Framework for a resilient future

• Equity Risk: Portfolios that invest in securities listed on a stock exchange or market could be affected by general changes in the stock market. The value of investments can go down as well as up due to equity markets movements.
• Interest Rate Risk: As interest rates rise debt securities will fall in value. The value of debt is inversely proportional to interest rate movements.
• Counterparty Risk: The possibility that the counterparty to a transaction may be unwilling or unable to meet its obligations.
• Derivatives Risk: Derivatives can behave unexpectedly. The pricing and volatility of many derivatives may diverge from strictly reflecting the pricing or volatility of their underlying reference(s), instrument or asset.
• Emerging Markets Risk: Emerging markets are less established, and often more volatile, than developed markets and involve higher risks, particularly market, liquidity and currency risks.
• Exchange Rate Risk: Changes in currency exchange rates could reduce or increase investment gains or investment losses, in some cases significantly.
• Investment Leverage Risk: Investment Leverage occurs when the economic exposure is greater than the amount invested, such as when derivatives are used. A Fund that employs leverage may experience greater gains and/or losses due to the amplification effect from a movement in the price of the reference source.
• Liquidity Risk: Liquidity Risk is the risk that a Fund may encounter difficulties meeting its obligations in respect of financial liabilities that are settled by delivering cash or other financial assets, thereby compromising existing or remaining investors.
• Operational Risk: Operational risks may subject the Fund to errors affecting transactions, valuation, accounting, and financial reporting, among other things.
• Style Risk: Different investment styles typically go in and out of favour depending on market conditions and investor sentiment.
• Model Risk: Model risk occurs when a financial model used in the portfolio management or valuation processes does not perform the tasks or capture the risks it was designed to. It is considered a subset of operational risk, as model risk mostly affects the portfolio that uses the model.
• Alternatives: Alternative investments include Private Equity, Commodities, Hedge Funds and Property. They may be difficult to sell in a timely manner or at a reasonable price. It may be difficult to obtain reliable information about their value.
• Sustainability Risk: Sustainability risk means an environmental, social or governance event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of the investment.

Past performance is no guarantee of future returns. The return, the value of money invested in the fund may become negative as a result of price losses and currency fluctuations. There is no guarantee that all of your invested capital can be redeemed.

Representative overview of the investment process, which may differ by product, client mandate or market conditions.

Any forecast, projection or target where provided is indicative only and is not guaranteed in any way.

The commentary and analysis presented in this document reflect the opinion of HSBC Asset Management on the markets, according to the information available to date. They do not constitute any kind of commitment from HSBC Asset Management. Consequently, HSBC Asset Management will not be held responsible for any investment or disinvestment decision taken on the basis of the commentary and/or analysis in this document.

Tax treatment depends on the individual circumstances of each client and may be subject to change in the future.