Global Debt Capital Markets Inc., Bank of Canada. Neither MSCI nor any other party involved in or related to compiling, computing or creating the MSCI data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any of such data. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in or related to compiling, computing or creating the data have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages. No further distribution or dissemination of the MSCI data is permitted without MSCI’s express written consent. FTSE TMX Global Debt Capital Markets Inc. (“FTDCM”), FTSE International Limited (“FTSE”), the London Stock Exchange Group companies (the “Exchange”) or TSX Inc. (“TSX” and together with FTDCM, FTSE and the Exchange, the “Licensor Parties”). The Licensor Parties make no warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the FTSE TMX Canada Index and/or the figure at which the said Index stands at any particular time on any particular day or otherwise. The Index is compiled and calculated by FTDCM and all copyright in the Index values and constituent lists vests in FTDCM. The Licensor Parties shall not be liable (whether in negligence or otherwise) to any person for any error in the Index and the Licensor Parties shall not be under any obligation to advise any person of any error therein. “TMX” is a trade mark of TSX Inc. and is used under licence. “FTSE®” is a trade mark of FTSE International Limited and is used by FTDCM under licence.

Issued by HSBC Global Asset Management (Canada) Limited

(2018-03) DFS

Unauthorized reproduction, distribution, transmission or publication without our prior written consent is strictly prohibited.

HSBC World Selection® Diversified Balanced Fund Annual Management Report of Fund Performance for the year ended December 31, 2017

®

World Selection is a registered trademark of HSBC Bank Canada.

◆

HSBC World Selection Diversified Balanced Fund Management Discussion of Fund Performance In this document, you and your refer to the unitholder of the Fund; we, us and our refer to HSBC Global Asset Management (Canada) Limited; and the Fund refers to the HSBC World Selection Diversified Balanced Fund.

Results of Operations

We are the manager, trustee and primary investment advisor of the Fund.

As of December 31, 2017, the Fund’s net assets increased by 19.6% to $654.0 million from $546.7 million at the end of 2016. Of this increase, a $46.3 million gain was attributable to investment performance and $61.0 million was attributable to net contributions to the Fund.

Introduction

Investment Performance

This Annual Management Report of Fund Performance contains financial highlights but does not contain the complete annual financial statements of the investment fund. You may obtain a copy of the Fund’s annual financial statements at your request, at no cost, by calling us toll-free at 1-888-390-3333, by visiting our website at www.hsbc.ca/investment-resources, by visiting the SEDAR website at www.sedar.com or by writing to us at:

The HSBC World Selection Diversified Balanced Fund (Investor Series) rose 7.91% over the 12-month period ending December 31, 2017, while its benchmark rose 8.15% over the same period. The benchmark is a weighted composite consisting of the FTSE TMX Canada 91 Day T-Bill Index (5%), FTSE TMX Canada Universe Bond Index (33%), S&P/TSX Capped Composite Index (30%) and MSCI World Net Index (C$) (32%).

Corporate Secretary HSBC Global Asset Management (Canada) Limited 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8

In 2017, the Fund was neutral or modestly overweight in Canadian and global equities and underweight in fixed income (although within this segment it was overweight in corporate bonds). Returns from the Fund’s three main asset classes were the biggest contributors to performance. Security selection within Canadian equities and fixed income added to performance, and global equity selection was a small positive.

You may also contact us using one of these methods to request a copy of the Fund’s interim financial report, proxy voting policies and procedures, proxy voting disclosure record or quarterly statement of investment portfolio.

From a Canadian investor’s perspective, global equities were the best-performing major asset class in 2017, returning 14.4%. Canadian equities posted a respectable 9.1% return, while the domestic bond market gained a modest 2.5%. Following weakness early in the year, oil prices rallied and ended the year at $60 per barrel, up approximately 12% in 2017. The Canadian dollar appreciated 7% during the year, benefiting from strength in commodity prices and Bank of Canada rate hikes.

Investment Objective and Strategies The fundamental investment objective of this Fund is to provide investors with a balance of income and potential long-term capital growth through a diversified portfolio of investments across several asset classes. To achieve its objectives, the Fund invests in other mutual funds and uses strategic asset allocation as the principal investment strategy. The Fund has an established policy asset mix, based on its stated objectives. In addition to adjusting the Fund’s asset mix depending on economic conditions and the relative value of securities in the Fund, the Fund may also use tactical asset allocation to take advantage of current and expected future market conditions.

The market rally has been well supported by improving fundamentals, including strong earnings growth. Additionally, the relative attractiveness of equities compared to cash or government bonds remains compelling. The Fund therefore remains tilted towards corporate assets (both equities and bonds).

Recent Developments

Risk

The global economy continues to accelerate. Consumer spending remains solid, supported by an increase in household net worth and a healthy labour market. Both business investment and manufacturing activity are also trending higher.

The risks of investing in the Fund remain as discussed in the Simplified Prospectus. During the year, there were no material changes to the Fund that affected the overall risk level of the Fund.

Looking ahead, while central banks will gradually remove stimulus, rates are likely to remain much lower than historic norms. On fiscal spending, the path is less clear, but the bias seems somewhat expansionary. Canadian economic growth remains healthy, although it was slower in the second half of 2017 than in the robust first half of the year. Employment remains strong and the unemployment rate has dipped to its lowest reading in four decades.

This Fund is suitable for investors who want to earn a balance of interest income with some potential for low to moderate long-term growth of their capital. Investors in this Fund should have a medium-term investment time horizon and a low to medium tolerance for investment risk.

1

HSBC World Selection Diversified Balanced Fund The US Federal Reserve raised its target rate three times in 2017 and we expect three more in 2018. The Bank of Canada surprised markets with two hikes mid-year, taking the target rate to 1%. Three additional hikes are expected in 2018.

Fund on Fund Investing During the year, the Fund invested in units of other HSBC Mutual Funds, which are also managed by us. To proceed with the transactions, the Fund relied on the positive recommendation of the Fund’s Independent Review Committee by way of Standing Instruction. A condition of this positive recommendation was that the transactions were performed in accordance with our policy on fund on fund investing.

Effective June 20, 2017, the management fee charged to the Investor Series and Advisor Series of the Fund was reduced from 1.75% to 1.55%, and the trailer fee was reduced from 0.85% to 0.75% effective September 22, 2017.

Financial Highlights

Related Party Transactions

The following tables show selected key financial information about the Fund and are intended to help you understand the Fund’s financial performance for the years shown. This information is derived from the Fund’s audited annual financial statements. The information in the following tables is based on prescribed regulations, and as a result, is not expected to add down due to the increase/decrease in net assets from operations being based on average units outstanding during the year and all other numbers being based on actual units outstanding at the relevant point in time.

We, on behalf of the Fund, or the Fund Manager, may, from time to time, enter into transactions or arrangements with or involving other members of the HSBC Group or other people or companies related or connected to us or the Fund. To proceed with the transactions, the Fund relies on the positive recommendation of the Fund’s Independent Review Committee. A condition of this positive recommendation is that the transactions are performed in accordance with our policy on Related Party Transactions. For more general information on persons related to the Fund and the types of potential transactions, see the Fund’s Simplified Prospectus. The following is a summary of current transactions and arrangements with entities that are related to us or the Fund.

HSBC World Selection Diversified Balanced Fund – Investor Series – Net Assets per Unit(1) Years ended December 31

Manager, Trustee and Investment Advisor

2017

We are the manager, trustee and primary investment advisor of the Fund. As manager, we manage the overall business and operations of the Fund. As trustee, we hold legal title to the property of the Fund on your behalf. As primary investment advisor, we provide investment advice and portfolio management services to the Fund. We receive a fee from the Fund for these services based on assets under management, calculated daily and paid monthly.

Net assets per unit, beginning of year (2)

Custodial Services HSBC Bank Canada (“the Bank”) (of which we are a wholly owned subsidiary) was the custodian of the Fund from January 1, 2017 to September 30, 2017. For the years ended December 31, 2017, and December 31, 2016, all fees for these services were waived by the Bank. Effective October 1, 2017, Northern Trust Company, Canada took over as custodian for the Fund.

Distribution Services The Fund is distributed through us, HSBC Investment Funds (Canada) Inc. (our wholly owned subsidiary and affiliate) and HSBC Securities (Canada) Inc. (an affiliate) directly or through its division, HSBC InvestDirect. We pay distribution and servicing fees to them based on the amount of assets held in the investor’s account, and additionally, in some cases, on the amount of the initial purchase. If you hold units of this Fund and/or other HSBC Mutual Funds in a registered plan with HSBC Investment Funds (Canada) Inc., they may charge you an annual fee to cover the annual administration costs of the plan. We permit HSBC Investment Funds (Canada) Inc. to collect these fees by redeeming sufficient units of the Fund with the highest market value in your registered plan. 2

2016

2015

2014

2013

$14.40 $14.33 $13.95 $13.01 $11.56

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.45 (0.27) 0.12 0.84

0.49 (0.28) 0.84 (0.08)

0.47 (0.28) 0.25 –

0.32 (0.27) 0.11 0.78

0.29 (0.24) 0.31 1.17

Total increase (decrease) from operations (2)

$1.14

$0.97

$0.44

$0.94

$1.53

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

(0.02) (0.10) – –

(0.01) (0.15) (0.73) –

– (0.05) (0.09) –

(0.01) (0.04) – –

(0.01) (0.03) (0.01) –

Total annual distributions (2,3)

$(0.12) $(0.89) $(0.14) $(0.05) $(0.05)

Net assets per unit at December 31 of year shown (2)

$15.42 $14.40 $14.33 $13.95 $13.01

HSBC World Selection Diversified Balanced Fund Ratios and Supplemental Data

HSBC World Selection Diversified Balanced Fund – Manager Series – Net Assets per Unit(1)

Years ended December 31 2017

2016

2015

2014

Years ended December 31

2013

2017 2016*

Net Asset Value (in 000s) (4) $653,583 $546,207 $491,755 $405,031 $275,092 Number of units outstanding (in 000s) (4) 42,381 37,924 34,308 29,026 21,144 Management expense ratio (⬙MER⬙) (5) 1.90% 1.99% 1.99% 2.01% 2.02% MER before waivers or absoptions (5) 1.90% 1.99% 1.99% 2.01% 2.02% Trading expense ratio (6) 0.02% 0.05% 0.07% 0.06% 0.02% Portfolio turnover rate (7) 6.36% 43.26% 12.89% 6.08% 26.82% Net Asset Value per unit (4) $15.42 $14.40 $14.33 $13.95 $13.01

Net assets per unit, beginning of year (2)

Total increase (decrease) from operations (2)

Net assets per unit, beginning of year (2)

2015

2014

– – – –

– – – 0.17

$– $0.17

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

Years ended December 31 2016

$–

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

HSBC World Selection Diversified Balanced Fund – Advisor Series – Net Assets per Unit(1) 2017

$–

– – – –

– – – –

Total annual distributions (2,3)

$–

$–

Net assets per unit at December 31 of year shown (2)

$–

$–

2013

Ratios and Supplemental Data

$12.99 $12.97 $12.65 $11.78 $10.47

Years ended December 31

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.40 (0.27) 0.11 0.76

0.44 (0.29) 0.92 (0.47)

0.42 (0.29) 0.22 (0.02)

0.31 (0.25) 0.11 0.79

0.25 (0.22) 0.26 1.08

Total increase (decrease) from operations (2)

$1.00

$0.60

$0.33

$0.96

$1.37

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

(0.02) (0.09) – –

(0.01) (0.13) (0.66) –

– (0.04) (0.07) –

(0.01) (0.02) – –

(0.01) (0.03) (0.01) –

Total annual distributions (2,3)

$(0.11) $(0.80) $(0.11) $(0.03) $(0.05)

Net assets per unit at December 31 of year shown (2)

$13.88 $12.99 $12.97 $12.65 $11.78

2017 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

*

2016*

$– $– – – – 1.04% – 1.04% – 0.05% – 43.26% $– $–

The Manager Series was fully redeemed during 2016; however, it remains in offer as at period-end.

HSBC World Selection Diversified Balanced Fund – Institutional Series – Net Assets per Unit(1) Years ended December 31

Ratios and Supplemental Data Net assets per unit, beginning of year (2)

Years ended December 31 2017 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2016

2015

2014

2017**

2016

2015 2014**

2013

$10.13

$9.90 $10.00 $10.06

$–

2013

$415

$385

$620

$491

$352

30

30

48

39

30

2.09%

2.27%

2.24% 2.07%

2.07%

2.09% 2.27% 2.24% 2.07% 2.07% 0.02% 0.05% 0.07% 0.06% 0.02% 6.36% 43.26% 12.89% 6.08% 26.82% $13.88 $12.99 $12.97 $12.65 $11.78

3

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.19 (0.04) 0.04 0.49

0.11 (0.03) 0.05 (1.68)

0.22 – 0.04 (0.09)

0.01 – 0.01 0.08

– – – 0.06

Total increase (decrease) from operations (2)

$0.68

$(1.55)

$0.17

$0.10

$0.06

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– – – –

(0.01) (0.14) (0.69) –

– (0.10) (0.18) –

– – – –

– – – –

Total annual distributions (2,3)

$–

$(0.84) $(0.28)

$–

$–

Net assets per unit at December 31 of year shown (2)

$– $10.13

$9.90

$– $10.06

HSBC World Selection Diversified Balanced Fund The Fund’s management fees were used by us to pay costs for managing the investment portfolio, providing investment analysis and recommendations, making investment decisions, making brokerage arrangements for the purchase and sale of the investment portfolio and providing other services. The management fees also funded commission payments and other compensation to sales representatives and registered dealers and brokers (collectively “distribution costs”), including HSBC Investment Funds (Canada) Inc., for units of the Fund bought and held by unitholders. Finally, we used management fees to pay for additional marketing and distribution services to the Fund.

Ratios and Supplemental Data Years ended December 31 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2017**

2016

2015 2014**

$–

$60

$167

$–

$47

–

6

17

–

5

0.51%

0.45%

0.07% 0.10%

0.11%

2013

1.37% 1.33% 0.07% 0.10% 0.11% 0.02% 0.05% 0.07% 0.06% 0.02% 6.36% 43.26% 12.89% 6.08% 26.82% $– $10.13 $9.90 $– $10.06

For the year ended December 31, 2017, approximately 46% of the total management fees collected from all HSBC Mutual Funds were used to fund distribution costs. In comparison, for the Fund, such distribution costs represented 48% of the management fees collected. This may vary by series depending on the assets invested in each of the series.

** The Institutional Series was fully redeemed during 2014 & 2017; however, it remains in offer as at period-end. (1) This information is derived from the Fund’s audited annual financial statements. 2017, 2016, 2015, 2014 and 2013 balances are stated in IFRS. Under IFRS, the net asset per unit presented in the financial statements is the same as the net asset value calculated for fund pricing purposes. (2) Net assets per unit and distributions per unit are based on the actual number of units outstanding for the relevant series at the relevant time. The increase/decrease in net assets from operations per unit is based on the weighted average number of units outstanding for the relevant series over the fiscal year.

Past Performance The performance information shown assumes that all distributions made by the Fund in the years shown were reinvested in additional securities of the Fund. The performance information does not take into account sales, redemption, distribution, optional charges or expenses you may be charged outside of the Fund or the effect of any income tax you may have to pay as a result of your investment in the Fund that would have reduced returns or performance. The performance of different fund series may vary for a number of reasons, including differences in management fees and expenses. The Fund’s past performance does not necessarily indicate how it will perform in the future.

(3) Distributions are automatically reinvested in additional units of the Fund, unless the unitholder withdraws from the automatic reinvestment plan by providing written notice to us. (4) This information is provided as at December 31 of the year shown. (5) MER is based on total expenses (excluding distributions, commissions and other portfolio transaction costs) for the stated period and is expressed as an annualized percentage of daily average net asset value during the year. The MER may vary from one mutual fund to another and from one series of units to another. We have waived or absorbed certain fees and expenses otherwise payable by the Fund. The amount of expenses absorbed or waived is at the discretion of and can be terminated at any time by us.

Year-by-Year Returns Years ended December 31

(6) The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the year.

The following bar charts show the Fund’s performance for each of the years shown, and illustrate how the Fund’s performance changed from year to year. In percentage terms, the bar charts show how much an investment made on the first day of each financial year would have grown or decreased by the last day of each financial year.

(7) The Fund’s portfolio turnover rate indicates how actively the Fund’s portfolio advisor manages its portfolio investments. A portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the year. The higher the Fund’s portfolio turnover rate in a year, the greater the trading costs payable by the Fund in the year, and the greater the chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high turnover rate and the performance of the Fund. The rate is calculated based on the lesser of purchases or sales of securities divided by the average weighted market value of the portfolio securities, excluding short-term securities.

Annual Returns – Investor Series 20% 15%

13.0%

12.3%

10%

7.8%

5.9%

7.7%

6.6%

7.9%

3.7%

5% 0%

Management Fees

-2.5%

-5%

For the year ended December 31, 2017, the Fund paid us management fees of $9,933,442. The management fee for each series is calculated as a percentage of the daily net asset value for that series. The fees are reduced, where required, so that these fees do not duplicate fees payable by mutual funds in which the Fund invests for the same service.

-10% -15% -20%

4

-15.4% Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

HSBC World Selection Diversified Balanced Fund Annual Returns – Advisor Series 15%

Advisor Series

13.0% 1 Year

10%

7.8%

7.6%

5%

6.3%

7.7%

3.4%

0% -5%

-2.4%

Annual Compound Returns The following tables show the Fund’s historical annual compound total returns for the years indicated, compared with the benchmark index. The benchmark of this Fund is a weighted composite of the FTSE TMX Canada 91-Day T-Bill Index (5%), FTSE TMX Canada Universe Bond Index (33%), S&P/TSX Capped Composite Index (30%) and MSCI World Net Index (32%) (in Canadian dollars).

7.71% 5.79% 7.56%

6.10%

5% FTSE TMX Canada 91 Days Treasury Bill Index, 33% FTSE TMX Canada Universe Bond Index, 30% S&P/TSX Capped Composite Index, 32% MSCI World Net Index (C$)

8.15% 6.83% 9.01%

7.42%

Summary of Investment Portfolio As at December 31, 2017

Asset Mix Percentage of NAV

The FTSE TMX Canada 91-Day T-Bill Index is a measure of the total return of Canadian T-Bills with a term to maturity of three months. The FTSE TMX Canada Universe Bond Index is a broad measure of the total return for the Canadian bond market, covering marketable Canadian bonds with a term to maturity of more than one year. The S&P/TSX Capped Composite Index tracks changes in the share prices of the largest companies listed on the Toronto Stock Exchange, representing a broad range of industries. The MSCI World Net Index is an international index that measures the performance of stocks traded in Europe, Australia, the Far East, the US, Canada and South Africa. This index is tracked in US dollars and was converted to Canadian dollars.

International Equities Bonds Canadian Equities Cash & Equivalents Total

Percentage of NAV HSBC Global Equity Fund - Institutional Series HSBC Equity Fund - Institutional Series HSBC Canadian Bond Fund - Institutional Series HSBC Dividend Fund - Institutional Series HSBC Mortgage Fund - Institutional Series HSBC Emerging Markets Debt Fund - Institutional Series HSBC Canadian Money Market Fund - Institutional Series HSBC Emerging Markets Fund - Institutional Series HSBC Small Cap Growth Fund - Institutional Series Remaining Holdings Total of Top 25 Holdings

5 Year 10 Year

7.91% 6.05% 7.74%

4.39%

5% FTSE TMX Canada 91 Days Treasury Bill Index, 33% FTSE TMX Canada Universe Bond Index, 30% S&P/TSX Capped Composite Index, 32% MSCI World Net Index (C$) 8.15% 6.83% 9.01%

5.66%

32.70% 31.26% 30.99% 5.05% 100.00%

Top 25 Holdings*

Investor Series 3 Year

HSBC World Selection Diversified Balanced Fund

(2) For investment commentary and relative performance of the Fund compared to its benchmark, please refer to the Results of Operations section of this report.

Year ended December 31, 2017

1 Year

Since 5 Year Inception

(1) Due to the fact that several benchmark indices are only available on a monthly basis, the performance data for the HSBC Funds and the benchmark indices are calculated using values from the first month-end date each Fund was in operation.

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2011 2012 2013 2014 2015 2016 2017

HSBC World Selection Diversified Balanced Fund

3 Year

*

29.13% 22.77% 20.26% 5.71% 5.67% 5.33% 5.16% 3.57% 2.51% -0.11% 100.00%

The Fund had less than 25 holdings as at December 31, 2017.

The Summary of Investment Portfolio may change due to ongoing portfolio transactions of the Fund, and is available quarterly. The Fund invests in other mutual funds, and the prospectus and other information about the underlying funds are available on SEDAR at www.sedar.com.

5

For more information

How to reach us

You can find more information about HSBC Mutual Funds in the Fund’s Simplified Prospectus, Annual Information Form, Annual and Semi-Annual Report and Fund Facts. You can get a copy of these documents, as well as the Fund’s Financial Statements, at no cost by calling 1-888-390-3333, by contacting your authorized dealer or by visiting our website at www.hsbc.ca/investment-resources.

HSBC Global Asset Management (Canada) Limited

These documents and other information about the Fund, such as information circulars and material contracts, are also available at www.sedar.com. Copies of the Annual Report and Semi-Annual Report, Simplified Prospectus, Annual Information Form, Annual and Interim Management Report of Fund Performance and Fund Facts are available on our website at www.hsbc.ca/investment-resources.

Vancouver 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8 Toronto Suite 300, 70 York Street Toronto, ON M5J 1S9 Toll-free: 1-888-390-3333 Fax: 604-669-2756 Email: [email protected] Website: www.hsbc.ca/investment-resources

A NOTE ON FORWARD-LOOKING STATEMENTS This report may contain forward-looking statements about the Fund, including its strategy, expected performance and condition. Forward-looking statements include statements that are predictive in nature that depend upon or refer to future events or conditions, or that include words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates” or negative versions thereof and similar expressions. In addition, any statement that may be made concerning future performance, strategies or prospects, and possible future Fund action, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the Fund and economic factors. Forward-looking statements are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied in any forward-looking statements made by the Fund. Any number of important factors could contribute to these digressions, including, but not limited to, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, and catastrophic events. We stress that the above-mentioned list of important factors is not exhaustive. We encourage you to consider these and other factors carefully before making any investment decisions and we urge you to avoid placing undue reliance on forward-looking statements. Further, you should be aware of the fact that the Fund has no specific intention of updating any forward-looking statements, whether as a result of new information, future events or otherwise. Sources: HSBC Global Asset Management (Canada) Limited, Bloomberg, MSCI, FTSE TMX Global Debt Capital Markets Inc., Bank of Canada. Neither MSCI nor any other party involved in or related to compiling, computing or creating the MSCI data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any of such data. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in or related to compiling, computing or creating the data have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages. No further distribution or dissemination of the MSCI data is permitted without MSCI’s express written consent. FTSE TMX Global Debt Capital Markets Inc. (“FTDCM”), FTSE International Limited (“FTSE”), the London Stock Exchange Group companies (the “Exchange”) or TSX Inc. (“TSX” and together with FTDCM, FTSE and the Exchange, the “Licensor Parties”). The Licensor Parties make no warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the FTSE TMX Canada Index and/or the figure at which the said Index stands at any particular time on any particular day or otherwise. The Index is compiled and calculated by FTDCM and all copyright in the Index values and constituent lists vests in FTDCM. The Licensor Parties shall not be liable (whether in negligence or otherwise) to any person for any error in the Index and the Licensor Parties shall not be under any obligation to advise any person of any error therein. “TMX” is a trade mark of TSX Inc. and is used under licence. “FTSE®” is a trade mark of FTSE International Limited and is used by FTDCM under licence.

Issued by HSBC Global Asset Management (Canada) Limited

(2018-03) DFS

Unauthorized reproduction, distribution, transmission or publication without our prior written consent is strictly prohibited.

HSBC World Selection® Diversified Growth Fund Annual Management Report of Fund Performance for the year ended December 31, 2017

®

World Selection is a registered trademark of HSBC Bank Canada.

◆

HSBC World Selection Diversified Growth Fund Management Discussion of Fund Performance In this document, you and your refer to the unitholder of the Fund; we, us and our refer to HSBC Global Asset Management (Canada) Limited; and the Fund refers to the HSBC World Selection Diversified Growth Fund.

Results of Operations

We are the manager, trustee and primary investment advisor of the Fund.

As of December 31, 2017, the Fund’s net assets increased by 8.7% to $343.2 million from $315.6 million at the end of 2016. Of this increase, a $30.0 million gain was attributable to investment performance and $2.4 million was attributable to net withdrawals from the Fund.

Introduction

Investment Performance

This Annual Management Report of Fund Performance contains financial highlights but does not contain the complete annual financial statements of the investment fund. You may obtain a copy of the Fund’s annual financial statements at your request, at no cost, by calling us toll-free at 1-888-390-3333, by visiting our website at www.hsbc.ca/investment-resources, by visiting the SEDAR website at www.sedar.com or by writing to us at:

The HSBC World Selection Diversified Growth Fund (Investor Series) rose 9.53% over the 12-month period ending December 31, 2017, while its benchmark rose 9.99% over the same period. The benchmark is a weighted composite consisting of the FTSE TMX Canada Universe Bond Index (23%), S&P/TSX Capped Composite Index (31%) and MSCI World Net Index (C$) (46%).

Corporate Secretary HSBC Global Asset Management (Canada) Limited 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8

In 2017, the Fund was neutral or modestly overweight in Canadian and global equities and underweight in fixed income (although within this segment it was overweight in corporate bonds). Returns from the Fund’s three main asset classes were the biggest contributors to performance. Security selection within Canadian equities and fixed income added to performance, and global equity selection was a small positive.

You may also contact us using one of these methods to request a copy of the Fund’s interim financial report, proxy voting policies and procedures, proxy voting disclosure record or quarterly statement of investment portfolio.

From a Canadian investor’s perspective, global equities were the best-performing major asset class in 2017, returning 14.4%. Canadian equities posted a respectable 9.1% return, while the domestic bond market gained a modest 2.5%. Following weakness early in the year, oil prices rallied and ended the year at $60 per barrel, up approximately 12% in 2017. The Canadian dollar appreciated 7% during the year, benefiting from strength in commodity prices and Bank of Canada rate hikes.

Investment Objective and Strategies The fundamental investment objective of this Fund is to provide investors with potential long-term capital growth and low to moderate income through a diversified portfolio of investments across several asset classes. To achieve its objectives, the Fund invests in other mutual funds and uses strategic asset allocation as the principal investment strategy. The Fund has an established policy asset mix, based on its stated objectives. In addition to adjusting the Fund’s asset mix depending on economic conditions and the relative value of securities in the Fund, the Fund may also use tactical asset allocation to take advantage of current and expected future market conditions.

The market rally has been well supported by improving fundamentals, including strong earnings growth. Additionally, the relative attractiveness of equities compared to cash or government bonds remains compelling. The Fund therefore remains tilted towards corporate assets (both equities and bonds).

Recent Developments

Risk

The global economy continues to accelerate. Consumer spending remains solid, supported by an increase in household net worth and a healthy labour market. Both business investment and manufacturing activity are also trending higher.

The risks of investing in the Fund remain as discussed in the Simplified Prospectus. During the year, there were no material changes to the Fund that affected the overall risk level of the Fund.

Looking ahead, while central banks will gradually remove stimulus, rates are likely to remain much lower than historic norms. On fiscal spending, the path is less clear, but the bias seems somewhat expansionary. Canadian economic growth remains healthy, although it was slower in the second half of 2017 than in the robust first half of the year. Employment remains strong and the unemployment rate has dipped to its lowest reading in four decades.

This Fund is suitable for investors who want long-term potential growth of their capital and low to moderate interest income. Investors in this Fund should have a long-term investment time horizon and a medium tolerance for investment risk.

1

HSBC World Selection Diversified Growth Fund The US Federal Reserve raised its target rate three times in 2017 and we expect three more in 2018. The Bank of Canada surprised markets with two hikes mid-year, taking the target rate to 1%. Three additional hikes are expected in 2018.

Fund on Fund Investing During the year, the Fund invested in units of other HSBC Mutual Funds, which are also managed by us. To proceed with the transactions, the Fund relied on the positive recommendation of the Fund’s Independent Review Committee by way of Standing Instruction. A condition of this positive recommendation was that the transactions were performed in accordance with our policy on fund on fund investing.

Effective June 20, 2017, the management fee charged to the Investor Series and Advisor Series of the Fund was reduced from 2.00% to 1.75%, and the trailer fee was reduced from 1.00% to 0.85% effective September 22, 2017.

Financial Highlights

Related Party Transactions

The following tables show selected key financial information about the Fund and are intended to help you understand the Fund’s financial performance for the years shown. This information is derived from the Fund’s audited annual financial statements. The information in the following tables is based on prescribed regulations, and as a result, is not expected to add down due to the increase/decrease in net assets from operations being based on average units outstanding during the year and all other numbers being based on actual units outstanding at the relevant point in time.

We, on behalf of the Fund, or the Fund Manager, may, from time to time, enter into transactions or arrangements with or involving other members of the HSBC Group or other people or companies related or connected to us or the Fund. To proceed with the transactions, the Fund relies on the positive recommendation of the Fund’s Independent Review Committee. A condition of this positive recommendation is that the transactions are performed in accordance with our policy on Related Party Transactions. For more general information on persons related to the Fund and the types of potential transactions, see the Fund’s Simplified Prospectus. The following is a summary of current transactions and arrangements with entities that are related to us or the Fund.

HSBC World Selection Diversified Growth Fund – Investor Series – Net Assets per Unit(1) Years ended December 31

Manager, Trustee and Investment Advisor

2017

We are the manager, trustee and primary investment advisor of the Fund. As manager, we manage the overall business and operations of the Fund. As trustee, we hold legal title to the property of the Fund on your behalf. As primary investment advisor, we provide investment advice and portfolio management services to the Fund. We receive a fee from the Fund for these services based on assets under management, calculated daily and paid monthly.

Net assets per unit, beginning of year (2)

Custodial Services HSBC Bank Canada (“the Bank”) (of which we are a wholly owned subsidiary) was the custodian of the Fund from January 1, 2017 to September 30, 2017. For the years ended December 31, 2017, and December 31, 2016, all fees for these services were waived by the Bank. Effective October 1, 2017, Northern Trust Company, Canada took over as custodian for the Fund.

Distribution Services The Fund is distributed through us, HSBC Investment Funds (Canada) Inc. (our wholly owned subsidiary and affiliate) and HSBC Securities (Canada) Inc. (an affiliate) directly or through its division, HSBC InvestDirect. We pay distribution and servicing fees to them based on the amount of assets held in the investor’s account, and additionally, in some cases, on the amount of the initial purchase. If you hold units of this Fund and/or other HSBC Mutual Funds in a registered plan with HSBC Investment Funds (Canada) Inc., they may charge you an annual fee to cover the annual administration costs of the plan. We permit HSBC Investment Funds (Canada) Inc. to collect these fees by redeeming sufficient units of the Fund with the highest market value in your registered plan. 2

2016

2015

2014

2013

$15.00 $15.09 $15.01 $13.86 $11.74

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.49 (0.32) 0.26 1.01

0.49 (0.33) 1.24 (0.29)

0.62 (0.35) 0.83 (0.40)

0.29 (0.32) 0.36 0.80

0.26 (0.28) 0.40 1.75

Total increase (decrease) from operations (2)

$1.44

$1.11

$0.70

$1.13

$2.13

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– (0.07) – –

– (0.09) (1.10) –

– – (0.68) –

– – – –

– – – –

Total annual distributions (2,3)

$(0.07) $(1.19) $(0.68)

$–

$–

Net assets per unit at December 31 of year shown (2)

$16.36 $15.00 $15.09 $15.01 $13.86

HSBC World Selection Diversified Growth Fund Ratios and Supplemental Data

HSBC World Selection Diversified Growth Fund – Manager Series – Net Assets per Unit(1)

Years ended December 31 2017

2016

2015

2014

Years ended December 31

2013

2017** 2016** 2015** 2014**

Net Asset Value (in 000s) (4) $343,068 $315,402 $297,785 $265,597 $214,327 Number of units outstanding (in 000s) (4) 20,975 21,032 19,737 17,690 15,469 Management expense ratio (⬙MER⬙) (5) 2.17% 2.28% 2.27% 2.28% 2.31% MER before waivers or absoptions (5) 2.17% 2.28% 2.27% 2.28% 2.31% Trading expense ratio (6) 0.03% 0.06% 0.09% 0.10% 0.05% Portfolio turnover rate (7) 11.42% 49.25% 23.62% 11.92% 24.58% Net Asset Value per unit (4) $16.36 $15.00 $15.09 $15.01 $13.86

Net assets per unit, beginning of year (2)

HSBC World Selection Diversified Growth Fund – Advisor Series – Net Assets per Unit(1) Years ended December 31 2017 Net assets per unit, beginning of year (2)

2016

2015

2014

$12.56 $12.71 $12.68 $11.71

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.39 (0.32) 0.22 0.82

0.40 (0.35) 1.64 (1.45)

0.52 (0.34) 0.69 (0.31)

0.21 (0.28) 0.27 0.87

2013 $9.93 0.21 (0.25) 0.33 1.51

Total increase (decrease) from operations (2)

$1.11

$0.24

$0.56

$1.07

$1.80

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– (0.05) – –

– (0.07) (0.91) –

– – (0.56) –

– – – –

– – – –

Total annual distributions (2,3)

$(0.05) $(0.98) $(0.56)

$–

$–

Net assets per unit at December 31 of year shown (2)

$13.66 $12.56 $12.71 $12.68 $11.71

$10.00

$–

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

$– $18.33 $15.37

0.01 (0.01) 0.03 0.27

– – – 0.34

– – – –

0.07 (0.09) 0.15 0.97

0.33 (0.19) 0.52 2.27

Total increase (decrease) from operations (2)

$0.30

$0.34

$–

$1.10

$2.93

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– – – –

– – – –

– – – –

– – – –

– – – –

Total annual distributions (2,3)

$–

$–

$–

$–

$–

Net assets per unit at December 31 of year shown (2)

$–

$–

$–

$– $18.33

Ratios and Supplemental Data Years ended December 31 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

*

2017**

2016**

2015**

2014**

2013

$–

$–

$–

$–

$4

–

–

–

–

–*

1.26%

2.00%

–

1.31%

1.23%

1.26% 2.00% – 1.31% 1.23% 0.03% 0.06% 0.09% 0.10% 0.05% 11.42% 49.25% 23.62% 11.92% 24.58% $– $– $– $– $18.33

Amount less than one thousand.

** The Manager Series was fully redeemed during 2014, 2015, 2016 and 2017; however, it remains in offer as at period end.

Ratios and Supplemental Data Years ended December 31 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2013

2017

2016

2015

2014

2013

$157

$165

$446

$406

$611

11

13

35

32

52

2.58%

2.83%

2.61%

2.35%

2.37%

2.87% 2.90% 2.61% 2.35% 2.37% 0.03% 0.06% 0.09% 0.10% 0.05% 11.42% 49.25% 23.62% 11.92% 24.58% $13.66 $12.56 $12.71 $12.68 $11.71

3

HSBC World Selection Diversified Growth Fund waived or absorbed certain fees and expenses otherwise payable by the Fund. The amount of expenses absorbed or waived is at the discretion of and can be terminated at any time by us.

HSBC World Selection Diversified Growth Fund – Institutional Series – Net Assets per Unit(1) Years ended December 31 2017*** Net assets per unit, beginning of year (2)

$10.12

2016

$9.59 $10.00

$10.00

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.10 (0.02) 0.11 0.22

0.13 (0.03) 0.31 (3.61)

0.27 – 0.04 (0.06)

0.01 – 0.03 0.07

Total increase (decrease) from operations (2)

$0.41

$(3.20)

$0.25

$0.11

– – – –

– (0.08) (0.98) –

– – (0.66) –

– – – –

$(1.06) $(0.66)

$–

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital Total annual distributions (2,3)

$–

Net assets per unit at December 31 of year shown (2)

$– $10.12

(6) The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the year.

2015 2014***

$9.59

(7) The Fund’s portfolio turnover rate indicates how actively the Fund’s portfolio advisor manages its portfolio investments. A portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the year. The higher the Fund’s portfolio turnover rate in a year, the greater the trading costs payable by the Fund in the year, and the greater the chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high turnover rate and the performance of the Fund. The rate is calculated based on the lesser of purchases or sales of securities divided by the average weighted market value of the portfolio securities, excluding short-term securities.

$–

Ratios and Supplemental Data Years ended December 31 2017*** Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2016

2015 2014***

$– $52 $1,005 $– – 5 105 – 0.39% 0.38% 0.08% 0.09% 0.68% 0.38% 0.08% 0.09% 0.03% 0.06% 0.09% 0.10% 11.42% 49.25% 23.62% 11.92% $– $10.12 $9.59 $–

*** The Institutional Series was fully redeemed during 2017 & 2014; however, it remains in offer as at period-end. (1) This information is derived from the Fund’s audited annual financial statements. 2017, 2016, 2015, 2014 and 2013 balances are stated in IFRS. Under IFRS, the net asset per unit presented in the financial statements is the same as the net asset value calculated for fund pricing purposes. (2) Net assets per unit and distributions per unit are based on the actual number of units outstanding for the relevant series at the relevant time. The increase/decrease in net assets from operations per unit is based on the weighted average number of units outstanding for the relevant series over the fiscal year. (3) Distributions are automatically reinvested in additional units of the Fund, unless the unitholder withdraws from the automatic reinvestment plan by providing written notice to us. (4) This information is provided as at December 31 of the year shown. (5) MER is based on total expenses (excluding distributions, commissions and other portfolio transaction costs) for the stated period and is expressed as an annualized percentage of daily average net asset value during the year. The MER may vary from one mutual fund to another and from one series of units to another. We have

4

HSBC World Selection Diversified Growth Fund Annual Returns – Investor Series

Management Fees For the year ended December 31, 2017, the Fund paid us management fees of $6,115,990. The management fee for each series is calculated as a percentage of the daily net asset value for that series. The fees are reduced, where required, so that these fees do not duplicate fees payable by mutual funds in which the Fund invests for the same service.

30% 18.0%

16.7%

20%

9.0%

7.1%

10%

8.4%

5.0%

7.2%

9.5%

0% -5.5%

-10%

The Fund’s management fees were used by us to pay costs for managing the investment portfolio, providing investment analysis and recommendations, making investment decisions, making brokerage arrangements for the purchase and sale of the investment portfolio and providing other services. The management fees also funded commission payments and other compensation to sales representatives and registered dealers and brokers (collectively “distribution costs”), including HSBC Investment Funds (Canada) Inc., for units of the Fund bought and held by unitholders. Finally, we used management fees to pay for additional marketing and distribution services to the Fund.

-20% -30%

-23.4% Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Annual Returns – Advisor Series 30% 17.9%

16.7%

20%

8.9%

7.0%

10%

8.3%

4.6%

6.5%

9.1%

0%

For the year ended December 31, 2017, approximately 46% of the total management fees collected from all HSBC Mutual Funds were used to fund distribution costs. In comparison, for the Fund, such distribution costs represented 47% of the management fees collected. This may vary by series depending on the assets invested in each of the series.

-5.5%

-10% -20% -30%

-23.4% Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Annual Returns – Manager Series

Past Performance

25%

The performance information shown assumes that all distributions made by the Fund in the years shown were reinvested in additional securities of the Fund. The performance information does not take into account sales, redemption, distribution, optional charges or expenses you may be charged outside of the Fund or the effect of any income tax you may have to pay as a result of your investment in the Fund that would have reduced returns or performance. The performance of different fund series may vary for a number of reasons, including differences in management fees and expenses. The Fund’s past performance does not necessarily indicate how it will perform in the future.

19.2%

20% 15% 10%

10.2%

8.2%

5% 0% -5% -10%

*

Year-by-Year Returns Years ended December 31

-4.4% Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2010 2011 2012 2013 2014* 2015* 2016* 2017*

The Manager Series was fully redeemed during 2014. There were no unitholders for the full calendar year of 2014 and onwards; however, the series remains in offer as at period-end.

Annual Compound Returns

The following bar charts show the Fund’s performance for each of the years shown, and illustrate how the Fund’s performance changed from year to year. In percentage terms, the bar charts show how much an investment made on the first day of each financial year would have grown or decreased by the last day of each financial year.

Year ended December 31, 2017 The following tables show the Fund’s historical annual compound total returns for the years indicated, compared with the benchmark index. The benchmark of this Fund is a weighted composite consisting of the FTSE TMX Canada Universe Bond Index (23%), S&P/TSX Capped Composite Index (31%) and MSCI World Net Index (in Canadian dollars) (46%). The FTSE TMX Canada Universe Bond Index is a broad measure of the total return for the Canadian bond market, covering marketable Canadian bonds with a term to maturity of more than one year. The S&P/TSX Capped Composite Index tracks changes in the share prices of the largest companies listed on the Toronto 5

HSBC World Selection Diversified Growth Fund Stock Exchange, representing a broad range of industries. The MSCI World Net Index is an international index that measures the performance of stocks traded in Europe, Australia, the Far East, the US, Canada and South Africa. This index is tracked in US dollars and was converted to Canadian dollars.

Summary of Investment Portfolio As at December 31, 2017

Asset Mix Percentage of NAV

Investor Series 1 Year

3 Year

International Equities Canadian Equities Bonds Cash & Equivalents Total

5 Year 10 Year

HSBC World Selection Diversified Growth Fund

9.53% 7.24%

9.54%

4.51%

46% MSCI World Net Index (C$), 31% S&P/TSX Capped Composite Index, 23% FTSE TMX Canada Universe Bond Index

9.99% 8.32% 11.14%

6.23%

46.43% 31.93% 21.51% 0.13% 100.00%

Top 25 Holdings*

Advisor Series 1 Year

3 Year

Percentage of NAV

5 Year 10 Year

HSBC World Selection Diversified Growth Fund

9.08% 6.73%

9.20%

4.34%

46% MSCI World Net Index (C$), 31% S&P/TSX Capped Composite Index, 23% FTSE TMX Canada Universe Bond Index

9.99% 8.32% 11.14%

6.23%

HSBC Global Equity Fund - Institutional Series HSBC Equity Fund - Institutional Series HSBC Canadian Bond Fund - Institutional Series HSBC Mortgage Fund - Institutional Series HSBC Emerging Markets Debt Fund - Institutional Series HSBC Emerging Markets Fund - Institutional Series HSBC Small Cap Growth Fund - Institutional Series HSBC Canadian Money Market Fund - Institutional Series Remaining Holdings Total of Top 25 Holdings

(1) Due to the fact that several benchmark indices are only available on a monthly basis, the performance data for the HSBC Funds and the benchmark indices are calculated using values from the first month-end date each Fund was in operation. (2) For investment commentary and relative performance of the Fund compared to its benchmark, please refer to the Results of Operations section of this report.

*

41.35% 28.82% 10.06% 6.23% 5.22% 5.09% 3.10% 0.25% -0.12% 100.00%

The Fund had less than 25 holdings as at December 31, 2017.

The Summary of Investment Portfolio may change due to ongoing portfolio transactions of the Fund, and is available quarterly. The Fund invests in other mutual funds, and the prospectus and other information about the underlying funds are available on SEDAR at www.sedar.com.

6

For more information

How to reach us

You can find more information about HSBC Mutual Funds in the Fund’s Simplified Prospectus, Annual Information Form, Annual and Semi-Annual Report and Fund Facts. You can get a copy of these documents, as well as the Fund’s Financial Statements, at no cost by calling 1-888-390-3333, by contacting your authorized dealer or by visiting our website at www.hsbc.ca/investment-resources.

HSBC Global Asset Management (Canada) Limited

These documents and other information about the Fund, such as information circulars and material contracts, are also available at www.sedar.com. Copies of the Annual Report and Semi-Annual Report, Simplified Prospectus, Annual Information Form, Annual and Interim Management Report of Fund Performance and Fund Facts are available on our website at www.hsbc.ca/investment-resources.

Vancouver 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8 Toronto Suite 300, 70 York Street Toronto, ON M5J 1S9 Toll-free: 1-888-390-3333 Fax: 604-669-2756 Email: [email protected] Website: www.hsbc.ca/investment-resources

A NOTE ON FORWARD-LOOKING STATEMENTS This report may contain forward-looking statements about the Fund, including its strategy, expected performance and condition. Forward-looking statements include statements that are predictive in nature that depend upon or refer to future events or conditions, or that include words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates” or negative versions thereof and similar expressions. In addition, any statement that may be made concerning future performance, strategies or prospects, and possible future Fund action, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the Fund and economic factors. Forward-looking statements are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied in any forward-looking statements made by the Fund. Any number of important factors could contribute to these digressions, including, but not limited to, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, and catastrophic events. We stress that the above-mentioned list of important factors is not exhaustive. We encourage you to consider these and other factors carefully before making any investment decisions and we urge you to avoid placing undue reliance on forward-looking statements. Further, you should be aware of the fact that the Fund has no specific intention of updating any forward-looking statements, whether as a result of new information, future events or otherwise. Sources: HSBC Global Asset Management (Canada) Limited, Bloomberg, MSCI, FTSE TMX Global Debt Capital Markets Inc., Bank of Canada. Neither MSCI nor any other party involved in or related to compiling, computing or creating the MSCI data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any of such data. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in or related to compiling, computing or creating the data have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages. No further distribution or dissemination of the MSCI data is permitted without MSCI’s express written consent. FTSE TMX Global Debt Capital Markets Inc. (“FTDCM”), FTSE International Limited (“FTSE”), the London Stock Exchange Group companies (the “Exchange”) or TSX Inc. (“TSX” and together with FTDCM, FTSE and the Exchange, the “Licensor Parties”). The Licensor Parties make no warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the FTSE TMX Canada Index and/or the figure at which the said Index stands at any particular time on any particular day or otherwise. The Index is compiled and calculated by FTDCM and all copyright in the Index values and constituent lists vests in FTDCM. The Licensor Parties shall not be liable (whether in negligence or otherwise) to any person for any error in the Index and the Licensor Parties shall not be under any obligation to advise any person of any error therein. “TMX” is a trade mark of TSX Inc. and is used under licence. “FTSE®” is a trade mark of FTSE International Limited and is used by FTDCM under licence.

Issued by HSBC Global Asset Management (Canada) Limited

(2018-03) DFS

Unauthorized reproduction, distribution, transmission or publication without our prior written consent is strictly prohibited.

HSBC World Selection® Diversified Aggressive Growth Fund Annual Management Report of Fund Performance for the year ended December 31, 2017

®

World Selection is a registered trademark of HSBC Bank Canada.

◆

HSBC World Selection Diversified Aggressive Growth Fund Management Discussion of Fund Performance In this document, you and your refer to the unitholder of the Fund; we, us and our refer to HSBC Global Asset Management (Canada) Limited; and the Fund refers to the HSBC World Selection Diversified Aggressive Growth Fund.

Results of Operations

We are the manager, trustee and primary investment advisor of the Fund.

As of December 31, 2017, the Fund’s net assets increased by 13.1% to $95.1 million from $84.1 million at the end of 2016. Of this increase, a $9.5 million gain was attributable to investment performance and $1.5 million was attributable to net contributions to the Fund.

Introduction

Investment Performance

This Annual Management Report of Fund Performance contains financial highlights but does not contain the complete annual financial statements of the investment fund. You may obtain a copy of the Fund’s annual financial statements at your request, at no cost, by calling us toll-free at 1-888-390-3333, by visiting our website at www.hsbc.ca/investment-resources, by visiting the SEDAR website at www.sedar.com or by writing to us at:

The HSBC World Selection Diversified Aggressive Growth Fund (Investor Series) rose 11.27% over the 12-month period ending December 31, 2017, while its benchmark rose 11.74% over the same period. The benchmark is a weighted composite consisting of the FTSE TMX Canada Universe Bond Index (10%), S&P/TSX Capped Composite Index (27.5%) and MSCI World Net Index (C$) (62.5%).

Corporate Secretary HSBC Global Asset Management (Canada) Limited 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8

In 2017, the Fund was neutral or modestly overweight in Canadian and global equities and underweight in fixed income (although within this segment it was overweight in corporate bonds). Returns from the Fund’s three main asset classes were the biggest contributors to performance. Security selection within Canadian equities and fixed income added to performance, and global equity selection was a small positive.

You may also contact us using one of these methods to request a copy of the Fund’s interim financial report, proxy voting policies and procedures, proxy voting disclosure record or quarterly statement of investment portfolio.

From a Canadian investor’s perspective, global equities were the best-performing major asset class in 2017, returning 14.4%. Canadian equities posted a respectable 9.1% return, while the domestic bond market gained a modest 2.5%. Following weakness early in the year, oil prices rallied and ended the year at $60 per barrel, up approximately 12% in 2017. The Canadian dollar appreciated 7% during the year, benefiting from strength in commodity prices and Bank of Canada rate hikes.

Investment Objective and Strategies The fundamental investment objective of this Fund is to provide investors with potential long-term capital growth through a diversified portfolio of investments across several asset classes. To achieve its objectives, the Fund invests in other mutual funds and uses strategic asset allocation as the principal investment strategy. The Fund has an established policy asset mix, based on its stated objectives. In addition to adjusting the Fund’s asset mix depending on economic conditions and the relative value of securities in the Fund, the Fund may also use tactical asset allocation to take advantage of current and expected future market conditions.

The market rally has been well supported by improving fundamentals, including strong earnings growth. Additionally, the relative attractiveness of equities compared to cash or government bonds remains compelling. The Fund therefore remains tilted towards corporate assets (both equities and bonds).

Risk

Recent Developments

The risks of investing in the Fund remain as discussed in the Simplified Prospectus. During the year, there were no material changes to the Fund that affected the overall risk level of the Fund.

The global economy continues to accelerate. Consumer spending remains solid, supported by an increase in household net worth and a healthy labour market. Both business investment and manufacturing activity are also trending higher.

This Fund is suitable for investors who want to maximize the long-term potential growth of their capital and earn low to moderate interest income. Investors in this Fund should have a long-term investment time horizon and a medium tolerance for investment risk.

Looking ahead, while central banks will gradually remove stimulus, rates are likely to remain much lower than historic norms. On fiscal spending, the path is less clear, but the bias seems somewhat expansionary. Canadian economic growth remains healthy, although it was slower in the second half of 2017 than in the robust first half of the year. Employment remains strong and the unemployment rate has dipped to its lowest reading in four decades. 1

HSBC World Selection Diversified Aggressive Growth Fund The US Federal Reserve raised its target rate three times in 2017 and we expect three more in 2018. The Bank of Canada surprised markets with two hikes mid-year, taking the target rate to 1%. Three additional hikes are expected in 2018.

Fund on Fund Investing During the year, the Fund invested in units of other HSBC Mutual Funds, which are also managed by us. To proceed with the transactions, the Fund relied on the positive recommendation of the Fund’s Independent Review Committee by way of Standing Instruction. A condition of this positive recommendation was that the transactions were performed in accordance with our policy on fund on fund investing.

Effective June 20, 2017, the management fee charged to the Investor Series and Advisor Series of the Fund was reduced from 2.00% to 1.75%, and the trailer fee was reduced from 1.00% to 0.85% effective September 22, 2017.

Financial Highlights

Related Party Transactions

The following tables show selected key financial information about the Fund and are intended to help you understand the Fund’s financial performance for the past five years. This information is derived from the Fund’s audited annual financial statements. The information in the following tables is based on prescribed regulations, and, as a result, is not expected to add down due to the increase/decrease in net assets from operations being based on average units outstanding during the year and all other numbers being based on actual units outstanding at the relevant point in time.

We, on behalf of the Fund, or the Fund Manager, may, from time to time, enter into transactions or arrangements with or involving other members of the HSBC Group or other people or companies related or connected to us or the Fund. To proceed with the transactions, the Fund relies on the positive recommendation of the Fund’s Independent Review Committee. A condition of this positive recommendation is that the transactions are performed in accordance with our policy on Related Party Transactions. For more general information on persons related to the Fund and the types of potential transactions, see the Fund’s Simplified Prospectus. The following is a summary of current transactions and arrangements with entities that are related to us or the Fund.

HSBC World Selection Diversified Aggressive Growth Fund – Investor Series – Net Assets per Unit(1)

Manager, Trustee and Investment Advisor

Years ended December 31

We are the manager, trustee and primary investment advisor of the Fund. As manager, we manage the overall business and operations of the Fund. As trustee, we hold legal title to the property of the Fund on your behalf. As primary investment advisor, we provide investment advice and portfolio management services to the Fund. We receive a fee from the Fund for these services based on assets under management, calculated daily and paid monthly.

2017 Net assets per unit, beginning of year (2)

Custodial Services HSBC Bank Canada (“the Bank”) (of which we are a wholly owned subsidiary) was the custodian of the Fund from January 1, 2017 to September 30, 2017. For the years ended December 31, 2017, and December 31, 2016, all fees for these services were waived by the Bank. Effective October 1, 2017, Northern Trust Company, Canada took over as custodian for the Fund.

Distribution Services The Fund is distributed through us, HSBC Investment Funds (Canada) Inc. (our wholly owned subsidiary and affiliate) and HSBC Securities (Canada) Inc. (an affiliate) directly or through its division, HSBC InvestDirect. We pay distribution and servicing fees to them based on the amount of assets held in the investor’s account, and additionally, in some cases, on the amount of the initial purchase. If you hold units of this Fund and/or other HSBC Mutual Funds in a registered plan with HSBC Investment Funds (Canada) Inc., they may charge you an annual fee to cover the annual administration costs of the plan. We permit HSBC Investment Funds (Canada) Inc. to collect these fees by redeeming sufficient units of the Fund with the highest market value in your registered plan. 2

2016

2015

2014

2013

$15.72 $15.30 $14.68 $13.39 $10.79

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.54 (0.35) 0.32 1.25

0.46 (0.34) 0.88 0.16

0.75 (0.36) 0.67 (0.19)

0.30 (0.33) 0.34 0.94

0.24 (0.28) 0.51 2.15

Total increase (decrease) from operations (2)

$1.76

$1.16

$0.87

$1.25

$2.62

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– (0.07) – –

– (0.06) (0.63) –

– – (0.38) –

– – – –

– – – –

Total annual distributions (2,3)

$(0.07) $(0.69) $(0.38)

$–

$–

Net assets per unit at December 31 of year shown (2)

$17.42 $15.72 $15.30 $14.68 $13.39

HSBC World Selection Diversified Aggressive Growth Fund Ratios and Supplemental Data

HSBC World Selection Diversified Aggressive Growth Fund – Institutional Series – Net Assets per Unit(1)

Years ended December 31 2017 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

2016

2015

2014

2013

Years ended December 31

$95,121 $84,052 $75,987 $59,490 $39,220

2017* 2016* 5,460

5,348

4,966

4,051

2,930

2.22%

2.34%

2.35%

2.36%

2.45%

Net assets per unit, beginning of year (2)

2.22% 2.34% 2.35% 2.36% 2.45% 0.04% 0.08% 0.11% 0.13% 0.10% 12.45% 47.53% 24.71% 13.48% 28.05% $17.42 $15.72 $15.30 $14.68 $13.39

Total increase (decrease) from operations (2)

HSBC World Selection Diversified Aggressive Growth Fund – Advisor Series – Net Assets per Unit(1) Years ended December 31 2017 Net assets per unit, beginning of year (2)

2016

2015

2014

2013

$14.82 $14.38 $13.87 $12.66 $10.21

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

0.51 (0.36) 0.30 1.33

0.32 (0.39) 0.68 (1.82)

0.93 (0.40) 0.60 (0.31)

0.23 (0.32) 0.30 1.06

0.23 (0.28) 0.49 2.05

0.01 – 0.06 0.15

$9.57 $10.00 0.01 (0.11) 0.01 (0.50)

2013*

$– $11.47

0.19 – 0.30 (0.71)

– – – –

– – 0.03 0.72

$0.22 $(0.59) $(0.22)

$–

$0.75

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

– – – –

– – – –

– – (0.46) –

– – – –

– – – –

Total annual distributions (2,3)

$–

$–

$(0.46)

$–

$–

Net assets per unit at December 31 of year shown (2)

$–

$–

$9.57

$–

$–

Ratios and Supplemental Data Years ended December 31

Total increase (decrease) from operations (2)

$1.78

Distributions to unitholders: From net investment income (excluding dividends) From dividends From capital gains Return of capital

$(1.21)

– (0.06) – –

– (0.06) (0.57) –

$0.82

$1.27

$2.49

– – (0.35) –

– – – –

– – – –

Total annual distributions (2,3)

$(0.06) $(0.63) $(0.35)

$–

$–

Net assets per unit at December 31 of year shown (2)

$16.34 $14.82 $14.38 $13.87 $12.66

Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

*

Ratios and Supplemental Data 2017

2016

2015

2014

2013

$12

$14

$98

$53

$60

1

1

7

4

5

2.46%

2.87%

2.79%

2.47%

2.54%

2017*

2016*

2015

2014*

2013*

$–

$–

$15

$–

$–

–

–

2

–

–

0.32%

7.75%

0.30%

–

0.20%

0.32% 7.76% 0.30% – 0.20% 0.04% 0.08% 0.11% 0.13% 0.10% 12.45% 47.53% 24.71% 13.48% 28.05% $– $– $9.57 $– $–

The Institutional Series was fully redeemed during 2013, 2014, 2016 & 2017; however, it remains in offer as at period end.

(1) This information is derived from the Fund’s audited annual financial statements. 2017, 2016, 2015, 2014 and 2013 balances are stated in IFRS. Under IFRS, the net asset per unit presented in the financial statements is the same as the net asset value calculated for fund pricing purposes.

Years ended December 31 Net Asset Value (in 000s) (4) Number of units outstanding (in 000s) (4) Management expense ratio (⬙MER⬙) (5) MER before waivers or absoptions (5) Trading expense ratio (6) Portfolio turnover rate (7) Net Asset Value per unit (4)

$–

Increase (decrease) from operations: Total revenue Total expenses Realized gains (losses) Unrealized gains (losses)

2015 2014*

(2) Net assets per unit and distributions per unit are based on the actual number of units outstanding for the relevant series at the relevant time. The increase/decrease in net assets from operations per unit is based on the weighted average number of units outstanding for the relevant series over the fiscal year.

10.01% 6.32% 4.21% 2.47% 2.54% 0.04% 0.08% 0.11% 0.13% 0.10% 12.45% 47.53% 24.71% 13.48% 28.05% $16.34 $14.82 $14.38 $13.87 $12.66

(3) Distributions are automatically reinvested in additional units of the Fund, unless the unitholder withdraws from the automatic reinvestment plan by providing written notice to us. (4) This information is provided as at December 31 of the year shown. (5) MER is based on total expenses (excluding distributions, commissions and other portfolio transaction costs) for the stated period and is expressed as an annualized percentage of daily average net asset value during the year. The MER may vary from one mutual fund to another and from one series of units to another. We have

3

HSBC World Selection Diversified Aggressive Growth Fund waived or absorbed certain fees and expenses otherwise payable by the Fund. The amount of expenses absorbed or waived is at the discretion of and can be terminated at any time by us.

Year-by-Year Returns Years ended December 31 The following bar charts show the Fund’s performance for each of the years shown, and illustrate how the Fund’s performance changed from year to year. In percentage terms, the bar charts show how much an investment made on the first day of each financial year would have grown or decreased by the last day of each financial year.

(6) The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the year. (7) The Fund’s portfolio turnover rate indicates how actively the Fund’s portfolio advisor manages its portfolio investments. A portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the year. The higher the Fund’s portfolio turnover rate in a year, the greater the trading costs payable by the Fund in the year, and the greater the chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high turnover rate and the performance of the Fund. The rate is calculated based on the lesser of purchases or sales of securities divided by the average weighted market value of the portfolio securities, excluding short-term securities.

Annual Returns – Investor Series 40% 30%

24.1%

18.7%

20%

10.1%

6.8%

10%

9.7%

6.8%

7.2%

11.3%

0% -10%

Management Fees

-20%

For the year ended December 31, 2017, the Fund paid us management fees of $1,662,533. The management fee for each series is calculated as a percentage of the daily net asset value for that series. The fees are reduced, where required, so that these fees do not duplicate fees payable by mutual funds in which the Fund invests for the same service.

-30% -40%

-8.3%

-30.3% Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Annual Returns – Advisor Series 30%

The Fund’s management fees were used by us to pay costs for managing the investment portfolio, providing investment analysis and recommendations, making investment decisions, making brokerage arrangements for the purchase and sale of the investment portfolio and providing other services. The management fees also funded commission payments and other compensation to sales representatives and registered dealers and brokers (collectively “distribution costs”), including HSBC Investment Funds (Canada) Inc., for units of the Fund bought and held by unitholders. Finally, we used management fees to pay for additional marketing and distribution services to the Fund.

24.0%

20% 10.2%

10%

9.6%

6.1%

7.4%

10.7%

0% -10% -20%

-8.4% Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2011 2012 2013 2014 2015 2016 2017

Annual Returns – Institutional Series

For the year ended December 31, 2017, approximately 46% of the total management fees collected from all HSBC Mutual Funds were used to fund distribution costs. In comparison, for the Fund, such distribution costs represented 47% of the management fees collected. This may vary by series depending on the assets invested in each of the series.

15% 12.5% 10%

5%

Past Performance The performance information shown assumes that all distributions made by the Fund in the years shown were reinvested in additional securities of the Fund. The performance information does not take into account sales, redemption, distribution, optional charges or expenses you may be charged outside of the Fund or the effect of any income tax you may have to pay as a result of your investment in the Fund that would have reduced returns or performance. The performance of different fund series may vary for a number of reasons, including differences in management fees and expenses. The Fund’s past performance does not necessarily indicate how it will perform in the future.

0%

*

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2012 2013* 2014* 2015* 2016* 2017*

The Institutional Series was fully redeemed during 2013. There were no unitholders for the full calendar year of 2014 and onwards. However, the Institutional Series remains in offer as at period-end.

Annual Compound Returns Year ended December 31, 2017 The following tables show the Fund’s historical annual compound total returns for the years indicated, compared with the benchmark index. The benchmark of this Fund is a weighted 4

HSBC World Selection Diversified Aggressive Growth Fund composite consisting of the FTSE TMX Canada Universe Bond Index (10%), S&P/TSX Capped Composite Index (27.5%) and MSCI World Net Index (in Canadian dollars) (62.5%).

Summary of Investment Portfolio

The FTSE TMX Canada Universe Bond Index is a broad measure of the total return for the Canadian bond market, covering marketable Canadian bonds with a term to maturity of more than one year. The S&P/TSX Capped Composite Index tracks changes in the share prices of the largest companies listed on the Toronto Stock Exchange, representing a broad range of industries. The MSCI World Net Index is an international index that measures the performance of stocks traded in Europe, Australia, the Far East, the US, Canada and South Africa. This index is tracked in US dollars and was converted to Canadian dollars.

Asset Mix

As at December 31, 2017

Percentage of NAV International Equities Canadian Equities Bonds Cash & Equivalents Total

62.61% 27.82% 9.70% -0.13% 100.00%

Top 25 Holdings*

Investor Series

Percentage of NAV 1 Year

3 Year

5 Year 10 Year

HSBC World Selection Diversified Aggressive Growth Fund

11.27% 8.40% 11.63%

4.45%

62.5% MSCI World Net Index (C$), 27.5% S&P/TSX Capped Composite Index, 10% FTSE TMX Canada Universe Bond Index

11.74% 9.77% 13.25%

6.65%

HSBC Global Equity Fund - Institutional Series HSBC Equity Fund - Institutional Series HSBC Emerging Markets Fund - Institutional Series HSBC Emerging Markets Debt Fund - Institutional Series HSBC Small Cap Growth Fund - Institutional Series HSBC Mortgage Fund - Institutional Series HSBC Canadian Bond Fund - Institutional Series Remaining Holdings Total of Top 25 Holdings

Advisor Series 1 Year

3 Year

Since 5 Year Inception

HSBC World Selection Diversified Aggressive Growth Fund

10.69% 8.05% 11.37%

8.13%

62.5% MSCI World Net Index (C$), 27.5% S&P/TSX Capped Composite Index, 10% FTSE TMX Canada Universe Bond Index

11.74% 9.77% 13.25%

10.33%

*

55.96% 24.80% 6.65% 5.17% 3.02% 2.64% 1.89% -0.13% 100.00%

The Fund had less than 25 holdings as at December 31, 2017.

(1) Due to the fact that several benchmark indices are only available on a monthly basis, the performance data for the HSBC Funds and the benchmark indices are calculated using values from the first month-end date each fund was in operation. (2) For investment commentary and relative performance of the Fund compared to its benchmark, please refer to the Results of Operations section of this report.

The Summary of Investment Portfolio may change due to ongoing portfolio transactions of the Fund, and is available quarterly. The Fund invests in other mutual funds, and the prospectus and other information about the underlying funds are available on SEDAR at www.sedar.com.

5

For more information

How to reach us

You can find more information about HSBC Mutual Funds in the Fund’s Simplified Prospectus, Annual Information Form, Annual and Semi-Annual Report and Fund Facts. You can get a copy of these documents, as well as the Fund’s Financial Statements, at no cost by calling 1-888-390-3333, by contacting your authorized dealer or by visiting our website at www.hsbc.ca/investment-resources.

HSBC Global Asset Management (Canada) Limited

These documents and other information about the Fund, such as information circulars and material contracts, are also available at www.sedar.com. Copies of the Annual Report and Semi-Annual Report, Simplified Prospectus, Annual Information Form, Annual and Interim Management Report of Fund Performance and Fund Facts are available on our website at www.hsbc.ca/investment-resources.

Vancouver 3rd Floor, 885 West Georgia Street Vancouver, BC V6C 3E8 Toronto Suite 300, 70 York Street Toronto, ON M5J 1S9 Toll-free: 1-888-390-3333 Fax: 604-669-2756 Email: [email protected] Website: www.hsbc.ca/investment-resources

A NOTE ON FORWARD-LOOKING STATEMENTS This report may contain forward-looking statements about the Fund, including its strategy, expected performance and condition. Forward-looking statements include statements that are predictive in nature that depend upon or refer to future events or conditions, or that include words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates” or negative versions thereof and similar expressions. In addition, any statement that may be made concerning future performance, strategies or prospects, and possible future Fund action, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the Fund and economic factors. Forward-looking statements are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied in any forward-looking statements made by the Fund. Any number of important factors could contribute to these digressions, including, but not limited to, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, and catastrophic events. We stress that the above-mentioned list of important factors is not exhaustive. We encourage you to consider these and other factors carefully before making any investment decisions and we urge you to avoid placing undue reliance on forward-looking statements. Further, you should be aware of the fact that the Fund has no specific intention of updating any forward-looking statements, whether as a result of new information, future events or otherwise. Sources: HSBC Global Asset Management (Canada) Limited, Bloomberg, MSCI, FTSE TMX Global Debt Capital Markets Inc., Bank of Canada. Neither MSCI nor any other party involved in or related to compiling, computing or creating the MSCI data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any of such data. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in or related to compiling, computing or creating the data have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages. No further distribution or dissemination of the MSCI data is permitted without MSCI’s express written consent. FTSE TMX Global Debt Capital Markets Inc. (“FTDCM”), FTSE International Limited (“FTSE”), the London Stock Exchange Group companies (the “Exchange”) or TSX Inc. (“TSX” and together with FTDCM, FTSE and the Exchange, the “Licensor Parties”). The Licensor Parties make no warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the FTSE TMX Canada Index and/or the figure at which the said Index stands at any particular time on any particular day or otherwise. The Index is compiled and calculated by FTDCM and all copyright in the Index values and constituent lists vests in FTDCM. The Licensor Parties shall not be liable (whether in negligence or otherwise) to any person for any error in the Index and the Licensor Parties shall not be under any obligation to advise any person of any error therein. “TMX” is a trade mark of TSX Inc. and is used under licence. “FTSE®” is a trade mark of FTSE International Limited and is used by FTDCM under licence.

Issued by HSBC Global Asset Management (Canada) Limited

(2018-03) DFS

Unauthorized reproduction, distribution, transmission or publication without our prior written consent is strictly prohibited.