HSBC Islamic Investing

The value of an investment in the portfolios and any income from them can go down as well as up and as with any investment you may not receive back the amount originally invested. Shariah investment restrictions may result in the funds performing less well than funds with similar objectives which are not subject to these restrictions.

• CoCo Bond Risk Contingent convertible securities (CoCo bonds) are comparatively untested, their income payments may be cancelled or suspended, and they are more vulnerable to losses than equities and can be highly volatile.
• Callable Bond Risk Any unexpected behaviour in interest rates could negatively impact the performance of callable debt securities (securities whose issuers have the right to pay off the security’s principal before the maturity date)
• Counterparty Risk The possibility that the counterparty to a transaction may be unwilling or unable to meet its obligations
• Credit Risk A bond or money market security could lose value if the issuer’s financial health deteriorates
• Default Risk The issuers of certain bonds could become unwilling or unable to make payments on their bonds
• Derivatives Risk Derivatives can behave unexpectedly. The pricing and volatility of many derivatives may diverge from strictly reflecting the pricing or volatility of their underlying reference(s), instrument or asset
• Emerging Markets Risk Emerging markets are less established, and often more volatile, than developed markets and involve higher risks, particularly market, liquidity and currency risks
• Exchange Rate Risk Changes in currency exchange rates could reduce or increase investment gains or investment losses, in some cases significantly
• Index Tracking Risk To the extent that the Fund seeks to replicate index performance by holding individual securities, there is no guarantee that its composition or performance will exactly match that of the target index at any given time (“tracking error”)
• Interest Rate Risk When interest rates rise, bond values generally fall. This risk is generally greater the longer the maturity of a bond investment and the higher its credit quality
• Investment Leverage Risk Investment Leverage occurs when the economic exposure is greater than the amount invested, such as when derivatives are used. A Fund that employs leverage may experience greater gains and/or losses due to the amplification effect from a movement in the price of the reference source
• Liquidity Risk is the risk that a Fund may encounter difficulties meeting its obligations in respect of financial liabilities that are settled by delivering cash or other financial assets, thereby compromising existing or remaining investors
• Operational Risk Operational risks may subject the Fund to errors affecting transactions, valuation, accounting, and financial reporting, among other things
• Sustainability Risk Sustainability risk means an environmental, social or governance event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of the investment.

Further information on the potential risks can be found in the Key Investor Information Document (KIID) and/or the Prospectus of Offering Memorandum.