hsbc gif euroland equityhsbc gif euroland equity this document is intended for professional clients...
TRANSCRIPT
Frédéric Leguay
Lead Portfolio Manager
HSBC Global Asset Management (France)
Performance review: June 2017
HSBC GIF Euroland Equity
This document is intended for Professional Clients only and should not be distributed to or relied upon by Retail
Clients. The information contained in this document is not intended as investment advice or recommendation.
Non contractual document.
2 Non contractual document
Contents
HSBC Global Asset Management: Organisation Section 1
HSBC GIF Euroland Equity: Performance review and positioning Section 2
Euroland market outlook Section 3
HSBC GIF Euroland Equity
– Historical performance review (2007-2016) Section 4
– Investment philosophy and process Section 5
Appendices Section 6
HSBC Global Asset Management
Organisation
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OrganisationGlobal equity team leadership
Source: HSBC Global Asset Management as at 31.03.2017
Process development and evolution
Research
Portfolio construction
Quantitative tools
Global oversight of processes
Promotes best practice and consistency while maintaining team
ownership of performance
Ties in management of global and regional process and governance
frameworks
Benefits of a global team
Promotion of team approach and values
Common investment approach
Equity leadership team strategyChris Cheetham
Global CIO
Jim HugganCIO [Canada]
Sanjiv DuggalHead of Asian and Indian Equities [HK]
Nick TimberlakeHead of GEM & Latam Equities [London]
Mandy ChanHead of China and HK Equities [HK]
Vis NayarDeputy CIO, Equities. Head of Research &
Systematic Strategies [London]
Frédéric LeguayHead of European Equities [Paris]
Angus ParkerHead of Developed Market
Equities [London]
Tushar PradhanCIO [India]
Chingi ChangCIO [Taiwan]
Yigit OnatHead of Turkey Equities [Istanbul]
Quentin CaoCIO HSBC Jintrust [Shanghai]
Abdullah S. Al HamedCIO [Saudi Arabia]
Joseph MolloyHead of Passive Equities [London]
Bill MaldonadoGlobal CIO, Equities
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Source: HSBC Global Asset Management as at 30.04.2017
HSBC Global Asset Management: Equity specialistManufacturing center: Paris
European equities: Key facts (30.04.2017) Our key strengths
– Integrated: one team/one process “profitability and
valuation”
– Specialised: analysts (6) supporting the large cap team
cover 2-3 sectors each. Manager/analyst role for small
and mid cap segment
– ESG database allows for complete company analysis
– Unique and “repeatable” approach: each investment
case follows predefined steps to decompose profitability
drivers
– Global infrastructure: global database and tools brings
consistency and comparability
– Dedicated Bloomberg application allows teams to
exchange investment cases and meeting notes
EUR 9.6 bn
in equity AUM
~15 equity portfolio
managers
10 large and 5 small and mid cap
~6 large cap equity
analysts
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1. Employees’ Savings Plans
Source: HSBC Global Asset Management as at 30.04.2017
HSBC Global Asset Management: Equity specialistCapabilities managed in Paris
European equities: Assets under management by type Active fundamental stock selection
Long-dated track record
Robust long-term performance
– Consistently in 1st or 2nd quartile; 3 & 5Y periods
– Focus on delivering high risk-adjusted returns
Strategy Geography
Core (large cap) Europe, Europe ex UK, Euroland, France
Volatility Focused Europe, Europe ex UK
Dividend/Income Europe
SMID Europe, Euroland, France
Strategy Launch date Process upgrade
Core (large cap) 1980 2004
Dividend/Income 2003 2012
SMID 1998 2003
Core (large cap):
EUR 6.8 bn
Dividend/Income:
EUR 565.0 ml
SMID: EUR 995.0 ml
Other*: EUR 1.2 bn
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OrganisationParis European equity investment team
An experienced investment team in Paris with an average over 20 years industry experience
Stable and committed teams benefiting from a common investment framework supported by customized tools
ESG (Environmental, Social and Governance) criteria are systematically taken into account1
1. Formal integration of ESG criteria were implemented as of 2012.
Source: HSBC Global Asset Management. As of June 2017. ( x ) Years of industry experience. For illustrative purposes only.
Research and
Development
1 economist
European Equity:
Tony Eagleton (24)
Product
Specialists
Cédric Carpentier (15)
Risk management tools and
strategy research
Investment Process
R&D
Pascal Pierre (19)
Head of Equity
and ESG1 Research
Denis Grandjean (27)
Head of Large Cap
European Equity
Frédéric Leguay (29)
Head of Thematic
Equity
Pascal Pierre (19)
Portfolio Managers Financial and ESG1 AnalystsFinancial engineering
& quantitative research
Head of European Equities - Frédéric Leguay (29)
Equity Traders
4 tradersLaura Fauveau (4)
Materials and Construction,
Healthcare, Business
Services
Aloys Goichon (13)
Utilities, Oil & Gas
and Capital Goods
Guillaume d’Harcourt (38)
Aerospace-Defense, Autos
Eric Hazart (25)
Bank, Insurance and Real
Estate
Benoit Olle-Laprune (23)
Technology, Media and
Telecoms
Florence Tassan (19)
Consumer goods and
services, Transportation
François Chacun (29)
Jeanne Follet (19)
Patrick Gautier (18)
Denis Grandjean (27)
Bénédicte Mougeot (22)
Yann Petel (34)
Jean-Luc Rondet (30)
TBA
SMID Cap Equity
Other Thematic
Abderrahman Belcaid (11)
Frédérique Caron (16)
Christophe Peroni (21)
François Travaillé (30)
Clément Tasseau (18)
HSBC GIF Euroland Equity
Performance review and positioning
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HSBC GIF Euroland Equity: net performance (IC share class) AUM EUR783.4 million as at 30.06.2017
Net cumulative performance (IC share class)
Over 5 years 29.06.2012 – 30.06.2017
Source: HSBC Global Asset Management as at 30.06.2017.
1. Index given for comparative and illustrative purposes only. The fund has no official benchmark.
2. Morningstar fund quartile - category Eurozone Large-Cap Equity: Data Source - © Copyright 2017 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content
providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this
information.
3. Quartile ranking is based on period from 16.12.2006 to 30.06.2017, as the NAV of Morningstar database start on 16.12.2006.
Allocation is as at the date indicated, may not represent current or future allocation and is subject to change without prior notice.
The performance figures displayed in the document relate to the past and past performance should not be seen as an indication of future returns.
Net performance
as at 30.06.2017YTD 2017 2016 2015 2014 2013 1 year 3 years 5 years
Since launch
(15.12.2006)
HSBC GIF Euroland Equity
(IC)10.4% 4.7% 11.8% 2.8% 31.6% 31.5% 27.2% 106.6% 48.8%
MSCI EMU (NR)1 8.5% 4.3% 9.8% 4.3% 23.4% 24.8% 22.8% 85.6% 26.0%
Excess Return +1.9% +0.4% +2.0% -1.5% +8.2% +6.7% +4.3% +21.0% +22.7%
Quartile2 1 1 2 2 1 1 1 1 13
Fund
Tracking Error (ex-post 3 years) 3.88%
Number of holdings 55
1st Quartile
2st Quartile
3rd Quartile
4th Quartile
10 Largest holdings (%) Weight
ALLIANZ SE-REG 3.57%
SANOFI 3.35%
ING GROEP NV 3.15%
BAYER AG 3.10%
SOCIETE GENERALE 3.05%
BANCO SANTANDER SA 3.00%
AXA SA 2.69%
DEUTSCHE POST AG 2.61%
UNICREDIT SPA 2.36%
DAIMLER AG 2.35%
Total 26.87%
90100110120130140150160170180190200210220
06/2012 06/2013 06/2014 06/2015 06/2016 06/2017
HSBC GIF EUROLAND EQUITY EN EUR (I) MSCI EMU (NR)*
+106.6%
+85.6%
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HSBC GIF Euroland Equity (YTD)Country allocation and attribution 30.12.2016 to 30.06.2017
Source: HSBC Global Asset Management. For illustrative purposes only.
1. Index given for comparative and illustrative purposes only. The fund has no official benchmark.
Allocation is as at the date indicated, may not represent current or future allocation and is subject to change without prior notice.
The content of this page is historic and contains information that is not current. It is not intended as advice or a recommendation to buy or sell any sector or financial instrument.
The performance figures in the document are gross of fees. Returns would be lower once fees are taken into account.
The performance figures displayed in the document relate to the past and past performance should not be seen as an indication of future returns.
10.2% 8.5% 9.0%13.8%
9.4%
31.6%
-9.0%
-30.0%
8.5% 6.9%11.5% 13.7%
6.0%
22.9%
-10.6%
0.0%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
FRANCE GERMANY NETHERLANDS SPAIN ITALY AUSTRIA LUXEMBOURG SWITZERLAND
HSBC GIF EUROLAND EQUITY MSCI EMU (NR)*
Country – average portfolio weight vs comparative index*
Country – portfolio performance vs comparative index*
(YTD) Comparative index
performance: 8.5%
33.6%
25.0%
18.0%
11.1%
4.2% 3.9%
0.6% 0.2%
30.8% 29.7%
12.5%10.5%
6.2%
0.7% 0.6% 0.0%0%
5%
10%
15%
20%
25%
30%
35%
40%
FRANCE GERMANY NETHERLANDS SPAIN ITALY AUSTRIA LUXEMBOURG SWITZERLAND
HSBC GIF EUROLAND EQUITY MSCI EMU (NR)*
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HSBC GIF Euroland Equity (YTD)Sector allocation and attribution 30.12.2016 to 30.06.2017
Source: HSBC Global Asset Management. For illustrative purposes only.
1. Index given for comparative and illustrative purposes only. The fund has no official benchmark.
Allocation is as at the date indicated, may not represent current or future allocation and is subject to change without prior notice.
The content of this page is historic and contains information that is not current. It is not intended as advice or a recommendation to buy or sell any sector or financial instrument.
The performance figures in the document are gross of fees. Returns would be lower once fees are taken into account.
The performance figures displayed in the document relate to the past and past performance should not be seen as an indication of future returns.
13.8% 14.9%11.9%
4.5% 6.1%
2.0%3.5%
12.2%
15.3%
6.6%
11.4% 11.0% 11.8%
7.4%8.6%
3.2% 3.3%
-6.4%
13.6% 12.5%
-10%
-5%
0%
5%
10%
15%
20%
Financials Industrials Health Care Cons. Disc. Cons. Staples Telecom. Materials Energy Utilities IT
HSBC GIF EUROLAND EQUITY MSCI EMU (NR)*
Sector – average portfolio weight vs comparative index1
Sector – portfolio performance vs comparative index1
(YTD) Comparative index
performance: 8.5%
24.8%
18.8%
10.8% 10.7%7.6%
5.8% 5.0% 5.0% 4.7%3.4%
21.5%
14.1%
8.0%
14.0%
10.6%
5.5%
8.4%
5.4% 4.7%
7.7%
0%
5%
10%
15%
20%
25%
30%
Financials Industrials Health Care Cons. Disc. Cons. Staples Telecom. Materials Energy Utilities IT
HSBC GIF EUROLAND EQUITY MSCI EMU (NR)*
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Company
Average
weight Performance Contribution
AHOLD (KONINKLIJKE) NV 1.31% -14.42% -0.22%
TOTAL SA 2.03% -8.56% -0.22%
DAIMLER AG 2.56% -7.29% -0.19%
ARYZTA AG 0.18% -29.59% -0.08%
RENAULT 1.73% -2.75% -0.08%
Company
Average
weight Performance Contribution
OMV AG 2.08% 37.85% 0.55%
DEUTSCHE LUFTHANSA AG 1.04% 65.64% 0.51%
BASF SE -2.15% -5.06% 0.31%
UNICREDIT SPA 1.16% 7.16% 0.29%
CREDIT AGRICOLE SA 1.66% 24.73% 0.26%
Company
Average
weight Performance Contribution
OMV AG 2.23% 37.85% 0.79%
DEUTSCHE LUFTHANSA AG 1.14% 65.64% 0.65%
BANCO SANTANDER SA 3.02% 18.62% 0.55%
CREDIT AGRICOLE SA 2.04% 24.73% 0.49%
BAYER AG 3.06% 16.24% 0.47%
Company
Average
weight Performance Contribution
LVMH MOET HENNESSY LOUIS
VUITTON SA -1.52% 21.87% -0.18%
GEMALTO 1.36% -3.58% -0.17%
AHOLD (KONINKLIJKE) NV 0.65% -14.42% -0.17%
RENAULT 1.31% -2.75% -0.15%
DAIMLER AG 0.83% -7.29% -0.15%
HSBC GIF Euroland Equity (YTD)Performance attribution 30.12.2016 to 30.06.2017
Source: HSBC Global Asset Management. For illustrative purposes only.
The content of this page is historic and contains information that is not current. It is not intended as advice or a recommendation to buy or sell any sector or financial instrument.
The performance figures in the document are gross of fees. Returns would be lower once fees are taken into account.
The performance figures displayed in the document relate to the past and past performance should not be seen as an indication of future returns.
5 best contributors – absolute performance 5 worst contributors – absolute performance
5 best contributors – relative performance 5 worst contributors – relative performance
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HSBC GIF Euroland Equity1-year and 3-year factorial performance attribution (30.06.2017)
Source: HSBC Global Asset Management. For illustrative purposes only.
The performance figures displayed in the document relate to the past and past performance should not be seen as an indication of future returns.
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HSBC GIF Euroland Equity (gross returns)An illustration of how the fund performs in up and down markets
Source: HSBC Global Asset Management. Performance in EUR, gross of fees. Period: 30.09.2004 to 30.06.2017. For illustrative purposes only.
1. As of end of September 2004, the fund has been fully managed following the profitability and valuation investment process.
2. Index given for comparative and illustrative purposes only. The fund has no official benchmark.
The performance figures displayed in the document relate to the past and past performance should not be seen as an indication of future returns.
The performance figures in the document are gross of fees. Returns would be lower once fees are taken into account.
99.4
%
-58.5
%
106.6
%
-33.4
%
28.3
%
-20.1
%
123.5
%
-23.7
%
32.9
%
180.5
%
88.5
%
-60.1
%
85.1
%
-30.5
%
29.1
%
-17.2
%
100.3
%
-23.7
%
24.8
%
109.1
%
10.9
%
1.5
% 21.4
%
-2.8
%
-0.8
%
-2.9
%
23.2
%
0.1
%
8.0
%
71.4
%
-150%
-100%
-50%
0%
50%
100%
150%
200%
09.2004 -07.2007
07.2007 -03.2009
03.2009 -02.2011
02.2011 -09.2011
09.2011 -03.2012
03.2012 -06.2012
06.2012 -04.2015
04.2015 -06.2016
06.2016 -06.2017
09.2004 -06.2017
HSBC GIF Euroland Equity (gross of fees) MSCI EMU (NR)² Excess return
The fund tends to "do better" in rising markets and perform "in line" in down markets
Excess return (gross of fees): +71.4% (from September 20041 to June 2017)
Gross performance in up and down periods (from 30.09.2004 to 30.06.2017)
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HSBC GIF Euroland Equity: factor based competitive positioningBased on weekly NAV between 31.12.2011 and 31.12.2016
Illustration of the fund and its sensitivity to a number of factors (value, size, quality, dividend yield and market beta); these factors
allow you to show the alpha of the fund
140 funds in the Morningstar Euro Large Cap category with AUM > EUR100m and that have a Euroland large cap benchmark
Source: HSBC Global Asset Management. Each dot on the line is the sensitivity of one of 140 funds to the mentioned factors.
Period: 31.12.2011 – 31.12.2016. The commentary and analysis presented in this document reflect the opinion of HSBC Global Asset Management (France) on the markets, according to the information
available to date. For illustrative purposes only.
The performance figures displayed in the document relate to the past and past performance should not be seen as an indication of future returns.
Alpha Size factor Value factor
Market factor Dividend Yield factor Quality factor
16 Non contractual document
Allocation effect
+0.58 %
(p.a. on avg.)
Selection
effect
+1.70%
(p.a. on avg.)
HSBC GIF Euroland Equity (gross returns)10Y gross relative performance analysis confirms importance of stock selection and validates fundamental
Source: HSBC Global Asset Management, MSCI. Annualised performance gross of fees over 10 years. Period: 29.12.2006 – 31.12.2016. For illustrative purposes only.
* P/V approach refers to our proprietary tool that filters and identifies all companies within our scope of investment, from which the portfolio manager will analyse and select stocks
The performance figures in the document are gross of fees. Returns would be lower once fees are taken into account.
The performance figures displayed in the document relate to the past and past performance should not be seen as an indication of future returns.
Relative performance to P/V approach
Selection effect
Finance +0.9
Industrial +0.4
Health +0.4
Telecom -0.3
Allocation effect
Health +0.3
Finance +0.2
Consum. Disc. -0.3
90
95
100
105
110
115
120
125
130
12/06 12/08 12/10 12/12 12/14 12/16
P&V approach in Eurozone*
HSBC GIF Euroland Equity (gross)
Performance attribution
P&V approach
in Eurozone*
+1.00 %
(p.a. on avg.)
Alpha
+1.28%
(p.a. on avg.)
Relative performance comparison
+2.28%
Relative
performance(p.a. on avg.)
MSCI EMU: +1.50%
(p.a. on avg.)
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HSBC GIF Euroland EquityPerformance commentary as at end June 2017
Source: HSBC Global Asset Management (France) as at 30.06.2017. For illustrative purposes only.
1. Index given for comparative and illustrative purposes only. The fund has no official benchmark.
The content of this page is historic and contains information that is not current. It is not intended as advice or a recommendation to buy or sell any sector or financial instrument.
The commentary and analysis presented in this document reflect the opinion of HSBC Global Asset Management (France) on the markets, according to the information available to date.
The performance figures displayed in the document relate to the past and past performance should not be seen as an indication of future returns.
The fund outperformed the comparative index1 in 2017 with
a net return of +11.2% (I share) vs. +9.2% for the MSCI EMU
index1
The value bias was a slight headwind in an environment that
tended to favor quality over value companies as hopes of
reflation fades especially in the US
Stock selection has constituted most of the total
outperformance this year, with the biggest contributors
coming from a broad range of industrials, energy companies
and banks
In contrast stock selection in software & services, healthcare
equipment and food & staples retailing were the biggest
detractors
In June, the fund continues to accumulate outperformance
due to profit-taking in retail, food and semiconductors and
the ongoing uptrend banks in particular, to which we are
overexposed
We remain overexposed to financials, healthcare and the
fairly diverse industrials segment. Conversely, we are
underexposed to consumer staples and discretionary, as well
as basic industries
Key active positions at 30.06.2017
Positions Rational
Société
Générale
Banks
The stock is still undervalued despite improved solvability (CET1 FL @ 11.5% in 2017). International network is in growth mode with improving profits. France should benefit from a steeper yield curve & restructuring in the network. The stock is trading at 0.8x TBV 2017 for a ROTE of 8.2% vs 0.9x and 7.2% for the Eurozone sector.
OMV
Petroleum
The attractive valuation of this energy group does not reflect the transformation that it is currently experiencing. Its agreement with Gazprom will allow it to strongly grow its resources and improve its profitability per barrel and cash flow generation. The current divestment of certain assets provides a high level of visibility on the dividend payment with a yield in excess of 4%.
Natixis
Banks
The CET1 is strong and improving. The groups’ dividend policy is conservative with a payout ratio of 50%. The CEO reiterated that the excess capital above 10.5% will be returned to shareholders in absence of potential acquisitions. The business model is based on low capital consumption (e.g. asset management) and the dividend story remains intact.
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Portfolio characteristics
Comparative index MSCI EMU (NR)1
CapitalisationBiased to large-cap stocks:
EUR1bn minimum (at purchase)
Style "Relative Value" bias
Typical holdings 50-602
Individual stock holdings 5% max.
Tracking error ex-ante 3 - 5%2
Average annual turnover < 30%2
Regional exposure
Mainly 10 developed Eurozone countries
(Austria, Belgium, Finland, France,
Germany, Ireland, Italy, Netherlands,
Portugal, Spain)
Sector exposure
No sector constraints yet impose a minimum
of 15 to be held at all times
(out of the 24 MSCI industry groups)
Cash weighting 0-5%2
HSBC GIF Euroland EquityFund details and assets under management
Source: HSBC Global Asset Management as at 30.06.2017. For illustrative purposes only.
Characteristics and weightings are for illustrative purposes only, are not guaranteed and are subject to change over time, and without prior notice, taking into account any changes in markets.
1. Index given for comparative and illustrative purposes only. The fund has no official benchmark.
2. The above mentioned limits/objectives are to be considered on the recommended minimum investment period; there can be no assurance that the strategy of the fund will achieve this objective.
Net new money and assets under management
(EUR million) as of 30.06.2017
23
9
19
2
-15
5
-14
0
-19
2
-19
44
10
2
-23
0
-27
40
1
92
5
11
18
80
2
75
2
75
3
74
8
88
2
75
5
78
3
-500
-250
0
250
500
750
1 000
1 250
2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD2017
Net New Money AUM
19 Non contractual document
HSBC GIF Euroland EquityFund details
Source: HSBC Global Asset Management. The information contained above does not constitute a commitment from HSBC Global Asset Management (France) and is subject to change without prior
notice. For information purposes only, the fund may not be registered for sale in your country. Before subscription, investors should refer to the Key Investor Information Document (KIID) of the fund as
well as its complete prospectus. For more detailed information on the risks associated with this fund, investors should refer to the prospectus of the fund.
Legal Form
Sub-fund of Luxembourg UCITS IV HSBC Global Investment Funds
Valuation
Daily
Dealing
Daily by 10:00 (CET)
Execution
Trade Day
Settlement
Trade Day + 4 business days
Management Company
HSBC Investment Fund (Lux.) SA
Custodian and transfer agent
HSBC Bank Plc. Luxembourg Branch
Recommended investment horizon
Minimum 5 years
Main Risks
Equity risk, Capital loss risk
Launch Date
04 April 2003
Reference Currency
EUR
Dealing currencies
EUR, USD, PLN
Management Fees
1.50% (A) | 0.75% (I)
Performance Fees
None
Subscription/Redemption Fees
5.54% max./None
Minimum Initial Investment
A Share Class: USD5,000 | I Share Class: USD1,000,000
Share Type
Accumulation (C) or Distribution (D)
ISIN Codes
AC: LU0165074666
AD: LU0165074740
IC: LU0165074823
ID: LU0165075127
Publication of Net Asset Value
www.assetmanagement.hsbc.com/fr
Euroland market outlook“Bull markets are born on pessimism, grow on skepticism, mature on optimism and die
in euphoria”
Sir John Templeton
21 Non contractual document
European market outlook overview
Source: HSBC Global Asset Management as at 30.06.2017. For illustrative purposes only.
The commentary and analysis presented in this document reflect the opinion of HSBC Global Asset Management (France) on the markets, according to the information available to date. They do not
constitute any kind of commitment from HSBC Global Asset Management (France). Consequently, HSBC Global Asset Management (France) will not be held responsible for any investment or
disinvestment decision taken on the basis of the commentary and/or analysis in this document.
Any forecast, projection or target where provided is indicative only and is not guaranteed in any way. HSBC Global Asset Management (France) accepts no liability for any failure to meet such forecast,
projection or target.
Although losing some momentum, the global recovery is lending credibility to projected European corporate
earnings growth of 10% to 15% in 2017 and 2018 from depressed levels. Monetary support remains elevated
although diminishing
Earnings revisions are positive for the first time since 2010 with the biggest contributions coming from financials
and commodities, sectors that suffered the most from a collapse in the earnings bubbles
The liquidity picture for European equities remains positive with both corporates and investors eager to increase
exposure
Although above long-term averages, European valuation multiples are reasonable given a supportive earnings
backdrop and the low returns generated by most other European asset classes
We see the key risks in 2017 as political developments in Europe and globally, the pace of the rise in long-term
interest rate in the US and further US dollar strengthening
22 Non contractual document
Are there good reasons to be optimistic?Euroland and EM economic momentum remain strong
Citigroup – Economic Surprise Indicators
Period: 30.09.2013 to 30.06.2017
Source: Citigroup – Economic Surprise Indicators as at 30.06.2017. For illustrative purposes only.
* Relative evolution to the Top 10 developed countries: Belgium, Canada, France, Germany, Italy, Japan, Netherlands, Sweden, Switzerland, UK and US.
Higher Commodity Prices
Bounce in Manufacturing
Activity
End of Inventory Destocking
Rebound in Capital
Spending
Falling Unemployment
Rising Consumer spending
Global Fiscal Expansion
* * *
23 Non contractual document
Are there good reasons to be optimistic?Credible acceleration in profit growth in Europe
Earnings revision ratio (30.06.2017)
Source: HSBC Global Asset Management, MSCI, IBES, Factset, Morgan Stanley Research, Consensus Earnings Estimates over time, as at 30.06.2017.
Any forecast, projection or target where provided is indicative only and is not guaranteed in any way. HSBC Global Asset Management (France) accepts no liability for any failure to meet such forecast,
projection or target.
The figures displayed in the document relate to the past and past performance should not be seen as an indication of future returns.
Higher commodity prices
Bounce in global nominal
GDP
Higher inflation
Lower Euro
Lower interest rates
Lower tax rates
24 Non contractual document
Are there good reasons to be optimistic?4 bubbles and a cycle
Source: MSCI EMU – Consensus Next 12-month Earnings Estimates over time. Sources: Global Asset Management and MSCI, MSCI, IBES, Factset, Morgan Stanley Research as at 31.05.2017.
Note: Data calculated before goodwill and in local currency terms.
Any forecast, projection or target where provided is indicative only and is not guaranteed in any way. HSBC Global Asset Management (France) accepts no liability for any failure to meet such forecast,
projection or target.
The figures displayed in the document relate to the past and past performance should not be seen as an indication of future returns.
Eurozone Consensus Profit Estimates (EURm)
FIN COD COS ENE IND MAT INF TEL HEA UTI MKT
From previous
peak(58.8%) 0.0% (2.6%) (64.3%) (1.9%) (48.3%) (3.2%) (46.8%) 0.0% (54.0%) (30.8%)
Trend growth
1996-200610.2% 4.9% 8.3% 15.2% 6.1% 6.4% 2.8% 11.3% 8.0% 7.9% 8.3%
Trend growth
2007-2016(7.4%) 8.0% 3.7% (7.1%) 1.4% (3.8%) 1.7% (7.4%) 4.9% (7.6%) (1.9%)
High operational
gearing
(net margins at 5%)
High proportion of
financials
(20% earnings)
Large sensitivity to
commodity
(15% earnings)
Large exposure to
emerging
(20% sales)
Domestic pent-up
Positive impact of
lower Euro
(50% of sales)
25 Non contractual document
Europe Absolute Valuations: above long-term averages
NTM PE in Europe
Period: 31.12.1987 to 30.06.2017
Source: Datastream, Morgan Stanley, MSCI as at 30.06.2017. For illustrative purposes only.
The performance figures displayed in the document relate to the past and past performance should not be seen as an indication of future returns.
26 Non contractual document
Trend valuations in Europe: not expensive on conservative growth estimates
Trend PE in Europe
Period: 31.07.1985 to 31.05.2017
Source: Datastream, Morgan Stanley, MSCI as at 31.05.2017. For illustrative purposes only.
The performance figures displayed in the document relate to the past and past performance should not be seen as an indication of future returns.
Actual 3.0% growth
average valuation
At 6.7% trend growth
inexpensive valuation
1985 2017
Europe – Earnings per Share and Trends (Log scale)
Period: 31 July 1985 to 28 April 2017
Shift in trend
growth from 2004
27 Non contractual document
CAGR Expected total returns for the market are clearly attractive
Europe Trend PE vs. Real total return achieved 10 years later (April 2017)
Period: December 1979 to May 2007
Source: Bloomberg and MSCI as at 31.05.2017. For illustrative purposes only.
The performance figures displayed in the document relate to the past and past performance should not be seen as an indication of future returns.
On the horizontal axis (left to right) a given dot presents the valuation (trend PE) of the Europe
equity market at a given month over the period (December 1979 to end-April 2007). The same
given dot also shows the historical returns achieved over the following 10 years (December 1989 to
May 2017). It is pretty clear that the dots further to the right which present the market at high
valuations (Trend PE) are generally followed by very low to negative returns over the following 10
years. At the current Trend PE of 16.5x, most of the returns in the following 10 years are
concentrated in a +5% to +15% return range. Months in which Trend PEs are particularly low (far
left) have systematically been followed by 10-year returns in excess of +10% per year.
Historical range of yearly Real Total Return achieved
for 10 years in Europe when the Trend PE is at 16.6x
Trend PE of 16.5x is at 31.05.2017
28 Non contractual document
Long-term valuation measuresHistorical discount to US equities
Source: Datastream, Morgan Stanley, MSCI as at 31.05.2017. For illustrative purposes only.
The performance figures displayed in the document relate to the past and past performance should not be seen as an indication of future returns.
Relative Long Term Valuation Measures (Europe vs. US) – Z-Score
Period: 31.12.1980 to 31.05.2017
29 Non contractual document
Improving appetite for the asset class from international investors
Source: Datastream, Morningstar, MSCI as at 31.05.2017. For illustrative purposes only.
The performance figures displayed in the document relate to the past and past performance should not be seen as an indication of future returns.
Monthly net Flows into European Equity Funds – as a percentage of the Assets under Management (€547bn)
Period: 31.01.2007 to 31.05.2017
30 Non contractual document
"Value" Calling!A typical value rally lasts 2 years & averages +25% relative performance
Source: Datastream, Morgan Stanley, MSCI as at 30.06.2017. For illustrative purposes only.
The performance figures displayed in the document relate to the past and past performance should not be seen as an indication of future returns.
Value Spread (Price to book: expensive/cheapest) – Z-Scored
Period: September 1996 – June 2017
Jun 12
Mar 09Sep 16
Apr 10
Mar 14
Jan 15
31 Non contractual document
"Value" Calling!Positively correlated to the cycle and reflation
Source: Datastream, Morgan Stanley, MSCI as at 30.06.2017. For illustrative purposes only.
The performance figures displayed in the document relate to the past and past performance should not be seen as an indication of future returns.
MSCI Europe Value – Relative performance vs. MSCI Europe Growth and Long term US interest rates
Period: September 2002 – June 2017
32 Non contractual document
"Value" Calling!Positively correlated to the cycle and reflation
MSCI Europe (Dec. 2016)
6-Month regression between the Industry Group relative performance and the change in the indicator – 20 years
Source: HSBC Global Asset Management, MSCI as at end-December 2016. For illustrative purposes only. The content of this page is historic and contains information that is not current. It is not intended
as advice or a recommendation to buy or sell any sector or financial instrument. Any forecast, projection or target where provided is indicative only and is not guaranteed in any way. HSBC Global Asset
Management (France) accepts no liability for any failure to meet such forecast, projection or target.
The performance figures displayed in the document relate to the past and past performance should not be seen as an indication of future returns.
Relative performance expectations Higher Long term Interest rates Higher Inflation
Diversified Financials
Materials
Banks
Capital Goods
Automobiles & Components
Diversified Financials
Materials
Banks
Energy
Capital Goods
Retailing
Household & Personal Products
Telecommunication Services
Pharmaceuticals Biotechnology & Life Sciences
Food Beverage & Tobacco
Retailing
Pharmaceuticals Biotechnology & Life Sciences
Household & Personal Products
Food Beverage & Tobacco
Telecommunication Services
Relative performance expectations Higher ISM (US) Higher Eurozone Composite PMI
Banks
Semisconductors and equipment
Materials
Consumer Durables & Apparel
Capital Goods
Banks
Semisconductors and equipment
Consumer Durables & Apparel
Capital Goods
Materials
Household & Personal Products
Telecommunication Services
Food & Staples Retailing
Food Beverage & Tobacco
Pharmaceuticals Biotechnology & Life Sciences
Food & Staples Retailing
Telecommunication Services
Household & Personal Products
Food Beverage & Tobacco
Pharmaceuticals Biotechnology & Life Sciences
+
-
+
-
33 Non contractual document
Risks
Source: HSBC Global Asset Management. For illustrative purposes only.
Bond yields overshoot
US profit cycle weakens
Chinese investment bubble bursts
Excessive currency volatility
Political uncertainties
Structural deflation awakens again
Disruption in economic models accelerates
HSBC GIF Euroland Equity
Historical performance review: 2007-2016
35 Non contractual document
2016 in summary
Source: HSBC Global Asset Management in 2016. For illustrative purposes only.
Allocation is as at the date indicated, may not represent current or future allocation and is subject to change without prior notice.
The performance figures displayed in the document relate to the past and past performance should not be seen as an indication of future returns.
Performance
Europe < Developed
World (in $)
Government bonds (+)
Commodities (+ +)
Credit (+)
Style
Small / Mid (-)
Large (+)
Value (+)
Beta (+)
Key performance
drivers
Cyclical sensitivity (+)
EM exposure (+)
US exposure (+)
Value (=)
Domestic exposure (-)
Defensive (-)
Rate Sensitive (-)
Sectors
Best (+)
Energy
Materials
Industrials
IT
Worst (-)
Telecoms
Utilities
Health Care
Consumer Staples
Countries
Best (+)
Austria
Netherlands
France
Portugal
Germany
Worst (-)
Italy
Belgium
Ireland
36 Non contractual document
HSBC GIF Euroland Equity (2015-2016)Historical relative performance commentary (IC share net of fees)
Source: HSBC Global Asset Management. For illustrative purposes only and does not constitute any investment recommendation to buy or sell the above-mentioned sectors and securities.
The commentary and analysis presented in this document reflect the opinion of HSBC Global Asset Management (France) on the markets, according to the information available to date. They do not
constitute any kind of commitment from HSBC Global Asset Management (France). Consequently, HSBC Global Asset Management (France) will not be held responsible for any investment or
disinvestment decision taken on the basis of the commentary and/or analysis in this document.
The performance figures displayed in the document relate to the past and past performance should not be seen as an indication of future returns.
2016: +4.73%
The fund slightly outperformed year to date with a net return of +4.73% (I share) against +4.33% for the MSCI EMU*. Sector exposure
weighed marginally due to an absence from semi conductors and consumer durables & apparel
Stock selection, on the other hand, had a positive impact in the most cyclical sectors such as banks, capital goods, materials,
commercial services, transportation and autos - but a negative impact in utilities, software & services and food & staples
The value bias of our fund was detrimental until July and the became favourable starting in August
We remained overexposed to financials, transportation, autos and healthcare as well as to the heterogeneous mix of industrial
equipment and services. We are underexposed to consumption, both discretionary and staples, technology and resources
2015: +1.94%
In Q1, the market rallied on signs of a recovery in the euro zone boosted by a decline in commodity prices. This initially boosted
cyclicals and value stocks performed relatively well
However starting in Q2, investors rotated into defensive, quality companies and stocks with a domestic sales bias as news from China
and the Emerging world continued to disappoint. As such, cyclical sectors such as Banks and the Capital Goods that were directly
impacted by the declines of commodity prices underperformed
The fund suffered relative to peers as of end June because of its value and large cap bias. Small caps outperformed large caps by
over 16% in 2015. The fund was also mostly underweight the types of companies that outperformed: outperformers were either small
cap growth companies or defensive companies mainly in Health Care, Retailing & Household Products, Food & Beverages,
Consumer Durables and Insurance; however a handful of cyclicals outperformed due to their domestic bias, notably Autos,
Commercial Services and Media
Fortunately, the fund net of fees was still able to outperform the gross total return benchmark because of good stock selection: this
offset sector allocation exposures such as being overweight Banks and underweight Food, Beverages and Tobacco
37 Non contractual document
HSBC GIF Euroland Equity (2012-2014)Historical relative performance commentary (IC share net of fees)
Source: HSBC Global Asset Management. For illustrative purposes only and does not constitute any investment recommendation to buy or sell the above-mentioned sectors and securities.
The commentary and analysis presented in this document reflect the opinion of HSBC Global Asset Management (France) on the markets, according to the information available to date. They do not
constitute any kind of commitment from HSBC Global Asset Management (France). Consequently, HSBC Global Asset Management (France) will not be held responsible for any investment or
disinvestment decision taken on the basis of the commentary and/or analysis in this document.
The performance figures displayed in the document relate to the past and past performance should not be seen as an indication of future returns.
2013: +8.23%
“Value" stocks in Europe outperformed due to a combination of increased investor appetite for risk in the eurozone as well as an
improving economic outlook. During the year, we continued to shift the portfolio’s positioning towards stocks with low profitability
(cyclical and financial stocks) as we anticipated their normalisation over the medium-long term
At a sector level, the fund benefited from the favourable impact of stock-picking in banks, business services, utilities, IT services,
basic industries and automotive. The fund also benefited from positive contribution coming from allocation, notably an underweight to
companies in basic industries, durable consumer goods and the food industry
Geographically, the fund had positive contribution from our selection of stocks in France (Natixis, Société Générale), Germany
(Deutsche Post, Daimler), Italy (Unicredit, Autogrill) and Spain (ACS, Telecinco)
2012: -0.93%
Value bias was detrimental particularly in the first half of the year but returns of the strategy started to rebound in June as the
historically deep discount of value to growth companies closed slightly
At the sector level, the adverse impact came from lack of emerging market exposure through Germany autos (Volkswagen), retail and
luxury goods (Inditex), chemicals (BASF) and beverages (ABI Inbev); Moreover, holdings with European domestic exposure in
defensive sectors suffered: telecoms (KPN) food retail (Delhaize) and utilities (GDF Suez). We were also penalized holdings in
Repsol, Peugeot and absence from SAP. Strong performance in the second half of the year came about from stock selection in
financials eg Société Générale and BNP Paribas, foods (Kerry), household (Henkel), pharmaceuticals (Grifols) and transportation
(Deutsche Post, Lufthansa)
2014: -1.18%
The fund has had a slightly cyclical orientation given our positioning to a gradual recovery in the global and European economies. This has been slightly negative given the strong run of defensives year to date
Our long standing position in undervalued European domestic companies such as Peugeot in autos and Natixis in banking paid off due to restructuring efforts; However, other cyclicals with high domestic exposure such as ArcelorMittal, Randstad and Prysmianunderperformed because of their “too early in the cycle” status
Our cheap defensive growth companies such as Bayer in Healthcare and Delhaize in Food retailing, and Heineken contributed positively. The fund’s underweighting in utilities was costly: the sector rebounded in anticipation of an earnings trough and lower long term interest rates. Our investments in in oil sensitive companies such as CGG, OMV and Vallourec were a negative
Country allocation was slightly negative, particularly underweighting in Belgium and Finnish stocks, up +18% and 14% respectively
38 Non contractual document
HSBC GIF Euroland Equity (2007-2011)Historical relative performance commentary (IC share net of fees)
Source: HSBC Global Asset Management. For illustrative purposes only and does not constitute any investment recommendation to buy or sell the above-mentioned sectors and securities.
The commentary and analysis presented in this document reflect the opinion of HSBC Global Asset Management (France) on the markets, according to the information available to date. They do not
constitute any kind of commitment from HSBC Global Asset Management (France). Consequently, HSBC Global Asset Management (France) will not be held responsible for any investment or
disinvestment decision taken on the basis of the commentary and/or analysis in this document.
The performance figures displayed in the document relate to the past and past performance should not be seen as an indication of future returns.
2011: -2.84%
After outperforming in the 1st half of the year on the back of the energy sector (good stock selection), healthcare (overweight & stock selection) and the financials (good stock selection), the fund started to underperform in the 2nd half
Our slight overweighting in financials was slightly negative but it was stock exposure within French banks that was our single most negative contributor. Stocks with a value bias, particularly in the financial and cyclical sectors were pushed downwards because the market had very little confidence in consensus earnings forecasts, due to a deteriorating geopolitical environment
2010: -0.52% The fund performed in line with the comparative index. In spite of a very tough period for value oriented strategies, returns were
resilient due to 1) partial shift into higher profitability companies and 2) the fact that selected stocks outperformed their peers on average in both cyclical and non cyclical categories, mainly in financials and industrials
2009: +10.92% Strong out performance due to increased exposure to transitory profitability companies in 2008 with a view that distressed valuations
were being driven by sentiment and not fundamentals. The strategy benefited from owning companies benefitting from economic normalization. By year end, the exposure to the cyclicals diminished somewhat
2008: +0.68% Small out performance of the strategy is mainly due to the positions taken on stocks with more stable profitability profiles. While
strategy remained relatively defensive, we gradually increased exposure to cyclical companies because the valuation discount widened. In terms of stock selection, our absence from Volkswagen was the most costly contributor over the year
2007: +2.25% Almost all of the outperformance was generated by stock selection. The sectors where stock selection was especially strong are
capital goods, healthcare equipment, software and services, technology hardware and pharmaceuticals. This was also a year in which a ROE/Price to Book - Profitability and valuation model unperformed the market
HSBC GIF Euroland Equity
Philosophy and process
40 Non contractual document
Investment philosophy
Source: HSBC Global Asset Management. For illustrative purposes only. Representative overview of the investment process, which may differ by product, client mandate or market conditions.
We believe that markets are inefficient at times; hence, underlying profitability fundamentals are
not always reflected by valuation
We seek to determine whether a company’s current valuation is valid or not by evaluating its
structural and sustainable level of profitability
We focus on the long term believing that the short term is not fundamentally driven
We also believe that ESG factors can impact financial returns so that it is essential we reflect on
them when we make investment decisions
"Fundamental valuation as a framework"
41 Non contractual document
Investment process1. Investment case identification
Source: HSBC Global Asset Management. For illustrative purposes only. Representative overview of the investment process, which may differ by product, client mandate or market conditions.
Illustration of investment universe
"Quantimental"
Universe screened
Relative valuation bias
Quality neutral
Contrarian
Va
lua
tio
n
1st Quintile – the most attractive
2nd Quintile – attractive
3rd Quintile – Fair value
4th Quintile – Not attractive
5th Quintile – the least attractive
Profitability
Attractive
Expensive
"Exploiting the strong relationship that exists between profitability and valuation"
42 Non contractual document
Investment process 2. Fundamental analysis
Source: HSBC Global Asset Management. For illustrative purposes only. Representative overview of the investment process, which may differ by product, client mandate or market conditions.
The content of this page is historic and contains information that is not current. It is not intended as an advice or recommendation to buy or sell any sector or financial instrument.
"Acquiring a conviction on the company's structural level of profitability"
Profitability analysis Fundamental valuation ESG analysis
43 Non contractual document
Investment process3. Portfolio construction
Source: HSBC Global Asset Management (France). For illustrative purposes only. Representative overview of the investment process, which may differ by product, client mandate or market conditions.
1. Global Industry Classification Standard (GICS) developed by MSCI
2. Tracking error targets are not a regulatory obligation and are given for information purposes only. These objectives and guidelines do not constitute a commitment from the asset manager. HSBC
accepts no liability for any failure to meet such forecasts, projections or targets. Tracking error targets are not a regulatory obligation and are given for information purposes only.
Conviction-based
25% average Turnover
Market cap >€1bn
Avg. Daily Volume > €2m
50-60 stocks
15 Industry Group
minimum1
3-5% T/E
60% active share
"Adapting the valuation bias of a conviction-based portfolio to the cycle"
10%
60%
30%
30%
50%
20%
Average profitability
Recessionary phase Expansionary phase
Time
Profitability profiles of
companies in strategy …
…high and stable
Pro
fita
bilit
y (
%)
Cost of capital
…average but growing
Pro
fita
bilit
y (
%)
Cost of capital
…weak but recovering
Pro
fita
bilit
y%
Cost of capital
44 Non contractual document
Investment process4. Understand and manage the risk embedded in the portfolio
Source: HSBC Global Asset Management. For illustrative purposes only. Representative overview of the investment process, which may differ by product, client mandate or market conditions.
The content of this page is historic and contains information that is not current. It is not intended as an advice or recommendation to buy or sell any sector or financial instrument.
Tools
"Guided by governance and focused on performance"
Resources
First line
Front and Middle office
Second line
Invest. risk and compliance
Third line
Internal audit
Identifying
Recording
Reporting
Managing
Controlling
Setting policy and guidelines
Providing advise and guidance
Risk management
Independently ensures the effective
management of risk
Pre-trade / Trade
Risk metrics calibration
Investment process analysis
Orders and counterparties
In-house, clients, regulatory guidelines
Post-trade
Trade and position controls
Risk guidelines, portfolio constraint and
market risk monitoring
Economic and credit events
Post-trade checks for consistency with
guidelines
Monitoring coherence with portfolio's
objectives
Daily monitoring of investment guidelines
and restrictions
Portfolio analytics including performance,
risk and attribution
Investment and market risk
Risk management
Determination and monitoring of key risk
metrics
Validate front office models
Monitor performance and return volatility
Pre- and Post-trade checks
Define liquidity framework for all funds
Approval of all counterparties and control
of exposure limits
Risk and compliance
Advising on and setting policies and
procedures
Providing business with advise and
support
Oversight of business activity
Helping business to meet changing
regulations
Defining the overall policy for operational
risk management
Thematic audits
Regular on-site audits
Follow-up on audit recommendations
45 Non contractual document
Investment process Combining financial and ESG analysis
Source: HSBC Global Asset Management. For illustrative purposes only. Representative overview of the investment process, which may differ by product, client mandate or market conditions.
Risk management
Ste
p 4
Focus on 1st and 2nd quintile companies
Proprietary modellingCompanies’ current
profitability
Market
valuations
Ste
p 1
Identify key profitability drivers/structural profitability/qualitative profitability drivers and ESG assessment
Europe 800 companies or EMU 500 companies
Market-cap > EUR1bn
Company profitability profiles
Proprietary research
templateProfitability analysis
Detailed company
valuation
Ste
p 2
Maintain adequate diversification & level of relative risk
50 – 60 holdings
High conviction
top picks selection
Optimal
diversification
Relative risk
(level and composition)
and ESG criteria
Ste
p 3
Ownership
Proprietary
valuation tools
Profitability & valuation
analysis
Portfolio construction
Equity Analysts
Financial engineer
Portfolio Manager
46 Non contractual document
Integration of ESG criteria is key in our stock selection
Source: HSBC Global Asset Management. As at end of April 2017. For illustrative purposes only. Representative overview of the investment process, which may differ by product, client mandate or
market conditions.
For additional information related to the voting policy and the exercise of voting rights is available in the annual report, please refer to the following website:
http://www.assetmanagement.hsbc.com/fr/footer/politique.html
In addition to financial analysis,
each investment case
undergoes ESG analysis:
1. Absolute: how the company
conforms to the 10 principles of
the UN Global Compact:
– «High Risk» : proven breach
– «Medium Risk» : alleged breach
– «Low Risk»: no breach
2. Relative: company ranking
relative to our 30 proprietary ESG
sector ratings (derived from
MSCI GICS):
– «High Risk» : 0 to 5th percentile
– «Medium Risk» : 5th to 20th
percentile
– «Low Risk»: 20th to 100th
percentile)
The two rating outcomes are
combined to create a final ESG
risk rating: Low, Medium or
High
Combined
approach:
absolute
and relative
We rely on external providers
for our database:
– Equity and Fixed Income: MSCI
ESG Research, GMI, Ethix,
Sustainalytics
– Country analysis and SOE
(State Owned Enterprises; not
listed): Oekom
– Carbon: Trucost Research
Our Global ESG intranet
platform is used by portfolio
managers and analysts. Here
they find:
– Company reports from data
providers Internal
– "Executive Summary" reports
– Company risk ratings (High,
Medium and Low)
– Portfolio level ESG ratings and
carbon footprints calculations
Company
Coverage
All companies considered for
purchase are subject to ESG
analysis
Companies held in the portfolio
are monitored and should be
challenged at all times
Market events will change the
risk profile (low, medium, high)
of a company over time
Holding or investing in a «High
Risk» company requires:
– An enhanced «Due Diligence»
– Senior management approval:
Local CIO for Equities; Committee
chaired by the Global Head of
Credit Research for Fixed income
– This is included in the FIM
Ownership
Our voting policy aims to favour
good governance practice with
an objective to meet HSBC
Group values
We publish an annual report
which includes summarised
voting decisions and if
applicable, reasons for which
we are not supportive with
resolutions
It’s framed around global
guidelines and local
supplements
Europe voting policy was made
fully homogeneous during Q1
2017
Voting
policy
We employ a dedicated
"Engagement" team who is
responsible to meet with
companies we are invested in.
Here, the engagement team
will raise controversies and
issues
The aim of the team’s
engagement actions is to
create awareness and
increase comprehension on
HSBC’s concerns and
expectations
In accordance with the results
of this engagement activity,
voting decisions or decisions to
sell the company may be taken
Engagement
Appendices
48 Non contractual document
Materials
Source: HSBC Global Asset Management. For illustrative purposes only.
One-on-One’sFund overview(s)Standard presentation(s)
4-page reporting
49 Non contractual document
Large Cap: global equity or a separate allocation to Europe-Eurozone?
Source: Global Asset Management and MSCI, as of December 2015. For illustrative purposes only.
The content of this page is historic and contains information that is not current. It is not intended as advice or a recommendation to buy or sell any sector or financial instrument.
MSCI Europe: 15 countries MSCI EMU: developed eurozone (10 countries)
Comparison of global sector biases by region
How to read the table? For example, Europe has a larger portion of energy companies in comparison to the Eurozone
Global Markets
2,500 companies
European Markets
1,000 companies
Eurozone Markets
500 companies
Technology Energy Consumer discretionary
Health Care Pharmacy Financials
Energy Consumer staples Industrials
« Growth » bias « Defensive » bias « Cyclical » bias
Eurozone member countries
NB: there are currently 19 Eurozone countries that share the common currency yet only the
developed Eurozone countries are in the MSCI indices.
On January 1st 2015, Lithuania became the 19th member state
Denmark and UK have « opt-out » clauses
Norway is not a member of the EU but belongs to the European Economic Area
Sweden is an EU member yet has still not yet chosen to join the 2 year currency mechanism to
tie its exchange rate to the Euro
Switzerland is neither a member of the EU nor the European Economic Area
Austria, Belgium, Denmark, Finland, France,
Germany, Ireland, Italy, Netherlands, Norway,
Portugal, Spain, Sweden, Switzerland, UK
Austria, Belgium, Finland, France,
Germany, Ireland, Italy, Netherlands,
Portugal, Spain
239 large and mid size companies
USD3,742bn market cap
446 large and mid size companies
USD7,952bn market cap
50 Non contractual document
Important information
This presentation is distributed in France, Italy, Spain and Sweden by HSBC Global Asset Management (France), in Switzerland by HSBC Global Asset Management (Switzerland) Ltd and is only intended for professional investors as
defined by MIFID. All non-authorised reproduction or use of this commentary and analysis will be the responsibility of the user and will be likely to lead to legal proceedings. This document has no contractual value and is not by any
means intended as a solicitation, nor an investment advice for the purchase or sale of any financial instrument in any jurisdiction in which such an offer is not lawful. The commentary and analysis presented in this document reflect the
opinion of HSBC Global Asset Management on the markets, according to the information available to date. They do not constitute any kind of commitment from HSBC Global Asset Management (France). Consequently, HSBC Global
Asset Management (France) will not be held responsible for any investment or disinvestment decision taken on the basis of the commentary and/or analysis in this document. The performance figures displayed in the document relate
to the past and past performance should not be seen as an indication of future returns. It is important to remember that the value of investments and any income from them can go down as well as up and is not guaranteed. Capital is
not guaranteed. Fluctuations in the rate of exchange of currencies may have a significant impact on fund performance. Funds 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. Please note that the strategies are authorised to invest in small and mid-cap stocks, which can present a greater risk for the
investor.
HSBC GIF Euroland Equity is a sub-fund of HSBC Global Investment Funds, a Luxemburg domiciled SICAV. Shares of the Company may not be offered or sold for sale or sold to any "U.S. Person within the meaning of the Articles of
Incorporation, i.e. a citizen or resident of the United States of America (the "United States"), a partnership organised or existing under the laws of any state, territory or possession of the United States, or a corporation organised or
existing under the laws of the United States or of any state, territory or possession thereof, or any estate or trust, other than an estate or trust the income of which from sources outside the United States is not includible in gross income
for purposes of computing United States income tax payable by it. This material is solely for the attention of institutional, professional, qualified or sophisticated investors and distributors. It is not to be distributed to the general public,
private customers or retail investors in any jurisdiction.
Funds 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. Investment in
Financial Derivative Instrumetns (FDI) may result in losses in excess of the amount invested. This is because a small movement in the price of the underlying financial instrument may result in a substantial movement in the price of the
FDI.
Source: MSCI. The MSCI information may only be used for your internal use, may not be reproduced or redisseminated in any form and may not be used as a basis for or a component of any financial instruments or products or
indices. None of the MSCI information is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. Historical data and analysis
should not be taken as an indication or guarantee of any future performance analysis, forecast or prediction. The MSCI information is provided on an “as is” basis and the user of this information assumes the entire risk of any use made
of this information. MSCI, each of its affiliates and each other person involved in or related to compiling, computing or creating any MSCI information (collectively, the “MSCI Parties”) expressly disclaims all warranties (including, without
limitation, any warranties of originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose) with respect to this information. Without limiting any of the foregoing, in no event shall
any MSCI Party have any liability for any direct, indirect, special, incidental, punitive, consequential (including, without limitation, lost profits) or any other damages (www.mscibarra.com).
All data come from HSBC Global Asset Management (France) unless otherwise specified. Any third party information has been obtained from sources we believe to be reliable, but which we have not independently verified. The funds
presented in this document may not be registered and/or authorised for sale in your country.
Before subscription. investors should refer to the Key Investor Document (KIID) of the fund as well as its complete prospectus. For more detailed information on the risks associated with this fund. investors should refer to the complete
prospectus of the fund. Funds 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.
Important information for Luxembourg investors: HSBC entities in Luxembourg are regulated and authorised by the Commission de Surveillance du Secteur Financier (CSSF).
Important information for Swiss investors: This presentation is intended exclusively towards qualified investors in the meaning of Art. 10 para 3, 3bis and 3ter of the Federal Collective Investment Schemes Act (CISA).
HSBC Global Asset Management is the brand name for the asset management business of HSBC Group. The above document has been produced by HSBC Global Asset Management (France) and has been approved for
distribution/issue by the following entities:
HSBC Global Asset Management (France)
HSBC Global Asset Management (France) - 421 345 489 RCS Nanterre. Portfolio management company authorised by the French regulatory authority AMF (no. GP99026) with capital of 8.050.320 euros.
Offices: HSBC Global Asset Management (France) - Immeuble Coeur Défense - 110, esplanade du Général Charles de Gaulle - 92400 Courbevoie - La Défense 4 – France.
(Website: www.assetmanagement.hsbc.com/fr).
HSBC Global Asset Management (Switzerland) Limited
Gartenstrasse 26, P.O. Box, CH-8002 Zurich. Paying agent: HSBC Private Bank (Suisse) S.A., Quai des Bergues 9-17, P. O. Box 2888, CH-1211 Geneva 1 In respect of the units distributed in Switzerland, the competent courts shall
have exclusive venue at the registered office of the Representative in Switzerland. The official documents as per Art. 13a CISO as well as the (Semi-)Annual Report of the Fund may be obtained free of charge at the office of the
Representative in Switzerland.
(Website: www.assetmanagement.hsbc.com/ch)
Copyright © 2017, HSBC Global Asset Management (France). All rights reserved.
Updated in July 2017.
AMFR_Ext_430_2017 Exp. Q3.2018