Investor FAQ

What is a BRIC market?

BRIC is an acronym for Brazil, Russia, India and China. They are four of the fastest growing economies in the world. Compared to more mature markets like Australia, they can offer the potential for quite dynamic growth.

How risky are they?

All investments carry an element of risk.

This investment is linked to the performance of emerging market financial investments. Emerging markets investments generally carry a higher risk. Even with capital protection you should be aware that emerging market investments carry higher risks of underperformance through the impact of factors including trade barriers, exchange controls, and political instability, to name a few.

Additionally this particular investment is subject to specific risks such as HSBC BRIC Markets Fund movements (particularly given the leverage of up to 50%), foreign exchange risk, interest rate risk, tax risk and investment portfolio mechanics risk.

When you invest in the HSBC 100+ Series BRIC Investment you are relying on HSBC Bank Australia Limited's general creditworthiness and ability to meet its contractual obligations. There are also other risks, including inflation risk and the risk that HSBC terminates your investment early in which case you may receive less than your application amount.

These risk factors are why capital protection is a significant benefit. With HSBC 100+ Series BRIC Investment there is 100% capital protection at maturity. Also when the investment makes sufficient gains, a part of these is locked into the capital protection.

Is HSBC a good company for BRIC market investments?

HSBC is one of the world's leaders in BRIC investment. We have US$63 billion in assets under management across BRIC countries (as at December 2007). We also have:

• the world's largest offshore actively managed Brazil equity fund;
• strong record in managing Russian equities;
• the world's largest India equity mutual fund;
• the world's 2nd largest China equity fund.

(as at December 2007)

How does the rising capital protection work?

At the end of every month, if the notional dynamic portfolio value reaches a new high lock-in step, part of your investment return is locked into the capital protection level received at maturity. Every $0.10 stepped rise above $1.00 in the dynamic portfolio value per $1.00 invested will trigger a $0.03 lock-in.

For example, if the notional dynamic portfolio value increases per $1.00 invested to $1.32, then the total increase in the capital protection level would be $0.09, (equalling three steps of $0.03). This would lift the capital protection level at maturity from $1.00 to $1.09.

How would this investment fit into my portfolio?

BRIC markets can be used as a diversification tool in portfolios that are focussed on mature markets such as Australia.

If you are looking to access the potential growth of emerging markets, this investment might be suitable.

We recommend you seek independent financial advice on whether this product is suitable for you. If you would like to make an appointment with an HSBC financial planner please call 1300 308 880 (Monday to Friday 8am to 8pm) or visit our Appointment Advice page.

What are the fees?

The fees for the HSBC 100+ Series BRIC Investment are:

• HSBC Bank Australia Limited deducts an upfront fee of 2% (inc GST) and a trail fee of 0.50% p.a. (inc. GST) of the application amount.
• The dynamic portfolio management fee is 1.50% p.a.
• The HSBC BRIC Markets Fund shares that the HSBC BRIC Investments are linked to have a management fee of 1.50% p.a. and an administration fee of 0.35% p.a. taken from the fund value. They have no performance fees. The fees are explained in more detail in the PDS. Please speak with your financial planner on the details.

What happens if I want to exit early?

For the first three years there is a withdrawal fee if you exit early:

• 1st year 3%
• 2nd year 2%
• 3rd year 1%

One of the advantages of this investment is that there is no early withdrawal fee after the first three years. However if you do exit early you won't have the right to the capital protection at maturity and it is possible that you'll receive less than you invested.

Can I get an independent expert's view on the product?

Research reports produced by Lonsec and S&P on the product are available from this website. Please follow the links on the right-hand column to download them for an independent opinion on the strengths and weaknesses of the of the product.

How can I apply?

You can download a copy of the Combined Product Disclosure Statement (PDS) and Financial Services Guide (FSG). After reading the Combined PDS and FSG, you can fill in the attached application form and apply directly with HSBC. Alternatively you can apply through your financial adviser.

If you would like to make an appointment with an HSBC financial planner please call 1300 308 880 (Monday to Friday 8am to 8pm) or visit our Appointment Advice page.

Why is there a time limit?

Because of the structure of the dynamic portfolio and the capital protection, the investment requires a clear start and finish date. The investment begins on the issue date, 2 July 2008 and matures on 20 June 2014.

What is my worst case scenario?

Because of the 100% capital protection at maturity, your worst case scenario would be if the investment made no gains over the six years and so no profit lock-ins were added to the capital protection. You would then simply get the money you invested back.