THE HSBC AMANAH GLOBAL EQUITY INDEX FUND

u hsbcamanah.comFor professional advisers only

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HSBC Amanah is the Islamic financial services division of the HSBC Group and is uniquely positioned to

understand, structure and deliver financial solutions that are compatible with the requirements of Shariah.

HSBC Amanah is one of the leading global players in the Islamic Finance industry.

u Total assets of Islamic financial institutions have grown by an average of 15-20% per annum* over the past five years

u Sinopia Asset Management (UK) Ltd is the Investment Adviser for the HSBC Amanah Global Equity Index Fund

u Sinopia launched its first equity index fund in 1990 and has a long track record in managing index funds

u Sinopia’s indexation process and strategies are designed to consistently deliver index returns, whilst minimising trading

associated costs and tracking error risk through a distinct quantitative process

u The Global Equity Index fund is a sub-fund of the HSBC Amanah Funds SICAV and it has the potential to provide

diversification as a strategic investment

u Index funds offer diversification in a broad section of the market.

*Source: HSBC Amanah, October 2008 and www.zawya.com

The HSBC Amanah Global Equity Index Fund

HSBC Amanah

HSBC Amanah is the Islamic financial services division of

the HSBC Group. With experienced personnel working from

regional offices, its mission is to ensure that HSBC is one

of the leading providers of value-added Shariah compliant

financial products and services to its clients.

The HSBC Amanah Funds SICAV is an investment company

(Société d’Investissement à Capital Variable) constituted

in the Grand Duchy of Luxembourg and qualifies as an

Undertaking for Collective Investment in Transferable

Securities (a ‘UCITS’). The Company is organised as an

umbrella structure with the ability to issue shares of

different classes corresponding to different sub-funds.

HSBC Amanah Funds SICAV is specifically designed

for investors who wish to invest in equity markets in

compliance with Shariah (Islamic law).

HSBC Amanah is guided and supervised by the HSBC

Amanah Central Shariah Committee, an independent

committee of Islamic scholars. The Committee oversees

the development and operations of all HSBC Amanah

products and transactions to ensure that they meet the

requirements of Shariah.

Central Shariah Committee

Three scholars of international repute, well versed in

both Islamic law and modern finance, serve on the HSBC

Amanah Shariah Committee. The Central Committee not

only provides initial approvals on investment objectives

and investment strategies of all funds, but also reviews

the investments periodically to ensure the continuous

compliance of the investments of the funds to Islamic

principles. Moreover, the committee conducts annual

audits of all funds to ensure adherence to their rulings

during the year.

Sheikh Nizam Yaquby

Sheikh Nizam is a graduate in Economics and Comparative

Religion from McGill University and is an internationally

acclaimed scholar in the Islamic banking industry. He has

been a teacher of Tafsir since 1976. He advises a number of

banks and financial institutions including Abu Dhabi Islamic

Bank, BNP Paribas, Dow Jones† Lloyds TSB and Standard

Chartered on Islamic banking and finance.

Sheikh Dr Mohamed Elgari

Sheikh Mohamed holds a PhD in Economics from the

University of California. He is an expert at the Islamic

Jurisprudence Academy (OIC), Jeddah. Dr Elgari is the

editor of the Review of Islamic Economics. He is also an

adviser to several Islamic financial institutions worldwide

and the author of many books on Islamic banking.

Dr Mohamed Imran Ashraf Usmani

Dr Usmani holds a PhD in Islamic Finance. He also

obtained degrees of Alimiyyah and Takhassus (specialisation

in Islamic Jurisprudence) from Jamia Darul Uloom, Karachi.

His area of expertise is Islamic Finance in which he has

carried out extensive research. Dr Usmani is a faculty

member/teacher of Jamia Darul Uloom, Karachi and

Institute of Business Administration (IBA), Karachi. He is

the author of various books on Shariah (Islamic law).

All Shariah compliant investments must be certified by

experts in Shariah, generally through a panel or board

comprised of respected Shariah scholars who are qualified

to issue ‘Fatwas’ (religious rulings) on financial transactions.

This panel of Shariah experts ensure full compliance of

all Shariah compliant investment funds. For illustration,

the Central Shariah Committee of HSBC Amanah has

determined that investment funds investing in equities as

an asset class will not invest in companies whose primary

business activity is as shown in Figure 1 (sectoral screens),

or in companies which exhibit characteristics as shown in

Figure 2 (financial screens)*.

*The above screens apply only to funds managed using the Dow Jones† Islamic Market indices. For funds using the MSCI††, different financial screenings will

be used.

Figure 1: Sectors Figure 2: Financial

Alcohol Weapons All the following should be less than 33%

Tobacco Pork Total Debt/12 month trailing market capitalisation

Financial services Gambling Cash & Interest bearing securities/12 month trailing market capitalisation

Pornography Leisure/media Accounts Receivable/12 month trailing market capitalisation

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The HSBC Amanah Global Equity Index Fund

The Fund meets Shariah principles as interpreted and laid

down by the Shariah Committee and provided to the Board

of Directors. The investment process ensures adherence to

Shariah principles which HSBC Amanah’s Central Shariah

Committee closely monitor.

The HSBC Amanah Global Equity Index Fund aims to create

long-term appreciation of capital through investment in a

well-diversified portfolio of equities listed worldwide, as

defined by the relevant world index, in a manner that is

consistent with the principles of the Shariah law. Investors

have access to equity markets through an experienced

manager and service provider, with daily liquidity and the

highest standard of compliance with Islamic principles.

The fund is managed by Sinopia, the specialist quantitative

management arm of the HSBC Group.

Why an Islamic global equity index fund ?

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Total assets of Islamic financial institutions have grown

by an average of 15-20% per annum over the past five

years*, suggesting strong demand for Islamic investing.

It is expected Islamic finance will continue to grow at this

rate for the next few years and that total assets in Islamic

finance will reach $1 trillion by 2012. The growth in Islamic

finance has also been mirrored in the growth of Shariah

compliant investment funds. It is estimated that currently,

there are more than US$30 billion under management in

Shariah compliant investment funds**.

A Global Equity Index fund has the potential to provide

diversification as a strategic investment within a balanced

portfolio. Companies in an index are carefully selected and

are representative of various industries. Global equities can

be used defensively, diversifying the risk found in single

country investments. This spreads risk among many stocks

and keeps the investment diversified. Globalisation has

aided the rise of multinational giants that derive much of

their revenue from global markets other than their own. A

global investment approach can help your clients participate

in the growth potential of these industry leaders, wherever

they may be headquartered.

* Source: HSBC Amanah, October 2008 and

www.zawya.com

** Source: www.zawya.com

Why HSBC Amanah Global Equity Index fund ?

HSBC Amanah is uniquely positioned to understand,

structure, and deliver financial solutions that are compatible

with the requirements of Shariah. It is headquartered in

Dubai, and with regional representatives in New York,

Riyadh, Dubai, London, Jakarta and Kuala Lumpur, HSBC

Amanah is one of the leading global players in the Islamic

finance industry.

Sinopia Asset Management is the specialist for quantitative

asset management of the HSBC Group, providing robust

quantitative investment solutions in a controlled risk

environment for all types of investors. The highly innovative

product offering, the disciplined investment strategies and

the specialised staff have made Sinopia a key player in the

quantitative asset management community.

Sinopia’s indexation process and strategies are designed to

consistently deliver index returns, whilst minimising trading

associated costs and tracking error risk through a distinct

quantitative process. Sinopia launched its first index fund in

1990 and has a long track record in managing index funds.

Investment strategy

This sub-fund aims to create long-term appreciation of

capital through investment in a diversified portfolio of

securities which meets Islamic investment principles

as interpreted and laid down by the Shariah Supervisory

Committee and provided to the Board of Directors. The

fund adopts a pragmatic full replication strategy using the

Dow Jones† Islamic Titans 100 Index as the underlying

index. The objective is to neutralise key risk sources such

as fund weight deviations (vs index), sector and country

neutrality. Changes to the index are analysed and replicated

after taking into consideration the trade-off between

tracking error and trading costs. This fund is a quantitative

indexed fund.

Investment process

Sinopia’s indexation process and strategies are designed to

deliver index returns, whilst minimising trading associated

costs and tracking error risk through a distinct quantitative

process. The fund strategy is determined by the index it

aims to fully replicate. The fund manager monitors the

ex-ante (predicted) tracking error on a weekly basis or

when executing transactions. ‘Northfield’ is the dedicated

tool used by the Equity Indexation team to estimate

volatility and tracking error calculations. The team check the

adequacy of the fund’s risk and the parameters of the fund

and report any breaches to the head of the team. The load

difference is calculated for each stock held in the index fund

and compared against upper and lower threshold limits. All

index funds are monitored on a daily basis with respect to

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‘load’ differences (i.e. the difference between the weight

of a stock, a country, a sector, a capitalisation class in the

index and the fund). This analysis of the load differences

allows us to quickly identify any potential sources of

tracking error and allows us to monitor it.

The difference between an Index fund’s performance and

the Index is measured on a daily basis. Any significant

difference in the tracking error or in the investment is

therefore quickly established.

Sinopia follow a three-step process when implementing

and managing index funds and mandates:

Step 1: Preliminary index analysis

They analyse the underlying index with respect to the

number of investible securities, liquidity, volume, index

turnover, volatility, sector/industry composition and

large cap/small cap distribution. This analysis allows an

informed decision to be made on what would be the most

pragmatic and cost effective approach to tracking the

performance of the fund’s index.

Step 2: Portfolio construction

Once the investible universe of securities has been

defined we construct the initial portfolio using one of the

range of available index tracking methodologies. A full

replication methodology is applied in the case of the HSBC

Amanah Global Equity Index Fund as the index consists of

a limited number of member stocks and the constituent

markets are highly efficient.

Sinopia employs a matrix approach to manage factor risk

in the equity portfolio to ensure that it has neutral position

risk exposure relative to the risk exposures implied by the

index. The risk exposures managed include country and

sector bias.

The portfolio is continually monitored and adjusted to

incorporate cash flows, corporate actions and market

information.

Step 3: Trading analysis and implementation

In order to limit the erosion of portfolio returns Sinopia

emphasise controlling the cost of trading the index

portfolio. Generally, an analysis is undertaken to estimate

the component trading costs and risks of the individual

stocks in a portfolio, as well as the costs of a large

rebalancing.

Orders are executed via a centralised dealing team. The

objective is to bulk order flow to reduce trading costs and

maximise the supply of internal liquidity through crossing

and order matching.

As risk management is key to Sinopia’s investment and

allocation process, a number of processes are continually

deployed to ensure that investment and operational risks

are actively managed. Trade orders are input and analysed

through a front office system which is controlled by Group

Compliance to ensure that portfolio mandates are adhered

to in accordance with portfolio objectives and regulatory

considerations.

A performance attribution system allows the fund

manager to observe the portfolios performance on a real

time basis to ensure it performs in line with the index and

immediately determine the sources of any unexplained

performance deviations.

As risk management is key to Sinopia’s investment and

allocation process, all the sources of risk are strictly

monitored and controlled at each stage of the process.

Through the use of internal and external tools, the

investment process gives a very significant place to

risk management issues: the calculation, management

and control of absolute and relative risks. Portfolios are

explicitly built taking into account the trade-off between

expected return and risk levels. On an ongoing basis,

Sinopia’s investment process incorporates the constant

monitoring of portfolio exposures, absolute or relative

risk levels, as well as a strict control of operational risk.

All tools incorporate a daily data-feed, which enables risk

analysis to be continuously updated.

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The investment team

((YY/YY): Number of years at Sinopia / Number of years experience - as at 31/10/08)

Jean Francois Schmitt (8/15), Global Head of Equity - Sinopia Asset Management

10 portfolio managers

Paris Francois Dossou, Deputy Head (10/10) Jeanne Follet (1/9)

Patrick Gautier (7/9) Nadia Ben Djemiaa (4/4)

Laurence Jobert (1/9) Malika Oueznadji (7/7)

London Nils Jungbacke (7/11) Sunny Wu (4/6)

Harvey Sidhu (8/10)

Hong Kong Benedicte Mougeot, Deputy Head (13/13)

3 assistant managers

Paris Abderrahman Belcad (3/3)

Sylvain Treilles (1/1)

Jeremy Pierre (1/1)

Celine Boe-Deschamps (9/9), Head of UK Trading

6 equity traders

Paris Jerome Allouch, Deputy Head (1/8)

Julien Tourchon (1/6)

Ekaterina Diatchenko (2/4)

Elena Ripca (1/1)

Gabriel Taboul (1/1)

Hong Kong Elie El Khoueiri (3/3)

Fund Characteristics

Fund name: HSBC Amanah Global Equity Index Fund

Portfolio manager: Harvey Sidhu

Management company: HSBC Investment Funds (Luxembourg) SA

Legal form: Sub Fund of the Luxembourg based HSBC Amanah Funds SICAV

Investment adviser: Sinopia Asset Management (UK) Limited

Management style: Indexation (full replication)

Index: Dow Jones† Islamic Titans 100 Index.

Restrictions: Shariah principles

Universe: Dow Jones† Islamic Titans 100 Index

Fund tracking error: Expected maximum of 50bps

Number of stocks: Around 100

Management fees: 0.75%

Subscription fees: up to 5.54% of the net asset value per share

Redemption fees: None

Dealing: Daily

Valuation: Daily

Settlement: T+4

This document is intended for investment professionals only and should not be distributed to retail clients. HSBC Amanah Funds SICAV is a Luxembourg

domiciled SICAV and is regulated by the CSSF. HSBC Amanah Funds SICAV cannot be sold by anyone in any jurisdiction in which such offer or solicitation is not

lawful or in which the person making such an offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make such offer or solicitation.

All applications are made on the basis of the current HSBC Amanah Funds SICAV Prospectus, simplified prospectus and most recent annual and semi-annual

reports. These can be obtained on request and free of charge from HSBC Global Asset Management (UK) Limited or the local distributors. The securities

representing interests in HSBC Amanah Funds SICAV have not been and will not be registered under the US Securities Act of 1933 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 United States person, except in a transaction

which does not violate the Securities Law of the United States of America. The value of investments may go down as well as up and you may not get back the

full amount you invested. Where overseas investments are held the rate of exchange may cause the value of investments to go down as well as up. Markets

in some countries can be described as ‘emerging markets’. Some of these may involve a higher risk than where an investment is within a more established

market. Where a sub-fund invests predominately in one geographical area, any decline in economic conditions may affect prices and the value of underlying

investments. HSBC Global Asset Management (UK) Limited provides information to professional advisers and their clients on the investment products and

services of members of the HSBC Group. The material contained in this document is for information only and does not constitute investment advice or a

recommendation to any reader of this material to buy or sell investments. The funds mentioned in this document may not be registered for sale or available in

all jurisdictions. For available funds please contact your local HSBC office. It is possible that the restrictions placed on investment such as the prohibition on the

use of interest bearing investments, the donations to approved Charities and the limited universe of stocks available to the Investment Adviser may result in the

funds performing less well than funds with similar investment objectives which are not subject to Shariah restrictions.

This document is issued by HSBC Global Asset Management (UK) Limited, 8 Canada Square, Canary Wharf, London, E14 5HQ, UK. Authorised and regulated by

the Financial Services Authority and registered as number 122335. © Copyright. HSBC Global Asset Management 2009. All Rights Reserved.

This product is marketed in a sub-distributing capacity on a principal – to – principal basis by the HSBC Global Asset Management MENA, a unit that is part of

HSBC Bank Middle East Limited, PO Box 66, Dubai, UAE, which is incorporated and regulated by the Jersey Financial Services Commission. Services are subject

to the Bank’s terms and conditions. HSBC Bank Middle East Limited is a member of the HSBC Group.

The information provided has not been prepared taking into account the particular investment objectives, financial situation and needs of any particular investor.

As a result, investors using this information should assess whether it is appropriate in the light of their own individual circumstances before acting on it. The

information in this document is derived from sources believed to be reliable, but which have not been independently verified. However, HSBC Bank Middle East

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consideration has been given to the particular investment objectives, financial situation or particular needs of any recipient. Any transaction will be subject to

HSBC Bank’s Terms of Business. 16419/ME/0309

† Source: Dow Jones and Dow Jones Islamic Market Titans Index SM are service marks of Dow Jones & Company, Inc. and will be licensed for use by HSBC

Investment Funds (Luxembourg) S.A. The HSBC Amanah Global Equity Index Fund is not sponsored, endorsed, sold or promoted by Dow Jones and Dow Jones

makes no representation regarding the advisability of investing in the Fund.

† † Source: MSCI. The MSCI information may only be used for your internal use, may not be reproduced or redisseminated in any form and may not be used

to create any financial instruments or products or any indices. The MSCI information is provided on an ‘as is’ basis and the user of this information assumes

the entire risk of any use it may make or permit to be made of this information. Neither MSCI, any of its affiliates or any other person involved in or related

to compiling, computing or creating the MSCI information (collectively, the ‘MSCI Parties’) makes any express or implied warranties or representations with

respect to such information or the results to be obtained by the use thereof, and the MSCI Parties hereby expressly disclaim all warranties (including, without

limitation, all warranties of originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose) with respect

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consequential or any other damages (including, without limitation, lost profits) even if notified of, or if it might otherwise have anticipated, the possibility of

such damages.