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HSBC Mutual FundDecember 2010

Factsheet - December 2010

The Asset

HSBC Global Asset Management


Index

Fund Manager’s Comments - Equity & MIP Pg 2

Fund Manager’s Comments - Debt Pg 4

HSBC Equity Fund Pg 5

HSBC India Opportunities Fund Pg 7

HSBC Midcap Equity Fund Pg 9

HSBC Progressive Themes Fund Pg 11

HSBC Tax Saver Equity Fund Pg 13

HSBC Unique Opportunities Fund Pg 15

HSBC Dynamic Fund Pg 17

HSBC Emerging Markets Fund Pg 19

HSBC Small Cap Fund Pg 20

Fund Managers - Equity Pg 22

HSBC MIP - Savings Plan Pg 24

HSBC MIP - Regular Plan Pg 26

HSBC Income Fund - Investment Plan Pg 28

HSBC Income Fund - Short Term Plan Pg 30

HSBC Floating Rate Fund - Long Term Plan Pg 32

HSBC Floating Rate Fund - Short Term Plan Pg 34

HSBC Cash Fund Pg 36

HSBC Gilt Fund Pg 38

HSBC Ultra Short Term Bond Fund Pg 39

HSBC Flexi Debt Fund Pg 42

Fund Managers - MIP & Debt Pg 44

In this Issue ...

1


Fund Manager’s Comments - Equity & MIP

2

Markets remained range bound in the early part of December 2010, but a year end rally led themarkets erase the November 2010 losses and end the year on a high note. BSE Sensex wasup by 5.1% for the month while the broader indices BSE 200 and BSE 500 were up by 3.4% and3.1% respectively. BSE Midcap was up by 0.5% and BSE Smallcap was down by 0.8% therebyunderperforming the large cap index by a significant margin. So after an eventful 2010, we sawthe markets give good returns with the BSE Sensex up by 17.4%, BSE 200 up by 16.2%, BSE500 up by 16.4%, BSE Midcap up by 16.1% and BSE Smallcap up by 15.7%.

December 2010 was a good contrast to the prior month which was haemorrhaging scams(2G, CWG, Adarsh, loan for bribes, etc) but the low volume rally during the month raisesquestions on the sustainability of the rally.

The best performing sectoral indices were BSE Metals (up by 12.5%), BSE Technology (upby 8.6%), BSE Oil & Gas (up by 5.3%), BSE FMCG (up by 2.8%), BSE Capital Goods (up by2.4%), BSE Healthcare (up by 2.3%) while the worst performing were BSE Realty (down by2.4%), BSE Bankex (down by 1.8%), BSE Auto (up by 1.3%). So the sectoral moves reflectinvestors preference shifting to sectors linked to global recovery rather than domesticconsumption. Also we saw inflation rate and interest rate risk increase in investors mind,showing in the underperformance of interest rate sensitive sectors like auto, banks and realestate. On a overall 2010 basis, the best performing sectors were BSE Auto (up 37.6%), BSEHealthcare (up 34.2%), BSE Bankex (up 33.3%), BSE FMCG (up 31.9%), BSE Technology(up 23.5%) while the worst performing were BSE Realty (down 25.9%), BSE Oil & Gas (up1.2%), BSE Capital Good (up 9.2%).

FII inflows in the cash market remained positive for another month (10 occasions in 2010). FIIsturned buyers in futures market after selling for three months in a row. Domestic mutual fundsturned buyers for the first time since August 2009 while domestic insurance companies turnedsellers during the month. In 2010, FIIs bought stock worth USD 29 billion in the cash market(a new high) - FII inflows in the primary market are about USD 8.5 billion for the year. Domesticinstitutions have sold USD 4.6 billion (domestic insurance have bought USD 1.4 billion andmutual funds have sold stock worth USD 6 billion).

Domestically, we saw the Reserve Bank of India (RBI) in its mid-quarter review of monetarypolicy, kept the repo rate and the reverse repo rate unchanged at 6.25% and 5.25%, respectively.The cash reserve ratio (CRR) was also retained at 6%. RBI announced another round ofliquidity measures. These include: (a) permanent reduction in the Statutory Liquidity Ratio(SLR) from 25% of bank deposits (net time and demand liabilities, NDTL) to 24% with effectfrom December 18, 2010. (b) Additional buyback of government securities of ̀ 480 billion inthe next one month. These measures should improve liquidity to a certain extent. The headlineinflation rate (WPI) decelerated to 7.48% in November 2010 from 8.58% in October 2010. Theseasonally adjusted WPI index was up by 0.8% MoM in November 2010. Industrial Productiongrowth accelerated to 10.8% YoY in October 2010, compared with growth of 4.4% YoY inSeptember 2010. Given the volatility in monthly IP growth numbers, we believe the best way isto look at the 3 months moving average. On this basis, IP growth decelerated to an averageof 7.4% YoY during the three months ended October 2010 from 8.8% during the three monthsended September 2010. Food Price inflation remains sticky and could pose upward risks toyear end inflation targets.

Higher tax collections and 3G and BWA license fees has helped government to achieve fiscaldeficit of 2.6% of GDP FYTD (Financial Year to Date) (vs. the budget estimate of 5.5% of GDPfor the full year). For the period April-November 2010, the fiscal deficit has reached 48.9% ofthe FY 2011 Budgeted Estimate. Even after excluding 3G and BWA license fees from totalrevenue receipts, on a FYTD basis, the fiscal deficit was down 4.4% YoY.

On the external front, we saw the current account deficit widened to an all-time high of USD15.8 billion (4.3% of GDP, annualized) in quarter ending September 2010 compared with adeficit of USD 12.1 billion (3.5% of GDP, annualized). This level of current account deficit wasabove market expectations (as per Bloomberg survey) of USD 15.3 billion. The current accountdeficit (excluding remittances) widened to 8% of GDP, annualized, in the September 2010quarter compared with 7.4% of GDP in June 2010 quarter. With oil prices rising, one of thebiggest concerns will be the adverse impact of high oil prices on current account and the fiscaldeficit since India imports 75% of its oil requirement. India is one of the few emerging marketswhich suffers from twin deficits (both current and fiscal). Whenever oil prices rise, globalinvestors become concerned about its impact on inflation and interest rate in India and hencethe growth rates, thereby leading to capital flows out of the country. Since last year, India wasone of the prime beneficiaries of the easy liquidity situation globally and the strong domesticgrowth story meant global investors allocating a greater share of their capital to India. Indiaremains susceptible to capital outflows.

Globally, we saw economic data points improve especially in the United States, on the back ofsecond round of quantitative easing announced by the Federal Reserve last month. And thisled to sharp up move in asset classes linked to developed markets recovery. Hence, we sawindustrial commodities rallying with Zinc up 16.2%, Copper up 14.8% and Aluminum up 8.5%.Also,Crude Oil was up by 8.6% and crossed USD 90 per barrel after a long time. Goingforward, recovery in the developed markets could turn out to be a bane for the Indian marketswith global commodities including crude oil moving up, thereby adding fuel to already highinflation rates and hence interest rate. And this could impact growth rates going forward.


Review: HSBC Equity Fund

Being overweight Energy and underweight Consumer Discretionary, Real Estate helpedperformance while being overweight Financials and underweight Software, Materialshurt performance.

Review: HSBC India Opportunities Fund

Being overweight Energy and underweight Real Estate helped performance while beingoverweight Consumer Discretionary, Financials and underweight Software, Materialshurt performance.

Review: HSBC Midcap Equity Fund

Being overweight Consumer Staples, Software helped performance while being overweightConsumer Discretionary, Financials and underweight Energy, Materials hurt performance.

Review: HSBC Progressive Themes Fund

Currently focusing on the following themes, 1. Economic Reforms (42.4%) which includesBanking- 29.6%, Oil & Gas Sector deregulation -8.7%, opening of FDI/Disinvestment subtheme 4% and 2. Infrastructure (32%) which includes Power-3.3%, Construction-21.2% andLogistics-7.4%. Well-diversified exposure across sectors encompassing the above themes.

Review: HSBC Dynamic Fund

The cash levels in the fund are likely to change depending on market conditions and technicalfactors. We are overweight Financials, Healthcare and Industrials and underweightConsumer Discretionary, Materials and Utilities.

Review: HSBC MIP Regular and Savings Plans

Our current exposure is 13.83% in HMIP Regular and 23.41%, in HMIP Savings. Currentlyit is more biased towards large caps than mid/small caps.

Fund Manager’s Comments - Equity & MIP

3

Sectors HSBC HSBC India HSBCEquity Opportunities MidcapFund Fund Equity Fund

Consumer Discretionary r a a

Consumer Staples a r a

Energy a a r

Financials a a a

Healthcare a a r

Industrials a a a

Information Technology r r a

Materials r r r

Telecommunication a r r

Utilities r r r

a Overweight r Underweight = Neutral

�

Outlook

We expect FY 2011 GDP to be in the range of 8-8.5%, while with the increasingmomentum in corporate earnings and a favorable base; we expect earnings to grow at20% plus in FY 2011.

In our view, Indian valuations are at marginal premia to the region with higher tail risksemerging from strong crude oil and commodity prices, topped up by a wide currentaccount deficit making us susceptible to external flows. As a result we see that for thefull year, markets are likely to perform marginally below corporate earnings growth of18-20%. Though a bulk of this performance is likely to be back-ended. Shorter term wesee domestic consumption (on rising incomes - both rural & urban), upstream energyand commodities being the relative out performers. IT should also do well as a proxyto developed market growth and the INR remaining range bound on inflation/CurrentAccount Deficit worries. Second half should see the return of capex oriented themes- industrials and banking making a comeback.

�


Fund Manager’s Comments - Debt

4

Market Assessment

Domestic fixed income market was marked by high volatility and tight liquidity over the month of December2010. Liquidity conditions became extremely tight on back of advance tax outflow with liquidity infusionby RBI via the LAF repo window touching an all time high. Tracking the tight liquidity, money market ratesretained elevated levels as one year prime bank CD yields rose to 9.80%. To combat the squeezedliquidity scenario, banks further increased the deposit rates across segments as well as the base rates.

Monthly inflation for November 2010 was lower at 7.48%. However, the expectation of lower food pricesdue to better monsoon turned futile with vegetable and other food prices going up sharply on the back ofunseasonal rains. Primary articles inflation reached 17.2% level for the week ended December 18, 2010with an upward bias. Fuel inflation also added fire with hike in petrol price of ̀ 2.95 / litre. With higher weeklynumbers, monthly inflation print for the month of December 2010 is likely to inch up in spite of favourablebase effect.

Sovereign yields remained volatile amongst different maturities due to selection of stocks for the OpenMarket Operations (OMO). OMO infused liquidity to the tune of ̀ 41,179 crores into the system duringthe month, providing a much needed respite. Upswing in the government expenditure towards the fagend of the month and reduction in the gilt auction amount by ̀ 10,000 crs during the month, also boughtrelief from liquidity concerns. Overall, G-Sec yields moved downwards during the month on the backof liquidity support and OMO announcements. Deposit growth continued to remain sluggish along withhigher credit growth. Corporate bond curve was largely range bound and inverted on the back of fewsupplies and limited demand from end investors.

Recently released data indicates that fiscal deficit for the current fiscal is down by 39% YoY on the backof higher than budgeted tax collections and windfall gain from the 3G spectrum sale. The rate ofspending of the government is yet to catch up with additional revenues. However, with various supplementarydemands already approved, the expenditure levels are bound to increase in the last quarter.

Current account deficit for the quarter ended September 2010 widened to USD 15.8 billion, due tohigher imports and oil prices. The Balance of payment was positive on the back of portfolio flows. Giventhe global economic recovery is slower than India; higher current account deficit may pose somechallenges for the exchange rates.

Optimism on the US growth outlook on the back of recent data releases and extension of tax cuts led tosignificant hardening of the US yields, since the onset of December 2010.

Going Forward

RBI acted on the liquidity concerns in the December mid quarter policy to generate primary liquidity.The OMOs along with the government spending towards the end of December 2010, has startedeasing liquidity scenario to some extent. However, lack of end buyers, rising inflation and lowervolumes in market due to OMO in liquid segments, would keep government securities on the edge.The shorter end of corporate curve (up to 12 months) is attractive due to lower duration and higheraccrual. The longer end corporate curve may remain under pressure due to supply concerns andlower spreads. Bond funds have reduced duration and focusing more on accrual. Short end fundswould continue to earn better accruals and continue to provide good investment avenues.


An Open Ended Diversified Equity SchemeInvestment Objective: Aims to generate long term capital growth from an actively managedportfolio of equity and equity related securities.

Issuer Market Value % to Net(` in Lacs) Assets

HSBC Equity Fund (HEF)

5

AutoTata Motors DVR 2,545.99 2.41%BanksState Bank of India 5,820.63 5.50%ICICI Bank 5,771.30 5.45%HDFC Bank 4,856.94 4.59%Punjab National Bank 3,519.36 3.33%CementGrasim Industries 3,373.49 3.19%ConstructionPrestige Estates Projects 1,238.40 1.17%Consumer Non DurablesI T C 4,427.63 4.18%Glaxo Smithkline Consumer Healthcare 2,525.36 2.39%Shree Renuka Sugars 1,747.80 1.65%Construction ProjectsLarsen and Toubro 6,056.51 5.72%Engineering ServicesVA Tech Wabag 1,878.59 1.78%FinanceHDFC 4,588.61 4.34%Fixed DepositsHSBC Bank** 1,800.00 1.70%HSBC Bank** 1,600.00 1.51%HSBC Bank** 900.00 0.85%GasGAIL (India) 1,384.16 1.31%Industrial Capital GoodsBharat Heavy Electricals 5,646.59 5.34%Industrial ProductsJain Irrigation Systems 1,702.62 1.61%Media & EntertainmentSun TV 3,549.83 3.35%Non - Ferrous MetalsHindustan Zinc 2,094.03 1.98%OilOil and Natural Gas Corporation 5,217.21 4.93%Cairn India 2,994.75 2.83%PesticideUnited Phosphorus 1,556.55 1.47%Petroleum ProductsReliance Industries 6,669.81 6.30%PharmaceuticalsRanbaxy Laboratories 2,693.93 2.55%SoftwareInfosys Technologies 7,126.49 6.73%Tata Consultancy Services 3,252.16 3.07%Telecom - ServicesBharti Airtel 2,906.28 2.75%


HSBC Equity Fund (HEF)

Date of Allotment 10-Dec-02Benchmark BSE 200Average AUM `1,058.30 croresNAV (Growth) ̀111.6977per unit(as on 31.12.10)Fund Manager Jitendra SriramSIP AvailableMinimum ` 10,000ApplicationAmountExit Load@ 1% - if redeemed/

switched out$ within1 year from date ofinvestment;otherwise Nil.

Standard Deviation 1.32%R-Squared 0.9598Beta (Slope) 0.7611Sharpe Ratio -0.0230Annualised Expense Ratio from 01 April2010 onwards 2.00%Portfolio Turnover 1.22

Asset Allocation

HEF BSE 2006 Months 13.94 12.721 Year 18.00 16.223 Years -0.94 -1.565 Years 16.29 16.37Since Inception 34.89 26.33

* Past performance may or may not be sustainedin the future. Returns less than 1 year areabsolute. Returns equal to or greater than 1year are compounded annualized. ‘Sinceinception’ returns are calculated on ` 10invested at inception. Calculations are basedon Growth NAVs.

Auto 2.41%Banks 18.87%Cement 3.19%Construction 1.17%Consumer Non Durables 8.22%Construction Projects 5.72%Engineering Services 1.78%Finance 4.34%Fixed Deposits 4.06%Gas 1.31%Industrial Capital Goods 5.34%Industrial Products 1.61%Media & Entertainment 3.35%Non - Ferrous Metals 1.98%Oil 7.76%Pesticide 1.47%Petroleum Products 6.30%Pharmaceuticals 2.55%Software 9.81%Telecom - Services 2.75%Other Equity Investments 3.98%Reverse Repos/CBLOs 2.38%Net Current Assets -0.33%

Dividend Declaration


** Fixed deposits are placed as margin Deposit for Futures, Options and Equities.Total outstanding exposure in derivatives as on December 31, 2010 is ` 5029.44(Notional value in lakhs).

6

Performance* (%) as on 31 December 2010

Record Date/period Dividend (` per unit) Dividend (` per unit) NAV per unitof dividend declared Non-Institutional Institutional (cum dividend)

HSBC Equity Fund - Dividend11-Dec-09 2.50 2.50 29.407328-May-10 1.50 1.50 26.691119-Nov-10 2.00 2.00 29.3244

Statistical ratios disclosed as per daily returns ofthe last 3 years/since inception, whichever islater.@ Including SIP/STP where applicable.$ No load in case of switches between equityschemes of HSBC Mutual Fund.

Other Equity Investments 4,212.74 3.98%CBLOs 510.01 0.48%Reverse Repos 2,008.76 1.90%Net Current Assets -347.00 -0.33%Total Net Assets as on 31 December 2010 105,829.54 100%


An Open Ended Flexi-Cap Equity SchemeInvestment Objective: Seeks long term capital growth through investments across all marketcapitalisations, including small, mid and large cap stocks. It aims to be predominantly investedin equity & equity related securities. However it could move a significant portion of its assetstowards fixed income securities if the fund manager becomes negative on equity markets.

HSBC India Opportunities Fund (HIOF)


7

AutoEicher Motors 300.17 1.42%Auto AncillariesBosch 1,360.88 6.44%BanksICICI Bank 927.53 4.39%State Bank of India 911.06 4.31%HDFC Bank 739.10 3.50%Bank of Baroda 645.62 3.06%CementShree Cements 272.79 1.29%Consumer Non DurablesI T C 885.53 4.19%Triveni Engineering & Industries 479.30 2.27%Construction ProjectsLarsen and Toubro 1,068.80 5.06%Fixed DepositsHSBC Bank** 800.00 3.79%HSBC Bank** 500.00 2.37%FertilizersCoromandel Fertilizers 341.77 1.62%FinanceHDFC 786.62 3.72%CRISIL 324.31 1.54%Industrial Capital GoodsBharat Heavy Electricals 941.10 4.45%Industrial ProductsJain Irrigation Systems 378.36 1.79%Leisure FacilitiesTalwalkars Better Value Fitness 413.10 1.96%Media & EntertainmentSun TV 662.63 3.14%Minerals/MiningGujarat Mineral Development Corporation 339.47 1.61%OilOil and Natural Gas Corporation 927.50 4.39%Cairn India 539.06 2.55%Petroleum ProductsReliance Industries 1,286.32 6.09%Bharat Petroleum Corporation 237.02 1.12%PharmaceuticalsRanbaxy Laboratories 484.91 2.30%Aurobindo Pharma 354.75 1.68%Aventis Pharma 349.55 1.65%SoftwareInfosys Technologies 1,161.93 5.50%Tata Consultancy Services 629.45 2.98%Info Edge India 356.86 1.69%Telecom - ServicesBharti Airtel 484.38 2.29%


HSBC India Opportunities Fund (HIOF)


** Fixed deposits are placed as margin Deposit for Futures, Options and Equities.Total outstanding exposure in derivatives as on December 31, 2010 is ` 1068.32(Notional value in lakhs).

Asset AllocationAuto 1.42%Auto Ancillaries 6.44%Banks 15.26%Cement 1.29%Consumer Non Durables 6.46%Construction Projects 5.06%Fixed Deposits 6.15%Fertilizers 1.62%Finance 5.26%Industrial Capital Goods 4.45%Industrial Products 1.79%Leisure Facilities 1.96%Media & Entertainment 3.14%Minerals/Mining 1.61%Oil 6.94%Petroleum Products 7.21%Pharmaceuticals 5.63%Software 10.17%Telecom - Services 2.29%Other Equity Investments 1.67%Reverse Repos/CBLOs 1.34%Net Current Assets 2.84%

Date of Allotment 24-Feb-04Benchmark BSE 500Average AUM ` 211.25 croresNAV (Growth) ` 37.3287per unit(as on 31.12.10)Fund Manager Jitendra Sriram &

Dhimant ShahSIP AvailableMinimum ` 10,000ApplicationAmountExit Load@ 1% - if redeemed/




8

HIOF BSE 5006 Months 13.49 12.251 Year 15.74 16.353 Years -5.58 -2.515 Years 14.02 15.95Since Inception 21.19 20.21





HSBC India Opportunities Fund - Dividend24-Mar-08 1.00 1.00 16.406511-Dec-09 1.00 1.00 16.901319-Nov-10 1.00 1.00 18.2313

Other Equity Investments 352.93 1.67%CBLOs 57.21 0.27%Reverse Repos 225.34 1.07%Net Current Assets 599.80 2.84%Total Net Assets as on 31 December 2010 21,125.15 100%


An Open Ended Diversified Equity SchemeInvestment Objective: Seeks to generate long term capital growth from an actively managedportfolio of equity and equity related securities primarily being midcap stocks. However, it couldmove a portion of its assets towards fixed income securities if the fund manager becomesnegative on the Indian equity markets.


HSBC Midcap Equity Fund (HMEF)

9

Auto AncillariesFederal-Mogul Goetze (India) 719.97 4.05%WABCO - TVS (India) 199.22 1.12%BanksThe Jammu and Kashmir Bank 939.00 5.28%Dena Bank 630.85 3.55%Bank of Maharashtra 414.72 2.33%State Bank of Travancore 224.32 1.26%State Bank of Bikaner and Jaipur 220.38 1.24%Construction ProjectsGammon India 237.26 1.34%Consumer DurablesHitachi Home & Life Solutions (India) 392.67 2.21%Consumer Non DurableKRBL 1,086.52 6.11%Shree Renuka Sugars 776.80 4.37%Venkys (India) 498.51 2.81%FinanceIFCI 407.17 2.29%Fixed DepositsHSBC Bank** 320.00 1.80%HardwareAllied Digital Services 626.50 3.53%HotelsAsian Hotels (East) 529.33 2.98%Industrial Capital GoodsDiamond Power Infrastructure 840.36 4.73%Numeric Power Systems 293.62 1.65%Kirloskar Pneumatic Company 206.45 1.16%Industrial ProductsPolyplex Corporation 505.38 2.84%Media & EntertainmentPrime Focus 834.66 4.70%PesticidePI Industries 323.93 1.82%PharmaceuticalsShasun Chemicals & Drugs 435.92 2.45%PowerBF Utilities 942.54 5.30%Textiles - CottonThe Bombay Dyeing & Manufacturing Company 1,455.19 8.19%Vardhman Textiles 317.58 1.79%Textiles - SyntheticJBF Industries 331.00 1.86%TradingGujarat Ambuja Exports 486.64 2.74%TransportationJet Airways India 795.91 4.48%


HSBC Midcap Equity Fund (HMEF)

Date of Allotment 19-May-05Benchmark BSE MidcapAverage AUM ` 177.71 croresNAV (Growth) ` 24.4392per unit(as on 31.12.10)Fund Manager Dhiraj Sachdev & Dhimant ShahSIP AvailableMinimum ` 10,000ApplicationAmountExit Load@ 1% - if redeemed/



Asset AllocationAuto Ancillaries 5.17%Banks 13.67%Construction Projects 1.34%Consumer Durables 2.21%Consumer Non Durable 13.29%Finance 2.29%Fixed Deposits 1.80%Hardware 3.53%Hotels 2.98%Industrial Capital Goods 7.54%Industrial Products 2.84%Media & Entertainment 4.70%Pesticide 1.82%Pharmaceuticals 2.45%Power 5.30%Textiles - Cotton 9.98%Textiles - Synthetic 1.86%Trading 2.74%Transportation 4.48%Other Equity Investments 4.63%Reverse Repos/CBLOs 3.59%Net Current Assets 1.78%


HMEF BSE Midcap6 Months 9.39 9.141 Year 12.43 16.153 Years -8.44 -7.285 Years 10.39 11.99Since Inception 17.23 16.88

10





HSBC Midcap Equity Fund - Dividend24-Mar-08 0.75 0.75 13.379711-Dec-09 1.00 1.00 13.892719-Nov-10 2.00 2.00 15.4864

** Fixed deposits are placed as margin Deposit for Futures, Options and Equities.Total outstanding exposure in derivatives as on December 31, 2010 is ` 1,197.97(Notional value in lakhs).




An Open Ended Flexi-Theme Equity SchemeInvestment Objective: Seeks to generate long term capital growth from an actively managedportfolio of equity and equity related securities by investing primarily in sectors, areas and themesthat play an important role in, and/or benefit from India’s progress, reform process andeconomic development.


HSBC Progressive Themes Fund (HPTF)

11

AutoTata Motors DVR 628.64 2.23%BanksJammu and Kashmir Bank 1,447.63 5.13%State Bank of India 984.17 3.49%ICICI Bank 916.08 3.25%IDBI Bank 739.42 2.62%Karnataka Bank 592.74 2.10%ConstructionKajaria Ceramics 1,403.77 4.97%Gammon Infrastructure Projects 650.51 2.31%Construction ProjectsGammon India 523.55 1.86%FertilizersGujarat State Fertilizer & Chemicals 1,504.63 5.33%FinanceIFCI 841.25 2.98%Rane Holdings 640.00 2.27%Fixed DepositsHSBC Bank** 800.00 2.84%HSBC Bank** 800.00 2.84%Industrial Capital GoodsDiamond Power Infrastructure 755.26 2.68%Industrial ProductsPolyplex Corporation 1,336.14 4.74%FAG Bearings India 1,072.14 3.80%Media & EntertainmentPrime Focus 664.94 2.36%Non - Ferrous MetalsSterlite Industries (India) 821.26 2.91%OilOil and Natural Gas Corporation 811.57 2.88%Petroleum ProductsHindustan Petroleum Corporation 881.21 3.12%Indian Oil Corporation 772.45 2.74%PowerReliance Infrastructure 927.52 3.29%Textiles - CottonThe Bombay Dyeing & Manufacturing Company 1,559.88 5.53%Vardhman Textiles 696.27 2.47%TradingThe State Trading Corporation of India 523.53 1.86%Gujarat Ambuja Exports 402.60 1.43%TransportationBalmer Lawrie & Company 586.07 2.08%Jet Airways India 382.65 1.36%


HSBC Progressive Themes Fund (HPTF)


Date of Allotment 23-Feb-06Benchmark BSE 200Average AUM ` 282.18 croresNAV (Growth) ` 13.9167per unit(as on 31.12.10)Fund Manager Dhiraj Sachdev &

Jitendra ShriramSIP AvailableMinimum ` 10,000ApplicationAmountExit Load@ 1% - if redeemed/



Asset AllocationAuto 2.23%Banks 16.59%Construction 7.28%Construction Projects 1.86%Fertilizers 5.33%Finance 5.25%Fixed Deposits 5.67%Industrial Capital Goods 2.68%Industrial Products 8.53%Media & Entertainment 2.36%Non - Ferrous Metals 2.91%Oil 2.88%Petroleum Products 5.86%Power 3.29%Textiles - Cotton 8.00%Trading 3.28%Transportation 3.43%Other Equity Investments 3.51%Reverse Repos/CBLOs 7.49%Net Current Assets 1.59%


12


HPTF BSE 2006 Months 3.98 12.721 Year 5.88 16.223 Years -12.77 -1.56Since Inception 7.04 15.11





HSBC Progressive Themes Dividend11-May-07 1.00000 1.00000 12.239026-May-08 1.00000 1.00000 13.7160

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Other Equity Investments 990.43 3.51%

CBLOs 427.70 1.52%

Reverse Repos 1,684.58 5.97%

Net Current Assets 448.90 1.59%

Total Net Assets as on 31 December 2010 28,217.51 100%


An Open Ended Equity Linked Savings SchemeInvestment Objective: Aims to provide long term capital appreciation by investing in adiversified portfolio of equity & equity related instruments of companies across various sectorsand industries, with no capitalisation bias. The Fund may also invest in fixed income securities.


HSBC Tax Saver Equity Fund (HTSF)

13

AutoTata Motors DVR 777.94 2.86%Mahindra and Mahindra 544.74 2.00%Auto AncillariesBosch 661.54 2.43%Exide Industries 525.74 1.93%Motherson Sumi Systems 437.04 1.61%BanksICICI Bank 1,552.95 5.71%State Bank of India 1,012.28 3.72%Bank of Baroda 810.17 2.98%HDFC Bank 633.51 2.33%Punjab National Bank 439.92 1.62%Syndicate Bank 299.75 1.10%CementShree Cements 614.80 2.26%ConstructionSadbhav Engineering 616.72 2.27%Construction ProjectsLarsen and Toubro 817.43 3.01%Consumer Non DurablesGlaxo Smithkline Consumer Healthcare 1,269.70 4.67%Shree Renuka Sugars 611.73 2.25%Jyothy Laboratories 404.55 1.49%EngineeringUB Engineering 586.17 2.16%Engineering ServicesVA Tech Wabag 571.19 2.10%FinanceHDFC 582.68 2.14%Power Finance Corporation 397.96 1.46%Industrial Capital GoodsCrompton Greaves 669.61 2.46%Thermax 550.99 2.03%Bharat Heavy Electricals 406.65 1.50%Industrial ProductsSintex Industries 273.23 1.01%Leisure FacilitiesTalwalkars Better Value Fitness 536.91 1.98%Media & EntertainmentHindustan Media Ventures 387.24 1.42%Minerals/MiningCoal India 285.87 1.05%Non - Ferrous MetalsHindustan Zinc 994.78 3.66%Hindalco Industries 466.83 1.72%OilOil and Natural Gas Corporation 779.36 2.87%Petroleum ProductsReliance Industries 1,143.40 4.21%Indian Oil Corporation 385.64 1.42%PharmaceuticalsAurobindo Pharma 709.51 2.61%



HSBC Tax Saver Equity Fund (HTSF)

Date of Allotment 05-Jan-07Benchmark BSE 200Average AUM ` 271.83 croresNAV (Growth) ` 15.9276per unit(as on 31.12.10)Fund Manager Dhimant Shah &

Aditya KhemaniSIP AvailableMinimum ` 500ApplicationAmountExit Load@ NilStandard Deviation 1.01%R-Squared 0.8858Beta (Slope) 0.8143Sharpe Ratio 0.0153Annualised Expense Ratio from 01 April2010 onwards 2.34%Portfolio Turnover 1.23

Asset AllocationAuto 4.87%Auto Ancillaries 5.98%Banks 17.47%Cement 2.26%Construction 2.27%Construction Projects 3.01%Consumer Non Durables 8.41%Engineering 2.16%Engineering Services 2.10%Finance 3.61%Industrial Capital Goods 5.99%Industrial Products 1.01%Leisure Facilities 1.98%Media & Entertainment 1.42%Minerals/Mining 1.05%Non - Ferrous Metals 5.38%Oil 2.87%Petroleum Products 5.62%Pharmaceuticals 5.03%Software 10.01%Telecom - Service 1.99%Textiles - Cotton 1.47%Transportation 1.52%Other Equity Investments 1.91%Reverse Repos/CBLOs 0.87%Net Current Assets -0.23%

14


HTSF BSE 2006 Months 12.79 12.721 Year 17.90 16.223 Years 0.85 -1.56Since Inception 12.38 11.13

Statistical ratios disclosed as per daily returns ofthe last 3 years/since inception, whichever islater.@ Including SIP/STP where applicable.


Lupin 657.24 2.42%SoftwareInfosys Technologies 1,673.18 6.16%Tata Consultancy Services 1,049.09 3.86%Telecom - ServicesBharti Airtel 539.64 1.99%Textiles - CottonVardhman Textiles 399.57 1.47%TransportationJet Airways India 413.26 1.52%Other Equity Investments 517.85 1.91%CBLOs 47.89 0.18%Reverse Repos 188.61 0.69%Net Current Assets -61.83 -0.23%Total Net Assets as on 31 December 2010 27,183.02 100%


An Open-Ended Equity Scheme

Investment Objective: To provide long-term capital growth from a diversified portfolio of equityand equity related instruments. The focus would be to invest in stocks of companies facing“out-of-ordinary” conditions.


HSBC Unique Opportunities Fund (HUOF)

15

AutoTata Motors DVR 353.61 3.10%Mahindra and Mahindra 350.19 3.07%Auto AncillariesMotherson Sumi Systems 284.05 2.49%Steel Strips Wheels 192.00 1.68%BanksICICI Bank 618.35 5.41%Bank of Baroda 484.22 4.24%Allahabad Bank 250.75 2.20%The Jammu and Kashmir Bank 176.06 1.54%Construction ProjectsLarsen and Toubro 415.64 3.64%Consumer Non DurablesShree Renuka Sugars 262.17 2.30%United Spirits 241.52 2.11%JHS Svendgaard Laboratories 188.55 1.65%Engineering ServicesVA Tech Wabag 334.29 2.93%FinanceShriram Transport Finance Company 246.03 2.15%Rural Electrification Corporation 215.35 1.89%HDFC - Warrants 195.87 1.72%Fixed DepositsHSBC Bank** 600.00 5.25%HSBC Bank** 200.00 1.75%HSBC Bank** 100.00 0.88%FertilizersGujarat State Fertilizers & Chemicals 225.93 1.98%GasPetronet LNG 224.91 1.97%Industrial Capital GoodsCrompton Greaves 278.96 2.44%Bharat Heavy Electricals 243.99 2.14%Mcnally Bharat Engineering Company 220.97 1.93%Kirloskar Pneumatic Company 209.32 1.83%Industrial ProductsGreaves Cotton 298.35 2.61%Jain Irrigation Systems 114.41 1.00%Leisure FacilitiesTalwalkars Better Value Fitness 219.20 1.92%Minerals/MiningCoal India 114.21 1.00%Non - Ferrous MetalsHindustan Zinc 495.37 4.34%Petroleum ProductsReliance Industries 444.65 3.89%Bharat Petroleum Corporation 174.48 1.53%PharmaceuticalsLupin 405.26 3.55%Aurobindo Pharma 315.34 2.76%SoftwareInfosys Technologies 774.62 6.78%


Asset AllocationAuto 6.16%Auto Ancillaries 4.17%Banks 13.39%Construction Projects 3.64%Consumer Non Durables 6.06%Engineering Services 2.93%Finance 5.76%Fixed Deposits 7.88%Fertilizers 1.98%Gas 1.97%Industrial Capital Goods 8.35%Industrial Products 3.61%Leisure Facilities 1.92%Minerals/Mining 1.00%Non - Ferrous Metals 4.34%Petroleum Products 5.42%Pharmaceuticals 6.31%Software 6.78%Textiles - Cotton 1.43%Textiles - Synthetic 1.25%Transportation 1.61%Other Equity Investments 0.37%Reverse Repos/CBLOs 1.97%Net Current Assets 1.70%

Date of Allotment 21-Mar-07Benchmark BSE 200Average AUM ` 114.20 croresNAV (Growth) ` 12.2825per unit(as on 31.12.10)Fund Manager Dhimant Shah &

Jitendra SriramSIP AvailableMinimum ` 10,000ApplicationAmountExit Load@ 1% if redeemed/switched

out$ within 1 year fromdate of investment;otherwise Nil


HUOF BSE 2006 Months 18.40 12.721 Year 21.22 16.223 Years -8.60 -1.56Since Inception 5.58 14.08

HSBC Unique Opportunities Fund (HUOF)


16





Textiles - CottonVardhman Textiles 163.38 1.43%Textiles - SyntheticJBF Industries 143.22 1.25%TransportationJet Airways India 183.67 1.61%Other Equity Investments 42.18 0.37%CBLOs 45.54 0.40%Reverse Repos 179.35 1.57%Net Current Assets 194.08 1.70%Total Net Assets as on 31 December 2010 11,420.04 100%


An Open-Ended SchemeInvestment Objective: To provide long term capital appreciation by allocating funds in equity andequity related instruments. It also has the flexibility to move, entirely if required, into debt instrumentsin times that the view on equity markets seems negative.


HSBC Dynamic Fund (HDF)

17

Auto

Tata Motors DVR 282.89 2.17%

Banks

ICICI Bank 824.47 6.32%

State Bank of India 759.21 5.82%

HDFC Bank 527.93 4.05%

Bank of Baroda 484.22 3.71%

Cement

Grasim Industries 421.69 3.23%

Construction Projects

Larsen and Toubro 641.28 4.91%

Consumer Non Durables

I T C 590.35 4.52%

Fertilizers

Zuari Industries 189.62 1.45%

Fixed Deposits

HSBC Bank** 960.00 7.36%

Industrial Capital Goods

Bharat Heavy Electricals 627.40 4.81%

Bharat Electronics 159.36 1.22%

Leisure Facilities

Talwalkars Better Value Fitness 170.10 1.30%

Media & Entertainment

Sun TV 615.30 4.72%

Oil

Oil and Natural Gas Corporation 753.60 5.77%

Cairn India 509.11 3.90%

Petroleum Products

Reliance Industries 809.91 6.21%

Pharmaceuticals

Lupin 390.78 2.99%

Ranbaxy Laboratories 377.15 2.89%

Aurobindo Pharma 177.38 1.36%

Software

Infosys Technologies 774.62 5.94%

Tata Consultancy Services 314.73 2.41%

Tata Elxsi 140.49 1.08%

Telecom - Services

Bharti Airtel 419.80 3.22%

Transportation

Spicejet 247.55 1.90%


Asset AllocationAuto 2.17%Banks 19.89%Cement 3.23%Construction Projects 4.91%Consumer Non Durables 4.52%Fertilizers 1.45%Fixed Deposits 7.36%Industrial Capital Goods 6.03%Leisure Facilities 1.30%Media & Entertainment 4.72%Oil 9.68%Petroleum Products 6.21%Pharmaceuticals 7.24%Software 9.42%Telecom - Services 3.22%Transportation 1.90%Reverse Repos/CBLOs 0.75%Other Equity Investments 0.97%Net Current Assets 5.03%

Date of Allotment 24-Sep-07Benchmark BSE 200Average AUM ` 130.50 croresNAV (Growth) ̀11.1655per unit(as on 31.12.10)Fund Manager Jitendra Sriram

(for Equity portion)Sanjay Shah(for Debt portion)

SIP AvailableMinimum ` 10,000ApplicationAmountExit Load@ 1% - if redeemed/



HDF BSE 2006 Months 14.30 12.721 Year 16.13 16.223 Years -4.16 -1.56Since Inception 3.43 6.36




HSBC Dynamic Fund (HDF)

18


** Fixed deposits are placed as margin Deposit for Futures, Options and Equities.Total outstanding exposure in derivatives as on December 31, 2010 is ` 1.368.83(Notional value in lakhs).



An Open-Ended SchemeInvestment Objective: To provide long term capital appreciation by investing in India and in theemerging markets, in equity and equity related instruments, share classes and units/securitiesissued by overseas mutual funds or unit trusts. The fund may also invest a limited proportion indomestic debt and money market instruments.


HSBC Emerging Markets Fund (HEMF)

19

Asset AllocationReverse Repos/CBLOs 3.87%Net Current Assets -1.93%Overseas Mutual Fund 98.06%

Date of Allotment 17-Mar-08Benchmark MSCI Emerging

Markets IndexAverage AUM ` 62.61 croresNAV (Grodwth) ` 10.4482per unit(as on 30.12.10)Fund Manager Niren Parekh

(dedicated fund managerfor overseas investments)Gaurav Mehrotra(Co-fund manager foroverseas investments)

SIP AvailableMinimum ` 10,000ApplicationAmountExit Load@ 1% - if redeemed/


Standard Deviation 1.49%R-Squared 0.5886Beta (Slope) 0.9482Sharpe Ratio -0.0288Annualised Expense Ratio from 01 April2010 onwards 0.94%Portfolio Turnover -



HEMF MSCI-EMI6 Months 22.27 17.711 Year 9.44 12.14Since Inception 1.58 3.66


Overseas Mutual Fund

HSBC GIF Global Emerging Markets Equity 6,140.20 98.06%

CBLOs 60.09 0.96%

Reverse Repos 181.97 2.91%

Net Current Assets -120.89 -1.93%

Total Net Assets as on 30 December 2010 6,261.37 100%


An Close Ended Equity SchemeInvestment Objective: To provide long term capital appreciation primarily from a diversifiedportfolio of equity and equity related instruments of small cap companies.


HSBC Small Cap Fund (HSCF)

20

Auto

Majestic Auto 90.11 1.74%

Auto Ancillaries

SRF 176.75 3.41%

Autoline Industries 299.28 5.78%

Pricol 106.75 2.06%

Banks

State Bank of Travancore 124.62 2.41%

State Bank of Bikaner and Jaipur 94.45 1.82%

Cement

Orient Paper and Industries 166.37 3.21%

Chemicals

Deepak Nitrite 194.96 3.77%

India Glycols 118.69 2.29%

Construction

Sadbhav Engineering 141.36 2.73%

Consumer Durables

Hitachi Home & Life Solutions (India) 196.34 3.79%

IFB Industries 82.39 1.59%

Symphony 67.96 1.31%

Consumer Non Durables

KRBL 423.50 8.18%

Lakshmi Energy and Foods 72.55 1.40%

Finance

Rane Holdings 252.80 4.88%

Fertilizers

Zuari Industries 156.44 3.02%

Hardware

Allied Digital Services 131.05 2.53%

Hotels

Asian Hotels (East) 132.33 2.56%

Industrial Capital Goods

TIL 199.41 3.85%

Indo Tech Transformers 190.90 3.69%

Sanghvi Movers 100.10 1.93%

Industrial Products

Polyplex Corporation 419.53 8.10%

FAG Bearings India 131.20 2.53%

Ador Welding 107.54 2.08%

Pesticide

Excel Crop Care 219.26 4.24%

PI Industries 53.99 1.04%

Software

Nucleus Software Exports 229.05 4.42%

Textiles - Cotton

RSWM 159.30 3.08%

Trading

Gujarat Ambuja Exports 127.14 2.46%


HSBC Small Cap Fund (HSCF)

21

Asset AllocationAuto 1.74%Auto Ancillaries 11.26%Banks 4.23%Cement 3.21%Chemicals 6.06%Construction 2.73%Consumer Durables 6.70%Consumer Non Durables 9.58%Finance 4.88%Fertilizers 3.02%Hardware 2.53%Hotels 2.56%Industrial Capital Goods 9.47%Industrial Products 12.72%Pesticide 5.28%Software 4.42%Textiles - Cotton 3.08%Trading 2.46%Transportation 2.54%Other Equity Investments 0.78%Reverse Repos/CBLOs 1.88%Net Current Assets -1.13%

Date of Allotment 24-Mar-08Benchmark BSE Small Cap IndexAverage AUM ` 51.77 croresNAV (Growth) ` 13.6372per unit(as on 31.12.10)Fund Manager Dhiraj Sachdev &

Dhimant ShahSIP Available (Upon

conversion into openended scheme)

Minimum ` 10,000ApplicationAmountExit Load@ If the investments are

redeemed/switched out $

within: 1 year: 2%;2 years : 1.5%; 3 years :1%; otherwise Nil^; Afterconversion into openended scheme: Nil

Standard Deviation 1.32%R-Squared 0.8065Beta (Slope) 0.7886Sharpe Ratio 0.0171Annualised Expense Ratio from 01 April2010 onwards* 2.47%Portfolio Turnover 0.83Statistical ratios disclosed as per returns of thelast 3 years/since inception, whichever is later.@ Including SIP/STP where applicable. $ No load incase of switches between equity schemes of HSBCMutual Fund. ̂The investor will have to bear thebalance proportionate unamortized initial issueexpenses for exiting during the close ended tenor of thescheme.

HSCF BSE Small Cap6 Months 14.71 6.601 Year 29.20 15.71Since Inception 11.84 12.65






HSBC Small Cap Fund - Dividend19-Nov-10 1.00 1.00 14.3053

TransportationSical Logistics 131.31 2.54%Other Equity Investments 40.48 0.78%CBLOs 19.67 0.38%Reverse Repos 77.49 1.50%Net Current Assets -58.36 -1.13%Total Net Assets as on 31 December 2010 5,176.71 100%


Fund Managers - Equity

22

Jitendra SriramVice President & Head of Fund Management - EquitiesB.E. (Elect), Post Graduate Diploma in Business Management

Experience:Over 15 years experience in Equity Research. This involved analysing varioussectors and companies and presenting investment ideas to fund managers inIndia and abroad.

� HSBC Asset Management (India) Private LimitedHead of Fund Management - Equities from February 2009 to present

� HSBC Asset Management (India) Private LimitedFund Manager from May 2006 to February 2009

� Deutsche Equities India Private LimitedVice President from August 2002 to April 2006

� HSBC Securities and Capital Markets (India) Private LimitedDeputy Head of Research from March 1997 to August 2002

� ITC Classic Share & Stock BrokingAnalyst from June 1995 to March 1997

Dhiraj SachdevSenior Fund ManagerB.Com., ACA, Grad CWA, Diploma in Foreign Trade Management (DFTM)

Experience:Over 14 years of experience in Equity Research & Fund Management.

� HSBC Asset Management (India) Private LimitedSenior Fund Manager from December 2009 to present

� HSBC Asset Management (India) Private LimitedHead of Equity-Portfolio Management Servicesfrom October 2005 to November 2009

� ASK Raymond James Securities India Private LimitedPortfolio Manager from October 2003 to September 2005

� HDFC Bank LimitedSenior Manager Equities from November 1999 to September 2003

� DSQ Software LtdBusiness Analyst from June 1999 to November 1999

� Probity Research & Services Ltd (India Infoline Limited)Research Analyst from November 1998 to May 1999

� Ford Brothers Capital Services (P) LimitedManager Research from July 1996 to Sept 1998

Name of Scheme Fund Manager

HSBC Equity Fund Jitendra Sriram (from 05 July 2006)

HSBC India Opportunities Fund Jitendra Sriram (from 05 July 2006) &Dhimant Shah (from 24 February 2009)

HSBC Midcap Equity Fund Dhiraj Sachdev (from 01 December 2009)& Dhimant Shah (from 23 March 2007)

HSBC Progressive Themes Fund Dhiraj Sachdev (from 01 December 2009) &Jitendra Sriram (from 24 February 2009)

HSBC Tax Saver Equity Fund Dhimant Shah (from 14 August 2009) &Aditya Khemani (from 24 February 2009)

HSBC Unique Opportunities Fund Dhimant Shah (from 24 February 2009)& Jitendra Sriram (from 02 February 2007)

HSBC Dynamic Fund For Equity portion: Jitendra Sriram(from 03 August 2007) &For Debt portion: Sanjay Shah(from 14 August 2009)

HSBC Emerging Markets Fund Niren Parekh (from 17 March 2008) &Gaurav Mehrotra (from 27 October 2010)

HSBC Small Cap Fund Dhiraj Sachdev (from 01 December 2009) &Dhimant Shah (from 31 March 2008)

Fund Manager’s Experience


Fund Managers - Equity

23

Dhimant ShahVice President & Fund ManagerB.Com., CA

Experience:Over 16 years experience in Equity Research. This involved analysingvarious sectors and companies and presenting investment ideas to fundmanagers in India and abroad.� HSBC Asset Management (India) Private Limited

Fund Manager from Mar 2007 to present� Reliance Asset Management Co. Limited

Vice President/ Portfolio Manager from October 2005 to February 2007� ASK Raymond James Securities Pvt. Limited

Portfolio Manager from September 2003 to September 2005� IL&FS Asset Management Co. Limited

Senior Analyst from April 1997 to August 2003

Niren ParekhAssociate Vice President, Investment Management(Dedicated Fund Manager for overseas investments)Post Graduate Diploma in Business Management, CA

Experience:Over 5 years experience in research.� HSBC Asset Management (India) Private Limited

Assistant Fund Manager from September 2007 to present� Motilal Oswal Securities Limited

Analyst from October 2005 to September 2007� SBI Capital Markets

Management Trainee from May 2005 to September 2005

Gaurav Mehrotra

Associate Vice President, Investment Management(Co-Fund Manager for overseas investments)Post Graduate Diploma in Business Management, Bachelor of Engineering


Associate Vice president from September 2007 to present� JPMorgan Services India Private Limited

Equity Research from August 2005 to September 2007� Tata Consultancy Services Limited

Business Analyst from June 2004 to July 2005

Aditya KhemaniAssociate Vice President and Assistant Fund Manager, EquitiesB.Com. (Hons.), Post Graduate Diploma in Business Management


Assistant Fund Manager, Equities from February 2009 to presentAssociate Vice President - Investment Managementfrom October 2007 to February 2009

� SBI Funds Management India Private LimitedSenior Manager - Equity Research from March 2007 to September 2007

� Prudential ICICI Asset Management Company India Private LimitedAssistant Manager - Equity Researchfrom December 2005 to February 2007

� Morgan Stanley Advantage Services India Private LimitedResearch Associate from May 2005 to November 2005


An Open Ended Fund with Regular & Savings Plans.Monthly income is not assured and is subject to availability ofdistributable surplus.Investment Objective: Seeks to generate reasonable returns through investments in Debt andMoney Market Instruments. The secondary objective of the scheme is to invest in equity andequity related instruments to seek capital appreciation.

Issuer Market % toValue Net Rating

(` in Lacs) Assets

HSBC MIP - Savings Plan (HMIP-S)

24

Money Market InstrumentsCDsFixedAllahabad Bank 4,307.34 5.62% A1+State Bank of Patiala 2,528.21 3.30% A1+Corporation Bank 2,456.82 3.20% P1+Indian Overseas Bank 2,453.12 3.20% A1+Indian Overseas Bank 2,287.93 2.98% P1+Canara Bank 1,672.90 2.18% P1+State Bank of Travancore 1,403.88 1.83% P1+Central Bank of India 1,180.87 1.54% PR1+Punjab National Bank 982.53 1.28% PR1+UCO Bank 686.64 0.90% P1+State Bank of Mysore 674.26 0.88% P1+IDBI Bank 493.04 0.64% P1+HDFC Bank 492.13 0.64% PR1+Central Bank of India 491.27 0.64% PR1+Indian Overseas Bank 491.27 0.64% A1+Bank of Maharashtra 491.13 0.64% P1+Bank of India 490.99 0.64% P1+Andhra Bank 196.50 0.26% PR1+Fixed DepositsHSBC Bank** 120.00 0.16% UnratedHSBC Bank** 100.00 0.13% UnratedSecuritised DebtFixedBHPC Auto Securitisation Trust November 2007 I(Tata Motors Services) PTCCorporate/PSU DebtFixedExim Bank 4,465.70 5.83% AAAPower Finance Corporation 2,427.35 3.17% AAAPower Grid Corporation of India 1,508.81 1.97% AAANational Bank for Agricultural and Rural Development 1,472.91 1.92% AAALIC Housing Finance 977.00 1.27% AAAPower Grid Corporation of India 299.75 0.39% AAAPower Finance Corporation 293.28 0.38% AAAGovernment Securities7.17% Government Stock-M-14-June-2015 6,181.18 8.06% Sovereign8.08% Government Stock-M-02-Aug-2022 6,134.09 8.00% Sovereign8.30% Government Stock-M- 02-Jul-2040 2,036.71 2.66% Sovereign7.49% Government Stock-M-16-April-2017 1,277.38 1.67% Sovereign7.80% Government Stock-M-03-May-2020 972.65 1.27% Sovereign8.13% Government Stock-M- 21-Sep-2022 725.40 0.95% Sovereign8.26% Government Stock-M-02-Aug-2027 655.64 0.86% SovereignEquitiesListed EquityTata Motors DVR 1,465.89 1.91%Tata Consultancy Services 1,037.43 1.35%Aurobindo Pharma 721.07 0.94%State Bank of India 688.92 0.90%Punjab National Bank 665.99 0.87%Bank of Baroda 658.04 0.86%Bharti Airtel 638.66 0.83%ICICI Bank 595.45 0.78%HDFC Bank 586.59 0.77%Lupin 570.69 0.74%Mahindra and Mahindra 540.85 0.71%Jaiprakash Associates 539.84 0.70%Shree Cement 442.62 0.58%Oil and Natural Gas Corporation 425.11 0.55%Spicejet 424.66 0.55%Bajaj Auto 416.07 0.54%Amara Raja Batteries 405.16 0.53%Sterlite Industries (India) 391.97 0.51%Titan Industries 369.70 0.48%UB Engineering 358.42 0.47%Vardhman Textiles 355.18 0.46%VA Tech Wabag 350.65 0.46%Hindalco Industries 348.27 0.45%Infosys Technologies 344.28 0.45%Glaxo Smithkline Consumer Healthcare 330.66 0.43%Allahabad Bank 297.08 0.39%Hindustan Door-Oliver 287.59 0.38%Orient Paper and Industries 281.70 0.37%IVRCL Assets and Holdings 258.05 0.34%B L Kashyap and Sons 248.76 0.32%

544.49 0.71% AAA(SO)


HSBC MIP - Savings Plan (HMIP-S)

25


(` in Lacs) Assets

Money Market Instruments 31.02%Fixed Deposits 0.29%Securitised Debt 0.71%Corporate/ PSU Debt 14.93%Government Securities 23.46%Cash Equivalents 4.38%Net Current Assets 1.80%Other Equity Investments 23.41%

Asset Allocation


HMIP- Crisil MIPS Blended Index

6 Months 4.51 3.891 Year 6.83 7.003 Years 7.22 5.705 Years 10.43 7.90Since Inception 10.20 7.40

Date of Allotment 24-Feb-04Benchmark Crisil MIP Blended IndexAverage AUM ` 766.56 croresNAV (Growth) ` 19.4653per unit(as on 31.12.10)Average Maturity 51.71 monthsof PortfolioModified Duration 31.79 monthsof PortfolioFund Manager Dhimant Shah &

Aditya Khemani(for Equity portion)Sanjay Shah(for Debt portion)

SIP AvailableMinimum Application AmountGrowth ` 10,000Quarterly Dividend ` 10,000Monthly Dividend ` 25,000Exit Load@ 1% - if redeemed/

switched out within 1 year from date of investment.

Annualised Expense Ratio from 01 April2010 onwards 2.04%

Rating ProfileAAA 46.66%Sovereign 23.46%Unrated 0.29%Cash Equivalents 4.38%Net Current Assets 1.80%Other Equity Investments 23.41%



@ Including SIP/STP where applicable.


HSBC MIP - Savings Plan - Monthly Dividend29-Oct-10 0.11419 0.10643 11.996326-Nov-10 0.11419 0.10643 11.775731-Dec-10 0.09663 0.09006 11.7561HSBC MIP - Savings Plan - Quarterly Dividend11-Jun-10 0.21961 0.20467 12.156017-Sep-10 0.21961 0.20467 12.436116-Dec-10 0.21961 0.20467 12.2219

** Fixed deposits are placed as Margin Deposit for Futures, Options and Equities.

Sanghvi Movers 246.66 0.32%HT Media 241.49 0.32%Sintex Industries 205.83 0.27%Ahluwalia Contracts 202.16 0.26%Crompton Greaves 201.47 0.26%Grasim Industries 187.42 0.24%Karur Vysya Bank 180.13 0.23%TVS Motor Company 172.51 0.23%Jet Airways India 172.19 0.22%Century Textiles and Industries 171.26 0.22%Exide Industries 169.72 0.22%Rural Electrification Corporation 149.55 0.20%Tata Coffee 125.38 0.16%Hindustan Media Ventures 121.30 0.16%Bharat Petroleum Corporation 105.34 0.14%Hitachi Home & Life Solutions (India) 93.25 0.12%Bharat Forge (Warrant) 90.00 0.12%Punjab and Sind Bank 57.21 0.07%Pantaloon Retail (India) 6.22 0.01%Cash EquivalentsCBLOs 680.20 0.89%Reverse Repos 2,679.08 3.49%Net Current Assets 1,379.61 1.80%Total Net Assets as on 31-December-2010 76,656.50 100%


An Open Ended Fund with Regular & Savings Plans.Monthly income is not assured and is subject to availability ofdistributable surplus.Investment Objective: Seeks to generate reasonable returns through investments in Debt andMoney Market Instruments. The secondary objective of the scheme is to invest in equity andequity related instruments to seek capital appreciation.

HSBC MIP - Regular Plan (HMIP-R)

26


(` in Lacs) Assets

Money Market InstrumentsCPsSREI Equipment Finance 784.58 3.12% A1+CDsFixedState Bank of Patiala 1,685.48 6.71% A1+Allahabad Bank 1,076.81 4.29% A1+State Bank of Travancore 935.92 3.73% P1+State Bank of Mysore 866.91 3.45% P1+State Bank of Hyderabad 493.57 1.96% A1+Canara Bank 489.90 1.95% P1+Punjab National Bank 489.50 1.95% A1+Canara Bank 393.64 1.57% P1+Central Bank of India 393.62 1.57% PR1+Fixed DepositsHSBC Bank** 100.00 0.40% UnratedSecuritised DebtFixedBHPC Auto Securitisation Trust November 2007 I(Tata Motors Services) PTCCorporate/PSU DebtFixedExim Bank 1,864.80 7.42% AAAPower Finance Corporation 1,486.13 5.92% AAANational Bank for Agricultural and Rural Development 490.97 1.95% AAALIC Housing Finance 390.80 1.56% AAAPower Grid Corporation of India 222.61 0.89% AAAPower Finance Corporation 212.38 0.85% AAAPower Grid Corporation of India 199.83 0.80% AAAGovernment Securities8.08% Government Stock-M-02-Aug-2022 2,385.48 9.49% Sovereign7.17% Government Stock-M-14-June-2015 2,374.00 9.45% Sovereign8.30% Government Stock-M-02-Jul-2040 759.45 3.02% Sovereign7.49% Government Stock-M-16-April-2017 491.30 1.96% Sovereign7.80% Government Stock-M-03-May-2020 367.22 1.46% Sovereign8.13% Government Stock-M-21-Sep-2022 282.10 1.12% Sovereign8.26% Government Stock-M-02-Aug-2027 273.18 1.09% SovereignEquitiesListed EquityTata Motors DVR 224.00 0.89%Tata Consultancy Services 221.47 0.88%State Bank of India 157.47 0.63%Oil and Natural Gas Corporation 154.58 0.62%Aurobindo Pharma 151.02 0.60%Bharti Airtel 143.52 0.57%Punjab National Bank 137.48 0.55%Bank of Baroda 116.92 0.47%Amara Raja Batteries 115.44 0.46%ICICI Bank 114.51 0.46%Mahindra and Mahindra 112.84 0.45%Lupin 99.92 0.40%HDFC Bank 93.85 0.37%B L Kashyap and Sons 84.15 0.33%Hindustan Door-Oliver 83.54 0.33%Spicejet 83.39 0.33%UB Engineering 81.88 0.33%VA Tech Wabag 80.17 0.32%IVRCL Assets and Holdings 80.14 0.32%Orient Paper and Industries 77.72 0.31%Bajaj Auto 77.05 0.31%Titan Industries 76.68 0.31%Shree Cement 71.83 0.29%Hindalco Industries 71.63 0.29%Sterlite Industries (India) 69.06 0.27%

362.99 1.44% AAA(SO)


HSBC MIP - Regular Plan (HMIP-R)


AAA 51.11%Sovereign 27.59%Unrated 0.40%Other Equity Investments 13.83%Cash Equivalents 6.66%Net Current Assets 0.40%

Rating Profile

Money Market Instruments 30.29%Fixed Deposits 0.40%Securitised Debt 1.44%Corporate/ PSU Debt 19.37%Government Securities 27.59%Cash Equivalents 6.66%Net Current Assets 0.40%Other Equity Investments 13.83%

Asset Allocation Date of Allotment 24-Feb-04Benchmark Crisil MIP Blended IndexAverage AUM ` 251.24 croresNAV (Growth) ` 17.0419per unit(as on 31.12.10)Average Maturity 54.85 monthsof PortfolioModified Duration 33.90 monthsof PortfolioFund Manager Dhimant Shah &

Aditya Khemani(for Equity portion)Sanjay Shah(for Debt portion)

SIP AvailableMinimum Application AmountGrowth ` 10,000Quarterly Dividend ` 10,000Monthly Dividend ` 25,000Exit Load@ 1% - if redeemed/

switched out within 1 year from date of investment.


HMIP- Crisil MIPR Blended Index


27





HSBC MIP - Regular Plan - Monthly Dividend29-Oct-10 0.10541 0.09824 11.236026-Nov-10 0.10541 0.09824 11.079031 -Dec-10 0.08784 0.08187 11.0210HSBC MIP - Regular Plan - Quarterly Dividend11-Jun-10 0.20204 0.18830 11.684317-Sep-10 0.20204 0.18830 11.795516-Dec-10 0.20204 0.18830 11.6089


(` in Lacs) Assets

** Fixed deposits are placed as Margin Deposit for Futures, Options and Equities.

Allahabad Bank 64.30 0.26%HT Media 61.99 0.25%Century Textiles and Industries 55.66 0.22%Jaiprakash Associates 47.63 0.19%Vardhman Textiles 44.40 0.18%Sintex Industries 42.46 0.17%Exide Industries 41.73 0.17%Crompton Greaves 37.19 0.15%Karur Vysya Bank 36.57 0.15%Infosys Technologies 34.43 0.14%TVS Motor Company 31.11 0.12%Hindustan Media Ventures 30.15 0.12%Ahluwalia Contracts 29.95 0.12%Hitachi Home & Life Solutions (India) 29.09 0.12%Bharat Petroleum Corporation 26.34 0.10%Tata Coffee 25.08 0.10%Glaxo Smithkline Consumer Healthcare 23.03 0.09%Sanghvi Movers 22.64 0.09%Punjab and Sind Bank 10.10 0.04%Pantaloon Retail (India) 1.28 0.01%Cash EquivalentsCBLOs 338.95 1.35%Reverse Repos 1,335.00 5.31%Net Current Assets 101.17 0.40%Total Net Assets as on 31-December-2010 25,123.69 100%


28

HSBC Income Fund - Investment Plan (HIF-IP)

An Open Ended Income SchemeInvestment Objective: Aims to provide reasonable income through a diversified portfolio offixed income securities. The AMC’s view of interest rate trends and the nature of the Plans willbe reflected in the type and maturities of securities in which the Short Term and InvestmentPlans are invested.Issuer Market % to

Value Net Rating(` in Lacs) Assets

Money Market Instruments

CDs

Fixed

Canara Bank 196.82 7.10% P1+

Central Bank of India 196.81 7.10% PR1+

Punjab National Bank 195.80 7.06% A1+

Allahabad Bank 195.78 7.06% A1+

State Bank of Mysore 192.65 6.95% P1+

Securitised Debt

Fixed

India MBS 2002 Series I-D (LIC Housing Finance) PTC 53.68 1.94% AAA(SO)

Corporate/PSU Debt

Fixed

Power Finance Corporation 118.89 4.29% AAA

Exim Bank 49.07 1.77% AAA

Government Securities

7.17% Government Stock-M-14-June-2015 658.09 23.73% Sovereign

8.08% Government Stock-M-02-Aug-2022 290.67 10.48% Sovereign

8.30% Government Stock-M-02-Jul-2040 187.40 6.76% Sovereign

8.13% Government Stock-M-21-Sep-2022 146.09 5.27% Sovereign

7.80% Government Stock-M-03-May-2020 64.51 2.33% Sovereign

7.49% Government Stock 2017 39.30 1.42% Sovereign


5.59% Government Stock-M-04-Jun-2016 0.36 0.01% Sovereign

Cash Equivalents

CBLOs 144.11 5.20%



Total Net Assets as on 31-December-2010 2,772.72 100%


29

HSBC Income Fund - Investment Plan (HIF-IP)


AAA 43.26%Sovereign 50.72%Reverse Repos/ CBLOs 25.67%Net Current Assets -19.65%

Rating Profile

Money Market Instruments 35.27%Securitised Debt 1.94%Corporate / PSU Debt 6.06%Government Securities 50.72%Cash Equivalents 25.67%Net Current Assets -19.65%

Asset Allocation

HIF- Crisil CompositeIP Bond Fund Index


Date of Allotment 10-Dec-02Benchmark Crisil Composite Bond

Fund IndexAverage AUM ` 27.73 croresNAV (Growth) ` 16.5320per unit(as on 31.12.10)Average Maturity 69.68 monthsof PortfolioModified Duration 40.14 monthsof PortfolioFund Manager Sanjay ShahSIP AvailableMinimum Application AmountRegular ` 10,000Institutional ` 50,00,000Exit Load@ Regular and Institutional

Options:0.5% - ifredeemed/switched outwithin 6 months from dateof investment

Annualised Expense Ratio from 01 April2010 onwardsRegular 1.85%Institutional 1.50%





HSBC Income Fund - Investment Plan - Regular Option - Quarterly Dividend11-Jun-10 0.19325 0.18011 11.308217-Sep-10 0.19325 0.18011 11.175616-Dec-10 0.17568 0.16374 11.1070HSBC Income Fund - Investment Plan - Institutional Option - Quarterly Dividend12-Jun-09 0.11387 0.10598 11.029411-Sep-09 0.11387 0.10598 10.996011-Dec-09 0.11387 0.10598 11.0973


HSBC Income Fund - Short Term Plan (HIF-STP)

An Open Ended Income SchemeInvestment Objective: Aims to provide reasonable income through a diversified portfolio offixed income securities. The AMC’s view of interest rate trends and the nature of the Plans willbe reflected in the type and maturities of securities in which the Short Term and InvestmentPlans are invested.


(` in Lacs) Assets

30

(Rated mfAAA by ICRA)


CDs

Fixed

ICICI Bank 2,455.88 28.80% A1+

HDFC Bank 1,968.51 23.08% PR1+

Bank of India 1,963.94 23.03% P1+

Canara Bank 1,959.62 22.98% P1+

Cash Equivalents

CBLOs 38.54 0.45%





HSBC Income Fund - Short Term Plan (HIF-STP)

** Core MTM would mean bonds / instruments whichhave residual maturity greater than 3 months and arevalued as per Crisil Bond Valuer. Core MTM is as on31 December 2010.

Dividend DeclarationRecord Date/period Dividend (` per unit) Dividend (` per unit) NAV per unitof dividend declared Non-Institutional Institutional (cum dividend)

HSBC Income Fund - Short Term Plan - Regular Option - Monthly Dividend29-Oct-10 0.03822 0.03562 10.908226-Nov-10 0.03990 0.03718 10.910531-Dec-10 0.04817 0.04489 10.9323HSBC Income Fund - Short Term Plan - Institutional Option - Monthly Dividend29-Oct-10 0.06920 0.06450 10.099826-Nov-10 0.03889 0.03625 10.065631-Dec-10 0.04746 0.04423 10.0862HSBC Income Fund - Short Term Plan - Institutional Plus Option - Monthly Dividend24-Sep-10 0.04360 0.04064 10.191329-Oct-10 0.04689 0.04371 10.194926-Nov-10 0.04050 0.03775 10.1874

HIF- Crisil Short TermSTP Bond Fund Index


Date of Allotment 10-Dec-02Benchmark Crisil Short Term Bond

Fund IndexAverage AUM ` 85.28 croresNAV (Growth) ` 16.1696per unit(as on 31.12.10)Average Maturity 2.45 monthsof PortfolioModified Duration 2.25 monthsof PortfolioFund Manager Sanjay ShahSIP AvailableMinimum Application AmountRegular ` 1,00,000Institutional ̀100,00,000Institutional Plus ̀500,00,000Exit Load@ Regular, Institutional and

Institutional Plus Options:0.25% - ifredeemed/switched outwithin 3 months from dateof allotment

Annualised Expense Ratio from 01 April2010 onwardsRegular 1.01%Institutional 0.70%Institutional Plus 0.60%

Core MTM (% to Net Assets)** 0.00Money Market Instruments 97.89%Cash Equivalents 2.23%Net Current Assets -0.12%

Asset Allocation

AAA 97.89%Reverse Repos/ CBLOs 2.23%Net Current Assets -0.12%

Rating Profile

31





32

An Open Ended Income SchemeInvestment Objective: Seeks to generate a reasonable return with commensurate risk throughinvestments in floating rate debt instruments and fixed rate debt instruments swapped forfloating rate returns. The Scheme may also invest in fixed rate money market and debtinstruments.


(` in Lacs) Assets

HSBC Floating Rate Fund - Long Term Plan


(HFRF-LTP)


CPs

Tata Capital 2,453.58 7.83% A1+

L&T Finance 2,450.22 7.82% PR1+

CDs

Fixed

Punjab National Bank 3,930.17 12.54% PR1+

Federal Bank 2,998.22 9.56% PR1+

State Bank of Bikaner and Jaipur 2,499.03 7.97% A1+

Vijaya Bank 2,498.05 7.97% PR1+

ING Vysya Bank 2,495.03 7.96% P1+

UCO Bank 2,465.84 7.86% P1+

Vijaya Bank 2,483.73 7.92% PR1+

Indian Overseas Bank 2,453.09 7.82% A1+

Union Bank of India 2,451.53 7.82% P1+

State Bank of Patiala 1,498.88 4.78% A1+

State Bank of India 636.94 2.03% P1+

Cash Equivalents

CBLOs 11.73 0.04%





33

HSBC Floating Rate Fund - Long Term Plan

HSBC Floating Rate Fund - Long Term Plan - Regular Option - Monthly Dividend29-Oct-10 0.05010 0.04669 10.057026-Nov-10 0.04188 0.03904 10.047731-Dec-10 0.05456 0.05085 10.0621HSBC Floating Rate Fund - Long Term Plan - Institutional Option - Monthly Dividend27-Aug-10 0.03065 0.02857 10.191524-Sep-10 0.03893 0.03629 10.201129-Oct-10 0.05700 0.05313 10.2216HSBC Floating Rate Fund - Long Term Plan - Institutional Option - Weekly Dividend27-Aug-10 0.01017 0.00948 11.241329-Oct-10 0.01284 0.01196 11.2446

Core MTM (% to Net Assets)** 0.00



AAA 99.88%Reverse Repos/ CBLOs 0.18%Net Current Assets -0.06%

Rating Profile

Money Market Instruments 99.88%Cash Equivalents 0.18%Net Current Assets -0.06%

Asset Allocation

HFRF- Crisil LiquidLTP Fund Index


Date of Allotment 16-Nov-04Benchmark Crisil Liquid Fund IndexAverage AUM ` 313.52 croresNAV (Growth) ` 14.7295per unit(as on 31.12.10)Average Maturity 1.50 monthsof PortfolioModified Duration 1.38 monthsof PortfolioFund Manager Sanjay Shah &

Kedar KarnikSIP AvailableMinimum Application AmountRegular ` 10,000Institutional ` 50,00,000Exit Load@ NilAnnualised Expense Ratio from 01 April2010 onwardsRegular 0.98%Institutional 0.28%





(HFRF-LTP)


An Open Ended Income SchemeInvestment Objective: Seeks to generate a reasonable return with commensurate risk throughinvestments in floating rate debt instruments and fixed rate debt instruments swapped forfloating rate returns. The Scheme may also invest in fixed rate money market and debtinstruments.


(` in Lacs) Assets

HSBC Floating Rate Fund - Short Term Plan

34


Cash Equivalents 88.66%Net Current Assets 11.34%

Asset Allocation

Reverse Repos/ CBLOs 88.66%Net Current Assets 11.34%

Rating Profile

*The MTM % disclosed is the weekly averagefor the week ended 31 December 2010.

MTM (% of Net Assets)* 0.00

(HFRF-STP)

Cash Equivalents

CBLOs 503.08 17.95%


Net Current Assets 317.92 11.34%




HSBC Floating Rate Fund - Short Term Plan

35

HFRF- Crisil LiquidSTP Fund Index

1 Week 5.54 7.702 Weeks 5.54 7.471 Month 5.47 7.403 Months 5.51 6.786 Months 5.11 6.231 Year 4.11 5.123 Years 5.11 6.125 Years 5.91 6.38Since Inception 5.82 6.06

* Past performance may or may not be sustainedin the future. Returns less than 1 yearare simple annualized. Returns equal to orgreater than 1 year are compoundedannualized. ‘Since inception’ returns arecalculated on ` 10 invested at inception.Calculations are based on Growth NAVs.



HSBC Floating Rate Fund - Short Term Plan - Institutional Option - Monthly Dividend26-Mar-10 0.01567 0.01567 10.149730-Apr-10 0.02177 0.02177 10.157528-May-10 0.01928 0.01928 10.1542HSBC Floating Rate Fund - Short Term Plan - Institutional Plus Option - MonthlyDividend30-Dec-05 0.03967 0.04259 10.054027-Jan-06 0.03825 0.03562 10.048524-Feb-06 0.03660 0.03408 10.0483

Date of Allotment 16-Nov-04Benchmark Crisil Liquid Fund IndexAverage AUM ` 28.02 croresNAV (Growth) ` 14.1423per unit(as on 31.12.10)Average Maturity 0.09 monthsof PortfolioModified Duration 0.03 monthsof PortfolioFund Manager Sanjay Shah &

Kedar KarnikSIP AvailableMinimum Application AmountRegular ` 1,00,000Institutional ` 50,00,000Institutional Plus ` 5,00,00,000Exit Load@ NilAnnualised Expense Ratio from 01 April2010 onwardsRegular 0.50%Institutional 0.43%Institutional Plus 0.35%


Expense Ratios (%) 01 December 2010 to Average for31 December 2010 the month

- Regular 0.50 0.50- Institutional 0.43 0.43- Institutional Plus 0.35 0.35

(HFRF-STP)


An Open Ended Liquid SchemeInvestment Objective: Aims to provide reasonable returns, commensurate with low risk whileproviding a high level of liquidity, through a portfolio of money market and debt securities.

HSBC Cash Fund (HCF)


(` in Lacs) Assets

36

(Rated mfA1+ by ICRA)


CPs

SREI Equipment Finance 1,667.24 4.49% A1+

CDs

Fixed

Andhra Bank 2,259.73 6.08% PR1+

Federal Bank 1,998.83 5.38% PR1+

Canara Bank 1,967.95 5.30% P1+

Central Bank of India 1,965.08 5.29% PR1+

Indian Overseas Bank 1,965.06 5.29% A1+

Bank of Maharashtra 1,964.51 5.29% P1+

State Bank of India 1,812.83 4.88% P1+

UCO Bank 1,765.64 4.75% P1+

Punjab National Bank 1,762.19 4.74% A1+

Allahabad Bank 1,762.05 4.74% A1+

Vijaya Bank 998.23 2.69% P1+

Cash Equivalents

CBLOs 2,696.08 7.26%


Net Current Assets 1,954.18 5.26%



HSBC Cash Fund (HCF)

37

HCF Crisil LiquidFund Index

1 Week 6.29 7.702 Weeks 6.21 7.471 Month 5.88 7.403 Months 5.81 6.786 Months 5.37 6.231 Year 4.30 5.123 Years 4.99 6.125 Years 5.80 6.38Since Inception 5.51 5.62


Money Market Instruments 58.91%Cash Equivalents 35.83%Net Current Assets 5.26%

Asset Allocation

AAA 58.91%Reverse Repos/ CBLOs 35.83%Net Current Assets 5.26%

Rating Profile

* Past performance may or may not be sustainedin the future. Returns less than 1 yearare simple annualized. Returns equal to orgreater than 1 year are compoundedannualized. ‘Since inception’ returns arecalculated on ` 10 invested at inception.Calculations are based on Growth NAVs.



HSBC Cash Fund - Institutional Option - Monthly Dividend29-Oct-10 0.04629 0.04629 10.580426-Nov-10 0.03825 0.03825 10.570131-Dec-10 0.04848 0.04848 10.5832HSBC Cash Fund - Institutional Plus Option - Monthly Dividend29-Oct-10 0.04738 0.04738 10.136726-Nov-10 0.03907 0.03907 10.126131-Dec-10 0.04948 0.04948 10.1394

Date of Allotment 04-Dec-02Benchmark Crisil Liquid Fund IndexAverage AUM ` 371.59 croresNAV (Growth) ` 15.4279per unit(as on 31.12.10)Average Maturity 1.36 monthsof PortfolioModified Duration 1.23 monthsof PortfolioFund Manager Sanjay Shah &

Kedar KarnikSIP AvailableMinimum Application AmountRegular ` 1,00,000Institutional ` 50,00,000Institutional Plus ` 5,00,00,000Exit Load@ NilAnnualised Expense Ratio from 01 April2010 onwardsRegular 1.00%Institutional 0.75%Institutional Plus 0.35%


*The MTM % disclosed is the weekly averagefor the week ended 31 December 2010.

MTM (% of Net Assets)* 0.00





38

HGF I-Sec Composite

Index6 Months 4.00 2.381 Year 6.92 6.043 years 2.13 7.675 years 3.03 7.17Since Inception 2.94 6.06

An Open Ended Gilt SchemeInvestment Objective: Aims to generate reasonable returns through investments in GovernmentSecurities of various maturities. The AMC's view of interest rate trends and the nature of the plans willbe reflected in the maturities of securities in which the Plans are invested.


(` in Lacs) Assets

HSBC Gilt Fund (HGF)

Date of Allotment 05-Dec-03Benchmark I-Sec Composite IndexAverage AUM ` 0.93 croresNAV (Growth) ` 12.2757per unit(as on 31.12.10)Average Maturity 86.48 monthsof PortfolioModified Duration 44.06 monthsof PortfolioFund Manager Sanjay ShahSIP AvailableMinimum ` 10,000ApplicationAmountExit Load@ 0.5% if redeemed /

switched out with6 months from date ofinvestment.






HSBC Gilt Fund - Monthly Dividend31-Oct-08 0.06136 0.05711 10.807728-Nov-08 0.04193 0.03903 10.785526-Dec-08 0.03400 0.03164 10.7764

Government Securities 53.21%Cash Equivalents 50.87%Net Current Assets -4.08%

Asset Allocation

Sovereign 53.21%Reverse Repos/ CBLOs 50.87%Net Current Assets -4.08%

Rating Profile


7.17% Government Stock-M-14-June-2015 14.62 15.73% Sovereign






Cash Equivalents

CBLOs 9.58 10.30%



Total Net Assets as on 31-December-2010 92.98 100%


An Open Ended Debt SchemeInvestment Objective: Seeks to provide liquidity and reasonable returns by investing primarilyin a mix of short term debt and money market instruments

HSBC Ultra Short Term Bond Fund (HUSBF)


(` in Lacs) Assets

39

(Rated mfA1 by ICRA)


CDs

Fixed

State Bank of Hyderabad 1,974.29 9.53% A1+

IDBI Bank 1,972.17 9.52% P1+

Vijaya Bank 1,497.34 7.23% P1+

State Bank of Patiala 999.25 4.82% A1+

Corporate/PSU Debt

INBMK Linked

HDFC 4,979.21 24.04% LAAA

Axis Bank 4,453.03 21.50% LAAA

Cash Equivalents

CBLOs 1,400.04 6.76%


Net Current Assets -2,073.52 -10.01%




40

Money Market Instruments 31.10%Corporate/PSU Debt 45.53%Cash Equivalents 33.38%Net Current Assets -10.01%

Asset Allocation

Rating ProfileAAA 76.63%Reverse Repos/ CBLOs 33.38%Net Current Assets -10.01%


Core MTM (% to Net Assets)** 45.53

Asset Allocation for Floaters % to Net AssetINBMK Linked 45.53%



41



HSBC Ultra Short Term Bond Fund - Institutional Option - Monthly Dividend29-Oct-10 0.03778 0.03522 10.181526-Nov-10 0.04180 0.03896 10.186131-Dec-10 0.04547 0.04238 10.1903HSBC Ultra Short Term Bond Fund - Institutional Plus Option - Monthly Dividend29-Oct-10 0.04417 0.04116 10.377426-Nov-10 0.04712 0.04392 10.380731-Dec-10 0.05200 0.04846 10.3863

HUSBF Customised Benchmark

Index**6 Months 4.82 6.231 Year 4.38 5.123 Years 5.73 6.12Since Inception 6.45 6.45


** Composite index of Crisil Liquid Fund Index(90%) and Crisil Short Term Bond Fund Index(10%)

Performance* (%) as on 31 December 2010 Date of Allotment 17-Oct-06Benchmark Customised Benchmark

Index**Average AUM ` 207.16 croresNAV (Growth) ` 13.0075per unit(as on 31.12.10)Average Maturity 2.04 monthsof PortfolioModified Duration 1.86 monthsof PortfolioFund Manager Sanjay Shah &

Kedar KarnikSIP AvailableMinimum Application AmountRegular ` 10,000Institutional ` 50,00,000Institutional Plus ` 5,00,00,000Exit Load@ Regular, Institutional and

Institutional Plus Options:0.25% - ifredeemed/switched outwithin 15 days from dateof allotment

Annualised Expense Ratio from 01 April2010 onwardsRegular 1.27%Institutional 1.02%Institutional Plus 0.37%

@ Including SIP/STP where applicable.* * Composite index of Crisil Liquid Fund Index

(90%)and Crisil Short Term Bond Fund Index(10%)




42

An Open Ended Debt SchemeInvestment Objective: Seeks to deliver returns in the form of interest income and capital gains, alongwith high liquidity, commensurate with the current view on the markets and the interest rate cycle, throughactive investment in debt and money market instruments.


(` in Lacs) Assets

HSBC Flexi Debt Fund (HFDF)(Rated mfAAA by ICRA)


CDs

Fixed

Canara Bank 688.87 10.34% P1+

Central Bank of India 688.84 10.34% PR1+

State Bank of Mysore 674.26 10.12% P1+

State Bank of Patiala 468.19 7.03% A1+

Corporate/PSU Debt

Fixed

National Bank for Agricultural and Rural Development 490.97 7.37% AAA

Power Finance Corporation 426.03 6.39% AAA

LIC Housing Finance 97.70 1.47% AAA


7.17% Government Stock-M-14-June-2015 1,009.07 15.14% Sovereign




7.49% Government Stock 2017 157.22 2.36% Sovereign



Cash Equivalents

CBLOs 170.77 2.56%





HSBC Flexi Debt Fund (HFDF)

43


AAA 53.05%Sovereign 42.00%Reverse Repos/ CBLOs 12.66%Net Current Assets -7.70%

Rating Profile

Money Market Instruments 37.82%Corporate / PSU Debt 15.23%Government Securities 42.00%Cash Equivalents 12.66%Net Current Assets -7.70%

Asset Allocation


HSBC Flexi Debt Fund - Regular Option - Monthly Dividend29-Oct-10 0.01243 0.01159 10.316126-Nov-10 0.05466 0.05094 10.364231-Dec-10 0.04660 0.04343 10.3549HSBC Flexi Debt Fund - Institutional Option - Monthly Dividend29-Oct-10 0.01599 0.01490 10.550626-Nov-10 0.05839 0.05442 10.598931-Dec-10 0.05095 0.04748 10.5901HSBC Flexi Debt Fund - Regular Option - Quarterly Dividend11-Jun-10 0.13176 0.12280 11.277017-Sep-10 0.13176 0.12280 11.218516-Dec-10 0.13176 0.12280 11.2075HSBC Flexi Debt Fund - Institutional Option - Quarterly Dividend11-Jun-10 0.13176 0.12280 11.107017-Sep-10 0.13176 0.12280 11.057516-Dec-10 0.13176 0.12280 11.0539HSBC Flexi Debt Fund - Regular Option - Half Yearly Dividend11-Sep-09 0.08759 0.08153 10.216812-Mar-10 0.10511 0.09783 10.355117-Sep-10 0.10541 0.09824 10.4880

HFDF CrisilCompositeBond Fund

Index6 months 2.09 1.881 Year 4.51 4.963 Years 8.01 5.81Since Inception 8.27 6.11



Date of Allotment 05-Oct-07Benchmark Crisil Composite Bond

Fund IndexAverage AUM ` 66.63 croresNAV (Growth) ` 12.9287per unit(as on 31.12.10)Average Maturity 66.65 monthsof PortfolioModified Duration 37.72 monthsof PortfolioFund Manager Sanjay ShahSIP AvailableMinimum Application AmountRegular ` 10,000Institutional ` 50,00,000Exit Load@ Regular &

Institutional Option –0.25% - if redeemed/switched out within3 months from the dateof investment.

Annualised Expense Ratio from 01 April2010 onwardsRegular 1.85%Institutional 1.50%



Fund Managers - MIP & Debt

44

Name of Scheme Fund Manager

HSBC MIP For Debt portion: Sanjay Shah- Savings & Regular Plan (from 14 August 2009) &

For Equity portion: Dhimant Shah(from 14 August 2009) & Aditya Khemani(from 24 February 2009)

HSBC Income Fund Sanjay Shah (from 09 January 2009)

- Investment Plan

HSBC Income Fund Sanjay Shah (from 09 January 2009)

- Short Term Plan

HSBC Floating Rate Fund Sanjay Shah (from 09 January 2009) &

Long Term Plan & Kedar Karnik (from 11 January 2010)

Short Term Plan

HSBC Cash Fund Sanjay Shah (from 09 January 2009) &

Kedar Karnik (from 11 January 2010)

HSBC Gilt Fund Sanjay Shah (from 09 January 2009)

HSBC Ultra Short Term Sanjay Shah (from 09 January 2009) &

Bond Fund Kedar Karnik (from 18 December 2008)

HSBC Flexi Debt Fund Sanjay Shah (from 09 January 2009)

Fund Manager’s Experience

Sanjay ShahVice President & Fund Manager - Fixed IncomeB. Com, A.C.A., Post Graduate Diploma in Management

Experience:Over 11 years of experience in Risk.� HSBC Asset Management (India) Private Limited

Vice President & Fund Manager, Fixed Income since December 2008onwards

� FIL Fund Management Private LimitedCredit Analyst from September 2008 to December 2008

� Lehman Brothers Structured Financial Services Private LimitedVice President, Convertible Products from September 2006 toSeptember 2008

� Rabo India Finance Private LimitedSenior Manager – Credit Risk from July 2004 to September 2006

� ICICI Bank LimitedManager, Credit Risk from January 2003 to June 2004

� SBI Funds Management Private LimitedChief Manager, Debt Funds from June 1999 to January 2003


Fund Managers - MIP & Debt

45

Kedar KarnikAssociate Vice President & Assistant Fund Manager - Fixed IncomeM.M.S. (Finance), B.E.

Experience:Over 5 years experience in research and credit rating.� HSBC Asset Management (India) Private Limited

Associate Vice President & Assistant Fund Manager - Fixed Incomefrom December 2008 to present

� HSBC Asset Management (India) Private LimitedAssociate Vice President & Credit Analyst from July 2008 toDecember 2008

� CRISIL LimitedManager – Financial Sector Ratings from September 2005 to July 2008

� ICICI Bank LimitedManagement Trainee from May 2005 to September 2005


Statutory Details & Disclaimers

All returns have been sourced from MutualFundsIndia Explorer software unless otherwise stated.With regard to equity schemes (including the equity component of MIPs), Fund performance iscalculated on a total return basis (i.e. it includes dividends re-invested) while the benchmark iscalculated on a price return basis (i.e. it does not consider dividends re-invested).

This document has been prepared by HSBC Asset Management (India) Private Limited (HSBC) forinformation purposes only and should not be construed as an offer or solicitation of an offer forpurchase of any of the funds of HSBC Mutual Fund. All information contained in this document(including that sourced from third parties), is obtained from sources HSBC, the third party believesto be reliable but which it has not independently verified and HSBC, the third party makes no guarantee,representation or warranty and accepts no responsibility or liability as to the accuracy or completenessof such information. The information and opinions contained within the document are based uponpublicly available information and rates of taxation applicable at the time of publication, which aresubject to change from time to time. Expressions of opinion are those of HSBC only and are subjectto change without notice. It does not have regard to specific investment objectives, financial situationand the particular needs of any specific person who may receive this document. Investors should seekfinancial advice regarding the appropriateness of investing in any securities or investment strategiesthat may have been discussed or recommended in this report and should understand that the viewsregarding future prospects may or may not be realized. Neither this document nor the units of HSBCMutual Fund have been registered in any jurisdiction. The distribution of this document in certainjurisdictions may be restricted or totally prohibited and accordingly, persons who come into possessionof this document are required to inform themselves about, and to observe, any such restrictions.Mutual fund investments are subject to market risks. Please read the Scheme Information Documentcarefully before investing.

© Copyright. HSBC Asset Management (India) Private Limited 2011, ALL RIGHTS RESERVED.

No part of this publication may be reproduced, stored in a retrieval system, or transmitted, on any formor by any means, electronic, mechanical, photocopying, recording, or otherwise, without the priorwritten permission of HSBC Asset Management (India) Private Limited.

Investors may obtain Scheme Information Document / Statement of Additional Information and KeyInformation Memorandums along with application forms from the office of HSBC Mutual Fund.

Statutory Details: HSBC Mutual Fund has been set up as a trust by HSBC Securities and CapitalMarkets (India) Private Limited (liability restricted to the corpus of 1 lakh). The Sponsor/associatesof the Sponsor/Asset Management Company (AMC) are not responsible or liable for any loss orshortfall resulting from the operation of the Schemes. The Trustees of HSBC Mutual Fund haveappointed HSBC Asset Management (India) Private Limited as the Investment Manager.Risk Factors: All investments in mutual funds and securities are subject to market risksand the Net Asset Value (NAV) of the Scheme(s) may go up or down depending on thefactors and forces affecting the securities markets. There can be no assurance that theobjectives of the Scheme(s) will be achieved. Past performance of the Sponsor, AMC,Mutual Fund or any associates of the Sponsor/AMC does not indicate the futureperformance of the Scheme(s) of the Mutual Fund. The names of the Scheme(s) do not inany manner indicate the quality of the Scheme(s) or their future prospects or returns.Please read the Scheme Information Document and Statement of Additional Informationcarefully before investing.


HSBC Asset Management (India) Private Limited314 D. N. Road, Fort, Mumbai 400 001Tel.: 022-6614 5000Fax: 022-4002 9600Email: [email protected] : www.assetmanagement.hsbc.com/in

HSBC MUTUAL FUND INVESTOR SERVICE CONTACT NUMBERS

City Telephone No.

Ahmedabad 098983 77319

Andhra Pradesh 098496 77319

Bangalore 080 4118 6519

Bihar 099313 97319

Chandigarh 0172 500 8119

Chennai 044 4200 8719

Coimbatore 098944 77319

Delhi 011 4149 0719

Hyderabad 040 6667 4719

Indore 098934 77319

Jaipur 099280 37319

Karnataka 099809 27319

Kerala 098954 77319

Kochi 098954 77319

Kolkata 033 2213 9919

Lucknow 099367 97319

Maharashtra / Goa 099600 77321

MP / Chattisgarh 098934 77319

Mumbai 022 6666 8819

NCR 099107 97319

Pune 020 2600 1119,020 2600 1121

Punjab 098769 37319

UP 099350 97321

Vadodara 098983 77319

sms INVEST to 56767

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