HSBC Overnight Fund

October 2019

(Overnight fund – An open ended debt scheme investing in overnight securities)

Park your surplus money with confidence

2

What are Overnight Funds and where do they invest?

Debt instruments* Risk Profile Price Risk

TREPS (Tri Party Repos) Low Nil

Reverse Repo Low Nil

Overnight Fund’s underlying investment reflect its lowest risk

• The primary objective of these funds is to seek to generate returns commensurate with low risk and

providing high level of liquidity, through investments made primarily in overnight securities having maturity

of up to 1 business day.

• Risk is low as interest rate changes may not affect the price of the security

• Overnight funds are debt funds that invest in debt and money market instruments having maturity of up to

one business day

* Above list is not exhaustive and for illustration purpose only. Overnight funds can invest in other instruments that includes Commercial Papers (CP), Certificate of Deposits (CD) and T-Bills

with the maturity of 1 business day. Please refer the offer document for complete list of investment options.

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Positioning of Fixed Income funds

Liquid Funds

Ultra Short Duration Funds 4

Short Duration Funds 3

Gilt Funds 2

RIS

K

RETURN

Med-Long Duration Funds 1

^^General strategy followed by the fund categories. Above list is not exhaustive and for illustration purpose only

* Typical duration / maturity period of the investment securities where fund invests$ Overnight Fund redemption – the fund endeavors to make the payout within one business day on redemption.1 An open ended debt scheme investing in instruments with Macaulay duration between 4 to 7 years 2 An open ended debt scheme investing in government securities across maturity3 An open ended short term debt scheme investing in instruments with Macaulay duration between 1 year and 3 years 4 An open ended ultra-short term debt scheme investing in instruments with Macaulay duration between 3 months and 6 months 5 An open ended low duration debt scheme investing in instruments with Macaulay duration between 6 months and 12 months

Fixed Maturity Plans

CG

CG

Accrual + CG

Accrual

Accrual + Liquidity

Liquidity

Investment

Strategy ^^

Across maturity

4 to 7 Years

1 to 3 Years

3 Years

3 to 6 Months

Up to 91 days

Duration / Maturity*

Credit Risk Funds Capital gains (CG) Strategic

Low Duration Funds 5 Accrual + Liquidity 6 to 12 months

Dynamic Bond Funds CG Across durations

Overnight Funds$ Liquidity 1 business day

Overnight Funds are placed at the lowest risk level compared to other fixed income funds

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Benefits of Overnight Funds

** As per the Regulations, the Overnight Fund shall dispatch the redemption proceeds within 10 Business Days from the date of acceptance of redemption request. The Fund will endeavor to dispatch

the redemption proceeds in 1 Business Day from the date of receiving a valid redemption request.

Lowest volatility

Lowest risk

Reasonable risk adjusted performance

High liquidity**

Overnight funds offer relatively lower volatility compared to other fixed

income funds

Overnight funds carry no interest rate risk and lowest credit default risk

vs other fixed income funds

Overnight funds can deliver consistent and reasonable risk adjusted

performance vs traditional saving products

Overnight funds are one of the most liquid investments available in the

market with redemption availability on any working day

Less volatile + Less risky + Highest liquidity = Reasonable performance

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Key differentiator of Overnight Funds - lowest volatility

Overnight funds represented by CRISIL Overnight Index here

Volatility is represented by Standard Deviation on daily performance for the respective periods, data as at September 2019

Overnight Funds offer lowest volatility

0.0000%

0.0020%

0.0040%

0.0060%

0.0080%

0.0100%

0.0120%

0.0140%

0.0160%

0.0180%

7 days 15 days 1 month 2 months 3 months

Volatility of Overnight index over Liquid Fund index

CRISIL Overnight Index CRISIL Liquid Fund Index

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Differences between Overnight and Liquid Funds

• Whilst both categories are positioned as liquidity solutions there are some critical differences

• Overnight funds carry lower maturity than Liquid funds

• Overnight funds invest in debt securities maturing in 1 business day while Liquid Funds invest in debt

securities maturing in upto 91 days

• Ideally, anyone who wish to park their surplus money with the least amount of risk can invest in overnight funds

1 day

Up to 91 days

0

10

20

30

40

50

60

70

80

90

100

Overnight Funds Liquid Funds

Ma

turity

perio

d (

days)

Overnight funds offer lowest maturity

Overnight Funds

No

interest

rate risk

Lowest

credit

risk

Overnight Funds are not exposed to interest rate and have lowest credit risk

7

How have Overnight Funds fared?

Source: ICRA, data as at September 2019, Periodic annualised returns based on overnight funds category returns,

Past performance may or may not sustain and is not an indication of the future performance

Overnight Funds have delivered reasonable risk adjusted returns

0

1

2

3

4

5

6

7

1 Day 7 Days 15 Days 1 M 3 M 1 Y

An

nu

alis

ed

re

turn

s %

Period

Overnight Funds category performance

Minimum Maximum Average

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Overnight Funds - A solution to your one day investment worries

Subject to lowest

volatility

and lowest risk

compared to other

mutual fund categories

Offers highest liquidity

with redemption

availability on any

working day

Overnight funds can

deliver consistent

reasonable risk adjusted

performance compared

to traditional saving

instruments

Lowest volatility & risk High liquidity**Reasonable risk

adjusted returns

** As per the Regulations, the Overnight Fund shall dispatch the redemption proceeds within 10 Business Days from the date of acceptance of redemption request. The Fund will endeavor to dispatch

the redemption proceeds in 1 Business Day from the date of receiving a valid redemption request.

Best suitable to park idle money for reasonable returns and high liquidity

Presenting,

HSBC Overnight Fund(Overnight fund – An open ended debt scheme investing in overnight securities)

Park your surplus money with confidence

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The scheme aims to offer reasonable returns commensurate with low risk and high degree of

liquidity through investments in overnight securities

Type of scheme - Overnight fund – An open ended debt scheme investing in overnight

securities

Benchmark – Crisil Overnight Index

HSBC Overnight Fund (HOF)

The above investment list is indicative and not exhaustive. Overnight funds can invest in above instruments having the maturity of 1 business day.

• TREPS & reverse repos

• Money market instruments

• Certificate of Deposits (CDs)

• Commercial Paper (CPs

• Debt obligations of government agencies

and statutory bodies

• Debt obligations of banks

• Securities issued by Central / State

governments

• Bank Fixed Deposits as permitted by SEBI

• Bills of Exchange / Promissory Notes

• Corporate debt

• Securitised Debt

• Other domestic fixed income securities

Where can the fund invest?

The fund offers reasonable returns commensurate with low risk and high degree of liquidity

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HSBC Overnight Fund (HOF) - investment strategy

HSBC Overnight Fund aims to deliver returns in line with overnight call / money

market rates.

The scheme will have low risk and offer a very high degree of liquidity as it will invest

only in overnight securities.

Investments would be made normally in overnight securities including Tri-party Repo

/ reverse repos, debt instruments with overnight maturity / liquidity.

Offers return in-line with existing overnight call / money market rates

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Who should invest in HSBC Overnight Fund (HOF)?

Source – HSBC MF, Note - Above list is an indicative list and is not exhaustive

Park surplus money

HOF is well suited for investors looking to park their surplus money as the fund provides reasonable return

potential with high liquidity

Emergency funds

The fund is well suited for investors looking to park their emergency funds for short term such as 1 day and earn

reasonable returns with better access to funds

High quality, high liquidity and low risk

HOF is also best suited for investors who would like to invest in a low volatile, high quality fixed income portfolio

with easy redemption access

Investors with investment horizon of 1 day to 1 month

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Fund Name HSBC Overnight Fund

Benchmark CRISIL Overnight Index

Minimum

Application

Amount

Rs 5,000/- per application

Minimum

Application

Amount

(SIP)

Rs. 500 (monthly)

TypeOvernight fund – An open ended debt scheme

investing in overnight securities

Plans /

Options /

Sub options

Regular, Direct plans, Growth option,

Daily Dividend (Reinvestment),

Weekly Dividend (Payout and Reinvestment),

Monthly Dividend (Payout and Reinvestment)

Loads

(including

SIP / STP

wherever

applicable)

Entry Load* : Nil

Exit Load^:– Nil

STP/SWP Available

Fund

ManagersKapil Punjabi

^The exit loads set forth above is subject to change at the discretion of the AMC and such

changes shall be implemented prospectively

*In terms of SEBI circular no. SEBI/IMD/CIR No.4/ 168230/09 dated June 30, 2009, no entry

load will be charged by the Scheme to the investor effective August 1, 2009. No exit load (if

any) will be charged for units allotted under bonus / dividend reinvestment option.

HSBC Overnight Fund (HOF)

Investment Objective - The scheme aims to offer reasonable returns commensurate with low risk and high degree

of liquidity through investments in overnight securities. However, there is no assurance that the investment

objective of the Scheme will be achieved.

Annexure:

HSBC Global Asset Management, India

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A global network of local experts

Investment professionals working across key locations

1. Asia-Pacific includes employees and assets of Hang Seng Bank, in which HSBC has a majority holding.

2. HSBC Jintrust Fund Management company is a joint venture between HSBC Global Asset Management and Shanxi Trust Corporation Limited.

*Alternatives assets include USD3.6bn from committed capital (“dry powder”).

**Other is the assets of Hang Seng Bank, in which HSBC has a majority holding, and of HSBC Jintrust Fund Management, a joint venture between HSBC Global Asset Management and Shanxi Trust Corporation Limited. Source: HSBC

Global Asset Management as at 31 March 2019. Any differences are due to rounding.

HSBC Global Asset Management offices - Countries where our investment teams sit are in bold

Canada

USA

Mexico

Argentina

Bermuda

UK

Sweden

Luxembourg

JerseyFrance

Spain

Switzerland

Malta

Italy

Austria

Germany

Turkey

Saudi

ArabiaUAE

India

Singapore

Hong Kong

Taiwan

Japan

Australia

China2

Presence in

26 countries

and territories

Around 600investment

professionals

81Americas

358EMEA

169Asia-

pacific1

USD470.2bn under management

By asset class (USDbn)

Fixed Income (179.2)

Equity (71.9)

Multi-Asset (99.0)

Liquidity (67.2)

Alternatives (26.8)*

Other (26.1)**

Americas (89.1)

EMEA (240.1)

Asia Pacific (140.9)

By region (USDbn)

Wholesale (228.7)

By client type (USDbn)

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HSBC Global Asset Management, India – expertise and experience

The investment management team manages/advises strategies with assets across investment categories under

Mutual fund and Portfolio Management Services

Data as at October 2019

INR 38,764 Cr

assets under management

Strategy

AUM

(INR Cr)

Equity – Domestic 2493.4

Fixed Income – Domestic 6672.7

Hybrid – Domestic 761.1

Fund of Funds –

Domestic362

Fund of Funds – Offshore 46.1

Offshore advisory (Equity

and Fixed Income)28429

Total AUM 38764

Expertise in managing Indian equity and debt

Managers/sub-advisors of Indian equity and debt assets from last 17 years

Differentiate Product offerings

Clear and differentiated product offerings across asset classes

Recognised leader in emerging markets asset management

International experience

Global presence, local knowledge

Ability to identify and position for global trends

Supported by global perspective on long term asset prices

Inputs on impact of macro economic developments on Indian fixed income markets

On the ground presence combined with global oversight

Personal local relationships combined with Executive Management engagement

and global support through dedicated Official Sector Institutions team based in

London

Tailored and bespoke approach when working with Official Sector Institutions

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Fixed Income investment philosophy

The information above is provided by and represents the opinions of HSBC Global Asset Management and is subject to change without notice

Fixed Income investment process of HSBC Global Asset Management, India operates on three

major pillars

– Robust risk management

– Proactive liquidity measures

– Optimised returns

Out philosophy is that liquidity management must be focused on risk management

– Our aim is to preserve capital and provide liquidity

Our investment process seeks to manage credit, liquidity, and interest rate risks effectively

Asset management process is guided by:

– In-depth research, assessment

– Monitoring of various potential risks as per the global standard set by the Regulator & HSBC groups internal

guidelines

‘True to Label’ products

– Duration and credit strategies are ‘true to label’

– We do not use ‘proxy’ for credit quality

– Our duration strategy is played out using a combination of instruments rather than concentrated securities

A holistic risk approach to a well diversified portfolio

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research, investment advice or a recommendation to any reader of this content to buy or sell investments. It has not been prepared in accordance with

legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of its

dissemination.

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sourced from third parties), is obtained from sources HSBC, the third party believes to be reliable but which it has not independently verified and HSBC,

the third party makes no guarantee, representation or warranty and accepts no responsibility or liability as to the accuracy or completeness of such

information. The information and opinions contained within the document are based upon publicly available information and rates of taxation applicable at

the time of publication, which are subject to change from time to time. Expressions of opinion are those of HSBC only and are subject to change without

notice. It does not have regard to specific investment objectives, financial situation and the particular needs of any specific person who may receive this

document. Investors should seek financial advice regarding the appropriateness of investing in any securities or investment strategies that may have been

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Email: hsbcmf@camsonline.com

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