Key Features of the Funds Portfolio and ISA Funds Portfolio

Transcription

1 Key Features of the Funds Portfolio and ISA Funds Portfolio Global Investment Centre This is an important document. You need to read this before you invest in the Funds Portfolio and ISA Funds Portfolio

2 2 Key Features of the Funds Portfolio and ISA Funds Portfolio December 2011 Global Investment Centre our investments service is provided by HSBC Trust Company (UK) Limited, through which you can open and invest in a Funds Portfolio and an ISA Funds Portfolio. What is the purpose of this document? To provide you with important information about our Funds Portfolio and ISA Funds Portfolio. In this document each Funds Portfolio and ISA Funds Portfolio is referred to as an Account for simplicity. The Financial Services Authority is the independent financial services regulator. It requires us, HSBC Trust Company (UK) Limited, to give you this important information to help you to decide whether our Funds Portfolio and ISA Funds Portfolio are right for you. You should read this document along with the Fund Details and Terms and Conditions carefully so that you understand what you are buying, and then keep it safe for future reference. How to contact us This document and the Terms and Conditions explain how you can provide instructions to invest and make withdrawals and how to contact us if you have any questions. If you have any questions or need to contact us, you can phone or write to us by post. Telephone Call our Customer Service Centre on: By textphone for instructions: , By textphone for general enquiries: Lines are open from 8am - 6pm Monday to Friday (excluding public holidays). To help us continually improve our services and in the interests of security, we may monitor and/or record your communications with us. We must be able to verify your identity in order to provide you with any information or accept any instruction over the telephone. Post Write to us at: HSBC Trust Company (UK) Limited Frobisher House Nelson Gate Commercial Road Southampton SO15 9DF If you write to us, we may need to contact you about your investment. Please provide a contact number to avoid delays in processing.

3 3 Its aims } To enable you to invest in investment funds from a range of providers through our Global Investment Centre platform service. } To allow you to invest in one or more funds in a tax efficient way through the ISA Funds Portfolio. } The specific aims of each fund and the dates when income will be paid or accumulated are explained in the relevant Fund Details. Your commitment } You should view this as a medium to long term investment, and should plan to keep it for at least five years. } You must invest a lump sum of at least 500 into each class of Fund Shares you choose for each Account. The classes of Fund Shares available are income and/or accumulation. } You must open and retain a Funds Portfolio in order to open an ISA Funds Portfolio. However, you do not need to make an investment in the Funds Portfolio if you do not wish to. } You should regularly review the fund(s) you have chosen. } If you invest in an ISA Funds Portfolio but do not subscribe to it during one complete tax year, you will need to complete a new Application before you can subscribe again. } You must maintain an HSBC current or savings account to be used as your Settlement Account. Risk factors General risks } Any investment has an element of risk and your investment is not guaranteed. The value of your investment, and any income from it, may fall and you may not get back the amount you invested. } Past performance of a fund is not a reliable indicator of future returns. } The favourable tax treatment of ISAs may not be maintained in the future if UK tax law and HM Revenue & Customs practice change. } Further risks relating to specific events or actions are described in the relevant sections of this document. Fund specific risks } There are additional risks that can apply to funds, or for funds that invest in other collective investment schemes additional risks can apply to the underlying funds. These risks are listed on pages 15 and 16. } The Fund Details for each fund explains which of the risks apply to that fund.

4 4 Questions and answers What are the Funds Portfolio and ISA Funds Portfolio? } The Funds Portfolio is an Account offered by HSBC Trust Company (UK) Limited in which you can invest in open ended investment company (OEIC) and unit trust funds from a range of fund providers through our Global Investment Centre. } An ISA Funds Portfolio is an Account offered by HSBC Trust Company (UK) Limited that allows you to hold investments available on our Global Investment Centre within a tax efficient ISA. What is an OEIC or unit trust fund? } It is a wide range of investments purchased with a pool of money received from a large number of investors. } The type of investments purchased are those that should help the fund achieve its objectives. } The broad selection of investments help spread the potential risk. } The OEIC funds are divided into shares and unit trusts are divided into units. The number of shares or units you receive is dependent on the amount you invest and the price of the shares or units at the time of your investment. For simplicity, shares and units will both be referred to as Fund Shares in the remainder of this document. What is an ISA? } An ISA is a tax efficient way of saving or investing as all income and capital gains arising within an ISA are exempt from any personal liability to UK Income Tax and Capital Gains Tax. } There are two types of ISA: stocks and shares cash. } The ISA Funds Portfolio is a stocks and shares ISA. } A payment by you into an ISA in any tax year is called a subscription. You can only subscribe to one of each type of ISA per tax year. } Because of their tax advantages, ISAs are subject to annual subscription limits. The overall ISA subscription limit for tax year 2011/2012 (6 April 2011 to 5 April 2012) is 10,680. Up to 5,340 of this overall limit can be saved in a cash ISA with one provider. The remainder of the 10,680 can be invested in a stocks and shares ISA with either the same or another provider. Alternatively the full 10,680 can be invested in a stocks and shares ISA with one provider. } Please note that each year all ISA providers are required to report details of ISA subscriptions made by their customers to HM Revenue & Customs (HMRC) so that HMRC can check that individuals do not exceed the limits. Who might the Funds Portfolio and ISA Funds Portfolio be suitable for? } The Funds Portfolio and ISA Funds Portfolio may be suitable for investors: who like to make their own investment decisions without advice with a lump sum to invest who expect to keep their investment for five years or more who are looking to grow their investment, generate a regular income or achieve a combination of both } We will categorise you as a retail customer and treat you as such in all our dealings with you in respect of this investment. } This is a general outline of who the Funds Portfolio and ISA Funds Portfolio may be suitable for. It is not investment advice and if you have any doubts as to the suitability of this type of investment for your needs you should consult a financial adviser. Who can apply for a Funds Portfolio and ISA Funds Portfolio? } You can apply for an Account if you: are aged 18 or over are a UK resident hold an HSBC current and/or savings account. } You cannot apply for a Funds Portfolio and ISA Funds Portfolio if you are a non-uk resident (including if you are a UK Crown Servant working overseas). } Accounts cannot be held in joint names and non-personal Accounts are not permitted. Which funds can I hold in my Account? } A selection of funds from a range of fund providers is available. } Each fund has its own investment objective and policy. } The funds available are listed on pages 17 and 18.

5 5 How can I apply for an Account? } You can apply for an Account by completing an Application either by logging in to HSBC s Personal Internet Banking at or by telephoning us. } If you wish to apply for an ISA Funds Portfolio you must first apply for a Funds Portfolio. } When you apply you must select an HSBC current or savings account to be your Settlement Account, which will be used for all payments you make into your Account, withdrawals and any income paid out. } We will send you confirmation by post after an Account has been opened. The confirmation will show your Global Investment Centre account number and also your Funds Portfolio and, where applicable, your ISA Funds Portfolio Account numbers. Can I change my mind about my Account? } You have 14 days to cancel your Account after it is opened but please note that you do not have the right to cancel any purchases of Fund Shares, including any ISA subscriptions. } If you wish to cancel your Account, you need to write to us or telephone us with your instructions. } If you cancel, any Fund Shares you hold in your Account will be sold and the proceeds paid into your Settlement Account. You may receive back less than your original investment and we will not refund any initial charges taken by us, or any other charges. } If you subscribe to an ISA Funds Portfolio and cancel your Account you will not be able to subscribe to another stocks and shares ISA in the same tax year and you will lose the tax benefits of the ISA. In addition you will not be able to subscribe to a cash ISA in the same tax year if you have subscribed the full 10,680 (overall subscription limit) to your ISA Funds Portfolio. } If you do not exercise your right to cancel your Account you will be subject to all the Terms and Conditions. How can I invest in my Account? } You can provide instructions to purchase Fund Shares by logging in to Personal Internet Banking at co.uk, selecting Investments and clicking on the relevant Global Investment Centre Account. } You can also invest by telephoning us with your instructions. You should quote the relevant Funds Portfolio or ISA Funds Portfolio Account number when you call us. } Please note that instructions received by us at 4pm or later on a Business Day will be treated as though they were received the following Business Day. } The minimum initial investment is 500 for each class of Fund Shares for each Account and the minimum additional investment is 500 for each class of Fund Shares for each Account. } The maximum amount you can invest for each instruction to purchase Fund Shares is 99, } All payments into your Account will be taken from your Settlement Account at the time you provide an instruction to invest. How are Fund Shares purchased? } We will normally place your instruction to purchase Fund Shares with the relevant fund provider on the next Business Day after we receive it. } The Fund Shares will be purchased at the price calculated at the fund s valuation point following the fund provider s receipt of our instruction. The valuation point for each fund is shown in the Fund Details. } We will send you by post a confirmation of the number of Fund Shares purchased for you and the price you paid. The details of the purchase can also viewed by logging in to Personal Internet Banking at selecting Investments and clicking on the relevant Global Investment Centre Account. What are the charges? } Each Fund Details shows the initial charge, annual management charge and total expenses payable for the fund. } Each Fund Details also shows whether annual management charges and other annual costs are taken from capital or income. } Charges taken from the capital of a fund may have the effect of limiting capital growth or eroding capital if there is insufficient growth. } If charges are taken from the income of a fund, and there is insufficient income to meet such charges, any deficit will be taken from the capital of the fund. Initial charge } Where an initial charge is taken, this is deducted from your investment before your Fund Shares are purchased and is payable to us.

6 6 Annual management charge (AMC) } The AMC is a percentage of the value of each fund and is payable to the applicable fund provider for the management of the fund. It is reflected in the price of the Fund Shares rather than being taken from each individual s investment. Total expenses } Other annual costs such as depositary and audit fees are also payable out of each fund. } For funds that invest primarily in other collective investment schemes the managers of these underlying funds also take AMCs. The managers of the underlying funds may pay rebates that are invested back into the fund to reduce the impact of the AMCs on the underlying funds. } The total expenses shown in the Fund Details include the AMC for the relevant fund, the other applicable annual costs and the AMCs (less rebates) for any underlying funds. It excludes the initial charge. How will charges and expenses affect my investments? } The effect of charges and expenses for an income fund, a growth fund, an index tracker fund and a fund of funds are shown in the following tables. These tables demonstrate in detail the effect of charges and expenses on a 5,000 lump sum investment in the funds. The fund shown in each example is the fund in that category which is typically most affected by charges. } These figures are only examples and are not guaranteed. They are not minimum or maximum amounts. What you will get back depends on how your investment grows, on tax treatment of the fund(s) and on your own tax position. } You could get back more or less than the amounts shown. } Firms typically use the same rates of growth for projections but their charges vary. } Please note that inflation would reduce what you could buy in the future with the amounts shown. } Please note that dealing costs and interest on borrowing are not included in the examples that follow. Income Fund Funds Portfolio Effect of charges and expenses on Jupiter Japan Income Fund assuming 6.00% a year growth for a 5,000 lump sum investment: At end of year Investment Income paid out Effect of deductions Income What you might get back at 6.00% Income accumulated Effect of deductions 1 5, , , , , , , , , ,000 1,370 1,250 5,880 1,520 7,420 What you might get back at 6.00% The last line in the table shows that over 10 years the effect of the total charges and expenses could amount to 1,370 if income is paid out and 1,520 if income is accumulated. Putting it another way, this would have the same effect as bringing investment growth from 6% a year down to 4% a year if income is paid out or accumulated.

7 7 ISA Funds Portfolio Effect of charges and expenses on Jupiter Japan Income Fund assuming 7.00% a year growth for a 5,000 lump sum investment: Income paid out Income accumulated At end of year Investment to date Effect of deductions to date Income What you might get back at 7.00% Effect of deductions to date What you might get back at 7.00% 1 5, , , , , , , , , ,000 1,510 1,320 6,460 1,670 8,150 The last line in the table shows that over 10 years the effect of the total charges and expenses could amount to 1,510 if income is paid out and 1,670 if income is accumulated. Putting it another way, this would have the same effect as bringing investment growth from 7% a year down to 5% a year if income is paid out or accumulated. Growth Fund Funds Portfolio Effect of charges and expenses on BlackRock Gold & General Fund assuming 6.00% a year growth for a 5,000 lump sum investment: Income accumulated At end of year Investment Effect of deductions What you might get back at 6.00% 1 5, , , , , , ,000 1,640 7,300 The last line in the table shows that over 10 years the effect of the total charges and expenses could amount to 1,640. Putting it another way, this would have the same effect as bringing investment growth from 6% a year down to 3.9% a year. ISA Funds Portfolio Effect of charges and expenses on BlackRock Gold & General Fund assuming 7.00% a year growth for a 5,000 lump sum investment: Income accumulated At end of year Investment Effect of deductions What you might get back at 7.00% 1 5, , , , , , ,000 1,800 8,020 The last line in the table shows that over 10 years the effect of the total charges and expenses could amount to 1,800. Putting it another way, this would have the same effect as bringing investment growth from 7% a year down to 4.8% a year.

8 8 Index Fund Funds Portfolio Effect of charges and expenses on HSBC Pacific Index Fund assuming 6.00% a year growth for a 5,000 lump sum investment: At end of year Income paid out Investment Effect of deductions Income Income accumulated What you might get back at 6.00% Effect of deductions 1 5, , , , , , , , , , ,360 6, ,620 What you might get back at 6.00% The last line in the table shows that over 10 years the effect of the total charges and expenses could amount to 290 if income is paid out and 325 if income is accumulated. Putting it another way, this would have the same effect as bringing investment growth from 6% a year down to 5.6% a year if income is paid out or accumulated. ISA Funds Portfolio Effect of charges and expenses on HSBC Pacific Index Fund assuming 7.00% a year growth for a 5,000 lump sum investment: At end of year Investment Income paid out Effect of deductions Income What you might get back at 7.00% Income accumulated Effect of deductions 1 5, , , , , , , , , , ,430 7, ,470 What you might get back at 7.00% The last line in the table shows that over 10 years the effect of the total charges and expenses could amount to 319 if income is paid out and 357 if income is accumulated. Putting it another way, this would have the same effect as bringing investment growth from 7% a year down to 6.6% a year if income is paid out or accumulated.

9 9 Fund of Funds Funds Portfolio Effect of charges and expenses on Jupiter Merlin Worldwide Portfolio assuming 6.00% a year growth for a 5,000 lump sum investment: Income accumulated At end of year Investment Effect of deductions What you might get back at 6.00% 1 5, , , , , , ,000 2,050 6,890 The last line in the table shows that over 10 years the effect of the total charges and expenses could amount to 2,050. Putting it another way, this would have the same effect as bringing investment growth from 6% a year down to 3.3% a year. ISA Funds Portfolio Effect of charges and expenses on Jupiter Merlin Worldwide Portfolio assuming 7.00% a year growth for a 5,000 lump sum investment: Income accumulated At end of year Investment Effect of deductions What you might get back at 7.00% 1 5, , , , , , ,000 2,260 7,570 The last line in the table shows that over 10 years the effect of the total charges and expenses could amount to 2,260. Putting it another way, this would have the same effect as bringing investment growth from 7% a year down to 4.2% a year.

10 10 Dilution levy and dilution adjustment } For single-priced OEIC and unit trust funds when there is a large purchase or sale, the price of the shares may not reflect the actual price a fund has to pay or receive in order to purchase or sell the underlying assets. This effect is known as dilution. } Therefore to protect existing holders of shares from circumstances which would adversely affect the value of the fund, the fund providers may charge a dilution levy or make a dilution adjustment. It is not possible to accurately predict whether dilution will occur at any particular time. Neither we nor the fund provider will benefit from applying a dilution levy or making a dilution adjustment as it serves only to protect the continuing investors in the funds. } Each Fund Details shows whether a dilution levy or a dilution adjustment can be applied to that fund. } More information on dilution levy and dilution adjustment is contained in the prospectus or simplified prospectus (where available) or key investor information document (where available) for the available funds. Do you receive any payments from the fund providers for offering these funds? } The fund providers pay us a percentage of the AMCs for arranging the purchase of Fund Shares in the funds. } The amount that we receive from each of the fund providers is shown in each Fund Details. 50% of any amount we receive will be paid by us to HSBC Bank plc for acting as distributor. } Occasionally we may benefit from non-financial incentives, such as corporate hospitality and training. } We maintain strict policies to control how benefits of this type are managed to protect the interests of customers. } Further information is available on request. How can I find out how much my investments are worth? } You can obtain a current valuation of your fund holdings by logging in to Personal Internet Banking at co.uk, selecting Investments and clicking on the relevant Global Investment Centre Account. Alternatively you can telephone us. } We will also send you a statement by post within 25 Business Days of 5 April and 5 October each year. Your statement will include a valuation of your investments and details of any sales, purchases and income paid during the period. How is the price of Fund Shares calculated? } The price of a share is based on the value of the assets and the number of shares in the fund. The value of all the shares held in the fund is known as the Net Asset Value (NAV). An explanation of how the NAV is calculated is given in the prospectus for the fund(s). } Valuations are based on the selling price of the shares. Some funds are single priced which means that one price is used for buying and selling. Some funds are dual priced which means that a different price is used for buying and selling shares. For funds that are dual priced the selling price is sometimes called the bid price. Each Fund Details shows whether that fund is single priced or dual priced. } The latest prices for the funds can be found by visiting Can I take an income? } If you wish to have income paid out to your Settlement Account you can invest in income Fund Shares, where available. } Alternatively, if you do not want income paid out you can invest in accumulation Fund Shares, where available. For accumulation Fund Shares any income will be reflected in the price of Fund Shares. } Each Fund Details shows whether income and/or accumulation Fund Shares are available for that fund. } Income cannot be automatically reinvested where you invest in income Fund Shares. When will income be paid out or accumulated? } Income will be paid out within 4 Business Days of being paid into your Account. } Each Fund Details shows the dates that income is accumulated or distributed from the fund. When will I receive my first income payment? } If you invest in a fund which pays out a monthly income you must invest at least one month before the next distribution date, as shown in the Fund Details, to qualify for a payment on that date.

11 11 } For all other funds which pay an income you must invest at least two months before the next distribution date to qualify for a payment on that date. Can I transfer in an existing ISA? } We do not accept ISA transfers into your ISA Funds Portfolio. Can I change my selection of funds? } You can switch from one fund to another fund within an Account without payment of an initial charge. } You can provide instructions to switch funds by logging in to Personal Internet Banking at selecting Investments and clicking on the relevant Global Investment Centre Account. Alternatively you can telephone us. You should quote your relevant Funds Portfolio or ISA Funds Portfolio Account number when you call us. } Please note that instructions received by us at 4pm or later on a Business Day will be treated as though they were received the following Business Day. } You must retain a minimum investment value of 500 for the class of Fund Shares you are switching from, unless you are switching your entire holding. } You will not be able to place an instruction to switch out of a particular class of Fund Shares if we have not received confirmation from the fund provider that any previous instructions to switch out or sell placed by you for that class of Fund Shares have been executed. } You cannot switch directly from a Funds Portfolio to an ISA Funds Portfolio. } We will normally place your instruction to sell Fund Shares from the fund you are switching from on the next Business Day after we receive it. The Fund Shares will be sold at the price calculated at the fund s valuation point. } Once we have received confirmation from the fund provider that the sell instruction has been executed we will normally place your instruction to purchase Fund Shares in the fund you are switching into on the Business Day thereafter. The Fund Shares will be purchased at the price calculated at the fund s valuation point. } Please note that your investment will normally be out of the market for up to 2 Business Days and during this time the market may move up or down, resulting in potential loss of growth and/or income. } We will send you by post a confirmation of the switch, which will show the number of Fund Shares sold and purchased and the price in each case. The details of the switch can also be viewed by logging in to Personal Internet Banking at selecting Investments and clicking on the relevant Global Investment Centre Account. How can I make a withdrawal from my Account? } You can provide instructions to sell Fund Shares by logging in to Personal Internet Banking at selecting Investments and clicking on the relevant Global Investment Centre Account. } You can also provide instructions to sell by telephoning us. You should quote the relevant Funds Portfolio or ISA Funds Portfolio Account number when you call us. } Please note that instructions received by us at 4pm or later on a Business Day will be treated as though they were received the following Business Day. } Unless you are withdrawing your entire holding, the minimum withdrawal amount is 100 and you must retain a minimum investment value of 500 in each class of Fund Shares you hold. } You will not be able to place a sell instruction for a particular class of Fund Shares if we have not received confirmation from the fund provider that any previous instructions to sell or switch out placed by you for that class of Fund Shares have been executed. } If you request in writing, and if the fund provider agrees, we can transfer Fund Shares to you to the value requested for the withdrawal without selling the Fund Shares. How are Fund Shares sold? } We will normally place your instruction to sell the Fund Shares with the relevant fund provider on the next Business Day after we receive it. } The Fund Shares will be sold at the price calculated at the fund s valuation point following the fund provider s receipt of our instruction. The valuation point for each fund is shown in the relevant Fund Details. } We will send you by post a confirmation of the number of Fund Shares sold for you and the selling price. The details of the sale can also be viewed by logging into Personal Internet Banking at selecting Investments and clicking on the relevant Global Investment Centre Account. } The proceeds from the sale will normally be paid into your Settlement Account within 8 Business Days of us receiving your instruction.

12 12 Can I transfer my ISA Funds Portfolio to another ISA? } You can transfer all or part of your ISA Funds Portfolio to another stocks and shares ISA by telling us in writing. The new ISA manager must agree to the transfer. } If you wish to transfer a current tax year s ISA subscription, the whole tax year s subscription must be transferred. } Once we have received your instructions and written acceptance from your new ISA manager, we will usually sell the shares in your ISA Funds Portfolio and transfer the proceeds to your new ISA manager for investment. However, at your request, and if your new ISA manager agrees, we can instead transfer the shares to your new ISA without first selling them. } Where applicable, we will send you a confirmation by post of the number of Fund Shares sold and the selling price. Do I have to pay tax on my investment? } This information is intended as general guidance only. The taxation information below is based on our understanding and interpretation of current UK tax law and HM Revenue & Customs practice. Both law and practice may change. } Your tax liability will depend on your own individual circumstances, including the country in which you live. If you are unsure about the tax consequences of your investment, you should seek appropriate professional advice. } Each Fund Details shows whether the fund pays interest or dividend distributions. } Interest distributions are paid after a deduction of basic rate tax currently equal to one quarter of the net payment. } Dividend distributions are paid with a tax credit equal to one ninth of the net payment. } We will send you a tax voucher each year for your Funds Portfolio showing the amount of income accumulated or paid out, the tax deducted from interest distributions and the attached tax credit in respect of dividend distributions. The voucher will also show details of any interest credited on uninvested cash received in the previous tax year together with details of any tax deducted at source from such interest. } On certain dealings in shares, Stamp Duty Reserve Tax (SDRT) may be payable. For certain OEICs and unit trusts SDRT is usually charged to the fund and becomes payable where there is a transfer in beneficial ownership of shares. It is not possible to accurately predict how frequently an SDRT charge will be made as it is directly related to inflows and outflows of monies from a fund. } More information on SDRT is contained in the prospectus or simplified prospectus (where available) or key investor information document (where available) for the available funds. UK Income Tax Funds Portfolio } The effect of each type of income distribution for individual taxpayers is shown in the table below. } For dividend distributions your income for tax purposes is the sum of the net payment and the tax credit. Non-taxpayer 10% starting rate for savings taxpayer Basic rate taxpayer Higher rate taxpayer and additional rate taxpayer Interest distribution You can use the tax voucher to support a claim to have the tax repaid to you. You will have no further tax to pay but you will be able to reclaim part of the tax we have deducted at source. You will have no further tax to pay. You will have further tax to pay. The amount of tax will depend on your level of income, that is, whether your income falls into the 40% or 50% tax band. Dividend distribution You cannot reclaim the dividend tax credit but you will have no further tax to pay. Not applicable. You will have no further tax to pay. The 10% tax credit satisfies the basic rate tax liability. You will have further tax to pay. The amount of tax will depend on your level of income, that is, whether your income falls into the 40% or 50% tax band.

13 13 UK Income Tax ISA Funds Portfolio } Where a distribution is received within an ISA you will have no UK Income Tax to pay. } Interest distributions will be paid gross of UK Income Tax, or where applicable, we will reclaim from HM Revenue & Customs the UK Income Tax deducted from the distributions at source. } Any tax reclaimed for accumulation Fund Shares will be used to purchase further accumulation Fund Shares. Any tax reclaimed for income Fund Shares will be paid out of your ISA Funds Portfolio to your Settlement Account. } It is not possible to reclaim the tax credit from dividend distributions. UK Capital Gains Tax Funds Portfolio } You may have to pay UK Capital Gains Tax on any gains you make when you sell your Fund Shares if your total chargeable gains (less any allowable losses) from all sources in the relevant tax year exceeds your annual exemption limit. } This also applies if you are selling Fund Shares to switch into another fund. } You will not have to pay UK Capital Gains Tax if you are switching between income and accumulation Fund Shares of the same fund within the same Account. UK Capital Gains Tax ISA Funds Portfolio } You will not have to pay UK Capital Gains Tax on any gains you make from an ISA. How is any uninvested cash held? } This is money held in your Account, awaiting investment or payment to you. } Uninvested cash will be held in our name on your behalf in accounts with HSBC Bank plc and other banks. It will be held as Client Money and will be segregated from our own money. } Interest will be earned on Client Money at a rate of 2.5% below the standard Bank of England base rate and will be credited to your account quarterly. } Further information, including the tax treatment of the interest, can be found in the Terms and Conditions.

14 14 Further Information Account Manager of the Funds Portfolio and ISA Funds Portfolio: HSBC Trust Company (UK) Limited Frobisher House Nelson Gate Commercial Road Southampton SO15 9DF Registered Office: 8 Canada Square, London E14 5HQ. HSBC Trust Company (UK) Limited is authorised and regulated by the Financial Services Authority and is entered on the Financial Services Authority register as number You can check this on the Financial Services Authority register Its main business is the provision of trustee services and administering investments. Information about the fund providers that manage the funds we offer can be found in the Fund Details. Conflicts of interest We have a strict policy on how we manage any conflict of interest which may arise between your interests and that of other customers, ourselves or other members of the HSBC Group. Annex 2 of the Terms and Conditions covers this policy in more detail. Prospectuses and further information on funds Copies of prospectuses, simplified prospectuses (where available) and key investor information documents (where available), together with the latest reports and accounts and any other information about any of the available funds can be obtained at any time. Write to us or call us to receive a copy. A charge of 10 may be made for each copy of the report and accounts requested. If you wish to vote and/or attend meetings of shareholders, please let us know in writing. A charge may be made for these services. Further details are contained in the Terms and Conditions. Law This investment and any proceedings, as well as our dealings with you are governed by the law of England and Wales. All communication during the course of this investment will be in the English language. How to complain If you are unhappy in any way with our products and services then please let us know. On receipt of your complaint, we will send you a copy of our leaflet Listening to your comments which explains how we will handle your complaint. A written copy of our complaint procedures is available on request. If we cannot resolve your complaint in the first instance, you can refer it to: Financial Ombudsman Service South Quay Plaza 183 Marsh Wall London E14 9SR Telephone: (from a landline) or (from a mobile) [email protected] The Financial Ombudsman Service will generally review complaints from retail customers. However, their criteria for reviewing complaints may mean that even if you have been categorised by a provider of products and services as a retail client they may not regard you as an eligible complainant. Complaining to the ombudsman will not affect your legal rights. Compensation HSBC Trust Company (UK) Limited is a member of the Financial Services Compensation Scheme (FSCS). You may be eligible to compensation from the scheme if you have a valid claim against us in respect of investment business and we cannot meet our obligations. Most types of investment business are covered up to a maximum limit of 50,000 per person. The types of claims that may be considered and further details of the scheme are available from the FSCS, through their website or by calling them on or

15 15 Fund Specific Risks There are additional risks that can apply to funds, or for funds that invest in other collective investment schemes additional risks can apply to the underlying funds. These risks are listed below. The Fund Details for each fund explains which of the risks apply to that fund. } Certain funds may invest in equities. Equities are at risk if the company issuing them becomes insolvent. If this happens a fund may not recover the whole investment relating to this company and this will affect the return you receive. } The performance of bonds, gilts and other fixed interest securities tends to be less unstable than that of equities. However, there is a risk that if the company or government issuing the fixed interest security becomes insolvent a fund may not recover the whole investment relating to this, which will affect the return that you receive. There is a also risk that both the relative yield and the capital value of bonds, gilts and other fixed interest securities may be reduced if interest rates go up. } Some funds invest in the highest yielding fixed income securities. These types of financial instrument can be exposed to a higher level of liquidity risk which may mean the fund has to sell holdings at unfavourable prices. This may affect the level of income you receive and/or the capital value of your investment. } Markets in some countries are described as emerging markets. Some of these may involve higher risks than where investment is within a more established market. These risks include the possibility of failed or delayed settlement, registration and custody of securities and the level of investor protection offered. Emerging markets are generally, but not exclusively, those that are not within the United States, Canada, Switzerland and members of the European Economic Area, Japan, Australia and New Zealand. } You should be aware of currency movements between sterling and the currencies of other countries. This could have an impact on your investment return from funds that invest outside the UK. } Where funds hold investments in smaller companies, it should be noted that by their nature these companies are generally new to the market and their shares may therefore be subject to significant price movements. They may also be difficult for the fund manager to buy and sell. } For funds that invest in a small number of underlying holdings you should not expect the same level of diversity of investment that is generally expected from a fund investing in a larger number of underlying holdings. This means that each holding within the fund may have a more significant effect on its performance. } Investments in commodities may be subject to greater instability than investments in traditional investment types. They may be affected by disease, climatic changes and international economic and political developments, which may cause individual commodity prices to rise or fall sharply. } Some of the funds may hold derivative financial instruments in pursuit of their objectives and these may involve a high degree of financial risk. There is a risk that a small movement in the price of the underlying security, or benchmark, may result in a disproportionately large movement (favourable or unfavourable) in the price of the derivative instrument; the risk of default by a counterparty and the risk that transactions may not be liquid. } Some funds are sub-funds of an open ended investment company (OEIC). If the assets of these sub-funds are not sufficient to meet their liabilities, the Authorised Corporate Director may reallocate assets, liabilities, expenses, costs and charges between the sub-funds in a manner which would be fair to the investors of the OEIC. } Where funds hold investments in property and land it should be noted that the long-term nature of the investment and the income generated tend to make this type of investment less unstable than equities, although it can be difficult to buy and/ or sell quickly. In addition, the value of property is generally a matter of valuer s opinion. } Some of the funds available invest primarily in other collective investment schemes. The following risks apply to the underlying investments: Hedge funds often engage in borrowing money to increase returns and other speculative investment practices that may increase the risk of investment loss. They can be difficult to sell, are not required to provide periodic pricing or valuation information to investors, may involve complex tax structures and there may be delays in distributing important information. Alternative investments are often not subject to the same regulatory requirements as, say, funds and often charge high fees that may potentially offset trading profits when they occur. Some of the underlying funds will hold alternative investments. These may not necessarily price daily and there is a risk that the underlying holdings cannot be sold in a timely manner at a reasonable price.

16 16 Private equity assets are generally illiquid, longterm investments that do not display the liquidity or transparency characteristics often found in other investments (eg, listed securities). It can take a longer time for money to be invested as well as a longer time for investments to produce returns after initial losses. } Where a new fund is launched there is a risk that if the assumed size of the fund is not achieved, the proportion of charges and expenses allocated to the investment may be higher and the value of the investment consequently reduced. } Some funds may invest in unregulated collective investment schemes, which involves a higher degree of risk as they are not regulated by the FSA. } For funds that invest predominantly in one specialist sector, country or geographic area, any decline in that sector or the economy of that country or area may significantly affect the prices and value of the shares held by a fund.

17 17 Funds Available These are the funds currently available through the Global Investment Centre: Aberdeen Unit Trust Managers Limited Aberdeen Asia Pacific Fund Aberdeen Emerging Markets Fund Aberdeen Ethical World Fund Allianz Global Investors (UK) Limited Allianz PIMCO Gilt Yield Fund Allianz RCM BRIC Stars Fund Aviva Investors UK Fund Services Limited Aviva Investors Sustainable Future Corporate Bond Fund Aviva Investors Sustainable Future Global Growth Fund BlackRock Fund Managers Limited BlackRock European Dynamic Fund BlackRock Global Equity Fund BlackRock Gold & General Fund BlackRock UK Income Fund BlackRock UK Special Situations Fund BlackRock US Dynamic Fund BNY Mellon Fund Managers Limited Newton Global Higher Income Fund Newton International Bond Fund Newton Oriental Fund Newton Real Return Fund Cazenove Investment Fund Management Limited Cazenove Multi-Manager Diversity Fund Cazenove UK Corporate Bond Fund Fidelity Investment Services Limited Fidelity American Fund Fidelity European Fund Fidelity European Opportunities Fund Fidelity Global Property Fund Fidelity MoneyBuilder Dividend Fund Fidelity Multi Asset Strategic Fund Fidelity Strategic Bond Fund First State Investments (UK) Limited First State Asia Pacific Leaders Fund First State Global Emerging Markets Leaders Fund First State Global Listed Infrastructure Fund Henderson Investment Funds Limited Henderson Extra Monthly Income Bond Fund Henderson Multi-Manager Income & Growth Fund Henderson UK Gilt Fund HSBC Global Asset Management (UK) Limited HSBC American Index Fund HSBC European Index Fund HSBC FTSE 100 Index Fund HSBC FTSE 250 Index Fund HSBC FTSE All Share Index Fund HSBC Japan Index Fund HSBC Open Global Distribution Fund HSBC Open Global Property Fund HSBC Pacific Index Fund HSBC UK Growth & Income Fund HSBC World Index Balanced Portfolio HSBC World Index Cautious Portfolio HSBC World Index Dynamic Portfolio HSBC World Selection Balanced Portfolio HSBC World Selection Cautious Portfolio HSBC World Selection Dynamic Portfolio HSBC World Selection Income Portfolio

18 18 Invesco Fund Managers Limited Invesco Perpetual Asian Fund Invesco Perpetual Corporate Bond Fund Invesco Perpetual High Income Fund Invesco Perpetual Income Fund Invesco Perpetual Japan Fund Invesco Perpetual Latin American Fund Invesco Perpetual Monthly Income Plus Fund Investec Fund Managers Limited Investec American Fund Investec Emerging Markets Local Currency Debt Fund Investec Global Energy Fund Investec UK Special Situations Fund JPMorgan Funds Limited JPM Emerging Markets Fund JPM Global Equity Income Fund JPM Global High Yield Bond Fund JPM Natural Resources Fund Jupiter Unit Trust Managers Limited Jupiter Ecology Fund Jupiter Financial Opportunities Fund Jupiter Japan Income Fund Jupiter Merlin Balanced Portfolio Jupiter Merlin Income Portfolio Jupiter Merlin Worldwide Portfolio Jupiter UK Special Situations Fund Legal & General (Unit Trust Managers) Limited Legal & General Dynamic Bond Trust Legal & General High Income Trust Legal & General UK Alpha Trust M&G Securities Limited M&G Corporate Bond Fund M&G Global Basics Fund M&G Optimal Income Fund M&G Recovery Fund Schroder Unit Trusts Limited Schroder European Alpha Plus Fund Schroder Global Emerging Markets Fund Schroder Global Property Securities Fund Schroder Income Maximiser Fund Schroder UK Mid 250 Fund hsbc.co.uk Issued by HSBC Trust Company (UK) Limited We are a member of the HSBC Group, one of the world s largest banking and financial services organisations with around 7,500 offices in 87 countries and territories. HSBC Trust Company (UK) Limited, Frobisher House, Nelson Gate, Commercial Road, Southampton SO15 9DF LIT01349 MCP /12 HSBC Trust Company (UK) Limited All Rights Reserved.