Investments: Mutual funds | HSBC


Investing in Mutual funds

What are mutual funds?

Mutual funds as represented by hanging objects

Mutual funds1 are a type of pooled investment vehicle.  Shareholders of a mutual fund invest their money by purchasing shares of the fund.  The money that they pay for the shares is pooled together and invested in a portfolio of securities, such as stocks, bonds, or money market instruments. Mutual funds are professionally managed and operated by money managers, who maintain the portfolio in accordance with the fund's investments objectives as stated in the prospectus.

Popular investment disciplines which can involve mutual funds include:

  • Asset allocation2: a disciplined approach to long-term investing, designed to seek consistent exposure to markets. This approach does not guarantee a profit or protect against a loss. It also cannot eliminate the risk of fluctuating prices and uncertain returns. However, it may be used in an effort to manage risk and enhance returns.
  • Dollar cost averaging3: a strategy in which securities, typically mutual funds, are purchased in fixed dollar amounts at regular intervals, regardless of what direction the market is moving. While this method doesn't guarantee against losses, over time, this can help to reduce the average cost of acquired shares.
  • Target date ("life cycle") investing4: investors choose a fund with a specified target date near a personal need or goal (such as retirement) for which they will need to access their invested funds. Though target date investing does not protect against loss of principal, the fund's risk exposure is gradually reduced as a target date draws nearer to prepare for the approaching liquidity needs.

Mutual funds built on HSBC's global capabilities

Our World Selection Funds5 offer asset allocation solutions–designed to help minimize the roller-coaster ride that volatile market conditions can generate. The five different fund strategies are aligned to a the full spectrum of risk profiles: Income Strategy Fund, Conservative Strategy Fund, Moderate Strategy Fund, Balanced Strategy Fund and Aggressive Strategy Fund.

Explore our other exclusive asset allocation solutions.

In addition, the suite of HSBC Funds6 includes domestic money market funds and domestic and international equity and debt funds7. The HSBC Emerging Markets Debt Fund, HSBC Emerging Markets Local Debt Fund, HSBC Frontier Markets Fund and the HSBC Total Return Fund  all provide access to some of the world's fastest growing markets through the lens of HSBC's deep global knowledge and experience.

Mutual funds from the world's leading managers

A financial professional8 from HSBC Securities can not only provide access to the competitive funds managed by HSBC, but also help you choose from a broad selection of third-party mutual funds. Each of these funds is thoroughly screened and regularly reviewed by HSBC Wealth Portfolio Management Americas team 9 – a global team of research analysts dedicated to identifying third party money managers with competitive advantages in their asset class, to enhance our clients' portfolios.

Take advantage of our mutual fund experience

Mutual funds offer a convenient avenue for entering financial markets and can also become integral parts of a broader investment strategy. To fully understand your personal investment objectives and help determine which mutual funds may be suited for your needs, an HSBC Securities financial professional8 will take the time to conduct a thorough financial review. To schedule your review, or to receive information on HSBC mutual funds, please call 866.586.4722 or schedule a consultation online.

Investment and certain insurance products, including annuities, are offered by HSBC Securities (USA) Inc. (HSI), member NYSE/FINRA/SIPC. In California, HSI conducts insurance business as HSBC Securities Insurance Services. License #: OE67746. HSI is an affiliate of HSBC Bank USA, N.A. Whole life, universal life, term life and health insurance products are provided by unaffiliated third parties and are offered through Insurance Agents of HSBC Insurance Agency (USA) Inc., which is a wholly owned subsidiary of HSBC Bank USA, N.A. Products and services may vary by state and are not available in all states. California license #: OD36843.

Investment, Annuity and Insurance Products:

All decisions regarding the tax implications of your investment(s) should be made in connection with your independent tax advisor.

Research backgrounds of brokers and brokerage firms for free by visiting FINRA's BrokerCheck website

1 Mutual funds, money market funds, and Exchange Traded Funds are sold by prospectus. Please consider the investment objectives, risks, charges and expenses carefully before investing. The prospectus, which contains this and other information, can be obtained by calling your HSBC Securities (USA) Inc. Premier Wealth Advisor/Premier Relationship Advisor or call 800.662.3343. Read it carefully before you invest.

An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. Although a money market fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in a money market fund.

2 Asset allocation is a method of diversification that positions assets among major investment categories. This tool may be used in an effort to manage risk and enhance returns. However, it does not guarantee a profit or protect against a loss. It also cannot eliminate the risk of fluctuating prices and uncertain returns.

3 Dollar Cost Averaging is a plan of investing which allows you to take advantage of market fluctuations, but it does not assure a profit or protect against a loss in declining markets.

4 Target date funds invest in other funds, so performance can vary significantly based on the investment restrictions of the target date fund. A target date fund may have losses and does not guarantee that sufficient assets will be available for retirement or any specific return.

5 HSBC Global Asset Management (USA) Inc. is the investment adviser for the HSBC World Selection Funds. Foreside Distribution Services, L.P., a member of the Financial Industry Regulatory Authority ("FINRA"), serves as the distributor of the Funds' shares.

6 HSBC Global Asset Management (USA) Inc. serves as the investment adviser to the HSBC Funds. Foreside Distribution Services, L.P., member FINRA, is the distributor of the HSBC Funds and is not affiliated with the Advisor. HSBC Global Asset Management (UK) Limited serves as investment subadviser to the HSBC Frontier Markets Fund. HSBC Global Asset Management (Hong Kong) Limited serves as subadviser to the HSBC RMB Fixed Income Fund. HSBC Securities (USA) Inc., member NYSE, FINRA, SIPC is a sub-distributor of the HSBC Funds. Affiliates of HSBC Global Asset Management (USA) Inc. receive fees for providing various services to the funds.

7 International investing involves a greater degree of risk and increased volatility that is heightened when investing in emerging or frontier markets. Foreign securities can be subject to greater risks than U.S. investments, including currency fluctuations, less liquid trading markets, greater price volatility, political and economic instability, less publicly available information, and changes in tax or currency laws or monetary policy. The risks of investing in emerging-market countries are greater than the risks generally associated with foreign investments. Frontier market countries generally have smaller economies and even less developed capital markets or legal and political systems than traditional emerging market countries. As a result, the risks of investing in emerging market countries are magnified in frontier market countries. Fixed income investments are subject to credit and interest-rate risk. Credit risk refers to the ability of an issuer to make timely payments of interest and principal. Interest-rate risk refers to fluctuations in the value of a fixed-income security resulting from changes in the general level of interest rates. In a declining interest-rate environment, the portfolio may generate less income. In a rising interest-rate environment, bond prices fall.

8 HSBC Securities financial professional refers to Premier Wealth Advisors (PWA)/Premier Relationship Advisors (PRA) and Licensed Sales Professionals. PWA/PRA's provide a full suite of investment products that are available with HSBC based on individualized customer financial needs and objectives. Licensed Sales Professionals have access to more simplified product sets created to meet customers' key life–cycle needs, e.g., education, retirement, wealth transfers.

9 HSBC Wealth Portfolio Management Americas team is a research and asset management capability utilized by certain HSBC companies in various regions around the world. In the U.S. the company offering these capabilities is HSBC Global Asset Management (USA) Inc.

United States persons (including U.S. citizens and residents) are subject to U.S. taxation on their worldwide income and may be subject to tax and other filing obligations with respect to their U.S. and non–U.S. accounts – including, for example, Form TD F 90–22.1 (Report of Foreign Bank and Financial Accounts ("FBAR")). U.S. persons should consult a tax adviser for more information.

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