452 FIFTH AVENUE
NEW YORK, NY 10018
(Address of principal executive offices) (Zip code)

CITI FUND SERVICES
3435 STELZER ROAD
COLUMBUS, OH 43219
(Name and address of agent for service)

HSBC Global Asset Management (USA) Inc.

HSBC Funds
Annual Report
October 31, 2016

Intermediary

MONEY MARKET FUNDS

Class A

Class B

Class C

Class D

Class E

Class

Service Class

Class I

Class Y

HSBC U.S. Government

Money Market Fund

FTRXX

HUBXX

HUMXX

HGDXX

HGEXX

HGGXX

HGFXX

HGIXX

RGYXX

HSBC U.S. Treasury

Money Market Fund

HWAXX

—

HUCXX

HTDXX

HTEXX

HTGXX

HTFXX

HBIXX

HTYXX

Table of Contents

HSBC Family of Funds

Annual Report - October 31, 2016

Glossary of Terms
Commentary From the Investment Manager	3
Portfolio Reviews	4
Portfolio Composition	6

Schedules of Portfolio Investments
HSBC U.S. Government Money Market Fund	7
HSBC U.S. Treasury Money Market Fund	9
Statements of Assets and Liabilities	10
Statements of Operations	12
Statements of Changes in Net Assets	13
Financial Highlights	15
Notes to Financial Statements	19
Report of Independent Registered Public Accounting Firm	29
Other Federal Income Tax Information	30
Table of Shareholder Expenses	31
Board of Trustees and Officers	33
Other Information	35

Glossary of Terms

Bloomberg Barclays Emerging Markets USD Aggregate Index is a flagship hard currency Emerging Markets debt benchmark that includes fixed and floating-rate US dollar-denominated debt issued from sovereign, quasi-sovereign, and corporate EM issuers.

Bloomberg Barclays Euro Aggregate Bond Index is a broad-based flagship benchmark that measures the investment-grade, euro-denominated, fixed-rate bond market, including treasuries, government-related, corporate, and securitized issues.

Bloomberg Barclays Global Aggregate Index is a broad-based measure of the global investment-grade fixed income markets. The three major components of this index are the U.S. Aggregate, the Pan-European Aggregate, and the Asian-Pacific Aggregate Indices. The index also includes Eurodollar and Euro-Yen corporate bonds, Canadian government, agency and corporate securities, and USD investment grade 144A securities.

Bloomberg Barclays Global High Yield Index is a multi-currency flagship measure of the global high-yield debt market. The index represents the union of the U.S. High Yield, the Pan-European High Yield, and Emerging Markets (EM) Hard Currency High Yield Indices. The high yield and emerging markets sub-components are mutually exclusive.

Bloomberg Barclays U.S. Corporate High-Yield Index covers the USD-denominated, non-investment grade, fixed-rate, taxable corporate bond market. Securities are classified as high-yield if the middle rating of Moody’s, Fitch, and S&P is Ba1/BB+/BB+ or below. The index excludes Emerging Markets debt.

Bloomberg Barclays U.S. Aggregate Bond Index is an index generally representative of investment-grade, USD-denominated, fixed-rate debt issues, taxable bond market, including Treasuries, government-related and corporate securities, asset-backed, mortgage-backed and commercial mortgage-backed securities, with maturities of at least one year.

Gross Domestic Product (“GDP”) is the value of goods and services produced in a given country in a given year.

Lipper U.S. Government Money Market Funds Average is an equally weighted average of mutual funds that invest principally in financial instruments issued or guaranteed by the U.S. government, its agencies, or its instrumentalities, with dollar-weighted average maturities of less than 90 days. These funds intend to keep a constant net asset value.

Lipper U.S. Treasury Money Market Funds Average is an equally weighted average of mutual funds that invest principally in U.S. Treasury obligations with dollar-weighted average maturities of less than 90 days. These funds intend to keep a constant net asset value.

London Interbank Offered Rate (LIBOR) is a daily reference rate based on the interest rates at which banks borrow unsecured funds from other banks in the London wholesale money market.

MSCI Brazil Index measures the performance of the large- and mid-cap segments of the Brazilian market. With 60 constituents, the index covers about 85% of the Brazilian equity universe.

MSCI Europe Australasia and Far East (“MSCI EAFE”) Index is an equity index which captures the large- and mid-cap representation across developed markets countries: Australia, Austria, Belgium, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland and the UK (excluding the US and Canada).

MSCI Emerging Markets (“MSCI EM”) Index is an index that captures the large- and mid-cap representation across 23 emerging markets countries: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Peru, Philippines, Poland, Qatar, Russia, South Africa, Taiwan, Thailand, Turkey and United Arab Emirates.

MSCI Golden Dragon Index captures the equity market performance of large- and mid-cap China securities (H shares, B shares, Red- Chips and P-Chips) and non-domestic China securities listed in Hong Kong and Taiwan.

MSCI World Index is part of a broad global equity benchmark that represents large- and mid-cap equity performance across 23 developed markets countries. It covers approximately 85% of the free float-adjusted market capitalization in each country and MSCI World benchmark does not offer exposure to emerging markets.

Standard & Poor’s 500 (“S&P 500”) Index is an index that is widely regarded as a gauge of the U.S. equities market. This index includes 500 leading companies in leading industries of the U.S. economy. The S&P 500 Index focuses on the large-cap segment of the market, with approximately 80% coverage of U.S. equities.

Lipper is an independent mutual fund performance monitor whose results are based on total return and do not reflect a sales charge.

Securities indices are unmanaged and assume reinvestment of all distributions and interest payments and do not take in account brokerage fees or expenses. Securities in the Funds do not match those in the indices and performance of the Funds will differ. Investors cannot invest directly in an index.

2 HSBC FAMILY OF FUNDS

Commentary From the Investment Manager

HSBC Global Asset Management (USA) Inc.

Global Economic Review

The global economy remained resilient over the 12 month period from November 1, 2015, through October 31, 2016, even as a wide range of developments challenged its stability and exposed weaknesses.

Concern about slowing global economic growth was a central theme early in the period, as low commodity prices and weak economic data in major developed economies dragged on equity markets. Conditions improved in mid-February 2016, however, as oil prices rose and the Chinese economy showed signs of stabilization. Supportive monetary policies from the European Central Bank (ECB) and several other central banks also helped send stocks higher. The U.K.’s June Brexit referendum shocked global markets, but a swift recovery reversed losses in most markets before the end of the period.

In December 2015, the U.S. Federal Reserve raised its federal funds rate 25 basis points (0.25%) from a target range of 0.00% to 0.25% to a range of 0.25% to 0.50%. The Fed then adopted a more “dovish” outlook in 2016, softening its rate-hiking stance and postponing further rate increases.

U.S. gross domestic product growth (GDP¹) slowed in the first three quarters of the period. Preliminary estimates point to more rapid but still modest growth in the third quarter of 2016. Economic data in the U.S. was mixed for much of the 12-month period, with positive signs of general health in the labor and housing markets.

European economies saw steady but slow growth. Quarterly GDP growth in the euro zone peaked at 0.5% during the period as improving labor markets, rising personal consumption and increasing manufacturing activity were offset by political uncertainty and weak global demand. The ECB maintained its accommodative monetary policy and implemented new stimulus measures that included broad interest rate cuts and incentives for banks to lend.

In the first few months of the period, Chinese industrial overcapacity drove down demand and prices for commodities, helping extend a multi-year slump in the asset class that began in 2014. Commodities-dependent countries such as Russia and Brazil were particularly vulnerable in this environment. However, this dynamic shifted early in 2016 as commodities began to recover and trended upwards for the remainder of the period.

The Bank of Japan shifted strategies in September after several years of quantitative easing, launching a new plan to maintain long-term interest rate targets. The new tactic was preceded one month earlier by President Shinzo Abe’s announcement of new stimulus measures valued at $276 billion.

Rising prices for oil and other commodities, such as iron ore, provided a boost to many emerging economies in early 2016, including Russia and Brazil. Yet the Russian economy continued to experience meager growth in the wake of heightened Western sanctions. Meanwhile, the Brazilian economy struggled with a recession and ongoing political turmoil and the impeachment trial of President Dilma Rousseff. Brazilian equities still managed to post strong gains in the final months of the period as Rousseff’s successor, Michel Temer, introduced a market-friendly economic program.

Global inflation remained low during the period. A strong U.S. dollar encouraged U.S. imports and discouraged exports. The strong dollar also created a challenging environment for countries that hold high levels of debt denominated in the U.S. dollar, such as Mexico and Turkey.

Market Review

Global equity delivered mixed results for the period. Stocks lost ground twice early in the period: once during the first four months of the period and then again after the June Brexit vote. Equity markets rebounded after both market corrections, and by early September, some major equity indexes were hitting 52-week highs.

Emerging market equities outperformed developed market equities in three of the four quarters during the period and for the period overall. The strong performance for these stocks was fueled by rising commodity prices, accommodative monetary policy, and a return to risk-on sentiment among investors attracted by long-term growth prospects and attractive valuations. The MSCI Emerging Market Index¹ returned 9.27% over the period while the MSCI EAFE Index¹ of international stocks in developed markets returned -3.23% and the MSCI World Index¹ returned 1.18%.

Brazilian stocks soared during the period, with the MSCI Brazil Index¹ gaining more than 71.23% on that nation’s new economic plan. Asian emerging market gains were less dramatic, with the MSCI Golden Dragon Index¹ of large- and mid-cap securities in China, Hong Kong, and Taiwan climbing 6.96%.

U.S. equities posted modest gains during the period; the S&P 500 Index¹ of large-company stocks returned 4.51%. U.S. economic fundamentals generally improved throughout the period.

Japanese stocks declined during the first half of the period and plummeted after the June Brexit vote, only to rebound strongly enough to end the period with a modest gain. European stocks lost ground overall during the period.

The low-rate environment supported prices on U.S. government and corporate issues for much of the 12-month period. Rates on U.S. Treasuries rose modestly from early July 2016 through the end of the period in response to improving economic data and increasingly hawkish commentary from the Fed.

The Bloomberg Barclays U.S. Aggregate Bond Index¹, which tracks the broad U.S. investment-grade fixed income market, returned 4.37% for the 12-month period through October 31, 2016. Meanwhile the Bloomberg Barclays U.S. Corporate High-Yield Index¹ gained 10.14% during the same time.

Global fixed income markets posted significant gains during the period as well. The Bloomberg Barclays Global Aggregate Index¹ gained 6.44% for the 12-month period through October 31, 2016, while the Bloomberg Barclays Global High Yield Index¹ gained 9.83%.

Fixed income markets in Europe posted modest gains for the period. Increased monetary stimulus from the ECB supported demand for high-yield bonds, helping fixed income markets stabilize in the aftermath of the Brexit vote. The Bloomberg Barclays Euro Aggregate Bond Index¹ returned 3.72%.

Emerging markets debt rallied during the period as investors became increasingly tolerant of risk in search of yield and returns. The Bloomberg Barclays Emerging Markets USD Aggregate Index¹ returned 10.23% during the 12-month period.

1 For additional information, please refer to the Glossary of Terms.

HSBC FAMILY OF FUNDS 3

Portfolio Reviews (Unaudited)

HSBC U.S. Government Money Market Fund
(Class A Shares, Class B Shares, Class C Shares, Class D Shares, Class E Shares, Class I Shares,
Intermediary Class, Intermediary Service Class and Class Y Shares)

by John Chiodi
Senior Portfolio Manager

Moody’s and Standard & Poor’s
have assigned an “Aaa-mf” and
“AAAm” rating to the
HSBC U.S. Government
Money Market Fund.¹

Investment Concerns

For a complete description of these and other risks associated with investment in a mutual fund, please refer to the Fund’s prospectus.

Portfolio Performance

Yields on U.S. government money market securities rose during the period ended October 31, 2016.

Early in the period (December 2015), the Federal Reserve Board (the Fed) raised the target range for its key short-term interest rate for the first time in almost a decade. That rate rose from a range of 0.00% to 0.25% to a range of 0.25% to 0.50%. The Fed noted that the small increase was likely the first in a series of modest interest rate hikes, pending signs of improvement in the domestic and global economies. However, less-than-impressive economic performance through October Moody’s and Standard & Poor’s have assigned an “Aaa-mf” and “AAAm” rating to the HSBC U.S. Government Money Market Fund.¹ 2016 convinced the Fed to leave interest rates unchanged for the duration of the period.

Treasury yields had already priced in the first December rate hike, along with additional rate increases that they assumed would follow. The Fund benefited from a steepening of the yield curve during the first half of the period. We added Treasury coupons that matured in July and August; those securities earned a rate of interest that priced in at least two additional rate hikes, though those increases never ultimately happened.

In the second half of the period, pending money market reforms led to increased demand for government bonds, which kept yields artificially low. As a response, the Fund bought floating rate notes pegged to LIBOR⁷, which rose during the period, thus providing higher yields to the Fund. This barbell-like strategy reduced the impact of those pending reforms on the Fund.^†

The HSBC U.S. Prime Money Market Fund merged with and into the Fund in the last month of the reporting period. The move had no material effect on the Fund’s performance.^†

^† Portfolio composition is subject to change.

	Average Annual						Expense
Fund Performance	Total Return (%)					Yield (%)²	Ratio (%)³
	Inception	1	5	10	Since	7-Day
As of October 31, 2016	Date	Year	Year	Year	Inception	Average	Gross	Net
Class A	5/3/90	0.02	0.02	0.70	2.60	0.01	0.68	0.68
Class B⁴	9/11/98	-3.99	0.02	0.65	1.47	0.01	1.28	1.28
Class C⁵	11/20/06	—	—	—	1.39	—	1.28	1.28
Class D	4/1/99	0.02	0.02	0.73	1.64	0.01	0.53	0.53
Class E	7/12/16	—	—	—	0.11	0.18	0.28	0.28
Class I⁶	12/24/03	0.21	0.06	—	1.01	0.31	0.18	0.18
Intermediary Class	7/12/16	—	—	—	0.11	0.25	0.33	0.33
Intermediary Service Class	7/12/16	—	—	—	0.10	0.25	0.38	0.38
Class Y	7/1/96	0.12	0.04	0.81	2.23	0.18	0.28	0.28
Lipper U.S. Government
Money Market Funds Average⁷	—	0.03	0.02	0.74	2.66⁸	N/A	N/A	N/A

Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. Total return figures include change in share price, reinvestment of dividends and capital gains and do not reflect taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed may be worth more or less than the original cost. To obtain performance information current to the most recent month end, please call 1-800-782-8183.

Certain returns shown include monies received by the Fund in respect of a one-time payment in respect of a class action settlement and a one-time reimbursement from HSBC Global Asset Management (USA) Inc. related to past marketing arrangements. As a result, the Fund’s total returns for those periods were higher than they would have been had the Fund not received the payments.

1		The “Aaa-mf ” and “AAAm” money market fund rating is historical and reflects Moody’s and Standard & Poor’s opinion as to the quality of the Fund’s investments, liquidity management, and operations and trading support. Periodic reviews are conducted to ensure a secure operations environment. Moody’s and Standard & Poor’s ratings represent an opinion only, not a recommendation to buy or sell. Obligations rated A-1+, A-1 or P-1 are rated in the highest short-term rating category by Standard & Poor’s (A-1+ or A-1) or Moody’s Investor Service (P-1). The obligor’s capacity to meet its financial commitments on these obligations is regarded to be “extremely strong” (A-1+), “strong” (A-1) or “superior” (P-1).
2		The seven-day yield quotation more closely reflects the current earnings of the money market fund than the total return quotation. The seven-day yield reflects voluntary fee waivers/expense reimbursements. Without the voluntary fee waivers/expense reimbursements, the yields would have been -0.29%, -0.89%, -0.14%, 0.11%, 0.21%, 0.06%, 0.01% and 0.11% for Class A Shares, Class B Shares, Class D Shares, Class E Shares, Class I Shares, Intermediary Class, Intermediary Service Class and Class Y Shares, respectively.
3		Reflects the expense ratio as reported in the prospectus dated February 28, 2016. Additional information pertaining to the October 31, 2016 expense ratios can be found in the financial highlights.
4		Reflects the applicable contingent deferred sales charge, maximum of 4.00%, for returns presented.
5		Reflects the applicable contingent deferred sales charge, maximum of 1.00%, for returns presented. Class C Shares were operational during a portion of the periods presented. Amounts reflect performance for the period of time the Class had operations, which was 346, 362 and 351 days during the years ended October 31, 2006, 2009 and 2010, respectively. The Class was not operational during the entire fiscal years ended October 31, 2007, 2008, 2011, 2012, 2013, 2014, 2015 and 2016. No returns are presented for the one-year, five-year and 10-year periods with non-continuous operations.
6		Class I Shares were operational during a portion of the periods presented. Amounts reflect performance for the period of time the Class had operations, which was 10, 89, 136 and 357 days during the years ended October 31, 2004, 2005, 2006 and 2007, respectively. The Class was operational during the entire years ended October 31, 2008 through 2016. No returns are presented for the 10-year period with non-continuous operations.
7		For additional information, please refer to the Glossary of Terms.
8		Return for the period April 30, 1990 to October 31, 2016.

4 HSBC FAMILY OF FUNDS

Portfolio Reviews (Unaudited)

HSBC U.S. Treasury Money Market Fund
(Class A Shares, Class C Shares, Class D Shares, Class E Shares, Class I Shares, Intermediary Class, Intermediary Service Class and Class Y Shares)

by John Chiodi
Senior Portfolio Manager

Moody’s and Standard & Poor’s
have assigned an “Aaa-mf” and
“AAAm” rating to the
HSBC U.S. Treasury
Money Market Fund.¹

Investment Concerns

An investment in the Fund is not insured or guaranteed by the FDIC or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund. The Fund’s income may be subject to the federal alternative minimum tax and to certain state and local taxes.

For a complete description of these and other risks associated with investment in a mutual fund, please refer to the Fund’s prospectus.

Portfolio Performance

The Federal Reserve Board (the Fed) raised the target range for its federal funds rate (a short-term interest rate that significantly influences Treasury bill yields) in December 2015. As a result, Treasury bill yields increased during the reporting period ended October 31, 2016.

Following that rate increase, the Fed implied that there may be additional increases to come. However, less-than-impressive economic performance, caused the Fed to leave the rate unchanged for the rest of the reporting period.

The typical year-end demand—and the resulting dip in yield—for Treasury bills from hedge funds and other institutional investors did not materialize at the end of 2015. This allowed the Fund to benefit in the first half of the period from the improving performance on its shorter-term issues. The Fund also benefited from the addition of floating rate bonds throughout the reporting period, as these issues performed well in a rising rate environment.

In the second half of the period, regulatory money market reforms led some investors out of the market, which in turn led to an increased supply of short-term Treasury bills. As a result, yields rose, which benefited the Fund during the latter half of the period^†

† Portfolio composition is subject to change.

				Average Annual				Expense
Fund Performance				Total Return (%)			Yield (%)²	Ratio (%)³
	Inception		1	5	10	Since	7-Day
As of October 31, 2016	Date		Year	Year	Year	Inception	Average	Gross	Net
Class A⁴		5/24/01	—	—	—	1.08	—	0.69	0.69
Class C⁵		12/24/03	—	—	—	0.04	—	1.29	1.29
Class D		5/14/01	0.00	0.00	0.59	0.98	0.00	0.54	0.54
Class E		7/12/16	—	—	—	0.11	0.36	0.29	0.29
Class I⁶		12/30/03	0.13	0.03	0.68	1.11	0.19	0.19	0.19
Intermediary Class		7/12/16	—	—	—	0.11	0.36	0.34	0.34
Intermediary Service Class		7/12/16	—	—	—	0.10	0.13	0.39	0.39
Class Y		5/11/01	0.04	0.01	0.64	1.11	0.08	0.29	0.29
Lipper U.S. Treasury Money Market Funds Average⁷		—	0.03	0.01	0.61	1.05⁸	N/A	N/A	N/A

1	The “Aaa-mf ” and “AAAm” money market fund rating is historical and reflects Moody’s and Standard & Poor’s opinion as to the quality of the Fund’s investments, liquidity management, and operations and trading support. Periodic reviews are conducted to ensure a secure operations environment. Moody’s and Standard & Poor’s ratings represent an opinion only, not a recommendation to buy or sell. Obligations rated A-1+, A-1 or P-1 are rated in the highest short-term rating category by Standard & Poor’s (A-1+ or A-1) or Moody’s Investor Service (P-1). The obligor’s capacity to meet its financial commitments on these obligations is regarded to be “extremely strong” (A-1+), “strong” (A-1) or “superior” (P-1).
2	The seven-day yield quotation more closely reflects the current earnings of the money market fund than the total return quotation. The seven-day yield reflects voluntary fee waivers/expense reimbursements. Without the voluntary fee waivers/expense reimbursements, the yields would have been -0.25%, 0.00%, 0.10%, -0.05%, -0.10% and 0.00% for Class D Shares, Class E Shares, Class I Shares, Intermediary Class, Intermediary Service Class and Class Y Shares, respectively.
3	Reflects the expense ratio as reported in the prospectus dated February 28, 2016. Additional information pertaining to the October 31, 2016 expense ratios can be found in the financial highlights.
4	Class A Shares were operational during a portion of the periods presented. Amounts reflect performance for the period of time the Class had operations, which was 201 days during the year ended October 31, 2014. The Class was operational during the entire years ended October 31, 2001 through 2013. The Class was not operational during the entire years ended October 31, 2015 and 2016. No returns are presented for the one-year, five-year and 10-year periods with non-continuous operations.
5	Reflects the applicable contingent deferred sales charge, maximum of 1.00%, for returns presented. Class C Shares were operational during a portion of the periods presented. Amounts reflect performance for the period of time the Class had operations, which was 26 and 351 days during the years ended October 31, 2008 and 2010, respectively. The Class was operational during the entire years ended October 31, 2005, 2006, 2007 and 2009. The Class was not operational during the entire years ended October 31, 2011 through 2015 and 2016. No returns are presented for the one-year, five-year and 10-year periods with non-continuous operations.
6	Class I Shares were operational during a portion of the periods presented. Amounts reflect performance for the period of time the Class had operations, which was 13 and 280 days during the years ended October 31, 2004 and 2005, respectively. The Class was operational during the entire years ended October 31, 2006 through 2016.
7	For additional information, please refer to the Glossary of Terms.
8	Return for the period April 30, 2001 to October 31, 2016.

HSBC FAMILY OF FUNDS 5

Portfolio Reviews

Portfolio Composition*
October 31, 2016 (Unaudited)

HSBC U.S. Government Money Market Fund
Investment Allocation	Percentage of Investments at Value (%)
Repurchase Agreements		42.8
U.S. Government and
Government Agency
Obligations		32.8
U.S. Treasury Obligations		24.4
Total		100.0

HSBC U.S. Treasury Money Market Fund
Investment Allocation	Percentage of Investments at Value (%)
U.S. Treasury Obligations		100.0
Total		100.0

____________________

*	Portfolio composition is subject to change.

6 HSBC FAMILY OF FUNDS

HSBC U.S. GOVERNMENT MONEY MARKET FUND

Schedule of Portfolio Investments—as of October 31, 2016

U.S. Government and Government Agency
Obligations – 31.1%

		Principal	Amortized
		Amount ($)	Cost ($)
Federal Farm Credit Bank – 3.8%
	0.47%, 12/28/16(a)	41,000,000	40,968,840
	0.50%, 10/25/17(b)	100,000,000	100,000,000
	0.51%, 4/20/18(b)	50,000,000	49,996,088
	0.52%, 4/10/17(b)	50,000,000	49,997,786
	0.53%, 4/28/17(b)	50,000,000	49,999,455
	0.56%, 4/26/17(b)	10,175,000	10,172,558
	0.58%, 4/17/17(b)	20,604,000	20,605,049
	0.59%, 6/27/17(a)	10,000,000	9,960,994
	0.60%, 12/22/17(b)	66,000,000	65,992,389
			397,693,159
Federal Home Loan Bank – 20.2%
	0.25%, 11/10/16(a)	50,000,000	49,996,500
	0.28%, 11/14/16(a)	200,000,000	199,978,333
	0.35%, 11/25/16(a)	72,610,000	72,592,330
	0.40%, 3/22/17(b)	100,000,000	100,000,000
	0.41%, 4/21/17(b)	130,000,000	130,000,000
	0.43%, 3/16/17(b)	30,000,000	30,001,851
	0.48%, 1/9/17(b)	85,000,000	85,000,000
	0.50%, 11/18/16(b)	200,000,000	200,000,000
	0.51%, 9/12/17(b)	100,000,000	100,003,711
	0.51%, 11/3/16(b)	63,000,000	63,000,000
	0.51%, 8/21/17(b)	100,000,000	100,000,000
	0.53%, 11/16/16(a)	30,000,000	29,993,000
	0.54%, 4/25/17(b)	14,850,000	14,857,410
	0.57%, 9/7/17(b)	190,000,000	190,017,401
	0.58%, 8/22/17(b)	16,000,000	16,008,675
	0.58%, 5/30/17(a)	50,000,000	49,992,692
	0.58%, 1/19/18(b)	150,000,000	150,000,000
	0.60%, 11/8/17(b)	175,000,000	175,078,519
	0.67%, 11/2/17(b)	50,000,000	49,978,811
	0.80%, 10/10/17(b)	100,000,000	100,000,000
	0.81%, 10/27/17(b)	8,000,000	8,000,176
	0.81%, 10/27/17(b)	8,000,000	8,000,176
	0.83%, 1/8/18(b)	100,000,000	100,000,000
	0.83%, 9/29/17(b)	100,000,000	100,053,050
			2,122,552,635
Federal Home Loan Mortgage Corp. – 3.6%
	0.43%, 4/28/17(b)	100,000,000	100,000,000
	0.54%, 1/13/17(b)	232,500,000	232,495,409
	0.58%, 4/27/17(b)	16,000,000	15,996,157
	0.75%, 7/14/17	20,900,000	20,919,548
			369,411,114
Federal National Mortgage Association — 3.5%
	0.54%, 10/5/17(b)	100,000,000	99,990,601
	0.54%, 8/16/17(b)	150,000,000	149,968,165
	0.55%, 1/26/17(b)	100,000,000	99,997,599
	0.81%, 12/20/17(b)	27,800,000	27,810,133
			377,766,498
TOTAL U.S. GOVERNMENT
	AND GOVERNMENT
	AGENCY OBLIGATIONS
	(Cost $3,267,423,406)		3,267,423,406

U.S. Treasury Obligations – 23.2%

U.S. Treasury Bill – 2.6%
	0.32%, 1/12/17(a)	50,000,000	49,967,900
	0.43%, 2/2/17(a)	225,000,000	224,748,803
			274,716,703
U.S. Treasury Notes – 20.6%
	0.50%, 2/28/17	75,000,000	74,997,972
	0.50%, 4/30/17	120,000,000	119,975,371
	0.63%, 12/31/16	280,000,000	280,112,576
	0.63%, 2/15/17	125,000,000	125,072,731
	0.63%, 5/31/17	50,000,000	50,025,231
	0.75%, 1/15/17	100,000,000	100,082,486
	0.75%, 3/15/17	100,000,000	100,106,626
	0.75%, 6/30/17	50,000,000	50,050,645
	0.88%, 12/31/16	350,000,000	350,277,066
	0.88%, 2/28/17	75,000,000	75,116,211
	0.88%, 4/30/17	180,000,000	180,318,626
	1.00%, 3/31/17	375,000,000	375,784,211
	3.00%, 2/28/17	150,000,000	151,224,269
	3.25%, 12/31/16	50,000,000	50,231,540
	4.75%, 8/15/17	90,000,000	92,900,596
			2,176,276,157
TOTAL U.S. TREASURY
	OBLIGATIONS
	(Cost $2,450,992,860)		2,450,992,860

Repurchase Agreements – 40.5%

BNP Paribas, 0.32%,
	11/1/16, Purchased on
	10/31/16, with maturity
	value of $200,001,778,
	collateralized by U.S. Treasury
	Obligations, 2.25%-8.75%,
	8/15/20-3/31/21, fair value
	$204,000,037	200,000,000	200,000,000
BNP Paribas, 0.34%, 11/1/16,
	Purchased on 10/31/16,
	with maturity value of
	$100,000,944, collateralized
	by various U.S. Government
	and Government Agency
	Obligations, 2.50%-7.50%,
	7/1/18-9/1/46, fair value
	$102,000,001	100,000,000	100,000,000
Citigroup Global Markets,
	0.34%, 11/1/16, Purchased
	on 10/31/16, with maturity
	value of $100,000,944,
	collateralized by U.S. Treasury
	Obligations, 0.00%-2.38%,
	1/15/17-5/15/44, fair value
	$102,000,000	100,000,000	100,000,000
Federal Reserve Bank, N.Y.,
	0.25%, 11/1/16, Purchased
	on 10/31/16, with maturity
	value of $2,275,015,799,
	collateralized by U.S. Treasury
	Obligations, 2.00%-5.00%,
	3/31/21-2/15/43, fair value
	$2,275,015,855	2,275,000,000	2,275,000,000

See notes to financial statements.

HSBC FAMILY OF FUNDS 7

HSBC U.S. GOVERNMENT MONEY MARKET FUND

Schedule of Portfolio Investments—as of October 31, 2016 (continued)

Repurchase Agreements, continued

			Principal	Amortized
			Amount ($)	Cost ($)
Goldman Sachs & Co., 0.32%,
	11/1/16, Purchased on
	10/31/16, with maturity value
	of $100,000,889, collateralized
	by various U.S. Government
	and Government Agency
	Obligations, 3.00%-4.50%,
	5/1/28-8/1/44, fair value
	$102,000,000		100,000,000		100,000,000
Goldman Sachs & Co., 0.33%,
	11/3/16, Purchased on
	10/27/16, with maturity value
	of $300,019,250, collateralized
	by various U.S. Government
	and Government Agency
	Obligations, 2.00%-6.50%,
	12/1/18-9/1/46, fair value
	$306,000,000	.	300,000,000		300,000,000
Merrill Lynch Pierce Fenner &
	Smith, Inc., 0.31%, 11/1/16,
	Purchased on 10/31/16,
	with maturity value of
	$150,001,292, collateralized
	by U.S. Treasury Obligations,
	0.13%, 1/15/23, fair value
	$153,000,023		150,000,000		150,000,000
RBS Securities, Inc., 0.28%,
	11/1/16, Purchased on
	10/31/16, with maturity value
	of $400,003,111, collateralized
	by U.S. Treasury Obligations,
	0.13%, 4/15/17-7/15/26,
	fair value $408,004,466		400,000,000		400,000,000
Societe’ Generale, 0.33%,
	11/1/16, Purchased on
	10/31/16, with maturity value
	of $300,002,750, collateralized
	by various U.S. Government
	and Government Agency
	Obligations, 0.00%-8.00%,
	11/3/16-2/15/45, fair value
	$306,000,001	.	300,000,000		300,000,000
Societe’ Generale, 0.38%,
	11/15/16, Purchased on
	10/12/16, with maturity value
	of $250,089,722, collateralized
	by various U.S. Government
	and Government Agency
	Obligations, 0.00%-4.00%,
	11/3/16-05/1/46, fair value
	$255,000,000		250,000,000		250,000,000
Toronto Dominion Bank NY,
	0.28%, 11/1/16, Purchased on
	10/31/16, with maturity value
	of $100,000,778, collateralized
	by U.S. Treasury Obligations,
	0.00%-2.50%, 9/14/17-
	2/15/45, fair value
	$102,000,083		100,000,000		100,000,000
TOTAL REPURCHASE
	AGREEMENTS
	(Cost $4,275,000,000)				4,275,000,000
TOTAL INVESTMENT
	SECURITIES
	(Cost $9,993,416,266) – 94.8%				9,993,416,266
Other Assets
	(Liabilities) – 5.2%				551,201,559
NET ASSETS – 100%				$	10,544,617,825

____________________

(a)	Discount note. Rate presented represents the effective yield at time of purchase.
(b)	Variable rate security. The rate presented represents the rate in effect on October 31, 2016. These securities are deemed to have a maturity remaining until the next adjustment of the interest rate or the longer of the demand period or time to the next readjustment.

8 HSBC FAMILY OF FUNDS

See notes to financial statements.

HSBC U.S. TREASURY MONEY MARKET FUND

Schedule of Portfolio Investments—as of October 31, 2016

U.S. Treasury Obligations – 100.0%
		Principal	Amortized
		Amount ($)	Cost ($)
U.S. Treasury Bills – 63.1%
	0.08%, 11/3/16(a)	131,000,000		130,999,158
	0.22%, 11/17/16(a)	300,000,000		299,969,068
	0.23%, 11/10/16(a)	225,000,000		224,985,669
	0.31%, 1/5/17(a)	150,000,000		149,915,500
				805,869,395
U.S. Treasury Notes – 36.9%
	0.41%, 4/30/17(b)	110,000,000		109,995,501
	0.42%, 7/31/17(b)	55,000,000		54,994,051
	0.42%, 1/31/17(b)	85,000,000		85,002,867
	0.51%, 10/31/17(b)	55,000,000		55,000,351
	0.53%, 4/30/18(b)	40,000,000		40,019,709
	0.61%, 1/31/18(b)	25,000,000		25,012,926
	0.63%, 2/15/17	50,000,000		50,021,868
	0.75%, 6/30/17	25,000,000		25,030,865
	0.88%, 2/28/17	25,000,000		25,033,112
				470,111,250
TOTAL U.S. TREASURY OBLIGATIONS (Cost $1,275,980,645)				1,275,980,645
TOTAL INVESTMENT SECURITIES (Cost $1,275,980,645) – 100.0%				1,275,980,645
Other Assets (Liabilities) – 0.0%				435,444
NET ASSETS – 100%			$	1,276,416,089

____________________

(a)	Discount note. Rate presented represents the effective yield at time of purchase.
(b)	Variable rate security. The rate presented represents the rate in effect on October 31, 2016. These securities are deemed to have a maturity remaining until the next adjustment of the interest rate or the longer of the demand period or time to the next readjustment.

See notes to financial statements.

HSBC FAMILY OF FUNDS 9

HSBC FAMILY OF FUNDS

Statements of Assets and Liabilities—as of October 31, 2016

	HSBC U.S.			HSBC
	Government			U.S. Treasury
	Money Market			Money Market
	Fund			Fund
Assets:
Investments, at amortized cost		$	5,718,416,266		$	1,275,980,645
Repurchase agreements, at cost			4,275,000,000			—
Total Investments			9,993,416,266			1,275,980,645
Cash			546,287,084			429,345
Interest receivable			6,464,602			171,577
Prepaid expenses and other assets			293,575			77,245
Total Assets			10,546,461,527			1,276,658,812

Liabilities:
Dividends payable			442,104			43,888
Accrued expenses and other liabilities:
Investment Management			345,878			63,455
Administration			286,433			42,579
Shareholder Servicing			299,261			15,302
Accounting			7,563			4,133
Custodian fees			16,000			2,840
Transfer Agent			4,399			3,978
Other			442,064			66,548
Total Liabilities			1,843,702			242,723
Net Assets		$	10,544,617,825		$	1,276,416,089

Composition of Net Assets:
Capital			10,544,511,121			1,276,402,837
Accumulated net investment income/(distributions in excess of net investment income)			—			0
Accumulated net realized gains/(losses) from investments			106,704			13,252
Net Assets		$	10,544,617,825		$	1,276,416,089

Net Assets:
Class A Shares		$	1,720,091		$	—
Class B Shares			48,774			—
Class D Shares			1,949,225,350			214,041,232
Class E Shares			2,002			1,001
Class I Shares			4,687,197,461			346,398,881
Intermediary Class Shares			10,121,428			1,001
Intermediary Service Class Shares			5,003,408			18,107,928
Class Y Shares			3,891,299,311			697,866,046
		$	10,544,617,825		$	1,276,416,089
Shares Outstanding:
($0.001 par value, unlimited number of shares authorized):
Class A Shares			1,720,084			—
Class B Shares			48,761			—
Class D Shares			1,949,012,249			214,038,795
Class E Shares			2,002			1,001
Class I Shares			4,687,299,004			346,430,056
Intermediary Class Shares			10,121,429			1,001
Intermediary Service Class Shares			5,003,568			18,107,934
Class Y Shares			3,891,314,380			697,829,019

10 HSBC FAMILY OF FUNDS

See notes to financial statements.

HSBC FAMILY OF FUNDS

Statements of Assets and Liabilities—as of October 31, 2016 (continued)

	HSBC U.S.		HSBC
	Government		U.S. Treasury
	Money Market		Money Market
	Fund		Fund
Net Asset Value, Offering Price and Redemption Price per share:
Class A Shares	$	1.00	$	—
Class B Shares(a)	$	1.00	$	—
Class D Shares	$	1.00	$	1.00
Class E Shares	$	1.00	$	1.00
Class I Shares	$	1.00	$	1.00
Intermediary Class Shares	$	1.00	$	1.00
Intermediary Service Class Shares	$	1.00	$	1.00
Class Y Shares	$	1.00	$	1.00

____________________

(a)

Redemption price per share varies by length of time shares are held.

See notes to financial statements.

HSBC FAMILY OF FUNDS 11

HSBC FAMILY OF FUNDS

Statements of Operations—For the year ended October 31, 2016

	U.S.
	Government				U.S. Treasury
	Money Market				Money Market
	Fund				Fund
Investment Income:
Interest		$	20,717,712			$	4,095,614
Total Investment Income			20,717,712				4,095,614

Expenses:
Investment Management			5,930,144				1,446,940
Operational Support:
Class A Shares			1,048				—
Class B Shares			48				—
Class D Shares			1,005,360				225,525
Intermediary Class Shares			166				—
Intermediary Service Class Shares			656				1,140
Class Y Shares			3,485,538				826,671
Administration:
Class A Shares			442				—
Class B Shares			21				—
Class D Shares			421,546				95,565
Class E Shares			—				—
Class I Shares			601,457				164,425
Intermediary Class Shares			66				—
Intermediary Service Class Shares			284				451
Class Y Shares			1,485,809				348,303
Distribution:
Class B Shares			366				—
Shareholder Servicing:
Class A Shares			4,193				—
Class B Shares			121				—
Class D Shares			2,513,433				563,819
Class E Shares			—				—
Intermediary Class Shares			83				—
Intermediary Service Class Shares			656				1,140
Accounting			64,266				59,189
Compliance Services			119,663				21,381
Custodian			318,936				85,410
Printing			389,054				35,134
Professional			1,185,981				271,220
Transfer Agent			41,766				40,642
Trustee			237,924				63,911
Registration fees			121,066				125,192
Other			202,405				118,756
Total expenses before fee and expense reductions			18,132,498				4,494,814
Fees voluntarily reduced/reimbursed by Investment Adviser			(2,657,359	)			(653,195	)
Fees voluntarily reduced by Administrator			(223,048	)			(55,040	)
Fees voluntarily reduced by Distributor			(366	)			—
Fees voluntarily reduced by Shareholder Servicing Agent			(1,443,022	)			(479,108	)
Custody earnings credits			(271,516	)			(41,752	)
Net Expenses			13,537,187				3,265,719

Net Investment Income			7,180,525				829,895

Realized/Unrealized Gains/(Losses) from Investments:
Net realized gains/(losses) from investment securities			106,704				15,357
Net realized/unrealized gains (losses) on investments			106,704				15,357
Change in Net Assets Resulting from Operations		$	7,287,229			$	845,252

____________________

Amounts designated as “—“ are $0 or have been rounded to $0.

12 HSBC FAMILY OF FUNDS

See notes to financial statements.

HSBC FAMILY OF FUNDS

Statements of Changes in Net Assets

	HSBC U.S. Government								HSBC U.S. Treasury
	Money Market Fund								Money Market Fund
	Year Ended				Year Ended				Year Ended				Year Ended
	October 31, 2016				October 31, 2015				October 31, 2016				October 31, 2015
Investment Activities:
Operations:
Net investment income		$	7,180,525			$	1,915,453			$	829,895			$	—
Net realized gains/(losses) from investments			106,704				58,725				15,357				36,870
Change in net assets resulting from operations			7,287,229				1,974,178				845,252				36,870

Distributions:
Net investment income:
Class A Shares			(167	)			(109	)			—				—
Class B Shares			(7	)			(15	)			—				—
Class D Shares			(157,507	)			(233,083	)			(16	)			—
Class E Shares			(1	)			—				(1	)			—
Class I Shares			(3,240,578	)			(487,824	)			(517,995	)			—
Intermediary Class Shares			(429	)			—				(1	)			—
Intermediary Service Class Shares			(1,568	)			—				(1,541	)			—
Class Y Shares			(3,780,275	)			(1,194,417	)			(310,662	)			—
Net realized gains:
Class A Shares			—				—				—				—
Class B Shares			—				—				—				—
Class D Shares			(1,011	)			—				(2,318	)			—
Class I Shares			(1,073	)			—				(3,554	)			—
Class Y Shares			(4,002	)			—				(8,118	)			—
Change in net assets from distributions			(7,186,618	)			(1,915,448	)			(844,206	)			—

Change in net assets resulting from
capital transactions			4,286,595,666				660,883,397				(151,452,006	)			(431,134,675	)
Change in net assets			4,286,696,277				660,942,127				(151,450,960	)			(431,097,805	)

Net Assets:
Beginning of period			6,257,921,548				5,596,979,421				1,427,867,049				1,858,964,854
End of period		$	10,544,617,825			$	6,257,921,548			$	1,276,416,089			$	1,427,867,049
Accumulated net investment income/(distributions
in excess of net investment income)		$	—			$	7			$	—			$	—

____________________

Amounts designated as “—“ are $0 or have been rounded to $0.

See notes to financial statements.

HSBC FAMILY OF FUNDS 13

HSBC FAMILY OF FUNDS

Statements of Changes in Net Assets (continued)

	HSBC U.S. Government								HSBC U.S. Treasury
	Money Market Fund								Money Market Fund
	Year Ended				Year Ended				Year Ended				Year Ended
	October 31, 2016				October 31, 2015				October 31, 2016				October 31, 2015
*CAPITAL TRANSACTIONS:**
Class A Shares
Proceeds from shares issued		$	1,205,234			$	940,017			$	—			$	—
Proceeds from merger			340,856				—				—				—
Dividends reinvested			167				108				—				—
Value of shares redeemed			(755,634	)			(164,851	)			—				—
Class A Shares capital transactions			790,623				775,274				—				—

Class B Shares
Proceeds from shares issued			—				—				—				—
Dividends reinvested			7				15				—				—
Class B Shares capital transactions			7				15				—				—

Class C Shares
Class C Shares capital transactions			—				—				—				—

Class D Shares
Proceeds from shares issued			3,682,762,518				2,487,351,997				900,175,290				1,120,322,048
Proceeds of merger			1,668,424				—				—				—
Dividends reinvested			46,636				67,153				1,271				—
Value of shares redeemed			(2,623,349,427	)			(2,326,630,455	)			(966,167,073	)			(1,479,236,109	)
Class D Shares capital transactions			1,061,128,151				160,788,695				(65,990,512	)			(358,914,061	)

Class E Shares
Proceeds from shares issued			1,000				—				1,000				—
Proceeds from merger			1,001				—				—				—
Dividends reinvested			1				—				1				—
Class E Shares capital transactions			2,002				—				1,001				—

Class I Shares
Proceeds from shares issued			16,374,346,788				10,758,223,000				3,707,312,527				4,050,846,479
Proceeds from merger			516,688,873				—				—				—
Dividends reinvested			1,765,424				287,532				135,888				—
Value of shares redeemed			(13,794,885,625	)			(10,580,351,583	)			(3,745,412,945	)			(3,930,207,887	)
Class I Shares capital transactions			3,097,915,460				178,158,949				(37,964,530	)			120,638,592

Intermediary Class Shares
Proceeds from shares issued			10,119,999				—				1,000				—
Proceeds from merger			1,001				—				—				—
Dividends reinvested			429				—				1				—
Intermediary Class Shares capital transactions			10,121,429				—				1,001				—

Intermediary Service Class Shares
Proceeds from shares issued			5,001,000				—				18,706,393				—
Proceeds from merger			1,001				—				—				—
Dividends reinvested			1,567				—				1,541				—
Value of shares redeemed			—				—				(600,000	)			—
Intermediary Service Class Shares
capital transactions			5,003,568				—				18,107,934				—

Class Y Shares
Proceeds from shares issued			25,082,584,192				21,862,447,049				1,130,575,987				1,145,300,679
Proceeds from merger			3,036,134				—				—				—
Dividends reinvested			3,515,422				1,192,843				317,857				—
Value of shares redeemed			(24,977,501,322	)			(21,542,479,428	)			(1,196,500,744	)			(1,338,159,885	)
Class Y Shares capital transactions			111,634,426				321,160,464				(65,606,900	)			(192,859,206	)
Change in net assets resulting from
capital transactions		$	4,286,595,666			$	660,883,397			$	(151,452,006	)		$	(431,134,675	)

____________________

Share transactions are at net asset value of $1.00 per share.

14 HSBC FAMILY OF FUNDS

See notes to financial statements.

HSBC U.S. GOVERNMENT MONEY MARKET FUND

Financial Highlights

Selected data for a share outstanding throughout the periods indicated.

			Investment Activities			Distributions							Ratios/Supplementary Data
	Net Asset Value, Beginning of Period		Net Investment Income	Net Realized and Unrealized Gains/ (Losses) from Investments	Total from Investment Activities	Net Investment Income	Net Realized Gains from Investment Transactions	Total Distributions	Net Asset Value, End of Period		Total Return(a)		Net Assets at End of Period (000’s)		Ratio of Net Expenses to Average Net Assets(b)		Ratio of Net Investment Income to Average Net Assets(b)		Ratio of Expenses to Average Net Assets (Excluding Fee Reductions)(b)
CLASS A SHARES
Year Ended October 31, 2016	$	1.00	$—	$—	$—	$—	$—	$—	$	1.00	0.02	%	$	1,720	0.34	%	0.02	%	0.69	%
Year Ended October 31, 2015		1.00	—	—	—	—	—	—		1.00	0.03	%		929	0.08	%	0.03	%	0.69	%
Year Ended October 31, 2014		1.00	—	—	—	—	—	—		1.00	0.02	%		154	0.07	%	0.02	%	0.69	%
Year Ended October 31, 2013		1.00	—	—	—	—	—	—		1.00	0.01	%		428	0.17	%	0.01	%	0.68	%
Year Ended October 31, 2012		1.00	—	—	—	—	—	—		1.00	0.01	%		238	0.14	%	0.01	%	0.69	%
CLASS B SHARES
Year Ended October 31, 2016	$	1.00	—	—	—	—	—	—	$	1.00	0.01	%	$	49	0.33	%	0.01	%	1.13	%
Year Ended October 31, 2015		1.00	—	—	—	—	—	—		1.00	0.03	%		49	0.07	%	0.03	%	1.27	%
Year Ended October 31, 2014		1.00	—	—	—	—	—	—		1.00	0.02	%		49	0.07	%	0.02	%	1.28	%
Year Ended October 31, 2013		1.00	—	—	—	—	—	—		1.00	0.01	%		49	0.14	%	0.01	%	1.28	%
Year Ended October 31, 2012		1.00	—	—	—	—	—	—		1.00	0.01	%		76	0.16	%	0.01	%	1.29	%
CLASS D SHARES
Year Ended October 31, 2016		1.00	—	—	—	—	—	—	$	1.00	0.02	%	$	1,949,225	0.34	%	0.02	%	0.54	%
Year Ended October 31, 2015		1.00	—	—	—	—	—	—		1.00	0.03	%		888,084	0.07	%	0.03	%	0.53	%
Year Ended October 31, 2014		1.00	—	—	—	—	—	—		1.00	0.02	%		727,290	0.06	%	0.02	%	0.54	%
Year Ended October 31, 2013		1.00	—	—	—	—	—	—		1.00	0.01	%		670,893	0.13	%	0.01	%	0.53	%
Year Ended October 31, 2012		1.00	—	—	—	—	—	—		1.00	0.01	%		614,499	0.16	%	0.01	%	0.54	%
CLASS E SHARES
July 12, 2016(c) through
October 31, 2016	$	1.00	—	—	—	—	—	—	$	1.00	0.11	%	$	2	0.06	%	0.32	%	0.31	%
CLASS I SHARES
Year Ended October 31, 2016	$	1.00	—	—	—	—	—	—		1.00	0.21	%	$	4,687,197	0.14	%	0.23	%	0.19	%
Year Ended October 31, 2015		1.00	—	—	—	—	—	—		1.00	0.03	%		1,589,264	0.07	%	0.03	%	0.18	%
Year Ended October 31, 2014		1.00	—	—	—	—	—	—		1.00	0.02	%		1,411,088	0.06	%	0.02	%	0.19	%
Year Ended October 31, 2013		1.00	—	—	—	—	—	—		1.00	0.01	%		1,156,894	0.13	%	0.02	%	0.18	%
Year Ended October 31, 2012		1.00	—	—	—	—	—	—		1.00	0.02	%		1,873,166	0.16	%	0.01	%	0.19	%

See notes to financial statements.

HSBC FAMILY OF FUNDS 15

HSBC U.S. GOVERNMENT MONEY MARKET FUND

Financial Highlights (continued)

			Investment Activities			Distributions							Ratios/Supplementary Data
	Net Asset Value, Beginning of Period		Net Investment Income	Net Realized and Unrealized Gains/ (Losses) from Investments	Total from Investment Activities	Net Investment Income	Net Realized Gains from Investment Transactions	Total Distributions	Net Asset Value, End of Period		Total Return(a)		Net Assets at End of Period (000’s)		Ratio of Net Expenses to Average Net Assets(b)		Ratio of Net Investment Income to Average Net Assets(b)		Ratio of Expenses to Average Net Assets (Excluding Fee Reductions)(b)
INTERMEDIARY CLASS SHARES
July 12, 2016(c) through
October 31, 2016	$	1.00	$—	$—	$—	$—	$—	$—	$	1.00	0.11	%	$	10,121	0.18	%	0.26	%	0.37	%
INTERMEDIARY SERVICE CLASS SHARES
July 12, 2016(c) through
October 31, 2016	$	1.00	—	—	—	—	—	—	$	1.00	0.10	%	$	5,003	0.18	%	0.22	%	0.42	%
CLASS Y SHARES
Year Ended October 31, 2016	$	1.00	—	—	—	—	—	—	$	1.00	0.12	%	$	3,891,299	0.23	%	0.11	%	0.28	%
Year Ended October 31, 2015		1.00	—	—	—	—	—	—		1.00	0.03	%		3,779,595	0.07	%	0.03	%	0.28	%
Year Ended October 31, 2014		1.00	—	—	—	—	—	—		1.00	0.02	%		3,458,399	0.06	%	0.02	%	0.29	%
Year Ended October 31, 2013		1.00	—	—	—	—	—	—		1.00	0.01	%		2,404,867	0.13	%	0.01	%	0.28	%
Year Ended October 31, 2012		1.00	—	—	—	—	—	—		1.00	0.01	%		2,505,448	0.17	%	0.01	%	0.29	%

(a)	Not annualized for periods less than one year. Total return calculations do not include any sales or redemption charges.
(b)	Annualized for periods less than one year.
(c)	Commencement of operations on July 12, 2016.
Amounts designated as “—“ are $0.00 or have been rounded to $0.00.

16 HSBC FAMILY OF FUNDS

See notes to financial statements.

HSBC U.S. TREASURY MONEY MARKET FUND

Financial Highlights

Selected data for a share outstanding throughout the periods indicated.

			Investment Activities			Distributions							Ratios/Supplementary Data
	Net Asset Value, Beginning of Period		Net Investment Income	Net Realized and Unrealized Gains/ (Losses) from Investments	Total from Investment Activities	Net Investment Income	Net Realized Gains from Investment Transactions	Total Distributions	Net Asset Value, End of Period		Total Return(a)		Net Assets at End of Period (000’s)		Ratio of Net Expenses to Average Net Assets(b)		Ratio of Net Investment Income to Average Net Assets(b)		Ratio of Expenses to Average Net Assets (Excluding Fee Reductions)(b)
CLASS A SHARES
Period Ended October 31, 2014(c)	$	1.00	$—	$—	$—	$—	$—	$—	$	1.00	—	%	$	—	—	%	—	%	—	%
Year Ended October 31, 2013		1.00	—	—	—	—	—	—		1.00	—	%		5	0.10	%	—	%	0.69	%
Year Ended October 31, 2012		1.00	—	—	—	—	—	—		1.00	—	%		5	0.05	%	—	%	0.70	%
CLASS D SHARES
Year Ended October 31, 2016	$	1.00	—	—	—	—	—	—	$	1.00	—	%	$	214,041	0.28	%	—	%	0.55	%
Year Ended October 31, 2015		1.00	—	—	—	—	—	—		1.00	—	%		280,032	0.06	%	—	%	0.54	%
Year Ended October 31, 2014		1.00	—	—	—	—	—	—		1.00	0.01	%		638,939	0.06	%	—	%	0.54	%
Year Ended October 31, 2013		1.00	—	—	—	—	—	—		1.00	—	%		517,845	0.09	%	—	%	0.53	%
Year Ended October 31, 2012		1.00	—	—	—	—	—	—		1.00	—	%		662,063	0.08	%	—	%	0.54	%
CLASS E SHARES
July 12, 2016(d) through
October 31, 2016	$	1.00	—	—	—	—	—	—	$	1.00	0.11	%	$	1	—	%	0.37	%	0.33	%
CLASS I SHARES
Year Ended October 31, 2016	$	1.00	—	—	—	—	—	—	$	1.00	0.13	%	$	346,399	0.16	%	0.13	%	0.20	%
Year Ended October 31, 2015		1.00	—	—	—	—	—	—		1.00	—	%		384,363	0.05	%	—	%	0.19	%
Year Ended October 31, 2014		1.00	—	—	—	—	—	—		1.00	0.01	%		263,714	0.06	%	0.01	%	0.19	%
Year Ended October 31, 2013		1.00	—	—	—	—	—	—		1.00	—	%		1,086,181	0.09	%	—	%	0.18	%
Year Ended October 31, 2012		1.00	—	—	—	—	—	—		1.00	—	%		555,287	0.08	%	—	%	0.19	%
INTERMEDIARY CLASS SHARES
July 12, 2016(d) through
October 31, 2016	$	1.00	—	—	—	—	—	—	$	1.00	0.11	%	$	1	—	%	0.37	%	0.38	%

See notes to financial statements.

HSBC FAMILY OF FUNDS 17

HSBC U.S. TREASURY MONEY MARKET FUND

Financial Highlights (continued)

			Investment Activities			Distributions							Ratios/Supplementary Data
	Net Asset Value, Beginning of Period		Net Investment Income	Net Realized and Unrealized Gains/ (Losses) from Investments	Total from Investment Activities	Net Investment Income	Net Realized Gains from Investment Transactions	Total Distributions	Net Asset Value, End of Period		Total Return(a)		Net Assets at End of Period (000’s)		Ratio of Net Expenses to Average Net Assets(b)		Ratio of Net Investment Income to Average Net Assets(b)		Ratio of Expenses to Average Net Assets (Excluding Fee Reductions)(b)
INTERMEDIARY SERVICE CLASS SHARES
July 12, 2016(d) through
October 31, 2016	$	1.00	—	—	—	—	—	—	$	1.00	0.10	%	$	18,108	0.20	%	0.14	%	0.48	%
CLASS Y SHARES
Year Ended October 31, 2016	$	1.00	$—	$—	$—	$—	$—	$—	$	1.00	0.04	%	$	697,866	0.25	%	0.04	%	0.30	%
Year Ended October 31, 2015		1.00	—	—	—	—	—	—		1.00	—	%		763,473	0.06	%	—	%	0.29	%
Year Ended October 31, 2014		1.00	—	—	—	—	—	—		1.00	0.01	%		956,312	0.06	%	0.01	%	0.29	%
Year Ended October 31, 2013		1.00	—	—	—	—	—	—		1.00	—	%		968,290	0.09	%	—	%	0.28	%
Year Ended October 31, 2012		1.00	—	—	—	—	—	—		1.00	—	%		1,156,631	0.09	%	—	%	0.29	%

(a)	Not annualized for periods less than one year. Total return calculations do not include any sales or redemption charges.
(b)	Annualized for periods less than one year.
(c)	Class A Shares were operational during a portion of the year only. Amounts reflect performance for a period of time the class had operations, which was 201 days during the period. The net asset value reflected represents the last day the class had operations.
(d)	Commencement of operations on July 12, 2016.
Amounts designated as “—“ are $0.00 or have been rounded to $0.00.

18 HSBC FAMILY OF FUNDS

See notes to financial statements.

HSBC FAMILY OF FUNDS

Notes to Financial Statements—as of October 31, 2016

1. Organization:

The HSBC Funds (the “Trust”), a Delaware statutory trust organized on March 2, 2016, is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company. Effective June 24, 2016, the Funds (as defined below), which were series of HSBC Funds, a Massachusetts business trust, reorganized with and into corresponding series of the Trust (each, a “Reorganization”). The series of the Trust into which the Funds reorganized had no assets, liabilities, or operations prior to the Reorganization. Upon completion of each Reorganization, the respective share classes of each Fund assumed the performance, financial and other historical information of those of the corresponding predecessor series. As of October 31, 2016, the Trust is composed of 19 separate operational funds, each a series of the HSBC Family of Funds. The accompanying financial statements are presented for the following two funds (individually a “Fund”, collectively the “Funds”) of the Trust:

Fund			Short Name
HSBC U.S. Government Money Market Fund			U.S. Government Money Market Fund
HSBC U.S. Treasury Money Market Fund			U.S. Treasury Money Market Fund

Both of the Funds are diversified funds. Financial statements for all other funds of the Trust are published separately.

Both of the Funds are money market funds and seek to maintain a stable net asset value of $1.00 per share, although it is possible to lose money by investing in the Funds. The Funds are authorized to issue an unlimited number of shares of beneficial interest with a par value of $ 0.001 per share. The Funds are authorized to issue nine classes of shares: Class A Shares, Class B Shares, Class C Shares, Class D Shares, Class E Shares, Class I Shares, Intermediary Class Shares, Intermediary Service Class Shares and Class Y Shares. The Class B Shares of the Funds are offered without any front-end sales charge but will be subject to a contingent deferred sales charge (“CDSC”) ranging from a maximum of 4.00% if redeemed less than one year after purchase to 0.00% if redeemed more than four years after purchase. Class C Shares of the Funds are offered without any front-end sales charge but will be subject to a maximum CDSC of 1.00% if redeemed less than one year after purchase. No sales charges are assessed with respect to Class A, Class D, Class E, Class I, Intermediary Class, Intermediary Service Class or Class Y Shares of the Funds. Each class of shares in each Fund has identical rights and privileges, except with respect to arrangements pertaining to shareholder servicing and/or distribution, class-related expenses, voting rights on matters affecting a single class of shares, and exchange privileges. Class B Shares may no longer be purchased or acquired by any new or existing Class B shareholder, except through dividend and/or capital gains reinvestment.

Under the Trust’s organizational documents, the Trust’s officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Funds. In addition, in the normal course of business, the Trust may enter into contracts with its service providers, which also provide for indemnifications by the Funds. The Funds’ maximum exposure under these arrangements is unknown as this would involve any future claims that may be made against the Funds. However, based on experience, the Trust expects the risk of loss to be remote.

The Funds are investment companies and follow accounting and reporting guidance under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946, “Financial Services-Investment Companies.”

2. Significant Accounting Policies:

HSBC FAMILY OF FUNDS 19

HSBC FAMILY OF FUNDS

Notes to Financial Statements—as of October 31, 2016 (continued)

contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.

Securities Valuation:

Investments of the Funds are valued using the amortized cost method pursuant to Rule 2a-7 under the Act, which approximates fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The valuation techniques used to determine fair value are further described in Note 3 below.

Investment Transactions and Related Income:

Investment transactions are accounted for no later than one business day after trade date. However, for financial reporting purposes, investment transactions are accounted for on trade date. Investment gains and losses are calculated on the identified cost basis. Interest income is recognized on the accrual basis and includes, where applicable, the amortization or accretion of premium or discount. Dividend income is recorded on the ex-dividend date.

Restricted Securities:

A restricted security is a security which has been purchased through a private offering and cannot be resold to the general public without prior registration under the Securities Act of 1933 (the “1933 Act”) or pursuant to the resale limitations provided by Rule 144 under the 1933 Act, or another exemption from the registration requirements of the 1933 Act. Certain restricted securities may be resold in transactions exempt from registration, normally to qualified institutional buyers, and may be deemed liquid by the Investment Adviser (as defined in Note 4) based on procedures established by the Board of Trustees (“Board”). Therefore, not all restricted securities are considered illiquid. At October 31, 2016, there were no restricted securities held by the Funds.

Repurchase Agreements:

The U.S. Government Money Market Fund may enter into repurchase agreements with an entity which is a member of the Federal Reserve System or which is a “primary dealer” (as designated by the Federal Reserve Bank of New York) in U.S. government obligations. The U.S. Treasury Money Market Fund may temporarily invest in repurchase agreements collateralized by U.S. Treasury Obligations. The repurchase price generally equals the price paid by a Fund plus interest negotiated on the basis of current short-term rates, which may be more or less than the rate on the underlying portfolio securities. The seller, under a repurchase agreement, is required to maintain the collateral held pursuant to the agreement, with a fair value equal to or greater than the repurchase price (including accrued interest). Securities subject to repurchase agreements are held by the Funds’ custodian or another qualified custodian or in the Federal Reserve/Treasury book-entry system. Master Repurchase Agreements (“MRA”) permit the Fund, under certain circumstances, including an event of default (such as bankruptcy or insolvency), to offset receivables under the MRA with collateral posted by the counterparty and create one net payment due to or from the Fund. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against such a right of offset in the event of the MRA counterparty’s bankruptcy or insolvency. Pursuant to terms of the MRA, the Fund receives securities as collateral with a market value in excess of the repurchase price to be received by the Fund upon the maturity of the transaction. Upon bankruptcy or insolvency of the MRA counterparty, the Fund would recognize a liability with respect to such excess collateral to reflect the Fund’s obligation under bankruptcy law to return the excess to the counterparty. There is potential for loss to a Fund in the event the Fund is delayed or prevented from exercising its rights to dispose of the collateral securities, including the risk of a possible decline in the fair value of the underlying securities during the period while the Fund seeks to assert its rights.

20 HSBC FAMILY OF FUNDS

HSBC FAMILY OF FUNDS

Notes to Financial Statements—as of October 31, 2016 (continued)

Cash:

Cash is held in deposit accounts at the Funds’ custodian bank and is a significant portion of the net assets, which may exceed the amount insured by the Federal Deposit Insurance Corporation (“FDIC”). To the extent that such balances exceed FDIC insurance limits, the Funds are subject to the creditworthiness of the custodian bank.

Allocations:

Expenses directly attributable to a Fund are charged to that Fund. Expenses not directly attributable to a Fund are allocated proportionately among the applicable series within the Trust in relation to the net assets of each fund or on another reasonable basis. Class specific expenses are charged directly to the class incurring the expense. In addition, income, expenses (other than class specific expenses), and unrealized and realized gains and losses are allocated to each class based on relative net assets on a daily basis.

Distributions to Shareholders:

Dividends to shareholders from net investment income, if any, are declared daily and paid monthly from each Fund. Distributions from net realized gains, if any, are declared and paid at least annually by the Funds. Additional distributions are also made to the Funds’ shareholders to the extent necessary to avoid the federal excise tax on certain undistributed income and net realized gains of regulated investment companies.

Federal Income Taxes:

Each Fund is a separate taxable entity for federal income tax purposes. Each Fund has qualified and intends to continue to qualify each year as a “regulated investment company” under Subchapter M of the Internal Revenue Code, as amended, and to distribute substantially all of its taxable net investment income and net realized gains, if any, to its shareholders. Accordingly, no provision for federal income or excise tax is required.

Management of the Funds has reviewed tax positions taken in tax years that remain subject to examination by all major tax jurisdictions, including federal (i.e., the last four tax year ends and the interim tax period since then, as applicable). Management believes that there is no tax liability resulting from unrecognized tax benefits related to uncertain tax positions taken. Management’s conclusions may be subject to future review based on changes in, or interpretation of, accounting standards or tax laws and regulations.

3. Investment Valuation Summary

The valuation techniques employed by the Funds, as described below, maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The Funds’ investments are classified within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. The inputs used for valuing the Funds’ investments are summarized in the three broad levels listed below:

●	Level 1: quoted prices in active markets for identical assets
●	Level 2: other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)
●	Level 3: significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

HSBC FAMILY OF FUNDS 21

HSBC FAMILY OF FUNDS

Notes to Financial Statements—as of October 31, 2016 (continued)

Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The Trust’s policy is to disclose transfers between fair value hierarchy levels based on valuations at the end of the reporting period. There were no transfers between levels as of October 31, 2016, from the valuation input levels used on October 31, 2015. The inputs or methodology used for valuing investments are not necessarily an indication of the risk associated with investing in those investments.

Investments of the Funds are valued using the amortized cost method pursuant to Rule 2a-7 under the Act, which approximates fair value, and are typically categorized as Level 2 in the fair value hierarchy. The amortized cost method involves valuing an instrument at its cost initially and thereafter assuming a constant amortization to maturity of any discounts or premium, regardless of the impact of fluctuating interest rates on the market value of the instrument. The amortized cost method that may result in periods during which value, as determined by amortized cost, is higher or lower than the price a Fund holding the instrument would receive if it sold the instrument. The fair value of securities in the Funds can be expected to vary with changes in prevailing interest rates.

Investments in other money market funds are priced at net asset value as reported by such companies and are typically categorized as Level 1 in the fair value hierarchy.

Repurchase agreements are valued at original cost and are typically categorized as Level 2 in the fair value hierarchy.

For the year ended October 31, 2016, there were no Level 3 investments for which significant unobservable inputs were used to determine fair value. As of October 31, 2016, all investments were categorized as Level 2 in the fair value hierarchy. The breakdown of investment categorization is disclosed in the Schedule of Portfolio Investments for each Fund.

4. Related Party Transactions and Other Agreements and Plans:

Investment Management:

HSBC Global Asset Management (USA) Inc. (“HSBC” or the “Investment Adviser”), a wholly owned subsidiary of HSBC Bank USA, N.A., a national bank organized under the laws of the United States, acts as Investment Adviser to the Funds. As Investment Adviser, HSBC manages the investments of the Funds and continuously reviews, supervises and administers the Funds’ investments pursuant to an Investment Advisory Contract. For its services as Investment Adviser, HSBC receives a fee from each Fund, accrued daily and paid monthly, based on the average daily net assets of each respective Fund, at an annual rate of 0.10%.

HSBC also provides operational support services to the Funds pursuant to an Operational Support Services Agreement. For its services in this capacity, HSBC is entitled to receive a fee, accrued daily and paid monthly, based on the average daily net assets of Class A Shares, Class B Shares, Class C Shares, Class D Shares, Intermediary Class Shares, Intermediary Service Class Shares and Class Y Shares, at an annual rate of 0.10%.

The Bank of New York Mellon (the “Servicer”) provides recordkeeping, reporting and processing services to the Class I Shares of the Funds. The Servicer is paid by the Investment Adviser and not by the Funds, for these services.

22 HSBC FAMILY OF FUNDS

HSBC FAMILY OF FUNDS

Notes to Financial Statements—as of October 31, 2016 (continued)

Administration:

HSBC also serves as Administrator to the Trust. Effective April 1, 2016, under the terms of the Administration Agreement, HSBC receives from the Funds (as well as other funds in the Trust combined) a fee, accrued daily and paid monthly, at an annual rate of:

Based on Average Daily Net Assets of		Fee Rate(%)
Up to $10 billion		0.0400
In excess of $10 billion but not exceeding $20 billion		0.0350
In excess of $20 billion but not exceeding $50 billion		0.0265
In excess of $50 billion		0.0245

Prior to April 1, 2016, for these services, HSBC received from the Funds (as well as other funds in the Trust combined) a fee, accrued daily and paid monthly, at an annual rate of:

Based on Average Daily Net Assets of		Fee Rate(%)
Up to $10 billion		0.0550
In excess of $10 billion but not exceeding $20 billion		0.0350
In excess of $20 billion but not exceeding $50 billion		0.0275
In excess of $50 billion		0.0250

The fee rates and breakpoints are determined on the basis of the aggregate average daily net assets of the Trust. For the year ended October 31, 2016, the effective annualized rate was 0.04%, prior to any fee waivers or expense reimbursements, based on the average daily net assets of the Trust. The total administration fee paid to HSBC is allocated to each series of the Trust based upon its proportionate share of the aggregate net assets of the Trust, subject to certain allocations in cases where one fund invests some or all of its assets in another fund.

Pursuant to a Sub-Administration Agreement with HSBC, Citi Fund Services Ohio, Inc. (“Citi”), a wholly-owned subsidiary of Citigroup, Inc., serves as the Trust’s Sub-Administrator, subject to the general supervision by the Trust’s Board and HSBC. For these services, Citi is entitled to a fee, payable by HSBC, at an annual rate equivalent to the fee rates set forth above subject to certain reductions associated with services provided to new funds, minus 0.02% which is retained by HSBC.

Under a Compliance Services Agreement between the Trust and Citi (the “CCO Agreement”), Citi makes an employee available to serve as the Trust’s Chief Compliance Officer (the “CCO”). Under the CCO Agreement, Citi also provides infrastructure and support in implementing the written policies and procedures comprising the Trust’s compliance program, including support services to the CCO. For the services provided under the CCO Agreement, the Trust paid Citi $304,597 for the year ended October 31, 2016, plus reimbursement of certain out of pocket expenses. Expenses incurred by each Fund are reflected on the Statements of Operations as “Compliance Services.” Citi pays the salary and other compensation earned by individuals performing these services, as employees of Citi.

Distribution Arrangements:

Foreside Distribution Services, L.P. (“Foreside”), a wholly-owned subsidiary of Foreside Financial Group LLC, serves the Trust as Distributor (the “Distributor”). The Trust has adopted a non-compensatory Distribution Plan and Agreement (the “Distribution Plan”) pursuant to Rule 12b-1 of the Act. The Distribution Plan provides for reimbursement of expenses incurred by the Distributor related to distribution and marketing, at a rate not to exceed 0.25%, 1.00%, 1.00% and 0.25% of the average daily net assets of Class A Shares (currently not being charged), Class B Shares (currently charging 0.75%), Class C Shares (currently charging 0.75%) and Class D Shares (currently not being charged) of the Funds, respectively. For the year ended October 31, 2016, Foreside, as Distributor, also received $64,049 in commissions from sales of the Trust, of which $97 was reallocated to HSBC-affiliated brokers and dealers.

Expenses reduced during the year ended October 31, 2016 are reflected on the Statements of Operations as “Fees voluntarily reduced by Distributor.”

HSBC FAMILY OF FUNDS 23

HSBC FAMILY OF FUNDS

Notes to Financial Statements—as of October 31, 2016 (continued)

Shareholder Servicing:

The Trust has adopted a Shareholder Services Plan, which provides for payments to shareholder servicing agents (which primarily consist of HSBC and its affiliates) for providing various shareholder services. As disclosed in the Statement of Operations, for the current fiscal period certain amounts of the Shareholder Servicing Fees have been waived by those shareholder servicing agents, including HSBC and its affiliates. For performing these services, the shareholder servicing agents receive a fee that is computed daily and paid monthly up to 0.60%, 0.25%, 0.25%, 0.25%, 0.10%, 0.05% and 0.10% of the average daily net assets of Class A Shares (currently charging 0.40%), Class B Shares, Class C Shares, Class D Shares, Class E Shares, Intermediary Class Shares and Intermediary Service Class Shares of the Funds, respectively. The aggregate fees paid to the Distributor pursuant to the Distribution Plan and to shareholder servicing agents pursuant to the Shareholder Services Plan may not exceed, in the aggregate, 0.60%, 1.00%, 1.00%, 0.25%, 0.10%, 0.05% and 0.10% annually of each Fund’s average daily net assets of Class A Shares, Class B Shares, Class C Shares, Class D Shares, Class E Shares, Intermediary Class Shares and Intermediary Service Class Shares, respectively. Expenses reduced during the year ended October 31, 2016 are reflected on the Statements of Operations as “Fees voluntarily reduced by Shareholder Servicing Agent.”

The Trust has entered into shareholder services contracts with affiliated and unaffiliated financial intermediaries who provide shareholder services and other related services to their clients or customers who invest in the Funds under which the Funds will pay all or a portion of such fees earned to financial intermediaries for performing such services.

Fund Accounting and Transfer Agency:

Citi provides fund accounting services for each Fund. As fund accountant, Citi receives an annual fee per Fund and share class, subject to certain minimums and reimbursement of certain expenses. Citi receives additional fees paid by the Trust for regulatory administration services and money market fund reporting services. Effective July 16, 2016, the transfer agency services were converted from FIS Investor Services, LLC (“FIS”) (formerly SunGard Investor Services LLC) to Boston Financial Data Services, Inc. (“BFDS”) under a separate transfer agency services agreement. As transfer agent, BFDS receives a fee based on the number of funds and shareholder accounts, subject to certain minimums, and reimbursement of certain expenses. Prior to July 16, 2016, transfer agent services were provided under the terms of a separate transfer agency services agreement with Citi. Citi’s rights and obligations under the transfer agency services agreement, in turn, were assigned to FIS. As transfer agent, FIS received a fee based on the number of funds and shareholder accounts, subject to certain minimums, reductions associated with services provided to new funds, blue sky exemption services and reimbursement of certain expenses.

Independent Trustees:

The Trust pays an annual retainer to each Independent Trustee, plus additional annual retainers to each Committee Chair and the Chairman of the Board. The Independent Trustees also receive a fee for each regular, special in-person, and telephonic meeting of the Board of Trustees attended. The aggregate amount of the fees and expenses of the Independent Trustees are allocated amongst all the funds in the Trust and are presented in the Statements of Operations.

24 HSBC FAMILY OF FUNDS

HSBC FAMILY OF FUNDS

Notes to Financial Statements—as of October 31, 2016 (continued)

Fee Reductions:

The Investment Adviser has contractually agreed to limit through March 1, 2017 the annual total expenses, exclusive of interest, taxes, brokerage commissions, and extraordinary expenses, of certain classes of the Funds. Each affected Fund Class has its own expense limitations based on the average daily net assets for any full fiscal year as follows:

		Contractual
		Expense
Fund	Class	Limitations(%)
U.S. Government Money Market Fund	E	0.25
U.S. Government Money Market Fund	I	0.20
U.S. Treasury Money Market Fund	E	0.25
U.S. Treasury Money Market Fund	I	0.20

Any amounts contractually waived or reimbursed by the Investment Adviser will be subject to repayment by the respective Fund to the Investment Adviser within three years to the extent that the repayment will not cause the Fund’s operating expenses to exceed the contractual expense limit that was in effect at the time of such waiver or reimbursement. At October 31, 2016, there were no remaining contractual reimbursements that are subject to repayment by the Funds in subsequent years.

The Administrator and Citi may voluntarily waive/reimburse fees to help support the expense limits of the Funds. In addition, HSBC, in its role as Investment Adviser and Administrator, may waive/reimburse additional fees at its discretion. Any voluntary fee waivers/reimbursements are not subject to recoupment in subsequent fiscal periods. Voluntary waivers/reimbursements may be stopped at any time. Amounts waived/reimbursed by the Investment Adviser and Administrator are reported separately on the Statements of Operations, as applicable. During the year ended October 31, 2016, Citi voluntarily reduced its sub-administration fees by $86,656 and $20,014 for U.S. Government Money Market Fund and U.S. Treasury Money Market Fund, respectively. HSBC also voluntarily reduced its administration fees by $143,673 and $39,347 for U.S. Government Money Market Fund and U.S Treasury Money Market Fund, respectively.

During the year ended October 31, 2016, the following amounts of expenses were waived:

									Intermediary
	Class A	Class B	Class C	Class D	Class E	Class I	Class Y	Intermediary	Service
Fund	($)	($)	($)	($)	($)	($)	($)	Class ($)	Class ($)
U.S. Government Money Market Fund	3,609	456	—	1,939,762	—	768,444	1,609,784	328	1,412
U.S. Treasury Money Market Fund	—	—	—	614,275	—	156,409	413,476	—	3,183

The Funds have entered into an arrangement with their custodian whereby credits realized as a result of uninvested cash balances are used to reduce a portion of the Funds’ custodian expenses. Expenses reduced during the year ended October 31, 2016 are reflected on the Statements of Operations as “Custody earnings credits,” as applicable.

Overdraft Facility:

The Funds have entered into an arrangement with their custodian whereby an, uncommitted, unsecured overdraft facility is made available to meet unanticipated end-of-day liquidity needs of the Funds which cannot be fulfilled by trading activities. The interest rate on overdraft amounts is calculated at an annual rate of 0.50% plus the Federal Funds Rate. The overdraft facility is limited to $500,000,000 and $50,000,000 for the U.S. Government Money Market Fund and the U.S. Treasury Money Market Fund, respectively.

HSBC FAMILY OF FUNDS 25

HSBC FAMILY OF FUNDS

Notes to Financial Statements—as of October 31, 2016 (continued)

5. Federal Income Tax Information:

At October 31, 2016, the cost basis of securities for federal income tax purposes, gross unrealized appreciation, gross unrealized depreciation and net unrealized appreciation/depreciation were as follows:

						Net Unrealized
		Tax Unrealized	Tax Unrealized			Appreciation/
	Tax Cost ($)	Appreciation ($)	Depreciation ($)			(Depreciation) ($)*
U.S. Government Money Market Fund	9,993,420,132	—		(3,866	)		(3,866	)
U.S. Treasury Money Market Fund	1,275,980,645	—		—			—

____________________

*	The differences between book-basis unrealized appreciation/(depreciation) is attributable primarily to tax deferral of losses on wash sales.

The tax character of dividends paid by the Funds as of the tax year ended October 31, 2016, was as follows:

Dividends paid from

Net

Long Term

Total

Ordinary

Capital

Taxable

Tax Exempt

Dividends

Income ($)

Gains ($)

Dividends ($)

Distributions ($)

Paid ($)⁽¹⁾

U.S. Government Money Market Fund

6,777,535

5,589

6,783,124

—

6,783,124

U.S. Treasury Money Market Fund

800,318

—

800,318

—

800,318

The tax character of dividends paid by the Funds as of the tax year ended October 31, 2015, was as follows:

	Dividends paid from
		Net
		Long Term	Total	Tax	Total
	Ordinary	Capital	Taxable	Exempt	Dividends
	Income ($)	Gains ($)	Dividends ($)	Distributions ($)	Paid ($)⁽¹⁾
U.S. Government Money Market Fund	1,911,422	—	1,911,422	—	1,911,422
U.S. Treasury Money Market Fund	—	—	—	—	—

____________________

(1)	Total dividends paid may differ from the amount reported in the Statement of Changes in Net Assets because dividends are recognized when actually paid for tax purposes.

26 HSBC FAMILY OF FUNDS

HSBC FAMILY OF FUNDS

Notes to Financial Statements—as of October 31, 2016 (continued)

As of the tax year ended October 31, 2016, the components of accumulated earnings/(deficit) on a tax basis for the Funds were as follows:

Undistributed

Accumulated

Total

Undistributed

Long Term

Capital and

Unrealized

Accumulated

Ordinary

Tax Exempt

Capital

Accumulated

Dividends

Other

Appreciation/

Earnings/

Income ($)

Gains ($)

Earnings ($)

Payable ($)

Losses ($)

(Depreciation) ($)

(Deficit) ($)

U.S. Government Money

Market Fund

552,674

—

552,674

(442,104

)

—

(3,866

)

106,704

U.S. Treasury Money

Market Fund

57,140

—

57,140

(43,888

)

—

13,252

Capital loss carryforwards (“CLCFs”) subject to expiration are applied as short-term capital loss regardless of whether the originating capital loss was short-term or long-term. CLCFs that are not subject to expiration must be utilized before those that are subject to expiration. The Board does not intend to authorize a distribution of any realized gain for the Funds until any applicable CLCF has been offset or expires. As of the tax year ended October 31, 2016, the Funds had no CLCFs.

Under current law, capital losses and specified ordinary losses realized after October 31 and non-specified ordinary losses incurred after December 31 (ordinary losses collectively known as “late year ordinary loss”) may be deferred and treated as occurring on the first business day of the following fiscal year. As of the tax year ended October 31, 2016, the Funds had no deferred losses.

The amount and character of net investment income and net realized gains distributed are determined in accordance with federal income tax regulations, which may differ from GAAP. These “book/tax” differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature (e.g., reclassification of market discounts, certain gain/loss, paydowns, and distributions), such amounts are reclassified within the composition of net assets based on their federal tax-basis treatment; temporary differences (e.g., wash losses and post-October loss deferrals) do not require reclassification. To the extent distributions to shareholders from net investment income and net realized gains exceed net investment income and net realized gains for tax purposes, they are reported as distributions of capital.

On the Statements of Assets and Liabilities, as a result of permanent book-to-tax differences, reclassification adjustments were made as follows:

	Accumulated
	Net Investment
	Income/(Distributions	Accumulated
	in Excess of Net	Net Realized	Paid-In
	Investment Income) ($)	Gains/(Losses) ($)	Capital ($)
U.S. Treasury Money Market Fund	321	(321)	—

6. Significant Shareholders:

Shareholders, including other funds, individuals, and accounts, as well as the Fund’s investment manager(s) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets (and which may differ from control as determined in accordance with accounting principles generally accepted in the United States of America).

HSBC FAMILY OF FUNDS 27

HSBC FAMILY OF FUNDS

Notes to Financial Statements—as of October 31, 2016 (continued)

The following list includes the Funds which had individual shareholder accounts with ownership of voting securities greater than 10% of the total outstanding voting securities but less than 25% and/or accounts with ownership of voting securities greater than 25% of the total outstanding voting securities. Significant transactions by these shareholder accounts may negatively impact the Funds’ performance.

		Number of
	Number of shareholders	shareholders with
	with ownership of voting	ownership of voting
	securities of the Portfolio	securities of the
	greater than 10% and	Portfolio greater
	less than 25% of the total	than 25% of the total
	Portfolio's outstanding	Portfolio's outstanding
Fund	voting securities	voting securities
U.S. Government Money Market Fund	—	1
U.S. Treasury Money Market Fund	1	1

7. Business Combinations:

On October 7, 2016, the U.S. Government Money Market Fund acquired all of the net assets of the HSBC Prime Money Market Fund (“Prime Money Market Fund”), an open-end investment company, pursuant to a plan of reorganization approved by the Board on September 7, 2016. The purpose of the transaction was to combine two funds with substantially similar investment policies and strategies. The acquisition was accomplished by a tax-free exchange of 521,737,290 shares of the U.S. Government Money Market Fund, valued at $521,737,290, for all of the assets and the assumption of the liabilities (net assets of $521,737,290) of the Prime Money Market Fund on October 7, 2016. The investment portfolio of the Prime Money Market Fund, with an amortized cost of $430,000,000, which approximates the fair value at October 7, 2016, was the principal asset acquired by the U.S. Government Money Market Fund. For financial reporting purposes, assets received and shares issued by the U.S. Government Money Market Fund were recorded at amortized cost which approximates fair value; and the amortized cost basis of the investments received from the Prime Money Market Fund was carried forward to align ongoing reporting of the U.S. Government Money Market Fund. Immediately prior to the merger, the net assets of the U.S. Government Money Market Fund were $8,728,801,871.

Assuming the acquisition had been completed on November 1, 2015, the beginning of the annual reporting period of the U.S. Government Money Market Fund, the U.S. Government Money Market Fund’s pro forma results of operations for the year ended October 31, 2016, would have been as follows:

Net investment income $29,664,336

Net realized gain (loss) on investments $398,295

Net increase (decrease) in net assets resulting from operations $30,062,631

Because the combined investment portfolios have been managed as a single integrated portfolio since the acquisition was completed, it is not practicable to separate the amounts of revenue and earnings of the Prime Money Market Fund that have been included in U.S. Government Money Market Fund’s Statement of Operations since October 7, 2016.

8. Subsequent Events:

Management has evaluated subsequent events through the date these financial statements were issued. Based on the evaluation, no adjustments or additional disclosures were required to the financial statements as of October 31, 2016.

28 HSBC FAMILY OF FUNDS

Report of Independent Registered Public Accounting Firm

To the Board of Trustees and Shareholders of HSBC Funds

In our opinion, the accompanying statements of assets and liabilities, including the schedules of portfolio investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of HSBC U.S. Government Money Market Fund and HSBC U.S. Treasury Money Market Fund (each a portfolio of HSBC Funds, and hereafter collectively referred to as the “Funds”) as of October 31, 2016, the results of each of their operations for the year then ended and the changes in each of their net assets and the financial highlights for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities as of October 31, 2016 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. The accompanying financial highlights for each of the years ended on or prior to October 31, 2014 were audited by other auditors whose report dated December 23, 2014 expressed an unqualified opinion on those financial highlights.

PricewaterhouseCoopers LLP
New York, New York
December 23, 2016

HSBC FAMILY OF FUNDS 29

HSBC FAMILY OF FUNDS

Other Federal Income Tax Information—as of October 31, 2016 (Unaudited)

During the year ended October 31, 2016, the following Funds declared capital gain distributions:

	Short Term		Long Term
	Capital Gain		Capital Gain
	Distributions ($)		Distributions ($)
U.S. Government Money Market Fund		497		5,589
U.S. Treasury Money Market Fund		14,311		—

30 HSBC FAMILY OF FUNDS

HSBC FAMILY OF FUNDS

Table of Shareholder Expenses—as of October 31, 2016 (Unaudited)

As a shareholder of the Funds, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchases, redemption fees and exchange fees; and (2) ongoing costs, including management fees, distribution fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare the cost with the ongoing costs of investing in other mutual funds.

These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from May 1, 2016 through October 31, 2016.

Actual Example

The table below provides information about actual account values and actual expenses. You may use the information below, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

												Annualized
			Beginning			Ending			Expenses Paid			Expense Ratio
			Account Value			Account Value			During Period*			During Period
			5/1/16			10/31/16			5/1/16 - 10/31/16			5/1/16 - 10/31/16
U.S. Government Money
Market Fund	Class A Shares			$	1,000.00		$	1,000.10		$	2.01		0.40	%
	Class B Shares				1,000.00			1,000.00			2.01		0.40	%
	Class D Shares				1,000.00			1,000.10			2.01		0.40	%
	Class E Shares	**			1,000.00			1,001.10			0.18		0.06	%
	Class I Shares				1,000.00			1,001.40			0.65		0.13	%
	Intermediary
	Class Shares	**			1,000.00			1,001.10			0.55		0.18	%
	Intermediary
	Service Class
	Shares	**			1,000.00			1,001.00			0.55		0.18	%
	Class Y Shares				1,000.00			1,000.80			1.26		0.25	%

U.S. Treasury Money
Market Fund	Class D Shares				1,000.00			1,000.00			1.56		0.31	%
	Class E Shares	**			1,000.00			1,001.10			—		0.00	%
	Class I Shares				1,000.00			1,000.80			0.70		0.14	%
	Intermediary
	Class Shares	**			1,000.00			1,001.10			—		0.00	%
	Intermediary
	Service Class
	Shares	**			1,000.00			1,001.00			0.61		0.20	%
	Class Y Shares				1,000.00			1,000.30			1.26		0.25	%

____________________

*	Expenses are equal to the average account value over the period, multiplied by the Fund’s annualized expense ratio, multiplied by 184/366 (to reflect the one half year period).
**	Expenses are equal to the average account value over the period, multiplied by the Fund’s annualized expense ratio, multiplied by 112/366 (to reflect the stub period July 12, 2016 to October 31, 2016).

HSBC FAMILY OF FUNDS 31

HSBC FAMILY OF FUNDS

Table of Shareholder Expenses—as of October 31, 2016 (Unaudited) (continued)

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and hypothetical expenses based on each Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

											Annualized
		Beginning			Ending			Expenses Paid			Expense Ratio
		Account Value			Account Value			During Period*			During Period
		5/1/16			10/31/16			5/1/16 - 10/31/16			5/1/16 - 10/31/16
U.S. Government Money
Market Fund	Class A Shares		$	1,000.00		$	1,023.13		$	2.03		0.40	%
	Class B Shares			1,000.00			1,023.13			2.03		0.40	%
	Class D Shares			1,000.00			1,023.13			2.03		0.40	%
	Class E Shares			1,000.00			1,024.83			0.31		0.06	%
	Class I Shares			1,000.00			1,024.48			0.66		0.13	%
	Intermediary
	Class Shares			1,000.00			1,024.23			0.92		0.18	%
	Intermediary
	Service Class
	Shares			1,000.00			1,024.23			0.92		0.18	%
	Class Y Shares			1,000.00			1,023.88			1.27		0.25	%

U.S. Treasury Money
Market Fund	Class D Shares			1,000.00			1,023.58			1.58		0.31	%
	Class E Shares			1,000.00			1,025.14			—		0.00	%
	Class I Shares			1,000.00			1,024.43			0.71		0.14	%
	Intermediary
	Class Shares			1,000.00			1,025.14			—		0.00	%
	Intermediary
	Service Class
	Shares			1,000.00			1,024.13			1.02		0.20	%
	Class Y Shares			1,000.00			1,023.88			1.27		0.25	%

____________________

*	Expenses are equal to the average account value over the period, multiplied by the Fund’s annualized expense ratio, multiplied by 184/366 (to reflect the one half year period).

32 HSBC FAMILY OF FUNDS

HSBC FAMILY OF FUNDS

Board of Trustees and Officers (Unaudited)

MANAGEMENT OF THE TRUST

The following table contains information regarding the HSBC Family of Funds’ Board of Trustees (“Trustees”). The HSBC Family of Funds’ Statement of Additional Information includes additional information about the Trustees and is available, without charge, upon request by calling (888) 525-5757.

Name, Address, Age	Position(s) Held with Funds	Term of Office and Length of Time Served	Principal Occupation(s) During Past 5 Years	Portfolios in Fund Complex Overseen By Trustee*	Other Directorships Held by Trustee During Past 5 Years
NON-INTERESTED TRUSTEES

MARCIA L. BECK P.O. Box 182845 Columbus, OH 43218-3035 Age: 61	Trustee	Indefinite; 2008 to present	Private Investor (June 1999 – present); Executive Vice President, Prudential Investments (1997 – 1999); President and Trustee, The Goldman Sachs Mutual Funds (1992 – 1996)	21	None

SUSAN C. GAUSE P.O. Box 182845 Columbus, OH 43218-3035 Age: 64	Trustee	Indefinite; 2013 to present	Private Investor (2003 - present); Chief Executive Officer, Dresdner RCM Global Investors and Allianz Dresdner Asset Management (2000 – 2002); Board Member of Dresdner Global Asset Management Board (2000 – 2002); Chief Operating Officer and Senior Managing Director of Dresdner RCM Global Investors (1998 – 2000); Global Chief Financial Officer, Dresdner RCM Global Investors (1996-1998)	21	Met Investors Series Trust and Metropolitan Series Fund

SUSAN S. HUANG P.O. Box 182845 Columbus, OH 43218-3035 Age: 62	Trustee	Indefinite; 2008 to present	Private Investor (2000- present); Senior Vice President, Schroder Investment Management (2001 – 2004); Managing Director, Chase Asset Management (1995-2000)	21	None

THOMAS F. ROBARDS P.O. Box 182845 Columbus, OH 43218-3035 Age: 70	Chairman and Trustee	Indefinite; 2005 to present	Private Investor (2003-present); Partner, Robards & Co. LLC (investment and advisory services) (2005-present); Chief Financial Officer, American Museum of Natural History (2003- 2004); Chief Financial Officer, Datek Online Holdings (2000-2003); Previously EVP and CFO Republic New York Corporation (1976-2000)	21	Ellington Financial LLC (NYSE listed financial services); Ellington Residential Mortgage REIT (NYSE listed real estate investment trust); Overseas Shipholding Group (OSG) (NYSE listed company)

INTERESTED TRUSTEE

DEBORAH HAZELL 452 Fifth Avenue New York NY 10018 Age: 53	Trustee	Indefinite; 2011 to present	CEO, HSBC Global Asset Management (USA) Inc. (2011-present); President and CEO, Fisher Francis Trees & Watts (“FFTW”) (investment advisor) (2008-2011); Client Service, Business Development and Marketing Group, FFTW (1999-2008)	21	None

____________________

* Includes all series of the HSBC Funds.

HSBC FAMILY OF FUNDS 33

HSBC FAMILY OF FUNDS

Board of Trustees and Officers (Unaudited) (continued)

Name, Address, Age	Position(s) Held Funds	Term of Office and Length of Time Served	Principal Occupation(s) During Past 5 Years
OFFICERS

RICHARD A. FABIETTI 452 Fifth Avenue New York, NY 10018 Age: 58	President	One year; 2004 to present	Senior Vice President, HSBC Global Asset Management (USA) Inc. (1998 - present)

JAMES D. LEVY 452 Fifth Avenue New York, NY 10018 Age: 53	Vice President	One year; 2014 to present	Vice President, Product Management, HSBC Global Asset Management (USA) Inc. (2014 – present); Vice President, Mutual Funds Product Development, GE Asset Management Inc. (2007 – 2014)

SCOTT RHODES* 3435 Stelzer Road Columbus, OH 43219-3035 Age: 57	Treasurer	One year; 2014 to present	Senior Vice President, Citi Fund Services (2010 - present)

IOANNIS TZOUGANATOS* 100 Summer Street, Suite 1500 Boston, MA 02110 Age: 40	Secretary	One Year; 2015 to present	Vice President, Regulatory Administration, Citi Fund Services (2008-present)

CHARLES BOOTH* 3435 Stelzer Road Columbus, OH 43219-3035 Age: 56	Chief Compliance Officer	One year; 2015 to present	Director and Compliance Officer, CCO Services, Citi Fund Services (1988 - present)

____________________

*	Mr. Rhodes, Mr. Tzouganatos, and Mr. Booth also are officers of other investment companies of which Citi (or an affiliate) is the administrator or sub-administrator.

34 HSBC FAMILY OF FUNDS

Other Information (Unaudited):

Information regarding how the Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30th is available (i) without charge, upon request, by calling 1-800-525-5757 for HSBC Bank USA and HSBC Brokerage (USA) Inc. clients and 1-800-782-8183 for all other shareholders; (ii) on the Funds’ website at www.investorfunds.us.hsbc.com; and (iii) on the Securities and Exchange Commission’s (“Commission”) website at http://www.sec.gov.

The Funds file their complete schedules of portfolio holdings with the Commission for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the Commission’s website at http://www.sec.gov. The Funds’ Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The Funds’ Schedules of Investments will be available no later than 60 days after each period end, without charge, on the Funds’ website at www.investorfunds.us.hsbc.com.

Each Fund discloses on its website at www.investorfunds.us.hsbc.com, within five business days after the end of each month, a complete schedule of portfolio holdings and information regarding the weighted average maturity of the Fund. In addition, each Fund files with the Commission on Form N-MFP, within five business days after the end of each month, more detailed portfolio holdings information. The Funds’ Forms N-MFP are be available on the Commission’s website at http://www.sec.gov and the Funds’ website also contains a link to these filings.

An investment in a Fund is not a deposit of HSBC Bank USA, National Association, and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

HSBC FAMILY OF FUNDS 35

HSBC FAMILY OF FUNDS:

INVESTMENT ADVISER AND ADMINISTRATOR

HSBC Global Asset Management (USA) Inc.

452 Fifth Avenue

New York, NY 10018

SHAREHOLDER SERVICING AGENTS

For HSBC Bank USA, N.A. and

HSBC Securities (USA) Inc. Clients:

HSBC Bank USA, N.A.

452 Fifth Avenue

New York, NY 10018

1-888-525-5757

For All Other Shareholders:

HSBC Funds

P.O. Box 8106

Boston, MA 02266-8106

1-800-782-8183

TRANSFER AGENT

Boston Financial Data Services, Inc.

2000 Crown Colony Drive

Quincy, MA 02169

DISTRIBUTOR

Foreside Distribution Services, L.P.

690 Taylor Road, Suite 150

Gahanna, Ohio 43230

Investment products:
ARE NOT A BANK DEPOSIT OR OBLIGATION OF THE BANK OR ANY OF ITS AFFILIATES	ARE NOT FDIC INSURED	ARE NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY
ARE NOT GUARANTEED BY THE BANK OR ANY OF ITS AFFILIATES		MAY LOSE VALUE

CUSTODIAN

The Northern Trust Company

50 South LaSalle Street

Chicago, IL 60603

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

PricewaterhouseCoopers LLP

300 Madison Avenue

New York, NY 10017

LEGAL COUNSEL

Dechert LLP

1900 K Street, N.W.

Washington, D.C. 20006

Investment products are offered by HSBC Securities (USA) Inc. (HSI), member NYSE/FINRA/SIPC. HSI is an affiliate of HSBC Bank USA, N.A. Investment products: Are not a deposit or other obligation of the bank or any of its affiliates; Not FDIC insured or insured by any federal government agency of the United States; Not guaranteed by the bank or any of its affiliates; and are subject to investment risk, including possible loss of principal invested.

Investors should consider the investment objectives, risks, charges, and expenses of the investment company carefully before investing. The prospectus contains this and other important information about the investment company. For clients of HSBC Securities (USA) Inc., please call 1-888-525-5757 for more information. For other investors and prospective investors, please call the Funds directly at 1-800-782-8183 or visit our website at www.investorfunds.us.hsbc.com. Investors should read the prospectus carefully before investing or sending money.

HSB-AR-MMF-1216

12/16

The World Selection Funds (the “Funds”) are “fund of funds” which aim to provide superior risk adjusted returns relative to a single asset class investment over the long term by investing primarily in underlying funds. The underlying funds may include mutual funds managed by HSBC Global Asset Management (USA) Inc. (the “Adviser”), mutual funds managed by investment advisers that are not associated with the Adviser and exchange traded funds (“ETFs”) (collectively, “Underlying Funds”). The Funds may also purchase or hold exchange traded notes (“ETNs”). The Funds’ broadly diversified investment approach across various asset classes and investment styles aims to contribute to achieving their objectives. Each World Selection Fund has a strategic asset allocation which represents a carefully constructed blend of asset classes, regions and currencies to meet longer term investment goals.

BofA Merrill Lynch U.S. High Yield Master II Index is an index that tracks the performance of USD-denominated, below investment-grade corporate debt publicly issued in the U.S. domestic market.

Citigroup U.S. Domestic 3-Month Treasury Bill Index is a market value-weighted index of public obligations of the U.S. Treasury with maturities of three months.

Gross Domestic Product (“GDP”) is the value of goods and services produced in a given country in a given year.

MSCI All Country World Index (“MSCI ACWI Index”) is an equity index which captures the large- and mid-cap representation across 23 developed markets countries—Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland , the UK and the US—and 23 emerging markets countries—Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Peru, Philippines, Poland, Russia, Qatar, South Africa, Taiwan, Thailand, Turkey and United Arab Emirates.

MSCI Brazil Index measures the performance of the large- and mid-cap segments of the Brazilian market. With 60 constituents, the index covers about 85% of the Brazilian equity universe.

The global economy remained resilient over the 12 month period from November 1, 2015, through October 31, 2016, even as a wide range of developments challenged its stability and exposed weaknesses.

U.S. equities posted modest gains during the period; the S&P 500 Index¹ of large-company stocks returned 4.51%. U.S. economic fundamentals generally improved throughout the period.

by Rayman Bovell, CFA, Senior Vice President and Head of Wealth Portfolio Management

The Aggressive Strategy Fund (the “Fund”) is a “fund of funds” which seeks long-term growth of capital by investing primarily in underlying funds. The underlying funds may include mutual funds managed by HSBC Global Asset Management (USA) Inc. (the “Adviser”) and mutual funds and exchange traded fund (“ETFs”) managed by investment advisers that are not associated with the Adviser (collectively, “Underlying Funds”). The Fund may invest in both actively-managed and passively-managed Underlying Funds to implement the Adviser’s investment views.

Allocation Risk: The risk that the Adviser’s target asset and sector allocations and changes in target asset and sector allocations cause the Fund to underperform other similar funds or cause you to lose money, and that the Fund may not achieve its target asset and sector allocations.

Underlying Fund Selection Risk: The risk that the Fund may invest in Underlying Funds that underperform other similar funds or the markets more generally, due to poor investment decisions by the investment adviser(s) for the Underlying Funds or otherwise. Underlying Funds also have their own expenses, which the Fund bears in addition to its own expenses.

Equity Securities Risk: A portion of the assets of the Fund is allocated to Underlying Funds investing primarily in equity securities. Therefore, the value of the Fund may increase or decrease as a result of its indirect interest in equity securities.

High Yield Risk: High yield, lower rated securities are considered speculative investments, involve greater price volatility and present greater risk than higher rated fixed income securities. At times, due to market conditions, the Fund may be unable to sell certain of its portfolio securities without a substantial drop in price. Prices of fixed income securities are generally inversely correlated to interest rates. Investments in the Fund are subject to possible loss due to the financial failure of underlying securities and their inability to meet their debt obligations. These risks may increase the Fund’s share price volatility.

Fixed Income Securities Risk: A portion of the assets of the Fund is allocated to Underlying Funds investing primarily in fixed income securities. Fluctuations in interest rates may affect the yield, liquidity and value of investments in income producing or debt instruments. Generally, if interest rates rise, the value of such investments will fall. The risks associated with rising interest rates are heightened given that interest rates are near historic lows, but are expected to increase in the future, with unpredictable effects on the markets and the Fund’s investments. Therefore, the value of the Fund may increase or decrease as a result of its indirect interest in fixed income securities.

Foreign Securities/Emerging Markets Risk: Foreign securities, including those of emerging market issuers, are subject to additional risks including international trade, currency, political, and regulatory risks. Securities of emerging market issuers generally have more risk than securities issued by issuers in more developed foreign markets.

REIT Risk: Investments in the Funds are subject to the risks related to direct investment in real estate, such as real estate risk, regulatory risks, concentration risk, and diversification risk.

For a complete description of these and other risks associated with investment in a mutual fund, please refer to the Fund’s prospectus.

The Fund returned 1.11% (without sales charge) for the Class A Shares for the year ended October 31, 2016. That compared to a 4.51% total return for the Fund’s primary benchmark, the S&P 500 Index¹.

The Fund measured performance against several additional reference indices for the year ended October 31, 2016: the MSCI ACWI Index¹ (2.64% total return), the MSCI EAFE Index¹ (-2.74% total return), Bloomberg Barclays U.S. Aggregate Bond Index¹ (4.37% total return), BofA Merrill Lynch U.S. High Yield Master II Index¹ (10.16% total return) and Citigroup U.S. Domestic 3-Month Treasury Bill Index¹ (0.22% total return).

Global equity markets were volatile for much of the period under review. In the first several months of the period through March 2016, stocks lagged amid concerns over the health of the global economy, slumping commodity prices and geopolitical issues such as the March terrorist attack in Brussels. As the period wore on, those concerns were largely tempered by improving economic conditions, stabilizing prices for commodities such as oil, and supportive monetary policies.

Although U.S. equity markets dropped sharply at the beginning of 2016, U.S. economic fundamentals exhibited substantial improvement as the period progressed. Manufacturing activity rebounded between May and October, and the U.S. job market continued to strengthen during the period, suggesting that the economy continues to improve. Investment-grade government and corporate bonds as well as high-yield bonds performed relatively well during the 12-months through October. In the first three months of 2016, many areas of the global bond market—from sovereign debt to investment-grade corporate bonds—benefited from central bank stimulus measures around the world. Interest rates remained low during the period as the U.S. Federal Reserve (the Fed) opted to keep key short-term interest rates unchanged following its late-2015 rate hike. The low-rate environment helped support prices on U.S. Treasury and corporate issues for much of the 12-month period. Rates rose modestly toward the end of the period in response to firming economic data and increasingly hawkish commentary from the Fed.

The Fund benefited from its bias toward U.S. stocks, which outperformed international stocks for the 12-month period. However, as the fund is a multi-asset portfolio and includes many asset classes to achieve its risk/ return profile, the Fund did not capture the full benefit from the strong domestic equity market, and so underperformed its primary benchmark, the S&P 500 Index.^†

We continue to expect stable but sluggish global economic growth. Economic indicators suggest that a lower-growth environment is likely to continue in the U.S. Moreover, while it appears likely that the Fed may raise interest rates in December 2016, we believe policymakers will remain cautious and gradually increase rates over time. In this environment, we maintain a preference for equities over cash or developed market government bonds, as we see better risk-adjusted returns over the long term. We continue to expect episodic volatility from time to time, and therefore we believe a broad, multi-asset approach is appropriate.^†

The chart above represent a historical 10-year performance comparison of a hypothetical $10,000 investment in the indicated share class versus a similar investment in the Fund’s benchmark and represents the reinvestment of dividends and capital gains in the Fund.

Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. Total return figures include change in share price, reinvestment of dividends and capital gains and do not reflect the taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed may be worth more or less than the original cost. To obtain performance information current to the most recent month end, please call 1-800-782-8183.

Certain returns shown include monies received by series of HSBC Portfolios (the “Portfolios”), in which the Fund had invested, in respect of one-time class action settlements. As a result, the Fund’s total returns for those periods were higher than they would have been had the Portfolios not received the payments.

The Fund’s performance is primarily measured against the S&P 500 Index, an unmanaged index that is widely regarded as a gauge of the U.S. equities market. This index includes 500 leading companies in leading industries of the U.S. economy. Although the S&P 500 Index focuses on the large-cap segment of the market, with approximately 80% coverage of U.S. equities, it is also an ideal proxy for the total market. The performance of the index does not reflect the deduction of expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these value-added services. Investors cannot invest directly in an index.

by Rayman Bovell, CFA, Senior Vice President and Head of Wealth Portfolio Management

The Balanced Strategy Fund (the “Fund”) is a “fund of funds” which seeks long-term growth of capital by investing primarily in underlying funds. The underlying funds may include mutual funds managed by HSBC Global Asset Management (USA) Inc. (the “Adviser”) and mutual funds and exchange traded fund (“ETFs”) managed by investment advisers that are not associated with the Adviser (collectively, “Underlying Funds”). The Fund may invest in both actively-managed and passively-managed Underlying Funds to implement the Adviser’s investment views.

REIT Risk: Investments in the Funds are subject to the risks related to direct investment in real estate, such as real estate risk, regulatory risks, concentration risk, and diversification risk.

For a complete description of these and other risks associated with investment in a mutual fund, please refer to the Fund’s prospectus.

The Fund returned 2.25% (without sales charge) for the Class A Shares for the year ended October 31, 2016. That compared to a 4.51% total return for the Fund’s primary benchmark, the S&P 500 Index¹.

The Fund measured performance against several additional reference indices for the year ended October 31, 2016: the MSCI ACWI Index¹ (2.64% total return), the MSCI EAFE Index¹ (-2.74% total return), Bloomberg Barclays U.S. Aggregate Bond Index¹ (4.37%, total return), BofA Merrill Lynch U.S. High Yield Master II Index¹ (10.16% total return) and Citigroup U.S. Domestic 3-Month Treasury Bill Index¹ (0.22% total return).

Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. Total return figures include change in share price, reinvestment of dividends and capital gains and do not reflect the taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed may be worth more or less than the original cost. To obtain performance information current to the most recent month end, please call 1-800-782-8183.

by Rayman Bovell, CFA, Senior Vice President and Head of Wealth Portfolio Management

The Moderate Strategy Fund (the “Fund”) is a “fund of funds” which seeks high total return consisting of long-term growth of capital and current income by investing primarily in underlying funds. The underlying funds may include mutual funds managed by HSBC Global Asset Management (USA) Inc. (the “Adviser”) and mutual funds and exchange traded fund (“ETFs”) managed by investment advisers that are not associated with the Adviser (collectively, “Underlying Funds”). The Fund may invest in both actively-managed and passively-managed Underlying Funds to implement the Adviser’s investment views.

REIT Risk: Investments in the Funds are subject to the risks related to direct investment in real estate, such as real estate risk, regulatory risks, concentration risk, and diversification risk.

For a complete description of these and other risks associated with investment in a mutual fund, please refer to the Fund’s prospectus.

The Fund returned 2.90% (without sales charge) for the Class A Shares for the year ended October 31, 2016. That compared to a 4.37% total return for the Fund’s primary benchmark, the Bloomberg Barclays U.S. Aggregate Bond Index¹.

The Fund measured performance against several additional reference indices for the year ended October 31, 2016: the S&P 500 Index¹ (4.51% total return), the MSCI ACWI Index¹(2.64% total return), MSCI EAFE Index¹ (-2.74% total return), BofA Merrill Lynch U.S. High Yield Master II Index¹(10.16% total return) and Citigroup U.S. Domestic 3-Month Treasury Bill Index¹ (0.22% total return).

The Fund benefited from its bias toward U.S. high yield and emerging market local debt for the 12-month period. However, as the fund is a multi-asset portfolio and includes many asset classes to achieve its risk/return profile, the Fund did not capture the full benefit from the strong domestic fixed income market, and so underperformed its primary benchmark, the Bloomberg Barclay U.S. Aggregate Bond Index.^†

Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. Total return figures include change in share price, reinvestment of dividends and capital gains and do not reflect the taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed may be worth more or less than the original cost. To obtain performance information current to the most recent month end, please call 1-800-782-8183.

The Fund’s performance is primarily measured against the Bloomberg Barclays U.S. Aggregate Bond Index, an unmanaged index generally representative of investment-grade, USD-denominated, fixed-rate debt issues, taxable bond market, including Treasuries, government-related and corporate securities, asset-backed, mortgage-backed and commercial mortgage-backed securities, with maturities of at least one year. The performance of the index does not reflect the deduction of expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these value-added services. Investors cannot invest directly in an index.

by Rayman Bovell, CFA, Senior Vice President and Head of Wealth Portfolio Management

The Conservative Strategy Fund (the “Fund”) is a “fund of funds” which seeks high total return consisting of long-term growth of capital and current income by investing primarily in underlying funds. The underlying funds may include mutual funds managed by HSBC Global Asset Management (USA) Inc. (the “Adviser”) and mutual funds and exchange traded fund (“ETFs”) managed by investment advisers that are not associated with the Adviser (collectively, “Underlying Funds”). The Fund may invest in both actively-managed and passively-managed Underlying Funds to implement the Adviser’s investment views.

REIT Risk: Investments in the Funds are subject to the risks related to direct investment in real estate, such as real estate risk, regulatory risks, concentration risk, and diversification risk.

For a complete description of these and other risks associated with investment in a mutual fund, please refer to the Fund’s prospectus.

The Fund returned 2.88% (without sales charge) for the Class A Shares for the year ended October 31, 2016. That compared to a 4.37% total return for the Fund’s primary benchmark, the Bloomberg Barclays U.S. Aggregate Bond Index¹.

The Fund measured performance against several additional reference indices for the year ended October 31, 2016: the S&P 500 Index¹ (4.51% total return), the MSCI ACWI Index¹ (2.64% total return), MSCI EAFE Index¹ (-2.74% total return), BofA Merrill Lynch U.S. High Yield Master II Index¹ (10.16% total return) and Citigroup U.S. Domestic 3-Month Treasury Bill Index¹ (0.22% total return).

Although U.S. equity markets dropped sharply in early 2016, U.S. economic fundamentals exhibited substantial improvement as the period progressed. Manufacturing activity rebounded between May and October, and the U.S. job market continued to strengthen during the period suggesting that the economy continues to improve. Investment-grade government and corporate bonds as well as high-yield bonds performed relatively well during the 12-months through October. During the first three months of 2016, many areas of the global bond market—from sovereign debt to investment-grade corporate bonds—benefited from central bank stimulus measures around the world. Interest rates remained low during the period as the U.S. Federal Reserve (the Fed) opted to keep key short-term interest rates unchanged following its late-2015 rate hike. The low-rate environment helped support prices on U.S. Treasury and corporate issues for much of the 12-month period. Rates rose modestly toward the end of the period in response to firming economic data and increasingly hawkish commentary from the Fed.

† Portfolio composition is subject to change.
1 For additional information, please refer to the Glossary of Terms.

Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. Total return figures include change in share price, reinvestment of dividends and capital gains and do not reflect the taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed may be worth more or less than the original cost. To obtain performance information current to the most recent month end, please call 1-800-782-8183.

by Rayman Bovell, CFA, Senior Vice President and Head of Wealth Portfolio Management

The Income Strategy Fund (the “Fund”) is a “fund of funds” which primarily seeks current income and secondarily seeks to provide long-term growth of capital by investing primarily in underlying funds. The underlying funds may include mutual funds managed by HSBC Global Asset Management (USA) Inc. (the “Adviser”) and mutual funds and exchange traded fund (“ETFs”) managed by investment advisers that are not associated with the Adviser (collectively, “Underlying Funds”). The Fund may invest in both actively-managed and passively-managed Underlying Funds to implement the Adviser’s investment views.

REIT Risk: Investments in the Funds are subject to the risks related to direct investment in real estate, such as real estate risk, regulatory risks, concentration risk, and diversification risk.

For a complete description of these and other risks associated with investment in a mutual fund, please refer to the Fund’s prospectus.

The Fund returned 2.75% (without sales charge) for the Class A Shares for the year ended October 31, 2016. That compared to a 4.37% total return for the Fund’s primary benchmark, the Bloomberg Barclays U.S. Aggregate Bond Index¹.

The Fund measured performance against several additional reference indices for the year ended October 31, 2016: the S&P 500 Index¹ (4.51% total return), the MSCI ACWI Index¹ (2.64% total return), MSCI EAFE index (-2.74% total return), BofA Merrill Lynch U.S. High Yield Master II Index¹ (10.16% total return) and Citigroup U.S. Domestic 3-Month Treasury Bill Index¹ (0.22% total return).

We continue to expect stable but sluggish global economic growth. Economic indicators suggest that a lower-growth environment is likely to continue in the U.S. Moreover, while it appears likely that the Fed may raise interest rates in December 2016, we believe policymakers will remain cautious and gradually increase rates over time. In this environment, we maintain a preference for equities over cash or developed market government bonds, as we see better risk-adjusted returns over the long-term. We continue to expect episodic volatility from time to time, and therefore we believe a broad, multi-asset approach is appropriate.^†

The chart above represent a historical since inception performance comparison of a hypothetical $10,000 investment in the indicated share class versus a similar investment in the Fund’s benchmark and represents the reinvestment of dividends and capital gains in the Fund.

Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. Total return figures include change in share price, reinvestment of dividends and capital gains and do not reflect the taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed may be worth more or less than the original cost. To obtain performance information current to the most recent month end, please call 1-800-782-8183.

The performance above reflects any fee waivers that have been in effect during the applicable periods, as well as any expense reimbursements that have periodically been made. Absent such waivers and reimbursements, returns would have been lower. Currently, contractual fee waivers are in effect for the Fund through March 1, 2017.

Selected data for a share outstanding throughout the periods indicated*

The HSBC Funds (the “Trust”), a Delaware statutory trust organized on March 2, 2016, is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company. Effective June 24, 2016, the Funds (as defined below), which were series of HSBC Funds, a Massachusetts business trust, reorganized with and into corresponding series of the Trust (each, a “Reorganization”). The series of the Trust into which the Funds reorganized had no assets, liabilities, or operations prior to the Reorganization. Upon completion of each Reorganization, the respective share classes of each Fund assumed the performance, financial and other historical information of those of the corresponding predecessor series. As of October 31, 2016, the Trust is composed of 19 separate operational funds, each a series of the HSBC Family of Funds. The accompanying financial statements are presented for the following five funds (individually a “Fund,” collectively the “Funds” or the “World Selection Funds”):

All of the World Selection Funds are diversified funds. Financial statements for all other funds of the Trust are published separately.

Each of the World Selection Funds is a “fund of funds,” meaning that it seeks to achieve its investment objective by investing primarily in a combination of mutual funds managed by HSBC Global Asset Management (USA) Inc. (the “Adviser”) (the “Affiliated Underlying Funds”), as well as mutual funds and exchange-traded funds managed by other investment advisers (“Unaffiliated Underlying Funds” and, together with the Affiliated Underlying Funds, the “Underlying Funds”). Each Fund may invest in both actively managed and passively managed Underlying Funds to implement the Adviser’s views. The Underlying Funds may include private equity funds and real estate funds that are organized as mutual funds or Exchange Traded Funds (“ETFs”). Each World Selection Fund invests according to the investment objectives and strategies described in its Prospectus.

The World Selection Funds are authorized to issue an unlimited number of shares of beneficial interest with a par value of $ 0.001 per share. Each Fund offers three classes of shares: Class A Shares, Class B Shares and Class C Shares. Class A Shares of the World Selection Funds (except, the Income Strategy Fund) have a maximum sales charge of 5.00% as a percentage of the original purchase price. The Class A Shares of the Income Strategy Fund have a maximum sales charge of 4.75% as a percentage of the original purchase price. Class B Shares of the World Selection Funds are offered without any front-end sales charge, but will be subject to a contingent deferred sales charge (“CDSC”) ranging from a maximum of 4.00% if redeemed less than one year after purchase to 0.00% if redeemed more than four years after purchase. Class C Shares of the World Selection Funds are offered without any front-end sales charge, but will be subject to a maximum CDSC of 1.00% if redeemed less than one year after purchase. Each class of shares in the World Selection Funds has identical rights and privileges except with respect to arrangements pertaining to shareholder servicing and/or distribution, class-related expenses, voting rights on matters affecting a single class of shares, and exchange privileges of each class of shares. Class B Shares may no longer be purchased or acquired by any new or existing Class B shareholder, except through dividend and/or capital gains reinvestment.

Under the Trust’s organizational documents, the Trust’s officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the World Selection Funds. In addition, in the normal course of business, the Trust enters into contracts with its service providers, which also provide for indemnifications by the World Selection Funds. The World Selection Funds’ maximum exposure under these arrangements is unknown as this would involve any future claims that may be made against the World Selection Funds. However, based on experience, the Trust expects the risk of loss to be remote.

The following is a summary of the significant accounting policies followed by the World Selection Funds in the preparation of their financial statements. The policies are in conformity with generally accepted accounting principles in the United States of America (“GAAP”). The preparation of financial statements requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.

The World Selection Funds record their investments at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The valuation techniques used to determine fair value in funds in which the World Selection Funds are invested are described in their respective notes to financial statements. Valuation techniques employed by the World Selection Funds are further described in Note 3 below.

Changes in holdings of the Underlying Funds for each World Selection Fund are reflected not later than one business day after trade date. However, for financial reporting purposes, changes in holdings of the Underlying Funds are accounted for on trade date. Dividend income and realized gain distributions from the Underlying Funds are recorded on the ex-dividend date. Investment gains and losses are calculated on the identified cost basis. Each World Selection Fund indirectly bears its proportionate share of fees and expenses incurred by the Underlying Funds in which it is invested; however, such expenses are not reflected as expenses on the World Selection Funds’ Statements of Operations.

Dividends to shareholders from net investment income, if any, are declared and distributed monthly in the case of the Income Strategy Fund, quarterly in the case of the Moderate Strategy Fund and Conservative Strategy Fund, and annually in the case of the Aggressive Strategy Fund and Balanced Strategy Fund.

The World Selection Funds’ net realized gains, if any, are distributed to shareholders at least annually. Additional distributions are also made to the World Selection Funds’ shareholders to the extent necessary to avoid the federal excise tax on certain undistributed income and net capital gains of regulated investment companies.

The valuation techniques employed by the World Selection Funds, as described below, maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The Funds’ investments are classified within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. The inputs used for valuing the World Selection Funds’ investments are summarized in the three broad levels listed below:

The World Selection Funds record their investments in mutual funds at the net asset value reported by those funds and are typically categorized as Level 1 in the fair value hierarchy.

The World Selection Funds record their investments in exchange traded funds at the last sale price on national securities exchange, or in the absence of recorded sales, at the readily available closing bid price on such exchanges, or at the quoted bid price in the over-the-counter market and are typically categorized as Level 1 in the fair value hierarchy.

As of October 31, 2016, all investments were categorized as Level 1 in the fair value hierarchy. The breakdown of investment categorization is disclosed in the Schedule of Portfolio Investments for each Fund.

HSBC Global Asset Management (USA), Inc. (“HSBC” or the “Investment Adviser”), a wholly owned subsidiary of HSBC Bank USA, N.A., a national bank organized under the laws of the United States, acts as Investment Adviser to the World Selection Funds. As Investment Adviser, HSBC manages the investments of the World Selection Funds and continuously reviews, supervises and administers the World Selection Funds’ investments pursuant to an Investment Advisory Contract. For its services as Investment Adviser, HSBC receives a fee from each Fund, accrued daily and paid monthly, based on average daily net assets, at an annual rate of 0.25%.

HSBC also serves the World Selection Funds as Administrator. Effective April 1, 2016, under the terms of the Administration Agreement, HSBC receives from the World Selection Funds (as well as other funds in the Trust combined) a fee, accrued daily and paid monthly, at an annual rate of:

Prior to April 1, 2016, for these services, HSBC received from the Funds (as well as other funds in the Trust combined) a fee, accrued daily and paid monthly, at an annual rate of:

Pursuant to a Sub-Administration Agreement with HSBC, Citi Fund Services Ohio, Inc. (“Citi”), a wholly-owned subsidiary of Citigroup, Inc., serves as the Trust’s Sub-Administrator, subject to the general supervision by the Trust’s Board of Trustees (the “Board”) and HSBC. For these services, Citi is entitled to a fee, payable by HSBC, at an annual rate equivalent to the fee rates set forth above subject to certain reductions associated with services provided to new funds, minus 0.02% which is retained by HSBC.

Foreside Distribution Services, L.P. (“Foreside”), a wholly-owned subsidiary of Foreside Financial Group LLC, serves the Trust as Distributor (the “Distributor”). The Trust has adopted a non-compensatory Distribution Plan and Agreement (the “Distribution Plan”) pursuant to Rule 12b-1 of the Act. The Distribution Plan provides for reimbursement of expenses incurred by the Distributor related to distribution and marketing, at a rate not to exceed 0.25%, 1.00% and 1.00% of the average daily net assets of Class A Shares (currently not being charged), Class B Shares (currently charging 0.75%), and Class C Shares (currently charging 0.75%) of the World Selection Funds, respectively. For the year ended October 31, 2016, Foreside, as Distributor, also received $64,049 in commissions from sales of the Trust, of which $97 was reallocated to HSBC-affiliated brokers and dealers.

The Trust has adopted a Shareholder Services Plan which provides for payments to shareholder servicing agents for providing various shareholder services. For performing these services, the shareholder servicing agents receive a fee that is computed daily and paid monthly up to 0.25% of the average daily net assets of each of the Class A Shares, Class B Shares and Class C Shares of the World Selection Funds. The fees paid to the Distributor pursuant to the Distribution Plan and to shareholder servicing agents pursuant to the Shareholder Services Plan currently are not intended to exceed, in the aggregate, 0.50% of the average daily net assets of Class A Shares and 1.00% of the average daily net assets of Class B Shares and Class C Shares.

The Distributor has entered into shareholder services contracts with affiliated and unaffiliated financial intermediaries who provide shareholder services and other related services to their clients or customers who invest in the Funds under which the Distributor will pay all or a portion of such fees earned to financial intermediaries for performing such services.

Citi provides fund accounting services for each Fund. As fund accountant, Citi receives an annual fee per Fund and share class, subject to minimums, reductions associated with services provided to new funds and reimbursement of certain expenses. Citi receives additional fees paid by the Trust for regulatory administration services. Effective July 16, 2016, the transfer agency services were converted from FIS Investor Services, LLC (“FIS”) (formerly SunGard Investor Services LLC) to Boston Financial Data Services, Inc. (“BFDS”) under a separate transfer agency services agreement. As transfer agent, BFDS receives a fee based on the number of funds and shareholder accounts, subject to certain minimums, and reimbursement of certain expenses. Prior to July 16, 2016 transfer agent services were provided under the terms of a separate transfer agency services agreement with Citi. Citi’s rights and obligations under the transfer agency services agreement, in turn, were assigned to FIS. As transfer agent, FIS received a fee based on the number of funds and shareholder accounts, subject to certain minimums, reductions associated with services provided to new funds and reimbursement of certain expenses.

The Investment Adviser has agreed to contractually limit through March 1, 2017 the total annual expenses, exclusive of interest, taxes, brokerage commissions, extraordinary expenses and estimated indirect expenses attributable to the Funds’ investments in investment companies. Each Fund Class has its own expense limitations based on the average daily net assets for any full fiscal year as follows: Class A Shares 1.50%, Class B Shares 2.25%, Class C Shares 2.25%.

Any amounts contractually waived or reimbursed by the Investment Adviser will be subject to repayment by the respective Fund to the Investment Adviser within three years to the extent that the repayment will not cause the Fund’s operating expenses to exceed the contractual expense limit that was in effect at the time of such waiver or reimbursement. During the year ended October 31, 2016, the Investment Adviser did not recapture any of its prior contractual waivers or reimbursements. As of October 31, 2016, the repayments that may potentially be made by the Funds are as follows:

A summary of each Fund’s investment in affiliated investment companies for the year ended October 31, 2016 is as follows:

Cost of purchases and proceeds from sales of securities (excluding securities maturing less than one year from acquisition) for the year ended October 31, 2016 were as follows:

The tax character of dividends paid by the Funds during the tax year ended October 31, 2016 was as follows:

The tax character of dividends paid by the Funds during the tax year ended October 31, 2015 was as follows:

As of the tax year ended October 31, 2016, the components of accumulated earnings/(deficit) on a tax basis for the Funds were as follows:

As of the tax year ended October 31, 2016, the Funds have net capital loss carryforwards (“CLCFs”) not subject to a expiration as summarized in the tables below. The Board does not intend to authorize a distribution of any realized gain for the Funds until any applicable CLCF has been offset or expires.

The amount and character of net investment income and net realized gains distributions are determined in accordance with federal income tax regulations which may differ from GAAP. These “book/tax” differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature (e.g., reclassification of market discounts, certain gain/loss, and certain distributions), such amounts are reclassified within the composition of net assets; temporary differences (e.g., wash losses and post-October loss deferrals) do not require reclassification. The World Selection Funds may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized gains distributed to shareholders on redemption of shares, as a part of the dividends paid deduction for income tax purposes. To the extent distributions to shareholders from net investment income and net realized gains exceed net investment income and net realized gains for tax purposes, they are reported as distributions of capital.

On the Statements of Assets and Liabilities, as a result of permanent book-to-tax differences, reclassification adjustments were made as follows:

The reclassifications for the Funds relate primarily to non-taxable dividends and the differing treatment of distributions from investments in exchange-traded funds.

Underlying Funds Risk: The Funds are subject to certain risks related to the Underlying Funds’ investments in securities and financial instruments such as debt investments risk, including high yield, interest rate and credit risks, equity securities, foreign and emerging markets securities, and real estate securities. These securities are subject to risks specific to their structure, sector or market. In addition, the Underlying Funds may use derivative instruments in connection with their individual investment strategies including futures, forward foreign currency exchange contracts, options, swaps and other derivatives, which are also subject to specific risks related to their structure, sector or market and may be riskier than investments in other types of securities. Specific risks and concentrations present in the Underlying Funds are disclosed within their individual financial statements and registration statements, as appropriate.

As of October 31, 2016, the following investments in underlying funds represented more than 25% of the respective World Selection Fund’s net assets. Additional information on the underlying fund, including the audited financials, can be found on the SEC website at http:/www.sec.gov.

In our opinion, the accompanying statements of assets and liabilities, including the schedules of portfolio investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Aggressive Strategy Fund, Balanced Strategy Fund, Moderate Strategy Fund, Conservative Strategy Fund and Income Strategy Fund (each an HSBC World Selection Fund and a portfolio of HSBC Funds, and hereafter collectively referred to as the “Funds”) as of October 31, 2016, the results of each of their operations for the year then ended and the changes in each of their net assets and the financial highlights for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities as of October 31, 2016 by correspondence with the custodian and transfer agents, provide a reasonable basis for our opinion. The accompanying financial highlights for each of the years or periods ended on or prior to October 31, 2014 were audited by other auditors whose report dated December 23, 2014 expressed an unqualified opinion on those financial highlights.

For the year ended October 31, 2016, the following percentages of the total ordinary income dividends paid by the World Selection Funds qualify for the corporate dividends received deduction available to corporate shareholders:

For the year ended October 31, 2016, dividends paid by the World Selection Funds may be subject to a maximum tax rate of 15%, as provided for by the Jobs and Growth Tax Relief Reconciliation Act of 2003. The World Selection Funds intend to designate the maximum amount allowable as taxed at a maximum rate of 15%. Complete information will be reported in conjunction with your 2016 Form 1099-DIV:

As a shareholder of the World Selection Funds, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchases, redemption fees and exchange fees; and (2) ongoing costs, including management fees; distribution and/or shareholder servicing fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to with the ongoing costs of investing in other mutual funds.

These examples are intended to help you understand your ongoing costs (in dollars) of investing in the World Selection Funds and to compare these costs with the ongoing costs of investing in other mutual funds.

These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from May 1, 2016 through October 31, 2016.

The table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

The Funds file their complete schedules of portfolio holdings with the Commission for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the Commission’s website at http://www.sec.gov. The Funds’ Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C.and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The Funds’ Schedules of Investments will be available no later than 60 days after each period end, without charge, on the Funds’ website at www.investorfunds.us.hsbc.com.

An investment in a Fund is not a deposit of HSBC Bank USA, National Association, and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

Bloomberg Barclays U.S. Aggregate Bond Index is an index that is generally representative of investment-grade, USD-denominated, fixed-rate debt issues, taxable bond market, including Treasuries, government-related and corporate securities, asset-backed, mortgage-backed and commercial mortgage-backed securities, with maturities of at least one year.

Gross Domestic Product (“GDP”) is the value of goods and services produced in a given country in a given year.

Lipper Mid-Cap Growth Funds Average is an equally weighted average of mutual funds that, by portfolio practice, invest at least 75% of their equity assets in companies with market capitalizations (on a three-year weighted basis) below Lipper’s U.S. Diversified Equity large-cap floor. Mid-cap growth funds typically have an above-average price-to-earnings ratio, price-to-book ratio, and three-year sales-per-share growth value, compared to the S&P MidCap 400 Index.

MSCI Brazil Index measures the performance of the large- and mid-cap segments of the Brazilian market. With 60 constituents, the index covers about 85% of the Brazilian equity universe.

Russell 2500™ Growth Index is an index that measures the performance of the small- to mid-cap growth segment of the U.S. equity universe. It includes those Russell 2500 companies with higher price-to-book ratios and higher forecasted growth values.

Lipper is an independent mutual fund performance monitor whose results are based on total return and do not reflect a sales charge.

The global economy remained resilient over the 12 month period from November 1, 2015, through October 31, 2016, even as a wide range of developments challenged its stability and exposed weaknesses.

U.S. equities posted modest gains during the period; the S&P 500 Index¹ of large-company stocks returned 4.51%. U.S. economic fundamentals generally improved throughout the period.

by William A. Muggia, Committee Lead/Portfolio Manager
Ethan J. Myers, CFA, Portfolio Manager
John M. Montgomery, Portfolio Manager
Hamlen Thompson, Portfolio Manager
Bruce N. Jacobs, CFA, Portfolio Manager
Westfield Capital Management Company, L.P.

The HSBC Opportunity Fund (the “Fund”) seeks long-term growth of capital by investing, under normal market conditions, primarily in equity securities of small- and mid-cap companies. Small- and mid-cap companies generally are defined as those that have market capitalizations within the range of market capitalizations represented in the Russell 2500™ Growth Index¹. The Fund may also invest in equity securities of larger, more established companies and may invest up to 20% of its assets in securities of foreign companies. The Fund employs a two-tier structure, commonly referred to as a “master-feeder” structure, in which the Fund invests all of its investable assets in the HSBC Opportunity Portfolio (the “Portfolio”). The Portfolio employs Westfield Capital Management Company, L.P. as its subadviser.

Equity securities (stocks) are more volatile and carry more risk than other forms of investments, including investments in high-grade fixed income securities.

Small- to mid-capitalization funds typically carry additional risks since smaller companies generally have a higher risk of failure, and historically, their stocks have experienced a greater degree of market volatility than stocks on average.

The growth investment style may fall out of favor in the marketplace and result in significant declines in the value of the Portfolio’s securities. Securities of companies considered to be growth investments may have rapid price swings in the event of earnings disappointments or during periods of market, political, regulatory and economic uncertainty.

There are risks associated with investing in foreign companies, such as erratic market conditions, economic and political instability and fluctuations in currency and exchange rates.

For a complete description of these and other risks associated with investment in a mutual fund, please refer to the Fund’s prospectus.

For the year ended October 31, 2016, the Class I Shares of the HSBC Opportunity Fund produced a -3.28% total return, and the Class A Shares of the Fund produced a -3.87% total return (without sales charge). The Russell 2500™ Growth Index¹, the Fund’s primary performance benchmark, and the Lipper Mid-Cap Growth Funds Average¹ returned 0.00% and -0.86%, respectively.

After a period of prolonged gains from 2011 through the middle of 2015, U.S. equity markets began to show signs of duress during the reporting period. The period witnessed two major corrections, during the first six weeks of the year and again in June. In both cases, investors sought refuge in the most defensive, bond-like segments of the U.S. equity market, such as the real estate, utilities and telecom sectors—high-valuation areas of the market to which the Fund has limited exposure given, what we believe are, lofty valuations and lower growth potential.^†

More typical market conditions emerged after both corrections, where stock prices followed fundamentals and earnings and valuations were once again rewarded. Investors shifted their attention to more growth-oriented information technology and industrial companies, with those sectors outperforming others for the period. The Fund’s return benefited from positive performance across a number of sectors, with the largest contributions stemming from the health care and real estate sectors.^†

The materials, industrials and information technology sectors were the largest detractors from the Fund’s relative results, leading to underperformance against the Fund’s primary benchmark. In particular, the Fund’s limited exposure to the materials sector, one of the market’s best performers during the period, dragged on relative performance. Investors sought counter-cyclical stocks within that sector, which are typically viewed as safe havens in weaker markets. However, these stocks did not fit the investment profile of the portfolio, and the Fund’s only exposure to the sector continued to be in the chemical industry. Stock selection within the specialty chemicals sub-industry was in fact the biggest source of relative underperformance.^†

Stock selection in the health care sector, particularly within the Fund’s biotechnology and life sciences holdings, was the largest positive contributor to relative results. The Fund’s investments in the financials, consumer staples, telecommunications, and real estate sectors also boosted relative returns.^†

The charts above represent a historical 10-year performance comparison of a hypothetical investment in the indicated share class versus a similar investment in the Fund’s benchmark and represents the reinvestment of dividends and capital gains in the Fund.

Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. Total return figures include change in share price, reinvestment of dividends and capital gains and do not reflect the taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed may be worth more or less than the original cost. To obtain performance information current to the most recent month end, please call 1-800-782-8183.

Certain returns shown include monies received by the Portfolio, in which the Fund invests, in respect of one-time class action settlements and a one-time reimbursement from HSBC Global Asset Management (USA) Inc. (the “Adviser”) to the Fund related to past marketing arrangements. As a result, the Fund’s total returns for those periods were higher than they would have been had the Portfolio and the Fund not received the payments.

The Fund’s performance is measured against the Russell 2500™ Growth Index, an unmanaged index that measures the performance of the small- to mid-cap growth segment of the U.S. equity universe. It includes those Russell 2500 companies with higher price-to-book ratios and higher forecasted growth values. The performance for the index does not reflect the deduction of expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these value-added services. Investors cannot invest directly in an index.

Selected data for a share outstanding throughout the periods indicated.*

The HSBC Funds (the “Trust”), a Delaware statutory trust organized on March 2, 2016, is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company. Effective June 24, 2016, the Funds (as defined below), which were series of HSBC Funds, a Massachusetts business trust, reorganized with and into corresponding series of the Trust (each, a “Reorganization”). The series of the Trust into which the Funds reorganized had no assets, liabilities, or operations prior to the Reorganization. Upon completion of each Reorganization, the respective share classes of each Fund assumed the performance, financial and other historical information of those of the corresponding predecessor series. As of October 31, 2016, the Trust is composed of 19 separate operational funds, each a series of the HSBC Family of Funds. For financial reporting purposes, Opportunity Fund that was formerly a series of Advisor Trust prior to the Reorganization, formerly referred to as Opportunity Fund (Advisor), is referred to as Opportunity Fund (Class I). The accompanying financial statements are presented for the following two funds (individually a “Fund”, collectively the “Funds”) of the Trust:

All the Funds are diversified funds. Financial statements for all other funds of the Trust are published separately.

Each Fund utilizes a master-feeder fund structure and seeks to achieve its investment objectives by investing all of its investable assets in the HSBC Opportunity Portfolio (the “Portfolio”), which is a diversified series of the Trust. The Portfolio operates as a master fund in a master-feeder arrangement and also may receive investments from certain fund of funds. The Funds’ proportionate ownership of the Portfolio as of October 31, 2016 was as follows:

The financial statements of the Portfolio, including the Schedules of Portfolio Investments, are included elsewhere in this report. The financial statements of the Portfolio should be read in conjunction with the financial statements of the Funds.

The Funds are authorized to issue an unlimited number of shares of beneficial interest with a par value of $ 0.001 per share. The Opportunity Fund offers three classes of shares: Class A Shares, Class B Shares, and Class C Shares. The Opportunity Fund (Class I) offers one class of shares: Class I Shares. Class A Shares of the Opportunity Fund have a maximum sales charge of 5.00% as a percentage of the original purchase price. Class B Shares of the Opportunity Fund are offered without any front-end sales charge but will be subject to a contingent deferred sales charge (“CDSC”) ranging from a maximum of 4.00% if redeemed less than one year after purchase to 0.00% if redeemed more than four years after purchase. Class C Shares of the Opportunity Fund are offered without any front-end sales charge but will be subject to a maximum CDSC of 1.00% if redeemed less than one year after purchase. No sales charges are assessed with respect to Class I Shares of the Opportunity Fund. Each class of shares in the Funds has identical rights and privileges except with respect to arrangements pertaining to shareholder servicing and/or distribution, class-related expenses, voting rights on matters affecting a single class of shares, and the exchange privilege of each class of shares. Class B Shares of the Opportunity Fund may no longer be purchased or acquired by any new or existing Class B shareholder, except through dividend and/or capital gains reinvestment.

the Funds. The Funds’ maximum exposure under these arrangements is unknown, as this would involve any future claims that may be made against the Funds. However, based on experience, the Trust expects that risk of loss to be remote.

The following is a summary of the significant accounting policies followed by the Funds in the preparation of their financial statements. The policies are in conformity with generally accepted accounting principles in the United States of America (“GAAP”). The preparation of financial statements requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.

The Funds record their investments at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The valuation techniques used to determine fair value are further described in Note 3 below.

The Funds record investment transactions to the Portfolio on a trade date basis. The Funds record daily their proportionate share of income, expenses, changes in unrealized appreciation and depreciation and realized gains and losses derived from the Portfolio. In addition, the Funds accrue their own expenses daily as incurred.

Dividends to shareholders from net investment income, if any, are declared and distributed semiannually in the case of the Funds.

The Funds’ net realized gains, if any, are distributed to shareholders at least annually. Additional distributions are also made to the Funds’ shareholders to the extent necessary to avoid the federal excise tax on certain undistributed income and net capital gains of regulated investment companies.

The Funds record their investments in the Portfolio at fair value, which represents their proportionate ownership of the value of the Portfolio’s net assets. These investments are typically categorized as Level 2 in the fair value hierarchy. The underlying securities of the Portfolio are recorded at fair value, as discussed more fully in the Notes to Financial Statements of the Portfolio included elsewhere in this report.

As of October 31, 2016, all investments were categorized as Level 2 in the fair value hierarchy.

HSBC Global Asset Management (USA) Inc. (“HSBC” or the “Investment Adviser”), a wholly-owned subsidiary of HSBC Bank USA, N.A., a national bank organized under the laws of the United States, acts as Investment Adviser to the Portfolio. As Investment Adviser, HSBC manages the investments of the Portfolio and continuously reviews, supervises, and administers the Portfolio’s investments. The Funds are not directly charged any investment management fees.

HSBC also serves the Funds as Administrator. Effective April 1, 2016, under the terms of the Administration Agreement, HSBC receives from the Funds (as well as other funds in the Trust combined) a fee, accrued daily and paid monthly, at an annual rate of:

Prior to April 1, 2016, for these services, HSBC received from the Funds (as well as other funds in the Trust combined) a fee, accrued daily and paid monthly, at an annual rate of:

The fee rates and breakpoints are determined on the basis of the aggregate average daily net assets of the Trust. For the year ended October 31, 2016, the effective annualized rate was 0.04%, prior to any fee waivers or expense reimbursements, based on the average daily net assets of the Trust. The total administration fee paid to HSBC is allocated to each series based upon its proportionate share of the aggregate net assets of the Trust. For assets invested in the Portfolio by the Funds, the Portfolio pays half of the administration fee and the Funds pay half, for a combination of the total fee rate as set forth above.

Pursuant to a Sub-Administration Agreement with HSBC, Citi Fund Services Ohio, Inc. (“Citi”), a wholly-owned subsidiary of Citigroup, Inc., serves as the Trust’s Sub-Administrator, subject to the general supervision by the Trust’s Board of Trustees (the “Board”) and HSBC. For these services, Citi is entitled to a fee, payable by HSBC, at an annual rate equivalent to the fee rates set forth above subject to certain reductions associated with services provided to new funds, minus 0.02% which is retained by HSBC.

Under a Compliance Services Agreement between the Trust and Citi (the “CCO Agreement”), Citi makes an employee available to serve as the Trust’s Chief Compliance Officer (the “CCO”). Under the CCO Agreement, Citi also provides infrastructure and support in implementing the written policies and procedures comprising the Trust’s compliance program, including support services to the CCO. For the services provided under the CCO Agreement, the Trust paid Citi $304,597 for the year ended October 31, 2016, plus reimbursement of certain out-of-pocket expenses. Expenses incurred by each Fund are reflected on the Statements of Operations as “Compliance Services.” Citi pays the salary and other compensation earned by individuals performing these services, as employees of Citi.

Foreside Distribution Services, L.P. (“Foreside”), a wholly-owned subsidiary of Foreside Financial Group LLC, serves the Trust as Distributor (the “Distributor”). The Trust, has adopted a non-compensatory Distribution Plan and Agreement (the “Distribution Plan”) pursuant to Rule 12b-1 of the Act. The Distribution Plan provides for reimbursement of expenses incurred by the Distributor related to distribution and marketing, at a rate not to exceed 0.25%, 1.00% and 1.00% of the average daily net assets of Class A Shares (currently not being charged), Class B Shares (currently charging 0.75%) and Class C Shares (currently charging 0.75%) of the Opportunity Fund, respectively. For the year ended October 31, 2016, Foreside, as Distributor, also received $64,049 in commissions from sales of the Trust, of which $97 was reallocated to HSBC-affiliated brokers and dealers.

The Trust has adopted a Shareholder Services Plan, which provides for payments to shareholder servicing agents for providing various shareholder services. For performing these services, the shareholder servicing agents receive a fee that is computed daily and paid monthly up to 0.25% of the average daily net assets of Class A Shares, Class B Shares, and Class C Shares of the Opportunity Fund. The fees paid to the Distributor pursuant to the Distribution Plan and to shareholder servicing agents pursuant to the Shareholder Services Plan will not exceed in the aggregate 0.50% of the average daily net assets of Class A Shares, and 1.00% of the average daily net assets of Class B Shares and Class C Shares.

The Trust has entered into shareholder services contracts with affiliated and unaffiliated financial intermediaries who provide shareholder services and other related services to their clients or customers who invest in the Opportunity Fund under which the Opportunity Fund will pay all or a portion of such fees earned to financial intermediaries for performing such services.

The Funds pay fees to certain intermediaries or financial institutions for record keeping, sub-accounting services, transfer agency and other administrative services as reflected on the Statements of Operations as “Administrative Services.”

The Investment Adviser has contractually agreed to limit, through June 25, 2017, the annual total expenses, exclusive of interest, taxes, brokerage commissions, extraordinary expenses, and estimated indirect expenses attributed to a Fund’s investment in investment companies of certain Funds. Each affected Fund Class has its own expense limitation based on the average daily net assets for any full fiscal year as follows:

Any amounts contractually waived or reimbursed by the Investment Adviser will be subject to repayment by the respective Fund to the Investment Adviser within three years to the extent that the repayment will not cause the Fund’s operating expenses to exceed the contractual expense limit that was in effect at the time of such waiver or reimbursement. During the year ended October 31, 2016, the Investment Adviser did not recapture any of its prior contractual waivers or reimbursements. As of October 31, 2016, the repayments that may potentially be made by the Funds are as follows:

Contributions to and withdrawals from the Portfolio for the year ended October 31, 2016 totaled:

There were no dividends paid by the Funds during the tax year ended October 31, 2016.

The tax character of dividends paid by the Funds during the tax year ended October 31, 2015 was as follows:

As of the tax year ended October 31, 2016, the components of accumulated earnings/(deficit) on a tax basis for the Funds were as follows:

The amount and character of net investment income and net realized gains distributions are determined in accordance with federal income tax regulations which may differ from GAAP. These “book/tax” differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature (e.g., reclassification of market discounts, certain gain/loss, and certain distributions), such amounts are reclassified within the composition of net assets; temporary differences (e.g., wash losses and post-October loss deferrals) do not require reclassification. The Funds may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized gains distributed to shareholders on redemption of shares, as a part of the dividends paid deduction for income tax purposes. To the extent distributions to shareholders from net investment income and net realized gains exceed net investment income and net realized gains for tax purposes, they are reported as distributions of capital.

On the Statements of Assets and Liabilities, as a result of permanent book-to-tax differences, reclassification adjustments were made as follows:

In our opinion, the accompanying statements of assets and liabilities and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the HSBC Opportunity Fund and the HSBC Opportunity Fund (Class I) (formerly referred to as HSBC Opportunity Fund (Advisor)) (each a portfolio of HSBC Funds, and hereafter collectively referred to as the “Funds”) as of October 31, 2016, the results of each of their operations for the year then ended and the changes in each of their net assets and the financial highlights for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities as of October 31, 2016 by correspondence with the custodian and transfer agents, provide a reasonable basis for our opinion. The accompanying financial highlights for each of the years ended on or prior to October 31, 2014 were audited by other auditors whose report dated December 23, 2014 expressed an unqualified opinion on those financial highlights.

As a shareholder of the Funds, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchases, redemption fees and exchange fees; and (2) ongoing costs, including management fees, distribution fees and /or shareholder servicing fees and other Fund expenses (including expenses allocated from the Portfolio). These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these cost with the ongoing costs of investing in other mutual funds.

These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from May 1, 2016 through October 31, 2016.

The HSBC Funds (the “Trust”), a Delaware statutory trust organized on March 2, 2016, is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company. Effective June 24, 2016, the Portfolio (as defined below), which was a series of the Portfolio Trust, a New York trust under the laws of the State of New York, reorganized with and into a corresponding series of the Trust (the “Reorganization”). The series of the Trust into which the Funds reorganized had no assets, liabilities, or operations prior to the Reorganization. Upon completion of the Reorganization, the Portfolio assumed the performance, financial and other historical information of its corresponding predecessor series. As of October 31, 2016, the Trust is composed of 19 separate operational funds, each a series of the HSBC Family of Funds. The accompanying financial statements are presented for the HSBC Opportunity Portfolio (the “Portfolio”):

The Portfolio operates as a master fund in master-feeder arrangements, in which other feeder funds invest all or part of their investable assets in the Portfolio. The Declaration of Trust permits the Board of Trustees (the “Board”) to issue an unlimited number of beneficial interests in the Portfolio.

The Portfolio is a diversified series of the Trust. Financial statements for all other funds of the Trust are published separately.

The following represents each feeder fund’s proportionate ownership interest in the Portfolio:

Under the Trust’s organizational documents, the Trust’s officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Portfolio. In addition, in the normal course of business, the Trust may enter into contracts with its service providers, which also provide for indemnifications by the Portfolio. The Portfolio’s maximum exposure under these arrangements is unknown as this would involve any future claims that may be made against the Portfolio. However, based on experience, the Trust expects the risk of loss to be remote.

The Portfolio is an investment company and follows accounting and reporting guidance under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946, “Financial Services-Investment Companies.”

The following is a summary of the significant accounting policies followed by the Portfolio in the preparation of its financial statements. The policies are in conformity with generally accepted accounting principles (“GAAP”) in the United States of America. The preparation of financial statements requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.

The Portfolio records its investments at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The valuation techniques used to determine fair value are further described in Note 3 below.

The Portfolio makes an allocation of its investment income, expenses and realized gains and losses from securities transactions to its investors in proportion to their investment in the Portfolio on the date of such accrual or gain/loss.

Expenses directly attributable to the Portfolio are charged to the Portfolio. Expenses not directly attributable to the Portfolio are allocated proportionately among the Portfolio and applicable funds within the Trust in relation to the net assets of each fund or on another reasonable basis.

The Portfolio is treated as a partnership for U.S. federal income tax purposes. Accordingly, the Portfolio passes through all of its net investment income and gains and losses to its feeder funds, and is therefore not subject to U.S. federal income tax. As such, investors in the Portfolio are allocated for tax purposes their respective share of the Portfolio’s ordinary income and realized gains or losses. It is intended that the Portfolio will be managed in such a way that an investor will be able to satisfy the requirements of the Internal Revenue Code, as amended, applicable to regulated investment companies.

Management of the Portfolio has reviewed tax positions taken in tax years that remain subject to examination by all major tax jurisdictions, including federal (i.e., the last four tax year ends and the interim tax period since then, as applicable). Management believes that there is no tax liability resulting from unrecognized tax benefits related to uncertain tax positions taken. Management’s conclusions may be subject to future review based on changes in, or interpretation of, accounting standards or tax laws and regulations.

The valuation techniques employed by the Portfolio, as described below, maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The Portfolio’s investments are classified within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. The inputs used for valuing the Portfolio’s investments are summarized in the three broad levels listed below:

Exchange traded domestic equity securities are valued at the last sales price on a national securities exchange, or in the absence of recorded sales, at the readily available closing bid price on such exchanges, or at the quoted bid price in the over-the-counter market and are typically categorized as Level 1 in the fair value hierarchy.

Shares of exchange traded and closed-end registered investment companies are valued in the same manner as other equity securities and are typically categorized as Level 1 in the fair value hierarchy. Mutual funds are valued at their net asset values (“NAVs”), as reported by such companies and are typically categorized as Level 1 in the fair value hierarchy.

Securities or other assets for which market quotations are not readily available, or are deemed unreliable due to a significant event or otherwise, are valued pursuant to procedures adopted by the Trust’s Board (“Procedures”). Depending on the source and relative significance of valuation inputs, these instruments may be classified as Level 2 or Level 3 in the fair value hierarchy. Examples of potentially significant events that could affect the value of an individual security and thus require pricing under the Procedures include corporate actions by the issuer, announcements by the issuer relating to its earnings or products, regulatory news, natural disasters, and litigation. Examples of potentially significant events that could affect multiple securities held by the Portfolio include governmental actions, natural disasters, and armed conflicts. Fair value pricing may require subjective determinations about the value of a security. While the Trust’s policy is intended to result in a calculation of the Portfolio’s NAV that fairly reflects security values as of the time of pricing, the Trust cannot ensure that fair values determined would accurately reflect the price that the Portfolio could obtain for a security if it were to dispose of that security as of the time of pricing. The prices used by the Portfolio may differ from the value that would be realized if the securities were sold and the differences could be material to the financial statements.

As of October 31, 2016, all investments were categorized as Level 1 in the fair value hierarchy. The breakdown of investment categorization is disclosed in the Schedule of Portfolio Investments.

HSBC Global Asset Management (USA) Inc. (“HSBC” or the “Investment Adviser”), a wholly owned subsidiary of HSBC Bank USA, N.A., a national bank organized under the laws of the United States, acts as Investment Adviser to the Portfolio. As Investment Adviser, HSBC manages the investments of the Portfolio and continuously reviews, supervises, and administers the Portfolio’s investments. Westfield Capital Management Company, L.P. (“Westfield”) serves as subadviser for the Portfolio and is paid for its services directly by the Portfolio.

For their services, the Investment Adviser and Westfield receive in aggregate, a fee, accrued daily and paid monthly, at an annual rate of 0.80% of the Portfolio’s average daily net assets. Currently, the Investment Adviser’s contractual fee is 0.25% and Westfield’s contractual fee is 0.55%.

HSBC also serves the Portfolio as Administrator. Effective April 1, 2016, under the terms of the Administration Agreement, HSBC receives from the Portfolio (as well as other funds in the Trust combined) a fee, accrued daily and paid monthly, at an annual rate of:

Prior to April 1, 2016, for these services, HSBC received from the Funds (as well as other funds in the Trust combined) a fee, accrued daily and paid monthly, at an annual rate of:

The fee rates and breakpoints are determined on the basis of the aggregate average daily net assets of the Trust, however, the assets of the funds of the HSBC Funds that invest in the Portfolio are not double-counted. For the year ended October 31, 2016, the effective annualized rate was 0.04%, prior to any fee waivers or expense reimbursements, based on the average daily net assets of the Trust. The total administration fee paid to HSBC is allocated to each series based upon its proportionate share of the aggregate net assets of the Trust. For assets invested in the Portfolio by the HSBC Funds, the Portfolio pays half of the administration fee and the feeder funds pay half of the administration fee, for a combination of the total fee rate set forth above.

Pursuant to a Sub-Administration Agreement with HSBC, Citi Fund Services Ohio, Inc. (“Citi”), a wholly-owned subsidiary of Citigroup, Inc., serves as the Trust’s Sub-Administrator, subject to the general supervision by the Trust’s Board of Trustees (the “Board”) and HSBC. For these services, Citi is entitled to a fee, payable by HSBC, at an annual rate equivalent to the fee rates set forth above subject to certain reductions associated with services provided to new funds, minus 0.02% which is retained by HSBC.

Under a Compliance Services Agreement between the Trust and Citi (the “CCO Agreement”), Citi makes an employee available to serve as the Trust’s Chief Compliance Officer (the “CCO”). Under the CCO Agreement, Citi also provides infrastructure and support in implementing the written policies and procedures comprising the Trust’s compliance program, including support services to the CCO. For the services provided under the CCO Agreement, the Trust paid Citi $304,597 for the year ended October 31, 2016, plus reimbursement of certain out-of-pocket expenses. Expenses incurred by the Portfolio are reflected on the Statements of Operations as “Compliance Services.” Citi pays the salary and other compensation earned by individuals performing these services, as employees of Citi.

Citi provides fund accounting services for the Portfolio. For its services to the Portfolio, Citi receives an annual fee per portfolio, including reimbursement of certain expenses, that is accrued daily and paid monthly. Citi receives additional fees paid by the Trust for regulatory administration services.

The Portfolio may purchase securities from an underwriting syndicate in which the principal underwriter or members of the syndicate are affiliated with the Adviser. For the year ended October 31, 2016, the Portfolio did not purchase any such securities.

The Adviser and its affiliates may have lending, banking, brokerage, underwriting, or other business relationships with the issuers of the securities in which the Portfolio invests.

Cost of purchases and proceeds from sales of securities (excluding securities maturing less than one year from acquisition) for the year ended October 31, 2016 were as follows:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of portfolio investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the HSBC Opportunity Portfolio (a portfolio of HSBC Funds and hereafter referred to as the “Fund”) as of October 31, 2016, the results of its operations for the year then ended and the changes in its net assets and the financial highlights for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities as of October 31, 2016 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. The accompanying financial highlights for each of the years ended on or prior to October 31, 2014 were audited by other auditors whose report dated December 23, 2014 expressed an unqualified opinion on those financial highlights.

As a shareholder of the Portfolio, you incur ongoing costs, including management fees and other Fund expenses.

These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Portfolio and to compare these costs with the ongoing costs of investing in other mutual funds.

These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from May 1, 2016 through October 31, 2016.

The table below provides information about actual account values and actual expenses. You may use the information below, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

The table below provides information about hypothetical account values and hypothetical expenses based on each Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

An investment in a Fund is not a deposit of HSBC Bank USA, National Association, and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

Bloomberg Barclays High Income Bond Composite Index is comprised of indexes across US, Euro and EM markets. Components include: 20% Bloomberg Barclays US Corporate Baa, 15% Bloomberg Barclays High Yield Ba, 15% Bloomberg Barclays Euro Aggregate Corporate Baa USD Hedged, 15% Bloomberg Barclays Euro HY BB Rating Only USD Hedged, and 35% Bloomberg Barclays EM USD Aggregate Index.

Beta is a measure of volatility, or systematic risk, of a security or portfolio in comparison to the market as a whole.

BofA Merrill Lynch 3-Month LIBOR Constant Maturity Index is an index that tracks the performance of a synthetic asset paying LIBOR to a stated maturity. The index is based on the assumed purchase at par of a synthetic instrument having exactly its stated maturity and with a coupon equal to that day’s fixing rate. That issue is assumed to be sold the following business day (priced at a yield equal to the current day fixing rate) and rolled into a new instrument.

BofA Merrill Lynch BB-B Euro High Yield Constrained Index contains all securities in the BofA Merrill Lynch U.S. High Yield Index rated BB+ through B- by S&P (or equivalent as rated by Moody;s or Fitch), but caps issuer exposure at 3%.

BofA Merrill Lynch BB-B Global High Yield Constrained Index is an index that tracks the performance of the United States Dollar, Canadian Dollar, British Pound and Euro denominated below investment-grade corporate debt publicly issued in the major domestic or eurobond markets.

Gross Domestic Product (“GDP”) is the value of goods and services produced in a given country in a given year.

J.P. Morgan Emerging Markets Bond Index Global is an index that tracks returns for USD-denominated debt instruments issued by emerging market sovereign and quasi-sovereign entities; Brady bonds; loans; Eurobonds; and local market instruments.

J.P. Morgan Government Bond Index–Emerging Markets Global Diversified is a comprehensive global emerging markets fixed income index, and consists of regularly traded, liquid fixed-rate, domestic currency government bonds to which international investors can gain exposure.

MSCI All Country Asia ex Japan Small Cap Index is a free float-adjusted market capitalization-weighted small call index of the stock markets of two developed markets countries: Hong Kong and Singapore — and eight emerging markets countries: China, India, Indonesia, Korea, Malaysia, the Philippines, Taiwan and Thailand.

MSCI Brazil Index measures the performance of the large- and mid-cap segments of the Brazilian market. With 60 constituents, the index covers about 85% of the Brazilian equity universe.

MSCI Frontier Markets Index is an index which captures the large- and mid-cap representation across 22 frontier markets countries: Argentina, Bahrain, Bangladesh, Croatia, Estonia, Jordan, Kenya, Kuwait, Lebanon, Lithuania, Kazakhstan, Mauritius, Morocco, Nigeria, Oman, Pakistan, Romania, Serbia, Slovenia, Sri Lanka, Tunisia and Vietnam.

MSCI Select Frontier and Emerging Markets Capped Index is a version of the MSCI Frontier Emerging Markets Index (capped) which also includes raises the initial cap of the 5 cross-over countries to 30% and includes Qatar and UAE.

The global economy remained resilient over the 12 month period from November 1, 2015, through October 31, 2016, even as a wide range of developments challenged its stability and exposed weaknesses.

U.S. equities posted modest gains during the period; the S&P 500 Index¹ of large-company stocks returned 4.51%. U.S. economic fundamentals generally improved throughout the period.

The HSBC Emerging Markets Debt Fund (the “Fund”) seeks to maximize total return (comprised of capital appreciation and income). Under normal market conditions, the Fund invests at least 80% of its net assets in fixed income instruments of issuers that economically are tied to emerging markets. The Fund will invest in instruments issued by foreign governments and corporations. Investments will generally be made in U.S. dollar denominated instruments, but the Fund will also seek to invest in emerging market local currency denominated instruments.

Bond funds will tend to experience smaller fluctuations in value than stock funds. However, investors in any bond fund should anticipate fluctuations in price, especially for longer term issues and in environments of rising interest rates. Investments in a bond fund are subject to possible loss due to the financial failure of underlying securities and their inability to meet their debt obligations. Fluctuations in interest rates may affect the yield, liquidity and value of investments in income producing or debt instruments. Generally, if interest rates rise, the value of such investments will fall. The risks associated with rising interest rates are heightened given that interest rates are near historic lows, but are expected to increase in the future, with unpredictable effects on the markets and the Fund’s investments.

High-yield, lower-rated securities are considered speculative investments, involve greater price volatility and present greater risk than higher rated fixed income securities. At times, due to market conditions, the Fund may be unable to sell certain of its portfolio securities without a substantial drop in price. Prices of fixed income securities are generally inversely correlated to interest rates. Investments in the Fund are subject to possible loss due to the financial failure of underlying securities and their inability to meet their debt obligations. These risks may increase the Fund’s share price volatility.

International investing involves increased risk and volatility. An investment in international funds entails the special risks of international investing, including currency exchange fluctuation, government regulations and intervention, and the potential for political and economic instability.

Prices of securities in emerging markets can fluctuate more significantly than the prices of companies in more developed countries. Securities of emerging market issuers generally have more risk than securities issued by issuers in more developed markets. The less developed the country, the greater effect the risks may have on an investment, and as a result, an investment may exhibit a higher degree of volatility than either the general domestic securities market or the securities markets of developed foreign countries.

Non-diversified funds focus investments in a small number of issuers, industries, foreign currencies or particular countries or regions which increase the risks associated with a single economic, political or regulatory occurrence. Derivatives may be riskier than other types of investments and could result in losses that significantly exceed the Fund’s original investment.

For a complete description of these and other risks associated with investment in a mutual fund, please refer to the Fund’s prospectus.

For the year ended October 31, 2016, the Fund returned 9.36% (without sales charge) for the Class A Shares, 9.70% for the Class I Shares for the year ended October 31, 2016, and 1.37% for the Class S Shares from its inception on April 7, 2011. That compared to a 11.59% total return for the 12-month period and 6.66% for the period ended April 7, 2011 for the Fund’s benchmark, the J.P. Morgan Emerging Markets Bond Index Global.¹

Emerging markets hard currency debt posted strong returns during the period, driven by a rally from February through September. Accommodative monetary policy in developed markets increased demand for emerging markets assets, which offered an attractive yield differential. Over the period, U.S. 10-year Treasury yields compressed sharply from 2.14% to 1.83%, providing support for emerging markets hard currency debt given the duration component of the asset class. Thanks to these conditions, the period saw near-record inflows for emerging markets hard currency debt and strong performance for the asset class.

The Fund’s underweight exposure to hard currency duration detracted from relative performance given the significant compression in U.S. Treasury yields over the period. In particular, a focus on shorter-dated bonds in Indonesia detracted from relative performance when long-end bonds outperformed in the duration rally. An overweight to Turkey and a focus on shorter-duration bonds also hurt relative performance when that country’s debt suffered due to a military coup attempt in July and Moody’s rating downgrade to high-yield status in September.^†

Off-benchmark exposure to emerging markets local currencies detracted from relative performance. While the majority of the currency exposures held over the year posted positive returns, including the Brazilian real and the Russian ruble, overall they underperformed hard currency assets. Off-benchmark exposure to corporates also hurt relative performance as corporates underperformed sovereigns during the period.^†

The Fund’s overweight to Brazil was the largest positive contributor to relative returns, as the country rebounded from a significant sell-off in 2015 on increased investor optimism following the change in political regime. Underweight exposure to expensive investment-grade countries trading at tight spread levels with little room for further compression—such as Chile, Philippines and Poland—also boosted relative returns.^†

The Fund obtained exposure to local currencies through forward currency exchange contracts. The Fund at times also used credit default swaps to achieve its positions in certain countries during the period.^†

The charts above represent a historical since inception performance comparison of a hypothetical investment in the indicated share class versus a similar investment in the Fund’s benchmark and represents the reinvestment of dividends and capital gains in the Fund.

Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. Total return figures include change in share price, reinvestment of dividends and capital gains and do not reflect the taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed may be worth more or less than the original cost. To obtain performance information current to the most recent month end, please call 1-800-782-8183.

The performance of the Fund is measured against the J.P. Morgan Emerging Markets Bond Index Global, an unmanaged index that tracks returns for USD-denominated debt instruments issued by emerging market and sovereign quasi-sovereign entities, Brady bonds, loans, Eurobonds, and local market instruments. The performance of the index does not reflect the deduction of expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these value-added services. Investors cannot invest directly in an index.

The HSBC Emerging Markets Local Debt Fund (the “Fund”) seeks maximum total return (comprised of capital appreciation and income). Under normal market conditions, the Fund invests at least 80% of its net assets, plus borrowings for investment purposes, in debt instruments issued by foreign governments, government agencies or corporations and denominated in local currencies of countries with emerging securities markets. The Fund may also invest in instruments denominated in U.S. dollars.

High-yield, lower-rated securities involve greater price volatility and present greater risk than higher rated fixed income securities. At times, due to market conditions, the Fund may be unable to sell certain of its portfolio securities without a substantial drop in price. Prices of fixed income securities are generally inversely correlated to interest rates. Investments in the Fund are subject to possible loss due to the financial failure of underlying securities and their inability to meet their debt obligations. These risks may increase the Fund’s share price volatility.

For a complete description of these and other risks associated with investment in a mutual fund, please refer to the Fund’s prospectus.

For the year ended October 31, 2016, the Fund returned 9.45% (without sales charge) for the Class A Shares, 9.83% for the Class I Shares and -0.86% for the Class S Shares from its inception on April 7, 2011. That compared to a 11.04% total return for the 12-month period and -1.33% for the period ended April 7, 2011 for the Fund’s benchmark, the J.P. Morgan Government Bond Index-Emerging Markets Global Diversified.¹

Emerging markets local debt experienced strong performance over the period with accommodative monetary policy in developed markets and compression in U.S. 10-year Treasury yields. Further support came from the rally in oil prices, which rose more than 70% from a low in February, 2016 through the end of October. This rally also contributed to the strength of emerging markets currencies. The yield on the local bond index tightened from 6.82% to 6.34% over the period, which also contributed to EM local debt gains.

Given the positive performance and yield compression in the asset class, the Fund’s underweight to local rate duration during the period was the largest detractor from relative performance.^†

Selective currency exposure was the largest contributor to relative returns. Tactical positions in the Russian ruble and Turkish lira during the period helped performance and underweights to expensive currencies with low yield—including the Polish zloty and the Korean won—also helped. Tactical exposure to the Brazilian real was also a strong boost to performance; the currency was the best performer in the year, having rebounded from a sharp sell-off in 2015.^†

The Fund benefited from the use of derivatives such as interest rate swap agreements and forward foreign currency exchange contracts during the period.^†

Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. Total return figures include change in share price, reinvestment of dividends and capital gains and do not reflect the taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed may be worth more or less than the original cost. To obtain performance information current to the most recent month end, please call 1-800-782-8183.

The performance of the Fund is measured against the J.P. Morgan Government Bond Index-Emerging Markets Global Diversified, a comprehensive global emerging markets fixed income index consisting of regularly traded, liquid fixed-rate, domestic currency government bonds to which international investors can gain exposure. This index is unmanaged and does not reflect the fees and expenses associated with a mutual fund such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these value-added services. Investors cannot invest directly in an index.

by Ramzi Sidani, Lead/Senior Portfolio Manager
Chris Turner, Senior Portfolio Manager

The HSBC Frontier Markets Fund (the “Fund”) seeks long-term capital appreciation. Under normal market conditions, the Fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in issuers located in “frontier market countries”. The term “frontier market countries” encompasses those countries that are at an earlier stage of economic, political or financial development, even by emerging markets standards.

Equity securities (stocks) may be more volatile and carry more risk than other forms of investments, including investments in high-grade fixed income securities.

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. The magnification of risks is the result of: the potential for extreme price volatility and illiquidity in frontier markets; government ownership or control of parts of the private sector and of certain companies; trade barriers, exchange controls, managed adjustments in relative currency values and other protectionist measures imposed or negotiated by the countries with which frontier market countries trade; and the relatively new and unsettled securities laws in many frontier market countries.

Derivatives may be riskier than other types of investments and could result in losses that significantly exceed the Fund’s original investment.

For a complete description of these and other risks associated with investment in a mutual fund, please refer to the Fund’s prospectus.

For the year ended October 31, 2016, the Fund returned 2.59% (without sales charge) for the Class A Shares and 2.99% for the Class I Shares. That compared to 1.13% return for the Fund’s benchmark, the MSCI Select Frontier and Emerging Markets Capped Index, and a -2.60% total return for the MSCI Frontier Markets Index¹.

Overall, Frontier Markets (FM) posted weak performance for the period, despite strong returns from a majority of individual countries. The lackluster performance, in our view, can be attributed to strongly negative returns from key markets, such as Nigeria, which was down almost 40% for the period; its currency continued to depreciate following the nation’s initiation of foreign exchange liberalization in June 2016. Index-heavyweight Kuwait (-8.2%) was another poorly performing equity market, which lagged due to weak performance from financials. These losses offset strong returns from Morocco (+23.5%), Lebanon (+21.9%), Croatia (+18.7%) and Pakistan (+11.5%). Among the smaller emerging countries that we consider in our frontier universe, Peru (+30.5%) and Egypt (+19.1%) performed strongly.

The Fund outperformed its reference index and outperformed the industry standard index for the period under review. Good stock selection and positive country allocation contributed to relative returns.^†

Notably, exposure to our core holding in Vietnam—a dairy producer—added value as the company reported strong quarterly results, driven by significant improvement in margins. The stock was also added to the MSCI Frontier Markets Index at the start of September 2016. Another positive contributor was an Egyptian gold mining company, which rallied strongly in July in anticipation of good quarterly results.

Elsewhere, exposure to off-index banking names in Georgia and in Colombia supported relative performance.^†

Offsetting some of those gains was the Fund’s stock selection in the Philippines, namely exposure to a second-tier power-generation company that declined on concerns over its capital expenditure program. Another detractor to relative returns was a Saudi Arabia-based travel agency that suffered as the government announced further cuts to subsidies across the economy, which are expected to impact consumer and corporate spending. Exposure to holdings in Nigeria also detracted as a result of the broad decline in that equity market. Exposure to a UAE-based company involved in offshore drilling, exploration and renewable energy platforms also dragged on relative performance, as oil majors continue to cut their budgets despite the short-term rise in the price of oil.^†

Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. Total return figures include change in share price, reinvestment of dividends and capital gains and do not reflect the taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed may be worth more or less than the original cost. To obtain performance information current to the most recent month end, please call 1-800-782-8183.

The performance of the Fund is measured against the MSCI Select Frontier and Emerging Markets Capped Index and the MSCI Frontier Markets Index. The MSCI Select Frontier and Emerging Markets Capped Index is a version of the MSCI Frontier Emerging Markets Index (capped) which also includes raises the initial cap of the 5 cross-over countries to 30% and includes Qatar and UAE. The MSCI Frontier Markets Index captures large- and mid-cap representation across 23 Frontier Markets countries: Argentina, Bahrain, Bangladesh, Bulgaria, Croatia, Estonia, Jordan, Kenya, Kuwait, Lebanon, Lithuania, Kazakhstan, Mauritius, Morocco, Nigeria, Oman, Pakistan, Romania, Serbia, Slovenia, Sri Lanka, Tunisia, and Vietnam. The indexes are unmanaged and their performance does not reflect the deduction of expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these value-added services. Investors cannot invest directly in an index.

by Nishant Upadhyay, Senior Vice President/Portfolio Manager
Vinayak Potti, Vice President/Portfolio Manager

The HSBC Total Return Fund (the “Fund”) seeks maximum total return (comprised of capital appreciation and income). Under normal market conditions, the Fund invests its assets (excluding U.S. cash and U.S. cash equivalents) primarily in instruments of issuers that are economically tied to emerging market countries, including in derivative instruments such as futures (including interest rate futures), forwards (including non-deliverable forwards), swaps (including interest rate, total return and credit default swaps), options (including interest rate options) and swaptions.

Derivatives may be riskier than other types of investments and could result in losses that significantly exceed the Fund’s original investment.

For a complete description of these and other risks associated with investment in a mutual fund, please refer to the Fund’s prospectus.

For the year ended October 31, 2016, the Fund returned 3.74% (without sales charge) for the Class A Shares, 4.16% for the Class I Shares and 4.14% for the Class S Shares. That compared to the 0.54% total return for the Fund’s benchmark, the BofA Merrill Lynch 3-Month LIBOR Constant Maturity Index¹, for the same period.

Emerging markets debt experienced strong performance during the period amid accommodative monetary policy in developed markets, which increased demand for emerging markets assets given the attractive yield differential. Further support came from the rebound in oil prices and a compression in U.S. 10-year Treasury yields from 2.14% to 1.83% over the course of the 12-month period. In our view, as a result of these conditions and near-record inflows, both emerging markets hard currency debt and local debt posted strong gains, returning 11.59% and 11.04%, respectively.

Given the significant compression in U.S. Treasury yields and positive performance of the asset class, long exposures to select investment-grade hard currency countries—including South Africa, Mexico, Indonesia and Colombia—contributed to the Fund’s performance. An overweight to Brazil was the largest contributor to returns, as the country rebounded from a significant sell-off in 2015 on increased investor optimism following the change in political regime.^†

Local currency exposure was also a large driver of returns. Long exposures to the Colombian peso and Russian ruble helped performance due to the rebound in oil prices. Long exposure to the Brazilian real in the first half of 2016 also boosted performance when the currency rebounded from a sharp sell-off in 2015.^†

Some currency exposures detracted from the Fund’s performance, including the long position in the Mexican peso. That currency suffered from an increase in short speculative positions, as well as the country’s sensitivity to the increase in candidate Donald Trump’s popularity in the U.S Presidential election.^†

Tactical long exposure to the South African rand also hurt performance when an escalation of political tensions in the country caused local South Africa assets to underperform from November 2015 through January 2016.^†

The Fund benefited strongly from the use of derivatives during the period. For example, the Fund used forward currency exchange contracts to achieve its local currency exposures. Credit default swaps were used to take long positions in some hard currency sovereigns, including Brazil.^†

Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. Total return figures include change in share price, reinvestment of dividends and capital gains and do not reflect the taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed may be worth more or less than the original cost. To obtain performance information current to the most recent month end, please call 1-800-782-8183.

The performance of the Fund is measured against the BofA Merrill Lynch 3-Month LIBOR Constant Maturity Index which tracks the performance of a synthetic asset paying LIBOR to a stated maturity. The index is based on the assumed purchase at par of a synthetic instrument having exactly its stated maturity and with a coupon equal to that day’s fixing rate. That issue is assumed to be sold the following business day (priced at a yield equal to the current day fixing rate) and rolled into a new instrument. The index is unmanaged and the performance of the index does not reflect the deduction of expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these value-added services. Investors cannot invest directly in an index.

by Elina Fung, Investment Director of Equities/Portfolio Manager
Alex Kwan, Associate Director of Asia Pacific Equities/Portfolio Manager

The HSBC Asia ex-Japan Smaller Companies Equity Fund (the “Fund”) seeks long-term capital appreciation. Under normal market conditions, the Fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in equity of, and equity-related instruments related to, smaller companies that are economically tied to Asia (excluding Japan).

Equity securities (stocks) may be more volatile and carry more risk than other forms of investments, including investments in high-grade fixed income securities.

Because the Fund invests in a single region, its shares do not represent a complete investment program and are subject to greater risk of loss as a result of adverse economic business or other developments affecting that region. As a geographically concentrated fund, the value of the shares may fluctuate more than shares invested in a broader range of industries and companies because of concentration in a specific region.

Derivatives may be riskier than other types of investments and could result in losses that significantly exceed the Fund’s original investment.

For a complete description of these and other risks associated with investment in a mutual fund, please refer to the Fund’s prospectus.

For the year ended October 31, 2016, the Fund returned 16.29% (without sales charge) for the Class A Shares, 16.75% for the Class I Shares and 16.87% for the Class S Shares. That compared to a 1.39% total return for the Fund’s benchmark, the MSCI All Country Asia ex Japan Small Cap Index¹, for the same period.

Overall, Asian small-cap equities posted a modest gain for the 12-month period. That performance came amid market volatility caused in part by concerns about the impact of the UK’s Brexit vote and China’s normalizing economic growth momentum. Uncertainty surrounding the timing and severity of interest rate increases by the U.S. Federal Reserve also contributed to market volatility. Despite these challenges, the Fund outperformed its benchmark.^†

Strong stock selection in the consumer discretionary sector—particularly among Hong Kong and Chinese shares—boosted the Fund’s relative returns. These stocks benefited from strong consumer demand and sales growth. Stock selection in information technology also contributed positively to the Fund’s relative performance. Stock selection in the financials sector, especially among banks and diversified financial companies, hurt relative performance. The Fund’s investments in Korean financials stocks were among the worst performers, including a life insurance company that suffered due to expectations of lower interest rates and a bank that underperformed due to its exposure to distressed Korean ship builders. An underweight allocation in real estate also hurt performance, as the sector was among the top performers during the period.^†

Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. Total return figures include change in share price, reinvestment of dividends and capital gains and do not reflect the taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed may be worth more or less than the original cost. To obtain performance information current to the most recent month end, please call 1-800-782-8183.

The performance of the Fund is measured against the MSCI All Country Asia ex Japan Small Cap Index, which is a free float-adjusted market capitalization-weighted small cap index of the stock markets of two developed markets and eight emerging markets: Hong Kong, Singapore, China, India, Indonesia, Malaysia, the Philippines, Korea, Taiwan and Thailand. The index is unmanaged and its performance does not reflect the deduction of expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these value-added services. Investors cannot invest directly in an index.

by Mary Bowers, Senior Portfolio Manager
Rick Liu, CFA/Portfolio Manager
Nishant Upadhyay, Senior Vice President/Portfolio Manager

The HSBC Global High Yield Bond Fund (the “Fund”) seeks to maximize total return (comprised of capital appreciation and income). Under normal market conditions, the Fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in a globally diversified portfolio of high-yield securities.

Derivatives may be riskier than other types of investments and could result in losses that significantly exceed the Fund’s original investment.

For a complete description of these and other risks associated with investment in a mutual fund, please refer to the Fund’s prospectus.

For the year ended October 31, 2016, the Fund returned 7.37% (without sales charge) for the Class A Shares and 7.79% for the Class I Shares. That compared to a 9.68% total return for the Fund’s benchmark, the BofA Merrill Lynch BB-B Global High Yield Constrained Index¹, for the same period.

Fixed income markets saw two different economic environments during the 12-month period. Through early February 2016, weak commodity prices and concerns over a slowdown in the global economy raised investor apprehension and led credit spreads to widen. With this spread widening, yields on riskier bonds increased and drove prices down. However, credit markets rebounded in mid-February, as talk of reduced output among oil producing nations sparked a rally in the price of oil, which in turn helped investors regain an appetite for risk. Consistent signs of growth in the U.S. economy also helped buoy investor sentiment, as did further efforts by the European Central Bank and Bank of Japan to provide monetary stimulus. Increased investor appetite for risk continued for the remainder of the period, fueling strong gains among global high income bonds. These gains materialized despite a few bouts of volatility triggered by geopolitical events: the U.K. vote to leave the European Union and the approaching U.S. presidential election.

The Fund underperformed its benchmark largely due to allocation decisions. An underweight position in emerging markets debt (EMD) relative to the benchmark dragged on performance as EMD was the best performing asset class during the period. An overweight exposure to U.S. high-yield debt also negatively impacted relative performance as it underperformed relative to Europe and EMD during the period. Relative performance also suffered from issuer selection within EMD.^†

The Fund’s relative performance benefited from investments in Europe. A defensive position in this region helped as European credit markets were volatile during the period.^†

The Fund maintained some derivative exposure during the period, including currency forwards used to hedge non-USD exposure. However, that derivative exposure did not materially impact performance.^†

Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. Total return figures include change in share price, reinvestment of dividends and capital gains and do not reflect the taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed may be worth more or less than the original cost. To obtain performance information current to the most recent month end, please call 1-800-782-8183.

The performance of the Fund is measured against the BofA Merrill Lynch BB-B Global High Yield Constrained Index, which tracks the performance of USC, CAD GBP and EUR denominated below investment-grade corporate debt publicly issued in he major domestic or eurobond markets. The index is unmanaged and its performance does not reflect the deduction of expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these value-added services. Investors cannot invest directly in an index.

by Jerry Samet, Senior Portfolio Manager
Rick Liu, CFA/Portfolio Manager
Nishant Upadhyay, Senior Vice President/Portfolio Manager

The HSBC Global High Income Bond Fund (the “Fund”) seeks to provide a high level of current income. Under normal market conditions, the Fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in a globally diversified portfolio of higher yielding securities.

Derivatives may be riskier than other types of investments and could result in losses that significantly exceed the Fund’s original investment.

For a complete description of these and other risks associated with investment in a mutual fund, please refer to the Fund’s prospectus.

For the year ended October 31, 2016, the Fund returned 7.04% (without sales charge) for the Class A Shares and 7.43% for the Class I Shares. That compared to a 4.37% and 8.86% total return for the Fund’s benchmarks, the Bloomberg Barclays Global Aggregate Index and the Bloomberg Barclays High Income Bond Composite Index¹, respectively, for the same period

Fixed income markets saw two different economic environments during the 12-month period. Weak commodity prices and concerns over a slowdown in the global economy raised concerns among investors, leading credit spreads to widen through early February 2016. As spreads widened, yields on riskier bonds increased, thus driving prices down. But credit markets rebounded in mid-February, as talk of reduced output among oil producing nations sparked a rally in the price of oil, which in turn helped investors regain their appetite for risk. Signs of continued growth in the U.S. economy also helped buoy investor sentiment, as did additional monetary stimulus efforts by the European Central Bank and the Bank of Japan. Increased investor appetite for risk continued throughout the period, fueling strong absolute gains among global high income bonds. These gains came despite a few bouts of increased volatility that were triggered by geopolitical events, namely the U.K. vote to leave the European Union and the upcoming U.S. presidential election.

The Fund underperformed its benchmark largely due to allocation decisions. A lower-than-benchmark position in emerging markets debt dragged on performance as that was the best performing asset class during the period.^†

The Fund’s relative performance was boosted by issue selection within U.S. BBB-rated assets, in particular securities in the basic industry, consumer goods and media sectors. The Fund’s underweight allocation to European assets also contributed to relative performance, as this was the worst performing asset class during the period.^†

Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. Total return figures include change in share price, reinvestment of dividends and capital gains and do not reflect the taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed may be worth more or less than the original cost. To obtain performance information current to the most recent month end, please call 1-800-782-8183.

The performance of the Fund is measured against the Bloomberg Barclays Global Aggregate Index and the Bloomberg Barclays High Income Bond Composite Index. The Bloomberg Barclays Global Aggregate Index provides a broad-based measure of the global investment-grade fixed income markets. The three major components of this index are the U.S. Aggregate, the Pan-European Aggregate, and the Asian-Pacific Aggregate Indices. The index also includes Eurodollar and Euro-Yen corporate bonds, Canadian government, agency and corporate securities, and USD investment grade 144A securities. The Bloomberg Barclays High Income Bond Composite Index is comprised of indexes across US, Euro and EM markets. Components include: 20% Bloomberg Barclays US Corporate Baa, 15% Bloomberg Barclays High Yield Ba, 15% Bloomberg Barclays Euro Aggregate Corporate Baa USD Hedged, 15% Bloomberg Barclays Euro HY BB Rating Only USD Hedged, and 35% Bloomberg Barclays EM USD Aggregate Index. The indexes are unmanaged and their performance does not reflect the deduction of expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these value-added services. Investors cannot invest directly in an index.

HSBC Global Equity Volatility Focused Fund (the “Fund”) seeks to provide long-term total return. Under normal market conditions, at least 80% of the Fund’s nets assets, plus any borrowings for investment purposes, are invested in a globally diversified portfolio of equity securities and equity-related instruments that is expected to generate lower volatility relative to the global equity market (as measured by the Fund’s benchmark index).

Equity securities (stocks) may be more volatile and carry more risk than other forms of investments, including investments in high-grade fixed income securities.

The Fund’s techniques for limiting portfolio volatility may or may not be successful, may cause the Fund’s portfolio to underperform its benchmark or may cause the Fund to lose money.

Derivatives may be riskier than other types of investments and could result in losses that significantly exceed the Fund’s original investment.

For a complete description of these and other risks associated with investment in a mutual fund, please refer to the Fund’s prospectus.

Since the Fund’s inception on November 4, 2015 through October 31, 2016, the Fund returned 0.74% (without sales charge) for the Class A Shares and 1.09% for the Class I Shares. That compared to a 1.94% total return for the Fund’s benchmark, the MSCI ACWI Index¹, for the same period.

Global equities posted a small gain during the period under review, even as they experienced two major corrections, one in early the period and the other in June. In early 2016, investors grew concerned about falling commodity prices, weak Chinese economic growth and political unrest in the Middle East. These factors pushed global equity markets lower during the first few months of the period. Strengthening commodity prices in late February, however, helped fuel a rally in stock prices. That rally was then interrupted by U.K.’s June vote to exit the European Union. Stocks declined sharply following the Brexit vote, but recovered relatively quickly as investors grew more confident about the state of the global economy.

The Fund seeks to achieve better risk-adjusted returns than its benchmark. It focuses on high-quality investments with attractive combinations of profitability and valuation to create a lower volatility portfolio. This approach is designed to capture long-term returns while navigating short-term uncertainties.^†

The Fund underperformed its benchmark for the period since its inception, although it posted 82.3% of the benchmark’s volatility for that time frame.^†

Stock selection in the consumer discretionary sector and information technology sector (in India) dragged on relative results, as did exposure to the U.K. In particular, the Fund’s investment in a U.K.-based low-cost airline detracted as investors anticipated increased regulation and expenses in a post-Brexit environment. In addition, the Fund’s holdings of a U.K. clothing retailer lagged as it reported slowing sales due to a weaker economy early in 2016. The Fund’s holding in a U.S. jewelry retailer also detracted.^†

Stock selection in the health care and financials sectors and in U.S. and Switzerland added to relative results. In terms of individual holdings, a U.S. food company with expanding operating margins helped relative results, as did an Indonesian bank that grew with the country’s economic expansion. While the Fund’s sector allocations are a result of its investment process within specific parameters relative to the benchmark, an overweight exposure to the defensive consumer staples sector, at 1.5 times the benchmark weighting, also contributed positively to the Fund’s relative results.^†

Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. Total return figures include change in share price, reinvestment of dividends and capital gains and do not reflect the taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed may be worth more or less than the original cost. To obtain performance information current to the most recent month end, please call 1-800-782-8183.

The performance of the Fund is measured against the MSCI ACWI Index, which is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets. It consists of 46 country indexes comprising 23 developed and 23 emerging market country indexes. The index is unmanaged and its performance does not reflect the deduction of expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these value-added services. Investors cannot invest directly in an index.

HSBC Euro High Yield Bond Fund (USD Hedged) (the “Fund”) seeks to maximize total return (comprised of capital appreciation and income). Under normal market conditions, the Fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in Euro-denominated high-yield securities.

Euro-denominated securities have significant exposure to the Euro and events affecting the Euro. The Economic and Monetary Union (“EMU”) of the European Union (“EU”) is comprised of EU members that have adopted the Euro. Recent market events affecting several of the EMU member countries have adversely affected the sovereign debt issued by those countries, and ultimately may lead to a decline in the value of the Euro.

Derivatives may be riskier than other types of investments and could result in losses that significantly exceed the Fund’s original investment.

For a complete description of these and other risks associated with investment in a mutual fund, please refer to the Fund’s prospectus.

Since the Fund’s inception on January 19, 2016 through October 31, 2016, the Fund returned 10.38% (without sales charge) for the Class A Shares and 10.51% for the Class I Shares. That compared to a 11.44% total return for the Fund’s benchmark, the BofA Merrill Lynch BB-B Euro High Yield Constrained Index¹, for the same period.

European high-yield securities posted strong gains during the period under review, despite a high level of volatility. In early 2016, investors were relatively risk-averse, which negatively impacted a number of higher-risk asset classes, including high-yield bonds. However, appetite for risk increased in March as the European Central Bank (ECB) and other central banks announced additional monetary stimulus efforts. As a result, demand for high-yield bonds increased amid the continued low-yield environment. This search for yield also helped the market recover rather quickly from the wave of risk aversion fueled by the U.K.’s June vote to exit the European Union. After a brief period of weakness following the Brexit vote, European high-yield securities rallied during the remainder of the period.

Sector allocation decisions dragged on the Fund’s results relative to its benchmark. In particular, the Fund’s overweight exposure to bonds issued by European banks (relative to the benchmark) hurt performance as that sector lagged the market for the period. Holdings of contingent convertible bonds—a type of security popular with European banks—also weighed on results. Underweight positions in bonds from the energy and commodity sectors detracted from relative performance, as those sectors were the best performers over the 2016 period.^†

Security selection had a mixed effect on relative results. The Fund was hurt primarily by a lack of exposure to some of the top performing securities in the asset class, including a Brazilian oil operator. However, the Fund benefited from its decision to avoid euro-denominated bonds issued by an embattled Brazilian telecom operator in the benchmark. Prices on that company’s bonds fell sharply when a proposed merger fell through.^†

Overall, asset allocation decisions benefited the Fund’s relative performance. The Fund also benefited from an overweight position in high beta¹ instruments such as non-financial hybrid bonds, subordinated insurance bonds and long-dated bonds, as these investments performed well during the period.^†

The Fund maintained some derivative exposure through the use of currency forwards to hedge non-USD exposure. These derivatives had no material impact on the Fund’s return.^†

Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. Total return figures include change in share price, reinvestment of dividends and capital gains and do not reflect the taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed may be worth more or less than the original cost. To obtain performance information current to the most recent month end, please call 1-800-782-8183.

The performance of the Fund is measured against the BofA Merrill Lynch BB-B Euro High Yield Constrained Index, which contains all securities in the BofA Merrill Lynch U.S. High Yield Index rated BB+ through B- by S&P (or equivalent as rated by Moody;s or Fitch), but caps issuer exposure at 3%. The index is unmanaged and its performance does not reflect the deduction of expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these value-added services. Investors cannot invest directly in an index.

The Fund invested, as a percentage of net assets at value, in the following industries, as of October 31, 2016:

At October 31, 2016, the Fund’s open credit default swap agreements were as follows:

At October 31, 2016, the Fund’s open forward foreign currency exchange contracts were as follows:

The Fund invested, as a percentage of net assets at value, in the following industries, as of October 31, 2016:

At October 31, 2016, the Fund’s open interest rate swap agreements were as follows:

At October 31, 2016, the Fund’s open forward foreign currency exchange contracts were as follows:

The Fund invested, as a percentage of net assets at value, in the following industries, as of October 31, 2016:

At October 31, 2016, the Fund’s open interest rate swap agreements were as follows:

At October 31, 2016, the Fund’s open credit default swap agreements were as follows:

At October 31, 2016, the Fund’s open forward foreign currency exchange contracts were as follows:

The Fund invested, as a percentage of net assets at value, in the following industries, as of October 31, 2016:

At October 31, 2016, the Fund’s open credit default swap agreements were as follows:

At October 31, 2016, the Fund’s open centrally cleared credit default swap agreements were as follows:

At October 31, 2016, the Fund’s open forward foreign currency exchange contracts were as follows:

The Fund invested, as a percentage of net assets at value, in the following industries, as of October 31, 2016:

At October 31, 2016, the Fund’s open credit default swap agreements were as follows:

At October 31, 2016, the Fund’s open forward foreign currency exchange contracts were as follows:

The Fund invested, as a percentage of net assets at value, in the following industries, as of October 31, 2016:

At October 31, 2016, the Fund’s open forward foreign currency exchange contracts were as follows:

Selected data for a share outstanding throughout the periods indicated.

The HSBC Funds (the “Trust”), a Delaware statutory trust organized on March 2, 2016, is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company. Effective June 24, 2016, the Funds (as defined below), which were series of HSBC Funds, a Massachusetts business trust, reorganized with and into corresponding series of the Trust (each, a “Reorganization”). The series of the Trust into which the Funds reorganized had no assets, liabilities, or operations prior to the Reorganization. Upon completion of each Reorganization, the respective share classes of each Fund assumed the performance, financial and other historical information of those of the corresponding predecessor series. As of October 31, 2016, the Trust is composed of 19 separate operational funds, each a series of the HSBC Family of Funds. The accompanying financial statements are presented for the following nine funds (individually a “Fund”, collectively the “Funds” or the “Global Funds”):

Financial statements for all other funds of the Trust are published separately. The Emerging Markets Debt Fund, Emerging Markets Local Debt Fund and Total Return Fund are non-diversified funds. The Frontier Markets Fund, Asia ex-Japan Smaller Companies Equity Fund, Global High Yield Bond Fund, Global High Income Bond Fund, Global Equity Volatility Focused Fund and Euro High Yield Bond Fund are diversified funds. The Funds are authorized to issue an unlimited number of shares of beneficial interest with a par value of $ 0.001 per share. The share classes offered by each Fund and the maximum sales charge for Class A Shares are summarized in the following table.

Each class of shares in each Fund has identical rights and privileges, except with respect to arrangements pertaining to shareholder servicing and/or distribution, class-related expenses, voting rights on matters affecting a single class of shares, and exchange privileges of each class of shares. Effective as of April 30, 2014, the Frontier Markets Fund closed to new shareholders, subject to certain exceptions, but remains open to existing shareholders.

The Global Equity Volatility Focused Fund commenced operations on November 4, 2015 and had no operations prior to commencement. The Euro High Yield Bond Fund commenced operations on January 19, 2016 and had no operations prior to commencement.

Under the Trust’s organizational documents, the Trust’s officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Funds. In addition, in the normal course of business, the Trust enters into contracts with its service providers, which also provide for indemnifications by the Funds. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds. However, based on experience, the Trust expects the risk of loss to be remote.

Investment transactions are accounted for no later than one business day after trade date. However, for financial reporting purposes, investment transactions are accounted for on trade date. Investment gains and losses are calculated on the identified cost basis. Interest income is recognized on the accrual basis and includes, where applicable, the amortization or accretion of premium or discount based on effective yield. Dividend income is recorded on the ex-dividend date except in the case of certain foreign securities, in which case dividends are recorded as soon as such information becomes available.

The accounting records of the Funds are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars at the current rate of exchange to determine the value of investments, assets and liabilities. Purchases and sales of securities, and income and expenses are translated at the prevailing rate of exchange on the respective dates of such transactions. The Funds do not isolate the portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments and foreign currencies.

Income received by the Funds from sources within foreign countries may be subject to withholding and other income or similar taxes imposed by such countries. The Funds may be subject to foreign taxes on gains in investments or currency repatriation. The Funds accrue foreign capital gains taxes, as applicable, based on their current interpretation of tax rules in the foreign markets in which they invest. Such tax accrual is based in part on actual and estimated realized gains. Estimated realized gains are subject to change and such change could be material. However, management’s conclusions may be subject to future review and change based on changes in, or the interpretation of, the accounting standards or tax laws and regulations.

A restricted security is a security which has been purchased through a private offering and cannot be resold to the general public without prior registration under the Securities Act of 1933 (the “1933 Act”) or pursuant to the resale limitations provided by Rule 144 under the 1933 Act, or another exemption from the registration requirements of the 1933 Act. Certain restricted securities may be resold in transactions exempt from registration, normally to qualified institutional buyers, and may be deemed liquid by the Investment Adviser (as defined in Note 4) based on procedures established by the Board of Trustees (the “Board”). Therefore, not all restricted securities are considered illiquid. Disposal of these securities may involve time consuming negotiations and expense. Prompt sale at the current valuation may be difficult and could adversely affect the net assets of the Funds.

The Frontier Markets Fund, Asia ex-Japan Smaller Companies Equity Fund, Global Equity Volatility Focused Fund and Euro High Yield Bond Fund may invest in participation notes or participatory notes (“P-notes”). P-notes are participation interest notes that are issued by banks or broker-dealers and are designed to offer a return linked to a particular underlying equity, debt, currency or market. If the P-note were held to maturity, the issuer would pay to the purchaser the difference between the nominal value of the underlying instruments at the time of purchase and that instrument’s value at maturity. The holder of a P-note that is linked to a particular underlying security or instrument may be entitled to receive any dividends paid in connection with that underlying security or instrument, but typically does not receive voting rights as it would if it directly owned the underlying security or instrument. P-notes involve transaction costs. Investments in P-notes involve the same risks associated with a direct investment in the underlying securities, instruments or markets that they seek to replicate. In addition, there can be no assurance that there will be a trading market for a P-note or that the trading price of a P-note will equal the underlying value of the security, instrument or market that it seeks to replicate. Due to liquidity and transfer restrictions, the secondary markets on which a P-note is traded may be less liquid than the market for other securities, or may be completely illiquid, which may also affect the ability of a Fund to accurately value a P-note. P-notes typically constitute general unsecured contractual obligations of the banks or broker-dealers that issue them, which subjects a Fund that holds them to counterparty risk (and this risk may be amplified if the Fund purchases P-notes from only a small number of issuers).

All open derivative positions at year end are reflected on the Funds’ Schedule of Portfolio Investments. The following is a description of the derivative instruments utilized by the Funds, including the primary underlying risk exposure related to each instrument type.

Each Fund may enter into forward foreign currency exchange contracts. The Funds may enter into forward foreign currency exchange contracts in connection with planned purchases or sales of securities, to hedge the U.S. dollar value of securities denominated in a particular currency or to enhance return. The forward foreign currency exchange contracts are adjusted by the daily exchange rate of the underlying currency and any gains or losses are recorded for financial statement purposes as unrealized gains or losses until the contract settlement date.

The Funds could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts and from unanticipated movements in the value of a foreign currency relative to the U.S. dollar.

The Funds remain subject to credit risk with respect to the amount they expect to receive from counterparties. However, the Funds have sought to mitigate these risks by generally requiring the posting of collateral to a Fund at prearranged exposure levels to cover a Fund’s exposure to the counterparty. Generally, the amount of collateral due from or to a counterparty must exceed a minimum transfer amount threshold before a transfer is required to be made. Forward foreign currency exchange contracts may involve credit or market risk in excess of the amounts reflected on the Statement of Assets and Liabilities.

During the year ended October 31, 2016, the Funds entered into forward foreign currency exchange contracts to gain exposure to certain markets and for hedging purposes. The notional amount of forward foreign currency exchange contracts outstanding as of October 31, 2016 and the monthly average notional amount for these contracts during the year ended October 31, 2016 were as follows:

The Funds may purchase or write put and call options on securities, indices, foreign currencies and derivative instruments. When purchasing options, the Funds pay a premium which is recorded as the cost basis in the investment and which is subsequently marked to market to reflect the current value of the option. Premiums paid for purchasing options that expire are treated as realized losses. When an option is exercised or closed, premiums paid for purchasing options are offset against proceeds to determine the realized gain or loss on the transaction. When writing options, the Funds receive a premium which is recorded as a liability and which is subsequently marked to market to reflect the current value of the option written. Premiums received from writing options that expire are treated as realized gains. Premiums received from writing options that are either exercised or closed are offset against the proceeds received or the amount paid on the transaction to determine realized gains or losses.

The Funds may purchase or write put and call options on foreign currencies for the purpose of protecting against declines in the dollar value of foreign portfolio securities and against increases in the U.S. dollar cost of foreign securities to be acquired. The Funds could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts and from unanticipated movements in the value of a foreign currency relative to the U.S. dollar.

The Funds may enter into interest rate swaption agreements for hedging purposes. A swaption is an option to enter into a pre-defined swap agreement by some specified date in the future. The writer of the swaption becomes the counterparty to the swap if the buyer exercises their option. The interest rate swaption agreement will specify whether the buyer of the swaption will be a fixed rate receiver or a fixed rate buyer. The Funds could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts and from unanticipated movements in interest rates.

The Funds remain subject to credit risk with respect to the amount they expect to receive from counterparties. However, the Funds have sought to mitigate these risks by generally requiring the posting of collateral to a Fund at prearranged exposure levels to cover a Fund’s exposure to the counterparty. Generally, the amount of collateral due from or to a counterparty must exceed a minimum transfer amount threshold before a transfer is required to be made. Options contracts may involve credit or market risk in excess of the amounts reflected on the Statement of Assets and Liabilities.

The Funds may invest in futures contracts for the purpose of hedging existing portfolio securities or securities they intend to purchase against fluctuations in fair value caused by changes in prevailing market interest conditions. Upon entering into futures contracts, the Funds are required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount (initial margin

deposit). Subsequent payments, known as “variation margin”, are made or received each day, depending on the daily fluctuations in the fair value of the underlying security. The Funds recognize an unrealized gain or loss equal to the daily variation margin. Should market conditions move unexpectedly, the Funds may not achieve the anticipated benefits of the futures contracts and may realize a loss. Futures contracts involve, to varying degrees, elements of market risk (generally equity price risk related to stock futures, interest rate risk related to bond futures, and foreign currency risk related to currency futures) and exposure to loss in excess of the amounts reflected on the Statements of Assets and Liabilities as variation margin. The primary risks associated with the use of futures contracts are the imperfect correlation between the change in market value of the securities held by the Funds and the prices of futures contracts, the possibility of an illiquid market, and the inability of the counterparty to meet the terms of the contract. During the year ended October 31, 2016, the Emerging Markets Debt Fund and the Total Return Fund invested in futures contracts to gain exposure to certain markets and for hedging purposes. The gross notional amount of futures contracts outstanding as of October 31, 2016, and the monthly average notional amount for these contracts for the year ended October 31, 2016 were as follows:

The Funds may enter into swap contracts in accordance with their investment objectives and policies. A swap is an agreement to exchange the return generated by one instrument for the return generated by another instrument. The payment streams are calculated by reference to a specified index and agreed upon notional amount. The term specified index includes currencies, fixed interest rates, prices and total return on interest rate indices, fixed income indices, stock indices and commodity indices.

The Funds will usually enter into swaps on a net basis, which means that the two return streams are netted out in a cash settlement on the payment date or dates specified in the instrument with a Fund receiving or paying only the net amount of the two returns. Upfront receipts and payments are recorded as a liability or asset, respectively. These upfront receipts and payments are amortized to gains or losses over the life of the swap agreement. Until a swap agreement is settled in cash, the gain or loss on the notional amount and the difference between periodic payments made and received by the Fund on the notional amount, is recorded as “unrealized appreciation or depreciation on swap agreements” and, when cash is exchanged, the gain or loss realized is recorded as “realized gains or losses on swap agreements”. A Fund’s obligations under a swap agreement will be accrued daily (offset against any amounts owing to the Fund) and any accrued but unpaid net amounts owed to a swap counterparty are generally collateralized by the maintenance of a segregated account consisting of cash, U.S. government securities, or other liquid securities or by pledging such securities as collateral.

Interest rate swaps involve the exchange of commitments to pay and receive interest based on a notional amount and are subject to interest rate risk exposure. Interest rate swaps do not involve the delivery of securities, other underlying assets or principal. Accordingly, the risk of loss with respect to interest rate swaps is limited to the net amount of interest payments that a Fund is contractually obligated to make. If the other party to an interest rate swap defaults, a Fund’s risk of loss consists of the net amount of interest payments that the Fund is contractually entitled to receive.

Credit default swap agreements involve one party making a stream of payments (referred to as the buyer of protection) to another party (the seller of protection) in exchange for the right to receive a specified return in the event of a default or other credit event for the referenced entity, obligation or index and are subject to

credit risk exposure. The maximum potential amount of future payments that a Fund as a seller of protection could be required to make under a credit default swap agreement would be an amount equal to the notional amount of the agreement. Notional amounts of each individual credit default swap agreement outstanding for which a Fund is the seller of protection are disclosed in the Schedules of Portfolio Investments. These potential amounts would be partially offset by any recovery values of the respective referenced obligations, upfront payments received upon entering into the agreement, or net amounts received from the settlement of buy protection credit default swap agreements entered into by a Fund for the same referenced entity or entities.

The Funds remain subject to credit risk with respect to the amount they expect to receive from counterparties. However, the Funds have sought to mitigate these risks by generally requiring the posting of collateral to a Fund at pre-arranged exposure levels to cover a Fund’s exposure to the counterparty. Generally, the amount of collateral due from or to a counterparty must exceed a minimum transfer amount threshold before a transfer is required to be made. Swap agreements may involve credit or market risk in excess of the amounts reflected on the Statement of Assets and Liabilities.

The use of swaps is a highly specialized activity that involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. If the Investment Adviser is incorrect in its forecasts of market values, interest rates and currency exchange rates, the investment performance of a Fund would be less favorable than it would have been if this investment technique were not used.

During the year ended October 31, 2016, the Emerging Markets Local Debt Fund and the Total Return Fund entered into interest rate swap agreements to manage their exposure to interest rates and as a substitute for investing directly in securities. The Emerging Markets Debt Fund, Total Return Fund, Global High Yield Bond Fund and Global High Income Bond Fund entered into credit default swap agreements primarily to manage and/or gain exposure to credit risk. The notional amount of swap agreements outstanding as of October 31, 2016 and the monthly average notional amount for these agreements during the year ended October 31, 2016 were as follows:

The following is a summary of the fair values of derivative instruments on the Statements of Assets and Liabilities, categorized by risk exposure, as of October 31, 2016:

The following is a summary of the effect of derivative instruments on the Statements of Operations, categorized by risk exposure, for the year ended October 31, 2016:

The Funds are generally subject to master netting arrangements that allow for amounts owed between each Fund and the counterparty to be netted. The party that has the larger payable pays the excess of the larger amount over the smaller amount to the other party. The master netting arrangements do not apply to amounts owed to/from different counterparties. For financial reporting purposes, the Funds do not offset derivative assets and derivative liabilities that are subject to legally enforceable master netting arrangements in the Statements of Assets and Liabilities. The tables below present the gross and net amounts of the assets and liabilities with any offsets to reflect the Funds’ ability to reflect the master netting arrangements at October 31, 2016 in the Statement of Assets and Liabilities.

As of October 31, 2016, each Fund’s derivative assets and liabilities by type are as follows:

The following table represents each Fund’s derivative assets by counterparty net of amounts available for offset under a master netting arrangement and net of the related collateral received by each Fund as of October 31, 2016:

The following table represents each Fund’s derivative liabilities by counterparty net of amounts available for offset under a master netting arrangement and net of the related collateral pledged by each Fund as of October 31, 2016:

Pursuant to each Fund’s ISDA Master Agreement for trading over-the-counter derivatives (“ISDA”), each Fund must notify counterparties if its net asset value declines below a predetermined level over specified periods. In the event a Fund’s net asset value declines below one of the predetermined levels, the decline may trigger an Additional Termination Event under the ISDA (“NAV Decline Trigger Event”) whereby each counterparty would have the right to declare an Early Termination Date, terminate the ISDA, and close-out all outstanding derivatives positions according to the close-out procedures of the ISDA. Pursuant to the terms of the ISDA, following a NAV Decline Trigger Event, counterparties may agree to waive their right to declare an Early Termination Date and thereby waive their right to terminate the ISDA and close-out any outstanding derivatives positions.

In addition to the provisions relating to Additional Termination Events, under the terms of the Credit Support Annex to the ISDA, parties to an ISDA are required to post collateral to the other party if any of their derivatives positions are in a position of net liability. If either party fails to post required collateral and such failure is not remedied following subsequent notice, the failure to post collateral may be an Additional Termination Event and the other party may declare an Early Termination Event, terminate the ISDA, and close out any outstanding derivatives position. As of October 31, 2016, for derivatives positions where the Funds were in a position of net liability, the balance of any collateral posted is included in the Statement of Assets and Liabilities.

Dividends to shareholders from net investment income, if any, are declared and distributed monthly in the case of the Funds except for the Frontier Markets Fund, Asia ex-Japan Smaller Companies Equity Fund and Global Equity Volatility Focused Fund, which distribute annually. Distributions from net realized gains, if any, are declared and paid at least annually by the Funds. Additional distributions are also made to the Funds’ shareholders to the extent necessary to avoid the federal excise tax on certain undistributed income and net realized gains of regulated investment companies.

Each Fund is a separate taxable entity for federal income tax purposes. Each Fund has qualified and intends to continue to qualify each year as a “regulated investment company’’ under Subchapter M of the Internal Revenue Code, as amended, and to distribute substantially all of its taxable net investment income and net realized gains, if any, to its shareholders. Accordingly, no provision for federal income or excise tax is required.

The inputs or methodology used for valuing investments are not necessarily an indication of the risk associated with investing in those investments.

Bonds and other fixed income securities (other than short-term obligations but including listed issues) are valued at the bid price as of the time net asset value is determined on the basis of valuations furnished by a pricing service, the use of which has been approved by the Funds’ Board of Trustees. In making such valuations, the pricing service utilizes both dealer-supplied valuations and matrix techniques. Those matrix techniques take into account appropriate factors such as the institutional-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue and trading characteristics other than market data. Because quoted prices on exchanges or over-the-counter prices are believed to reflect more accurately the fair value of such securities, matrix valuations are typically categorized as Level 2 in the fair value hierarchy.

Exchange traded, domestic equity securities are valued at the last sale price on a national securities exchange, or in the absence of recorded sales, at the readily available closing bid price on such exchanges, or at the quoted bid price in the over-the-counter market and are typically categorized as Level 1 in the fair value hierarchy.

Exchange traded, foreign equity securities are valued in the appropriate currency on the last quoted sale price, or in the absence of recorded sales, at the readily available closing bid price on such exchange. If no sale is available because the country is on holiday the previous day’s last quoted sales price would be utilized. These securities are typically categorized as Level 1 in the fair value hierarchy. Foreign equity securities that are not exchange traded are valued in the appropriate currency at the average of the quoted bid and asked prices in the over-the-counter market and are typically categorized as Level 2 in the fair value hierarchy.

Rights and warrants are valued at the last sales price on a national securities exchange. If these instruments are not scheduled to trade for a certain period they are generally valued intrinsically based on the terms of the issuance and the price of the underlying security. The time value of the warrants may also be considered by the Advisor. These instruments are typically categorized as Level 1 in the fair value hierarchy unless intrinsic value is used then would be categorized as Level 2 in the fair value hierarchy.

P-notes are valued by taking the last sales price of the underlying security on its primary exchange. In the absence of a recorded sale on the underlying security the readily available closing bid price on such exchange will be used. If no sale is available because the country is on holiday the previous day’s last quoted sales price would be utilized. All local prices will be converted to U.S. dollars using the foreign currency exchange rate as of the close of regular trading on the New York Stock Exchange. These instruments are typically categorized as Level 2 in the fair value hierarchy.

Mutual funds are valued at their net asset values, as reported by such companies and are typically categorized as Level 1 in the fair value hierarchy.

Exchange traded futures contracts and options contracts are valued at their settlement price on the exchange on which they are traded and are typically categorized as Level 1 in the fair value hierarchy.

Forward foreign currency exchange contracts are valued at the current day’s interpolated foreign exchange rate, as calculated using the current day’s spot rate, and the prevailing forward rates and converted to U.S. dollars at the exchange rate of such currencies against the U.S. dollar, as of the close of regular trading on the New York Stock Exchange, as provided by an approved pricing service, and are typically categorized as Level 2 in the fair value hierarchy. Non-exchange traded derivatives, such as swaps and options, are generally valued by using a valuation provided by an approved independent pricing service and are typically categorized as Level 2 in the fair value hierarchy.

Securities or other assets for which market quotations are not readily available, or are deemed unreliable due to a significant event or otherwise, are valued pursuant to procedures adopted by the Trust’s Board (“Procedures”). Depending on the source and relative significance of valuation inputs, these instruments may be classified as Level 2 or Level 3 in the fair value hierarchy. Examples of potentially significant events that could affect the value of an individual security and thus require pricing under the Procedures include corporate actions by the issuer, announcements by the issuer relating to its earnings or products, regulatory news, natural disasters, and litigation. Examples of potentially significant events that could affect multiple securities held by a Fund include governmental actions, natural disasters, and armed conflicts. Fair value pricing may require subjective determinations about the value of a security. While the Trust’s policy is intended to result in a calculation of a Fund’s net asset value (“NAV”) that fairly reflects security values as of the time of pricing, the Trust cannot ensure that fair values determined would accurately reflect the price that a Fund could obtain for a security if it were to dispose of that security as of the time of pricing. The prices used by a Fund may differ from the value that would be realized if the securities were sold and the differences could be material to the financial statements.

In addition, if events materially affecting the value of foreign securities occur between the time when the exchange on which they are traded closes and the time when the Funds’ NAV is calculated, such securities may be valued using fair value pricing in accordance with procedures adopted by the Board. Management identifies possible fluctuations in foreign securities by monitoring the rise or fall in the value of a designated benchmark index. In the event of a rise or fall greater than predetermined levels, the Funds may use a systematic valuation model provided by an independent third party to value its foreign securities, rather than local market closing prices. When a Fund uses such a valuation model, the value assigned to the Fund’s foreign securities may not be the quoted or published prices of the investment on their primary markets or exchanges and are typically categorized as Level 2 in the fair value hierarchy. The valuation of these securities may represent a transfer between Levels 1 and 2. The number of days on which fair value prices will be used will depend on market activity and it is possible that fair value prices will be used by the Funds to a significant extent.

There were, however, transfers from Level 2 to Level 1 as of October 31, 2016. On October 31, 2015, the fund shown below had securities that were fair valued pursuant to procedures approved by the Trust’s Board that were valued based upon quoted prices in active markets for identical securities on October 31, 2016.

The following is a summary of the valuation inputs used as of October 31, 2016 in valuing the Funds’ investments based upon the three levels defined above. The breakdown of country descriptions is disclosed in the Schedule of Portfolio Investments for each Fund:

HSBC Global Asset Management (USA) Inc. (“HSBC’’ or the “Investment Adviser’’), a wholly owned subsidiary of HSBC Bank USA, N.A., a national bank organized under the laws of the United States, acts as Investment Adviser to the Funds. As Investment Adviser, HSBC manages the investments of the Funds and continuously reviews, supervises and administers the Funds’ investments pursuant to an Investment Advisory Contract. For its services in this capacity, HSBC receives a fee from each Fund, accrued daily and paid monthly, based on the average daily net assets of each respective Fund, at annual rate of:

HSBC Global Asset Management (UK) Limited (“AMEU”) acts as sub-adviser to the Frontier Markets Fund and the Global Equity Volatility Focused Fund. AMEU receives a fee, accrued daily and paid monthly, based on average daily net assets of the Frontier Market Fund and the Global Equity Volatility Focused Fund at an annual rate of 0.625% and 0.375%, respectively, from the fees paid to the Investment Adviser.

HSBC Global Asset Management (Hong Kong) Limited (“AMHK”) acts as sub-adviser to the Asia ex-Japan Smaller Companies Equity Fund. AMHK receives a fee, accrued daily and paid monthly, based on average daily net assets of the Asia ex-Japan Smaller Companies Equity Fund at an annual rate of 0.50% from the fees paid to the Investment Adviser.

HSBC Global Asset Management (France) (“AMFR”) acts as sub-adviser to the Euro High Yield Bond Fund. AMFR receives a fee, accrued daily and paid monthly, based on average daily net assets of the Fund at an annual rate of 0.325% from the fees paid to the Investment Adviser.

HSBC also provides support services to the Funds pursuant to a Support Services Agreement. For its services in this capacity, HSBC is entitled to a fee, accrued daily and paid monthly, based on the average daily net assets of Class A Shares and Class I Shares, at an annual rate of:

Effective July 1, 2016, HSBC agreed to waive its Support Services Fees for the Class I Shares of the Emerging Markets Debt Fund, Emerging Markets Local Debt Fund, Frontier Markets Fund, Total Return Fund and Asia ex-Japan Smaller Companies Equity Fund. HSBC also voluntarily agreed to waive 0.10% of its Support Services Fee for the Class A Shares of those Funds.

HSBC serves the Funds as Administrator. Effective April 1, 2016, under the terms of the Administration Agreement, HSBC receives from the Funds (as well as other funds in the Trust combined) a fee, accrued daily and paid monthly, at an annual rate of:

Prior to April 1, 2016, for these services, HSBC received from the Funds (as well as other funds in the Trust combined) a fee, accrued daily and paid monthly, at an annual rate of:

The fee rates and breakpoints are determined on the basis of the aggregate average daily net assets of the Trust. For the year ended October 31, 2016, the effective annualized rate was 0.04%, prior to any fee waivers or expense reimbursements, based on the average daily net assets of the Trust. The total administration fee paid to HSBC is allocated to each series based upon its proportionate share of the aggregate net assets of the Trust, subject to certain allocations in cases where one fund invests some or all of its assets in another fund.

Pursuant to a Sub-Administration Agreement with HSBC, Citi Fund Services Ohio, Inc. (“Citi’’), a wholly-owned subsidiary of Citigroup, Inc., serves as the Trust’s Sub-Administrator, subject to the general supervision by the Trust’s Board and HSBC. For these services, Citi is entitled to a fee, payable by HSBC, at an annual rate equivalent to the fee rates set forth above subject to certain reductions associated with services provided to new funds, minus 0.02% which is retained by HSBC.

Under a Compliance Services Agreement between the Trust and Citi (the “CCO Agreement’’), Citi makes an employee available to serve as the Trust’s Chief Compliance Officer (the “CCO’’). Under the CCO Agreement, Citi also provides infrastructure and support in implementing the written policies and procedures comprising the Trust’s compliance program, including support services to the CCO. For the services provided under the CCO Agreement, the Trust paid Citi $304,597 for the year ended October 31, 2016, plus reimbursement of certain out of pocket expenses. Expenses incurred by each Fund are reflected on the Statements of Operations as “Compliance Services.’’ Citi pays the salary and other compensation earned by individuals performing these services, as employees of Citi.

Foreside Distribution Services, L.P. (“Foreside”), a wholly-owned subsidiary of Foreside Financial Group LLC, serves the Trust as Distributor (the “Distributor”). The Trust, on behalf of certain Funds, has adopted a non-compensatory Distribution Plan and Agreement (the “Distribution Plan”) pursuant to Rule 12b-1 of the Act. The Distribution Plan provides for reimbursement of expenses incurred by the Distributor related to distribution and marketing, at a rate not to exceed 0.25% of the average daily net assets of Class A Shares (currently not being charged). For the year ended October 31, 2016, Foreside, as Distributor, also received $64,049 in commissions from sales of Trust, of which $97 was reallocated to HSBC-affiliated brokers and dealers.

The Trust has adopted a Shareholder Services Plan, which provides for payments to shareholder servicing agents for providing various shareholder services. For performing these services, the shareholder servicing agents receive a fee that is computed daily and paid monthly up to 0.25% of the average daily net assets of Class A Shares. The fees paid to the Distributor pursuant to the Distribution Plan and to shareholder servicing agents pursuant to the Shareholder Services Plan may not exceed, in the aggregate, 0.50% annually of each Fund’s average daily net assets of Class A Shares.

Citi provides fund accounting services for each Fund. As fund accountant, Citi receives an annual fee per Fund and share class, subject to certain minimums and reimbursement of certain expenses. Citi receives additional fees paid by the Trust for regulatory administration services and money market fund reporting services. Effective July 16, 2016, the transfer agency services were converted from FIS Investor Services, LLC (“FIS”) (formerly SunGard Investor Services LLC) to Boston Financial Data Services, Inc. (“BFDS”) under a separate transfer agency services agreement. As transfer agent, BFDS receives a fee based on the number of funds and shareholder accounts, subject to certain minimums, and reimbursement of certain expenses. Prior to July 16, 2016 transfer agent services were provided under the terms of a separate transfer agency services agreement with Citi. Citi’s rights and obligations under the transfer agency services agreement, in turn, were assigned to FIS. As transfer agent, FIS received a fee based on the number of funds and shareholder accounts, subject to certain minimums, reductions associated with services provided to new funds and reimbursement of certain expenses.

The Investment Adviser has agreed to contractually limit through March 1, 2017, (June 30, 2017 with respect to the Emerging Markets Debt Fund and the Emerging Markets Local Debt Fund), the total annual expenses, exclusive of interest, taxes, brokerage commissions, extraordinary expenses, and estimated indirect expenses attributable to the Funds’ investments in investment companies, of the Funds. Each Fund Class has its own expense limitations based on the average daily net assets for any full fiscal year as follows:

Prior to June 30, 2016, the contractual expense limitation for Class A, Class I and Class S Shares of Emerging Markets Debt Fund and Emerging Markets Local Debt Fund was 1.20%, 0.85% and 0.75%, respectively.

Any amounts contractually waived or reimbursed by the Investment Adviser will be subject to repayment by the respective Fund to the Investment Adviser within three years to the extent that the repayment will not cause the Fund’s operating expenses to exceed the contractual expense limit that was in effect at the time of such waiver or reimbursement. During the year ended October 31, 2016, the Investment Adviser did not recapture any of its prior contractual waivers or reimbursements. As of October 31, 2016, the repayments that may potentially be made by the Funds are as follows:

* The year listed above the amounts is the fiscal year ending in which the amounts will no longer be able to be recouped.

The Funds may purchase securities from an underwriting syndicate in which the principal underwriter or members of the syndicate are affiliated with the Adviser. For the year ended October 31, 2016, the Funds purchased the following amounts of such securities:

The Funds may use related party broker-dealers. For the year ended October 31, 2016, there were no brokerage commissions earned by broker-dealers affiliated with the Adviser.

The Adviser and its affiliates may have lending, banking, brokerage, underwriting, or other business relationships with the issuers of the securities in which the Funds invest.

The Adviser has borne all the costs of the offering and organization of the Global Equity Volatility Focused Fund and the Euro High Yield Bond Fund.

Cost of purchases and proceeds from sales of securities (excluding securities maturing less than one year from acquisition) for the year ended October 31, 2016 were as follows:

For the year ended October 31, 2016, purchases and sales of long-term U.S. government securities were as follows:

Foreign Securities Risk: Investments in foreign securities are generally considered riskier than investments in U.S. securities. Foreign securities, including those of emerging and frontier market issuers, are subject to additional risks, including international trade, political and regulatory risks.

Emerging Markets Risk: The prices of securities in emerging markets can fluctuate more significantly than the prices of companies in more developed countries. Securities of emerging market issuers generally have more risk than securities issued by issuers in more developed markets. The less developed the country, the greater effect the risks may have in an investment, and as a result, an investment may exhibit a higher degree of volatility than either the general domestic securities market or the securities markets of developed foreign countries.

Frontier Market Countries Risk: 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. The magnification of risks are the result of: the potential for extreme price volatility and illiquidity in frontier markets; government ownership or control of parts of private sector and of certain companies; trade barriers, exchange controls, managed adjustments in relative currency values and other protectionist measures imposed or negotiated by the countries with which frontier market countries trade and the relatively new and unsettled securities laws in many frontier market countries.

High-Yield Securities Risk: Investments in high-yield securities (commonly referred to as “junk bonds”) are considered speculative investments and have significantly higher credit risk than investment-grade securities and tend to be less liquid than higher rated securities. The prices of high-yield securities, which may be more volatile than higher rated securities of similar maturity, may be more vulnerable to adverse market, economic, social or political conditions.

Interest Rate Risk: Fluctuations in interest rates may affect the yield, liquidity and value of investments in income producing or debt instruments. Generally, if interest rates rise, the value of such investments will fall. The risks associated with rising interest rates are heightened given that interest rates are near historic lows, but are expected to increase in the future, with unpredictable effects on the markets and a Fund’s investments.

Derivatives Risk: The term “derivatives” covers a broad range of investments, including swaps, futures, options and currency forwards. In general, a derivative refers to any financial instrument whose value is derived, at least in part, from the price of another security or a specified index, asset or rate. The use of derivatives presents risks different from, and possibly greater than, the risks associated with investing directly in traditional securities. The use of derivatives can lead to losses because of adverse movements in the price or value of the underlying asset, index or rate, which may be magnified by certain features of the derivatives. These risks are heightened when derivatives are used to enhance a Fund’s return or as a substitute for a position or security, rather than solely to hedge (or offset) the risk of a position or security held by a Fund. The success of Fund’s derivatives strategies will also be affected by its ability to assess and predict the impact of market or economic developments on the underlying asset, index or rate and the derivative itself, without the benefit of observing the performance of the derivative under all possible market conditions. Derivatives involve the risk of mispricing or improper valuation and the risk that changes in the value of the derivative may not correlate perfectly with the underlying asset, index or rate. Certain derivative positions may be difficult to close out when a Fund’s portfolio manager may believe it would be appropriate to do so. Also, suitable derivative transactions may not be available in all circumstances and there can be no assurance that a Fund will engage in these transactions to reduce exposure to other risks when that would be beneficial.

In December 2015, the SEC proposed new regulations relating to a mutual fund’s use of derivatives and related instruments. If these or other regulations are adopted, they could significantly limit or impact a Fund’s ability to invest in derivatives and other instruments and adversely affect the Fund’s performance and ability to pursue its investment objectives.

Swap Risk: The use of swap agreements, which are agreements to exchange the return generated by one instrument for the return generated by another instrument (or index), and similar instruments involves risks that are different from those associated with ordinary portfolio securities transactions. For example, a Fund bears the risk of loss of the amount expected to be received under a swap agreement in the event of the default or bankruptcy of a swap agreement counterparty. Swap agreements may also subject a Fund to the risk that the counterparty to the transaction may not meet its obligations, causing the Fund’s value to decrease. Swap agreements may also be considered illiquid.

Concentration of Market Risk: The Total Return Fund’s investment concentration in Brazilian securities and related derivatives may carry certain risks not ordinarily associated with investments that are less concentrated in a specific region or issuer. The risks include future political and economic developments that may adversely affect the value of the Fund’s securities and related derivatives.

The tax character of dividends paid by the Funds during the tax year ended October 31, 2016 was as follows:

The tax character of dividends paid by the Funds during the tax year ended October 31, 2015 was as follows:

As of the tax year ended October 31, 2016, the components of accumulated earnings/(deficit) on a tax basis for the Funds were as follows:

As of the tax year ended October 31, 2016, the Funds have net capital loss carryforwards (“CLCFs”) not subject to expiration as summarized in the tables below. The Board does not intend to authorize a distribution of any realized gain for the Funds until any applicable CLCF has been offset or expires.

The amount and character of net investment income and net realized gains distributions are determined in accordance with federal income tax regulations which may differ from GAAP. These “book/tax” differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature (e.g., certain gain/loss, differing treatment on certain swap agreements, and certain distributions), such amounts are reclassified within the composition of net assets; temporary differences (e.g., wash losses and the realization for tax purposes of unrealized gains/losses on investments in passive foreign investment companies) do not require reclassification. The Funds may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized gains distributed to shareholders on redemption of shares, as a part of the dividends paid deduction for income tax purposes. To the extent distributions to shareholders from net investment income and net realized gains exceed net investment income and net realized gains for tax purposes, they are reported as distributions of capital.

On the Statements of Assets and Liabilities, as a result of permanent book-to-tax differences, reclassification adjustments were made as follows:

The reclassifications for the Funds relate primarily to foreign currency gains or losses, investments in passive foreign investment companies, net investment loss, and the differing treatment of investments in swap agreements.

In our opinion, the accompanying statements of assets and liabilities, including the schedules of portfolio investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of HSBC Asia ex-Japan Smaller Companies Equity Fund, HSBC Euro High Yield Bond Fund (USD Hedged), HSBC Global Equity Volatility Focused Fund, HSBC Global High Yield Bond Fund, HSBC Global High Income Bond Fund, HSBC Emerging Markets Debt Fund, HSBC Emerging Markets Local Debt Fund, HSBC Frontier Markets Fund and HSBC Total Return Fund (each a portfolio of HSBC Funds, and hereafter collectively referred to as the “Funds”) as of October 31, 2016, and the results of each of their operations, the changes in each of their net assets and the financial highlights for each of the periods presented ended on or after October 31, 2015, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities as of October 31, 2016 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. The accompanying financial highlights for each of the years or periods ended on or prior to October 31, 2014 were audited by other auditors whose report dated December 23, 2014 expressed an unqualified opinion on those financial highlights.

During the year ended October 31, 2016, the following Fund declared capital gain distributions:

During the year ended October 31, 2016, the following Funds designated the maximum amount allowable as interest-related dividends for certain non-U.S. resident investors:

For the year ended October 31, 2016, the following percentages of the total ordinary income dividends paid by the Funds qualify for the corporate dividends received deduction available to corporate shareholders:

For the year ended October 31, 2016, dividends paid by the Funds may be subject to a maximum tax rate of 15%, as provided for by the Jobs and Growth Tax Relief Reconciliation Act of 2003. The Funds intend to designate the maximum amount allowable as taxed at a maximum rate of 15%. Complete information will be eported in conjunction with your 2016 Form 1099-DIV:

The following Fund intends to elect to pass through to shareholders the income tax credit for taxes paid to foreign countries. Foreign source income and foreign tax expense per outstanding share on October 31, 2016 are as follows:

The pass-through of this foreign tax credit will only affect those persons who are shareholders on the dividend record date in December 2016. These shareholders will receive more detailed information along with their 2016 Form 1099-DIV.

These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from May 1, 2016 through October 31, 2016.

The table below provides information about actual account values and actual expenses. You may use the information below, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

The table below provides information about hypothetical account values and hypothetical expenses based on each Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

The Funds file their complete schedules of portfolio holdings with the Commission for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the Commission’s website at http://www.sec.gov. The Funds’ Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C.and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The Funds’ Schedules of Investments will be available no later than 60 days after each period end, without charge, on the Funds’ website at www.investorfunds.us.hsbc.com.

An investment in a Fund is not a deposit of HSBC Bank USA, National Association, and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

Investors should consider the investment objectives, risks, charges, and expenses of the investment company carefully before investing. The prospectus contains this and other important information about the investment company. For clients of HSBC Securities (USA) Inc., please call 1-888-525-5757 for more information. For other investors and prospective investors, please call the Funds directly at 1-800-782-8183 or visit our website at www.emfunds.us.hsbc.com. Investors should read the prospectus carefully before investing or sending money.

(a) The registrant has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. This code of ethics is included as an Exhibit.

(b) During the period covered by the report, with respect to the registrant's code of ethics that applies to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions; there have been no amendments to, nor any waivers granted from, a provision that relates to any element of the code of ethics definition enumerated in paragraph (b) of this Item 2.

3(a)(1) The registrant’s board of directors has determined that the registrant has at least one audit committee financial expert serving on its audit committee.

3(a)(2) The audit committee financial experts are Tom Robards and Marcia Beck, who are “independent” for purposes of this Item 3 of Form N-CSR.

As all series of HSBC Funds were re-domiciled into a single trust, to conform with the current year presentation, 2015 fees reported below have been revised to aggregate fees which were previously reported separately.

(e)(1) The audit committee is required to pre-approve all audit and permitted non-audit services performed by the registrant’s independent auditors in accordance with the audit committee charter and the Investment Company Act of 1940.

Fees for 2015 and 2016 represent PricewaterhouseCoopers LLP services provided to the Funds and to HSBC Bank and affiliates related to general corporate, state and local tax assistance, accounting matters and various advisory projects.

(h) The audit committee considered the nonaudit services rendered to the registrant’s investment adviser and any entity controlling, controlled by, or under common control with the investment adviser, and believes the services are compatible with the principal accountant’s independence.

(a) Included as a part of the report to shareholders filed under Item 1.
(b) Not applicable.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

(a)The registrant’s principal executive officer and principal financial officer have concluded, based on their evaluation of the registrant's disclosure controls and procedures as conducted within 90 days of the filing date of this report, that these disclosure controls and procedures are adequately designed and are operating effectively to ensure that information required to be disclosed by the registrant on Form N-CSR is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms.

(b)There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d)) that occurred during the second fiscal quarter of the period covered by this report that have materially affected or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

(a)(1) The code of ethics that is the subject of the disclosure required by Item 2 is attached hereto.

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

This certification is provided pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. § 1350, and accompanies the report on Form N-CSR for the year ended October 31, 2016 of HSBC Funds (the “Registrant”).

Each of the undersigned, being the Principal Executive Officer and Principal Financial Officer of the Registrant, certifies that, to such officer’s knowledge:

This certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and is not being filed as part of Form N-CSR or as a separate disclosure document. A signed original of this written statement required by Section 906 has been provided to the Registrant and will be retained by the Registrant and furnished to the Securities and Exchange Commission or its staff upon request.

Approved by the Boards of Trustees
HSBC Investor Funds, HSBC Advisor Funds Trust and HSBC Investor Portfolios
as of August 14, 2003
Pursuant to the Sarbanes-Oxley Act of 2002

HSBC Investor Funds, HSBC Advisor Funds Trust and HSBC Investor Portfolios (each a “Trust”) recognize the importance of high ethical standards in the conduct of their business and require this Code of Ethics (“Code”) to be observed by their respective principal executive officers (each a “Covered Officer”) (defined below). In accordance with the Sarbanes-Oxley Act of 2002 (the “Act”) and the rules promulgated thereunder by the U.S. Securities and Exchange Commission (“SEC”) each Trust is required to file reports pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (“1934 Act”), and must disclose whether they have adopted a code of ethics applicable to the principal executive officers. Each Trust’s Board of Trustees (“Board”), including a majority of its Independent Trustees (defined below) has approved this Code as compliant with the requirements of the Act and related SEC rules. This Code does not supersede or otherwise affect the separate code of ethics that each Trust has adopted pursuant to Rule 17j-1 under the Investment Company Act of 1940, as amended (“1940 Act”).

All recipients of the Code are directed to read it carefully, retain it for future reference and abide by the rules and policies set forth herein. Any questions concerning the applicability or interpretation of such rules and policies, and compliance therewith, should be directed to the relevant Compliance Officer (defined below), as specified in Schedule 1.

This Code has been adopted by the Board in accordance with the Act and the rules promulgated by the SEC in order to deter wrongdoing and promote:

(A) honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

(B) full, fair, accurate, timely and understandable disclosure in reports and documents filed by the Trust with the SEC or made in other public communications by the Trust;

(D) prompt internal reporting to an appropriate person or persons of violations of the Code; and

(A) “Covered Officer” means the principal executive officer and senior financial officers, including the principal financial officer, controller or principal accounting officer, or persons performing similar functions.

(B) “Compliance Officer” means the person appointed by the Trust’s Board of Trustees to administer the Code.

(D) “Executive Officer” shall have the same meaning as set forth in Rule 3b-7 of the 1934 Act. Subject to any changes in the Rule, an Executive Officer means the president, any vice president, any officer who performs a policy making function, or any other person who performs similar policy making functions for the Trust.

(E) “Independent Trustee” means a trustee of the Trust who is not an “interested person” of the Trust within the meaning of Section 2(a)(19) of the 1940 Act.

(F) “Implicit Waiver” means the Compliance Officer failed to take action within a reasonable period of time regarding a material departure from a provision of the Code that has been made known to an Executive Officer.

(G) “Restricted List” means that listing of securities maintained by the Trust Compliance Officer in which trading by certain individuals subject to the Trust’s 17j-1 code of ethics is generally prohibited.

(H) “Waiver” means the approval by the Compliance Office of a material departure from a provision of the Code.

(A) Overview. A “conflict of interest” occurs when a Covered Officer’s personal interest interferes with the interests of, or his service to, the Trust. Certain conflicts of interest arise out of the relationships between Covered Officers and the Trust and already are subject to the conflict of interest provisions in the 1940 Act and the Investment Advisers Act of 1940, as amended (the “Advisers Act”). The Trust’s and each investment adviser and sub-adviser’s compliance programs and procedures are designed to prevent, or identify and correct, violations of these provisions. This Code does not, and is not intended to, repeat or replace these programs and procedures, and such conflicts fall outside of the parameters of this Code.

(B) General Policy. Each Covered Officer shall adhere to the highest standards of honest and ethical conduct. Each Covered Officer has a duty to exercise his or her authority and responsibility for the benefit of the Trust, to place the interests of the shareholders first and to refrain from having outside interests that conflict with the interests of the Trust and its shareholders. Each such person must avoid any circumstances that might adversely affect or appear to affect his or her duty of complete loyalty to the Trust and its shareholders in discharging his or her responsibilities, including the protection of confidential information and corporate integrity.

(C) Examples of Conflicts. The following list provides examples of conflicts of interest under the Code but Covered Officers should keep in mind that these examples are not exhaustive. The overarching principle is that the personal interest of a Covered Officer should not be placed improperly before the interest of the Trust.

(2) Conflicts of Interest that may be Waived. There are some conflict of interest situations for which a Covered Officer may seek a Waiver from a provision(s) of the Code. Waivers must be sought in accordance with Section VIII of the Code. Examples of these include:

(A) General Policy. This Code is intended to promote the full, fair, accurate, timely and understandable disclosure in reports and other documents filed by the Trust with the SEC or made in other public communications by the Trust. Accordingly, the Covered Officers are expected to consider this to be central to their roles as officers of the Trust and shall ensure that full, fair, accurate, timely and understandable disclosure is made in the Trust’s reports and other documents filed with the SEC and in other public communications.

(C) Changes in Disclosure Process. If, at any time, a Covered Officer believes that measures should be taken to improve the Trust’s disclosure process, he or she shall advise the Compliance Officer and shall work with the Compliance Officer and other appropriate personnel to facilitate any changes in the process.

(B) Reporting. A Covered Officer shall promptly report any knowledge of a material violation of this Code to the Compliance Officer. Failure to do so is itself a violation of the Code.

(C) Required Documentation. Any such report shall be in writing, and shall describe in reasonable detail the conduct that the Covered Officer believes to have violated this Code. If the Compliance Officer concludes that there has been a violation of the Code, he or she shall determine appropriate sanctions in accordance with Section IX(A) below. Notwithstanding the foregoing, the Compliance Officer shall be entitled to grant a Waiver of one or more provisions of this Code as set forth in Section VIII of the Code.

(A) Waivers. The Compliance Officer may grant Waivers to the Code in circumstances that present special hardship. Waivers shall be structured to be as narrow as is reasonably practicable with appropriate safeguards designed to prevent abuse of the Waiver. To request a Waiver from the Code, the Covered Officer shall submit to the Compliance Officer a written request describing the transaction, activity or relationship for which a Waiver is sought. The request shall briefly explain the reason for engaging in the transaction, activity or relationship.

(B) Implicit Waivers. In the event that the Compliance Officer has not acted upon a properly submitted request for a Waiver within a reasonable amount of time and a material departure from the Code has taken place in accordance with the request, the Compliance Officer may nevertheless, in lieu of finding a violation of the Code, determine retroactively to grant a Waiver.

(C) Documentation. The Compliance Officer shall document all Waiver determinations. If a Waiver is granted under paragraphs (A) or (B), above, the Compliance Officer shall prepare a brief description of the nature of the Waiver, the name of the Covered Officer and the date of the Waiver so that this information may be disclosed in the next Form N-CSR to be filed on behalf of the Trust or posted on the Trust’s internet website within five business days following the date of the Waiver. All Waivers must be reported to the Board at each quarterly meeting as set forth in Section IX below.

(A) Sanctions. Compliance by Covered Officers with the provisions of the Code is required. Covered Officers should be aware that in response to any violation, the Trust will take whatever action is deemed necessary under the circumstances, including, but not limited to, fines, suspension or termination.

(B) Board Reporting. The Compliance Officer shall report any material violations of the Code to the Board for its consideration on a quarterly basis. At a minimum, the report shall:

(C) Amendments to the Code. The Covered Officers and the Compliance Officer may recommend amendments to the Code for the consideration and approval of the Board. In connection with any amendment to the Code, the Compliance Officer shall prepare a brief description of the amendment, so that the necessary disclosure may be made with the next Form N-CSR to be filed on behalf of the Trust or posted on the Trust’s internet website within five business days following the date of the amendment.

The Compliance Officer shall maintain all records, including any internal memoranda, relating to compliance with the Code or Waivers of the Code, for a period of 6 years from the end of the fiscal year in which such document was created, 2 years in an accessible place. Such records shall be furnished to the SEC or its staff upon request.

All reports and records prepared or maintained pursuant to this Code will be considered confidential and shall be maintained on a confidential basis and will be reasonably secured to prevent access to such records by unauthorized personnel.

WORLD SELECTION FUNDS	Class A	Class B	Class C
Aggressive Strategy Fund	HAAGX	HBAGX	HCAGX
Balanced Strategy Fund	HAGRX	HSBGX	HCGRX
Moderate Strategy Fund	HSAMX	HSBMX	HSCMX
Conservative Strategy Fund	HACGX	HBCGX	HCCGX
Income Strategy Fund	HINAX	HINBX	HINCX

1	Reflects the maximum sales charge of 5.00%.
2	Reflects the applicable contingent deferred sales charge, maximum of 4.00%.
3	Reflects the applicable contingent deferred sales charge, maximum of 1.00%.
4	Reflects the expense ratios as reported in the prospectus dated February 28, 2016. The expense ratios reflected include Acquired Fund fees and expenses. Additional information pertaining to the October 31, 2016 expense ratios can be found in the financial highlights. Expenses of the Underlying Funds are reflected in realized and unrealized gain (loss) on investments in the accompanying Statement of Operations, and are not included in the expense ratios shown in the accompanying Financial Highlights.
5	For additional information, please refer to the Glossary of Terms.

1	Reflects the maximum sales charge of 5.00%.
2	Reflects the applicable contingent deferred sales charge, maximum of 4.00%.
3	Reflects the applicable contingent deferred sales charge, maximum of 1.00%.
4	Reflects the expense ratios as reported in the prospectus dated February 28, 2016. The expense ratios reflected include Acquired Fund fees and expenses. Additional information pertaining to the October 31, 2016 expense ratios can be found in the financial highlights. Expenses of the Underlying Funds are reflected in realized and unrealized gain (loss) on investments in the accompanying Statement of Operations, and are not included in the expense ratios shown in the accompanying Financial Highlights.
5	For additional information, please refer to the Glossary of Terms.

1	Reflects the maximum sales charge of 5.00%.
2	Reflects the applicable contingent deferred sales charge, maximum of 4.00%.
3	Reflects the applicable contingent deferred sales charge, maximum of 1.00%.
4	Reflects the expense ratios as reported in the prospectus dated February 28, 2016. The expense ratios reflected include Acquired Fund fees and expenses. Additional information pertaining to the October 31, 2016 expense ratios can be found in the financial highlights. Expenses of the Underlying Funds are reflected in realized and unrealized gain (loss) on investments in the accompanying Statement of Operations, and are not included in the expense ratios shown in the accompanying Financial Highlights.
5	For additional information, please refer to the Glossary of Terms.

1	Reflects the maximum sales charge of 5.00%.
2	Reflects the applicable contingent deferred sales charge, maximum of 4.00%.
3	Reflects the applicable contingent deferred sales charge, maximum of 1.00%.
4	Reflects the expense ratios as reported in the prospectus dated February 28, 2016. The expense ratios reflected include Acquired Fund fees and expenses. Additional information pertaining to the October 31, 2016 expense ratios can be found in the financial highlights. Expenses of the Underlying Funds are reflected in realized and unrealized gain (loss) on investments in the accompanying Statement of Operations, and are not included in the expense ratios shown in the accompanying Financial Highlights.
5	For additional information, please refer to the Glossary of Terms.

†	Portfolio composition is subject to change.
1	For additional information, please refer to the Glossary of Terms.

1	Reflects the maximum sales charge of 4.75%.
2	Reflects the applicable contingent deferred sales charge, maximum of 4.00%.
3	Reflects the applicable contingent deferred sales charge, maximum of 1.00%.
4	Reflects the expense ratios as reported in the prospectus dated February 28, 2016. The Adviser has entered into a contractual expense limitation agreement with the Fund under which it will limit total expenses of the Fund (excluding interest, taxes, brokerage commissions, extraordinary expenses and estimated indirect expenses attributable to the Fund’s investments in investment companies other than the HSBC Opportunity Portfolio) to an annual rate of 1.50%, 2.25% and 2.25% for Class A Shares, Class B Shares and Class C Shares, respectively. The expense limitation shall be in effect until March 1, 2017. The expense ratios reflected include Acquired Fund fees and expenses. Additional information pertaining to the October 31, 2016 expense ratios can be found in the financial highlights. Expenses of the Underlying Funds are reflected in realized and unrealized gain (loss) on investments in the accompanying Statement of Operations, and are not included in the expense ratios shown in the accompanying Financial Highlights.
5	For additional information, please refer to the Glossary of Terms.
6	Return for the period March 20, 2012 to October 31, 2016.

HSBC Aggressive Strategy Fund
	Percentage of
Investment Allocation	Investments at Value (%)
Global Equity		87.7
Fixed Income		6.7
Alternatives		4.6
Cash		1.0
Total		100.0

HSBC Balanced Strategy Fund
	Percentage of
Investment Allocation	Investments at Value (%)
Global Equity		71.9
Fixed Income		22.1
Alternatives		4.6
Cash		1.4
Total		100.0

HSBC Moderate Strategy Fund
	Percentage of
Investment Allocation	Investments at Value (%)
Global Equity		48.5
Fixed Income		45.8
Alternatives		4.7
Cash		1.0
Total		100.0

HSBC Conservative Strategy Fund
	Percentage of
Investment Allocation	Investments at Value (%)
Fixed Income		71.6
Global Equity		22.7
Alternatives		4.7
Cash		1.0
Total		100.0

HSBC Income Strategy Fund
	Percentage of
Investment Allocation	Investments at Value (%)
Fixed Income		80.0
Global Equity		17.6
Alternatives		2.0
Cash		0.4
Total		100.0

Affiliated Investment Companies—4.5%

	Shares	Value ($)
HSBC Emerging Markets Debt Fund,
Class I Shares (Fixed Income)	13,452		137,746
HSBC Emerging Markets Local Debt
Fund, Class I Shares (Fixed Income)	50,122		363,886
HSBC U.S. Government Money
Market Fund, Class I Shares,
0.28%(a) (Cash)	105,919		105,919
TOTAL AFFILIATED INVESTMENT
COMPANIES (COST $596,201)			607,551

Unaffiliated Investment Companies—33.2%

Columbia High Yield Bond Fund,
Class Z Shares (Fixed Income)	140,676		409,367
Northern Institutional Government
Assets Portfolio, Institutional
Shares, 0.08%(a) (Cash)	23,800		23,800
Vanguard 500 Index Fund,
Admiral Shares Global Equity	20,520		4,033,245
TOTAL UNAFFILIATED INVESTMENT
COMPANIES (COST $4,136,884)			4,466,412

Exchange Traded Funds—62.4%

iShares Core MSCI EAFE ETF
(Global Equity)	45,425		2,445,682
iShares Core MSCI Emerging
Markets ETF (Global Equity)	19,700		889,258
iShares Currency Hedged
MSCI EAFE ETF (Global Equity)	55,605		1,391,237
PowerShares FTSE RAFI Developed
Markets ex-U.S. Portfolio
(Global Equity)	26,501		971,527
PowerShares FTSE RAFI U.S.
1000 Portfolio (Global Equity)	22,599		2,073,684
SPDR Dow Jones Global Real
Estate ETF (Alternatives)	13,283		621,246
TOTAL EXCHANGE TRADED
FUNDS (COST $8,564,256)			8,392,634
TOTAL INVESTMENT
SECURITIES - 100.1%
(COST $13,297,341)			13,466,597
Other Assets (Liabilities)—(0.1)%			(13,316	)
NET ASSETS—100%		$	13,453,281

(a)	The rate represents the annualized one-day yield that was in effect on October 31, 2016.
ETF – Exchange-Traded Fund
SPDR – Standard & Poor’s Depositary Receipt

Affiliated Investment Companies—11.0%

	Shares	Value ($)
HSBC Emerging Markets Debt Fund,
Class I Shares (Fixed Income)	153,575		1,572,609
HSBC Emerging Markets Local Debt
Fund, Class I Shares (Fixed Income)	241,981		1,756,782
HSBC U.S. Government Money Market
Fund, Class I Shares, 0.28%(a)
(Cash)	470,756		470,756
TOTAL AFFILIATED INVESTMENT
COMPANIES (COST $3,907,024)			3,800,147

Unaffiliated Investment Companies—36.0%

Columbia High Yield Bond Fund,
Class Z Shares (Fixed Income)	1,295,493		3,769,879
Vanguard 500 Index Fund,
Admiral Shares (Global Equity)	44,158		8,679,319
TOTAL UNAFFILIATED INVESTMENT
COMPANIES (COST $11,821,229)			12,449,198

Exchange Traded Funds—53.2%

iShares Core MSCI EAFE ETF
(Global Equity)	99,367		5,188,399
iShares Core MSCI Emerging
Markets ETF (Global Equity)	42,007		1,896,196
iShares Currency Hedged
MSCI EAFE ETF (Global Equity)	116,113		2,905,147
PowerShares FTSE RAFI Developed
Markets ex-U.S. Portfolio
(Global Equity)	56,143		2,058,202
PowerShares FTSE RAFI U.S.
1000 Portfolio (Global Equity)	45,961		4,217,378
SPDR Barclays Intermediate
Term Corporate Bond ETF
(Fixed Income)	15,530		538,270
SPDR Dow Jones Global Real
Estate ETF (Alternatives)	34,073		1,593,594
TOTAL EXCHANGE TRADED
FUNDS (COST $18,781,810)			18,397,186
TOTAL INVESTMENT
SECURITIES—100.2%
(COST $34,510,063)			34,646,531
Other Assets (Liabilities)—(0.2)%			(52,180	)
NET ASSETS—100%		$	34,594,351

Affiliated Investment Companies—11.1%

	Shares	Value ($)
HSBC Emerging Markets Debt Fund,
Class I Shares (Fixed Income)	151,687		1,553,270
HSBC Emerging Markets Local Debt
Fund, Class I Shares (Fixed Income)	259,873		1,886,678
HSBC U.S. Government Money Market
Fund, Class I Shares, 0.28%(a)
(Cash)	346,551		346,551
TOTAL AFFILIATED INVESTMENT
COMPANIES (COST $3,941,117)			3,786,499

Unaffiliated Investment Companies—27.6%

Columbia High Yield Bond Fund,
Class Z Shares (Fixed Income)	1,278,214		3,719,594
Vanguard 500 Index Fund,
Admiral Shares (Global Equity)	29,182		5,735,732
TOTAL UNAFFILIATED INVESTMENT
COMPANIES (COST $9,059,942)			9,455,326

Exchange Traded Funds—61.4%

iShares 1-3 Year Treasury Bond ETF
(Fixed Income)	3,922		333,174
iShares 3-7 Year Treasury Bond ETF
(Fixed Income)	3,702		465,045
iShares 7-10 Year Treasury Bond ETF
(Fixed Income)	1,237		136,144
iShares Core MSCI EAFE ETF
(Global Equity)	63,555		3,421,798
iShares Core MSCI Emerging
Markets ETF (Global Equity)	25,488		1,150,528
iShares Currency Hedged
MSCI EAFE ETF (Global Equity)	84,175		2,106,058
iShares iBoxx $ Investment Grade
Corporate Bond ETF (Fixed Income)	30,696		3,713,600
iShares Treasury Inflation Protected
Securities ETF (Fixed Income)	946		109,604
PowerShares FTSE RAFI Developed
Markets ex-U.S. Portfolio
(Global Equity)	37,210		1,364,119
PowerShares FTSE RAFI U.S.
1000 Portfolio (Global Equity)	30,498		2,798,492
SPDR Barclays Intermediate
Term Corporate Bond ETF
(Fixed Income)	108,885		3,773,953
SPDR Dow Jones Global Real
Estate ETF (Alternatives)	34,672		1,621,614
TOTAL EXCHANGE TRADED
FUNDS (COST $21,066,180)			20,994,129
TOTAL INVESTMENT
SECURITIES—100.1%
(COST $34,067,239)			34,235,954
Other Assets (Liabilities)—(0.1)%			(47,907	)
NET ASSETS—100%		$	34,188,047

Affiliated Investment Companies—10.9%

	Shares	Value ($)
HSBC Emerging Markets Debt Fund,
Class I Shares (Fixed Income)	64,048		655,855
HSBC Emerging Markets Local Debt
Fund, Class I Shares (Fixed Income)	111,966		812,870
HSBC U.S. Government Money
Market Fund, Class I Shares,
0.28%(a) (Cash)	144,034		144,034
TOTAL AFFILIATED INVESTMENT
COMPANIES (COST $1,584,025)			1,612,759

Unaffiliated Investment Companies—19.0%

Columbia High Yield Bond Fund,
Class Z Shares (Fixed Income)	570,877		1,661,249
Northern Institutional Government
Assets Portfolio, Institutional
Shares, 0.08%(a) (Cash)	6,548		6,548
Vanguard 500 Index Fund,
Admiral Shares (Global Equity)	5,826		1,145,147
TOTAL UNAFFILIATED INVESTMENT
COMPANIES (COST $2,721,916)			2,812,944

Exchange Traded Funds—70.2%

iShares 1-3 Year Treasury Bond ETF
(Fixed Income)	9,351		794,367
iShares 20+ Year Treasury Bond ETF
(Fixed Income)	969		127,181
iShares 3-7 Year Treasury Bond ETF
(Fixed Income)	8,847		1,111,360
iShares 7-10 Year Treasury Bond ETF
(Fixed Income)	2,581		284,065
iShares Core MSCI EAFE ETF
(Global Equity)	12,089		650,872
iShares Core MSCI Emerging
Markets ETF (Global Equity)	5,069		228,815
iShares Currency Hedged
MSCI EAFE ETF (Global Equity)	20,588		515,112
iShares iBoxx $ Investment
Grade Corporate Bond ETF
(Fixed Income)	19,561		2,366,488
iShares Treasury Inflation Protected
Securities ETF (Fixed Income)	1,726		199,974
PowerShares FTSE RAFI Developed
Markets ex-U.S. Portfolio
(Global Equity)	6,858		251,414
PowerShares FTSE RAFI U.S.
1000 Portfolio (Global Equity)	6,095		559,277
SPDR Barclays Intermediate
Term Corporate Bond ETF
(Fixed Income)	73,845		2,559,468
SPDR Dow Jones Global Real
Estate ETF (Alternatives)	14,839		694,020
TOTAL EXCHANGE TRADED
FUNDS (COST $10,265,506)			10,342,413
TOTAL INVESTMENT
SECURITIES—100.1%
(COST $14,571,447)			14,768,116
Other Assets (Liabilities)—(0.1)%			(21,187	)
NET ASSETS—100%		$	14,746,929

Affiliated Investment Companies—8.5%

	Shares	Value ($)
HSBC Emerging Markets Debt Fund,
Class I Shares (Fixed Income)	2,233		22,868
HSBC Emerging Markets Local Debt
Fund, Class I Shares (Fixed Income)	6,878		49,933
HSBC U.S. Government Money
Market Fund, Class I Shares,
0.28%(a) (Cash)	3,534		3,534
TOTAL AFFILIATED INVESTMENT
COMPANIES (COST $74,309)			76,335

Unaffiliated Investment Companies—17.3%

Columbia High Yield Bond Fund,
Class Z Shares (Fixed Income)	34,842		101,390
Northern Institutional Government
Assets Portfolio, Institutional
Shares, 0.08%(a) (Cash)	319		319
Vanguard 500 Index Fund,
Admiral Shares (Global Equity)	276		54,291
TOTAL UNAFFILIATED INVESTMENT
COMPANIES (COST $152,772)			156,000

Exchange Traded Funds—74.8%

iShares 1-3 Year Treasury Bond ETF
(Fixed Income)	1,521		129,210
iShares 20+ Year Treasury Bond ETF
(Fixed Income)	153		20,081
iShares 3-7 Year Treasury Bond ETF
(Fixed Income)	1,465		184,034
iShares 7-10 Year Treasury Bond ETF
(Fixed Income)	412		45,345
iShares Core MSCI EAFE
ETF (Global Equity)	639		34,403
iShares Core MSCI Emerging
Markets ETF (Global Equity)	271		12,233
iShares Currency Hedged
MSCI EAFE ETF (Global Equity)	891		22,293
iShares iBoxx $ Investment Grade
Corporate Bond ETF (Fixed Income)	531		64,240
iShares Treasury Inflation Protected
Securities ETF (Fixed Income)	268		31,050
PowerShares FTSE RAFI Developed
Markets ex-U.S. Portfolio
(Global Equity)	271		9,935
PowerShares FTSE RAFI U.S.
1000 Portfolio (Global Equity)	289		26,519
SPDR Barclays Intermediate
Term Corporate Bond ETF
(Fixed Income)	2,170		75,212
SPDR Dow Jones Global Real
Estate ETF (Alternatives)	383		17,913
TOTAL EXCHANGE TRADED
FUNDS (COST $662,750)			672,468
TOTAL INVESTMENT
SECURITIES—100.6%
(COST $889,831)			904,803
Other Assets (Liabilities)—(0.6)%			(5,636	)
NET ASSETS—100%		$	899,167

	Aggressive				Balanced				Moderate				Conservative				Income
	Strategy				Strategy				Strategy				Strategy				Strategy
	Fund				Fund				Fund				Fund				Fund
Assets:
Investments in Affiliated Investment Companies, at value(a)		$	607,551			$	3,800,147			$	3,786,499			$	1,612,759			$	76,335
Investments in non-affiliates, at value			12,859,046				30,846,384				30,449,455				13,155,357				828,468
Total Investments			13,466,597				34,646,531				34,235,954				14,768,116				904,803
Interest and dividends receivable			188				8,141				7,962				3,292				583
Receivable for capital shares issued			199				270				1,044				789				150
Receivable for investments sold			2,548				14,992				20,099				5,679				3,878
Receivable from Investment Adviser			15,536				—				—				6,699				6,945
Prepaid expenses			5,564				6,134				4,376				3,562				2,766
Total Assets			13,490,632				34,676,068				34,269,435				14,788,137				919,125
Liabilities:
Payable for investments purchased			99				7,908				7,778				3,244				5
Payable for capital shares redeemed			35				2,578				6,304				1,497				1,493
Accrued expenses and other payables:
Investment Management			—				7,423				7,326				—				—
Administration			441				1,133				1,118				482				29
Distribution fees			2,080				5,705				5,349				3,992				469
Shareholder Servicing			3,361				8,446				8,291				3,754				223
Accounting			4,007				4,009				4,019				4,022				4,021
Custodian			738				877				1,065				846				665
Transfer Agent			8,618				17,697				15,869				5,484				259
Other			17,972				25,941				24,269				17,887				12,794
Total Liabilities			37,351				81,717				81,388				41,208				19,958
Net Assets		$	13,453,281			$	34,594,351			$	34,188,047			$	14,746,929			$	899,167

Composition of Net Assets:
Capital			13,899,344				35,841,733				35,066,625				14,929,136				906,686
Accumulated net investment income/(loss)			57,763				321,739				—				3,842				182
Accumulated net realized gains/(losses) from investments			(673,082	)			(1,705,589	)			(1,047,293	)			(382,718	)			(22,673	)
Net unrealized appreciation (depreciation) on investments			169,256				136,468				168,715				196,669				14,972
Net Assets		$	13,453,281			$	34,594,351			$	34,188,047			$	14,746,929			$	899,167

Net Assets:
Class A Shares		$	10,394,760			$	26,115,876			$	26,335,513			$	8,799,736			$	175,932
Class B Shares			2,271,115				6,226,371				5,096,270				3,821,949				279,285
Class C Shares			787,406				2,252,104				2,756,264				2,125,244				443,950
Total		$	13,453,281			$	34,594,351			$	34,188,047			$	14,746,929			$	899,167
Shares Outstanding:
($0.001 par value, unlimited number of shares authorized):
Class A Shares			905,621				2,323,651				2,391,263				819,140				17,337
Class B Shares			211,988				557,077				462,895				361,917				27,576
Class C Shares			73,997				200,591				260,518				194,616				43,768
Net Asset Value, Offering Price and Redemption
Price per share:
Class A Shares		$	11.48			$	11.24			$	11.01			$	10.74			$	10.15
Class B Shares(b)		$	10.71			$	11.18			$	11.01			$	10.56			$	10.13
Class C Shares(b)		$	10.64			$	11.23			$	10.58			$	10.92			$	10.14
Maximum Sales Charge:
Class A Shares			5.00%				5.00%				5.00%				5.00%				4.75%
Maximum Offering Price per share (Net Asset Value /
(100%-maximum sales charge))
Class A Shares		$	12.08			$	11.83			$	11.59			$	11.31			$	10.66
Investments in Affiliated Investment Companies, at cost(a)		$	596,201			$	3,907,024			$	3,941,117			$	1,584,025			$	74,309
Total Investments, at cost		$	13,297,341			$	34,510,063			$	34,067,239			$	14,571,447			$	889,831

	Aggressive Strategy Fund								Balanced Strategy Fund
	For the				For the				For the				For the
	year ended				year ended				year ended				year ended
	October 31,				October 31,				October 31,				October 31,
	2016				2015				2016				2015
Investment Activities:
Operations:
Net investment Income (loss)		$	119,583			$	101,055			$	576,706			$	548,076
Net realized gains (losses) from investments			(643,864	)			(39,333	)			(1,390,899	)			(325,125	)
Capital gains distributions from underlying funds			11,689				—				23,980				—
Change in unrealized appreciation/depreciation on investments			596,023				(411,726	)			1,370,984				(1,222,911	)
Change in net assets resulting from operations			83,431				(350,004	)			580,771				(999,960	)

Distributions:
Net investment income:
Class A Shares			(86,771	)			(89,983	)			(395,003	)			(458,031	)
Class B Shares			(948	)			(2,298	)			(98,113	)			(104,570	)
Class C Shares			(573	)			(1,109	)			(24,272	)			(50,243	)

Net realized gains:
Class A Shares			—				(2,780,772	)			—				(4,885,859	)
Class B Shares			—				(1,234,084	)			—				(2,251,068	)
Class C Shares			—				(396,410	)			—				(971,532	)
Change in net assets resulting from distributions			(88,292	)			(4,504,656	)			(517,388	)			(8,721,303	)
Change in net assets resulting from capital transactions			(2,230,178	)			2,723,456				(5,466,212	)			2,703,035
Change in net assets			(2,235,039	)			(2,131,204	)			(5,402,829	)			(7,018,228	)

Net Assets:
Beginning of period			15,688,320				17,819,524				39,997,180				47,015,408
End of period		$	13,453,281			$	15,688,320			$	34,594,351			$	39,997,180
Accumulated net investment income (loss)		$	57,763			$	26,472			$	321,739			$	254,306

	Moderate Strategy Fund								Conservative Strategy Fund
	For the				For the				For the				For the
	year ended				year ended				year ended				year ended
	October 31,				October 31,				October 31,				October 31,
	2016				2015				2016				2015
Investment Activities:
Operations:
Net investment Income (loss)		$	562,933			$	541,162			$	166,801			$	140,605
Net realized gains (losses) from investments			(855,488	)			(240,762	)			(184,771	)			(219,205	)
Capital gains distributions from underlying funds			15,170				—				3,528				—
Change in unrealized appreciation/depreciation on investments			1,178,336				(1,047,909	)			382,275				(227,091	)
Change in net assets resulting from operations			900,951				(747,509	)			367,833				(305,691	)

Distributions:
Net investment income:
Class A Shares			(441,235	)			(393,275	)			(110,834	)			(89,868	)
Class B Shares			(67,005	)			(76,388	)			(30,021	)			(28,843	)
Class C Shares			(35,287	)			(45,060	)			(14,719	)			(13,698	)

Net realized gains:
Class A Shares			—				(3,039,598	)			—				(713,806	)
Class B Shares			—				(1,334,759	)			—				(610,705	)
Class C Shares			—				(546,873	)			—				(317,991	)

Tax return of capital:
Class A Shares			(26,326	)			(37,732	)			—				(14,413	)
Class B Shares			(3,998	)			(14,442	)			—				(12,322	)
Class C Shares			(2,105	)			(7,251	)			—				(6,297	)
Change in net assets resulting from distributions			(575,956	)			(5,495,378	)			(155,574	)			(1,807,943	)
Change in net assets resulting from capital transactions			(3,185,322	)			644,762				(2,182,307	)			(1,188,317	)
Change in net assets			(2,860,327	)			(5,598,125	)			(1,970,048	)			(3,301,951	)

Net Assets:
Beginning of period			37,048,374				42,646,499				16,716,977				20,018,928
End of period		$	34,188,047			$	37,048,374			$	14,746,929			$	16,716,977
Accumulated net investment income (loss)		$	—			$	—			$	3,842			$	—

	Income Strategy Fund
	For the				For the
	year ended				year ended
	October 31,				October 31,
	2016				2015
Investment Activities:
Operations:
Net investment Income (loss)		$	7,860			$	6,321
Net realized gains (losses) from investments			(8,498	)			(14,384	)
Capital gains distributions from underlying funds			195				—
Change in unrealized appreciation/depreciation on investments			20,269				(5,903	)
Change in net assets resulting from operations			19,826				(13,966	)

Distributions:
Net investment income:
Class A Shares			(2,606	)			(2,317	)
Class B Shares			(2,130	)			(779	)
Class C Shares			(2,433	)			(1,400	)

Net realized gains:
Class A Shares			—				(3,735	)
Class B Shares			—				(5,659	)
Class C Shares			—				(10,430	)

Tax return of capital:
Class A Shares			—				(837	)
Class B Shares			—				(1,319	)
Class C Shares			—				(2,319	)
Change in net assets resulting from distributions			(7,169	)			(28,795	)
Change in net assets resulting from capital transactions			(212,151	)			(207,774	)
Change in net assets			(199,494	)			(250,535	)

Net Assets:
Beginning of period			1,098,661				1,349,196
End of period		$	899,167			$	1,098,661
Accumulated net investment income (loss)		$	182			$	—

*		The per share amounts and percentages reflect income and expenses assuming inclusion of the Fund’s proportionate share of the income and expenses of the master HSBC Portfolios that the fund invested in as part of a master-feeder structure during the fiscal years ended October 31, 2012, 2013 and 2014. The Fund does not include expenses of the affiliated and unaffiliated investment companies in which the Fund invests.
Amounts designated as “-“ are $0.00 or have been rounded to $0.00.
(a)		Calculated based on average shares outstanding.
(b)		Net investment income (loss) is affected by the timing of distributions from the affiliated and unaffiliated investment companies in which the Fund invests.
(c)		Total return calculations do not include any sales or redemption charges.
(d)		Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. For the fiscal years ended October 31, 2012, 2013 and 2014, the portfolio turnover rate was calculated by aggregating the results of multiplying the Fund’s investment percentage in the master HSBC Portfolios, affiliated and unaffiliated investment companies by their corresponding portfolio turnover rates.
(e)		The portfolio turnover rate for the year ended October 31, 2014 was higher than prior years primarily due to a realignment of the fund’s investments.

*		The expense ratios reflected do not include expenses of the affiliated and unaffiliated investment companies, in which the Fund invests.
Amounts designated as “-“ are $0.00 or have been rounded to $0.00.
(a)		Calculated based on average shares outstanding.
(b)		Net investment income (loss) is affected by the timing of distributions from the affiliated and unaffiliated investment companies in which the Fund invests.
(c)		Not annualized for periods less than one year. Total return calculations do not include any sales or redemption charges.
(d)		Annualized for periods less than one year.
(e)		Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued.
(f)		The portfolio turnover rate for the year ended October 31, 2014 was higher than prior years primarily due to a realignment of the fund’s investments.
(g)		Commencement of operations on March 20, 2012

Fund	2019($)	2018($)	2017($)	Total($)
Aggressive Strategy Fund	38,212	—	—	38,212
Conservative Strategy Fund	22,684	—	—	22,684
Income Strategy Fund	117,814	107,253	114,923	339,990

								Net				Change in
					Proceeds			Capital and				Unrealized
	Value		Purchases		from			Realized				Appreciation			Value			Dividend			Shares
	10/31/2015		at Cost		Sales			Gain (Loss)				(Depreciation)			10/31/2016			Income			10/31/2016
Aggressive Strategy Fund
HSBC U.S. Government Money
Market Fund - Class I*	$	351,984	$	10,670,689	$	(10,916,753	)		$	—			$	—		$	105,919		$	1,305		105,919
HSBC Emerging Markets
Debt Fund - Class I		—		291,673		(164,428	)			9,132				1,369			137,746			6,179		13,452
HSBC Emerging Markets Local
Debt Fund - Class I		—		368,202		(14,808	)			510				9,981			363,886			—		50,122
Total	$	351,984	$	11,330,564	$	(11,095,989	)		$	9,642			$	11,350		$	607,551		$	7,484

Balanced Strategy Fund
HSBC U.S. Government Money
Market Fund - Class I*	$	524,523	$	22,481,719	$	(22,535,486	)		$	—			$	—		$	470,756		$	2,381		470,756
HSBC Emerging Markets
Debt Fund - Class I		2,093,238		118,176		(693,778	)			(14,086	)			69,058			1,572,609			112,337		153,575
HSBC Emerging Markets Local
Debt Fund - Class I		1,140,336		698,005		(156,109	)			(21,751	)			96,302			1,756,782			43,748		241,981
Total	$	3,758,097	$	23,297,900	$	(23,385,373	)		$	(35,837	)		$	165,360		$	3,800,147		$	158,466

Moderate Strategy Fund
HSBC U.S. Government Money
Market Fund - Class I*	$	741,957	$	17,564,136	$	(17,959,542	)		$	—			$	—		$	346,551		$	2,837		346,551
HSBC Emerging Markets
Debt Fund - Class I		1,932,219		113,720		(551,357	)			(32,407	)			91,094			1,553,270			106,062		151,687
HSBC Emerging Markets Local
Debt Fund - Class I		1,081,130		813,526		(80,877	)			(2,175	)			75,075			1,886,678			40,830		259,873
Total	$	3,755,306	$	18,491,382	$	(18,591,776	)		$	(34,582	)		$	166,169		$	3,786,499		$	149,729

Conservative Strategy Fund
HSBC U.S. Government Money
Market Fund - Class I*	$	192,666	$	5,857,748	$	(5,906,381	)		$	—			$	—		$	144,034		$	901		144,034
HSBC Emerging Markets
Debt Fund - Class I		743,366		45,550		(156,030	)			(3,427	)			26,396			655,855			41,982		64,048
HSBC Emerging Markets Local
Debt Fund - Class I		—		806,936		(8,166	)			(7,960	)			22,061			812,870			8,583		111,966
Total	$	936,032	$	6,710,234	$	(6,070,577	)		$	(11,387	)		$	48,457		$	1,612,759		$	51,466

Income Strategy Fund
HSBC U.S. Government Money
Market Fund - Class I*	$	15,915	$	834,960	$	(847,341	)		$	—			$	—		$	3,534		$	71		3,534
HSBC Emerging Markets
Debt Fund - Class I		11,340		14,185		(3,550	)			113				779			22,868			1,019		2,233
HSBC Emerging Markets Local
Debt Fund - Class I		—		51,558		(2,316	)			(498	)			1,190			49,933			575		6,878
Total	$	27,255	$	900,703	$	(853,207	)		$	(385	)		$	1,969		$	76,335		$	1,665

Fund	Purchases ($)	Sales ($)
Aggressive Strategy Fund	6,996,442	8,915,959
Balanced Strategy Fund	13,700,787	19,077,854
Moderate Strategy Fund	11,248,450	14,081,622
Conservative Strategy Fund	3,773,746	5,901,735
Income Strategy Fund	276,110	489,859

	Dividends paid from
	Ordinary		Net Long Term	Total Taxable		Return of		Total Dividends
	Income ($)		Capital Gains ($)	Dividends ($)		Capital ($)		Paid ($)⁽¹⁾
Aggressive Strategy Fund		88,292	—		88,292		—		88,292
Balanced Strategy Fund		517,389			517,389		—		517,389
Moderate Strategy Fund		543,527	—		543,527		32,429		575,956
Conservative Strategy Fund		155,574	—		155,574		—		155,574
Income Strategy Fund		7,169	—		7,169		—		7,169

	Short Term		Long Term
	Amount($)		Amount($)	Total($)
Aggressive Strategy Fund		31,799	609,753	641,552
Balanced Strategy Fund		79,312	1,435,273	1,514,585
Moderate Strategy Fund		16,653	915,930	932,583
Conservative Strategy Fund		3,007	364,862	367,869
Income Strategy Fund		—	20,251	20,251

		% of Total
Fund	Investment	Investments
Aggressive Strategy Fund	Vanguard 500 Index Fund,
	Admiral Shares	30.0%
Balanced Strategy Fund	Vanguard 500 Index Fund,
	Admiral Shares	25.1%

		Dividends Received Deduction (%)
Aggressive Strategy Fund		93.55
Balanced Strategy Fund		53.42
Moderate Strategy Fund		30.01
Income Strategy Fund		25.56

		Qualified Dividend Income (%)
Aggressive Strategy Fund		100.00
Balanced Strategy Fund		100.00
Moderate Strategy Fund		97.12
Income Strategy Fund		91.11

				Portfolios in	Other
	Position(s)	Term of Office		Fund Complex	Directorships Held
Name,	Held with	and Length of	Principal Occupation(s)	Overseen By	by Trustee
Address, Age	Funds	Time Served	During Past 5 Years	Trustee*	During Past 5 Years
NON-INTERESTED TRUSTEES

MARCIA L. BECK P.O. Box 182845 Columbus, OH 43218-3035 Age: 61	Trustee	Indefinite; 2008 to present	Private Investor (June 1999 – present); Executive Vice President, Prudential Investments (1997 – 1999); President and Trustee, The Goldman Sachs Mutual Funds (1992 – 1996)	21	None

SUSAN C. GAUSE P.O. Box 182845 Columbus, OH 43218-3035 Age: 64	Trustee	Indefinite; 2013 to present	Private Investor (2003 - present); Chief Executive Officer, Dresdner RCM Global Investors and Allianz Dresdner Asset Management (2000 – 2002); Board Member of Dresdner Global Asset Management Board (2000 – 2002); Chief Operating Officer and Senior Managing Director of Dresdner RCM Global Investors (1998 – 2000); Global Chief Financial Officer, Dresdner RCM Global Investors (1996-1998)	21	Met Investors Series Trust and Metropolitan Series Fund

SUSAN S. HUANG P.O. Box 182845 Columbus, OH 43218-3035 Age: 62	Trustee	Indefinite; 2008 to present	Private Investor (2000-present); Senior Vice President, Schroder Investment Management (2001 – 2004); Managing Director, Chase Asset Management (1995-2000)	21	None

THOMAS F. ROBARDS P.O. Box 182845 Columbus, OH 43218-3035 Age: 70	Chairman and Trustee	Indefinite; 2005 to present	Private Investor (2003-present); Partner, Robards & Co. LLC (investment and advisory services) (2005-present); Chief Financial Officer, American Museum of Natural History (2003-2004); Chief Financial Officer, Datek Online Holdings (2000-2003); Previously EVP and CFO Republic New York Corporation (1976-2000)	21	Ellington Financial LLC (NYSE listed financial services); Ellington Residential Mortgage REIT (NYSE listed real estate investment trust); Overseas Shipholding Group (OSG) (NYSE listed company)

INTERESTED TRUSTEE

DEBORAH HAZELL 452 Fifth Avenue New York NY 10018 Age: 53	Trustee	Indefinite; 2011 to present	CEO, HSBC Global Asset Management (USA) Inc. (2011-present); President and CEO, Fisher Francis Trees & Watts (“FFTW”) (investment advisor) (2008-2011); Client Service, Business Development and Marketing Group, FFTW (1999-2008)	21	None

	Position(s) Held	Term of Office and	Principal Occupation(s)
Name, Address, Age	Funds	Length of Time Served	During Past 5 Years
OFFICERS

RICHARD A. FABIETTI 452 Fifth Avenue New York, NY 10018 Age: 58	President	One year; 2004 to present	Senior Vice President, HSBC Global Asset Management (USA) Inc. (1998 - present)

JAMES D. LEVY 452 Fifth Avenue New York, NY 10018 Age: 53	Vice President	One year; 2014 to present	Vice President, Product Management, HSBC Global Asset Management (USA) Inc. (2014 – present); Vice President, Mutual Funds Product Development, GE Asset Management Inc. (2007 – 2014)

SCOTT RHODES* 3435 Stelzer Road Columbus, OH 43219-3035 Age: 57	Treasurer	One year; 2014 to present	Senior Vice President, Citi Fund Services (2010 - present)

IOANNIS TZOUGANATOS* 100 Summer Street, Suite 1500 Boston, MA 02110 Age: 40	Secretary	One Year; 2015 to present	Vice President, Regulatory Administration, Citi Fund Services (2008-present)

CHARLES BOOTH* 3435 Stelzer Road Columbus, OH 43219-3035 Age: 56	Chief Compliance Officer	One year; 2015 to present	Director and Compliance Officer, CCO Services, Citi Fund Services (1988 - present)

EQUITY FUNDS		Class A		Class B		Class C		Class I
HSBC Opportunity Fund		HSOAX		HOPBX		HOPCX		RESCX

†		The Class I Shares are issued by a separate series of the HSBC Funds.
1		Reflects the maximum sales charge of 5.00%.
2		Reflects the applicable contingent deferred sales charge, maximum of 4.00%.
3		Reflects the applicable contingent deferred sales charge, maximum of 1.00%.
4		For additional information, please refer to the Glossary of Terms.
5		Reflects the expense ratios as reported in the prospectus dated February 28, 2016. The Adviser has entered into a contractual expense limitation agreement with the Fund under which it will limit total expenses of the Fund (excluding interest, taxes, brokerage commissions, extraordinary expenses and estimated indirect expenses attributable to the Fund’s investments in investment companies other than the Portfolio) to an annual rate of 1.65%, 2.40%, and 2.40% for Class A Shares, Class B Shares, and Class C Shares, respectively. The expense limitation shall be in effect until June 25, 2017. Additional information pertaining to the October 31, 2016 expense ratios can be found in the financial highlights.

					Opportunity
	Opportunity				Fund
	Fund				(Class I)
Assets:
Investments in Affiliated Portfolio		$	9,827,032			$	141,400,967
Receivable for capital shares issued			5,198				34,496
Receivable from Investment Adviser			25,490				—
Prepaid expenses			6,651				29,856
Total Assets			9,864,371				141,465,319

Liabilities:
Payable for capital shares redeemed			12,128				363,239
Accrued expenses and other payables:
Administration			163				2,372
Distribution fees			386				—
Shareholder Servicing			2,459				—
Accounting			1,635				775
Professional			9,868				11,768
Printing			1,014				14,764
Transfer Agent			10,948				9,100
Other			574				2,163
Total Liabilities			39,175				404,181
Net Assets		$	9,825,196			$	141,061,138

Composition of Net Assets:
Capital		$	8,509,694			$	123,229,935
Accumulated net investment income/(loss)			(79,658	)			(332,204	)
Accumulated net realized gains/(losses) from investments			1,023,036				12,584,643
Net unrealized appreciation / (depreciation) on investments			372,124				5,578,764
Net Assets		$	9,825,196			$	141,061,138

Net Assets:
Class A Shares		$	9,275,515			$	—
Class B Shares			74,570				—
Class C Shares			475,111				—
Class I Shares			—				141,061,138
Total		$	9,825,196			$	141,061,138

Shares Outstanding:
($0.001 par value, unlimited number of shares authorized):
Class A Shares			932,711				—
Class B Shares			11,097				—
Class C Shares			67,960				—
Class I Shares			—				10,628,939

Net Asset Value, Offering Price and Redemption Price per share:
Class A Shares		$	9.94			$	—
Class B Shares(a)		$	6.72			$	—
Class C Shares(a)		$	6.99			$	—
Class I Shares		$	—			$	13.27
Maximum Sales Charge:
Class A Shares			5.00	%			—	%
Maximum Offering Price per share
(Net Asset Value / (100%-maximum sales charge))
Class A Shares		$	10.46			$	—

	Opportunity Fund								Opportunity Fund (Class I)
	For the year				For the year				For the year				For the year
	ended				ended				ended				ended
	October 31, 2016				October 31, 2015				October 31, 2016				October 31, 2015
Investment Activities:
Operations:
Net investment income/(loss)		$	(96,199	)		$	(169,900	)		$	(305,239	)		$	(656,425	)
Net realized gains/(losses) from investments			1,215,936				(126,642	)			13,908,190				(1,250,197	)
Change in unrealized appreciation/depreciation
on investments			(1,855,077	)			(71,319	)			(20,296,364	)			(3,000,512	)
Change in net assets resulting from operations			(735,340	)			(367,861	)			(6,693,413	)			(4,907,134	)

Distributions:
Net realized gains:
Class A Shares			—				(3,049,523	)			—				—
Class B Shares			—				(79,546	)			—				—
Class C Shares			—				(180,411	)			—				—
Class I Shares			—				—				—				(42,957,976	)
Change in net assets resulting from distributions			—				(3,309,480	)			—				(42,957,976	)
Change in net assets resulting from
capital transactions			(7,035,888	)			4,007,938				(72,091,064	)			62,474,171
Change in net assets			(7,771,228	)			330,597				(78,784,477	)			14,609,061

Net Assets:
Beginning of period			17,596,424				17,265,827				219,845,615				205,236,554
End of period		$	9,825,196			$	17,596,424			$	141,061,138			$	219,845,615
Accumulated net investment income (loss)		$	(79,658	)		$	(160,996	)		$	(332,204	)		$	(617,681	)

			Proportionate
			Ownership
			Interest on
Fund			October 31, 2016 (%)
HSBC Opportunity Fund			6.5
HSBC Opportunity Fund (Class I)			93.5