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HSBC Frontier Markets Equity StrategyThe investment case for investing in global frontier marketsMay 2013For professional clients only
223542-AMG51621aRESTRICTED - For Professional Clients Only* As at 31 March 2013Source: HSBC Global Asset Management. The views expressed above were held at the time of preparation and are subject to change without notice Comprehensive universe: our universe and approachprovides a sensibly diversified exposure to c.30 frontier marketeconomies Change: relative improvements by way of reductions ininstitutional voids drives productivity growth and henceperformance of the asset class over time Consumers: frontier markets provide exposure to a large,young, and growing base of consumers who should fuel furtherproductivity (and GDP) growth over time Commodity wealth: many frontier markets are naturallyendowed with commodities which has resulted in a stronggovernment credit position Correlations: low correlations across countries results insurprisingly low volatility (less than emerging and developedmarkets) Cash returns: payout ratios and dividend yields have beenconsistently higher in frontier markets than both developed andemerging markets Cheap: frontier markets currently look cheap relative to bothdeveloped and emerging markets7Cs characterising frontier markets: A pioneer with a 5+ year track record of investing in frontiermarkets, having formed a dedicated frontier markets team in2007 and launched our first mutual fund in February 2008 A truly global investment approach that invests across c.30countries, as reflected by our customised and exclusivebenchmark that is reflective of our investment strategy Access to the global resources of HSBC (e.g. offices inKenya, Saudi Arabia, etc) and the retail bank network thatprovides incremental informational advantages A robust and enduring process that has withstood the test oftime and extreme market conditions e.g. Global FinancialCrisis, Dubai debt default, Arab Spring Strong outperformance over most periods and against ourbespoke benchmark that has proven to be a higher hurdle thanpublically available alternatives Our Frontier Markets mutual funds (Luxembourg UCITS III fundand US ‘40 Act’ fund) provide investors with daily pricing USD239 million* invested in the frontier markets across twomutual funds and a managed account for one of the largest andmost forward-thinking US public pension plansOur competitive advantage:HSBC Frontier Markets strategyExecutive summary
423542-AMG51621aRESTRICTEDFrontier Markets are often defined as fast growing, low income countriesHistoric and forecasted GDP growthSource: Citi Research, Haver, IMF, January 2013.Any forecast, projection or target when provided is indicative only and is not guaranteed in any way.GDP Growth Forecasts (IMF), 2012-14 averageGDP Growth: FM, EM and DM0% 1% 2% 3% 4% 5% 6% 7% 8%ArgentinaCroatiaSloveniaBulgariaKuw aitSerbiaUAERomaniaLithuaniaEstoniaJordanPakistanTunisiaBahrainUkraineMauritiusOmanLebanonKenyaVietnamKazakhstanBangladeshNigeriaQatarSri LankaAsia Sub-Saharan Africa CISMENA Central / Eastern Europe Latin Americaasts0%1%2%3%4%5%6%7%8%1985 1990 1995 2000 2005 2010 2015Frontier Emerging DevelopedforecastsEMFMDM
523542-AMG51621a0%50%100%150%200%250%300%350%400%450%ArgentinaBahrainBangladeshBulgariaCroatiaGeorgiaJordanKazakhstanKenyaKuwaitLebanonLithuaniaMauritiusNigeriaOmanPakistanPanamaQatarRomaniaSaudiArabiaSerbiaSriLankaTunisiaUAEUkraine0%50%100%150%200%250%300%350%400%450%Cum. real GDP growth (LHS) % Cum. stock mkt return (RHS) %But GDP growth is not sufficient to generate strong equity returnsCumulative GDP growth versus cumulative stock market returnsCumulative GDP growth of 25 Frontier Markets versus Stock Market returns from 2002 through to 2012Source: Citi, data as of December 2012. Any performance information shown refers to the past and should not be seen as an indication of future returns..
623542-AMG51621aWhat are frontier markets?Frontier markets and the equity market ecosystemThe equity market ecosystemSource: HSBC Global Asset Management. Data as at end of December 2012.Graphic shown for illustrative purposes only.Type ofmarketProductivitydInstitutionalvoidsTop 10countries‘Industry Standard’MSCI index DevelopedMarketsHighLowUSAUKJapanCanadaFranceAustraliaGermanySwitzerlandSwedenHong Kong2429,473,9191,610MSCI WorldNo ofcountries:Free floatmarket cap (USDm):No ofstocks: EmergingMarketsMediumMediumChinaKoreaBrazilTaiwanSouth AfricaIndiaRussiaMexicoMalaysiaIndonesia213,864,877821MSCI EmergingMarketsNo ofcountries:Free floatmarket cap (USDm):No ofstocks: FrontierMarketsLowHighKuwaitQatarNigeriaUAEPakistanKazakhstanOmanArgentinaKenyaLebanon25107,407141MSCI FrontierMarketsNo ofcountries:Free floatmarket cap (USDm):No ofstocks:INSTITUTIONAL VOIDSLowHighLow HighPRODUCTIVITY
723542-AMG51621aInstitutional voids and productivity growthReduced institutional voids drives productivity growth Productivity growth:– Political stability and policies fostering trust, transparency, etc. e.g. free and fair elections– Increased knowledge accumulation and application e.g. R&D– Improved economic infrastructure e.g. technology and communications– Improved social infrastructure: e.g. health, education, empowerment of women– More effective economic institutions e.g. regulations and enforcement…results in increased profits and dividend distributions toshareholders, better wages and conditions to the workforce, lowerprices to consumers, increased tax payments to governmentsThe views expressed above were held at the time of preparation and are subject to change without notice.Graphic shown for illustrative purposes only.Small reductions ininstitutional voidscan lead to largeproductivity gains=return opportunityfor equityinvestorsInstitutional VoidsLowHighLow HighProductivityReduced institutional voids:–Product market improvements through communications and infrastructure–Improved capital markets through institutional mechanisms and intermediation–Human development and deepening of labour markets–Improved regulation, reduced bureaucracy and corporate interference–Introduction of effective mechanisms to ensure contract enforcement…results in significant productivity growth
RESTRICTEDRESTRICTED - For Professional Clients OnlyInvestment case for frontier markets: 7Cs
923542-AMG51621aInvestment case for frontier marketsThe 7Cs of frontier markets that will drive convergence over time1. Comprehensive universe Reflective of our globally diversified approach Sensibly diversified and proprietary customisedbenchmark7. Cheap Frontier markets are cheaper than bothEmerging and Developed markets Less researched, less liquid, and lack of sell-side coverage6. Cash returns Established companies new to stockexchanges that generate strong free cash flow Dividend yields are higher than both Emergingand Developed Markets4. Commodity wealth Focus on growth commodity markets Natural endowments, competitive advantage in factor markets, andexport markets can generate significant wealth Associated state infrastructure spending and industrial diversification5. Correlations Favourable cross-country correlations drivessurprisingly low volatility Lower volatility than Emerging Markets andDeveloped Markets provides diversificationbenefits3. Consumers Large and expanding populations,liberalisation, increasing product penetration,etc fuel productivity gains and GDP growth Positive change in frontier markets drivesconvergence and returns over the long-run2. Change Positive political, economic, and social changeover time results in reduced institutional voidsand associated productivity gains Productivity gains improves equity returnsThe views expressed above were held at the time of preparation and are subject to change without notice.
1023542-AMG51621a1For illustrative purposes only.* There are 30 countries in our custom benchmark, as illustrated in the chart and detailed on the next page. As an active strategy however there will be deviations in the number of countries held, as well asadditional ‘off-benchmark’ frontier countries not highlighted (such as Saudi Arabia)Comprehensive universeGlobally diversified exposure to c.30 Frontier Markets*ArgentinaBahrainBangladeshBulgariaColombiaCroatiaEgyptEstoniaKazakhstanKenyaKuwaitLebanonLithuaniaMauritiusMoroccoNigeriaOmanPakistanPeruPhilippinesQatarRomaniaSerbiaSloveniaSri LankaTunisiaUAEUkraineVietnamJordanEurope (9)Americas (3)Asia-Pacific (5)Middle East and Africa (13)
1123542-AMG51621aRESTRICTEDComprehensive universeSensibly diversified portfolio by region and country HSBC has devised a customised and proprietary ‘capped’ benchmark in tandem with MSCI thatreflects our sensibly diversified approach to investing in frontier markets globallyPUBLICLY AVAILABLE EXCLUSIVE TO HSBCPUBLICLY AVAILABLE/USED IN ETFsMSCI Frontier Markets MSCI Frontier Emerging MarketsMSCI FrontierEmerging Markets CappedMSCI Frontier Markets 100Introduced: 30 November 2007Back history: from 31 May 2002Number of Countries: 25Number of stocks: 141Introduced: 30 September 2008Back history: from 29 November 2002Number of Countries: 30Number of stocks: 187Introduced: 31 May 2009Back history: from 29 November 2002Number of Countries: 30Number of stocks: 187Introduced: 11 April 2012Back history: from 29 November 2002Number of Countries: 19Number of stocks: 100Index is very concentrated in the GCC(58% of the total index is represented bythe Middle East, including 26% to Kuwaitalone), while other regions are under-represented.Index includes all the countries of the MSCIFrontier Markets index but is broader.However ‘crossover’ countries have adisproportionately large weight (over 50% otthe total).Our exclusive capped MSCI FrontierEmerging Markets index ensures abroad, well diversified universe that ispredominantly exposed to pure frontiercountries.Designed for index replication but iseven less representative of the frontieruniverse than the MSCI FrontierMarkets index. The Middle Eastaccounts for 60% of the index, half ofwhich is in Kuwait).1Source: MSCI as of 31 December 2012.Notes: GCC: Qatar, UAE, Kuwait, Bahrain, Oman [Saudi Arabia is not in the benchmark]; NON-GCC: Argentina, Bangladesh, Bulgaria, Croatia, Estonia, Jordan, Kazakhstan, Kenya, Lebanon, Lithuania,Mauritius, Nigeria, Pakistan, Romania, Serbia, Slovenia, Sri Lanka, Tunisia, Ukraine, Vietnam; CROSSOVER: Colombia, Philippines, Peru, Egypt, MoroccoThere is an initial cap of 25% for the combined weight of the 5 crossover countries. This gets reset back to 25% if it breaches 30%. There is an initial cap of 10% for any other country. This gets resetback to 10% every time it breaches 12% The capped index is maintained and calculated by MSCI.
1223542-AMG51621aChangeFrontier markets benefit from change or relative improvement Most countries within the frontier markets universe have become more business friendly since 2004 A low number of days means the regulatory environment is more conducive to entrepreneurial activityWorld Bank Survey: starting a business (days, low = good)020406080100120140160SaudiArabiaGeorgiaColombiaMoroccoPanamaBulgariaBangladeshSloveniaMauritiusArgentinaLithuaniaPakistanQatarPhilippinesTrinidadMongoliaPeruEgyptKazakhstanNigeriaOmanSriLankaKuwaitCroatiaMozambiqueLebanonCambodiaSerbiaKenyaBahrainGhanaUAETunisiaUkraineZambiaJordanRomaniaVietnamEstoniaZimbabwe2004 2012Source: Citi, 20122
1323542-AMG51621aChangeFrontier markets benefit from rapid change and relative improvement 17 of 27 countries that we have exposure to have improved Economic freedom covers 10 forms of freedoms in four broad categories: (1) rule of law (propertyrights, freedom from corruption); (2) limited government (fiscal freedom, government spending); (3)regulatory efficiency (business freedom, labour freedom, monetary freedom); and (4) open markets(trade freedom, investment freedom, financial freedom)Heritage Foundation Index of Economic Freedom (high = good)Source: Citi and Heritage Foundation, 20120102030405060708090VietnamBulgariaUkraineZimbabweBangladeshKazakhstanEgyptRomaniaMozambiqueNigeriaCroatiaGeorgiaLebanonPakistanGhanaSloveniaMongoliaCambodiaKenyaUAETunisiaLithuaniaQatarPhilippinesZambiaMoroccoSriLankaColombiaOmanSaudiArabiaMauritiusJordanPeruKuwaitEstoniaArgentinaPanamaTrinidadBahrain2000 2012FreeMostly FreeModerately FreeMostly UnfreeRepressed2
1423542-AMG51621aConsumersFrontier markets provide mass exposure to domestic consumption Frontier markets benefit from a young, large, and growing population of consumers (the so-called“demographic dividend”)Growing populations (Population growth - present to 2050)Young populations (median age)(50%)0%50%100%150%200%250%ZambiaNigeriaKenyaMozambiqueGhanaKuwaitPhilippinesZimbabweSaudiArabiaJordanPakistanUAEEgyptMongoliaPanamaQatarBahrainWorldPeruColombiaOmanKazakhstanBangladeshNAmericaArgentinaMoroccoTunisiaVietnamSriLankaLebanonMauritiusSloveniaEuropeTrinidadEstoniaSerbiaCroatiaRomaniaLithuaniaUkraineGeorgiaBulgariagrow ingdeclining0510152025303540ZambiaMozambiquNigeriaKenyaZimbabweGhanaJordanPakistanPhilippinesBangladesEgyptMongoliaPeruSaudiMoroccoColombiaOmanPanamaKuwaitVietnamWorldKazakhstaTunisiaUAELebanonArgentinaBahrainSriLankaTrinidadQatarMauritiusGeorgiaSerbiaRomaniaUkraineLithuaniaEstoniaCroatiaBulgariaSlovenia3Source: Citi, 2012
1523542-AMG51621aConsumersFrontier markets benefit from increasing product penetration Frontier markets are underserved in terms of mobile telephony, internet penetration, transportation,etc but increasing penetration will drive productivity improvements over timeInternetFixed broadband Internet subscribers (per 100 people)*Mobile phoneMobile cellular subscriptions (per 100 people)*TransportationPassenger cars (per 1,000 people)*0%5%10%15%20%25%30%35%2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011DM EM FM0204060801001201402001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011DM EM FM0%50%100%150%200%250%300%350%400%450%500%2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011DM EM FM* based on the simple average of values for the countries in the respective group. DM, EM and FM classification as per MSCISource: World Bank, HSBC Calculations3
1623542-AMG51621aCommodity wealthFrontier Markets have a comparative advantage in factor markets Many frontier markets (e.g. GCC countries) are naturally endowed with sought after commoditieswhich has facilitated a strong government credit position (unlike developed markets)Commodities in Frontier Markets43%30%21%20%19% 19%10%9%8%4%3%0%30%20%4%15%29%24%3%3%7%15%11%4%0%15%30%45%Oil Natural gas Iron ore Copper Uranium Zinc Coal Aluminium Molybdenum Nickel Gold PGMs% of global reserves % of global production4Source: Citi, 2012
1723542-AMG51621aCommodity wealthBut it is not just about oil and gas or a ‘commodity play’ Contrary to popular opinion, frontier markets have low correlations with commodity prices Wealth generated from commodities funds industrial diversification (eg Qatar) and associatedinfrastructure projectsSource: Bloomberg, December 2007 to December 2012, correlation of weekly index levels over 5 year period.Brent Oil DJ UBS CommoditiesEM 0.46 0.54FM 0.36 0.37Qatar 0.32 0.25Colombia 0.37 0.45UAE 0.31 0.32Nigeria 0.11 0.14Kuwait 0.16 0.17Kazakhstan 0.38 0.41Oman 0.33 0.26Brazil 0.52 0.63Russia 0.47 0.48India 0.33 0.36China 0.34 0.36BRIC 0.49 0.56World 0.51 0.60S&P 0.46 0.55Europe 0.48 0.594
1823542-AMG51621a20%40%60%80%100%120%140%2001 2003 2005 2007 2009 2011Frontier Emerging DevelopedCommodity wealthCommodities have generated strong credit positions Strong government credit position, unlike developed markets Private sector debt is also moderatePublic debt/GDP, 2001-2012 Private sector credit/GDP, 2010Source: Citi, December 2012.Any forecast, projection or target when provided is indicative only and is not guaranteed in any way.40%40%80%120%160%200%Frontier Emerging DevelopedCorporate debt Household debt
1923542-AMG51621aCorrelationsLow cross-country correlations Low correlations between frontier and emerging markets and individual country constituentsSource: Bloomberg, December 2007 to December 2012, correlation of weekly index levels (Wednesday to Wednesday) over a 5 year period.N.B. Blue font denotes correlation of 0.5 or lower, Red denotes a negative correlation.EMFMQatarColombiaUAENigeriaKuwaitPhilippinesPeruPakistanKazakhstanOmanKenyaEgyptArgentinaVietnamEM 1.00FM 0.64 1.00Qatar 0.54 0.80 1.00Colombia 0.69 0.49 0.37 1.00UAE 0.54 0.78 0.64 0.37 1.00Nigeria 0.02 0.25 0.07 0.03 0.09 1.00Kuwait 0.35 0.81 0.58 0.31 0.47 0.00 1.00Philippines 0.68 0.51 0.42 0.53 0.44 0.08 0.30 1.00Peru 0.71 0.36 0.32 0.59 0.28 (0.06) 0.17 0.44 1.00Pakistan 0.17 0.33 0.16 0.14 0.26 0.01 0.33 0.11 0.01 1.00Kazakhstan 0.69 0.50 0.43 0.48 0.39 0.02 0.23 0.40 0.51 0.13 1.00Oman 0.55 0.72 0.68 0.31 0.67 (0.04) 0.52 0.42 0.35 0.25 0.42 1.00Kenya 0.42 0.32 0.37 0.32 0.21 (0.03) 0.14 0.35 0.35 0.10 0.44 0.41 1.00Egypt 0.57 0.55 0.47 0.38 0.51 0.12 0.33 0.41 0.37 0.10 0.42 0.47 0.32 1.00Argentina 0.66 0.45 0.36 0.47 0.32 0.01 0.21 0.46 0.60 0.15 0.49 0.37 0.40 0.40 1.00Vietnam 0.42 0.38 0.31 0.33 0.30 0.04 0.19 0.34 0.28 0.00 0.35 0.29 0.22 0.30 0.27 1.005
2023542-AMG51621a Frontier Markets have consistently produced lower volatility of returns compared to emerging anddeveloped marketsCorrelationsLow correlations drive surprisingly low volatility1Rolling 12 month annualised volatility of returns0%5%10%15%20%25%30%35%40%45%50%Dec-05 May-07 Oct-08 Apr-10 Sep-11 Feb-13MSCI Emerging Markets MSCI World MSCI FEM Capped12.40%13.65%6.05%Source: Bloomberg, daily data from December 2005 to March 2013.The views expressed above were held at the time of preparation and are subject to change without notice.1.So long as investors embrace a truly diversified frontier markets portfolio globally. Otherwise, investors who selectively target a small number of frontier market countries(perhaps through a GEM only allocation) will inevitably experience higher idiosyncratic risk and hence much higher levels of volatility. Past performance is not an indication offuture returns.5
2123542-AMG51621aCash returnsFrontier Markets have the highest dividend yields Frontier markets have consistently offered higher dividends yields than both developed and emergingmarkets Certain countries offer dividend yields nearing 8% e.g. Pakistan has a 7.7% dividend yield12 month trailing dividend yield 12 month trailing dividend yield at year endSource: MSCI, Thomson Reuters DataStream, HSBC Calculations, March 2013.* Based on the MSCI indices. World represents EM + DM + FM. DM = Developed Markets, EM = Emerging Markets, FM = Frontier Markets.The views expressed above were held at the time of preparation and are subject to change without notice. The level of yield is not guaranteed and may rise or fall in the future.3.8%2.4%2.5%2.9%2.8%4.1%2%2.2%2.9%2.7%6.3%4.4%4.2%5.5%4.2%1.5%2.5%3.5%4.5%5.5%6.5%7.5%8.5%2008 2009 2010 2011 2012DM EM FM1.5%2.5%3.5%4.5%5.5%6.5%7.5%8.5%Jan 08 Jan 09 Jan 10 Jan 11 Jan 12 Jan 13DM EM FM2.8%2.6%4.0%6
2223542-AMG51621aCheapFrontier markets look undervalued on a trailing basis Frontier Markets are cheaper than Emerging and Developed Markets on a trailing Price to Book basisfor a higher level of return By comparison, on a trailing Price to Earnings basis, frontier markets are trading at 11.8x versusEmerging Markets at 12.5x and Developed Markets at 16.1x12-month trailing Price to Book Return on Equity0.5x1.0x1.5x2.0x2.5x3.0x3.5xJan-08Jan-09Jan-10Jan-11Jan-12Jan-13DM EM FM5.5%7.5%9.5%11.5%13.5%15.5%17.5%19.5%Jan-08Jan-09Jan-10Jan-11Jan-12Jan-13DM EM FM1.5x1.9x1.6x13.1%11.9%13.0%Source: MSCI, Thomson Reuters DataStream, HSBC Calculations, March 2013.* Based on the MSCI indices. World represents EM + DM + FM. DM = Developed Markets, EM = Emerging Markets, FM = Frontier Markets.The views expressed above were held at the time of preparation and are subject to change without notice.7
2323542-AMG51621aForward 12-month P/E estimatesSource: Bloomberg consensus estimates of forward P/E valuations as at March 2013 based on MSCI indices.The views expressed above were held at the time of preparation and are subject to change without notice. Any forecast, projection or target when provided is indicative only and is not guaranteed in any way14.21 13.7010.88 10.384.375.547.6 7.92 8.259.45 9.6310.7 10.71 11.23 11.4312.41 12.81 13.26 13.3 13.4 13.7115.3517.61.17.000.02.04.06.08.010.012.014.016.018.020.0WorldACWorldEmergingMarketsFrontierMarketsArgentinaKazakhstanPakistanBahrainRomaniaOmanEgyptKenyaSriLankaVietnamCroatiaUAELebanonNigeriaPeruQatarSloveniaKuwaitColombiaPhilippines7CheapFrontier markets are undervalued on a forward basis Frontier Markets are currently trading at attractive valuations, both in absolute terms and relative toEmerging Markets Frontier Markets are still trading significantly lower than the pre-crisis levels of August 2008, whereasEmerging Markets and Developed Markets have almost entirely recovered the losses
2523542-AMG51621aManagement teamEmerging markets platformKey: = investment management team and associated product specialists = closely affiliatedFM = Frontier Markets, EM = Emerging Markets, DM = Developed Markets* Joint venture with SABB (Saudi British Bank, an affiliate of the HSBC Group) ** Jintrust Fund Management is a joint venture between HSBC Global Asset Management and Shanxi Trust & Investment CorpChris CheethamGlobal Chief Investment Officer (CIO)Philip GlazeCIO UK & Global CIO, MultimanagerBill MaldonadoCIO Asia Pacific & Global CIO, EquityResearch AnalystsGlobal FM Seki MutukwaGlobal DMLinda SaitowitzLatin AmericaCarlos UemaCarlos LimaRaquel DinizAna BrowneTatyana KatalanJoão RoncagliaGiuliano AjejeGlobal EMTony MacNearyHelen KingGlobal ThematicSally Godley MaynardAsia PacificHugh LeeKwok Wing CheongFerdinand CheukSami AbouzahrJoy YuanDebbie ChanDivya BalakrishnanElina FungAlex KwanStanley ChenMabel Wong (HK)Arwen LiuPortfolio Managers – GlobalNick TimberlakeHead of EquitiesGlobal DMAngus ParkerAnn HallGraeme BlythNick DowellSe-Ting FrenzelBen HubbardOliver GottliebTobyn DickinsonGlobal FM Andrew Brudenell Chris TurnerGlobal EMDouglas HelferStephanie WuLee RayEd ConroyPortfolio Managers – Regional/LocalLatin America Natalia KerkisAline CardosoFernando FontouraGabriela Cervantes (Mexico)India (Offshore)Sanjiv DuggalViresh MehtaNilang MehtaIndia (Onshore)Tushar Pradhan + team of 6Asia PacificHusan PaiMick DillonKarma WilsonPhilip Mok (HK)Mandy Chan (China)Michael Chiu (China)Equity DealersLatin AmericaNelson Sussumu+ team of 2AsiaJames Levy+ team of 4EMEA Steve Chappell+ team of 5Equity Product SpecialistsGlobal EM & FM /Smart Beta David Wickham Jake WilliamsIndexation & ETFsCarmen GonzalezCalatayud BrummerOlena DatsenkoAlfred Le LeonLatin AmericaVictor ArakakiEM (BRIC, Russia,CIVETS)Soren Beck-PetersenTanya ChadhaGlobal DMJames HoganAsia PacificChris AdamsGrace ChuangIndia (Offshore)Roshan PadamadanSaudi British Bank (Riyadh)*Research Analysts Jafar Khan AbdulmajeedAl Hagbani+ team of 4Portfolio Managers Abdullah Al Hamed Khaled Al Braikan+ team of 6EM Debt (New York)Sovereign Analyst Binqi LiuPortfolio EngineersVinayak PottiPhil YuhnPortfolio ManagersGuillermo OssesSrinivas ParuchuriLisa ChuaMarge KarnerHSBC Retail Banking & Wealth ManagementGlobal Asset Management - HSBC Insurance - HSBC PremierHSBC Global Banking & MarketsGlobal Banking - Global Markets - Global ResearchJintrust Fund Management (Shanghai)**Research AnalystsQuentin Cao+ team of 8Portfolio ManagersTom Lin+ team of 12
2623542-AMG51621aSeki Mutukwa – Senior AnalystSeki Mutukwa is a Senior Analyst in the Frontier Markets equity team and has been working in the industry since 2004. Prior to joining HSBC in 2012, he spentsix years as a Portfolio Manager/ Analyst with Blackfriars Asset Management, a London based fund management boutique formerly majority owned by BNYMellon Asset Managementt, where he focused on emerging and frontier markets across Europe, Middle East and Africa. Prior to this he was an Analyst withState Street Global Advisors. Seki holds an MSc in investment management from Cass Business School and is a CFA charterholder.Andrew Brudenell – Co-Portfolio ManagerAndrew Brudenell is the lead Senior Portfolio Manager of the Frontier Markets strategy and has been working in the industry since 1997. Andrew joined HSBC in2007 as a member of the Global Emerging Markets equity team and subsequently joined the dedicated Frontier Markets equity team at launch in early 2008.Prior to HSBC, Andrew worked as a US Portfolio Manager at Scudder Investments in New York and at Deutsche Asset Management in London. He holds anMSc from the London School of Economics and is a CFA charterholder.Chris Turner – Co-Portfolio ManagerChris Turner is a Senior Portfolio Manager and co-portfolio manager of the Frontier Markets strategy and has been working in the industry since 1986. Prior tojoining HSBC in 2012, Chris was a Portfolio Manager with EMSO Partners (Citi Capital Partners) where he covered a number of emerging and frontier markets.Prior to this, he worked in emerging markets equity with Morley Fund Management (now Aviva Investors) and Morgan Grenfell Asset Management (nowDeutsche Asset Management) in a similar role. Chris is a graduate of University College London.Management teamA dedicated and experienced frontier markets teamDavid Wickham – Senior Product SpecialistDavid Wickham is a Director and Senior Product Specialist responsible for leading the promotion of the Global Emerging Markets, Global Frontier Markets, andAlternative Indexation equity capabilities. Prior to joining HSBC in 2011, he was a Senior Portfolio Manager with Invesco Asset Management in London where hemanaged the firm’s non-US private equity investment program. David holds a Master’s degree in International Relations from the University of Cambridge andan MBA with Distinction from the University of Oxford. David is a Nonresident Fellow of the Brookings Institution and an Associate Fellow of the University ofOxford’s Saïd Business School.
2723542-AMG51621aManagement team and associated global analytical resourcesGlobal Asset Management office locations in emerging and frontier marketsColombia*MoroccoPeru*Philippines*BrazilChileChinaCzechHungaryIndiaIndonesiaSouth KoreaMalaysiaMexicoPolandRussiaSouth AfricaTaiwanThailandTurkeyHong KongArgentinaBahrainBangladeshBulgariaCroatiaEstoniaJordanKazakhstanKenyaKuwaitLebanonLithuaniaMauritiusNigeriaOmanPakistanQatarRomaniaSerbiaSloveniaSri LankaTunisiaUAEUkraineVietnamEmerging CountriesFrontier CountriesEgypt*Source: HSBC Global Asset Management, September 2012
2923542-AMG51621aImportant informationThis presentation is intended for Professional clients only and should not be distributed to or relied upon by Retail Clients.The contents of this presentation are confidential and may not be reproduced or further distributed to any person or entity, whether in whole or in part, for any purpose.The material contained herein is for information only and does not constitute investment advice or a recommendation to any reader of this material to buy or sellinvestments.HSBC Global Asset Management (UK) Limited has based this presentation on information obtained from sources it believes to be reliable but which it has notindependently verified. HSBC Global Asset Management (UK) Limited and HSBC Group accept no responsibility as to its accuracy or completeness.This presentation is intended for discussion only and shall not be capable of creating any contractual or other legal obligations on the part of HSBC Global AssetManagement (UK) Limited or any other HSBC Group company. Care has been taken to ensure the accuracy of this presentation but HSBC Global Asset Management(UK) Limited accepts no responsibility for any errors or omissions contained therein.This presentation and any issues or disputes arising out of or in connection with it (whether such disputes are contractual or non-contractual in nature, such as claims intort, for breach of statute or regulation or otherwise) shall be governed by and construed in accordance with English law.The views expressed above were held at the time of preparation and are subject to change without notice.Any forecast, projection or target where provided is indicative only and is not guaranteed in any way. HSBC Global Asset Management (UK) Limited accepts no liabilityfor any failure to meet such forecast, projection or target.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.HSBC GIF Frontier Markets Fund is a sub-fund of the HSBC Global Investment Funds, a Luxembourg domiciled SICAV. UK based investors in HSBC GlobalInvestment Funds are advised that they may not be afforded some of the protections conveyed by the provisions of the Financial Services and Markets Act 2000. HSBCGlobal Investment Funds is recognised in the United Kingdom by the Financial Conduct Authority under section 264 of the Act. The shares in HSBC Global InvestmentFunds have not been and will not be offered for sale or sold in the United States of America, its territories or possessions and all areas subject to its jurisdiction, or toUnited States Persons. All applications are made on the basis of the current HSBC Global Investment Funds Prospectus, Key Investor Information Document (KIID),Supplementary Information Document (SID) and most recent annual and semi-annual reports, which can be obtained upon request free of charge from HSBC GlobalAsset Management (UK) Limited, 8 Canada Square, Canary Wharf, London, E14 5HQ. UK, or the local distributors. Investors and potential investors should read andnote the risk warnings in the prospectus and relevant KIID and additionally, in the case of retail clients, the information contained in the supporting SID.The HSBC Frontier Markets Fund is an unregulated collective investment schemes for UK Regulatory purposes. The promotion of the Fund is therefore restricted inthe UK by the Financial Services and Markets Act 2000 and this document can only be issued to persons permitted under COBS 4.12 of the FCA Handbook. UK basedinvestors are advised that they may not be afforded some of the protections conveyed by the provisions of the Act. In particular, compensation will not be availableunder the Financial Services Compensation Scheme in the UK.Where overseas investments are held the rate of currency exchange may cause the value of such investments to go down as well as up.Investments in Frontier Markets are by their nature higher risk and potentially more volatile than those inherent in some established markets.Economies in Frontier Markets generally are heavily dependent upon international trade and, accordingly, have been and may continue to be affected adversely bytrade barriers, exchange controls, managed adjustments in relative currency values and other protectionist measures imposed or negotiated by the countries with whichthey trade. These economies also have been and may continue to be affected adversely by economic conditions in the countries in which they trade.