Professional Documents
Culture Documents
Investment Funds
Annual Report and Accounts
15 May 2021
2
Company Information
Company Directors
HSBC Index Tracker Investment The Authorised Corporate Director (the "ACD") is HSBC Global Asset
Funds Registered in England Management (UK) Limited, which is the sole director.
with Company Number IC000075
HSBC Global Asset Management (UK) Limited is authorised and regulated
by the Financial Conduct Authority (FCA) and is a member of The Investment
Registered Office
Association (IA).
8 Canada Square
London E14 5HQ
HSBC Global Asset Management (UK) Limited - Directors
R.E.W. Apenbrink
P.G.P. Dew
M.G. McDonald
T.J. Palmer
J.R. Paterson
S. White
3
Contents
Market Review 5
Contracts for Difference 379
Independent Auditor’s
FTSE All-Share Report 382
Index Fund 32
General Information 385
FTSE All-World
Index Fund 86 Important Changes to the
Company and/or Fund
Documentation 389
European Index Fund 177
Directory 394
UK Gilt Index Fund 288
Developed World
Sustainable Equity
Index Fund 338
4
Director’s Report
We are pleased to present the Annual Report and Financial Statements for HSBC Index Tracker Investment
Funds Open-Ended Investment Company (OEIC), (“the Company”), covering the year from 16 May 2020 to
15 May 2021.
HSBC OEICs are investment companies with variable capital under regulation 12 (Authorisation) of the OEIC Regulations.
All Funds within the OEIC are classed as securities funds.
The ACD, HSBC Global Asset Management (UK) Limited, is incorporated in England and Wales under number 1917956
and authorised and regulated by the Financial Conduct Authority.
The Company is an umbrella company comprising various Funds, each of which is operated as a distinct Fund, with its
own portfolio of investments.
Each Fund has the investment powers equivalent to those of a securities company.
Shareholders are not liable for the debts of the Company. A shareholder is not liable to make any further payment to the
Company after the purchase price of the shares has been paid for.
Director Director
31 August 2021
5
Market Review
Welcome to the Annual Report for the HSBC Index Tracker Investment Funds Open-Ended Investment Company
(OEIC). The report covers the year 16 May 2020 to 15 May 2021.
Please do take the time to look through the report and if you have any questions, contact our Customer Services
on 0800 358 3011*.
To help us continually improve our service, and in the interests of security, we may monitor and/or record your
communications with us.
*Lines are open 9am to 5pm Monday to Friday (excluding public holidays).
Market Overview
This was a strong period for global equities. Having plunged in the first quarter of 2020, owing to the onset of coronavirus,
markets rallied substantially through the 12-month period to 15 May 2021.
Markets were underpinned by measures implemented by governments to support their respective economies, and by global
central banks, which radically increased monetary support. The easing of restrictions on daily life and a recovery in business
activity through the summer months boosted equity markets further. However, as autumn approached, there were signs of
a potential second wave of the pandemic across many countries, especially in the West; consequently, lockdown restrictions
were widely re-imposed at that time. The successful trials and gradual rollout of Covid-19 vaccines in the final two months of
2020 spurred an end-of-year rally in equities. The news of Joe Biden’s election as US president, albeit challenged by Donald
Trump, and the very late agreement between the UK and the EU on a post-Brexit trade agreement lifted investors’ moods.
By the end of the period, optimism around a quick economic recovery from Covid-19 and confidence in the vaccines were
waning somewhat as a third wave of the pandemic swept through much of Europe as well as Brazil and India, among other
countries. Equities were also impacted by worries about rising long-term inflation, resulting from recovering economic
growth and the impact of record levels of fiscal stimulus, which drove bond yields to levels not seen, in some cases,
for 12 months or more. The 10-year US Treasury yield climbed to over 1.7%, having begun 2021 at 0.9%. Bond markets
weakened over the period.
Nearly all countries fell into recession in the first two quarters of 2020, before recovering thereafter. The US contracted at
its highest ever-recorded rate in the second quarter, before recovering by a record amount in the third quarter. Recessions
were confirmed in the UK, Germany, France and Japan. The UK was also impacted by the uncertainties surrounding its
future relationship with the EU, finally agreed late in 2020. Mainland China’s economy was one of the very few to recover to
pre-pandemic levels by the end of the year. By the end of the period, economic data was clearly recovering across nearly all
regions as the most severe restrictions of the lockdown were lifted.
6
UK Equities
UK equities recovered over the period but underperformed European and global markets. The weaker relative performance
was largely due to the UK being harder hit than most other countries by the pandemic, in terms of higher death rates and
economic impact. Uncertainty about the UK’s future relationship with the EU was another factor impacting the market.
The UK government and the Bank of England (BoE) provided support to the economy. The UK’s furlough scheme was
extended twice in order to support workers until the economy was fully re-opened.
A recession in the UK was confirmed as GDP fell by a record 19.5%, on a quarterly basis, in the second quarter of 2020 –
the worst performance of any major developed economy – before recovering by 16.9% in the third quarter. GDP flattened in
the fourth quarter, with just 1.3% growth achieved, and fell in the first quarter of 2021, by 1.5%. For 2020 as a whole, GDP
fell 9.8%, the worst figure ever recorded. While unemployment remained close to generational lows of around 4.0% in the
early months of the period, it began to grow through the summer months, reaching 5.1% in the three months to December,
before falling marginally thereafter. UK inflation remained subdued, falling to a low of 0.2% in August, before ending the
period at a 0.7% annual rate in March.
Brexit talks, which had drifted into the background during the height of the coronavirus in the first half of the period,
became a much greater factor behind market movements in the final weeks of 2020, as negotiations became more
tense and positions on each side seemed to become more entrenched. A deal was finally announced on Christmas Eve.
However, tensions with the EU persisted over a number of issues, not least as the EU threatened to ban vaccines exports
to the UK after a dispute with supplier AstraZeneca.
The good news on vaccines in the US and, subsequently, the approval of the UK’s Oxford/AstraZeneca vaccine cheered
investors in the final months of 2020. The UK became the first country to administer a Covid-19 vaccine in December.
UK equities rallied strongly in the final two months of 2020, recovering some of the relative ground lost to global equity
markets. This rally continued into 2021, despite the renewed rise in coronavirus cases and deaths, and the re-imposition
of a nationwide lockdown in early January. By the end of the period, Covid-19 case numbers and related deaths had fallen
significantly, and restrictions were being eased.
US Equities
US equities surged over the period, quickly regaining the losses endured in the first few months of 2020 due to the spread
of Covid-19. Major indices such as the S&P 500 and Dow Jones Industrial Average broke through to new all-time highs
late in 2020, and again in the first few months of 2021. The US government and US Federal Reserve (Fed) were quick to
introduce emergency measures, amounting to trillions of dollars of fiscal and monetary support.
Lockdown measures were eased during the summer months. However, in the autumn, there were worries about rising
new cases of Covid-19 across the US, fuelling concern that a second lockdown might be required. The announcement of
the Pfizer and Moderna Covid-19 vaccines at the beginning of November radically boosted sentiment, and equities rallied
markedly. Joe Biden’s successful bid for the US presidency and the announcement of a further $900 billion of fiscal
stimulus at the end of the 2020 were additional positive factors. A further fiscal package was unveiled in early 2021,
totalling $1.9 trillion and featuring a $1400 cheque sent out to millions of people across the country.
In economic news, the US fell into recession in the first half of 2020. Second-quarter GDP fell 31.4% on an annualised
basis – the worst figure ever recorded – as the full impact of Covid-19 was felt. GDP then recovered to grow by 33.4%
in the second quarter, a record quarterly growth rate. The economy grew by 4.3% in the final quarter of the year, leaving it
down 3.5% over the whole of 2020, the worst performance since 1946. It rose a further 6.4% in the first quarter of 2021.
The unemployment rate fell steadily from a peak of 14.8% in April 2020 to 6.0% in March 2021, while consumer price
inflation began to pick up, rising to 4.2% annual growth in April, its highest level since September 2008.
Regarding monetary policy, Fed chairman Jerome Powell stated in August that the Fed would, in setting its strategy,
target average inflation rather than stick rigidly to its inflation target of 2%. This would potentially allow consumer inflation
to rise higher for a period before interest rates were raised, allowing growth and inflation to recover. However, inflation
fears abounded late in the period owing to expectations of a substantial economic recovery later in 2021 and in 2022.
The 10-year US Treasury yield rose above 1.7% in early March, the highest level for 14 months and approximately
double its level at the beginning of 2021.
7
Japanese Equities
The Japanese market climbed through the period, albeit it was relatively weak compared to other Asian and global markets.
The period started with a surge in equity prices as the government introduced special fiscal programmes to support the
economy following the arrival of Covid-19.
Regarding the economy, GDP fell 8.1% over the second quarter of 2020 – the third consecutive quarter of decline – largely
due to the impact of coronavirus. It recovered in the third quarter, rising 5.3% over the quarter, and then by 2.8% in the final
quarter of 2020. The much-followed Bank of Japan (BoJ) Tankan survey – a quarterly indicator of economic sentiment across
the economy – recovered during the period. Having fallen to an 11-year low of -34 in the second quarter of 2020, the headline
large manufacturing diffusion index improved to +5 in the first quarter of 2021.
The BoJ maintained its loose monetary policy, targeting -0.1% short-term interest rates, while stating that the long-term
inflation target of 2.0% was unlikely to be met in the near future. However, in March, the BoJ slightly widened its permitted
range of interest rate movements and pulled back from its commitment to purchase ¥6 trillion of exchange-traded fund
purchases on a monthly basis. Annual inflation began to drop into deflation in October, falling to -1.2% in December, before
recovering to -0.2% in March.
The country was surprised when Prime Minister Shinzo Abe announced his resignation due to ill-health in late August, in the
very week that he became Japan’s longest-serving prime minister. His successor Yoshihide Suga, however, settled investor
nerves when he confirmed that he would continue Abe’s policy of fighting deflation and trying to stimulate growth, widely
known as ‘Abenomics’.
The Japanese market was underpinned by the positive news on Covid-19 vaccines in late 2020 and the growing expectations
of economic recovery and a return to normality. The market rallied strongly on the vaccine news, confirmation of Joe Biden’s
US presidential election victory, and the further fiscal stimulus introduced in the US. The benchmark Nikkei index rose to a
30-year high of over 30,000 in February. However, Japan had to contend with an unexpected and sudden rise in coronavirus
cases in Tokyo and neighbouring districts, which led to a further lockdown, and caused the market to sell off from its
first-quarter highs.
8
UK Fixed Income
The UK bond market was weak over the period. The weakness was largely confined to 2021, which saw a substantial rise in
bond yields owing to fears about the prospects of rising long-term inflation. UK bond markets produced a positive return in the
first few months of the period, reflecting falling interest rates, economic recession and the widespread uncertainty caused by the
global pandemic. The 10-year gilt yield fell to a new all-time low of below 0.1% in August. The uncertainties over the UK’s future
trading relationship with the EU also kept yields low. Yields on UK corporate bonds followed government bond yields lower.
UK bonds produced a negative return in the second half of the period as bond yields rose. The rise in yields was particularly
marked from early 2021, as long-term inflationary expectations rose around the world. The rise in inflationary expectations
reflected the growing belief in a strong economic recovery in 2021, with lockdown restrictions expected to be eased further,
and the huge amount of fiscal spending recently pledged by the US and other nations to mitigate the effects of the pandemic.
The UK 10-year gilt yield touched 0.9% in mid-May, its highest in approximately two years and more than double its level at
the beginning of 2021.
In November, the BoE increased its bond-purchasing programme by a further £150 billion per month to £895 billion. Andrew
Bailey said that aggressive action was needed to reduce the risk of a sharp economic downturn. Media reports also suggested
that the BoE was seriously considering introducing negative interest rates. However, by the end of the period, this prospect
appeared to be less likely as bond yields rose. Global central banks, including the BoE, played down the likelihood of an
imminent adjustment to policy towards the end of the period.
A recession in the UK was confirmed as GDP fell by a record 19.5%, on a quarterly basis, in the second quarter of 2020 – the
worst performance of any major developed economy – before recovering by 16.9% in the third quarter. GDP flattened in the
fourth quarter, with just 1.3% growth achieved, before it fell 1.5% in the first quarter of 2021. Annual consumer price inflation fell
to just 0.2% in August – the lowest rate for nearly five years. The inflation rate ended the period at a 0.7% annual rate in March.
Generally greater risk appetite led to a preference from some investors for equities over bonds. Corporate and high yield
bonds outperformed government bonds, taking their cue more from equity markets.
Please note that the above information refers to the past and that past performance is not a reliable indication of future returns.
Information provided by HSBC Global Asset Management (UK) Limited 15 May 2021.
9
Accounting Policies
a. Basis of Accounting
The financial statements have been prepared under the historical cost basis, as modified by the revaluation of
investments and in compliance with FRS102 and in accordance with the Statement of Recommended Practice (SORP)
for Financial Statements of Authorised Funds issued by the Investment Association (“IA”) in May 2014.
Unless otherwise stated all other accounting policies are consistent with those of the prior year.
The ACD has considered the impact of the emergence and spread of Covid-19 and potential implications on future
operations of the sub-funds of reasonably possible downside scenarios. The ACD has undertaken a detailed assessment,
and continues to monitor, the sub-funds’ ability to meet their liabilities as they fall due, including liquidity, declines in
global capital markets and investor redemption levels. Based on this assessment, the sub-funds continue to be open for
trading and the ACD is satisfied the sub-funds have adequate financial resources to continue in operation for at least the
next 12 months and accordingly it is appropriate to adopt the going concern basis in preparing the financial statements.
b. Revenue
Dividends on equities and investment funds are recognised when the security is quoted ex-dividend.
Dividends on investment funds are accounted for on an accruals basis at an estimated rate based on available
information. Interest on fixed interest securities is accounted for on an effective yield basis. Interest on deposits is
accounted for on an accruals basis. Other revenue is accounted for on a receipts basis. The ordinary element of stocks
received in lieu of cash dividends is recognised as revenue and, where applicable, is included in the distribution, except
Pacific Index which recognises these as revenue but they are not included in the distribution.
Special dividends are treated as repayments of capital or revenue depending on the facts of each particular case.
Any reported revenue from an offshore fund in excess of any distributions is recognised as revenue after the end of the
reporting period, no later than the date when the reporting fund makes this information available.
c. Expenses
All expenses, other than those relating to the purchase and sale of investments are charged to revenue when incurred.
Transaction charges are treated as capital.
Where a Fund has more than one share class, each share class may suffer different expenses. Consequently, the level of
net revenue attributable to each share class will differ.
d. Taxation
Corporation tax is charged at 20% of the revenue liable to corporation tax less expenses.
Where overseas tax has been deducted from overseas revenue, that tax can, in some instances, be set off against
corporation tax payable by the Fund by way of a double taxation refund.
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance
sheet date where transactions or events have occurred at that date that will result in an obligation to pay less or
receive more tax.
Deferred tax assets are recognised only to the extent that the Authorised Corporate Director considers that it is more
likely than not that there will be taxable profits from which the underlying timing differences can be deducted.
10
e. Investments
Investments are initially recognised at fair value on the date the contract is entered into. The listed investments of
the Company have been valued at bid prices at the closing valuation point on 14 May 2021. The valuation of unlisted
investments is based on the Authorised Corporate Director’s assessment of their estimated realisable value. Suspended
securities are valued initially at the suspended price but are subject to constant review. Revaluation gains or losses
are recognised in the Statement of Total Return. Investments cease to be recognised on the date a contract for sale is
entered into or when the Company’s interest in the investment is extinguished or terminated.
f. Exchange Rates
All transactions in foreign currencies are converted into sterling at the rates of exchange ruling at the date of such
transactions. Foreign currency assets and liabilities at the end of the accounting period are translated at the exchange
rates at the closing valuation point on 14 May 2021. Forward foreign currency contracts held at the end of the accounting
year are valued at the price required to close out the contract at the balance sheet date.
Any gains or losses as a result of foreign currency transactions are applied to the capital of the Funds.
g. Distributions
Where the revenue from investments exceeds the expenses, a distribution will be made. Should expenses exceed
revenue, there will be no distribution and the shortfall will be transferred to capital.
For the purpose of calculating the distribution, revenue on debt securities is computed as the higher of the amount
determined on an accrual of coupon basis and an effective yield basis. A reconciliation of the net distribution to the
net revenue of the Fund as reported in the Statement of Total Return is shown in note 7 of the sub-fund accounts.
The policies of the Funds are to determine the amount available for distribution, with distributions to shareholders:
quarterly on 15 July, 15 October, 15 January and 15 April for UK Gilt Index and Sterling Corporate Bond Index;
semi-annually on 15 July and 15 January for FTSE 100 Index and FTSE All-Share Index; and annually on 15 July
for all other Funds within this OEIC.
h. Derivatives
Derivatives are initially recognised at fair value on the date the contract is entered into and are subsequently remeasured
at fair value at the 14 May 2021. Where the fair value of the derivative is positive, it is carried as a derivative asset and
where negative as a derivative liability.
The ACD monitors that any exposure is covered globally to ensure adequate cover from within the sub-fund is available
to meet the sub-fund's total exposure, taking into account the value of the underlying investments, any reasonably
foreseeable market movement, counterparty risk, and the time available to liquidate any positions. The ACD has adopted
the commitment approach to determine the global market risk exposure in relation to the futures held.
11
AMEU Board Risk Committee and the Risk Management Meeting (RMM)
The most senior risk management forum for the business is the AMEU Board Risk Committee; this meets quarterly.
The Executive senior risk committee is the Risk Management Meeting (RMM), chaired by the AMEU Chief Risk Officer,
and normally meets monthly. The RMM is responsible for all aspects of AMEU risk policy and control supported by a
number of specialist committees. The RMM monitors and controls key business risks, including reviewing the internal
control and assurance framework and risk profile, and considering the activities of Business Risk Internal Audit. In addition,
the RMM considers reports from other committees that assess the nature and extent of risks.
The following details the broad categories of risk covered by both the ACDGC and ACDISC as well as the above
mentioned AMEU executive committees:
Market Price Risk
Market price risk is the risk that the value of the investment holdings will fluctuate as a result of changes in market prices
caused by factors other than interest rate or foreign currency movement. Market price risk arises mainly from uncertainty
about future prices of financial instruments any underlying fund holds. It represents the potential loss the funds might
suffer through holding market positions in the face of price movements. The fund’s investment portfolio is exposed to
market price fluctuations which are monitored by the ACDISC with support from AMEU in pursuance of the Investment
Objective and Policy as set out in the Instrument of Incorporation.
Adherence to investment guidelines and to investment and borrowing powers set out in the Instrument of Incorporation,
the Prospectus and the rules of the FCA’s Collective Investment Schemes Sourcebook mitigates the risk of excessive
exposure to any particular type of security or issuer.
There are inherent risks in investing in securities markets. Security prices are subject to market fluctuations and can move
irrationally and be unpredictably affected by many and various factors including political and economic events, pandemics
and market rumours. There can be no assurance that any appreciation in the value of investments will occur. The value of
investments and the income derived from them may go down as well as up and investors may receive back less than the
original amount invested.
Liquidity Risk
The fund’s assets comprise mainly of readily realisable securities. The main liability of the underlying funds is the
redemption of any shares that investors wish to sell. Assets of the fund may need to be sold if insufficient cash is
available to finance such redemptions.
Credit Risk
Certain transactions in securities that the fund enters into expose it to the risk that the counterparty will not
deliver the investment for a purchase, or cash for a sale after the fund has fulfilled its responsibilities. The funds
only buys and sells investments through brokers which have been approved by the Authorised Corporate Director
as acceptable counterparties.
In current market conditions exposure to cash within the Fund could be at risk if the counter party fails. All cash is held at
HSBC (HSBC is rated AA- by Standard and Poor's) and exposure is limited to a maximum 10% of the value of the Fund.
All assets held within the Depositary are ring-fenced. The banks and Depositary used by the Company and the ACD are
subject to regular review.
FTSE 100 INDEX FUND 13
Investment Objective
The Fund aims to provide growth over the long term, which is a period of 5 years or more, by tracking the performance of
the FTSE 100 Index (the “Index”).
Investment Policy*
The Index is made up of the largest stock market listed companies in the United Kingdom as defined by the
Index provider.
The Fund may invest in different types of derivatives for efficient portfolio management, including hedging. In particular
the Fund may use derivatives to help it manage cash flows and dividend payments with the aim of generating returns
that are consistent with the Index. The use of derivatives will be consistent with the risk profile of the Fund.
Investment Strategy*
The Fund will invest directly in shares (equities) of all of the companies that make up the Index and in the same or very
similar proportions in which they are included in the Index.
However, there may be circumstances when it is not possible or practical for the Fund to invest in shares of all the
companies of the Index. The Fund may not invest in all the companies of the Index to manage transaction costs or to
reflect market conditions, regulations or HSBC’s banned weapons policy.
The Fund may hold cash and other funds, including funds managed by the HSBC Group, to manage day-to-day cash
flow requirements.
The Fund’s performance is measured against the Index, because the Fund intends to track the performance of
the Index.
*For details of the full Investment Policy and Strategy please refer to the HSBC Index Tracker Investment Funds
prospectus. We have also published a Glossary of key terms used which you may wish to refer to. Both documents
can be found at https://www.assetmanagement.hsbc.co.uk/en/individual-investor/fund-centre.
Portfolio Activity
The FTSE 100 index was up 20.28% during the reporting period. The main driver of this performance was the Financials
sector, contributing 6.11% of the index total return with a performance of 35.10%, followed by Basic Materials with a
contribution of 5.97%. Basic Materials was also the sector with the highest absolute return of 68.18%. At the same
time the Health Care sector as well as Technology contributed slightly negatively with -1.71% and -0.16% respectively.
During the first part of the period, the large cap UK equities slightly recovered first, before falling again amid rising
Covid-19 cases and fears over new economic restrictions and the announcement of a further lockdown in the UK
reaching a low end of October. Since then stock prices steadily increased first when the Bank of England extended
their quantitative easing program, then a positive effect came from the last minute free trade agreement between the
EU and UK and first approvals of vaccines. However, more and more the rising Covid-19 infections once more started to
dampen investor sentiment, mainly in January. More recently though investors were encouraged again by the improving
speed of the Covid-19 vaccine rollout, Central Bank support and the renewed optimism over the reopening of the
economy, leading to higher prices.
14 FTSE 100 INDEX FUND
Investment Performance
During the year under review, the value of the shares in the Fund increased by 21.73% while the value of the
FTSE 100 Index rose by 20.28%.
(Source: Morningstar Direct, GBP, UK net of tax, for the Accumulation C share class. Returns based on the NAV,
which is a single price.)
Please note that the above information refers to the past and that past performance is not a reliable indication
of future returns.
Tracking Error
Tracking error - 0.07%
The tracking error is based on gross returns from our internal performance system for the year to 15.5.21.
Fund Particulars
as at 17 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Comparative Tables
Retail Income
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 94.01p 118.50p 125.70p
Return before operating charges* 24.18p (19.67p) (2.16p)
Operating charges** (0.28p) (0.32p) (0.32p)
Return after operating charges* 23.90p (19.99p) (2.48p)
Distributions on income shares (3.01p) (4.50p) (4.72p)
Closing net asset value per share 114.90p 94.01p 118.50p
*after direct transaction costs of:*** 0.10p 0.11p 0.09p
Performance
Return after charges 25.42% (16.87%) (1.97%)
Other information
Closing net asset value £99,596 £12,486,354 £15,537,938
Closing number of shares 86,672 13,282,203 13,107,951
Operating charges - OCF 0.28% 0.28% 0.27%
Direct transaction costs 0.10% 0.10% 0.07%
Prices
Highest share price 117.60p 126.00p 128.30p
Lowest share price 91.60p 82.00p 107.80p
Retail Accumulation
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 192.30p 232.60p 236.90p
Return before operating charges* 48.98p (39.66p) (3.70p)
Operating charges** (0.58p) (0.64p) (0.60p)
Return after operating charges* 48.40p (40.30p) (4.30p)
Distributions on accumulation shares (6.30p) (8.91p) (8.93p)
Retained distributions on accumulation shares 6.30p 8.91p 8.93p
Closing net asset value per share 240.70p 192.30p 232.60p
*after direct transaction costs of:*** 0.21p 0.22p 0.17p
Performance
Return after charges 25.17% (17.33%) (1.82%)
Other information
Closing net asset value £20,440,844 £73,281,900 £86,023,872
Closing number of shares 8,493,693 38,106,680 36,986,477
Operating charges - OCF 0.28% 0.28% 0.27%
Direct transaction costs 0.10% 0.10% 0.07%
Prices
Highest share price 243.90p 252.90p 241.90p
Lowest share price 187.40p 164.70p 207.50p
** The operating charges include all costs borne by the Fund, except for direct transaction costs.
*** The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers,
levies by regulatory agencies and securities exchanges as well as transfer taxes and duties.
20 FTSE 100 INDEX FUND
Comparative Tables
Institutional Accumulation
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 196.70p 237.30p 241.10p
Return before operating charges* 50.06p (40.53p) (3.77p)
Operating charges** (0.06p) (0.07p) (0.03p)
Return after operating charges* 50.00p (40.60p) (3.80p)
Distributions on accumulation shares (7.02p) (9.69p) (9.67p)
Retained distributions on accumulation shares 7.02p 9.69p 9.67p
Closing net asset value per share 246.70p 196.70p 237.30p
*after direct transaction costs of:*** 0.23p 0.22p 0.17p
Performance
Return after charges 25.42% (17.11%) (1.58%)
Other information
Closing net asset value £291,586,706 £154,856,846 £126,406,341
Closing number of shares 118,217,427 78,727,999 53,270,559
Operating charges - OCF 0.03% 0.03% 0.01%
Direct transaction costs 0.10% 0.10% 0.07%
Prices
Highest share price 250.00p 258.50p 246.20p
Lowest share price 191.90p 168.40p 211.50p
Income C
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 95.13p 120.00p 127.20p
Return before operating charges* 23.96p (19.99p) (2.13p)
Operating charges** (0.10p) (0.20p) (0.20p)
Return after operating charges* 23.86p (20.19p) (2.33p)
Distributions on income shares (3.29p) (4.68p) (4.87p)
Closing net asset value per share 115.70p 95.13p 120.00p
*after direct transaction costs of:*** 0.11p 0.11p 0.09p
Performance
Return after charges 25.08% (16.83%) (1.83%)
Other information
Closing net asset value £224,457,238 £184,254,300 £229,087,277
Closing number of shares 194,007,734 193,689,128 190,973,610
Operating charges - OCF 0.10% 0.09%† 0.17%
Direct transaction costs 0.10% 0.10% 0.07%
Prices
Highest share price 119.10p 127.50p 129.80p
Lowest share price 92.80p 83.02p 109.10p
†Estimate for OCF as registrar fees were no longer to be paid by the class and the AMC was reduced for this class
effective 1.4.20.
**The operating charges include all costs borne by the Fund, except for direct transaction costs.
***The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers,
levies by regulatory agencies and securities exchanges as well as transfer taxes and duties.
FTSE 100 INDEX FUND 21
Comparative Tables
Accumulation C
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 193.70p 234.10p 238.20p
Return before operating charges* 49.31p (40.01p) (3.72p)
Operating charges** (0.21p) (0.39p) (0.38p)
Return after operating charges* 49.10p (40.40p) (4.10p)
Distributions on accumulation shares (6.76p) (9.23p) (9.21p)
Retained distributions on accumulation shares 6.76p 9.23p 9.21p
Closing net asset value per share 242.80p 193.70p 234.10p
*after direct transaction costs of:*** 0.22p 0.22p 0.17p
Performance
Return after charges 25.35% (17.26%) (1.72%)
Other information
Closing net asset value £518,976,732 £343,795,533 £310,817,226
Closing number of shares 213,788,494 177,450,477 132,790,906
Operating charges - OCF 0.10% 0.09%† 0.17%
Direct transaction costs 0.10% 0.10% 0.07%
Prices
Highest share price 246.00p 254.70p 243.20p
Lowest share price 188.90p 165.90p 208.70p
Income S
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 95.08p 119.90p 127.20p
Return before operating charges* 24.01p (19.93p) (2.24p)
Operating charges** (0.07p) (0.08p) (0.06p)
Return after operating charges* 23.94p (20.01p) (2.30p)
Distributions on income shares (3.32p) (4.81p) (5.00p)
Closing net asset value per share 115.70p 95.08p 119.90p
*after direct transaction costs of:*** 0.11p 0.11p 0.09p
Performance
Return after charges 25.18% (16.69%) (1.81%)
Other information
Closing net asset value £1,158,706 £1,552,442 £3,150,735
Closing number of shares 1,001,836 1,632,783 2,627,755
Operating charges - OCF 0.07% 0.07% 0.05%
Direct transaction costs 0.10% 0.10% 0.07%
Prices
Highest share price 119.10p 127.50p 129.90p
Lowest share price 92.70p 83.01p 109.00p
†Estimate for OCF as registrar fees were no longer to be paid by the class and the AMC was reduced for this class
effective 1.4.20.
**The operating charges include all costs borne by the Fund, except for direct transaction costs.
***The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers,
levies by regulatory agencies and securities exchanges as well as transfer taxes and duties.
22 FTSE 100 INDEX FUND
Comparative Tables
Accumulation S
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 194.40p 234.40p 238.30p
Return before operating charges* 49.45p (39.84p) (3.79p)
Operating charges** (0.15p) (0.16p) (0.11p)
Return after operating charges* 49.30p (40.00p) (3.90p)
Distributions on accumulation shares (6.85p) (9.48p) (9.47p)
Retained distributions on accumulation shares 6.85p 9.48p 9.47p
Closing net asset value per share 243.70p 194.40p 234.40p
*after direct transaction costs of:*** 0.22p 0.22p 0.17p
Performance
Return after charges 25.36% (17.06%) (1.64%)
Other information
Closing net asset value £6,941,888 £9,429,236 £10,531,671
Closing number of shares 2,848,863 4,849,628 4,492,949
Operating charges - OCF 0.07% 0.07% 0.05%
Direct transaction costs 0.10% 0.10% 0.07%
Prices
Highest share price 246.90p 255.20p 243.30p
Lowest share price 189.60p 166.50p 209.00p
**The operating charges include all costs borne by the Fund, except for direct transaction costs.
***The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers,
levies by regulatory agencies and securities exchanges as well as transfer taxes and duties.
FTSE 100 INDEX FUND 23
15.5.21 15.5.20
Notes £’000 £’000 £’000 £’000
Income
Net capital gains/(losses) 2 179,513 (170,850)
Revenue 3 28,980 33,287
Expenses 4 (832) (1,231)
Interest payable and similar charges (14) (1)
Net revenue before taxation 28,134 32,055
Taxation 5 (137) (400)
Net revenue after taxation 27,997 31,655
Total return/(deficit) before distributions 207,510 (139,195)
Distributions 6 (28,018) (31,658)
Change in net assets attributable
to shareholders from investment activities 179,492 (170,853)
15.5.21 15.5.20
£’000 £’000 £’000 £’000
Opening net assets attributable to shareholders 779,657 781,555
Amounts receivable on creation of shares 234,007 213,198
Amounts payable on cancellation of shares (152,751) (69,217)
81,256 143,981
Dilution adjustment 973 854
Change in net assets attributable to shareholders from
investment activities (see Statement of Total Return above) 179,492 (170,853)
Retained distribution on accumulation shares 22,284 24,120
Closing net assets attributable to shareholders 1,063,662 779,657
Balance Sheet
as at 15 May 2021
15.5.21 15.5.20
Notes £’000 £’000 £’000 £’000
Assets
Investments 1,024,224 742,713
Current assets
Debtors 8 7,692 5,278
Cash and bank balances 35,386 36,959
Total current assets 43,078 42,237
Total assets 1,067,302 784,950
Liabilities
Creditors
Distribution payable on income shares (3,575) (3,753)
Other creditors 9 (65) (1,540)
Total liabilities (3,640) (5,293)
Net assets attributable to shareholders 1,063,662 779,657
24 FTSE 100 INDEX FUND
Retail Income
Group 1 1.658131 - 1.658131 1.712876
Group 2 1.471321 0.186810 1.658131 1.712876
Retail Accumulation
Group 1 3.523332 - 3.523332 3.434245
Group 2 2.849651 0.673681 3.523332 3.434245
Institutional Accumulation
Group 1 3.917272 - 3.917272 3.789838
Group 2 2.848808 1.068464 3.917272 3.789838
Income C
Group 1 1.832438 - 1.832438 1.804527
Group 2 1.093557 0.738881 1.832438 1.804527
Accumulation C
Group 1 3.778610 - 3.778610 3.595088
Group 2 2.302908 1.475702 3.778610 3.595088
Income S
Group 1 1.842868 - 1.842868 1.855759
Group 2 1.034539 0.808329 1.842868 1.855759
Accumulation S
Group 1 3.828920 - 3.828920 3.701948
Group 2 1.857799 1.971121 3.828920 3.701948
FTSE 100 INDEX FUND 25
Retail Income
Group 1 1.350000 - 1.350000 2.790000
Group 2 0.700000 0.650000 1.350000 2.790000
Retail Accumulation
Group 1 2.780000 - 2.780000 5.480000
Group 2 1.370000 1.410000 2.780000 5.480000
Institutional Accumulation
Group 1 3.100000 - 3.100000 5.900000
Group 2 1.450000 1.650000 3.100000 5.900000
Income C
Group 1 1.460000 - 1.460000 2.880000
Group 2 0.820000 0.640000 1.460000 2.880000
Accumulation C
Group 1 2.980000 - 2.980000 5.630000
Group 2 1.560000 1.420000 2.980000 5.630000
Income S
Group 1 1.480000 - 1.480000 2.950000
Group 2 1.330000 0.150000 1.480000 2.950000
Accumulation S
Group 1 3.020000 - 3.020000 5.780000
Group 2 2.020000 1.000000 3.020000 5.780000
26 FTSE 100 INDEX FUND
15.5.21 15.5.20
£’000 £’000
1. Accounting Policies
The accounting policies are set out on pages 9 and 10.
3. Revenue
UK dividends (net) 25,919 27,567
Property investment income 205 257
Overseas dividends 2,548 4,161
Deposit interest - 5
Bank interest - 23
Stock dividends 308 1,274
Total revenue 28,980 33,287
4. Expenses
Payable to the Authorised Corporate Director, associates of
the Authorised Corporate Director and agents of either of them:
Authorised Corporate Director's charge 592 772
Registration fee - 240
Safe custody fee 11 12
603 1,024
Payable to the Depositary, associates of the Depositary
and agents of either of them:
Depositary fee 81 74
Other expenses:
Audit fee 7 5
Licence fee 139 125
Legal fee 1 -
Report and accounts fee 1 1
Professional fee - 2
148 133
Total expenses 832 1,231
FTSE 100 INDEX FUND 27
15.5.21 15.5.20
£’000 £’000
5. Taxation
a) Analysis of charge in year:
Overseas tax 137 400
Total tax for the year (note 5b) 137 400
b) Factors affecting taxation charge for the year:
The tax assessed for the year is lower than the standard rate of
corporation tax in the UK for an open-ended investment company (20%).
The differences are explained below:
Net revenue before taxation 28,134 32,055
Corporation tax at 20% 5,627 6,411
Effects of:
Revenue not subject to taxation (5,755) (6,601)
Current year expenses not utilised 128 190
Irrecoverable overseas tax 137 397
Overseas tax on special dividends in capital - 3
Current tax charge for the year (note 5a) 137 400
c) Provision for deferred taxation
At 15 May 2021, there is a potential deferred tax asset of £11,595,470 (15.5.20: £11,467,337) in relation to surplus
management expenses. It is unlikely the Fund will generate sufficient taxable profits in the near future to utilise these
expenses and therefore no deferred tax asset has been recognised in the year or prior year.
6. Distributions
The distributions take account of amounts received on the issue of shares
and amounts deducted on the cancellation of shares, and comprise:
Interim dividend distribution 12,098 19,154
Final dividend distribution 16,693 14,605
28,791 33,759
Add: Amounts deducted on cancellation of shares 813 646
Deduct: Amounts received on issue of shares (1,586) (2,747)
Net distribution for the year 28,018 31,658
8. Debtors
Amounts receivable for creation of shares 3,357 1,008
Sales awaiting settlement 507 -
Accrued revenue 3,343 3,810
Overseas tax recoverable 485 460
Total debtors 7,692 5,278
9. Other Creditors
Amounts payable for cancellation of shares 29 1,446
Accrued expenses 36 94
Total other creditors 65 1,540
28 FTSE 100 INDEX FUND
Retail Institutional
Retail Income
Accumulation Accumulation
% % % % % % %
As at 15.5.21 - - 96.84 51.55 9.27 - -
As at 15.5.20 - 0.24 92.24 53.76 10.34 - -
Details of all other material related party transactions during the year and any payment amounts outstanding at the
balance sheet date are disclosed in notes 8 and 9 to the financial statements and the Statement of Change in Net Assets
Attributable to Shareholders and the Portfolio Statement.
The balance due from/to the ACD (including amounts due to associates and agents) at the year end was £3,256,546
(15.5.20: £598,532), further details of such amounts can be found in notes 8 and 9.
At the year end, the Fund held £49,725,692 (15.5.20: £41,047,621) in Authorised Investment Funds managed by HSBC
and/or HSBC Holdings, the parent company of the ACD. During the year, transactions in Authorised Investment Funds
managed by HSBC Holdings totalled £8,371,195 (15.5.20: £10,459,533).
Investments in related parties are disclosed in the Portfolio Statement.
FTSE 100 INDEX FUND 29
For the year ended 15 May 2021 Purchases Commissions Taxes Other Expenses
£'000 £’000 % £’000 % £’000 %
Analysis of total purchases costs
Equity transactions 179,342 29 0.02 863 0.48 - -
Corporate actions 2,937 - - - - - -
Total purchases before transaction costs 182,279 29 863 -
Transaction costs 892
Total purchases after commission,
tax and fees 183,171
Portfolio transaction costs are incurred by the Fund when buying and selling underlying investments. These costs vary
depending on the class of investment, country of exchange and method of execution.
These costs can be classified as either direct or indirect transaction costs:
Direct transaction costs: Broker commissions, fees and taxes.
Indirect transaction costs: ‘Dealing spread’ – the difference between the buying and selling prices of the
Fund’s underlying investments.
In order to protect existing investors from the effects of dilution, portfolio transaction costs incurred as a result of
investors buying and selling shares in the Fund are recovered from those investors through a ‘dilution adjustment’
to the price they pay or receive.
17. Fair Value of Investments
FRS 102 requires an entity to classify fair value measurements using a fair value hierarchy that reflects the significance
of the inputs used in making the measurements. The fair value hierarchy shall have the following classifications:
Level 1: unadjusted quoted prices in an active market for identical assets or liabilities that the entity can access at
the measurement date.
Level 2: inputs other than quoted prices included within Level 1 that are observable (i.e. developed using market
data) for the asset or liability, either directly or indirectly.
Level 3: inputs are unobservable (i.e. for which market data is unavailable) for the asset or liability.
Investment Objective
The Fund aims to provide growth over the long term, which is a period of 5 years or more, by tracking the performance of
the FTSE All-Share Index (the “Index”).
Investment Policy*
The Index represents the performance of all shares on the main market of the London Stock Exchange, as defined by
the Index provider.
The Fund may invest in different types of derivatives for efficient portfolio management, including hedging. In particular
the Fund may use derivatives to help it manage cash flows and dividend payments with the aim of generating returns
that are consistent with the Index. The use of derivatives will be consistent with the risk profile of the Fund.
Investment Strategy*
The Fund will invest in a representative sample of the shares (equities) of companies that make up the Index and
possibly some securities that are not included in the Index that are designed to help the Fund track the performance
of the Index.
The Fund may not invest in all the companies of the Index to manage transaction costs or to reflect market conditions,
regulations or HSBC’s banned weapons policy.
The Fund may hold cash and other funds, including funds managed by the HSBC Group, to manage day-to-day cash
flow requirements.
The Fund’s performance is measured against the Index, because the Fund intends to track the performance of
the Index.
*For details of the full Investment Policy and Strategy please refer to the HSBC Index Tracker Investment Funds
prospectus. We have also published a Glossary of key terms used which you may wish to refer to. Both documents
can be found at https://www.assetmanagement.hsbc.co.uk/en/individual-investor/fund-centre.
Portfolio Activity
FTSE All-Share Index was up 24.51% during the reporting period. It is the aggregation of the FTSE 100, FTSE 250
and FTSE small Cap indices, with the first two indices representing over 90% of the total index weight. Hence the
performance of the FTSE 100 and 250 explain the majority of the performance of the FTSE All Share. Therefore, the
main contributor to the index total return was the Financial sector with 7.88%, followed by the Basic Materials and the
Industrials, contributing 5.09% and 4.91% respectively. The Basic Material sector was also the best performing sector
with a return of 67.92% over the period. The Health Care sector was the only sector contributing negatively (-1.12%).
During the first part of the period, UK equities slightly recovered first, before falling again amid rising Covid-19 cases
and fears over new economic restrictions and the announcement of a further lockdown in the UK reaching a low end of
October. Since then stock prices steadily increased first when the Bank of England extended their quantitative easing
program, then a positive effect came from the last minute free trade agreement between the EU and UK and first
approvals of vaccines. However, more and more the rising Covid-19 infections once more started to dampen investor
sentiment, mainly in January. More recently though investors were encouraged again by the improving speed of the
Covid-19 vaccine rollout, Central Bank support and the renewed optimism over the reopening of the economy,
leading to higher prices.
FTSE ALL-SHARE INDEX FUND 33
Investment Performance
During the year under review, the value of the shares in the Fund increased by 25.63% while the value of the
FTSE All-Share Index rose by 24.51%.
(Source: Morningstar Direct, GBP, UK net of tax, for the Accumulation C share class. Returns based on the NAV,
which is a single price.)
Please note that the above information refers to the past and that past performance is not a reliable indication
of future returns.
Tracking Error
Tracking error - 0.06%
The tracking error is based on gross returns from our internal performance system for the year to 15.5.21.
Fund Particulars
as at 17 May 2021
Income Accumulation
C C
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Comparative Tables
Retail Income
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 269.30p 337.90p 359.20p
Return before operating charges* 78.68p (55.31p) (6.80p)
Operating charges** (0.47p) (0.54p) (0.54p)
Return after operating charges* 78.21p (55.85p) (7.34p)
Distributions on income shares (8.51p) (12.75p) (13.96p)
Closing net asset value per share 339.00p 269.30p 337.90p
*after direct transaction costs of:*** 0.09p 0.43p 0.49p
Performance
Return after charges 29.04% (16.53%) (2.04%)
Other information
Closing net asset value £442,136 £11,354,836 £17,993,191
Closing number of shares 130,415 4,216,132 5,324,482
Operating charges - OCF 0.16% 0.16% 0.16%
Direct transaction costs 0.03% 0.13% 0.14%
Prices
Highest share price 348.60p 363.80p 366.70p
Lowest share price 268.50p 233.20p 306.50p
Retail Accumulation
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 493.80p 595.00p 608.20p
Return before operating charges* 145.69p (100.25p) (12.29p)
Operating charges** (0.89p) (0.95p) (0.91p)
Return after operating charges* 144.80p (101.20p) (13.20p)
Distributions on accumulation shares (16.08p) (22.02p) (22.47p)
Retained distributions on accumulation shares 16.08p 22.02p 22.47p
Closing net asset value per share 638.60p 493.80p 595.00p
*after direct transaction costs of:*** 0.16p 0.77p 0.83p
Performance
Return after charges 29.32% (17.01%) (2.17%)
Other information
Closing net asset value £20,058,123 £47,707,830 £59,720,818
Closing number of shares 3,141,018 9,662,039 10,037,301
Operating charges - OCF 0.16% 0.16% 0.16%
Direct transaction costs 0.03% 0.13% 0.14%
Prices
Highest share price 647.80p 655.20p 620.80p
Lowest share price 492.40p 419.70p 529.50p
**The operating charges include all costs borne by the Fund, except for direct transaction costs.
***The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers,
levies by regulatory agencies and securities exchanges as well as transfer taxes and duties.
50 FTSE ALL-SHARE INDEX FUND
Comparative Tables
Institutional Income
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 272.50p 341.80p 363.30p
Return before operating charges* 79.82p (56.31p) (7.89p)
Operating charges** (0.07p) (0.07p) (0.05p)
Return after operating charges* 79.75p (56.38p) (7.94p)
Distributions on income shares (9.25p) (12.92p) (13.56p)
Closing net asset value per share 343.00p 272.50p 341.80p
*after direct transaction costs of:*** 0.09p 0.44p 0.49p
Performance
Return after charges 29.27% (16.50%) (2.19%)
Other information
Closing net asset value £286,111,555 £358,286,472 £518,464,866
Closing number of shares 83,412,540 131,494,865 151,710,700
Operating charges - OCF 0.02% 0.02% 0.02%
Direct transaction costs 0.03% 0.13% 0.14%
Prices
Highest share price 353.20p 368.00p 370.80p
Lowest share price 271.90p 235.80p 309.90p
Institutional Accumulation
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 515.40p 620.30p 633.50p
Return before operating charges* 152.12p (104.77p) (13.10p)
Operating charges** (0.12p) (0.13p) (0.10p)
Return after operating charges* 152.00p (104.90p) (13.20p)
Distributions on accumulation shares (17.62p) (23.75p) (23.88p)
Retained distributions on accumulation shares 17.62p 23.75p 23.88p
Closing net asset value per share 667.40p 515.40p 620.30p
*after direct transaction costs of:*** 0.17p 0.80p 0.87p
Performance
Return after charges 29.49% (16.91%) (2.08%)
Other information
Closing net asset value £21,151,437 £46,642,962 £84,256,283
Closing number of shares 3,169,082 9,050,728 13,584,344
Operating charges - OCF 0.02% 0.02% 0.02%
Direct transaction costs 0.03% 0.13% 0.14%
Prices
Highest share price 677.10p 683.60p 646.70p
Lowest share price 514.20p 438.00p 551.90p
**The operating charges include all costs borne by the Fund, except for direct transaction costs.
***The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers,
levies by regulatory agencies and securities exchanges as well as transfer taxes and duties.
FTSE ALL-SHARE INDEX FUND 51
Comparative Tables
Institutional A Income#
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 272.20p 341.40p 362.90p
Return before operating charges* 64.21p (56.15p) (7.79p)
Operating charges** (0.31p) (0.54p) (0.54p)
Return after operating charges* 63.90p (56.69p) (8.33p)
Distributions on income shares (3.90p) (12.51p) (13.17p)
Cancellation price (332.20p) - -
Closing net asset value per share - 272.20p 341.40p
*after direct transaction costs of:*** 0.09p 0.44p 0.49p
Performance
Return after charges 23.48% (16.61%) (2.30%)
Other information
Closing net asset value N/A £3,491,894 £4,395,923
Closing number of shares N/A 1,282,822 1,287,693
Operating charges - OCF N/A 0.16% 0.16%
Direct transaction costs N/A 0.13% 0.14%
Prices
Highest share price 332.20p 367.60p 370.40p
Lowest share price 271.40p 235.50p 309.60p
Institutional A Accumulation#
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 505.10p 608.70p 622.50p
Return before operating charges* 119.78p (102.62p) (12.86p)
Operating charges** (0.58p) (0.98p) (0.94p)
Return after operating charges* 119.20p (103.60p) (13.80p)
Distributions on accumulation shares (7.24p) (22.48p) (22.77p)
Retained distributions on accumulation shares 7.24p 22.48p 22.77p
Cancellation price (624.30p) - -
Closing net asset value per share - 505.10p 608.70p
*after direct transaction costs of:*** 0.16p 0.79p 0.85p
Performance
Return after charges 23.60% (17.02%) (2.22%)
Other information
Closing net asset value N/A £50,983,314 £66,257,413
Closing number of shares N/A 10,094,050 10,884,391
Operating charges - OCF N/A 0.16% 0.16%
Direct transaction costs N/A 0.13% 0.14%
Prices
Highest share price 624.30p 670.30p 635.40p
Lowest share price 503.70p 429.40p 541.90p
#The Institutional A Income and Institutional A Accumulation share classes closed on 8 January 2021.
**The operating charges include all costs borne by the Fund, except for direct transaction costs.
***The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers,
levies by regulatory agencies and securities exchanges as well as transfer taxes and duties.
52 FTSE ALL-SHARE INDEX FUND
Comparative Tables
Income C
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 272.50p 341.70p 363.30p
Return before operating charges* 79.81p (56.18p) (7.97p)
Operating charges** (0.19p) (0.20p) (0.19p)
Return after operating charges* 79.62p (56.38p) (8.16p)
Distributions on income shares (9.12p) (12.82p) (13.44p)
Closing net asset value per share 343.00p 272.50p 341.70p
*after direct transaction costs of:*** 0.09p 0.43p 0.49p
Performance
Return after charges 29.22% (16.50%) (2.25%)
Other information
Closing net asset value £442,813,150 £327,014,611 £223,266,866
Closing number of shares 129,097,583 120,017,129 65,332,359
Operating charges - OCF 0.06% 0.06% 0.06%
Direct transaction costs 0.03% 0.13% 0.14%
Prices
Highest share price 353.10p 368.00p 370.80p
Lowest share price 271.80p 235.80p 309.90p
Accumulation C
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 497.40p 598.80p 611.80p
Return before operating charges* 146.85p (101.04p) (12.67p)
Operating charges** (0.35p) (0.36p) (0.33p)
Return after operating charges* 146.50p (101.40p) (13.00p)
Distributions on accumulation shares (16.78p) (22.66p) (22.87p)
Retained distributions on accumulation shares 16.78p 22.66p 22.87p
Closing net asset value per share 643.90p 497.40p 598.80p
*after direct transaction costs of:*** 0.17p 0.77p 0.84p
Performance
Return after charges 29.45% (16.93%) (2.12%)
Other information
Closing net asset value £1,048,879,699 £732,488,559 £660,435,162
Closing number of shares 162,905,012 147,279,327 110,293,954
Operating charges - OCF 0.06% 0.06% 0.06%
Direct transaction costs 0.03% 0.13% 0.14%
Prices
Highest share price 653.20p 659.80p 624.50p
Lowest share price 496.20p 422.70p 532.90p
**The operating charges include all costs borne by the Fund, except for direct transaction costs.
***The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers,
levies by regulatory agencies and securities exchanges as well as transfer taxes and duties.
FTSE ALL-SHARE INDEX FUND 53
15.5.21 15.5.20
Notes £’000 £’000 £’000 £’000
Income
Net capital gains/(losses) 2 394,269 (332,751)
Revenue 3 51,592 66,290
Expenses 4 (970) (960)
Interest payable and similar charges (17) (3)
Net revenue before taxation 50,605 65,327
Taxation 5 (263) (738)
Net revenue after taxation 50,342 64,589
Total return/(deficit) before distributions 444,611 (268,162)
Distributions 6 (50,357) (64,608)
Change in net assets attributable
to shareholders from investment activities 394,254 (332,770)
15.5.21 15.5.20
£’000 £’000 £’000 £’000
Opening net assets attributable to shareholders 1,577,970 1,634,791
Amounts receivable on creation of shares 306,027 575,670
Amounts payable on cancellation of shares (488,180) (339,802)
(182,153) 235,868
Dilution adjustment 1,336 3,212
Change in net assets attributable to shareholders from
investment activities (see Statement of Total Return above) 394,254 (332,770)
Retained distribution on accumulation shares 28,049 36,869
Closing net assets attributable to shareholders 1,819,456 1,577,970
Balance Sheet
as at 15 May 2021
15.5.21 15.5.20
Notes £’000 £’000 £’000 £’000
Assets
Investments 1,806,602 1,542,625
Current assets
Debtors 8 9,040 9,730
Cash and bank balances 17,974 39,683
Total current assets 27,014 49,413
Total assets 1,833,616 1,592,038
Liabilities
Investment liabilities - (118)
Creditors
Distribution payable on income shares (10,844) (12,735)
Other creditors 9 (3,316) (1,215)
Total creditors (14,160) (13,950)
Total liabilities (14,160) (14,068)
Net assets attributable to shareholders 1,819,456 1,577,970
54 FTSE ALL-SHARE INDEX FUND
Retail Income
Group 1 4.653502 - 4.653502 4.916159
Group 2 3.679205 0.974297 4.653502 4.916159
Retail Accumulation
Group 1 8.995109 - 8.995109 8.533502
Group 2 6.857327 2.137782 8.995109 8.533502
Institutional Income
Group 1 5.138709 - 5.138709 4.977850
Group 2 3.487197 1.651512 5.138709 4.977850
Institutional Accumulation
Group 1 9.835029 - 9.835029 9.296752
Group 2 8.855869 0.979160 9.835029 9.296752
Institutional A Income*
Group 1 N/A - N/A 4.789817
Group 2 N/A N/A N/A 4.789817
Institutional A Accumulation*
Group 1 N/A - N/A 8.705854
Group 2 N/A N/A N/A 8.705854
Income C
Group 1 5.074821 - 5.074821 4.933108
Group 2 2.664647 2.410174 5.074821 4.933108
Accumulation C
Group 1 9.379022 - 9.379022 8.841454
Group 2 5.585984 3.793038 9.379022 8.841454
*The Institutional A Income and Institutional A Accumulation share classes closed on 8 January 2021.
FTSE ALL-SHARE INDEX FUND 55
Retail Income
Group 1 3.860000 - 3.860000 7.830000
Group 2 2.790000 1.070000 3.860000 7.830000
Retail Accumulation
Group 1 7.080000 - 7.080000 13.490000
Group 2 4.930000 2.150000 7.080000 13.490000
Institutional Income
Group 1 4.110000 - 4.110000 7.940000
Group 2 2.210000 1.900000 4.110000 7.940000
Institutional Accumulation
Group 1 7.780000 - 7.780000 14.450000
Group 2 7.160000 0.620000 7.780000 14.450000
Institutional A Income
Group 1 3.900000 - 3.900000 7.720000
Group 2 2.630000 1.270000 3.900000 7.720000
Institutional A Accumulation
Group 1 7.240000 - 7.240000 13.770000
Group 2 4.070000 3.170000 7.240000 13.770000
Income C
Group 1 4.050000 - 4.050000 7.890000
Group 2 2.200000 1.850000 4.050000 7.890000
Accumulation C
Group 1 7.400000 - 7.400000 13.820000
Group 2 4.100000 3.300000 7.400000 13.820000
56 FTSE ALL-SHARE INDEX FUND
15.5.21 15.5.20
£’000 £’000
1. Accounting Policies
The accounting policies are set out on pages 9 and 10.
3. Revenue
UK dividends (net) 44,822 54,235
Property investment income 813 1,105
Overseas dividends 5,280 8,548
Deposit interest - 10
Bank interest 1 51
Stock dividends 676 2,341
Total revenue 51,592 66,290
4. Expenses
Payable to the Authorised Corporate Director, associates of
the Authorised Corporate Director and agents of either of them:
Authorised Corporate Director's charge 604 604
Safe custody fee 22 25
626 629
Payable to the Depositary, associates of the Depositary
and agents of either of them:
Depositary fee 149 151
Other expenses:
Audit fee 7 5
Professional fee - 1
Report and accounts fee 1 2
License fee 187 172
195 180
Total expenses 970 960
FTSE ALL-SHARE INDEX FUND 57
15.5.21 15.5.20
£’000 £’000
5. Taxation
a) Analysis of charge in year:
Overseas tax 263 738
Total tax for the year (note 5b) 263 738
b) Factors affecting taxation charge for the year:
The tax assessed for the year is lower than the standard rate of
corporation tax in the UK for an open-ended investment company (20%).
The differences are explained below:
Net revenue before taxation 50,605 65,327
Corporation tax at 20% 10,121 13,065
Effects of:
Revenue not subject to taxation (10,156) (13,020)
Irrecoverable overseas tax 263 718
Overseas tax on special dividends in capital - 20
Excess management expenses unutilised /(utilised) 35 (44)
Tax relief on overseas tax suffered - (1)
Current tax charge for the year (note 5a) 263 738
c) Provision for deferred taxation
At 15 May 2021, there is a potential deferred tax asset of £3,743,313 (15.5.20: £3,708,495) in relation to surplus
management expenses. It is unlikely the Fund will generate sufficient taxable profits in the future to utilise these
expenses and therefore no deferred tax asset has been recognised in the year or prior year.
6. Distributions
The distributions take account of amounts received on the issue of shares
and amounts deducted on the cancellation of shares, and comprise:
Interim dividend distribution 22,679 39,769
Final dividend distribution 26,717 28,301
49,396 68,070
Add: Amounts deducted on cancellation of shares 3,079 3,403
Deduct: Amounts received on issue of shares (2,118) (6,865)
Net distribution for the year 50,357 64,608
8. Debtors
Amounts receivable for creation of shares 508 1,859
Sales awaiting settlement 1,740 -
Accrued revenue 6,003 7,146
Overseas tax recoverable 789 725
Total debtors 9,040 9,730
9. Other Creditors
Amounts payable for cancellation of shares 3,320 1,139
Accrued expenses (4) 76
Total other creditors 3,316 1,215
58 FTSE ALL-SHARE INDEX FUND
*The Institutional A Income and Institutional A Accumulation share classes closed on 8 January 2021.
% % % % % %
As at 15.5.21 - - 24.69 36.48 5.21 3.91
As at 15.5.20 0.28 - 36.29 77.72 5.56 4.37
Details of all other material related party transactions during the year and any payment amounts outstanding at the
balance sheet date are disclosed in notes 8 and 9 to the financial statements and the Statement of Change in Net Assets
Attributable to Shareholders and the Portfolio Statement.
The balance due to/from the ACD (including amounts due to associates and agents) at the year end was £2,892,587
(15.5.20: £592,839), further details of such amounts can be found in notes 8 and 9.
At the year end, the Fund held £72,581,668 (15.5.20: £72,458,696) in Authorised Investment Funds managed by HSBC
and HSBC Holdings, the parent company of the ACD. During the period, transactions in Authorised Investment Funds
managed by HSBC and HSBC Holdings totalled £8,656,764 (15.5.20: £33,684,975).
There were no shares held by the Trustee or its associates.
Investments in related parties are disclosed in the Portfolio Statement.
FTSE ALL-SHARE INDEX FUND 59
For the year ended 15 May 2021 Purchases Commissions Taxes Other Expenses
£'000 £’000 % £’000 % £’000 %
Analysis of total purchases costs
Equity transactions 88,515 10 0.01 439 0.50 - -
Corporate actions 7,439 - - - - - -
Total purchases before transaction costs 95,954 10 439 -
Transaction costs 449
Total purchases after commission,
tax and fees 96,403
For the year ended 15 May 2020 Purchases Commissions Taxes Other Expenses
£'000 £’000 % £’000 % £’000 %
Analysis of total purchases costs
Equity transactions 435,452 82 0.02 2,068 0.47 3 -
Corporate actions 3,240 - - - - - -
Total purchases before transaction costs 438,692 82 2,068 3
Transaction costs 2,153
Total purchases after commission,
tax and fees 440,845
Investment Objective
The Fund aims to provide growth over the long term, which is a period of 5 years or more, by tracking the performance of
the FTSE 250 Index (the “Index”).
Investment Policy*
The Index is made up of the 250 largest companies after the 100 largest stock market listed companies in the United
Kingdom, as defined by the Index Provider.
The Fund may invest in different types of derivatives for efficient portfolio management, including hedging. In particular
the Fund may use derivatives to help it manage cash flows and dividend payments with the aim of generating returns
that are consistent with the Index. The use of derivatives will be consistent with the risk profile of the Fund.
Investment Strategy*
The Fund will invest directly in shares (equities) of all of the companies that make up the Index and in the same or very
similar proportions in which they are included in the Index.
However, there may be circumstances when it is not possible or practical for the Fund to invest in shares of all the
companies of the Index. The Fund may not invest in all the companies of the Index to manage transaction costs or
to reflect market conditions, regulations or HSBC’s banned weapons policy.
The Fund may hold cash and other funds, including funds managed by the HSBC Group, to manage day-to-day cash
flow requirements.
The Fund’s performance is measured against the Index, because the Fund intends to track the performance of
the Index.
*For details of the full Investment Policy and Strategy please refer to the HSBC Index Tracker Investment Funds
prospectus. We have also published a Glossary of key terms used which you may wish to refer to. Both documents
can be found at https://www.assetmanagement.hsbc.co.uk/en/individual-investor/fund-centre.
Portfolio Activity
FTSE 250 Index was up 40.37% during the reporting period. The main contributor to the total index return was the
Financials sector with a contribution of 12.32%, followed by Industrials and Consumer Discretionary with a contribution
of 9.78% and 9.29% respectively. The best performing sector was the Utilities sector with 68.79%. None of the sectors
were negative, however the weakest sector was the Real Estate sector with a performance of 14.75%.
During the first part of the period, the mid cap UK equities were only slightly positive and more range-bound until the
end of October as the positive sentiment after the first shock was limited to rising Covid-19 cases and fears over new
economic restrictions and the announcement of a further lockdown in the UK. Since then stock prices steadily increased
first when the Bank of England extended their quantitative easing program, then a positive effect came from the last
minute free trade agreement between the EU and UK and first approvals of vaccines. However, more and more the
rising Covid-19 infections once more started to dampen investor sentiment, mainly in January. More recently though
investors were encouraged again by the improving speed of the Covid-19 vaccine rollout, Central Bank support and the
renewed optimism over the reopening of the economy, leading to higher prices.
64 FTSE 250 INDEX FUND
Investment Performance
During the year under review, the value of the shares in the Fund increased by 40.99% while the value of the
FTSE 250 Index increased by 40.37%.
(Source: Morningstar Direct, GBP, UK net of tax, for the Accumulation C share class. Returns based on the NAV,
which is a single price.)
Please note that the above information refers to the past and that past performance is not a reliable indication
of future returns.
Tracking Error
Tracking error - 0.06%
The tracking error is based on gross returns from our internal performance system for the year to 15.5.21.
Fund Particulars
as at 17 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Comparative Tables
Retail Income
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 139.40p 173.50p 186.80p
Return before operating charges* 65.55p (28.90p) (7.65p)
Operating charges** (0.45p) (0.48p) (0.48p)
Return after operating charges* 65.10p (29.38p) (8.13p)
Distributions on income shares (2.90p) (4.72p) (5.17p)
Closing net asset value per share 201.60p 139.40p 173.50p
*after direct transaction costs of:*** 0.23p 0.37p 0.33p
Performance
Return after charges 46.70% (16.93%) (4.35%)
Other information
Closing net asset value £301,638 £7,778,881 £10,927,967
Closing number of shares 149,658 5,581,088 6,296,727
Operating charges - OCF 0.28% 0.27% 0.27%
Direct transaction costs 0.14% 0.21% 0.18%
Prices
Highest share price 207.30p 202.60p 192.10p
Lowest share price 143.00p 115.10p 157.30p
Retail Accumulation
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 219.70p 265.50p 278.00p
Return before operating charges* 99.71p (45.06p) (11.79p)
Operating charges** (0.71p) (0.74p) (0.71p)
Return after operating charges* 99.00p (45.80p) (12.50p)
Distributions on accumulation shares (4.70p) (6.38p) (7.20p)
Retained distributions on accumulation shares 4.70p 6.38p 7.20p
Closing net asset value per share 318.70p 219.70p 265.50p
*after direct transaction costs of:*** 0.37p 0.57p 0.49p
Performance
Return after charges 45.06% (17.25%) (4.50%)
Other information
Closing net asset value £13,840,851 £67,862,306 £83,031,545
Closing number of shares 4,342,721 30,883,414 31,267,935
Operating charges - OCF 0.28% 0.27% 0.27%
Direct transaction costs 0.14% 0.21% 0.18%
Prices
Highest share price 326.40p 309.40p 285.90p
Lowest share price 225.60p 175.30p 233.90p
**The operating charges include all costs borne by the Fund, except for direct transaction costs.
***The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers,
levies by regulatory agencies and securities exchanges as well as transfer taxes and duties.
74 FTSE 250 INDEX FUND
Comparative Tables
Institutional Income
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 140.30p 174.80p 188.10p
Return before operating charges* 64.06p (30.00p) (8.11p)
Operating charges** (0.04p) (0.04p) (0.03p)
Return after operating charges* 64.02p (30.04p) (8.14p)
Distributions on income shares (3.42p) (4.46p) (5.16p)
Closing net asset value per share 200.90p 140.30p 174.80p
*after direct transaction costs of:*** 0.23p 0.39p 0.33p
Performance
Return after charges 45.63% (17.19%) (4.33%)
Other information
Closing net asset value £405,337 £7,449,290 £86,306,757
Closing number of shares 201,779 5,309,960 49,380,077
Operating charges - OCF 0.03% 0.02% 0.02%
Direct transaction costs 0.14% 0.21% 0.18%
Prices
Highest share price 209.20p 203.80p 193.40p
Lowest share price 144.20p 115.50p 158.40p
Income C
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 140.50p 174.80p 188.10p
Return before operating charges* 63.91p (29.73p) (8.05p)
Operating charges** (0.22p) (0.30p) (0.30p)
Return after operating charges* 63.69p (30.03p) (8.35p)
Distributions on income shares (3.29p) (4.27p) (4.95p)
Closing net asset value per share 200.90p 140.50p 174.80p
*after direct transaction costs of:*** 0.25p 0.37p 0.33p
Performance
Return after charges 45.33% (17.18%) (4.44%)
Other information
Closing net asset value £223,394,602 £151,771,342 £156,610,918
Closing number of shares 111,223,129.00 108,054,141 89,570,072
Operating charges - OCF 0.12% 0.12%† 0.17%
Direct transaction costs 0.14% 0.21% 0.18%
Prices
Highest share price 209.00p 203.70p 193.50p
Lowest share price 144.10p 115.40p 158.30p
†Estimate for OCF as registrar fees were no longer to be paid by the class effective 1.4.20.
**The operating charges include all costs borne by the Fund, except for direct transaction costs.
***The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers,
levies by regulatory agencies and securities exchanges as well as transfer taxes and duties.
FTSE 250 INDEX FUND 75
Comparative Tables
Accumulation C
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 221.30p 267.30p 279.70p
Return before operating charges* 100.64p (45.54p) (11.95p)
Operating charges** (0.34p) (0.46p) (0.45p)
Return after operating charges* 100.30p (46.00p) (12.40p)
Distributions on accumulation shares (5.18p) (6.53p) (7.36p)
Retained distributions on accumulation shares 5.18p 6.53p 7.36p
Closing net asset value per share 321.60p 221.30p 267.30p
*after direct transaction costs of:*** 0.40p 0.58p 0.49p
Performance
Return after charges 45.32% (17.21%) (4.43%)
Other information
Closing net asset value £766,718,270 £445,812,108 £472,614,220
Closing number of shares 238,395,711 201,494,593 176,819,727
Operating charges - OCF 0.12% 0.12%† 0.17%
Direct transaction costs 0.14% 0.21% 0.18%
Prices
Highest share price 329.30p 311.50p 287.60p
Lowest share price 227.10p 176.50p 235.40p
Income S
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 140.40p 174.80p 188.10p
Return before operating charges* 63.88p (29.88p) (8.09p)
Operating charges** (0.13p) (0.13p) (0.12p)
Return after operating charges* 63.75p (30.01p) (8.21p)
Distributions on income shares (3.35p) (4.39p) (5.09p)
Closing net asset value per share 200.80p 140.40p 174.80p
*after direct transaction costs of:*** 0.25p 0.37p 0.33p
Performance
Return after charges 45.41% (17.17%) (4.36%)
Other information
Closing net asset value £95,983,850 £59,270,739 £41,146,688
Closing number of shares 47,793,595 42,205,385 23,533,662
Operating charges - OCF 0.07% 0.08% 0.07%
Direct transaction costs 0.14% 0.21% 0.18%
Prices
Highest share price 209.10p 203.80p 193.50p
Lowest share price 144.10p 115.50p 158.40p
†Estimate for OCF as registrar fees were no longer to be paid by the class effective 1.4.20.
**The operating charges include all costs borne by the Fund, except for direct transaction costs.
***The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers,
levies by regulatory agencies and securities exchanges as well as transfer taxes and duties.
76 FTSE 250 INDEX FUND
Comparative Tables
Accumulation S
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 222.10p 268.20p 280.40p
Return before operating charges* 101.10p (45.90p) (12.03p)
Operating charges** (0.20p) (0.20p) (0.17p)
Return after operating charges* 100.90p (46.10p) (12.20p)
Distributions on accumulation shares (5.34p) (6.74p) (7.58p)
Retained distributions on accumulation shares 5.34p 6.74p 7.58p
Closing net asset value per share 323.00p 222.10p 268.20p
*after direct transaction costs of:*** 0.40p 0.57p 0.49p
Performance
Return after charges 45.43% (17.19%) (4.35%)
Other information
Closing net asset value £502,289,121 £253,334,293 £252,002,642
Closing number of shares 155,487,023.00 114,054,854 93,975,185
Operating charges - OCF 0.07% 0.08% 0.07%
Direct transaction costs 0.14% 0.21% 0.18%
Prices
Highest share price 330.80p 312.60p 288.40p
Lowest share price 228.00p 177.10p 236.10p
**The operating charges include all costs borne by the Fund, except for direct transaction costs.
***The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers,
levies by regulatory agencies and securities exchanges as well as transfer taxes and duties.
FTSE 250 INDEX FUND 77
15.5.21 15.5.20
Notes £’000 £’000 £’000 £’000
Income
Net capital gains/(losses) 2 421,634 (269,217)
Revenue 3 25,091 29,520
Expenses 4 (1,401) (1,648)
Interest payable and similar charges (20) -
Net revenue before taxation 23,670 27,872
Taxation 5 (216) 160
Net revenue after taxation 23,454 28,032
Total return/(deficit) before distributions 445,088 (241,185)
Distributions 6 (23,517) (27,737)
Change in net assets attributable
to shareholders from investment activities 421,571 (268,922)
15.5.21 15.5.20
£’000 £’000 £’000 £’000
Opening net assets attributable to shareholders 993,279 1,102,641
Amounts receivable on creation of shares 337,466 470,512
Amounts payable on cancellation of shares (171,658) (337,467)
165,808 133,045
Dilution adjustment 1,416 3,713
Change in net assets attributable to shareholders from
investment activities (see Statement of Total Return above) 421,571 (268,922)
Retained distribution on accumulation shares 20,860 22,802
Closing net assets attributable to shareholders 1,602,934 993,279
Balance Sheet
as at 15 May 2021
15.5.21 15.5.20
Notes £’000 £’000 £’000 £’000
Assets
Investments 1,554,200 976,178
Current assets
Debtors 8 11,028 8,201
Cash and bank balances 43,689 33,001
Total current assets 54,717 41,202
Total assets 1,608,917 1,017,380
Liabilities
Investment liabilities (91) (479)
Creditors
Distribution payable on income shares (5,271) (6,970)
Other creditors 9 (621) (16,652)
Total creditors (5,892) (23,622)
Total liabilities (5,983) (24,101)
Net assets attributable to shareholders 1,602,934 993,279
78 FTSE 250 INDEX FUND
Retail Income
Group 1 2.895336 - 2.895336 4.717325
Group 2 2.040715 0.854621 2.895336 4.717325
Retail Accumulation
Group 1 4.697642 - 4.697642 6.378044
Group 2 2.095956 2.601686 4.697642 6.378044
Institutional Income
Group 1 3.424733 - 3.424733 4.461275
Group 2 2.585159 0.839574 3.424733 4.461275
Income C
Group 1 3.287338 - 3.287338 4.271931
Group 2 1.771379 1.515959 3.287338 4.271931
Accumulation C
Group 1 5.179105 - 5.179105 6.526443
Group 2 2.544158 2.634947 5.179105 6.526443
Income S
Group 1 3.354251 - 3.354251 4.391515
Group 2 1.574910 1.779341 3.354251 4.391515
Accumulation S
Group 1 5.344134 - 5.344134 6.735085
Group 2 2.198664 3.145470 5.344134 6.735085
FTSE 250 INDEX FUND 79
15.5.21 15.5.20
£’000 £’000
1. Accounting Policies
The accounting policies are set out on pages 9 and 10.
3. Revenue
UK dividends (net) 17,697 22,099
Unfranked dividends - 75
Property investment income 1,640 2,135
Overseas dividends 4,930 4,766
Interest on bonds and other debt securities 66 38
Deposit interest - 9
Bank interest - 31
Stock dividends 758 367
Total revenue 25,091 29,520
4. Expenses
Payable to the Authorised Corporate Director, associates of
the Authorised Corporate Director and agents of either of them:
Authorised Corporate Director's charge 1,109 1,068
Registration fee - 308
Safe custody fee 15 18
1,124 1,394
Payable to the Depositary, associates of the Depositary
and agents of either of them:
Depositary fee 111 105
Other expenses:
Audit fee 7 5
Report and accounts fee 1 1
Licence fee 158 142
Professional fees - 1
166 149
Total expenses 1,401 1,648
80 FTSE 250 INDEX FUND
15.5.21 15.5.20
£’000 £’000
5. Taxation
a) Analysis of charge in year:
Overseas tax 216 200
Total current tax charge for the year (note 5b) 216 200
Deferred tax (note 5c) - (360)
Total tax for the year (note 5b) 216 (160)
b) Factors affecting taxation charge for the year:
The tax assessed for the year is lower than the standard rate of
corporation tax in the UK for an open-ended investment company (20%).
The differences are explained below:
Net revenue before taxation 23,670 27,872
Corporation tax at 20% 4,734 5,574
Effects of:
Revenue not subject to taxation (4,677) (5,432)
Utilisation of excess management expenses (57) (500)
Irrecoverable overseas tax 216 200
Tax relief on overseas tax suffered - (2)
Current tax charge for the year (note 5a) 216 (160)
c) Provision for deferred taxation
Provision at start of year 360 -
Deferred tax charge in profit and loss account for the year (note 5a) - 360
Provision at end of year (note 5a) 360 360
At 15 May 2021, there is a potential deferred tax asset of £733,862 (15.5.20: £790,998) in relation to surplus
management expenses. Based on the judgement of the ACD, it is not probable that the Fund will generate sufficient
taxable profits in the future to utilise these expenses and as such, a deferred tax asset has not been crystallised in
respect of this portion of the surplus expenses.
6. Distributions
The distributions take account of amounts received on the issue of shares
and amounts deducted on the cancellation of shares, and comprise:
Final dividend distribution 26,131 29,772
26,131 29,772
Add: Amounts deducted on cancellation of shares 1,095 6,190
Deduct: Amounts received on issue of shares (3,709) (8,225)
Net distribution for the year 23,517 27,737
8. Debtors
Amounts receivable for creation of shares 5,327 4,083
Sales awaiting settlement - 1,417
Accrued revenue 5,131 2,233
Overseas tax recoverable 210 106
Income tax recoverable - 2
Deferred tax 360 360
Total debtors 11,028 8,201
FTSE 250 INDEX FUND 81
15.5.21 15.5.20
£’000 £’000
9. Other Creditors
Amounts payable for cancellation of shares 511 16,453
Accrued expenses 110 199
Total other creditors 621 16,652
% % % % % % %
As at 15.5.21 - - 92.32 9.81 4.94 - -
As at 15.5.20 - - 12.61 10.61 5.67 - -
Details of all other material related party transactions during the year and any payment amounts outstanding at the
balance sheet date are disclosed in notes 8 and 9 to the financial statements and the Statement of Change in Net Assets
Attributable to Shareholders and the Portfolio Statement.
The balance due from/to the ACD (including amounts due to associates and agents) at the year end was £4,653,244
(15.5.20: £12,630,839), further details of such amounts can be found in notes 8 and 9.
At the year end, the Fund held £12,204,178 (15.5.20: £10,555,965) in Authorised Investment Funds managed by
HSBC and/or HSBC Holdings, the parent company of the ACD. During the period, transactions in Authorised
Investment Funds managed by HSBC and/or HSBC Holdings totalled £1,988,774 (15.5.20: £4,428,720).
Investments in related parties are disclosed in the Portfolio Statement.
82 FTSE 250 INDEX FUND
For the year ended 15 May 2021 Purchases Commissions Taxes Other Expenses
£'000 £’000 % £’000 % £’000 %
Analysis of total purchases costs
Equity transactions 376,203 24 0.01 1,702 0.45 1 -
Corporate actions 6,283 - - - - - -
Total purchases before transaction costs 382,486 24 1,702 1
Transaction costs 1,727
Total purchases after commission,
tax and fees 384,213
For the year ended 15 May 2020 Purchases Commissions Taxes Other Expenses
£'000 £’000 % £’000 % £’000 %
Analysis of total purchases costs
Equity transactions 545,012 41 0.01 1,943 0.36 411 0.08
Corporate actions 2,014 - - - - - -
Total purchases before transaction costs 547,026 41 1,943 411
Transaction costs 2,395
Total purchases after commission,
tax and fees 549,421
Portfolio transaction costs are incurred by the Fund when buying and selling underlying investments. These costs vary
depending on the class of investment, country of exchange and method of execution.
These costs can be classified as either direct or indirect transaction costs:
Direct transaction costs: Broker commissions, fees and taxes.
Indirect transaction costs: ‘Dealing spread’ – the difference between the buying and selling prices of the
Fund’s underlying investments.
In order to protect existing investors from the effects of dilution, portfolio transaction costs incurred as a result of
investors buying and selling shares in the Fund are recovered from those investors through a ‘dilution adjustment’
to the price they pay or receive.
17. Fair Value of Investments
FRS 102 requires an entity to classify fair value measurements using a fair value hierarchy that reflects the significance
of the inputs used in making the measurements. The fair value hierarchy shall have the following classifications:
Level 1: unadjusted quoted prices in an active market for identical assets or liabilities that the entity can access at
the measurement date.
Level 2: inputs other than quoted prices included within Level 1 that are observable (i.e. developed using market
data) for the asset or liability, either directly or indirectly.
Level 3: inputs are unobservable (i.e. for which market data is unavailable) for the asset or liability.
Investment Objective
The Fund aims to provide growth over the long term, which is a period of 5 years or more, by tracking the performance of
the FTSE All-World Index (the “Index”).
Investment Policy*
The Index measures the performance of large and medium size companies in developed and emerging markets,
as defined by the Index provider.
The Fund may invest in different types of derivatives for efficient portfolio management, including hedging. In particular
the Fund may use derivatives to help it manage cash flows and dividend payments with the aim of generating returns
that are consistent with the Index. The use of derivatives will be consistent with the risk profile of the Fund.
Investment Strategy*
The Fund will invest in a representative sample of the shares (equities) of companies that make up the Index and
possibly some securities that are not included in the Index that are designed to help the Fund track the performance
of the Index.
The Fund may not invest in all the companies of the Index to manage transaction costs or to reflect market conditions,
regulations or HSBC’s banned weapons policy.
The Fund may hold cash and other funds, including funds managed by the HSBC Group, to manage day-to-day cash
flow requirements.
The Fund’s performance is measured against the Index, because the Fund intends to track the performance of
the Index.
*For details of the full Investment Policy and Strategy please refer to the HSBC Index Tracker Investment Funds
prospectus. We have also published a Glossary of key terms used which you may wish to refer to. Both documents
can be found at https://www.assetmanagement.hsbc.co.uk/en/individual-investor/fund-centre.
Portfolio Activity
FTSE All-World index was up 25.59% over the reporting period. The main contributor to the index total return was the
Technology sector with 6.55%, followed by the Financials sector with 5.52% and Industrials with 4.49%. In absolute
terms the best performing sectors were Basic Materials (47.55%) and Financials (42.99%). No sector has performed
negatively. From a country perspective, the main driver was the US with a contribution of 14.23% on its own.
Global equities reported steady gains throughout the reporting period and recovered quickly from the historic sell off
due to the Covid-19 crisis in late February and March 2020. This was mainly on the back of positive sentiment in the US
and Europe due to the fiscal stimuli and general political support and more recently a resurgence in economic activity
as social restrictions are gradually being lifted and the inoculation campaign is moving on swiftly in parts of the world.
Generally, the development was also supported by US data where labour markets have shown healthy sequential
progress and early corporate earnings reports towards the end of the period were equally encouraging. Asian stocks’
performance was generally also positive based on removed uncertainty in the markets as well as the supportive policy
actions in the Western world. However, towards the end of the period we have seen more mixed performances with
falling Chinese equities in March and then the Covid-19 crisis in India leading to weakening investor sentiment.
FTSE ALL-WORLD INDEX FUND 87
Investment Performance
During the year under review, the value of the shares in the Fund increased by 25.26% while the value of the
FTSE All-World Index rose by 25.59%.
(Source: Morningstar Direct, GBP, UK net of tax, for the Accumulation C share class. Returns based on the NAV,
which is a single price.)
Please note that the above information refers to the past and that past performance is not a reliable indication
of future returns.
Tracking Error
Tracking error - 0.12%
The tracking error is based on gross returns from our internal performance system for the year to 15.5.21.
Fund Particulars
as at 17 May 2021
Income Accumulation
S S
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Security Holding
Total Bid
net value
assets £’000
%
MAURITIUS- 0.00% (0.00%)
Golden Agri-Resources 409,708 53 0.00
Total Mauritius 53 0.00
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Comparative Tables
Institutional Income
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 154.70p 154.70p 150.40p
Return before operating charges* 43.85p 3.49p 7.79p
Operating charges** (0.06p) (0.06p) (0.05p)
Return after operating charges* 43.79p 3.43p 7.74p
Distributions on income shares (3.09p) (3.43p) (3.44p)
Closing net asset value per share 195.40p 154.70p 154.70p
*after direct transaction costs of:*** 0.05p 0.05p 0.03p
Performance
Return after charges 28.31% 2.22% 5.15%
Other information
Closing net asset value £89,867,079 £96,482,443 £109,105,733
Closing number of shares 45,980,909 62,370,619 70,538,209
Operating charges - OCF 0.03% 0.04% 0.03%
Direct transaction costs 0.03% 0.03% 0.02%
Prices
Highest share price 203.70p 179.50p 162.40p
Lowest share price 156.60p 133.30p 139.80p
Institutional Accumulation
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 175.10p 171.30p 162.90p
Return before operating charges* 49.77p 3.87p 8.45p
Operating charges** (0.07p) (0.07p) (0.05p)
Return after operating charges* 49.70p 3.80p 8.40p
Distributions on accumulation shares (3.50p) (3.80p) (3.73p)
Retained distributions on accumulation shares 3.50p 3.80p 3.73p
Closing net asset value per share 224.80p 175.10p 171.30p
*after direct transaction costs of:*** 0.05p 0.05p 0.03p
Performance
Return after charges 28.38% 2.22% 5.16%
Other information
Closing net asset value £1,782,125,676 £1,858,346,573 £1,778,942,788
Closing number of shares 792,686,752 1,061,064,857 1,038,562,142
Operating charges - OCF 0.03% 0.04% 0.03%
Direct transaction costs 0.03% 0.03% 0.02%
Prices
Highest share price 230.70p 198.90p 176.00p
Lowest share price 177.40p 147.60p 151.50p
**The operating charges include all costs borne by the Fund, except for direct transaction costs.
***The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers,
levies by regulatory agencies and securities exchanges as well as transfer taxes and duties.
FTSE ALL-WORLD INDEX FUND 165
Comparative Tables
Income C
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 154.70p 154.70p 150.40p
Return before operating charges* 43.84p 3.49p 7.79p
Operating charges** (0.24p) (0.30p) (0.28p)
Return after operating charges* 43.60p 3.19p 7.51p
Distributions on income shares (2.90p) (3.19p) (3.21p)
Closing net asset value per share 195.40p 154.70p 154.70p
*after direct transaction costs of:*** 0.05p 0.05p 0.03p
Performance
Return after charges 28.18% 2.06% 4.99%
Other information
Closing net asset value £35,951,909 £19,573,347 £13,680,526
Closing number of shares 18,394,888 12,652,828 8,845,274
Operating charges - OCF 0.13% 0.13%† 0.18%
Direct transaction costs 0.03% 0.03% 0.02%
Prices
Highest share price 203.50p 179.30p 162.20p
Lowest share price 156.70p 133.10p 139.70p
Accumulation C
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 173.70p 170.20p 162.10p
Return before operating charges* 49.37p 3.82p 8.40p
Operating charges** (0.27p) (0.32p) (0.30p)
Return after operating charges* 49.10p 3.50p 8.10p
Distributions on accumulation shares (3.26p) (3.51p) (3.46p)
Retained distributions on accumulation shares 3.26p 3.51p 3.46p
Closing net asset value per share 222.80p 173.70p 170.20p
*after direct transaction costs of:*** 0.05p 0.05p 0.03p
Performance
Return after charges 28.27% 2.06% 5.00%
Other information
Closing net asset value £291,767,367 £134,450,893 £65,135,339
Closing number of shares 130,950,248 77,388,935 38,279,005
Operating charges - OCF 0.13% 0.13%† 0.18%
Direct transaction costs 0.03% 0.03% 0.02%
Prices
Highest share price 228.60p 197.30p 174.80p
Lowest share price 176.00p 146.40p 150.50p
†Estimate for OCF as registrar fees were no longer to be paid by the class effective 1.4.20.
**The operating charges include all costs borne by the Fund, except for direct transaction costs.
***The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers,
levies by regulatory agencies and securities exchanges as well as transfer taxes and duties.
166 FTSE ALL-WORLD INDEX FUND
Comparative Tables
Income S
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 154.70p 154.70p 150.40p
Return before operating charges* 43.84p 3.49p 7.79p
Operating charges** (0.22p) (0.20p) (0.18p)
Return after operating charges* 43.62p 3.29p 7.61p
Distributions on income shares (2.92p) (3.29p) (3.31p)
Closing net asset value per share 195.40p 154.70p 154.70p
*after direct transaction costs of:*** 0.05p 0.04p 0.03p
Performance
Return after charges 28.20% 2.13% 5.06%
Other information
Closing net asset value £331,667,233 £354,362,528 £41,937
Closing number of shares 169,721,088 229,087,041 27,113
Operating charges - OCF 0.12% 0.13% 0.12%
Direct transaction costs 0.03% 0.03% 0.02%
Prices
Highest share price 203.50p 179.40p 162.30p
Lowest share price 156.60p 133.20p 139.70p
Accumulation S
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 174.00p 170.30p 162.20p
Return before operating charges* 49.35p 3.92p 8.30p
Operating charges** (0.25p) (0.22p) (0.20p)
Return after operating charges* 49.10p 3.70p 8.10p
Distributions on accumulation shares (3.29p) (3.62p) (3.56p)
Retained distributions on accumulation shares 3.29p 3.62p 3.56p
Closing net asset value per share 223.10p 174.00p 170.30p
*after direct transaction costs of:*** 0.05p 0.05p 0.03p
Performance
Return after charges 28.22% 2.17% 4.99%
Other information
Closing net asset value £185,746 £350,758 £43,661
Closing number of shares 83,244 201,605 25,636
Operating charges - OCF 0.12% 0.13% 0.12%
Direct transaction costs 0.03% 0.03% 0.02%
Prices
Highest share price 228.90p 197.60p 175.00p
Lowest share price 176.20p 146.60p 150.60p
**The operating charges include all costs borne by the Fund, except for direct transaction costs.
***The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers,
levies by regulatory agencies and securities exchanges as well as transfer taxes and duties.
FTSE ALL-WORLD INDEX FUND 167
15.5.21 15.5.20
Notes £’000 £’000 £’000 £’000
Income
Net capital gains 2 607,368 11,428
Revenue 3 51,172 51,983
Expenses 4 (1,425) (996)
Interest payable and similar charges (7) (10)
Net revenue before taxation 49,740 50,977
Taxation 5 (5,621) (5,557)
Net revenue after taxation 44,119 45,420
Total return before distributions 651,487 56,848
Distributions 6 (44,133) (45,521)
Change in net assets attributable
to shareholders from investment activities 607,354 11,327
15.5.21 15.5.20
£’000 £’000 £’000 £’000
Opening net assets attributable to shareholders 2,463,567 1,966,950
Amounts receivable on creation of shares 594,220 827,267
Amounts payable on cancellation of shares (1,167,959) (386,969)
(573,739) 440,298
Dilution adjustment 2,400 1,931
Change in net assets attributable to shareholders from
investment activities (see Statement of Total Return above) 607,354 11,327
Retained distribution on accumulation shares 31,983 43,061
Closing net assets attributable to shareholders 2,531,565 2,463,567
Balance Sheet
as at 15 May 2021
15.5.21 15.5.20
Notes £’000 £’000 £’000 £’000
Assets
Investments 2,530,934 2,408,879
Current assets
Debtors 8 42,344 9,603
Cash and bank balances 89,307 111,453
Total current assets 131,651 121,056
Total assets 2,662,585 2,529,935
Liabilities
Investment liabilities (6) (1,996)
Creditors
Distribution payable on income shares (6,913) (10,075)
Other creditors 9 (124,101) (54,297)
Total creditors (131,014) (64,372)
Total liabilities (131,020) (66,368)
Net assets attributable to shareholders 2,531,565 2,463,567
168 FTSE ALL-WORLD INDEX FUND
Institutional Income
Group 1 3.086719 - 3.086719 3.432591
Group 2 1.292283 1.794436 3.086719 3.432591
Institutional Accumulation
Group 1 3.495385 - 3.495385 3.801230
Group 2 1.987233 1.508152 3.495385 3.801230
Income C
Group 1 2.904373 - 2.904373 3.194186
Group 2 1.148032 1.756341 2.904373 3.194186
Accumulation C
Group 1 3.262740 - 3.262740 3.514793
Group 2 1.409247 1.853493 3.262740 3.514793
Income S
Group 1 2.921983 - 2.921983 3.287116
Group 2 1.939067 0.982916 2.921983 3.287116
Accumulation S
Group 1 3.286582 - 3.286582 3.617397
Group 2 1.103851 2.182731 3.286582 3.617397
FTSE ALL-WORLD INDEX FUND 169
15.5.21 15.5.20
£’000 £’000
1. Accounting Policies
The accounting policies are set out on pages 9 and 10.
3. Revenue
UK dividends (net) 3,225 3,775
Property investment income 27 42
Overseas dividends 47,519 47,627
Deposit interest - 111
Bank interest 1 151
Stock dividends 400 277
Total revenue 51,172 51,983
4. Expenses
Payable to the Authorised Corporate Director, associates of
the Authorised Corporate Director and agents of either of them:
Authorised Corporate Director's charge 621 167
Registration fee - 45
Safe custody fee 194 216
815 428
Payable to the Depositary, associates of the Depositary
and agents of either of them:
Depositary fee 219 190
Other expenses:
Audit fee 7 5
Dividend collection expenses 10 9
Licence fee 369 332
Legal fee 3 28
Professional fee - 2
Report and accounts fee 2 2
391 378
Total expenses 1,425 996
170 FTSE ALL-WORLD INDEX FUND
15.5.21 15.5.20
£’000 £’000
5. Taxation
a) Analysis of charge in year:
Corporation tax 177 380
Overseas tax 5,432 5,496
Reclaimable tax written off 189
Double tax relief (177) (320)
Adjustments in respect of prior years - 1
Total tax for the year (note 5b) 5,621 5,557
b) Factors affecting taxation charge for the year:
The tax assessed for the year is lower than the standard rate of
corporation tax in the UK for an open-ended investment company (20%).
The differences are explained below:
Net revenue before taxation 49,740 50,977
Corporation tax at 20% 9,948 10,195
Effects of:
Revenue not subject to taxation (9,771) (9,815)
Overseas tax 5,418 5,395
Reclaimable tax written off 189 -
Overseas tax on special dividends in capital 14 101
Double tax relief (177) (320)
Adjustments in respect of prior years - 1
Current tax charge for the year (note 5a) 5,621 5,557
c) Provision for deferred taxation
At 15 May 2021, there is no potential deferred tax asset (15.5.20: £nil) in relation to surplus management expenses.
6. Distributions
The distributions take account of amounts received on the issue of shares
and amounts deducted on the cancellation of shares, and comprise:
Final dividend distribution 38,896 53,136
38,896 53,136
Add: Amounts deducted on cancellation of shares 9,816 4,444
Deduct: Amounts received on issue of shares (4,579) (12,059)
Net distribution for the year 44,133 45,521
8. Debtors
Amounts receivable for creation of shares 1,958 1,848
Sales awaiting settlement 32,749 51
Accrued revenue 4,885 5,100
Overseas tax recoverable 2,706 2,484
Corporation tax recoverable 46 120
Total debtors 42,344 9,603
9. Other Creditors
Amounts payable for cancellation of shares 123,451 53,728
Purchases awaiting settlement 604 490
Accrued expenses 44 77
Tax payable 2 2
Total other creditors 124,101 54,297
FTSE ALL-WORLD INDEX FUND 171
Income Accumulation
S S
% % % % % %
As at 15.5.21 84.09 96.91 2.34 2.07 0.01 -
As at 15.5.20 88.62 97.11 1.28 0.97 - -
Details of all other material related party transactions during the year and any payment amounts outstanding at the
balance sheet date are disclosed in notes 8 and 9 to the financial statements and the Statement of Change in Net Assets
Attributable to Shareholders and the Portfolio Statement.
The balance due to the ACD (including amounts due to associates and agents) at the year end was £121,619,365
(15.5.20: £52,008,208), further details of such amounts can be found in notes 8 and 9.
At the year end, the Fund held £4,675,633 (15.5.20: £5,528,414) in Authorised Investment Funds managed by HSBC
and/or HSBC Holdings, the parent company of the ACD. During the year, transactions in Authorised Investment Funds
managed by HSBC and/or HSBC Holdings totalled £1,426,650 (15.5.20: £3,692,290).
Investments in related parties are disclosed in the Portfolio Statement.
172 FTSE ALL-WORLD INDEX FUND
For the year ended 15 May 2021 Purchases Commissions Taxes Other Expenses
£'000 £’000 % £’000 % £’000 %
Analysis of total purchases costs
Equity transactions 321,486 185 0.06 130 0.04 10 -
Corporate actions 1,770 - - - - - -
Total purchases before transaction costs 323,256 185 130 10
Transaction costs 325
Total purchases after commission,
tax and fees 323,581
For the year ended 15 May 2020 Purchases Commissions Taxes Other Expenses
£'000 £’000 % £’000 % £’000 %
Analysis of total purchases costs
Equity transactions 712,302 173 0.02 217 0.03 79 0.01
Corporate actions 949 - - - - - -
Total purchases before transaction costs 713,251 173 217 79
Transaction costs 469
Total purchases after commission,
tax and fees 713,720
Portfolio transaction costs are incurred by the Fund when buying and selling underlying investments. These costs vary
depending on the class of investment, country of exchange and method of execution.
These costs can be classified as either direct or indirect transaction costs:
Direct transaction costs: Broker commissions, fees and taxes.
Indirect transaction costs: ‘Dealing spread’ – the difference between the buying and selling prices of the
Fund’s underlying investments.
In order to protect existing investors from the effects of dilution, portfolio transaction costs incurred as a result of
investors buying and selling shares in the Fund are recovered from those investors through a ‘dilution adjustment’
to the price they pay or receive.
17. Fair Value of Investments
FRS 102 requires an entity to classify fair value measurements using a fair value hierarchy that reflects the significance
of the inputs used in making the measurements. The fair value hierarchy shall have the following classifications:
Level 1: unadjusted quoted prices in an active market for identical assets or liabilities that the entity can access at
the measurement date.
Level 2: inputs other than quoted prices included within Level 1 that are observable (i.e. developed using market
data) for the asset or liability, either directly or indirectly.
Level 3: inputs are unobservable (i.e. for which market data is unavailable) for the asset or liability.
Investment Objective
The Fund aims to provide growth over the long term, which is a period of 5 years or more, by tracking the performance of
the FTSE Developed Europe excluding UK Index (the “Index”).
Investment Policy*
The Index is made up of large and medium sized companies covering developed markets in Europe excluding the UK,
as defined by the Index provider.
The Fund may invest in different types of derivatives for efficient portfolio management, including hedging. In particular
the Fund may use derivatives to help it manage cash flows and dividend payments with the aim of generating returns
that are consistent with the Index. The use of derivatives will be consistent with the risk profile of the Fund.
Investment Strategy*
The Fund will invest directly in shares (equities) of all of the companies that make up the Index and in the same or very
similar proportions in which they are included in the Index.
However, there may be circumstances when it is not possible or practical for the Fund to invest in shares of all the
companies of the Index. The Fund may not invest in all the companies of the Index to manage transaction costs or
to reflect market conditions, regulations or HSBC’s banned weapons policy.
The Fund may hold cash and other funds, including funds managed by the HSBC Group, to manage day-to-day cash
flow requirements.
The Fund’s performance is measured against the Index, because the Fund intends to track the performance of
the Index.
*For details of the full Investment Policy and Strategy please refer to the HSBC Index Tracker Investment Funds
prospectus. We have also published a Glossary of key terms used which you may wish to refer to. Both documents
can be found at https://www.assetmanagement.hsbc.co.uk/en/individual-investor/fund-centre.
Portfolio Activity
FTSE Developed Europe ex UK Index was up 30.64% during the reporting period. The main drivers were the Industrials
and Financials with a contribution of 7.82% and 7.24% respectively to the total return of the index. The Industrials
sector also increased the most in absolute terms with 50.12%, while the Financials and Basic Materials also returned
over 40%. Only the Healthcare sector was slightly negative during the period. Country wise it was France and Germany
who contributed the most to this recovery with a contribution of 7.79% and 6.15% to the total index return. All countries
showed a positive performance.
During the first part of the period, European equities recovered first on the back of fiscal stimuli and strong policy
measures across many European countries, before falling again amid rising Covid-19 cases, Brexit uncertainties and fears
over new economic restrictions. Since then stock prices steadily increased again due to a positive effect coming from
the last minute free trade agreement between the EU and UK and first approvals of vaccines. However, more and more
the rising Covid-19 infections once more started to dampen investor sentiment, mainly in January. More recently though
investors were encouraged again by the improving speed of the Covid-19 vaccine rollout, Central Bank support and the
renewed optimism over the reopening of the economy, leading to higher prices.
178 EUROPEAN INDEX FUND
Investment Performance
During the year under review, the value of the shares in the Fund increased by 32.15% while the value of the
FTSE Developed Europe Excluding UK Index rose by 30.64%.
(Source: Morningstar Direct, GBP, UK net of tax, for the Accumulation C share class. Returns based on the NAV,
which is a single price.)
Please note that the above information refers to the past and that past performance is not a reliable indication
of future returns.
Tracking Error
Tracking error - 0.14%
The tracking error is based on gross returns from our internal performance system for the year to 15.5.21.
Fund Particulars
as at 17 May 2021
Income Accumulation
C C
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Comparative Tables
Retail Income
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 546.00p 597.40p 624.00p
Return before operating charges* 193.91p (36.95p) (8.78p)
Operating charges** (1.02p) (0.95p) (1.05p)
Return after operating charges* 192.89p (37.90p) (9.83p)
Distributions on income shares (13.09p) (13.50p) (16.77p)
Closing net asset value per share 725.80p 546.00p 597.40p
*after direct transaction costs of:*** 0.20p 0.19p 0.14p
Performance
Return after charges 35.33% (6.34%) (1.58%)
Other information
Closing net asset value £38,185 £3,469,856 £4,239,436
Closing number of shares 5,261 635,520 709,693
Operating charges - OCF 0.16% 0.15% 0.17%
Direct transaction costs 0.03% 0.03% 0.02%
Prices
Highest share price 744.90p 676.10p 644.70p
Lowest share price 556.40p 466.80p 551.10p
Retail Accumulation
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 819.40p 874.50p 888.60p
Return before operating charges* 290.16p (53.71p) (12.61p)
Operating charges** (1.56p) (1.39p) (1.49p)
Return after operating charges* 288.60p (55.10p) (14.10p)
Distributions on accumulation shares (19.97p) (19.76p) (23.89p)
Retained distributions on accumulation shares 19.97p 19.76p 23.89p
Closing net asset value per share 1,108.00p 819.40p 874.50p
*after direct transaction costs of:*** 0.30p 0.27p 0.19p
Performance
Return after charges 35.22% (6.30%) (1.59%)
Other information
Closing net asset value £29,777,551 £49,128,026 £55,190,315
Closing number of shares 2,687,435 5,995,944 6,311,139
Operating charges - OCF 0.16% 0.15% 0.17%
Direct transaction costs 0.03% 0.03% 0.02%
Prices
Highest share price 1,118.00p 990.20p 917.90p
Lowest share price 835.10p 683.60p 784.70p
**The operating charges include all costs borne by the Fund, except for direct transaction costs.
***The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers,
levies by regulatory agencies and securities exchanges as well as transfer taxes and duties.
192 EUROPEAN INDEX FUND
Comparative Tables
Institutional Income
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 805.00p 880.80p 921.10p
Return before operating charges* 285.19p (54.46p) (14.00p)
Operating charges** (0.28p) (0.23p) (0.39p)
Return after operating charges* 284.91p (54.69p) (14.39p)
Distributions on income shares (20.91p) (21.11p) (25.91p)
Closing net asset value per share 1,069.00p 805.00p 880.80p
*after direct transaction costs of:*** 0.30p 0.27p 0.20p
Performance
Return after charges 35.39% (6.21%) (1.56%)
Other information
Closing net asset value £315,288,235 £309,997,095 £238,852,090
Closing number of shares 29,507,425 38,510,568 27,117,441
Operating charges - OCF 0.03% 0.02% 0.04%
Direct transaction costs 0.03% 0.03% 0.02%
Prices
Highest share price 1,099.00p 998.00p 950.90p
Lowest share price 820.40p 689.00p 813.30p
Institutional Accumulation
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 889.90p 948.50p 962.50p
Return before operating charges* 315.42p (58.37p) (13.58p)
Operating charges** (0.32p) (0.23p) (0.42p)
Return after operating charges* 315.10p (58.60p) (14.00p)
Distributions on accumulation shares (23.12p) (22.74p) (27.11p)
Retained distributions on accumulation shares 23.12p 22.74p 27.11p
Closing net asset value per share 1,205.00p 889.90p 948.50p
*after direct transaction costs of:z** 0.34p 0.30p 0.21p
Performance
Return after charges 35.41% (6.18%) (1.45%)
Other information
Closing net asset value £1,114,433,156 £552,729,045 £508,917,662
Closing number of shares 92,516,870 62,110,949 53,653,230
Operating charges - OCF 0.03% 0.02% 0.05%
Direct transaction costs 0.03% 0.03% 0.02%
Prices
Highest share price 1,216.00p 1,075.00p 994.80p
Lowest share price 907.00p 742.30p 850.80p
**The operating charges include all costs borne by the Fund, except for direct transaction costs.
***The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers,
levies by regulatory agencies and securities exchanges as well as transfer taxes and duties.
EUROPEAN INDEX FUND 193
Comparative Tables
Institutional A Accumulation#
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 861.90p 919.80p 934.70p
Return before operating charges* 258.15p (56.43p) (13.33p)
Operating charges** (1.05p) (1.47p) (1.57p)
Return after operating charges* 257.10p (57.90p) (14.90p)
Distributions on accumulation shares (0.00p) (20.79p) (25.13p)
Retained distributions on accumulation shares 0.00p 20.79p 25.13p
Cancellation price (1,119.00p) - -
Closing net asset value per share - 861.90p 919.80p
*after direct transaction costs of:*** 0.31p 0.29p 0.20p
Performance
Return after charges 29.83% (6.29%) (1.59%)
Other information
Closing net asset value N/A £779,439 £917,064
Closing number of shares N/A 90,437 99,701
Operating charges - OCF N/A 0.15% 0.17%
Direct transaction costs N/A 0.03% 0.02%
Prices
Highest share price 1,119.00p 1,043.00p 965.50p
Lowest share price 878.40p 719.00p 825.40p
Income C
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 549.70p 601.40p 628.20p
Return before operating charges* 194.37p (37.14p) (8.83p)
Operating charges** (0.40p) (0.34p) (0.46p)
Return after operating charges* 193.97p (37.48p) (9.29p)
Distributions on income shares (14.07p) (14.22p) (17.51p)
Closing net asset value per share 729.60p 549.70p 601.40p
*after direct transaction costs of:*** 0.21p 0.19p 0.14p
Performance
Return after charges 35.29% (6.23%) (1.48%)
Other information
Closing net asset value £192,270,142 £108,336,922 £88,231,541
Closing number of shares 26,352,443 19,709,481 14,670,700
Operating charges - OCF 0.06% 0.05% 0.08%
Direct transaction costs 0.03% 0.03% 0.02%
Prices
Highest share price 750.50p 681.30p 649.20p
Lowest share price 560.20p 470.40p 555.20p
#The Institutional A Accumulation share class converted to Accumulation C on 8 January 2021.
**The operating charges include all costs borne by the Fund, except for direct transaction costs.
***The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers,
levies by regulatory agencies and securities exchanges as well as transfer taxes and duties.
194 EUROPEAN INDEX FUND
Comparative Tables
Accumulation C
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 825.80p 880.50p 893.70p
Return before operating charges* 291.80p (54.20p) (12.55p)
Operating charges** (0.60p) (0.50p) (0.65p)
Return after operating charges* 291.20p (54.70p) (13.20p)
Distributions on accumulation shares (21.15p) (20.83p) (24.91p)
Retained distributions on accumulation shares 21.15p 20.83p 24.91p
Closing net asset value per share 1,117.00p 825.80p 880.50p
*after direct transaction costs of:*** 0.31p 0.27p 0.20p
Performance
Return after charges 35.26% (6.21%) (1.48%)
Other information
Closing net asset value £945,212,031 £551,922,126 £395,972,349
Closing number of shares 84,587,624 66,833,957 44,972,738
Operating charges - OCF 0.06% 0.06% 0.08%
Direct transaction costs 0.03% 0.03% 0.02%
Prices
Highest share price 1,128.00p 997.80p 923.60p
Lowest share price 841.70p 688.80p 789.80p
**The operating charges include all costs borne by the Fund, except for direct transaction costs.
***The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers,
levies by regulatory agencies and securities exchanges as well as transfer taxes and duties.
EUROPEAN INDEX FUND 195
15.5.21 15.5.20
Notes £’000 £’000 £’000 £’000
Income
Net capital gains/(losses) 2 556,586 (149,231)
Revenue 3 52,722 38,893
Expenses 4 (884) (563)
Interest payable and similar charges (415) (235)
Net revenue before taxation 51,423 38,095
Taxation 5 (5,332) (2,774)
Net revenue after taxation 46,091 35,321
Total return/(deficit) before distributions 602,677 (113,910)
Distributions 6 (46,114) (35,324)
Change in net assets attributable
to shareholders from investment activities 556,563 (149,234)
15.5.21 15.5.20
£’000 £’000 £’000 £’000
Opening net assets attributable to shareholders 1,576,363 1,292,320
Amounts receivable on creation of shares 1,033,751 679,541
Amounts payable on cancellation of shares (611,271) (276,501)
422,480 403,040
Dilution adjustment 1,805 989
Change in net assets attributable to shareholders from
investment activities (see Statement of Total Return above) 556,563 (149,234)
Retained distribution on accumulation shares 39,808 29,248
Closing net assets attributable to shareholders 2,597,019 1,576,363
Balance Sheet
as at 15 May 2021
15.5.21 15.5.20
Notes £’000 £’000 £’000 £’000
Assets
Investments 2,487,408 1,527,589
Current assets
Debtors 8 50,628 16,442
Cash and bank balances 80,911 57,913
Total current assets 131,539 74,355
Total assets 2,618,947 1,601,944
Liabilities
Investment liabilities - (1,000)
Creditors
Distribution payable on income shares (9,878) (11,018)
Other creditors 9 (12,050) (13,563)
Total creditors (21,928) (24,581)
Total liabilities (21,928) (25,581)
Net assets attributable to shareholders 2,597,019 1,576,363
196 EUROPEAN INDEX FUND
Retail Income
Group 1 13.092697 - 13.092697 13.495720
Group 2 9.772126 3.320571 13.092697 13.495720
Retail Accumulation
Group 1 19.965917 - 19.965917 19.763613
Group 2 15.435235 4.530682 19.965917 19.763613
Institutional Income
Group 1 20.905444 - 20.905444 21.109084
Group 2 15.226983 5.678461 20.905444 21.109084
Institutional Accumulation
Group 1 23.115042 - 23.115042 22.738669
Group 2 15.722982 7.392060 23.115042 22.738669
Institutional A Accumulation†
Group 1 N/A - N/A 20.788000
Group 2 N/A N/A N/A 20.788000
Income C
Group 1 14.072652 - 14.072652 14.223239
Group 2 8.677045 5.395607 14.072652 14.223239
Accumulation C
Group 1 21.145534 - 21.145534 20.828558
Group 2 12.305704 8.839830 21.145534 20.828558
†The Institutional A Accumulation share class converted to Accumulation C on 8 January 2021.
EUROPEAN INDEX FUND 197
15.5.21 15.5.20
£’000 £’000
1. Accounting Policies
The accounting policies are set out on pages 9 and 10.
3. Revenue
UK dividends (net) 39 53
Overseas dividends 51,586 38,645
Bank interest - 8
Stock dividends 1,097 187
Total revenue 52,722 38,893
4. Expenses
Payable to the Authorised Corporate Director, associates of
the Authorised Corporate Director and agents of either of them:
Authorised Corporate Director's charge 325 255
Safe custody fee 188 177
513 432
Payable to the Depositary, associates of the Depositary
and agents of either of them:
Depositary fee 180 133
Other expenses:
Audit fee 7 5
Licence fee 182 (12)
Legal fee 1 -
Report and accounts fee 1 2
Professional fee - 3
191 (2)
Total expenses 884 563
198 EUROPEAN INDEX FUND
15.5.21 15.5.20
£’000 £’000
5. Taxation
a) Analysis of charge in year:
Overseas tax 4,515 2,774
Reclaimable tax written off 817 -
Total tax for the year (note 5b) 5,332 2,774
b) Factors affecting taxation charge for the year:
The tax assessed for the year is lower than the standard rate of
corporation tax in the UK for an open-ended investment company (20%).
The differences are explained below:
Net revenue before taxation 51,423 38,095
Corporation tax at 20% 10,285 7,619
Effects of:
Revenue not subject to taxation (10,484) (7,741)
Overseas tax 4,510 2,771
Overseas tax on special dividends in capital 5 3
Current year expenses not utilised 208 127
Tax relief on overseas tax suffered (9) (5)
Reclaimable tax written off 817 -
Current tax charge for the year (note 5a) 5,332 2,774
c) Provision for deferred taxation
At 15 May 2021, there is a potential deferred tax asset of £1,181,403 (15.5.20: £973,008) in relation to surplus
management expenses. It is unlikely the Fund will generate sufficient taxable profits in the future to utilise these
expenses and therefore no deferred tax asset has been recognised in the year or prior year.
6. Distributions
The distributions take account of amounts received on the issue of shares
and amounts deducted on the cancellation of shares, and comprise:
Final dividend distribution 49,686 40,266
49,686 40,266
Add: Amounts deducted on cancellation of shares 4,342 3,491
Deduct: Amounts received on issue of shares (7,914) (8,433)
Net distribution for the year 46,114 35,324
8. Debtors
Amounts receivable for creation of shares 36,293 5,891
Accrued revenue 2,369 1,465
Overseas tax recoverable 11,966 9,086
Total debtors 50,628 16,442
9. Other Creditors
Amounts payable for cancellation of shares 11,979 13,121
Purchases awaiting settlement - 317
Accrued expenses 56 110
Corporation tax payable 15 15
Total other creditors 12,050 13,563
EUROPEAN INDEX FUND 199
% % % % % % %
As at 15.5.21 - - 83.87 94.76 N/A 2.28 2.13
As at 15.5.20 - - 83.55 91.50 - 2.95 2.50
#The Institutional A Accumulation share class converted to Accumulation C on 8 January 2021.
Details of all other material related party transactions during the year and any payment amounts outstanding at the
balance sheet date are disclosed in notes 8 and 9 to the financial statements and the Statement of Change in Net Assets
Attributable to Shareholders and the Portfolio Statement.
The balance due from/to the ACD (including amounts due to associates and agents) at the year end was £24,228,216
(15.5.20: £7,345,408), further details of such amounts can be found in notes 8 and 9.
There were no shares held by the Trustee or its associates.
Investments in related parties are disclosed in the Portfolio Statement.
200 EUROPEAN INDEX FUND
For the year ended 15 May 2021 Purchases Commissions Taxes Other Expenses
£'000 £’000 % £’000 % £’000 %
Analysis of total purchases costs
Equity transactions 633,475 109 0.02 427 0.07 - -
Corporate actions 4,632 - - - - - -
Total purchases before transaction costs 638,107 109 427 -
Transaction costs 536
Total purchases after commission,
tax and fees 638,643
Sales Commissions Taxes Other Expenses
£'000 £’000 % £’000 % £’000 %
Analysis of total sales costs
Equity transactions 208,932 36 0.02 - - - -
Corporate actions 2,559 - - - - - -
Total sales before transaction costs 211,491 36 - -
Transaction costs (36)
Total sales after commission,
tax and fees 211,455
The Fund had paid £79,955 as commission on purchases and sales derivative transactions for the year ended 15.5.21.
Commissions, taxes and fees as % of average net assets:
Commissions 0.01%
Taxes 0.02%
Other expenses 0.00%
At the balance sheet date the portfolio dealing spread was 0.06%, being the difference between the respective bid and
offer prices for the Fund's investments.
For the year ended 15 May 2020 Purchases Commissions Taxes Other Expenses
£'000 £’000 % £’000 % £’000 %
Analysis of total purchases costs
Equity transactions 437,235 75 0.02 294 0.07 21 -
Corporate actions 736 - - - - - -
Total purchases before transaction costs 437,971 75 294 21
Transaction costs 390
Total purchases after commission,
tax and fees 438,361
Sales Commissions Taxes Other Expenses
£'000 £’000 % £’000 % £’000 %
Analysis of total sales costs
Equity transactions 18,503 2 0.01 - - - -
Corporate actions 935 - - - - - -
Total sales before transaction costs 19,438 2 - -
Transaction costs (2)
Total sales after commission,
tax and fees 19,436
The Fund had paid £56,091 as commission on purchases and sales derivative transactions for the year ended 15.5.20.
202 EUROPEAN INDEX FUND
Investment Objective
The Fund aims to provide growth over the long term, which is a period of five years or more, by tracking the performance
of the S&P 500 Index (the “Index”).
Investment Policy*
The Index is made up of the 500 largest stock market listed companies in the United States of America, as defined by
the Index provider.
The Fund may invest in different types of derivatives for efficient portfolio management, including hedging. In particular
the Fund may use derivatives to help it manage cash flows and dividend payments with the aim of generating returns
that are consistent with the Index. The use of derivatives will be consistent with the risk profile of the Fund.
Investment Strategy*
The Fund will invest directly in shares (equities) of all of the companies that make up the Index and in the same or very
similar proportions in which they are included in the Index.
However, there may be circumstances when it is not possible or practical for the Fund to invest in shares of all the
companies of the Index. The Fund may not invest in all the companies of the Index to manage transaction costs or to
reflect market conditions, regulations or HSBC’s banned weapons policy.
The Fund may hold cash and other funds, including funds managed by the HSBC Group, to manage day-to-day cash
flow requirements.
The Fund’s performance is measured against the Index, because the Fund intends to track the performance of
the Index.
*For details of the full Investment Policy and Strategy please refer to the HSBC Index Tracker Investment Funds
prospectus. We have also published a Glossary of key terms used which you may wish to refer to. Both documents
can be found at https://www.assetmanagement.hsbc.co.uk/en/individual-investor/fund-centre.
Portfolio Activity
S&P 500 index was up 24.27% during the reporting period. The main contributor to the total index return was the
Information Technology sector with 6.56%, followed by Financials and Industrials with 5.00% and 3.51% respectively.
Financials were also the best performing sector in absolute terms with an increase of 51.58%. All sectors showed a
positive performance, the smallest increase was for Utilities with 3.39%.
US equities reported steady gains throughout the reporting period and recovered quickly from the historic sell off due
to the Covid-19 crisis in late February and March 2020. This was mainly on the back of positive sentiment due to the
fiscal stimuli and general political support and more recently a resurgence in economic activity across manufacturing
and services sectors as social restrictions are gradually being lifted and the inoculation campaign is moving on swiftly.
Lower US bond yields boosted tech stocks. Labour markets have shown healthy sequential progress and early corporate
earnings reports towards the end of the period were equally encouraging. The US Federal Reserve remained committed
to not raise interest rates despite the prospects of higher inflation in the short-term. The US President, Joe Biden,
proposed tax increases to pay for the large fiscal stimulus already, or about to be, injected in the economy, which
partly dampened investor sentiment.
AMERICAN INDEX FUND 205
Investment Performance
During the year under review, the value of the shares in the Fund increased by 23.71% while the value of the
S&P 500 Index rose by 24.27%.
(Source: Morningstar Direct, GBP, UK net of tax, for the Accumulation C share class. Returns based on the NAV,
which is a single price.)
Please note that the above information refers to the past and that past performance is not a reliable indication
of future returns.
Tracking Error
Tracking error - 0.08%
The tracking error is based on gross returns from our internal performance system for the year to 15.5.21.
Fund Particulars
as at 17 May 2021
Income Accumulation
C C
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Comparative Tables
Retail Income
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 516.90p 485.70p 439.70p
Return before operating charges* 141.46p 39.94p 54.12p
Operating charges** (0.90p) (0.84p) (0.76p)
Return after operating charges* 140.56p 39.10p 53.36p
Distributions on income shares (6.76p) (7.90p) (7.36p)
Closing net asset value per share 650.70p 516.90p 485.70p
*after direct transaction costs of:*** 0.02p 0.03p 0.02p
Performance
Return after charges 27.19% 8.05% 12.14%
Other information
Closing net asset value £478,516 £9,684,693 £12,691,271
Closing number of shares 73,540 1,873,464 2,613,096
Operating charges - OCF 0.16% 0.16% 0.16%
Direct transaction costs 0.00% 0.01% 0.00%
Prices
Highest share price 671.60p 582.40p 505.80p
Lowest share price 520.90p 429.30p 422.50p
Retail Accumulation
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 630.00p 582.80p 519.70p
Return before operating charges* 172.82p 48.21p 64.00p
Operating charges** (1.12p) (1.01p) (0.90p)
Return after operating charges* 171.70p 47.20p 63.10p
Distributions on accumulation shares (8.62p) (9.49p) (8.71p)
Retained distributions on accumulation shares 8.62p 9.49p 8.71p
Closing net asset value per share 801.70p 630.00p 582.80p
*after direct transaction costs of:*** 0.03p 0.04p 0.02p
Performance
Return after charges 27.25% 8.10% 12.14%
Other information
Closing net asset value £80,686,185 £154,255,631 £180,329,119
Closing number of shares 10,063,839 24,485,733 30,940,441
Operating charges - OCF 0.16% 0.16% 0.16%
Direct transaction costs 0.00% 0.01% 0.00%
Prices
Highest share price 819.10p 699.10p 597.90p
Lowest share price 634.90p 515.30p 499.50p
**The operating charges include all costs borne by the Fund, except for direct transaction costs.
***The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers,
levies by regulatory agencies and securities exchanges as well as transfer taxes and duties.
220 AMERICAN INDEX FUND
Comparative Tables
Institutional Income
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 636.40p 597.90p 541.20p
Return before operating charges* 174.57p 49.27p 66.71p
Operating charges** (0.12p) (0.13p) (0.13p)
Return after operating charges* 174.45p 49.14p 66.58p
Distributions on income shares (9.75p) (10.64p) (9.88p)
Closing net asset value per share 801.10p 636.40p 597.90p
*after direct transaction costs of:*** 0.03p 0.04p 0.02p
Performance
Return after charges 27.41% 8.22% 12.30%
Other information
Closing net asset value £934,129,630 £495,278,449 £225,873,953
Closing number of shares 116,599,025 77,821,891 37,779,718
Operating charges - OCF 0.02% 0.02% 0.02%
Direct transaction costs 0.00% 0.01% 0.00%
Prices
Highest share price 828.40p 717.80p 623.40p
Lowest share price 640.70p 529.10p 520.50p
Institutional Accumulation
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 691.00p 638.30p 568.40p
Return before operating charges* 189.63p 52.84p 70.04p
Operating charges** (0.13p) (0.14p) (0.14p)
Return after operating charges* 189.50p 52.70p 69.90p
Distributions on accumulation shares (10.59p) (11.36p) (10.38p)
Retained distributions on accumulation shares 10.59p 11.36p 10.38p
Closing net asset value per share 880.50p 691.00p 638.30p
*after direct transaction costs of:*** 0.03p 0.04p 0.03p
Performance
Return after charges 27.42% 8.26% 12.30%
Other information
Closing net asset value £2,955,000,547 £1,777,354,564 £1,285,980,319
Closing number of shares 335,592,916 257,232,691 201,458,331
Operating charges - OCF 0.02% 0.02% 0.02%
Direct transaction costs 0.00% 0.01% 0.00%
Prices
Highest share price 899.50p 766.50p 654.80p
Lowest share price 696.40p 565.00p 546.70p
**The operating charges include all costs borne by the Fund, except for direct transaction costs.
***The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers,
levies by regulatory agencies and securities exchanges as well as transfer taxes and duties.
AMERICAN INDEX FUND 221
Comparative Tables
Institutional A Income#
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 539.50p 506.80p 458.80p
Return before operating charges* 107.22p 41.82p 56.49p
Operating charges** (0.62p) (0.87p) (0.80p)
Return after operating charges* 106.60p 40.95p 55.69p
Distributions on income shares 0.00p (8.25p) (7.69p)
Cancellation price (646.10p) 0.00p 0.00p
Closing net asset value per share 0.00p 539.50p 506.80p
*after direct transaction costs of:*** 0.02p 0.03p 0.02p
Performance
Return after charges 19.76% 8.08% 12.14%
Other information
Closing net asset value - £160,048 £196,596
Closing number of shares - 29,667 38,792
Operating charges - OCF - 0.16% 0.16%
Direct transaction costs 0.00% 0.01% 0.00%
Prices
Highest share price 646.10p 607.80p 527.80p
Lowest share price 543.10p 448.00p 440.90p
Institutional A Accumulation#
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 664.30p 614.90p 548.40p
Return before operating charges* 132.06p 50.50p 67.44p
Operating charges** (0.76p) (1.10p) (0.94p)
Return after operating charges* 131.30p 49.40p 66.50p
Distributions on accumulation shares (0.00p) (10.01p) (9.18p)
Retained distributions on accumulation shares 0.00p 10.01p 9.18p
Cancellation price (795.60p) 0.00p 0.00p
Closing net asset value per share 0.00p 664.30p 614.90p
*after direct transaction costs of:*** 0.03p 0.04p 0.02p
Performance
Return after charges 19.77% 8.03% 12.13%
Other information
Closing net asset value - £634,938 £993,441
Closing number of shares - 95,582 161,554
Operating charges - OCF - 0.16% 0.16%
Direct transaction costs 0.00% 0.01% 0.00%
Prices
Highest share price 795.60p 737.20p 630.80p
Lowest share price 668.80p 543.30p 527.00p
#The Institutional A Income class and Institutional A Accumulation classes were terminated on 8 January 2021.
**The operating charges include all costs borne by the Fund, except for direct transaction costs.
***The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers,
levies by regulatory agencies and securities exchanges as well as transfer taxes and duties.
222 AMERICAN INDEX FUND
Comparative Tables
Income C
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 519.20p 487.80p 441.50p
Return before operating charges* 142.45p 40.19p 54.47p
Operating charges** (0.34p) (0.32p) (0.30p)
Return after operating charges* 142.11p 39.87p 54.17p
Distributions on income shares (7.71p) (8.47p) (7.87p)
Closing net asset value per share 653.60p 519.20p 487.80p
*after direct transaction costs of:*** 0.02p 0.03p 0.02p
Performance
Return after charges 27.37% 8.17% 12.27%
Other information
Closing net asset value £470,051,915 £470,251,379 £323,926,406
Closing number of shares 71,918,670 90,570,133 66,409,949
Operating charges - OCF 0.06% 0.06% 0.06%
Direct transaction costs 0.00% 0.01% 0.00%
Prices
Highest share price 675.60p 585.40p 508.40p
Lowest share price 522.70p 431.50p 424.60p
Accumulation C
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 634.90p 586.80p 522.70p
Return before operating charges* 174.31p 48.48p 64.45p
Operating charges** (0.41p) (0.38p) (0.35p)
Return after operating charges* 173.90p 48.10p 64.10p
Distributions on accumulation shares (9.43p) (10.19p) (9.32p)
Retained distributions on accumulation shares 9.43p 10.19p 9.32p
Closing net asset value per share 808.80p 634.90p 586.80p
*after direct transaction costs of:*** 0.03p 0.04p 0.02p
Performance
Return after charges 27.39% 8.20% 12.26%
Other information
Closing net asset value £3,390,257,714 £2,482,210,255 £1,852,578,384
Closing number of shares 419,180,768 390,952,627 315,711,140
Operating charges - OCF 0.06% 0.06% 0.06%
Direct transaction costs 0.00% 0.01% 0.00%
Prices
Highest share price 826.20p 704.40p 601.90p
Lowest share price 639.30p 519.20p 502.70p
**The operating charges include all costs borne by the Fund, except for direct transaction costs.
***The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers,
levies by regulatory agencies and securities exchanges as well as transfer taxes and duties. .
AMERICAN INDEX FUND 223
15.5.21 15.5.20
Notes £’000 £’000 £’000 £’000
Income
Net capital gains 2 1,468,629 257,135
Revenue 3 103,869 91,843
Expenses 4 (2,604) (2,275)
Interest payable and similar charges (2) (3)
Net revenue before taxation 101,263 89,565
Taxation 5 (14,624) (13,184)
Net revenue after taxation 86,639 76,381
Total return before distributions 1,555,268 333,516
Distributions 6 (86,732) (76,758)
Change in net assets attributable
to shareholders from investment activities 1,468,536 256,758
15.5.21 15.5.20
£’000 £’000 £’000 £’000
Opening net assets attributable to shareholders 5,389,830 3,882,569
Amounts receivable on creation of shares 2,362,901 2,080,936
Amounts payable on cancellation of shares (1,468,499) (903,604)
894,402 1,177,332
Dilution adjustment 1,898 1,791
Change in net assets attributable to shareholders from
investment activities (see Statement of Total Return above) 1,468,536 256,758
Retained distribution on accumulation shares 75,939 71,380
Closing net assets attributable to shareholders 7,830,605 5,389,830
Balance Sheet
as at 15 May 2021
15.5.21 15.5.20
Notes £’000 £’000 £’000 £’000
Assets
Investments 7,592,379 5,322,492
Current assets
Debtors 8 21,231 18,181
Cash and bank balances 281,677 89,623
Total current assets 302,908 107,804
Total assets 7,895,287 5,430,296
Liabilities
Investment liabilities (119) (494)
Creditors
Distribution payable on income shares (16,919) (16,097)
Other creditors 9 (47,644) (23,875)
Total creditors (64,563) (39,972)
Total liabilities (64,682) (40,466)
Net assets attributable to shareholders 7,830,605 5,389,830
224 AMERICAN INDEX FUND
Retail Income
Group 1 6.759696 - 6.759696 7.903658
Group 2 5.595799 1.163897 6.759696 7.903658
Retail Accumulation
Group 1 8.623343 - 8.623343 9.487275
Group 2 5.904434 2.718909 8.623343 9.487275
Institutional Income
Group 1 9.748757 - 9.748757 10.637196
Group 2 5.919896 3.828861 9.748757 10.637196
Institutional Accumulation
Group 1 10.585849 - 10.585849 11.358789
Group 2 5.105590 5.480259 10.585849 11.358789
Institutional A Income*
Group 1 0.000000 - 0.000000 8.248598
Group 2 0.000000 0.000000 0.000000 8.248598
Institutional A Accumulation*
Group 1 0.000000 - 0.000000 10.006461
Group 2 0.000000 0.000000 0.000000 10.006461
Income C
Group 1 7.713553 - 7.713553 8.467136
Group 2 3.821932 3.891621 7.713553 8.467136
Accumulation C
Group 1 9.434070 - 9.434070 10.187736
Group 2 3.936932 5.497138 9.434070 10.187736
*The Institutional A Income and Institutional A Accumulation share classes were terminated on 8 January 2021.
AMERICAN INDEX FUND 225
15.5.21 15.5.20
£’000 £’000
1. Accounting Policies
The accounting policies are set out on pages 9 and 10.
3. Revenue
UK dividends (net) 243 354
Overseas dividends 103,392 90,898
Deposit interest 167
Bank interest - 424
Stock dividends 234 -
Total revenue 103,869 91,843
4. Expenses
Payable to the Authorised Corporate Director, associates of
the Authorised Corporate Director and agents of either of them:
Authorised Corporate Director's charge 1,532 1,325
Safe custody fee 122 162
1,654 1,487
Payable to the Depositary, associates of the Depositary
and agents of either of them:
Depositary fee 505 407
Other expenses:
Audit fee 7 5
Legal fee 1 -
Licence fee 433 368
Report and accounts fee 4 4
Professional fee - 4
445 381
Total expenses 2,604 2,275
226 AMERICAN INDEX FUND
15.5.21 15.5.20
£’000 £’000
5. Taxation
a) Analysis of charge in year:
Overseas tax 14,624 13,184
Total tax for the year (note 5b) 14,624 13,184
b) Factors affecting taxation charge for the year:
The tax assessed for the year is lower than the standard rate of
corporation tax in the UK for an open-ended investment company (20%).
The differences are explained below:
Net revenue before taxation 101,263 89,565
Corporation tax at 20% 20,253 17,913
Effects of:
Revenue not subject to taxation (19,895) (17,534)
Irrecoverable overseas tax 14,592 12,808
Irrecoverable overseas tax on capital special dividend 32 376
Utilisation of excess management expenses (233) (272)
Tax relief on overseas tax suffered (125) (107)
Current tax charge for the year (note 5a) 14,624 13,184
c) Provision for deferred taxation
At 15 May 2021, there is a potential deferred tax asset of £106,142 (15.5.20: £339,055) in relation to surplus management
expenses. It is unlikely the Fund will generate sufficient taxable profits in the future to utilise these expenses and therefore
no deferred tax asset has been recognised in the year or prior year.
6. Distributions
The distributions take account of amounts received on the issue of shares
and amounts deducted on the cancellation of shares, and comprise:
Final dividend distribution 92,858 87,478
92,858 87,478
Add: Amounts deducted on cancellation of shares 9,861 8,176
Deduct: Amounts received on issue of shares (15,987) (18,896)
Net distribution for the year 86,732 76,758
8. Debtors
Amounts receivable for creation of shares 15,426 12,786
Accrued revenue 5,805 5,395
Total debtors 21,231 18,181
9. Other Creditors
Amounts payable for cancellation of shares 43,927 19,475
Purchases awaiting settlement 3,433 3,865
Accrued expenses 284 535
Total other creditors 47,644 23,875
AMERICAN INDEX FUND 227
% % % % % % % %
As at 15.5.21 - - 87.19 93.44 - - 3.25 2.32
As at 15.5.20 - 0.16 82.35 92.03 - - 2.37 2.51
#The Institutional A Income and Institutional A Accumulation share classes were terminated on 8 January 2021.
Details of all other material related party transactions during the year and any payment amounts outstanding at the
balance sheet date are disclosed in notes 8 and 9 to the financial statements and the Statement of Change in Net Assets
Attributable to Shareholders and the Portfolio Statement.
The balance due to/from the ACD (including amounts due to associates and agents) at the year end was £(28,725,258)
(15.5.20: (£7,014,658)), further details of such amounts can be found in notes 8 and 9.
There were no shares held by the Trustee or its associates.
Investments in related parties are disclosed in the Portfolio Statement.
228 AMERICAN INDEX FUND
For the year ended 15 May 2021 Purchases Commissions Taxes Other Expenses
£'000 £’000 % £’000 % £’000 %
Analysis of total purchases costs
Equity transactions 1,268,744 164 0.01 - - - -
Corporate actions 666 - - - - - -
Total purchases before transaction costs 1,269,410 164 - -
Transaction costs 164
Total purchases after commission,
tax and fees 1,269,574
Sales Commissions Taxes Other Expenses
£'000 £’000 % £’000 % £’000 %
Analysis of total sales costs
Equity transactions 443,571 55 0.01 4 - 3 -
Corporate actions 5,521 - - - - - -
Total sales before transaction costs 449,092 55 4 3
Transaction costs (62)
Total sales after commission,
tax and fees 449,030
The Fund had paid £35,004 as commission on purchases and sales derivative transactions for the year ended 15.5.21.
Commissions, taxes and fees as % of average net assets:
Commissions 0.00%
Taxes 0.00%
Other expenses 0.00%
At the balance sheet date the portfolio dealing spread was 0.03%, being the difference between the respective bid and
offer prices for the Fund's investments.
For the year ended 15 May 2020 Purchases Commissions Taxes Other Expenses
£'000 £’000 % £’000 % £’000 %
Analysis of total purchases costs
Equity transactions 1,385,164 216 0.02 - - - -
Corporate actions 332 - - - - - -
Total purchases before transaction costs 1,385,496 216 - -
Transaction costs 216
Total purchases after commission,
tax and fees 1,385,712
Sales Commissions Taxes Other Expenses
£'000 £’000 % £’000 % £’000 %
Analysis of total sales costs
Equity transactions 166,991 21 0.01 - - 3 -
Corporate actions 6,804 - - - - - -
Total sales before transaction costs 173,795 21 - 3
Transaction costs (24)
Total sales after commission,
tax and fees 173,771
The Fund had paid £52,560 as commission on purchases and sales derivative transactions for the year ended 15.5.20.
Commissions, taxes and fees as % of average net assets:
Commissions 0.01%
Taxes 0.00%
Other expenses 0.00%
At the balance sheet date the portfolio dealing spread was 0.03%, being the difference between the respective bid and
offer prices for the Fund's investments.
230 AMERICAN INDEX FUND
Portfolio transaction costs are incurred by the Fund when buying and selling underlying investments. These costs vary
depending on the class of investment, country of exchange and method of execution.
These costs can be classified as either direct or indirect transaction costs:
Direct transaction costs: Broker commissions, fees and taxes.
Indirect transaction costs: ‘Dealing spread’ – the difference between the buying and selling prices of the
Fund’s underlying investments.
In order to protect existing investors from the effects of dilution, portfolio transaction costs incurred as a result of
investors buying and selling shares in the Fund are recovered from those investors through a ‘dilution adjustment’ to
the price they pay or receive.
17. Fair Value of Investments
FRS 102 requires an entity to classify fair value measurements using a fair value hierarchy that reflects the significance
of the inputs used in making the measurements. The fair value hierarchy shall have the following classifications:
Level 1: unadjusted quoted prices in an active market for identical assets or liabilities that the entity can access at
the measurement date.
Level 2: inputs other than quoted prices included within Level 1 that are observable (i.e. developed using market
data) for the asset or liability, either directly or indirectly.
Level 3: inputs are unobservable (i.e. for which market data is unavailable) for the asset or liability.
Investment Objective
The Fund aims to provide growth over the long term, which is a period of 5 years or more, by tracking the performance
of the FTSE Japan Index (the “Index”).
Investment Policy
The Index is made up of large and medium sized companies listed in Japan, as defined by the Index Provider.
The Fund may invest in different types of derivatives for efficient portfolio management, including hedging. In particular
the Fund may use derivatives to help it manage cash flows and dividend payments with the aim of generating returns
that are consistent with the Index. The use of derivatives will be consistent with the risk profile of the Fund.
Investment Strategy
The Fund will invest directly in shares (equities) of all of the companies that make up the Index and in the same or very
similar proportions in which they are included in the Index.
However, there may be circumstances when it is not possible or practical for the Fund to invest in shares of all the
companies of the Index. The Fund may not invest in all the companies of the Index to manage transaction costs or to
reflect market conditions, regulations or HSBC’s banned weapons policy.
The Fund may hold cash and other funds, including funds managed by the HSBC Group, to manage day-to-day cash
flow requirements.
The Fund’s performance is measured against the Index, because the Fund intends to track the performance of
the Index.
Portfolio Activity
FTSE Japan Index was up 13.40% in the reporting period. The main driver for the positive performance was the
Industrials sector with a contribution to the total index return of 5.58%, followed by the Consumer Staples sector and
the Financials with a contribution to the total index return of 2.89% and 2.18% respectively. Basic Materials was the
sector with the strongest absolute performance (32.82%), while a few sectors contributed negatively where the Health
Care sector was the worst with a contribution of -0.83%.
Japanese equities were still recovering at the beginning of the period from the sharp bear market in March, entering
a more range-bound period with falling prices in July. However, between July and October the prices increased
again supported by strong policy support as well as benefitting from a healthy banking and corporate sector. Relaxed
containment measures amid lower infection rates also helped. As was the case globally, the Japanese equities prices
saw a steep increase since early November thanks to the US elections as well as the positive news around the vaccine
trials. However, more recently re-imposed restrictions in some regions and additional uncertainty led to falling prices
towards the end of the period.
232 JAPAN INDEX FUND
Investment Performance
During the year under review, the value of the shares in the Fund increased by 12.35% and the value of the
FTSE Japan Index rose by 13.40%.
(Source: Morningstar Direct, GBP, UK net of tax, for the Accumulation C share class. Returns based on the NAV,
which is a single price.)
Please note that the above information refers to the past and that past performance is not a reliable indication
of future returns.
Tracking Error
Tracking error - 0.18%
The tracking error is based on gross returns from our internal performance system for the year to 15.5.21.
Fund Particulars
as at 17 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Comparative Tables
Retail Income
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 99.05p 96.87p 106.20p
Return before operating charges* 12.97p 4.51p (7.09p)
Operating charges** (0.30p) (0.29p) (0.28p)
Return after operating charges* 12.67p 4.22p (7.37p)
Distributions on income shares (1.72p) (2.04p) (1.96p)
Closing net asset value per share 110.00p 99.05p 96.87p
*after direct transaction costs of:*** 0.01p 0.01p 0.01p
Performance
Return after charges 12.79% 4.36% (6.94%)
Other information
Closing net asset value £39,257 £4,428,386 £2,809,822
Closing number of shares 35,683 4,470,703 2,900,488
Operating charges - OCF 0.29% 0.29% 0.27%
Direct transaction costs 0.01% 0.01% 0.01%
Prices
Highest share price 121.40p 109.20p 110.10p
Lowest share price 97.40p 84.81p 94.23p
Retail Accumulation
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 122.70p 117.50p 126.20p
Return before operating charges* 15.58p 5.55p (8.37p)
Operating charges** (0.38p) (0.35p) (0.33p)
Return after operating charges* 15.20p 5.20p (8.70p)
Distributions on accumulation shares (2.16p) (2.48p) (2.33p)
Retained distributions on accumulation shares 2.16p 2.48p 2.33p
Closing net asset value per share 137.90p 122.70p 117.50p
*after direct transaction costs of:*** 0.02p 0.02p 0.01p
Performance
Return after charges 12.39% 4.43% (6.89%)
Other information
Closing net asset value £6,619,549 £30,026,442 £28,207,101
Closing number of shares 4,798,544 24,479,340 24,000,072
Operating charges - OCF 0.28% 0.28% 0.27%
Direct transaction costs 0.01% 0.01% 0.01%
Prices
Highest share price 150.40p 132.50p 130.90p
Lowest share price 120.60p 102.90p 112.10p
** The operating charges include all costs borne by the Fund, except for direct transaction costs.
*** The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers,
levies by regulatory agencies and securities exchanges as well as transfer taxes and duties.
246 JAPAN INDEX FUND
Comparative Tables
Institutional Income
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 118.00p 115.40p 126.50p
Return before operating charges* 15.16p 5.37p (8.42p)
Operating charges** (0.04p) (0.03p) (0.03p)
Return after operating charges* 15.12p 5.34p (8.45p)
Distributions on income shares (2.42p) (2.74p) (2.65p)
Closing net asset value per share 130.70p 118.00p 115.40p
*after direct transaction costs of:*** 0.02p 0.02p 0.01p
Performance
Return after charges 12.81% 4.63% (6.68%)
Other information
Closing net asset value £144,235,591 £130,458,525 £136,428,612
Closing number of shares 110,324,429 110,531,906 118,223,227
Operating charges - OCF 0.03% 0.02% 0.02%
Direct transaction costs 0.01% 0.01% 0.01%
Prices
Highest share price 145.00p 130.40p 131.30p
Lowest share price 116.10p 101.30p 112.40p
Institutional Accumulation
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 130.20p 124.40p 133.30p
Return before operating charges* 16.64p 5.84p (8.87p)
Operating charges** (0.04p) (0.04p) (0.03p)
Return after operating charges* 16.60p 5.80p (8.90p)
Distributions on accumulation shares (2.66p) (2.96p) (2.79p)
Retained distributions on accumulation shares 2.66p 2.96p 2.79p
Closing net asset value per share 146.80p 130.20p 124.40p
*after direct transaction costs of:*** 0.02p 0.02p 0.01p
Performance
Return after charges 12.75% 4.66% (6.68%)
Other information
Closing net asset value £1,003,704,781 £922,057,557 £1,232,928,251
Closing number of shares 683,550,587 708,386,171 991,106,935
Operating charges - OCF 0.03% 0.03% 0.02%
Direct transaction costs 0.01% 0.01% 0.01%
Prices
Highest share price 159.90p 140.50p 138.30p
Lowest share price 128.10p 109.20p 118.50p
**The operating charges include all costs borne by the Fund, except for direct transaction costs.
***The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers,
levies by regulatory agencies and securities exchanges as well as transfer taxes and duties.
JAPAN INDEX FUND 247
Comparative Tables
Institutional A Accumulation#
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share N/A N/A 129.30p
Return before operating charges* N/A N/A (8.27p)
Operating charges** N/A N/A (0.23p)
Return after operating charges* N/A N/A (8.50p)
Distributions on accumulation shares N/A N/A -
Retained distributions on accumulation shares N/A N/A -
Cancellation price N/A N/A (120.80p)
Closing net asset value per share N/A N/A -
*after direct transaction costs of:*** N/A N/A 0.01p
Performance
Return after charges N/A N/A (6.57%)
Other information
Closing net asset value N/A N/A N/A
Closing number of shares N/A N/A N/A
Operating charges - OCF N/A N/A N/A
Direct transaction costs N/A N/A N/A
Prices
Highest share price N/A N/A 134.10p
Lowest share price N/A N/A 114.80p
Income C
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 98.61p 96.44p 105.70p
Return before operating charges* 12.64p 4.49p (7.03p)
Operating charges** (0.14p) (0.18p) (0.17p)
Return after operating charges* 12.50p 4.31p (7.20p)
Distributions on income shares (1.91p) (2.14p) (2.06p)
Closing net asset value per share 109.20p 98.61p 96.44p
*after direct transaction costs of:*** 0.01p 0.01p 0.01p
Performance
Return after charges 12.68% 4.47% (6.81%)
Other information
Closing net asset value £45,346,998 £41,837,575 £40,145,859
Closing number of shares 41,516,322 42,425,249 41,627,271
Operating charges - OCF 0.13% 0.12%† 0.17%
Direct transaction costs 0.01% 0.01% 0.01%
Prices
Highest share price 121.10p 108.80p 109.60p
Lowest share price 97.00p 84.52p 93.87p
#The Institutional A Accumulation share class closed on 21 January 2019.
†Estimate for OCF as register fees were no longer to be paid by the class effective 1.4.20.
** The operating charges include all costs borne by the Fund, except for direct transaction costs.
*** The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers, levies by
regulatory agencies and securities exchanges as well as transfer taxes and duties.
248 JAPAN INDEX FUND
Comparative Tables
Accumulation C
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 123.60p 118.30p 127.00p
Return before operating charges* 15.98p 5.52p (8.49p)
Operating charges** (0.18p) (0.22p) (0.21p)
Return after operating charges* 15.80p 5.30p (8.70p)
Distributions on accumulation shares (2.39p) (2.63p) (2.47p)
Retained distributions on accumulation shares 2.39p 2.63p 2.47p
Closing net asset value per share 139.40p 123.60p 118.30p
*after direct transaction costs of:*** 0.02p 0.02p 0.01p
Performance
Return after charges 12.78% 4.48% (6.85%)
Other information
Closing net asset value £247,344,996 £179,595,469 £162,071,599
Closing number of shares 177,446,916 145,267,643 136,964,372
Operating charges - OCF 0.13% 0.12%† 0.17%
Direct transaction costs 0.01% 0.01% 0.01%
Prices
Highest share price 151.90p 133.50p 131.70p
Lowest share price 121.60p 103.70p 112.80p
Income S
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 98.61p 96.41p 105.70p
Return before operating charges* 12.63p 4.52p (7.06p)
Operating charges** (0.06p) (0.07p) (0.06p)
Return after operating charges* 12.57p 4.45p (7.12p)
Distributions on income shares (1.98p) (2.25p) (2.17p)
Closing net asset value per share 109.20p 98.61p 96.41p
*after direct transaction costs of:*** 0.01p 0.01p 0.01p
Performance
Return after charges 12.75% 4.62% (6.74%)
Other information
Closing net asset value £192,938,689 £17,703,805 £35,831,482
Closing number of shares 176,643,675 17,952,691 37,166,727
Operating charges - OCF 0.06% 0.07% 0.06%
Direct transaction costs 0.01% 0.01% 0.01%
Prices
Highest share price 121.10p 108.90p 109.60p
Lowest share price 97.00p 84.59p 93.90p
†Estimate for OCF as register fees were no longer to be paid by the class effective 1.4.20.
**The operating charges include all costs borne by the Fund, except for direct transaction costs.
***The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers, levies by
regulatory agencies and securities exchanges as well as transfer taxes and duties.
JAPAN INDEX FUND 249
Comparative Tables
Accumulation S
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 124.00p 118.60p 127.00p
Return before operating charges* 15.79p 5.49p (8.33p)
Operating charges** (0.09p) (0.09p) (0.07p)
Return after operating charges* 15.70p 5.40p (8.40p)
Distributions on accumulation shares (2.48p) (2.77p) (2.61p)
Retained distributions on accumulation shares 2.48p 2.77p 2.61p
Closing net asset value per share 139.70p 124.00p 118.60p
*after direct transaction costs of:*** 0.02p 0.02p 0.01p
Performance
Return after charges 12.66% 4.55% (6.61%)
Other information
Closing net asset value £93,072,159 £29,702,572 £35,262,497
Closing number of shares 66,636,165 23,950,406 29,736,163
Operating charges - OCF 0.07% 0.07% 0.06%
Direct transaction costs 0.01% 0.01% 0.01%
Prices
Highest share price 152.20p 133.90p 131.90p
Lowest share price 122.00p 104.00p 113.00p
**The operating charges include all costs borne by the Fund, except for direct transaction costs.
***The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers, levies by
regulatory agencies and securities exchanges as well as transfer taxes and duties.
250 JAPAN INDEX FUND
15.5.21 15.5.20
Notes £’000 £’000 £’000 £’000
Income
Net capital gains 2 130,231 38,026
Revenue 3 30,637 37,887
Expenses 4 (743) (882)
Interest payable and similar charges (45) (28)
Net revenue before taxation 29,849 36,977
Taxation 5 (3,064) (3,788)
Net revenue after taxation 26,785 33,189
Total return before distributions 157,016 71,215
Distributions 6 (26,810) (33,192)
Change in net assets attributable
to shareholders from investment activities 130,206 38,023
15.5.21 15.5.20
£’000 £’000 £’000 £’000
Opening net assets attributable to shareholders 1,355,810 1,673,685
Amounts receivable on creation of shares 603,430 359,012
Amounts payable on cancellation of shares (382,172) (742,336)
221,258 (383,324)
Dilution adjustment 1,814 1,393
Change in net assets attributable to shareholders from
investment activities (see Statement of Total Return above) 130,206 38,023
Retained distribution on accumulation shares 24,214 26,033
Closing net assets attributable to shareholders 1,733,302 1,355,810
Balance Sheet
as at 15 May 2021
15.5.21 15.5.20
Notes £’000 £’000 £’000 £’000
Assets
Investments 1,706,052 1,296,555
Current assets
Debtors 8 18,207 16,814
Cash and bank balances 17,584 47,831
Total current assets 35,791 64,645
Total assets 1,741,843 1,361,200
Liabilities
Investment liabilities (475) -
Creditors
Distribution payable on income shares (6,952) (4,436)
Other creditors 9 (1,114) (954)
Total creditors (8,066) (5,390)
Total liabilities (8,541) (5,390)
Net assets attributable to shareholders 1,733,302 1,355,810
JAPAN INDEX FUND 251
Retail Income
Group 1 1.720312 - 1.720312 2.039152
Group 2 1.539687 0.180625 1.720312 2.039152
Retail Accumulation
Group 1 2.164247 - 2.164247 2.477069
Group 2 1.625667 0.538580 2.164247 2.477069
Institutional Income
Group 1 2.417160 - 2.417160 2.743343
Group 2 1.597331 0.819829 2.417160 2.743343
Institutional Accumulation
Group 1 2.663774 - 2.663774 2.956763
Group 2 1.588508 1.075266 2.663774 2.956763
Income C
Group 1 1.909546 - 1.909546 2.142326
Group 2 1.242566 0.666980 1.909546 2.142326
Accumulation C
Group 1 2.394024 - 2.394024 2.628583
Group 2 1.430892 0.963132 2.394024 2.628583
Income S
Group 1 1.976803 - 1.976803 2.250462
Group 2 0.078813 1.897990 1.976803 2.250462
Accumulation S
Group 1 2.482310 - 2.482310 2.767215
Group 2 0.803653 1.678657 2.482310 2.767215
252 JAPAN INDEX FUND
15.5.21 15.5.20
£’000 £’000
1. Accounting Policies
The accounting policies are set out on pages 9 and 10.
3. Revenue
Overseas dividends 30,637 37,882
Bank interest - 5
Total revenue 30,637 37,887
4. Expenses
Payable to the Authorised Corporate Director, associates of
the Authorised Corporate Director and agents of either of them:
Authorised Corporate Director's charge 365 331
Registration fee - 101
Safe custody fee 92 129
457 561
Payable to the Depositary, associates of the Depositary
and agents of either of them:
Depositary fee 132 133
Other expenses:
Audit fee 7 5
Legal fee 1 -
License fee 146 178
Report and accounts fee - 2
Professional fees - 3
154 188
Total expenses 743 882
JAPAN INDEX FUND 253
15.5.21 15.5.20
£’000 £’000
5. Taxation
a) Analysis of charge in year:
Overseas tax 3,064 3,788
Total current tax charge for the year (note 5b) 3,064 3,788
Deferred tax (note 5c) - -
Total tax for the year (note 5b) 3,064 3,788
b) Factors affecting taxation charge for the year:
The tax assessed for the year is lower than the standard rate of
corporation tax in the UK for an open-ended investment company (20%).
The differences are explained below:
Net revenue before taxation 29,849 36,977
Corporation tax at 20% 5,970 7,395
Effects of:
Revenue not subject to taxation (6,071) (7,576)
Current year expenses not utilised 107 181
Irrecoverable overseas tax 3,064 3,788
Tax relief on overseas tax suffered (6) -
Current tax charge for the year (note 5a) 3,064 3,788
c) Provision for deferred taxation
At 15 May 2021, there is a potential deferred tax asset of £1,233,889 (15.5.20: £1,127,009) in relation to surplus
management expenses. It is unlikely the Fund will generate sufficient taxable profits in the future to utilise these
expenses and therefore no deferred tax asset has been recognised in the year or prior year.
6. Distributions
The distributions take account of amounts received on the issue of shares
and amounts deducted on the cancellation of shares, and comprise:
Final dividend distribution 31,166 30,469
31,166 30,469
Add: Amounts deducted on cancellation of shares 1,862 6,664
Deduct: Amounts received on issue of shares (6,218) (3,941)
Net distribution for the year 26,810 33,192
8. Debtors
Amounts receivable for creation of shares 4,827 1,543
Sales awaiting settlement 4 -
Accrued revenue 13,376 15,271
Total debtors 18,207 16,814
9. Other Creditors
Amounts payable for cancellation of shares 1,062 868
Accrued expenses 52 86
Total other creditors 1,114 954
254 JAPAN INDEX FUND
% % % %
As at 15.5.21 2.59 3.10 - -
As at 15.5.20 2.61 4.20 - -
Details of all other material related party transactions during the year and any payment amounts outstanding at the
balance sheet date are disclosed in notes 8 and 9 to the financial statements and the Statement of Change in Net
Assets Attributable to Shareholders and the Portfolio Statement.
The balance due from the ACD (including amounts due to associates and agents) at the year end was £3,697,227
(15.5.20: £573,812), further details of such amounts can be found in notes 8 and 9.
Investments in related parties are disclosed in the Portfolio Statement.
JAPAN INDEX FUND 255
For the year ended 15 May 2021 Purchases Commissions Taxes Other Expenses
£'000 £’000 % £’000 % £’000 %
Analysis of total purchases costs
Equity transactions 450,753 76 0.02 - - - -
Total purchases before transaction costs 450,753 76 - -
Transaction costs 76
Total purchases after commission,
tax and fees 450,829
For the year ended 15 May 2020 Purchases Commissions Taxes Other Expenses
£'000 £’000 % £’000 % £’000 %
Analysis of total purchases costs
Equity transactions 195,820 45 0.02 - - - -
Total purchases before transaction costs 195,820 45 - -
Transaction costs 45
Total purchases after commission,
tax and fees 195,865
Sales Commissions Taxes Other Expenses
£'000 £’000 % £’000 % £’000 %
Analysis of total sales costs
Equity transactions 562,559 107 0.02 - - - -
Corporate actions 4,376 - - - - - -
Total sales before transaction costs 566,935 107 - -
Transaction costs (107)
Total sales after commission,
tax and fees 566,828
The Fund had paid £42,222 as commission on purchases and sales derivative transactions for the year ended 15.5.20.
Commissions, taxes and fees as % of average net assets:
Commissions 0.01%
Taxes 0.00%
Other expenses 0.00%
At the balance sheet date the portfolio dealing spread was 0.26%, being the difference between the respective bid and
offer prices for the Fund's investments.
JAPAN INDEX FUND 257
Portfolio transaction costs are incurred by the Fund when buying and selling underlying investments. These costs vary
depending on the class of investment, country of exchange and method of execution.
These costs can be classified as either direct or indirect transaction costs:
Direct transaction costs: Broker commissions, fees and taxes.
Indirect transaction costs: ‘Dealing spread’ – the difference between the buying and selling prices of the
Fund’s underlying investments.
In order to protect existing investors from the effects of dilution, portfolio transaction costs incurred as a result of
investors buying and selling shares in the Fund are recovered from those investors through a ‘dilution adjustment’ to
the price they pay or receive.
17. Fair Value of Investments
FRS 102 requires an entity to classify fair value measurements using a fair value hierarchy that reflects the significance
of the inputs used in making the measurements. The fair value hierarchy shall have the following classifications:
Level 1: unadjusted quoted prices in an active market for identical assets or liabilities that the entity can access at
the measurement date.
Level 2: inputs other than quoted prices included within Level 1 that are observable (i.e. developed using market
data) for the asset or liability, either directly or indirectly.
Level 3: inputs are unobservable (i.e. for which market data is unavailable) for the asset or liability.
Investment Objective
The Fund aims to provide growth over the long term, which is a period of 5 years or more, by tracking the performance
of the FTSE World Asia Pacific excluding Japan Index (the “Index”).
Investment Policy*
The Index is made up of large and medium sized companies in developed and emerging markets in the Asia Pacific
region, excluding Japan, as defined by the Index provider.
The Fund may invest in different types of derivatives for efficient portfolio management, including hedging. In particular
the Fund may use derivatives to help it manage cash flows and dividend payments with the aim of generating returns
that are consistent with the Index. The use of derivatives will be consistent with the risk profile of the Fund.
Investment Strategy*
The Fund will invest directly in shares (equities) of all of the companies that make up the Index and in the same or very
similar proportions in which they are included in the Index.
However, there may be circumstances when it is not possible or practical for the Fund to invest in shares of all the
companies of the Index. The Fund may not invest in all the companies of the Index to manage transaction costs or
to reflect market conditions, regulations or HSBC’s banned weapons policy.
The Fund may hold cash and other funds, including funds managed by the HSBC Group, to manage day-to-day cash
flow requirements.
The Fund’s performance is measured against the Index, because the Fund intends to track the performance of
the Index.
*For details of the full Investment Policy and Strategy please refer to the HSBC Index Tracker Investment Funds
prospectus. We have also published a Glossary of key terms used which you may wish to refer to. Both documents
can be found at https://www.assetmanagement.hsbc.co.uk/en/individual-investor/fund-centre.
Portfolio Activity
FTSE World Asia Pacific excluding Japan Index was up 37.64% during the reporting period. The main driving sector was
Technology with a contribution of 15.76%, followed by the Financials sectors with 9.51%. Technology was also the best
performing sector in absolute terms with a performance of 65.33%, followed by Basic Materials with 57.16%. Utilities
and Telecommunications sectors contributed slightly negatively. From a country perspective, it was a country trio leading
the way with Korea (11.84%), Australia (11.06%) and Taiwan (10.26%), while Cambodia contributed slightly negatively.
Asia Pacific equities reported steady gains throughout the reporting period and recovered quickly from the historic sell
off due to the Covid-19 crisis in late February and March 2020 and accelerated the recovery speed since end of October
on the back of easing Covid-19 measures, accommodative policy support as well as strong macro data in some countries
which were – especially at the beginning of the period – more positive than for Europe for example. The general recovery
since November including the removed uncertainty in the markets and the approval of vaccines have then support an
even faster growth.
PACIFIC INDEX FUND 259
Investment Performance
During the year under review, the value of the shares in the Fund increased by 36.81% and the value of the
FTSE World Asia Pacific Excluding Japan Index rose by 37.64%.
(Source: Morningstar Direct, GBP, UK net of tax, for the Accumulation C share class. Returns based on the NAV,
which is a single price.)
Please note that the above information refers to the past and that past performance is not a reliable indication
of future returns.
Tracking Error
Tracking error - 0.16%
The tracking error is based on gross returns from our internal performance system for the year to 15.5.21.
Fund Particulars
as at 17 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Comparative Tables
Retail Income
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 236.90p 256.40p 270.70p
Return before operating charges* 94.23p (10.79p) (5.65p)
Operating charges** (0.86) (0.87p) (0.86p)
Return after operating charges* 93.37p (11.66p) (6.51p)
Distributions on income shares (6.87p) (7.84p) (7.79p)
Closing net asset value per share 323.40p 236.90p 256.40p
*after direct transaction costs of:*** 0.09p 0.13p 0.09p
Performance
Return after charges 39.41% (4.55%) (2.40%)
Other information
Closing net asset value £10,204 £2,423,072 £3,192,082
Closing number of shares 3,155 1,022,888 1,244,988
Operating charges - OCF 0.31% 0.33% 0.33%
Direct transaction costs 0.03% 0.05% 0.03%
Prices
Highest share price 343.60p 290.10p 277.70p
Lowest share price 237.60p 206.90p 243.40p
Retail Accumulation
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 365.10p 382.60p 392.00p
Return before operating charges* 136.74p (16.21p) (8.15p)
Operating charges** (1.34p) (1.29p) (1.25p)
Return after operating charges* 135.40p (17.50p) (9.40p)
Distributions on accumulation shares (10.60p) (11.69p) (11.28p)
Retained distributions on accumulation shares 10.60p 11.69p 11.28p
Closing net asset value per share 500.50p 365.10p 382.60p
*after direct transaction costs of:*** 0.14p 0.19p 0.12p
Performance
Return after charges 37.09% (4.57%) (2.40%)
Other information
Closing net asset value £10,717,515 £40,219,298 £45,914,170
Closing number of shares 2,141,290 11,015,935 12,001,257
Operating charges - OCF 0.31% 0.33% 0.33%
Direct transaction costs 0.03% 0.05% 0.03%
Prices
Highest share price 529.30p 432.80p 402.20p
Lowest share price 366.30p 308.70p 352.50p
**The operating charges include all costs borne by the Fund, except for direct transaction costs.
***The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers,
levies by regulatory agencies and securities exchanges as well as transfer taxes and duties.
276 PACIFIC INDEX FUND
Comparative Tables
Institutional Income
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 271.30p 293.80p 310.30p
Return before operating charges* 101.85p (12.52p) (6.58p)
Operating charges** (0.19p) (0.23p) (0.23p)
Return after operating charges* 101.66p (12.75p) (6.81p)
Distributions on income shares (8.76p) (9.75p) (9.69p)
Closing net asset value per share 364.20p 271.30p 293.80p
*after direct transaction costs of:*** 0.11p 0.15p 0.10p
Performance
Return after charges 37.47% (4.34%) (2.19%)
Other information
Closing net asset value £49,544,248 £40,457,999 £48,442,443
Closing number of shares 13,603,316 14,911,283 16,486,707
Operating charges - OCF 0.06% 0.08% 0.08%
Direct transaction costs 0.03% 0.05% 0.03%
Prices
Highest share price 394.40p 332.90p 318.50p
Lowest share price 272.10p 237.50p 279.30p
Institutional Accumulation
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 394.50p 412.40p 421.50p
Return before operating charges* 148.16p (17.60p) (8.76p)
Operating charges** (0.26p) (0.30p) (0.34p)
Return after operating charges* 147.90p (17.90p) (9.10p)
Distributions on accumulation shares (12.74p) (13.69p) (13.17p)
Retained distributions on accumulation shares 12.74p 13.69p 13.17p
Closing net asset value per share 542.40p 394.50p 412.40p
*after direct transaction costs of:*** 0.15p 0.21p 0.13p
Performance
Return after charges 37.49% (4.34%) (2.16%)
Other information
Closing net asset value £15,941,168 £16,203,061 £39,679,317
Closing number of shares 2,938,950 4,107,149 9,622,209
Operating charges - OCF 0.05% 0.07% 0.08%
Direct transaction costs 0.03% 0.05% 0.03%
Prices
Highest share price 573.60p 467.30p 432.70p
Lowest share price 395.80p 333.40p 379.50p
**The operating charges include all costs borne by the Fund, except for direct transaction costs.
***The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers,
levies by regulatory agencies and securities exchanges as well as transfer taxes and duties.
PACIFIC INDEX FUND 277
Comparative Tables
Income C
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 239.00p 258.80p 273.20p
Return before operating charges* 89.67p (11.01p) (5.67p)
Operating charges** (0.45p) (0.59p) (0.60p)
Return after operating charges* 89.22p (11.60p) (6.27p)
Distributions on income shares (7.42p) (8.20p) (8.13p)
Closing net asset value per share 320.80p 239.00p 258.80p
*after direct transaction costs of:*** 0.10p 0.13p 0.09p
Performance
Return after charges 37.33% (4.48%) (2.30%)
Other information
Closing net asset value £60,817,354 £32,212,718 £37,056,964
Closing number of shares 18,958,397 13,478,877 14,320,649
Operating charges - OCF 0.15% 0.17%† 0.23%
Direct transaction costs 0.03% 0.05% 0.03%
Prices
Highest share price 347.10p 292.90p 280.40p
Lowest share price 239.70p 208.90p 245.80p
Accumulation C
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 367.90p 385.10p 394.20p
Return before operating charges* 138.09p (16.32p) (8.23p)
Operating charges** (0.69p) (0.88p) (0.87p)
Return after operating charges* 137.40p (17.20p) (9.10p)
Distributions on accumulation shares (11.42p) (12.20p) (11.73p)
Retained distributions on accumulation shares 11.42p 12.20p 11.73p
Closing net asset value per share 505.30p 367.90p 385.10p
*after direct transaction costs of:*** 0.15p 0.20p 0.12p
Performance
Return after charges 37.35% (4.47%) (2.31%)
Other information
Closing net asset value £316,674,315 £125,996,585 £171,307,915
Closing number of shares 62,665,804 34,246,287 44,482,866
Operating charges - OCF 0.15% 0.17%† 0.23%
Direct transaction costs 0.03% 0.05% 0.03%
Prices
Highest share price 534.40p 436.00p 404.50p
Lowest share price 369.10p 311.00p 354.70p
†Estimate for OCF as registrar fees were no longer to be paid by the class effective 1.4.20.
**The operating charges include all costs borne by the Fund, except for direct transaction costs.
***The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers, levies by
regulatory agencies and securities exchanges as well as transfer taxes and duties.
278 PACIFIC INDEX FUND
Comparative Tables
Income S
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 239.00p 258.80p 273.20p
Return before operating charges* 89.67p (11.00p) (5.66p)
Operating charges** (0.30p) (0.35p) (0.34p)
Return after operating charges* 89.37p (11.35p) (6.00p)
Distributions on income shares (7.57p) (8.45p) (8.40p)
Closing net asset value per share 320.80p 239.00p 258.80p
*after direct transaction costs of:*** 0.09p 0.13p 0.09p
Performance
Return after charges 37.39% (4.39%) (2.20%)
Other information
Closing net asset value £12,954,597 £8,141,839 £6,283,641
Closing number of shares 4,038,797 3,407,290 2,428,459
Operating charges - OCF 0.10% 0.13% 0.13%
Direct transaction costs 0.03% 0.05% 0.03%
Prices
Highest share price 347.20p 293.10p 280.40p
Lowest share price 239.70p 209.10p 245.90p
Accumulation S
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 368.90p 385.80p 394.50p
Return before operating charges* 138.46p (16.39p) (8.21p)
Operating charges** (0.46p) (0.51p) (0.49p)
Return after operating charges* 138.00p (16.90p) (8.70p)
Distributions on accumulation shares (11.68p) (12.60p) (12.13p)
Retained distributions on accumulation shares 11.68p 12.60p 12.13p
Closing net asset value per share 506.90p 368.90p 385.80p
*after direct transaction costs of:*** 0.15p 0.20p 0.12p
Performance
Return after charges 37.41% (4.38%) (2.21%)
Other information
Closing net asset value £157,415,747 £95,237,848 £105,435,579
Closing number of shares 31,051,747 25,816,453 27,329,297
Operating charges - OCF 0.10% 0.13% 0.13%
Direct transaction costs 0.03% 0.05% 0.03%
Prices
Highest share price 536.10p 437.00p 405.00p
Lowest share price 370.10p 311.80p 355.10p
**The operating charges include all costs borne by the Fund, except for direct transaction costs.
***The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers,
levies by regulatory agencies and securities exchanges as well as transfer taxes and duties.
PACIFIC INDEX FUND 279
15.5.21 15.5.20
Notes £’000 £’000 £’000 £’000
Net capital gains/(losses) 2 147,114 (26,841)
Revenue 3 16,008 16,836
Expenses 4 (687) (754)
Interest payable and similar charges (6) (5)
Net revenue before taxation 15,315 16,077
Taxation 5 (1,242) (1,464)
Net revenue after taxation 14,073 14,613
Total return/(deficit) before distributions 161,187 (12,228)
Distributions 6 (13,781) (14,414)
Change in net assets attributable
to shareholders from investment activities 147,406 (26,642)
15.5.21 15.5.20
£’000 £’000 £’000 £’000
Opening net assets attributable to shareholders 360,892 457,312
Amounts receivable on creation of shares 199,061 73,207
Amounts payable on cancellation of shares (95,545) (153,041)
103,516 (79,834)
Dilution adjustment 874 775
Change in net assets attributable to shareholders from
investment activities (see Statement of Total Return above) 147,406 (26,642)
Retained distribution on accumulation shares 11,387 9,281
Closing net assets attributable to shareholders 624,075 360,892
Balance Sheet
as at 15 May 2021
15.5.21 15.5.20
Notes £’000 £’000 £’000 £’000
Assets
Investments 606,874 354,644
Current assets
Debtors 8 2,242 1,312
Cash and bank balances 18,827 8,103
Total current assets 21,069 9,415
Total assets 627,943 364,059
Liabilities
Investment liabilities (609) -
Creditors
Distribution payable on income shares (2,904) (2,927)
Other creditors 9 (355) (240)
Total creditors (3,259) (3,167)
Total liabilities (3,868) (3,167)
Net assets attributable to shareholders 624,075 360,892
280 PACIFIC INDEX FUND
Retail Income
Group 1 6.866914 - 6.866914 7.836578
Group 2 5.298594 1.568320 6.866914 7.836578
Retail Accumulation
Group 1 10.600835 - 10.600835 11.693887
Group 2 6.030735 4.570100 10.600835 11.693887
Institutional Income
Group 1 8.762234 - 8.762234 9.751997
Group 2 7.896250 0.865984 8.762234 9.751997
Institutional Accumulation
Group 1 12.742785 - 12.742785 13.687348
Group 2 6.451660 6.291125 12.742785 13.687348
Income C
Group 1 7.417061 - 7.417061 8.195117
Group 2 3.295986 4.121075 7.417061 8.195117
Accumulation C
Group 1 11.421956 - 11.421956 12.196666
Group 2 6.594102 4.827854 11.421956 12.196666
Income S
Group 1 7.566810 - 7.566810 8.451787
Group 2 3.302077 4.264733 7.566810 8.451787
Accumulation S
Group 1 11.683613 - 11.683613 12.602473
Group 2 5.299226 6.384387 11.683613 12.602473
PACIFIC INDEX FUND 281
15.5.21 15.5.20
£’000 £’000
1. Accounting Policies
The accounting policies are set out on pages 9 and 10.
3. Revenue
Overseas dividends 15,646 16,593
Deposit interest - 2
Bank interest - 15
Stock dividends 362 226
Total revenue 16,008 16,836
4. Expenses
Payable to the Authorised Corporate Director, associates of
the Authorised Corporate Director and agents of either of them:
Authorised Corporate Director's charge 441 397
Registration fee - 98
Safe custody fee 128 128
569 623
Payable to the Depositary, associates of the Depositary
and agents of either of them:
Depositary fee 54 46
Other expenses:
Audit fee 6 5
Legal fee 5 22
Professional fee - 2
Report and accounts fee - 1
Administration fee 53 55
64 85
Total expenses 687 754
282 PACIFIC INDEX FUND
15.5.21 15.5.20
£’000 £’000
5. Taxation
a) Analysis of charge in year:
Overseas tax 1,242 1,464
Total tax for the year (note 5b) 1,242 1,464
b) Factors affecting taxation charge for the year:
The tax assessed for the year is lower than the standard rate of
corporation tax in the UK for an open-ended investment company (20%).
The differences are explained below:
Net revenue before taxation 15,315 16,077
Corporation tax at 20% 3,063 3,215
Effects of:
Revenue not subject to taxation (3,051) (3,160)
Utilisation of excess management expenses (1) (38)
Irrecoverable overseas tax 1,209 1,438
Overseas tax on special dividends in capital 33 26
Tax relief on overseas tax suffered (11) (17)
Current tax charge for the year (note 5a) 1,242 1,464
c) Provision for deferred taxation
At 15 May 2021, there is a potential deferred tax asset of £180,183 (15.5.20: £181,284) in relation to surplus management
expenses. The fund may generate sufficient taxable profits in the future to utilise these expenses. However, most of the
taxable profits derive from domiciles where double taxation relief for any overseas tax withheld on that income will also
be available. Based on the judgement of the ACD, because of this relief, it is not likely that a material UK corporation tax
liability will arise and as such, a deferred tax asset has not been crystallised.
6. Distributions
The distributions take account of amounts received on the issue of shares
and amounts deducted on the cancellation of shares, and comprise:
Final dividend distribution 14,291 12,208
Add: Amounts deducted on cancellation of shares 1,496 3,217
Deduct: Amounts received on issue of shares (2,006) (1,011)
Net distribution for the year 13,781 14,414
8. Debtors
Amounts receivable for creation of shares 833 713
Sales awaiting settlement 141 114
Accrued revenue 1,261 478
Overseas tax recoverable 7 7
Total debtors 2,242 1,312
PACIFIC INDEX FUND 283
9. Other Creditors
Amounts payable for cancellation of shares 261 51
Purchases awaiting settlement - 41
Accrued expenses 88 142
Corporation tax payable 6 6
Total other creditors 355 240
Details of all other material related party transactions during the year and any payment amounts outstanding at the
balance sheet date are disclosed in notes 8 and 9 to the financial statements and the Statement of Change in Net Assets
Attributable to Shareholders and the Portfolio Statement.
The balance due from the ACD (including amounts due to associates and agents) at the year end was £482,515 (15.5.20:
£513,945), further details of such amounts can be found in notes 8 and 9.
There were no shares held by the Trustee or its associates.
Investments in related parties are disclosed in the Portfolio Statement.
284 PACIFIC INDEX FUND
For the year ended 15 May 2021 Purchases Commissions Taxes Other Expenses
£'000 £’000 % £’000 % £’000 %
Analysis of total purchases costs
Equity transactions 143,607 54 0.04 16 0.01 14 0.01
Corporate actions 1,360 - - - - - -
Total purchases before transaction costs 144,967 54 16 14
Transaction costs 84
Total purchases after commission,
tax and fees 145,051
Sales Commissions Taxes Other Expenses
£'000 £’000 % £’000 % £’000 %
Analysis of total sales costs
Equity transactions 34,078 11 0.03 45 0.13 2 0.01
Corporate actions 1,866 - - - - - -
Total sales before transaction costs 35,944 11 45 2
Transaction costs (58)
Total sales after commission,
tax and fees 35,886
The Fund had paid £33,311 as commission on purchases and sales derivative transactions for the year ended 15.5.21.
Commissions, taxes and fees as % of average net assets:
Commissions 0.02%
Taxes 0.01%
Other expenses 0.00%
At the balance sheet date the portfolio dealing spread was 0.37% being the difference between the respective bid and
offer prices for the Fund's investments.
286 PACIFIC INDEX FUND
For the year ended 15 May 2020 Purchases Commissions Taxes Other Expenses
£'000 £’000 % £’000 % £’000 %
Analysis of total purchases costs
Equity transactions 34,559 14 0.04 6 0.02 1 -
Corporate actions 1,098 - - - - - -
Total purchases before transaction costs 35,657 14 6 1
Transaction costs 21
Total purchases after commission,
tax and fees 35,678
Sales Commissions Taxes Other Expenses
£'000 £’000 % £’000 % £’000 %
Analysis of total sales costs
Equity transactions 108,737 39 0.04 98 0.09 40 0.04
Corporate actions 921 - - - - - -
Total sales before transaction costs 109,658 39 98 40
Transaction costs (177)
Total sales after commission,
tax and fees 109,481
The Fund had paid £28,527 as commission on purchases and sales derivative transactions for the year ended 15.5.20.
Commissions, taxes and fees as % of average net assets:
Commissions 0.02%
Taxes 0.02%
Other expenses 0.01%
At the balance sheet date the portfolio dealing spread was 0.41%, being the difference between the respective bid and
offer prices for the Fund's investments.
Portfolio transaction costs are incurred by the Fund when buying and selling underlying investments. These costs vary
depending on the class of investment, country of exchange and method of execution.
These costs can be classified as either direct or indirect transaction costs:
Direct transaction costs: Broker commissions, fees and taxes.
Indirect transaction costs: ‘Dealing spread’ – the difference between the buying and selling prices of the
Fund’s underlying investments.
In order to protect existing investors from the effects of dilution, portfolio transaction costs incurred as a result of
investors buying and selling shares in the Fund are recovered from those investors through a ‘dilution adjustment’ to
the price they pay or receive.
PACIFIC INDEX FUND 287
Investment Objective
The Fund aims to provide income by tracking the performance of the FTSE Actuaries UK Conventional Gilts All Stocks
Index (the “Index”).
Investment Policy*
The Index is made up of Sterling denominated UK Government Bonds (“gilts”), as defined by the Index provider.
The Fund may invest in different types of derivatives for efficient portfolio management, including hedging. In particular
the Fund may use derivatives to help it manage cash flows and dividend payments with the aim of generating returns
that are consistent with the Index. The use of derivatives will be consistent with the risk profile of the Fund.
Investment Strategy*
The Fund will invest in all of the gilts that make up the Index in the same or very similar proportions in which they
are included in the Index.
However, there may be circumstances when it is not possible or practical for the Fund to invest in all the gilts that
make up the Index. The Fund may not invest in all the gilts of the Index to manage transaction costs or to reflect
market conditions, regulations or HSBC’s banned weapons policy.
The Fund may hold cash and other funds, including funds managed by the HSBC Group, to manage day-to-day
cash flow requirements.
The Fund’s performance is measured against the Index, because the Fund intends to track the performance of
the Index.
*For details of the full Investment Policy and Strategy please refer to the HSBC Index Tracker Investment Funds
prospectus. We have also published a Glossary of key terms used which you may wish to refer to. Both documents
can be found at https://www.assetmanagement.hsbc.co.uk/en/individual-investor/fund-centre.
Portfolio Activity
The FTSE Actuaries UK Conventional Gilts All Stocks Index has decreased 7.53% over the period on the back of
increasing gilt yields across all main maturities with a strong steepening of the curve. While the shorter dated gilt yields
(2 years) increased by 8 basis points, the longer dated gilt yields (30 years) increased by 75 basis points. At the same
time the 5 year gilt yields increased by 30 basis points and the 10 year gilt yields by 60 basis points.
The reporting period has been strongly dominated by the Covid-19 situation. First due to the recovery on the back of
continued government stimulus, easing of lockdowns and improving investor sentiment, later because of the second
wave of new infections and the outstanding Brexit deal which brought new uncertainty. Since November things have
improved due to the extension of the quantitative easing program by the Bank of England, the last minute free trade
agreement between the EU and UK and a strong vaccination campaign.
The UK economy is expected to experience a near term bounce in activity levels due to high vaccination rates and the
expected loosing of social distancing measures. Consequently, yields could rise further and higher expected inflation will
likely add to the bearish momentum but the magnitude of any move should be highly dependent on developments for
US Treasuries. The impact of Bank of England monetary policy on UK rates markets is seen as neutral at the moment.
UK GILT INDEX FUND 289
Investment Performance
During year under review, the value of the shares in the Fund decreased by 8.22% while the value of the
FTSE Actuaries UK Conventional Gilts All Stocks Index fell by 7.53%.
(Source: Morningstar Direct, GBP, UK net of tax, for the Accumulation C share class. Returns based on the NAV,
which is a single price.)
Please note that the above information refers to the past and that past performance is not a reliable indication
of future returns.
Tracking Error
Tracking error - 0.08%
The tracking error is based on gross returns from our internal performance system for the year to 15.5.21.
Fund Particulars
as at 17 May 2021
Income Accumulation
S S
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Bid Total
value net
£’000 assets
%
Treasury 4.25% 7/12/2049 £1,659,400 2,772 1.84
Treasury 4.25% 7/12/2055 £2,188,800 3,933 2.61
Treasury 4.5% 7/9/2034 £2,871,000 4,067 2.70
Treasury 4.5% 7/12/2042 £2,245,600 3,557 2.36
Treasury 4.75% 7/12/2030 £3,389,900 4,594 3.05
Treasury 4.75% 7/12/2038 £2,124,300 3,289 2.18
Treasury 5% 7/3/2025 £2,955,000 3,487 2.31
Treasury 6% 7/12/2028 £1,604,100 2,228 1.48
Treasury 8% 7/6/2021 £2,025,800 2,035 1.35
Total Government Bonds 149,754 99.41
Comparative Tables
Retail Income#
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 126.60p 114.60p 112.00p
Return before operating charges* (2.52p) 14.95p 5.69p
Operating charges** (0.25p) (0.35p) (0.33p)
Return after operating charges* (2.77p) 14.60p 5.36p
Distributions on income shares (1.13p) (2.60p) (2.76p)
Cancellation price (122.70p) - -
Closing net asset value per share - 126.60p 114.60p
*after direct transaction costs of:*** 0.00p 0.00p 0.00p
Performance
Return after charges (2.19%) 12.74% 4.79%
Other information
Closing net asset value N/A £515,841 £444,949
Closing number of shares N/A 407,612 388,432
Operating charges - OCF N/A 0.28% 0.29%
Direct transaction costs N/A 0.00% 0.00%
Prices
Highest share price 127.80p 130.80p 116.40p
Lowest share price 121.10p 114.60p 109.70p
Retail Accumulation
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 164.10p 145.40p 138.70p
Return before operating charges* (13.02p) 19.14p 7.11p
Operating charges** (0.48p) (0.44p) (0.41p)
Return after operating charges* (13.50p) 18.70p 6.70p
Distributions on accumulation shares (2.83p) (3.32p) (3.45p)
Retained distributions on accumulation shares 2.83p 3.32p 3.45p
Closing net asset value per share 150.60p 164.10p 145.40p
*after direct transaction costs of:*** 0.00p 0.00p 0.00p
Performance
Return after charges (8.23%) 12.86% 4.83%
Other information
Closing net asset value £559,841 £1,267,583 £1,248,231
Closing number of shares 371,664 772,656 858,722
Operating charges - OCF 0.30% 0.28% 0.29%
Direct transaction costs 0.00% 0.00% 0.00%
Prices
Highest share price 165.70p 168.70p 146.80p
Lowest share price 149.90p 145.40p 136.70p
#The Retail Income share class converted to Income C on 8 January 2021.
**The operating charges include all costs borne by the Fund, except for direct transaction costs.
***The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers,
levies by regulatory agencies and securities exchanges as well as transfer taxes and duties.
UK GILT INDEX FUND 293
Comparative Tables
Institutional Income
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 128.20p 116.00p 113.40p
Return before operating charges* (10.03p) 15.18p 5.72p
Operating charges** (0.06p) (0.04p) (0.04p)
Return after operating charges* (10.09p) 15.14p 5.68p
Distributions on income shares (2.51p) (2.94p) (3.08p)
Closing net asset value per share 115.60p 128.20p 116.00p
*after direct transaction costs of:*** 0.00p 0.00p 0.00p
Performance
Return after charges (7.87%) 13.05% 5.01%
Other information
Closing net asset value £35,108,345 £98,966,588 £79,635,919
Closing number of shares 30,383,091 77,222,865 68,639,209
Operating charges - OCF 0.05% 0.03% 0.04%
Direct transaction costs 0.00% 0.00% 0.00%
Prices
Highest share price 129.50p 132.50p 117.90p
Lowest share price 115.50p 116.00p 111.10p
Income C
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 126.40p 114.40p 111.80p
Return before operating charges* (9.87p) 14.93p 5.69p
Operating charges** (0.18p) (0.21p) (0.22p)
Return after operating charges* (10.05p) 14.72p 5.47p
Distributions on income shares (2.35p) (2.72p) (2.87p)
Closing net asset value per share 114.00p 126.40p 114.40p
*after direct transaction costs of:*** 0.00p 0.00p 0.00p
Performance
Return after charges (7.95%) 12.87% 4.89%
Other information
Closing net asset value £15,209,897 £17,917,955 £16,442,558
Closing number of shares 13,339,532 14,171,233 14,368,323
Operating charges - OCF 0.15% 0.13%† 0.19%
Direct transaction costs 0.00% 0.00% 0.00%
Prices
Highest share price 127.70p 130.70p 116.30p
Lowest share price 114.00p 114.40p 109.60p
†Estimate for OCF as registrar fees were no longer to be paid by the class effective 1.4.20.
**The operating charges include all costs borne by the Fund, except for direct transaction costs.
***The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers,
levies by regulatory agencies and securities exchanges as well as transfer taxes and duties.
294 UK GILT INDEX FUND
Comparative Tables
Accumulation C
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 165.00p 146.00p 139.20p
Return before operating charges* (12.97p) 19.27p 7.07p
Operating charges** (0.23p) (0.27p) (0.27p)
Return after operating charges* (13.20p) 19.00p 6.80p
Distributions on accumulation shares (3.09p) (3.51p) (3.61p)
Retained distributions on accumulation shares 3.09p 3.51p 3.61p
Closing net asset value per share 151.80p 165.00p 146.00p
*after direct transaction costs of:*** 0.00p 0.00p 0.00p
Performance
Return after charges (8.00%) 13.01% 4.89%
Other information
Closing net asset value £78,946,343 £86,599,958 £68,568,487
Closing number of shares 52,017,675 52,479,369 46,948,849
Operating charges - OCF 0.15% 0.13%† 0.19%
Direct transaction costs 0.00% 0.00% 0.00%
Prices
Highest share price 166.70p 169.70p 147.50p
Lowest share price 151.00p 146.10p 137.20p
Income S
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 126.40p 114.40p 111.80p
Return before operating charges* (9.87p) 14.94p 5.70p
Operating charges** (0.11p) (0.09p) (0.10p)
Return after operating charges* (9.98p) 14.85p 5.60p
Distributions on income shares (2.42p) (2.85p) (3.00p)
Closing net asset value per share 114.00p 126.40p 114.40p
*after direct transaction costs of:*** 0.00p 0.00p 0.00p
Performance
Return after charges (7.90%) 12.98% 5.01%
Other information
Closing net asset value £4,139,063 £16,306,661 £14,724,728
Closing number of shares 3,630,532 12,898,851 12,869,334
Operating charges - OCF 0.09% 0.07% 0.08%
Direct transaction costs 0.00% 0.00% 0.00%
Prices
Highest share price 127.70p 130.70p 116.30p
Lowest share price 114.00p 114.40p 109.60p
†Estimate for OCF as registrar fees were no longer to be paid by the class effective 1.4.20.
**The operating charges include all costs borne by the Fund, except for direct transaction costs.
***The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers,
levies by regulatory agencies and securities exchanges as well as transfer taxes and duties.
UK GILT INDEX FUND 295
Comparative Tables
Accumulation S
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 165.30p 146.30p 139.20p
Return before operating charges* (13.07p) 19.05p 7.22p
Operating charges** (0.13p) (0.05p) (0.12p)
Return after operating charges* (13.20p) 19.00p 7.10p
Distributions on accumulation shares (3.19p) (3.54p) (3.77p)
Retained distributions on accumulation shares 3.19p 3.54p 3.77p
Closing net asset value per share 152.10p 165.30p 146.30p
*after direct transaction costs of:*** 0.00p 0.00p 0.00p
Performance
Return after charges (7.99%) 12.99% 5.10%
Other information
Closing net asset value £16,684,146 £3,232,415 £31,971,995
Closing number of shares 10,968,310 1,955,605 21,855,044
Operating charges - OCF 0.08% 0.04% 0.08%
Direct transaction costs 0.00% 0.00% 0.00%
Prices
Highest share price 167.00p 170.00p 147.70p
Lowest share price 151.30p 146.30p 137.40p
**The operating charges include all costs borne by the Fund, except for direct transaction costs.
***The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers,
levies by regulatory agencies and securities exchanges as well as transfer taxes and duties.
296 UK GILT INDEX FUND
15.5.21 15.5.20
Notes £’000 £’000 £’000 £’000
Income
Net capital (losses)/gains 2 (15,007) 27,876
Revenue 3 1,287 2,437
Expenses 4 (191) (181)
Interest payable and similar charges - (6)
Net revenue before taxation 1,096 2,250
Taxation 5 - -
Net revenue after taxation 1,096 2,250
Total (deficit)/return before distributions (13,911) 30,126
Distributions 6 (3,412) (4,945)
Change in net assets attributable
to shareholders from investment activities (17,323) 25,181
15.5.21 15.5.20
£’000 £’000 £’000 £’000
Opening net assets attributable to shareholders 224,807 213,037
Amounts receivable on creation of shares 55,345 239,733
Amounts payable on cancellation of shares (114,163) (254,814)
(58,818) (15,081)
Dilution adjustment 42 279
Change in net assets attributable to shareholders from
investment activities (see Statement of Total Return above) (17,323) 25,181
Retained distribution on accumulation shares 1,940 1,391
Closing net assets attributable to shareholders 150,648 224,807
Balance Sheet
as at 15 May 2021
15.5.21 15.5.20
Notes £’000 £’000 £’000 £’000
Assets
Investments 149,754 223,838
Current assets
Debtors 8 9,756 5,683
Cash and bank balances 15 190
Total current assets 9,771 5,873
Total assets 159,525 229,711
Liabilities
Creditors
Distribution payable on income shares (272) (722)
Other creditors 9 (8,605) (4,182)
Total creditors (8,877) (4,904)
Total liabilities (8,877) (4,904)
Net assets attributable to shareholders 150,648 224,807
UK GILT INDEX FUND 297
Retail Income†
Group 1 n/a - n/a 0.616804
Group 2 n/a n/a n/a 0.616804
Retail Accumulation
Group 1 0.665649 - 0.665649 0.792037
Group 2 0.540795 0.124854 0.665649 0.792037
Institutional Income
Group 1 0.585870 - 0.585870 0.697904
Group 2 0.164250 0.421620 0.585870 0.697904
Income C
Group 1 0.550401 - 0.550401 0.653635
Group 2 0.410321 0.140080 0.550401 0.653635
Accumulation C
Group 1 0.729612 - 0.729612 0.845805
Group 2 0.471774 0.257838 0.729612 0.845805
Income S
Group 1 0.562782 - 0.562782 0.678828
Group 2 0.459619 0.103163 0.562782 0.678828
Accumulation S
Group 1 0.752402 - 0.752402 0.882734
Group 2 0.404717 0.347685 0.752402 0.882734
†The Retail Income share class converted to Income C on 8 January 2021.
298 UK GILT INDEX FUND
Retail Income†
Group 1 n/a - n/a 0.650000
Group 2 n/a n/a n/a 0.650000
Retail Accumulation
Group 1 0.690000 - 0.690000 0.830000
Group 2 0.660000 0.030000 0.690000 0.830000
Institutional Income
Group 1 0.620000 - 0.620000 0.740000
Group 2 0.470000 0.150000 0.620000 0.740000
Income C
Group 1 0.580000 - 0.580000 0.680000
Group 2 0.340000 0.240000 0.580000 0.680000
Accumulation C
Group 1 0.760000 - 0.760000 0.880000
Group 2 0.460000 0.300000 0.760000 0.880000
Income S
Group 1 0.600000 - 0.600000 0.710000
Group 2 0.500000 0.100000 0.600000 0.710000
Accumulation S
Group 1 0.780000 - 0.780000 0.920000
Group 2 0.390000 0.390000 0.780000 0.920000
†The Retail Income share class converted to Income C on 8 January 2021.
UK GILT INDEX FUND 299
Retail Income
Group 1 0.550000 - 0.550000 0.650000
Group 2 0.340000 0.210000 0.550000 0.650000
Retail Accumulation
Group 1 0.720000 - 0.720000 0.840000
Group 2 0.580000 0.140000 0.720000 0.840000
Institutional Income
Group 1 0.630000 - 0.630000 0.740000
Group 2 0.320000 0.310000 0.630000 0.740000
Income C
Group 1 0.600000 - 0.600000 0.680000
Group 2 0.240000 0.360000 0.600000 0.680000
Accumulation C
Group 1 0.780000 - 0.780000 0.880000
Group 2 0.340000 0.440000 0.780000 0.880000
Income S
Group 1 0.620000 - 0.620000 0.720000
Group 2 0.230000 0.390000 0.620000 0.720000
Accumulation S
Group 1 0.820000 - 0.820000 0.930000
Group 2 0.630000 0.190000 0.820000 0.930000
300 UK GILT INDEX FUND
Retail Income
Group 1 0.580000 - 0.580000 0.680000
Group 2 0.300000 0.280000 0.580000 0.680000
Retail Accumulation
Group 1 0.750000 - 0.750000 0.860000
Group 2 0.400000 0.350000 0.750000 0.860000
Institutional Income
Group 1 0.670000 - 0.670000 0.760000
Group 2 0.500000 0.170000 0.670000 0.760000
Income C
Group 1 0.620000 - 0.620000 0.710000
Group 2 0.360000 0.260000 0.620000 0.710000
Accumulation C
Group 1 0.820000 - 0.820000 0.900000
Group 2 0.440000 0.380000 0.820000 0.900000
Income S
Group 1 0.640000 - 0.640000 0.740000
Group 2 0.380000 0.260000 0.640000 0.740000
Accumulation S
Group 1 0.840000 - 0.840000 0.810000
Group 2 0.490000 0.350000 0.840000 0.810000
UK GILT INDEX FUND 301
15.5.21 15.5.20
£’000 £’000
1. Accounting Policies
The accounting policies are set out on pages 9 and 10.
3. Revenue
Interest on bonds and other debt securities 1,281 2,436
Bank interest 6 1
Total revenue 1,287 2,437
4. Expenses
Payable to the Authorised Corporate Director, associates of
the Authorised Corporate Director and agents of either of them:
Authorised Corporate Director's charge 116 90
Registration fee - 32
Safe custody fee 1 3
117 125
Payable to the Depositary, associates of the Depositary
and agents of either of them:
Depositary fee 20 24
Other expenses:
Audit fee 8 6
License fee 46 26
54 32
Total expenses 191 181
302 UK GILT INDEX FUND
15.5.21 15.5.20
£’000 £’000
5. Taxation
a) Analysis of charge in year:
Corporation tax - -
Total tax for the year (note 5b) - -
b) Factors affecting taxation charge for the year:
The tax assessed for the year is lower than the standard rate of
corporation tax in the UK for an open-ended investment company (20%).
The differences are explained below:
Net revenue before taxation 1,096 2,250
Corporation tax at 20% 219 450
Effects of:
Tax deductible interest distributions (219) (450)
Current tax charge for the year (note 5a) - -
c) Provision for deferred taxation
At 15 May 2021 there is no potential deferred tax asset (15.5.20: £nil) in relation to surplus management expenses.
6. Distributions
The distributions take account of amounts received on the issue of shares
and amounts deducted on the cancellation of shares, and comprise:
Interim dividend distribution 2,561 2,962
Final dividend distribution 736 1,189
3,297 4,151
Add: Amounts deducted on cancellation of shares 250 1,153
Deduct: Amounts received on issue of shares (135) (359)
Net distribution for the year 3,412 4,945
8. Debtors
Amounts receivable for creation of shares 62 51
Sales awaiting settlement 8,747 4,125
Accrued revenue 947 1,507
Total debtors 9,756 5,683
9. Other Creditors
Amounts payable for cancellation of shares 8,572 4,142
Accrued expenses 33 40
Total other creditors 8,605 4,182
UK GILT INDEX FUND 303
% % % % % %
As at 15.5.21 - 86.18 2.83 3.28 - -
As at 15.5.20 - 73.12 3.55 14.96 - -
Details of all other material related party transactions during the year and any payment amounts outstanding at the
balance sheet date are disclosed in notes 8 and 9 to the financial statements and the Statement of Change in Net Assets
Attributable to Shareholders and the Portfolio Statement.
The balance due from the ACD (including amounts due to associates and agents) at the year end was £8,524,684
(15.5.20: £4,114,644), further details of such amounts can be found in notes 8 and 9.
There were no shares held by the Trustee or its associates.
Related party transactions are disclosed within notes 3 and 4 Investments in related parties are disclosed in the
Portfolio Statement.
304 UK GILT INDEX FUND
Financial
Floating rate Fixed rate
assets not Total
financial assets* financial assets
carrying interest
Investment Objective
The Fund aims to track the performance of the Markit iBoxx GBP Non-Gilts Index (the “Index”).
Investment Policy*
The Index consists of various types of bond that have a credit rating of investment grade and are issued globally by
companies (corporates), other large organisations and governments, other than the UK Government, as defined by the
Index provider.
The Fund may invest in different types of derivatives for efficient portfolio management, including hedging. In particular
the Fund may use derivatives to help it manage cash flows and dividend payments with the aim of generating returns
that are consistent with the Index. The use of derivatives will be consistent with the risk profile of the Fund.
Investment Strategy*
The Fund will invest in a representative sample of the sterling-denominated bonds that make up the Index.
The Fund may also invest in sterling-denominated bonds that are no longer or not yet part of part of the Index, as
well as bonds issued by the UK Government (gilts). The Fund does not intend to use bonds that are not part of the
Index extensively and their use will be consistent with the risk profile of the Fund.
The Fund may hold cash and other funds, including funds managed by the HSBC Group, to manage day-to-day cash
flow requirements.
The Fund’s performance is measured against the Index, because the Fund intends to track the performance of
the Index.
*For details of the full Investment Policy and Strategy please refer to the HSBC Index Tracker Investment Funds
prospectus. We have also published a Glossary of key terms used which you may wish to refer to. Both documents
can be found at https://www.assetmanagement.hsbc.co.uk/en/individual-investor/fund-centre.
Portfolio Activity
The Markit iBoxx GBP Non-Gilts index increased during the period by 3.32% on the back of significantly tightening credit
spreads (yield difference versus a UK gilt of the same maturity) and despite increasing dated gilt yields. The 10 year gilt
yields increased by 60 basis points from 0.26% to 0.86%, while the 30 year gilt yields increased by even 75 basis points
to 1.40%.
The non-gilt credit spread (based on Bloomberg Barclays) decreased from 1.75% to 0.92%, across all rating as well as
industry segments. The largest tightening could be seen for the BBB segment as well as the Finance sector whose
spreads fell by over 100 basis points.
The reporting period has been strongly dominated by the Covid-19 situation. First due to the recovery on the back of
continued government stimulus, easing of lockdowns and improving investor sentiment, later because of the second
wave of new infections and the outstanding Brexit deal which brought new uncertainty. Since November things have
improved due to the extension of the quantitative easing program by the Bank of England, the last minute free trade
agreement between the EU and UK and a strong vaccination campaign.
We expect credit to remain range-bound. Whilst corporate fundamentals are expected to improve as the economic
recovery gains speed, current tight valuations limit the upside for the broader market. Fundamentals have improved from
mid-2020 as the economy started to reopen and fiscal measures supported personal incomes and consumption. The
market technicals as a result of the QE programmes are extremely supportive and likely to reduce market volatility.
STERLING CORPORATE BOND INDEX FUND 307
Investment Performance
During the year under review, the value of the shares in the Fund increased by 3.02% and the value of the
Markit IBoxx GBP Non-Gilts Index rose by 3.32%
(Source: Morningstar Direct, GBP, UK net of tax, for the Accumulation C share class. Returns based on the NAV,
which is a single price.)
Please note that the above information refers to the past and that past performance is not a reliable indication
of future returns.
Tracking Error
Tracking error - 0.26%
The tracking error is based on gross returns from our internal performance system for the period to 15.5.21.
Fund Particulars
as at 17 May 2021
Income Accumulation
S S
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Comparative Tables
Institutional Income
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 100.00p 97.81p 96.80p
Return before operating charges* 3.58p 5.40p 4.46p
Operating charges** (0.07p) (0.05p) (0.05p)
Return after operating charges* 3.51p 5.35p 4.41p
Distributions on income shares (2.91p) (3.16p) (3.40p)
Closing net asset value per share 100.60p 100.00p 97.81p
*after direct transaction costs of:*** 0.00p 0.00p 0.00p
Performance
Return after charges 3.51% 5.47% 4.56%
Other information
Closing net asset value £18,756,736 £132,932,697 £149,874,971
Closing number of shares 18,640,067 132,910,595 153,222,895
Operating charges - OCF 0.04% 0.05% 0.05%
Direct transaction costs 0.00% 0.00% 0.00%
Prices
Highest share price 106.70p 104.50p 99.72p
Lowest share price 100.30p 92.51p 94.69p
Institutional Accumulation
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 111.20p 106.70p 101.90p
Return before operating charges* 3.85p 4.56p 4.85p
Operating charges** (0.05p) (0.06p) (0.05p)
Return after operating charges* 3.80p 4.50p 4.80p
Distributions on accumulation shares (3.27p) (2.78p) (3.61p)
Retained distributions on accumulation shares 3.27p 2.78p 3.61p
Closing net asset value per share 115.00p 111.20p 106.70p
*after direct transaction costs of:*** 0.00p 0.00p 0.00p
Performance
Return after charges 3.42% 4.22% 4.71%
Other information
Closing net asset value £40,304 £38,979 £2,660,612
Closing number of shares 35,057 35,057 2,494,423
Operating charges - OCF 0.05% 0.05% 0.05%
Direct transaction costs 0.00% 0.00% 0.00%
Prices
Highest share price 120.30p 115.30p 107.10p
Lowest share price 111.50p 102.10p 101.50p
**The operating charges include all costs borne by the Fund, except for direct transaction costs.
***The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers,
levies by regulatory agencies and securities exchanges as well as transfer taxes and duties.
STERLING CORPORATE BOND INDEX FUND 325
Comparative Tables
Income C
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 101.10p 98.86p 96.80p
Return before operating charges* 3.49p 5.48p 5.48p
Operating charges** (0.17p) (0.17p) (0.17p)
Return after operating charges* 3.32p 5.31p 5.31p
Distributions on income shares (2.82p) (3.07p) (3.25p)
Closing net asset value per share 101.60p 101.10p 98.86p
*after direct transaction costs of:*** 0.00p 0.00p 0.00p
Performance
Return after charges 3.28% 5.37% 5.49%
Other information
Closing net asset value £10,246,762 £7,767,602 £4,549,032
Closing number of shares 10,082,981 7,684,394 4,601,667
Operating charges - OCF 0.16% 0.18%† 0.18%
Direct transaction costs 0.00% 0.00% 0.00%
Prices
Highest share price 107.90p 105.60p 100.10p
Lowest share price 101.30p 93.49p 95.69p
Accumulation C
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 111.90p 106.20p 101.70p
Return before operating charges* 3.79p 5.89p 4.68p
Operating charges** (0.19p) (0.19p) (0.18p)
Return after operating charges* 3.60p 5.70p 4.50p
Distributions on accumulation shares (3.15p) (3.34p) (3.41p)
Retained distributions on accumulation shares 3.15p 3.34p 3.41p
Closing net asset value per share 115.50p 111.90p 106.20p
*after direct transaction costs of:*** 0.00p 0.00p 0.00p
Performance
Return after charges 3.22% 5.37% 4.42%
Other information
Closing net asset value £65,992,780 £29,644,850 £12,144,617
Closing number of shares 57,118,304 26,499,435 11,436,747
Operating charges - OCF 0.16% 0.18%† 0.18%
Direct transaction costs 0.00% 0.00% 0.00%
Prices
Highest share price 121.00p 116.00p 106.60p
Lowest share price 112.10p 102.70p 101.10p
†Estimate for OCF as registrar fees were no longer to be paid by the class effective 1.4.20.
**The operating charges include all costs borne by the Fund, except for direct transaction costs.
***The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers,
levies by regulatory agencies and securities exchanges as well as transfer taxes and duties.
326 STERLING CORPORATE BOND INDEX FUND
Comparative Tables
Income S
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 100.20p 97.93p 96.80p
Return before operating charges* 3.46p 5.48p 4.58p
Operating charges** (0.09p) (0.09p) (0.09p)
Return after operating charges* 3.37p 5.39p 4.49p
Distributions on income shares (2.87p) (3.12p) (3.36p)
Closing net asset value per share 100.70p 100.20p 97.93p
*after direct transaction costs of:*** 0.00p 0.00p 0.00p
Performance
Return after charges 3.36% 5.50% 4.64%
Other information
Closing net asset value £60,671,110 £83,411,623 £22,797,761
Closing number of shares 60,272,541 83,289,645 23,280,378
Operating charges - OCF 0.08% 0.10%† 0.10%
Direct transaction costs 0.00% 0.00% 0.00%
Prices
Highest share price 106.80p 104.60p 99.74p
Lowest share price 100.40p 92.63p 94.79p
Accumulation S
15.5.21 15.5.20 15.5.19
Change in net assets per share
Opening net asset value per share 112.30p 106.50p 101.80p
Return before operating charges* 3.90p 5.90p 4.80p
Operating charges** (0.10p) (0.10p) (0.10p)
Return after operating charges* 3.80p 5.80p 4.70p
Distributions on accumulation shares (3.26p) (3.44p) (3.50p)
Retained distributions on accumulation shares 3.26p 3.44p 3.50p
Closing net asset value per share 116.10p 112.30p 106.50p
*after direct transaction costs of:*** 0.00p 0.00p 0.00p
Performance
Return after charges 3.38% 5.45% 4.62%
Other information
Closing net asset value £87,305,258 £69,606,309 £35,198,628
Closing number of shares 75,214,810 61,979,792 33,051,662
Operating charges - OCF 0.09% 0.10%† 0.10%
Direct transaction costs 0.00% 0.00% 0.00%
Prices
Highest share price 121.50p 116.50p 106.90p
Lowest share price 112.60p 103.10p 101.30p
†Estimate for OCF as registrar fees were no longer to be paid by the class effective 1.4.20.
**The operating charges include all costs borne by the Fund, except for direct transaction costs.
***The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers,
levies by regulatory agencies and securities exchanges as well as transfer taxes and duties.
STERLING CORPORATE BOND INDEX FUND 327
15.5.21 15.5.20
Notes £’000 £’000 £’000 £’000
Income
Net capital gains 2 6,982 4,325
Revenue 3 6,010 6,784
Expenses 4 (277) (217)
Interest payable and similar charges (1) -
Net revenue before taxation 5,732 6,567
Taxation 5 - -
Net revenue after taxation 5,732 6,567
Total return before distributions 12,714 10,892
Distributions 6 (8,045) (9,201)
Change in net assets attributable
to shareholders from investment activities 4,669 1,691
15.5.21 15.5.20
£’000 £’000 £’000 £’000
Opening net assets attributable to shareholders 323,402 227,226
Amounts receivable on creation of shares 82,033 185,714
Amounts payable on cancellation of shares (171,778) (95,208)
(89,745) 90,506
Dilution adjustment 783 1,095
Change in net assets attributable to shareholders from
investment activities (see Statement of Total Return above) 4,669 1,691
Retained distribution on accumulation shares 3,904 2,884
Closing net assets attributable to shareholders 243,013 323,402
Balance Sheet
as at 15 May 2021
15.5.21 15.5.20
Notes £’000 £’000 £’000 £’000
Assets
Investments 240,993 321,060
Current assets
Debtors 8 3,135 4,274
Cash and bank balances 3,007 383
Total current assets 6,142 4,657
Total assets 247,135 325,717
Liabilities
Investment liabilities (3) (5)
Creditors
Distribution payable on income shares (618) (1,674)
Other creditors 9 (3,501) (636)
Total creditors (4,119) (2,310)
Total liabilities (4,122) (2,315)
Net assets attributable to shareholders 243,013 323,402
328 STERLING CORPORATE BOND INDEX FUND
Institutional Income
Group 1 0.703303 - 0.703303 0.750702
Group 2 0.500226 0.203077 0.703303 0.750702
Institutional Accumulation
Group 1 0.802179 - 0.802179 0.824486
Group 2 0.802179 0.000000 0.802179 0.824486
Income C
Group 1 0.677776 - 0.677776 0.730937
Group 2 0.539724 0.138052 0.677776 0.730937
Accumulation C
Group 1 0.770408 - 0.770408 0.795724
Group 2 0.497182 0.273226 0.770408 0.795724
Income S
Group 1 0.694472 - 0.694472 0.743959
Group 2 0.368879 0.325593 0.694472 0.743959
Accumulation S
Group 1 0.797394 - 0.797394 0.826379
Group 2 0.511245 0.286149 0.797394 0.826379
STERLING CORPORATE BOND INDEX FUND 329
Institutional Income
Group 1 0.730000 - 0.730000 0.770000
Group 2 0.420000 0.310000 0.730000 0.770000
Institutional Accumulation
Group 1 0.820000 - 0.820000 0.170000
Group 2 0.820000 0.000000 0.820000 0.170000
Income C
Group 1 0.710000 - 0.710000 0.750000
Group 2 0.590000 0.120000 0.710000 0.750000
Accumulation C
Group 1 0.790000 - 0.790000 0.820000
Group 2 0.490000 0.300000 0.790000 0.820000
Income S
Group 1 0.720000 - 0.720000 0.760000
Group 2 0.470000 0.250000 0.720000 0.760000
Accumulation S
Group 1 0.820000 - 0.820000 0.840000
Group 2 0.370000 0.450000 0.820000 0.840000
330 STERLING CORPORATE BOND INDEX FUND
Institutional Income
Group 1 0.740000 - 0.740000 0.810000
Group 2 0.230000 0.510000 0.740000 0.810000
Institutional Accumulation
Group 1 0.830000 - 0.830000 0.880000
Group 2 0.830000 0.000000 0.830000 0.880000
Income C
Group 1 0.720000 - 0.720000 0.780000
Group 2 0.510000 0.210000 0.720000 0.780000
Accumulation C
Group 1 0.800000 - 0.800000 0.850000
Group 2 0.500000 0.300000 0.800000 0.850000
Income S
Group 1 0.730000 - 0.730000 0.800000
Group 2 0.410000 0.320000 0.730000 0.800000
Accumulation S
Group 1 0.830000 - 0.830000 0.880000
Group 2 0.570000 0.260000 0.830000 0.880000
STERLING CORPORATE BOND INDEX FUND 331
Institutional Income
Group 1 0.740000 - 0.740000 0.830000
Group 2 0.430000 0.310000 0.740000 0.830000
Institutional Accumulation
Group 1 0.820000 - 0.820000 0.910000
Group 2 0.820000 0.000000 0.820000 0.910000
Income C
Group 1 0.710000 - 0.710000 0.810000
Group 2 0.510000 0.200000 0.710000 0.810000
Accumulation C
Group 1 0.790000 - 0.790000 0.870000
Group 2 0.700000 0.090000 0.790000 0.870000
Income S
Group 1 0.730000 - 0.730000 0.820000
Group 2 0.340000 0.390000 0.730000 0.820000
Accumulation S
Group 1 0.810000 - 0.810000 0.890000
Group 2 0.340000 0.470000 0.810000 0.890000
332 STERLING CORPORATE BOND INDEX FUND
15.5.21 15.5.20
£’000 £’000
1. Accounting Policies
The accounting policies are set out on pages 9 and 10.
3. Revenue
Interest on bonds and other debt securities 6,010 6,783
Bank interest - 1
Total revenue 6,010 6,784
4. Expenses
Payable to the Authorised Corporate Director, associates of
the Authorised Corporate Director and agents of either of them:
Authorised Corporate Director's charge 137 79
Safe custody fee 11 38
148 117
Payable to the Depositary, associates of the Depositary
and agents of either of them:
Depositary fee 32 33
Other expenses:
Audit fee 8 6
License fee 89 61
97 67
Total expenses 277 217
STERLING CORPORATE BOND INDEX FUND 333
15.5.21 15.5.20
£’000 £’000
5. Taxation
a) Analysis of charge in year:
Corporation tax - -
Total tax for the year (note 5b) - -
b) Factors affecting taxation charge for the year:
The tax assessed for the year is lower than the standard rate of
corporation tax in the UK for an open-ended investment company (20%).
The differences are explained below:
Net revenue before taxation 5,732 6,567
Corporation tax at 20% 1,146 1,313
Effects of:
Tax deductible interest distributions (1,146) (1,313)
Current tax charge for the year (note 5a) - -
c) Provision for deferred taxation
At 15 May 2021, there is no potential deferred tax asset (15.5.20: £nil) in relation to surplus management expenses.
6. Distributions
The distributions take account of amounts received on the issue of shares
and amounts deducted on the cancellation of shares, and comprise:
Interim dividend distribution 5,876 7,041
Final dividend distribution 1,658 2,397
7,534 9,438
Add: Amounts deducted on cancellation of shares 715 431
Deduct: Amounts received on issue of shares (204) (668)
Net distribution for the year 8,045 9,201
8. Debtors
Amounts receivable for creation of shares 187 162
Accrued revenue 2,948 4,112
Total debtors 3,135 4,274
9. Other creditors
Amounts payable for cancellation of shares 1,462 177
Purchases awaiting settlement 2,005 408
Accrued expenses 34 51
Total other creditors 3,501 636
334 STERLING CORPORATE BOND INDEX FUND
Opening shares issued at 16.5.20 132,910,595 35,057 7,684,394 26,499,435 83,289,645 61,979,792
Share movements 16.5.20 to 15.5.21
Shares issued 250,123 - 8,197,392 33,606,735 12,078,089 18,681,745
Shares cancelled (114,429,095) - (5,889,357) (2,987,866) (35,095,193) (5,446,727)
Shares converted (91,556) - 90,552 - - -
Closing shares issued at 15.5.21 18,640,067 35,057 10,082,981 57,118,304 60,272,541 75,214,810
% % % % % %
As at 15.5.21 99.12 - 1.67 0.28 - -
As at 15.5.20 92.31 - 2.44 0.24 - -
Details of all other material related party transactions during the year and any payment amounts outstanding at the
balance sheet date are disclosed in notes 8 and 9 to the financial statements and the Statement of Change in Net Assets
Attributable to Shareholders and the Portfolio Statement.
The balance due to/from the ACD (including amounts due to associates and agents) at the year end was £1,296,186
(15.5.20: £47,976), further details of such amounts can be found in notes 8 and 9.
At the year end, the Fund held £7,336,858 (15.5.20: £8,695,457) in Authorised Investment Funds managed by HSBC
Holdings, the parent company of the ACD. During the period, transactions in Authorised Investment Funds managed by
HSBC Holdings totalled £68,228,573 (15.5.20: £99,890,879).
Investments in related parties are disclosed in the Portfolio Statement.
Investment Objective*
The Fund aims to provide returns by tracking the performance of the FTSE Developed ESG Low Carbon Select Index
(the “Index”) before the deduction of charges.
Investment Policy*
The Index is comprised of the shares (equities) of large and medium sized companies from developed markets.
The Index seeks to achieve a reduction in carbon emissions and fossil fuel reserves exposure and an improvement
of the FTSE Russell ESG rating against that of the FTSE Developed Index (the ‘Parent Index’). The Index also excludes
the shares of certain companies based on sustainability criteria. Further information about the Index and the criteria
can be found in the Prospectus.
The Fund may use different types of derivatives for efficient portfolio management, including hedging. In particular the
Fund may use derivatives to help it manage cash flows and to gain exposure to companies that make up the Index.
The Fund may invest up to 10% of its value in contracts for differences. The use of derivatives will be consistent with
the risk profile of the Fund.
Investment Strategy*
The Fund will invest directly in shares of all of the companies that make up the Index and in the same or very similar
proportions in which they are included in the Index.
However, there may be circumstances when it is not possible or practical for the Fund to invest in shares of all the
companies of the Index. The Fund may not invest in all the companies of the Index to manage transaction costs or
to reflect market conditions, regulations or HSBC’s banned weapons policy.
The Fund may hold cash and other funds, including funds managed by the HSBC Group, to manage day-to-day cash
flow requirements.
The Fund’s performance is measured against the Index, because the Fund intends to track the performance of the Index.
*For details of the full Investment Policy and Strategy please refer to the HSBC Index Tracker Investment Funds
prospectus. We have also published a Glossary of key terms used which you may wish to refer to. Both documents
can be found at https://www.assetmanagement.hsbc.co.uk/en/individual-investor/fund-centre.
Portfolio Activity
FTSE Developed ESG Low Carbon index was up 7.76% since inception (15th of December 2020). The main driver for the
positive performance was the Financials sector with a contribution to the total index return of 3.63%. This sector also
had the best absolute performance with 19.62%. The second best contributing sector was Technology with 1.62%.
All sectors contributed positively, some very marginally though. From a country perspective the positive performance
was significantly driven by the US with a contribution of 5.85%, while Japan, Denmark and New Zealand contributed
slightly negatively.
Developed ESG equities reported an overall growth during the period, however, it was a bumpy road with falling prices in
January, then February again after a short recovery and once more towards the end of the period after a strong rebound
before. This was on the back of the changing investor sentiment around new Covid-19 infections mainly in Europe
earlier in the year and slow vaccine rollout in some countries despite the US and UK. Overall though and especially more
recently, the global equities benefitted from a more positive sentiment in the US and Europe due to the fiscal stimuli and
general political support and more recently a resurgence in economic activity as social restrictions are gradually being
lifted and the inoculation campaign has gained on speed in several parts of the World.
DEVELOPED WORLD SUSTAINABLE EQUITY INDEX FUND 339
Investment Performance
As the Fund was launched on 10 December 2020, there are no performance values available.
ESG Performance
Carbon Intensity – 69.9 Fund 144.8 Benchmark.
ESG – 4.0 Fund 3.4 Benchmark.
Carbon Intensity is a measure of the quantity of carbon emissions of the companies held by the Fund/constituents of
the benchmark (measured in tonnes CO²e/USD million).
ESG Score is a measure of the Environmental, Social and Governance characteristics of the companies held by the
Fund/constituents of the benchmark.
Source: S&P Trucost/FTSE Russell (30 April 2021).
Tracking Error
As the Fund was launched on 10 December 2020, there are no tracking error values available.
Fund Particulars
as at 17 May 2021
Portfolio Statement
as at 15 May 2021
AUSTRIA - 0.07%
Erste Bank 12,781 367 0.02
OMV 9,442 373 0.02
Raiffeisen International Bank 9,189 156 0.01
Verbund 8,465 533 0.02
Total Austria 1,429 0.07
DEVELOPED WORLD SUSTAINABLE EQUITY INDEX FUND 341
Portfolio Statement
as at 15 May 2021
Security Holding
Total Bid
net value
assets £’000
%
BELGIUM - 0.34%
Anheuser-Busch InBev 32,430 1,741 0.08
KBC Group 70,247 4,142 0.19
Solvay 4,337 423 0.02
Telenet Group 16,967 490 0.02
UCB 5,155 346 0.02
Umicore 3,476 150 0.01
Total Belgium 7,292 0.34
BERMUDA - 0.17%
Credicorp (Nys) 1,279 132 0.01
Hiscox 14,533 118 0.00
IHS Markit 46,787 3,486 0.16
Total Bermuda 3,736 0.17
CANADA - 2.98%
Agnico Eagle Mines 5,509 274 0.01
Bank of Montreal 70,044 4,944 0.23
Bank of Nova Scotia 38,204 1,788 0.08
Barrick Gold 298,857 5,098 0.23
BCE 10,368 360 0.02
Canadian Imperial Bank 46,255 3,596 0.17
Canadian National Railway 13,722 1,047 0.05
Canadian Pacific Rail 8,610 490 0.02
Canadian Tire A 1,445 178 0.01
Enbridge 28,677 793 0.04
Fortis 3,645 117 0.00
IGM Financial 12,156 319 0.01
Intact Financial 7,733 726 0.03
Loblaw 3,555 150 0.01
Magna International 4,874 333 0.01
Manulife 134,321 2,063 0.09
Metro 7,930 270 0.01
National Bank of Canada 7,788 418 0.02
Power Corporation of Canada 16,641 366 0.02
Rogers Communications B 10,594 384 0.02
Royal Bank of Canada 300,952 21,501 0.99
Sun Life Financial 34,399 1,325 0.06
Suncor Energy 9,690 160 0.01
Teck Resources B 30,842 558 0.03
Telus 28,324 439 0.02
Thomson Reuters Corporation 2,581 174 0.01
Toronto Dominion Bank 328,729 16,919 0.78
Total Canada 64,790 2.98
342 DEVELOPED WORLD SUSTAINABLE EQUITY INDEX FUND
Portfolio Statement
as at 15 May 2021
DENMARK - 0.66%
Carlsberg B 7,065 916 0.04
Christian Hansen Holdings 2,039 129 0.01
Coloplast B 1,331 147 0.01
DSV 2,508 396 0.02
Genmab 903 233 0.01
GN Store 1,979 109 0.00
Novo Nordisk B 99,767 5,530 0.25
Novozymes 17,368 889 0.04
Orsted 23,737 2,328 0.11
Pandora 4,572 394 0.02
Tryg 11,717 195 0.01
Vestas Wind Systems 120,340 3,150 0.14
Total Denmark 14,416 0.66
FINLAND - 0.40%
Elisa 13,823 573 0.03
Fortum 40,799 800 0.04
Kesko B 49,882 1,124 0.05
Kone B 11,601 666 0.03
Neste 11,912 521 0.02
Nokia 673,425 2,343 0.11
Nokian Renkaat 6,442 178 0.01
Nordea Bank 164,822 1,234 0.06
Sampo 3,847 135 0.01
Stora Enso (registered) 35,998 485 0.02
UPM-Kymmene 19,460 548 0.02
Total Finland 8,607 0.40
DEVELOPED WORLD SUSTAINABLE EQUITY INDEX FUND 343
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
IRELAND - 2.23%
Accenture 97,889 20,025 0.92
AIB Group 141,528 313 0.01
AON 14,897 2,687 0.12
CRH 18,083 653 0.03
Eaton 7,230 760 0.03
Johnson Controls 148,707 6,918 0.32
Kerry Group A 9,399 879 0.04
Kingspan Group 5,025 328 0.02
Linde 16,218 3,465 0.16
Medtronic 84,872 7,543 0.35
Pentair 4,096 200 0.01
Perrigo 2,674 87 0.00
Seagate Technology 22,211 1,545 0.07
Smurfit Kappa Group 10,538 397 0.02
Steris 4,021 565 0.03
Trane Technologies 11,296 1,476 0.07
Willis Towers Watson 2,874 540 0.03
Total Ireland 48,381 2.23
ISRAEL - 0.11%
Bank Hapoalim 37,409 219 0.01
Bank Leumi Le Israel 129,269 687 0.03
ICL Group 98,691 475 0.02
Israel Discount Bank 156,449 522 0.02
Mizrahi Tefahot Bank 15,010 304 0.02
Nice Systems 688 110 0.01
Total Israel 2,317 0.11
346 DEVELOPED WORLD SUSTAINABLE EQUITY INDEX FUND
Portfolio Statement
as at 15 May 2021
JAPAN - 7.36%
Advantest 6,000 356 0.02
Aeon 55,200 1,072 0.05
Aica Kogyo 5,150 138 0.01
Aisin Seiki 28,200 782 0.04
Ajinomoto 43,700 685 0.03
Anritsu 14,300 194 0.01
Asahi Breweries 22,600 708 0.03
Asahi Glass 5,800 185 0.01
Asahi Kasei 83,200 659 0.03
Astellas Pharma 130,500 1,417 0.07
Azbil 8,900 250 0.01
Bridgestone 67,100 2,016 0.09
Brother Industries 25,500 352 0.02
Canon 67,100 1,099 0.05
Casio Computer 15,200 174 0.01
Century Tokyo Leasing Corporation 7,100 288 0.01
Chugai Pharmaceuticals 8,900 238 0.01
Daifuku 2,423 152 0.01
Dai-ichi Mutual Life Insurance 57,200 758 0.03
Daiichi Sankyo 226,200 3,962 0.18
Daikin Industries 24,832 3,425 0.16
Daiwa House Industry 45,900 971 0.04
Daiwa Securities Group 95,300 376 0.02
Denso 8,100 375 0.02
Dentsu 13,000 282 0.01
DIC 7,600 144 0.01
Ebara 7,600 227 0.01
Eisai 27,800 1,252 0.06
DEVELOPED WORLD SUSTAINABLE EQUITY INDEX FUND 347
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
LUXEMBOURG - 0.13%
Spotify Technology 17,812 2,828 0.13
Total Luxembourg 2,828 0.13
NETHERLANDS - 1.29%
ABN AMRO Group GDR 34,742 320 0.01
Aegon 79,218 275 0.01
Akzo Nobel 7,596 671 0.03
ASML Holdings 13,147 5,979 0.28
ASR Nederland 6,053 194 0.01
CNH Industrial 115,550 1,391 0.06
Ferrari New 1,660 233 0.01
Heineken 20,442 1,742 0.08
Heineken Holdings 9,328 681 0.03
ING Groep 201,231 1,882 0.09
Koninklijke Ahold Delhaize 59,289 1,198 0.05
350 DEVELOPED WORLD SUSTAINABLE EQUITY INDEX FUND
Portfolio Statement
as at 15 May 2021
NORWAY - 0.20%
Adevinta B 26,922 319 0.01
Den Norske Bank 104,789 1,647 0.08
Equinor 21,125 325 0.01
Norsk Hydro 77,627 360 0.02
Orkla 138,568 1,000 0.05
Telenor 39,297 500 0.02
Yara International 4,042 155 0.01
Total Norway 4,306 0.20
PANAMA - 0.01%
Carnival 8,982 173 0.01
Total Panama 173 0.01
DEVELOPED WORLD SUSTAINABLE EQUITY INDEX FUND 351
Portfolio Statement
as at 15 May 2021
Security Holding
Total Bid
net value
assets £’000
%
POLAND - 0.11%
KGHM 15,099 609 0.03
LPP 76 151 0.01
Pekao 12,692 206 0.01
PKO Bank Polski 65,432 428 0.02
Polski Koncern Naftowy 18,789 273 0.01
PZU Group 75,500 494 0.02
Santander Bank Polska 5,937 257 0.01
Total Poland 2,418 0.11
PORTUGAL - 0.05%
Galp Energia 65,252 580 0.03
Jeronimo Martins 40,453 551 0.02
Total Portugal 1,131 0.05
SINGAPORE - 0.42%
Capitaland 190,500 355 0.01
CapitaLand Mall Trust 353,100 372 0.02
City Developments 52,100 201 0.01
ComfortDelGro 178,600 150 0.01
DBS 268,147 4,177 0.19
Flex 69,931 870 0.04
Overseas-Chinese Banking 133,400 833 0.04
Singapore Exchange 37,300 201 0.01
Singapore Telecommunications 630,000 778 0.03
United Overseas Bank 65,100 880 0.04
Wilmar International 153,900 387 0.02
Total Singapore 9,204 0.42
Portfolio Statement
as at 15 May 2021
SPAIN - 0.75%
Amadeus IT 9,692 515 0.02
Banco Santander 577,752 1,668 0.08
BBV Argentaria 275,500 1,193 0.05
CaixaBank 241,880 592 0.03
Cellnex Telecom 17,432 683 0.03
Gamesa 16,718 374 0.02
Grifols A 7,783 159 0.01
Iberdrola 625,112 6,073 0.28
Industria de Diseño Textil 144,716 3,942 0.18
Naturgy Energy 8,532 160 0.01
Red Electrica de Espana 15,162 211 0.01
Telefonica 230,331 795 0.03
Total Spain 16,365 0.75
SWEDEN - 1.04%
Alfa Laval 8,080 208 0.01
Assa Abloy B 13,303 288 0.01
Atlas Copco A 17,751 790 0.04
Atlas Copco B 10,652 405 0.02
Boliden 16,918 502 0.02
Boliden redemption shares 16,918 9 0.00
Castellum AB 25,805 466 0.02
Electrolux B 33,102 670 0.03
Epiroc A 31,603 525 0.02
Epiroc B 19,177 287 0.01
Epiroc A redemption shares 31,603 8 0.00
Epiroc B redemption shares 19,177 5 0.00
Ericsson (L.M.) Telefonatkie B 491,096 4,605 0.21
Essity Aktiebolag B 102,842 2,561 0.12
Hennes & Mauritz B free 143,741 2,583 0.12
Hexagon 5,834 401 0.02
Husqvarna B 29,715 303 0.01
ICA Gruppen 4,457 152 0.01
DEVELOPED WORLD SUSTAINABLE EQUITY INDEX FUND 353
Portfolio Statement
as at 15 May 2021
SWITZERLAND - 2.93%
ABB (registered) 37,760 912 0.04
Adecco 2,677 128 0.00
Alcon 3,304 161 0.01
Chubb 41,796 5,048 0.23
CIE Financiere Richemont A 11,723 869 0.04
Coca-Cola HBC 34,603 869 0.04
Credit Suisse 93,963 688 0.03
#Credit Suisse rights 93,963 - 0.00
Garmin 1,756 175 0.01
Geberit 314 153 0.01
Givaudan (registered) 392 1,179 0.05
Julius Baer Group 3,930 183 0.01
LafargeHolcim 9,502 404 0.02
Lonza Group 720 319 0.01
Nestle 284,108 24,311 1.12
Novartis (registered) 160,145 10,134 0.47
Partners Group 200 204 0.01
Roche Holdings 38,994 9,301 0.43
Roche Holdings B 1,442 370 0.02
SGS Surveillance 303 651 0.03
Sika 1,094 235 0.01
Sonova 703 141 0.01
Swiss Life 682 246 0.01
Swiss Reinsurance (registered) 14,656 1,015 0.05
Swisscom (registered) 551 218 0.01
TE Connectivity 25,984 2,475 0.11
UBS 149,733 1,635 0.08
Zurich Insurance Group 5,292 1,589 0.07
Total Switzerland 63,613 2.93
354 DEVELOPED WORLD SUSTAINABLE EQUITY INDEX FUND
Portfolio Statement
as at 15 May 2021
Security Holding
Total Bid
net value
assets £’000
%
UNITED KINGDOM - 4.79%
3i Group 84,590 1,052 0.05
Associated British Foods 16,216 373 0.02
AstraZeneca 41,457 3,260 0.15
Auto Trader Group 89,517 494 0.02
Aviva 619,538 2,533 0.12
Barclays 2,141,141 3,869 0.18
Barratt Developments 35,036 269 0.01
BHP Group 68,015 1,512 0.07
BP 295,035 925 0.04
British Land REIT 37,485 197 0.01
BT Group 314,902 509 0.02
Bunzl 10,885 251 0.01
Burberry Group 26,011 548 0.02
Coca-Cola European Partners 94,878 4,059 0.19
Compass Group 36,397 560 0.03
Croda International 8,105 529 0.02
Diageo 305,803 10,255 0.47
GlaxoSmithKline 584,303 8,007 0.37
+HSBC Holdings 2,121,628 9,520 0.44
Informa 45,019 252 0.01
Intermediate Capital 12,523 257 0.01
Intertek Group 9,129 537 0.02
ITV 210,348 270 0.01
Johnson Matthey 10,458 339 0.01
Kingfisher 210,046 779 0.04
Land Securities 18,244 132 0.01
Legal & General 400,643 1,133 0.05
Liberty Global 6,060 122 0.01
Liberty Global C 12,958 260 0.01
Lloyds Banking Group 7,767,877 3,748 0.17
London Stock Exchange Group 28,950 2,081 0.10
Mondi 39,266 761 0.04
National Grid 70,544 660 0.03
NatWest Group 1,227,699 2,370 0.11
Nielsen 79,510 1,581 0.07
Ocado Group 12,156 241 0.01
Pearson 191,111 1,643 0.07
Phoenix Group Holdings 31,522 232 0.01
Prudential 109,276 1,655 0.08
Reckitt Benckiser 106,365 6,770 0.31
RELX 48,529 902 0.04
Rentokil Initial 31,207 147 0.01
Rio Tinto 21,722 1,333 0.06
Royal Dutch Shell A 45,283 643 0.03
Royal Dutch Shell B 40,919 557 0.02
DEVELOPED WORLD SUSTAINABLE EQUITY INDEX FUND 355
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Portfolio Statement
as at 15 May 2021
Comparative Tables
Institutional Income#
15.5.21*
Change in net assets per share
Opening net asset value per share 100.00p
Return before operating charges* 7.59p
Operating charges** (0.11p)
Return after operating charges* 7.48p
Distributions on income shares (0.58p)
Closing net asset value per share 106.90p
*after direct transaction costs of:*** 0.16p
Performance
Return after charges 7.48%
Other information
Closing net asset value £1,051,284
Closing number of shares 983,673
Operating charges - OCF 0.04%†
Direct transaction costs 0.15%
Prices
Highest share price 110.00
Lowest share price 100.00
Institutional Accumulation#
15.5.21*
Change in net assets per share
Opening net asset value per share 100.00p
Return before operating charges* 7.73p
Operating charges** (0.33p)
Return after operating charges* 7.40p
Distributions on accumulation shares (0.58p)
Retained distributions on accumulation shares 0.58p
Closing net asset value per share 107.40p
*after direct transaction costs of:*** 0.15p
Performance
Return after charges 7.40%
Other information
Closing net asset value £107,440
Closing number of shares 100,000
Operating charges - OCF 0.04%†
Direct transaction costs 0.15%
Prices
Highest share price 110.00p
Lowest share price 100.00p
#The Fund launched on 10 December 2020.
†Estimated value following Fund launch on 10 December 2020.
**The operating charges include all costs borne by the Fund, except for direct transaction costs.
***The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers,
levies by regulatory agencies and securities exchanges as well as transfer taxes and duties.
DEVELOPED WORLD SUSTAINABLE EQUITY INDEX FUND 365
Comparative Tables
Income C#
15.5.21*
Change in net assets per share
Opening net asset value per share 100.00p
Return before operating charges* 7.74p
Operating charges** (0.31p)
Return after operating charges* 7.43p
Distributions on income shares (0.53p)
Closing net asset value per share 106.90p
*after direct transaction costs of:*** 0.15p
Performance
Return after charges 7.43%
Other information
Closing net asset value £215,126
Closing number of shares 201,324
Operating charges - OCF 0.18%†
Direct transaction costs 0.15%
Prices
Highest share price 110.00p
Lowest share price 100.00p
Accumulation C#
15.5.21*
Change in net assets per share
Opening net asset value per share 100.00p
Return before operating charges* 7.56p
Operating charges** (0.16p)
Return after operating charges* 7.40p
Distributions on accumulation shares (0.54p)
Retained distributions on accumulation shares 0.54p
Closing net asset value per share 107.40p
*after direct transaction costs of:*** 0.15p
Performance
Return after charges 7.40%
Other information
Closing net asset value £951,798
Closing number of shares 886,243
Operating charges - OCF 0.18%†
Direct transaction costs 0.15%
Prices
Highest share price 110.00p
Lowest share price 100.00p
#The Fund launched on 10 December 2020.
†Estimated value following Fund launch on 10 December 2020.
**The operating charges include all costs borne by the Fund, except for direct transaction costs.
***The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers,
levies by regulatory agencies and securities exchanges as well as transfer taxes and duties.
366 DEVELOPED WORLD SUSTAINABLE EQUITY INDEX FUND
Comparative Tables
Income S#
15.5.21*
Change in net assets per share
Opening net asset value per share 100.00p
Return before operating charges* 7.55p
Operating charges** (0.21p)
Return after operating charges* 7.34p
Distributions on income shares (0.54p)
Closing net asset value per share 106.80p
*after direct transaction costs of:*** 0.15p
Performance
Return after charges 7.34%
Other information
Closing net asset value £2,830,682
Closing number of shares 2,650,000
Operating charges - OCF 0.15%†
Direct transaction costs 0.15%
Prices
Highest share price 110.00p
Lowest share price 100.00p
Accumulation S#
15.5.21*
Change in net assets per share
Opening net asset value per share 100.00p
Return before operating charges* 7.78p
Operating charges** (0.38p)
Return after operating charges* 7.40p
Distributions on accumulation shares (0.54p)
Retained distributions on accumulation shares 0.54p
Closing net asset value per share 107.40p
*after direct transaction costs of:*** 0.15p
Performance
Return after charges 7.40%
Other information
Closing net asset value £107,392
Closing number of shares 100,000
Operating charges - OCF 0.15%†
Direct transaction costs 0.15%
Prices
Highest share price 110.00p
Lowest share price 100.00p
#The Fund launched on 10 December 2020.
†Estimated value following Fund launch on 10 December 2020.
**The operating charges include all costs borne by the Fund, except for direct transaction costs.
***The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers,
levies by regulatory agencies and securities exchanges as well as transfer taxes and duties.
DEVELOPED WORLD SUSTAINABLE EQUITY INDEX FUND 367
Comparative Tables
Accumulation T#
15.5.21*
Change in net assets per share
Opening net asset value per share 100.00p
Return before operating charges* 7.73p
Operating charges** (0.03p)
Return after operating charges* 7.70p
Distributions on accumulation shares (0.86p)
Retained distributions on accumulation shares 0.86p
Closing net asset value per share 107.70p
*after direct transaction costs of:*** 0.16p
Performance
Return after charges 7.70%
Other information
Closing net asset value £2,167,059,838
Closing number of shares 2,011,710,873
Operating charges - OCF 0.028%†
Direct transaction costs 0.15%
Prices
Highest share price 110.00p
Lowest share price 100.00p
#The Fund launched on 10 December 2020.
†Estimated value following Fund launch on 10 December 2020.
**The operating charges include all costs borne by the Fund, except for direct transaction costs.
***The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers,
levies by regulatory agencies and securities exchanges as well as transfer taxes and duties.
368 DEVELOPED WORLD SUSTAINABLE EQUITY INDEX FUND
15.5.21*
Notes £’000 £’000
Income
Net capital gains 2 91,543
Revenue 3 11,985
Expenses 4 (185)
Interest payable and similar charges (9)
Net revenue before taxation 11,791
Taxation 5 (1,253)
Net revenue after taxation 10,538
Total return before distributions 102,081
Distributions 6 (10,538)
Change in net assets attributable
to shareholders from investment activities 91,543
15.5.21*
£’000 £’000
Opening net assets attributable to shareholders -
Amounts receivable on creation of shares 2,082,418
Amounts payable on cancellation of shares (21,059)
2,061,359
Dilution adjustment 2,139
Change in net assets attributable to shareholders from
investment activities (see Statement of Total Return above) 91,543
Retained distribution on accumulation shares 17,283
Closing net assets attributable to shareholders 2,172,324
Balance Sheet
as at 15 May 2021
15.5.21*
Notes £’000 £’000
Assets
Investments 2,114,603
Current assets
Debtors 8 14,589
Cash and bank balances 43,317
Total current assets 57,906
Total assets 2,172,509
Liabilities
Creditors
Distribution payable on income shares (21)
Other creditors 9 (164)
Total liabilities (185)
Net assets attributable to shareholders 2,172,324
Institutional Income
Group 1 0.584811 - 0.584811
Group 2 0.349402 0.235409 0.584811
Institutional Accumulation
Group 1 0.584650 - 0.584650
Group 2 0.584650 0.000000 0.584650
Income C
Group 1 0.528735 - 0.528735
Group 2 0.427442 0.101293 0.528735
Accumulation C
Group 1 0.535705 - 0.535705
Group 2 0.425926 0.109779 0.535705
Income S
Group 1 0.537500 - 0.537500
Group 2 0.185291 0.352209 0.537500
Accumulation S
Group 1 0.537190 - 0.537190
Group 2 0.537190 0.000000 0.537190
Accumulation T
Group 1 0.858827 - 0.858827
Group 2 0.542730 0.316097 0.858827
*The Fund launched on 10 December 2020.
370 DEVELOPED WORLD SUSTAINABLE EQUITY INDEX FUND
15.5.21*
£’000
1. Accounting Policies
The accounting policies are set out on pages 9 and 10.
3. Revenue
UK dividends (net) 687
Property investment income 2
Overseas dividends 11,225
Rebate to control charge for Accumulation T class 71
Total revenue 11,985
4. Expenses
Payable to the Authorised Corporate Director, associates of
the Authorised Corporate Director and agents of either of them:
Authorised Corporate Director's charge 110
Safe custody fee 28
138
Payable to the Depositary, associates of the Depositary
and agents of either of them:
Depositary fee 22
Other expenses:
Audit fee 7
Report and accounts fee 1
Licence fee 16
Professional fees 1
25
Total expenses 185
*The Fund launched on 10 December 2020.
DEVELOPED WORLD SUSTAINABLE EQUITY INDEX FUND 371
15.5.21*
£’000
5. Taxation
a) Analysis of charge in period:
Overseas tax 1,253
Total tax for the period (note 5b) 1,253
b) Factors affecting taxation charge for the period:
The tax assessed for the year is lower than the standard rate of
corporation tax in the UK for an open-ended investment company (20%).
The differences are explained below:
Net revenue before taxation 11,791
Corporation tax at 20% 2,358
Effects of:
Revenue not subject to taxation (2,368)
Tax relief on overseas tax suffered (2)
Current period expenses not utilised 12
Irrecoverable overseas tax 1,253
Current tax charge for the period (note 5a) 1,253
c) Provision for deferred taxation
At 15 May 2021, there is a potential deferred tax asset of £12,032 in relation to surplus management expenses.
It is unlikely the Fund will generate sufficient taxable profits in the future to utilise these expenses and therefore
no deferred tax asset has been recognised in the period.
6. Distributions
The distributions take account of amounts received on the issue of shares
and amounts deducted on the cancellation of shares, and comprise:
Final dividend distribution 17,304
17,304
Add: Amounts deducted on cancellation of shares 154
Deduct: Amounts received on issue of shares (6,920)
Net distribution for the period 10,538
8. Debtors
Amounts receivable for creation of shares 9,800
Sales awaiting settlement 13
Accrued revenue 4,294
Monies due from ACD 70
Overseas tax recoverable 412
Total debtors 14,589
9. Other Creditors
Accrued expenses 164
Total other creditors 164
*The Fund launched on 10 December 2020.
372 DEVELOPED WORLD SUSTAINABLE EQUITY INDEX FUND
% % % % % % %
As at 15.5.21 98.07 100.00 49.67 - - 100.00 -
Details of all other material related party transactions during the year and any payment amounts outstanding at the
balance sheet date are disclosed in notes 8 and 9 to the financial statements and the Statement of Change in Net Assets
Attributable to Shareholders and the Portfolio Statement.
The balance due from the ACD (including amounts due to associates and agents) at the period end was £9,751,283,
further details of such amounts can be found in notes 8 and 9.
At the period end, the Fund held £9,519,745 in Authorised Investment Funds managed by HSBC and/or HSBC Holdings,
the parent company of the ACD. During the period, transactions in Authorised Investment Funds managed by HSBC
and/or HSBC Holdings totalled £9,172,013. .
Investments in related parties are disclosed in the Portfolio Statement.
DEVELOPED WORLD SUSTAINABLE EQUITY INDEX FUND 373
For the year ended 15 May 2021 Purchases Commissions Taxes Other Expenses
£'000 £’000 % £’000 % £’000 %
Analysis of total purchases costs
Equity transactions 2,019,047 605 0.03 758 0.04 6 -
Corporate actions 184 - - - - - -
Total purchases before transaction costs 2,019,231 605 758 6
Transaction costs 1,369
Total purchases after commission,
tax and fees 2,020,600
Remuneration Policy
HSBC Index Tracker Investment Funds are managed by HSBC Global Asset Management (UK) Limited, which is a wholly
owned subsidiary of HSBC Holdings plc.
The firm's remuneration practicies and polices are governed by the HSBC Group Remuneration Committee in compliance
with the relevant regualtory requirements. For details please refer to the HSBC Group Remuneration Policy as published
on our website (http://www.hsbc.com/our-approach/remuneration).
HSBC Global Asset Management (UK) Limited's remuneration requirements as specified by the Undertakings for Collective
Investment in Transferable Securities (UCITS) Directive are covered in the specific remuneration policy published in the
HSBC Global Asset Management website (http://www.global.assetmanagement.hsbc.com/about-us/governance-structure).
Remuneration Disclosures
The following tables show the remuneration details, including fixed and variable remuneration, made by HSBC Global Asset
Management (UK) Limited to its employees and AIFMD Identified staff (Material Risk Takers) for performance year 2020.
Individuals have been identified as Material Risk Takers based on the criteria set out in the Financial Conduct Authority's
(FCA) AIFM Remuneration Code. The disclosures reflect the requirements of the FCA's COLL Sourcebook.
Fixed Variable
Headcount Remuneration Remuneration
No. £ £
HSBC Global Asset Management (UK) Ltd Employees 409 44,122,000 17,646,000
HSBC Index Tracker Investment Funds - Material Risk Takers 16 5,953,000 3,537,000
of which Executive and non-executive members of the management
body of the management company 4 1,475,000 811,000
Senior Management 8 1,830,000 1,119,000
Control Functions 6 1,447,000 314,000
Staff Responsible for heading the portfolio management, administration,
marketing, HR and Other Risk Takers 7 3,840,000 2,872,000
*The individual funds figures have been calculated using the net asset value as at 15 May 2021. These have then been
divided by the total HSBC Global Asset Management figures to give the split by fund.
377
Fixed Variable
Headcount Remuneration Remuneration
No. £ £
FTSE 250 Index Fund*
Material Risk Takers 1.15 428,067.09 254,337.87
of which Executive and non-executive members of the management
body of the management company 0.29 106,064.00 58,317.22
Senior Management 0.58 131,591.26 80,464.82
Control Functions 0.43 104,050.58 22,579.05
Staff Responsible for heading the portfolio management, administration,
marketing, HR and Other Risk Takers 0.50 276,125.93 206,519.18
*The individual funds figures have been calculated using the net asset value as at 15 May 2021. These have then been
divided by the total HSBC Global Asset Management figures to give the split by fund.
378
Fixed Variable
Headcount Remuneration Remuneration
No. £ £
Pacific Index Fund*
Material Risk Takers 0.45 168,122.29 99,890.56
of which Executive and non-executive members of the management
body of the management company 0.11 41,656.37 22,903.94
Senior Management 0.23 51,682.14 31,602.36
Control Functions 0.17 40,865.61 8,867.86
Staff Responsible for heading the portfolio management, administration,
marketing, HR and Other Risk Takers 0.20 108,447.77 81,109.90
Note: Material Unit Takers may be aligned to more than one sub-category
*The individual funds figures have been calculated using the net asset value as at 15 May 2021. These have then been
divided by the total HSBC Global Asset Management figures to give the split by fund.
379
The Manager entered into contracts for difference (“contract for differences” means a derivative that pays the differences
between the settlement prices of the opening and closing trades of the contract) during the period with the aim of gaining
short term exposure to a company's stock at a lower cost than directly holding the shares. This allows the Manager to gain
exposure to share price movements (whether up or down) without the need for ownership of the underlying shares.
The following table details the value of contracts for differences as a proportion of the Fund’s NAV, as at 15 May 2021 and
the income/returns earned for the year ended 15 May 2021.
The value of contracts for differences is based on the underlying exposure value on a gross absolute basis.
Total returns
Currency % of NAV earned '000
Developed World Sustainable Equity Index Fund GBP - 32
At the year end date of 15.05.21 no open contracts for difference were held by any Funds within the HIF Index Tracker.
As a result there is no underlying exposure value relating to contracts for difference to counterparties at 15.05.21 and no
further details in relation to associated collateral positions have been included.
380
Going concern
The Authorised Corporate Director has prepared the financial statements on the going concern basis as they do not intend
to liquidate the Company or its sub-funds or to cease their operations, and as they have concluded that the Company and
its sub-funds’ financial position means that this is realistic. They have also concluded that there are no material uncertainties
that could have cast significant doubt over their ability to continue as a going concern for at least a year from the date of
approval of the financial statements (“the going concern period”).
In our evaluation of the Authorised Corporate Director’s conclusions, we considered the inherent risks to the Company’s
and its sub-funds’ business model and analysed how those risks might affect the Company’s and its sub-funds’ financial
resources or ability to continue operations over the going concern period.
Our conclusions based on this work:
• we consider that the Authorised Corporate Director’s use of the going concern basis of accounting in the preparation of
the financial statements is appropriate;
• we have not identified, and concur with the Authorised Corporate Director’s assessment that there is not, a material
uncertainty related to events or conditions that, individually or collectively, may cast significant doubt on the Company’s
and its sub-funds’ ability to continue as a going concern for the going concern period.
However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are
inconsistent with judgements that were reasonable at the time they were made, the above conclusions are not a guarantee
that the Company or its sub-funds will continue in operation.
383
Identifying and responding to risks of material misstatement due to non-compliance with laws and regulations
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial
statements from our general commercial and sector experience and through discussion with the ACD and the Administrator
(as required by auditing standards) and discussed with the Directors the policies and procedures regarding compliance with
laws and regulations.
The potential effect of these laws and regulations on the financial statements varies considerably.
Firstly, the Company is subject to laws and regulations that directly affect the financial statements including financial
reporting legislation (including related authorised fund legislation maintained by the Financial Conduct Authority) and taxation
legislation and we assessed the extent of compliance with these laws and regulations as part of our procedures on the
related financial statement items.
Secondly, the Company is subject to many other laws and regulations where the consequences of non-compliance could
have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or
litigation. We identified the following areas as those most likely to have such an effect: money laundering, data protection,
bribery and corruption legislation recognising the Company’s activities. Auditing standards limit the required audit procedures
to identify non-compliance with these laws and regulations to enquiry of the Directors and the Administrator and inspection
of regulatory and legal correspondence, if any. Therefore, if a breach of operational regulations is not disclosed to us or
evident from relevant correspondence, an audit will not detect that breach.
Context of the ability of the audit to detect fraud or breaches of law or regulation
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material
misstatements in the financial statements, even though we have properly planned and performed our audit in accordance
with auditing standards. For example, the further removed non-compliance with laws and regulations is from the events
and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing
standards would identify it.
In addition, as with any audit, there remained a higher risk of non-detection of fraud, as these may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect
material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect
non-compliance with all laws and regulations.
384
Other information
The Authorised Corporate Director is responsible for the other information presented in the Annual Report together with the
financial statements. Our opinion on the financial statements does not cover the other information and, accordingly, we do
not express an audit opinion or, except as explicitly stated below, any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether, based on our financial statements audit
work, the information therein is materially misstated or inconsistent with the financial statements or our audit knowledge.
Based solely on that work:
• we have not identified material misstatements in the other information; and
• in our opinion the information given in the Authorised Corporate Director’s Report is consistent with the
financial statements.
Authorised Corporate Director’s (HSBC Global Asset Management (UK) Limited) responsibilities
As explained more fully in their statement set out on page 379, the Authorised Corporate Director is responsible for: the
preparation of financial statements that give a true and fair view; such internal control as they determine is necessary to
enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error;
assessing the Company and its sub-funds’ ability to continue as a going concern, disclosing, as applicable, matters related to
going concern; and using the going concern basis of accounting unless they either intend to liquidate the Company or its sub-
funds or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue our opinion in an auditor’s report. Reasonable assurance is a
high level of assurance, but does not guarantee that an audit conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually
or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the
financial statements.
A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities.
The purpose of our audit work and to whom we owe our responsibilities
This report is made solely to the Company’s shareholders, as a body, in accordance with Rule 4.5.12 of the Collective
Investment Schemes sourcebook (‘the COLL Rules’) issued by the Financial Conduct Authority under the Open-Ended
Investment Companies Regulations 2001. Our audit work has been undertaken so that we might state to the Company’s
shareholders those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s
shareholders as a body, for our audit work, for this report, or for the opinions we have formed.
Grant Archer
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
15 Canada Square
London
E14 5GL
31 August 2021
385
General Information
Cancellation Rights
• In certain circumstances we will send you a cancellation notice. If so this will be sent within 7 days of making your investment.
• Return this notice to us within 30 days if you do not wish to proceed with your investment.
• It is possible to receive back less than your original investment, if the value of your shares has fallen.
Publication of Prices
The prices of shares are updated daily on the following website: www.assetmanagement.hsbc.com/uk.
Alternatively you can call our Investments Helpline on 0800 358 3011*.
386
Prospectus
The Prospectus provides further details on our OEICs. For a copy of the latest Prospectus (available free of charge):-
• Telephone our Customer Services on 0800 358 3011*
• Write to our Administration Office
Income
Income is distributed or accumulated in the following way:-
• You will receive income payments net of tax. The payment dates for each of the Funds are detailed in the table
on pages 394 to 396.
• If you hold accumulation shares, income will be retained within the Fund. No additional shares will be bought.
The price of shares will reflect the net income received.
We must disclose details of such distributions to HM Revenue and Customs (HMRC). The distribution also needs
to be disclosed on your tax return.
Income Tax
A tax voucher is sent to all shareholders when distributions are paid or accumulated which will aid completion of tax returns.
Interest Distributions:
From 6 April 2017, any income that is distributed from our funds as interest is paid or accumulated gross of tax to all
shareholders. This follows the announcement from the UK Government in 2016 of its intention to remove the requirement
for tax to be deducted from interest distributions of open-ended investment companies.
A Personal Savings Allowance currently applies for UK individual taxpayers. This means that no tax is payable on savings
income, which includes interest distributions, of up to £1,000 for basic rate taxpayers and up to £500 for higher rate taxpayers.
This allowance is not available for additional rate taxpayers. UK taxpayers, including basic rate taxpayers, are liable to pay UK
tax on savings income above the allowance, subject to the starting rate of tax for savings.
For UK corporate shareholders, interest distributions will be paid without the deduction of tax. Such shareholders will be
subject to corporation tax on the gross amount of the distribution or accumulation.
For non-UK resident shareholders, interest distributions will be paid without the deduction of tax. Tax may or may not be
payable depending on the shareholder’s tax position and the provisions of any relevant double tax treaty with the UK.
Dividend Distributions:
A dividend allowance applies for UK resident individual shareholders which charges the first £2,000 of dividends received
in the tax year at 0%. A UK resident individual shareholder will have to pay income tax at the applicable basic, higher
or additional rate (depending on the shareholder’s individual tax position) on dividend income in excess of the £2,000
allowance. Note that dividend income within the £2,000 allowance will still count towards basic, higher and additional rate
bands and may therefore affect the rate of income tax that a shareholder pays on dividends they receive in excess of the
£2,000 allowance.
Where a corporate shareholder receives a dividend distribution from a Fund, such a shareholder should apportion the amount
of the distribution (by way of a formula) between that part representing the Fund’s income subject to corporation tax and that
part representing the Fund’s other income. Only that part which represents the income subject to corporation tax in the Fund
will be liable to corporation tax (in the hands of the corporate shareholder) and will be treated as an annual payment received
after deduction of income tax at the basic rate. That deemed income tax will be available to offset against the corporation tax
liability of the shareholder or may be repaid subject to certain restrictions.
For non-UK resident shareholders, tax may or may not be payable depending on the shareholder’s tax position and the
provisions of any relevant double tax treaty with the UK.
This information is based on our understanding of current UK law and HM Revenue and Customs practice which may be
subject to retrospective change. The future basis and rates of taxation may change without warning. Shareholders are
recommended to consult their professional advisers if they are in any doubt as to their individual tax position.
387
Assessment of Value
The Authorised Fund Manager is required to perform a detailed assessment on whether funds are 'providing value to investors'.
The resulting findings are published in a consolidated report on our website.
*To help us continually improve our service, and in the interests of security, we may monitor and/or record your
communications with us.
Lines are open Monday to Friday from 9am to 5pm (excluding public holidays).
388
Important Notes
The Annual Report covers the year 16 May 2020 to 15 May 2021.
The value of investments and any income from them can go down as well as up and investors may not get
back the amount originally invested. Where overseas investments are held the rate of currency exchange
may also cause the value of such investments to fluctuate. Investments in emerging markets are by their
nature higher risk and potentially more volatile than those inherent in some established markets. Stock market
investments should be viewed as a medium to long term investment and should be held for at least five years.
Any performance information shown refers to the past and should not be seen as an indication of future returns.
Your holding in an open-ended investment company must be regarded as a medium to long-term investment;
this means for at least five years.
The value and relative yield of fixed interest securities (including bonds) are strongly affected by interest
rate fluctuations and by changes in the credit ratings of the underlying issuer of the assets. Higher-yielding
securities are more likely to default.
The long-term nature of investment in property and the income generated tend to make this type of investment
less volatile than equities although it can be difficult to buy and/or sell quickly. Where the underlying Funds
invest directly in property, the property in the Fund may not be readily realisable, and the Manager of the
Fund may apply a deferral on redemption requests. The value of property is generally a matter of the valuer's
opinion rather than fact. Listed property securities are part of the equity market and are more volatile than
direct (unlisted) property, which can mean that the price of shares and the income from them can fluctuate,
sometimes dramatically.
Please note any reference to “Fund” or “Funds” means a sub-fund of the Company.
There are risks involved in investing in HSBC Index Tracker Investment Funds. Please refer to the Prospectus,
Key Investor Information Document (KIID) and Supplementary Information Document (SID) for further details.
The information in this report is based on our understanding of current law and HM Revenue and Customs
practice as at 15 May 2021. Both law and practice may of course change.
The views expressed are those of HSBC Global Asset Management (UK) Limited and do not constitute investment advice.
No liability can be accepted for recipients acting independently on its content.
The Company is authorised and regulated by the Financial Conduct Authority and is structured as an umbrella company,
in that the Company proposes to issue shares linked to different Funds which have been established. The Company is a
UCITS scheme.
Shareholders are not liable for the debts of the Company. A shareholder is not liable to make any further payment to the
Company after the purchase price of the shares has been paid for.
To help improve our service and in the interests of security we may record and/or monitor your communication with us.
HSBC Global Asset Management (UK) Limited provides information to Institutions, Professional Advisers and their clients
on the investment products and services of the HSBC Group.
Approved for issue in the UK by HSBC Global Asset Management (UK) Limited, who are authorised and regulated by the
Financial Conduct Authority.
HSBC Asset Management is the brand name for the asset management business of HSBC Group, which includes the
investment activities provided through our local regulated entity, HSBC Global Asset Management (UK) Limited.
http://www.assetmanagement.hsbc.com/uk
Copyright © HSBC Global Asset Management (UK) Limited 2021. All rights reserved.
389
Dealing in Shares
We have added wording to advise that the ACD may compulsorily redeem a shareholder’s shares under
certain circumstances.
Risks
The general risk section has been updated to add ‘pandemics’ to the list of factors that may lead to market fluctuations.
We have added the following text under the general risks section;
The ACD may, under certain circumstances (as detailed in “Dealing in Shares” section, “Compulsory Transfer and
Redemption” sub-section and “Compulsory Conversion” sub-section, on pages 23 and 24) compulsorily redeem or convert
all or a portion of a Shareholder’s Shares in a Fund. Such compulsory redemption and conversion may create adverse tax
and/or economic consequences to the Shareholder depending on the timing thereof.
No person will have any obligation to reimburse any portion of a Shareholder’s losses in the event of the termination of a
Fund, a compulsory redemption or a compulsory conversion.
390
Other Information
Equalisation
Revenue received by the Fund during the distribution period is reflected in the price of shares until the revenue is distributed.
The cost of Group 2 shares bought during a distribution period will therefore include an element of revenue.
Equalisation represents the average amount of accrued revenue included in the purchase price of all Group 2 shares sold
in the period, which is refunded as part of a shareholder’s first distribution. This amount is treated as a capital repayment
for tax purposes. It is not liable to income or corporation tax and is deducted from the original cost of the shares for capital
gains tax purposes.
Index Tracking
The Funds aim to achieve their objectives by investing in an optimised portfolio of the constituents, of the relevant Index,
providing an efficient exposure to this index. In replicating the index the ACD reserves the right to exercise the full powers
of the Funds in relation to borrowing and efficient portfolio management as and when it considers that the circumstances
which then exist make it appropriate to do so. The Scheme property may also not consist of the exact composition and
weighting of the underlying index in circumstances where the ACD determines that this is expedient for reasons of poor
liquidity or excessive cost to the Funds.
“FTSE®” is a trademark owned by the London Stock Exchange plc and The Financial Times Limited and used by FTSE
International Limited (“FTSE”) under licence.
The FTSE Indices are calculated by FTSE. FTSE does not sponsor, endorse or promote this product and is not in any way
connected to it and does not accept any liability in relation to its issue, operation and trading.
All copyright and database rights in the index values and constituent list vest in FTSE. HSBC has obtained full licence from
FTSE to use such copyrights and database rights in the creation of this product.
Standard & Poor’s and S&P are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”) and Dow
Jones is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”) and have been licensed for use
by S&P Dow Jones Indices LLC and sublicensed for certain purposes by HSBC Global Asset Management (UK) Limited.
The S&P 500 is a product of S&P Dow Jones Indices LLC, and has been licensed for use by HSBC Global Asset
Management (UK) Limited. HSBC Global Asset Management (UK) Limited ‘s American index Fund is not sponsored,
endorsed, sold or promoted by S&P Dow Jones Indices LLC, Dow Jones, S&P, their respective affiliates, and neither
S&P Dow Jones Indices LLC, Dow Jones, S&P, their respective affiliates make any representation regarding the advisability
of investing in such products.
392
Corporate Shareholders
A corporate shareholder will receive the distribution shown below on their annual consolidated tax voucher as follows:
All other Funds in this OEIC have a 100% franked distribution shown on their annual consolidated tax voucher.
393
Fund Rating*
†The previous ratings for these Funds was 5 until 4 August 2020.
Directory
The Company
HSBC Index Tracker Investment Funds, 8 Canada Square, London, E14 5HQ
Investment Manager
HSBC Global Asset Management (UK) Limited, 8 Canada Square, London, E14 5HQ
Depositary
State Street Trustees Limited, Quartermile 3, 10 Nightingale Way, Edinburgh, EH3 9EG
Regulator
Financial Conduct Authority (FCA), 12 Endeavour Square, London, E20 1JN
Auditor
KPMG LLP, 15 Canada Square, London E14 5GL
Registrar
HSBC Global Asset Management (UK) Limited (delegated to Northern Trust Global Services SE).
50 Bank Street, Canary Wharf, London, E14 5NT
Telephone: 0800 358 3011*
+44 800 358 3011 (Overseas)*
*Lines are open 9am to 5pm Monday to Friday (excluding public holidays).
Website
www.assetmanagement.hsbc.com/uk
To help us continually improve our services, and in the interests of security, we may monitor and/or record your
communications with us.
395
Number of
distributions 2 2 1 1
per year
Lump sum
minimum £1,000,000 £1,000,000 £1,000,000 £1,000,000
investment level †
Regular saver
minimum N/A N/A N/A N/A
investment level †
Available
Yes Yes Yes Yes
as an ISA
In ISA
can income Yes Yes Yes Yes
be paid
Income shares
Yes Yes Yes Yes
available
Accumulation
Yes Yes Yes Yes
shares available
†The above information relates only to the C share classes. Other share classes may differ.
396
Number of
distributions 1 1 1 1
per year
Distribution
15 Jul 15 Jul 15 Jul 15 Jul
dates
Lump sum
minimum £1,000,000 £1,000,000 £1,000,000 £1,000,000
investment level †
Regular saver
minimum N/A N/A N/A N/A
investment level †
Available
Yes Yes Yes Yes
as an ISA
In ISA
can income Yes Yes Yes Yes
be paid
Income shares
Yes Yes Yes Yes
available
Accumulation
Yes Yes Yes Yes
shares available
†The above information relates only to the C share classes. Other share classes may differ.
397
Number of
distributions 4 4 1
per year
15 Jul 15 Jul
Distribution 15 Oct 15 Oct
15 Jul
dates 15 Jan 15 Jan
15 Apr 15 Apr
Lump sum
minimum £1,000,000 £1,000,000 £1,000,000
investment level †
Regular saver
minimum N/A N/A N/A
investment level †
Available
Yes Yes Yes
as an ISA
In ISA
can income Yes Yes Yes
be paid
Income shares
Yes Yes Yes
available
Accumulation
Yes Yes Yes
shares available
†The above information relates only to the C share classes. Other share classes may differ.
Issued by HSBC Global Asset Management (UK) Limited.
Authorised and regulated by the Financial Conduct Authority.
www.assetmanagement.hsbc.com/uk
Printed by TPSquared Limited © HSBC Global Asset Management (UK) Limited 2021. All rights reserved.