-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HdBkdwpXvn31SQNSj9LLy2PNSOKRv2tRYEnaQ8srV8Pah893UVeuLcZ2G7xNefmd PyvS8VNbbjoagHsjti6H2g== 0000950117-03-002948.txt : 20030709 0000950117-03-002948.hdr.sgml : 20030709 20030709110604 ACCESSION NUMBER: 0000950117-03-002948 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20030430 FILED AS OF DATE: 20030709 EFFECTIVENESS DATE: 20030709 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HSBC ADVISOR FUNDS TRUST CENTRAL INDEX KEY: 0001010296 STATE OF INCORPORATION: MA FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-07583 FILM NUMBER: 03779429 BUSINESS ADDRESS: STREET 1: C/O BISYS STREET 2: 3435 STELZER RD CITY: COLUMBUS STATE: OH ZIP: 43219-3035 BUSINESS PHONE: (617) 470-8000 MAIL ADDRESS: STREET 1: C/O BISYS STREET 2: 3435 STELZER ROAD CITY: COLUMBUS STATE: OH ZIP: 43219-3035 FORMER COMPANY: FORMER CONFORMED NAME: REPUBLIC ADVISOR FUNDS TRUST DATE OF NAME CHANGE: 19960403 FORMER COMPANY: FORMER CONFORMED NAME: REPUBLIC INVESTMENT MANAGEMENT TRUST DATE OF NAME CHANGE: 19960308 N-CSR 1 a35721.txt HSBC ADVISOR FUNDS TRUST --------------------------------- OMB APPROVAL OMB Number: 3235-0570 Expires: November 30, 2005 Estimated average burden hours per response. . . . . 5.0 --------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act File Number: 811-07583 HSBC ADVISOR FUNDS TRUST (Exact name of registrant as specified in charter) 3435 STELZER ROAD COLUMBUS, OH 43219 (Address of principal executive offices) BISYS FUND SERVICES 3435 STELZER ROAD COLUMBUS, OH 43219 (Name and address of agent for service) Registrant's telephone number, including area code: 1-800-782-8183 Date of fiscal year end: October 31, 2003 Date of reporting period: April 30, 2003 Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. 'SS' 3507. Item 1. Reports to Stockholders. Semi-Annual Report HSBC Investor Family of Funds April 30, 2003 HSBC INVESTOR LIMITED MATURITY FUND HSBC INVESTOR FIXED INCOME FUND HSBC INVESTOR BOND FUND HSBC INVESTOR NEW YORK TAX-FREE BOND FUND [LOGO: PICTURE] HSBC INVESTOR BALANCED FUND HSBC INVESTOR EQUITY FUND HSBC INVESTOR GROWTH AND INCOME FUND HSBC INVESTOR MID-CAP FUND HSBC INVESTOR INTERNATIONAL EQUITY FUND HSBC INVESTOR OVERSEAS EQUITY FUND HSBC INVESTOR SMALL CAP EQUITY FUND HSBC INVESTOR OPPORTUNITY FUND [HSBC LOGO] Table of Contents - -------------------------------------------------------------------------------- HSBC Investor Family of Funds Semi-Annual Report - April 30, 2003 Glossary of Terms President's Message ........................................... 1 Commentary From the Investment Manager ........................ 2 Portfolio Reviews ............................................. 4 Schedules of Portfolio Investments HSBC Investor New York Tax-Free Bond Fund ............. 13 HSBC Investor Balanced Fund ........................... 15 HSBC Investor Equity Fund ............................. 17 HSBC Investor Growth and Income Fund .................. 19 HSBC Investor Mid-Cap Fund ............................ 20 Statements of Assets and Liabilities .......................... 22 Statements of Operations ...................................... 24 Statements of Changes in Net Assets ........................... 26 Financial Highlights .......................................... 38 Notes to Financial Statements ................................. 50 HSBC Investor Portfolios Schedules of Portfolio Investments HSBC Investor Limited Maturity Portfolio .............. 57 HSBC Investor Fixed Income Portfolio .................. 59 HSBC Investor International Equity Portfolio .......... 63 HSBC Investor Small Cap Equity Portfolio .............. 68 Statements of Assets and Liabilities .......................... 70 Statements of Operations ...................................... 71 Statements of Changes in Net Assets ........................... 72 Financial Highlights .......................................... 74 Notes to Financial Statements ................................. 75
Glossary of Terms Beta is a coefficient measuring a stock's relative volatility. The beta is the covariance of a stock in relation to the rest of the stock market. The S&P 500 Index has a beta coefficient of 1. Therefore, any stock with a higher beta is more volatile than the market, and any with a lower beta can be expected to rise and fall more slowly than the market. Citigroup Broad Investment-Grade Bond Fund Index is an unmanaged market capitalization-weighted index that includes fixed-rate Treasury, government-sponsored, corporate and mortgage securities. All issues mature in one year or more and have at least $50 million face amount outstanding for entry into the index. Gross Domestic Product Growth (GDP) is the measure of the market value of the goods and services produced by labor and property in the United States. Lehman Brothers 7-Year Municipal Bond Index is an unmanaged broad based index comprised of investment grade, fixed-rate and tax-exempt securities with a remaining maturity of at least 7 years. Lehman Brothers Aggregate Bond Index is an unmanaged index generally representative of the investment-grade debt issues with at least one year to final maturity. Lehman Brothers Intermediate Aggregate Bond Index is an unmanaged index generally representative of investment-grade issues with maturities between three and ten years. Lipper Balanced Funds Average is comprised of managed funds that primarily conserve principal by maintaining at all times a balanced portfolio of both stocks and bonds. Typically the stock/bond ratio ranges around 60%/40%. Lipper General Bond Funds Average is comprised of managed funds that do not have quality or maturity restrictions. The Funds primary goal is to keep the bulk of the portfolio's assets in corporate and government debt issues. Lipper Intermediate Investment-Grade Debt Funds Average is an average of managed funds that invest at least 65% of their assets in investment-grade debt issues (rated in the top four grades) with dollar-weighted average maturities of five to ten years. Lipper International Funds Average is comprised of managed funds that invest their assets in securities whose primary trading markets are outside of the United States. Lipper Large-Cap Core Funds Average is comprised of managed funds that, by portfolio practice, invest at least 75% of their equity assets in companies with market capitalizations (on a three-year weighted basis) greater than 300% of the dollar-weighted median market capitalization of the Standard & Poor's Mid-Cap 400 Index. Lipper Mid-Cap Growth Funds Average is comprised of managed funds that, by portfolio practice, invest at least 75% of their equity assets in companies with market capitalizations (on a three-year weighted basis) of less than 300% of the dollar-weighted median market capitalization of the Standard & Poor's Mid-Cap 400 Index. Lipper N.Y. Municipal Bond Funds Average is an average of managed funds that invest at least 65% of their assets in municipal debt issues that are exempt from taxation in New York or a city in New York. Morgan Stanley Europe, Australasia and Far East (MSCI EAFE) Index is an unmanaged index that measures performance of a diverse range of developed countries in the indicated regions. NASDAQ is a market price only index that tracks the performance of domestic common stocks traded on the regular Nasdaq market as well as National Market System traded foreign common stocks and American Depository Recipts. The Russell Universe - In 1984, Russell created the Russell family of stock indices as part of a more accurate and comprehensive system for evaluating the performance of investment managers. Russell now maintains 21 U.S. sotck indices and has launched similar broad-market and style indices in Canada and Japan. today, more than $214 billion is invested in funds modeling Russell's U.S. indices, and more than $1 trillion in funds is benchmarked against the global family of Russell indices. Russell MidCap Growth Index is an unmanaged index which measures the performance of securities found in the Russell universe that fall in the mid-range sector. Russell 1000 Index is an unmanaged index which measures the performance of the 1,000 larges securities found in the Russell 3000 Index, which represents approximately 92% of the total market capitalization of the Russell 3000 Index. Russell 1000 Growth Index is an unmanaged index which measures the performance of 1,000 securitities found in the Russell universe with higher price-to-book ratios and higher forecasted growth values. Russell 1000 Value Index is unmanaged index which measures the performance of the 1,000 largest of the 3,000 largest U.S.-domiciled companies (based on total market capitalizatin) with lower price-to-book ratios and lower forecasted growth values. Russell 2000 Index is an unmanaged index that generally representative of the performance of small-capitalization stocks. Russell 2000 Growth Index is an unmanaged index which tracks the performance of domestically traded common stocks of small- to mid-sized companies with higher price-to-book ratios and higher forecasted growth values. Russell 2000 Value Index is unmanaged index which measures the performance of those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values. Standard & Poor's 500 Index is an unmanaged index that measures the performance of the stock market as a whole. Standard & Poor's Mid Cap 400 Index is an unmanaged index that consists of 400 domestic stocks chosen for market size, liquidity and industry group representation. Lipper is an independent mutual fund performance monitor whose results are based on total return and do not reflect a sales charge. Securities indexes assume reinvestment of all distributions and interest payments and do not take in account brokerage fees or expenses. Securities in the Fund do not match those in the indexes and performance of the Fund will differ. Investors cannot invest directly in an index, although they can invest in the underlying funds or securities. President's Message - -------------------------------------------------------------------------------- Dear Shareholder: We are pleased to present you with the semi-annual reports for the HSBC Investor Family of Funds for the six months ended April 30, 2003. The report contains the following features: * Commentary From the Investment Manager * Portfolio Reviews--investment strategy, performance overview and outlook for the coming months * Schedules of Portfolio Investments--listing of the security holdings in each Fund * Statements of Assets and Liabilities--summary of the assets and liabilities of each Fund * Statements of Operations--summary of operations and its effect on the assets of each Fund * Statements of Changes in Net Assets--summary of changes in net assets during the period * Financial Highlights--per share summary of activity affecting net asset value per share * Notes to Financial Statements Finally, we thank you for your continued confidence in us. We look forward to providing you with investment management services to meet your needs now and in the years ahead. Sincerely, Walter B. Grimm Walter B. Grimm President June 2003 HSBC INVESTOR FAMILY OF FUNDS 1 Commentary From the Investment Manager - -------------------------------------------------------------------------------- HSBC Asset Management (Americas) Inc. U.S. Economic Review The United States economy struggled through a difficult environment during the six-months ended April 30, 2003. Corporate spending was weak, as companies cut costs and continued to pay down the heavy debt they built up during the economic expansion of the 1990s. The run-up to war with Iraq hurt already-weak corporate spending by clouding economic predictions and causing businesses to delay investments. The Federal Reserve Board (the "Fed") in early November tried to stimulate the economy by lowering short-term interest rates from 1.75% to 1.25%. However, rapidly rising oil prices, growing unemployment and sluggish corporate spending helped to stoke fears that the economy could fall back into a recession. Consumer spending played an essential role in keeping the economy growing. Rising unemployment threatened to weaken consumer spending, but that trend was offset by solid wage increases made possible by strong productivity growth. In addition, low interest rates encouraged homeowners to refinance their mortgages, boosting their cash flow and spending. Corporate profit growth improved during the period. Those gains came largely because of cost cutting, as revenue growth remained anemic. Many corporations also benefited from low interest rates as well as a weaker dollar, which allowed them to sell more products overseas. Global Economic Review Many of the same factors that plagued the U.S. influenced economies around the world. Like the Fed, the European Central Bank reduced short-term interest rates in an effort to boost economic growth. High unemployment, labor costs and taxes contributed to slow growth in many European countries, most notably Germany. A soaring housing market buoyed the United Kingdom's economy, keeping it stronger than continental Europe's. Japan continued to suffer from more than $300 billion in bad loans and a banking system that lacks transparency. Some emerging economies fared well, while others struggled. Brazil's economy appears to have stabilized, as the new president has taken moderate positions on economic matters. An export-based economy such as Taiwan's, that sells a great deal of technology equipment to developed countries suffered from weak capital spending in developed economies. Nevertheless, countries with strong domestic demand, such as South Korea, remained well insulated from the global downturn and fared relatively well. China benefited from its position as the low-cost producer of many of the world's goods, although the economy in its rural provinces is still dominated by inefficient and corrupt state-controlled industries. Many Asian countries near the end of the period suffered from the outbreak of severe acute respiratory syndrome (SARS), which dramatically reduced tourism and other economic activity in those areas. Market Environment The U.S. equity market began November with a rally, as investors were encouraged by the Fed's interest-rate cut, improved corporate profits and the prospect for an economic recovery. The rally proved short-lived, however. Investors sold stocks in December after tensions between the U.S., and Iraq increased, and economic indicators suggested that a strong economic recovery was unlikely. Concerns about an approaching war with Iraq and mixed signals about the direction of the economy led to stock market volatility during the first quarter of 2003. The conclusion of the war with Iraq removed a major source of uncertainty and led to a broad rally in the equity markets during April. Stocks began the year strongly and then fluctuated with the daily news from Iraq, ending the first quarter in negative territory. Growth stocks led the market during the first three months of 2003, and technology was the top-performing sector for the second consecutive quarter, as investors responded to signs of more stable capital spending. Strong returns from pharmaceutical stocks boosted health care shares, while solid earnings from large retailers helped consumer discretionary stocks. Financial services stocks lagged the market, as investors anticipated rising interest rates. Shares of larger companies outperformed small-company stocks during the period, as small retailers and media companies suffered from the perception that consumers might reduce spending going forward. Small-cap financial-services companies outperformed their larger brethren, however, due to strong performance from small banks and realtors. Meanwhile, small-cap health care stocks fared relatively well, due to a revitalized biotechnology sector. European markets outperformed U.S. equities early in the period, aided by the euro's strength versus the dollar. That trend reversed itself in early 2003 however, as the dollar strengthened and boosted the relative performance of the U.S. stock market. 2 HSBC INVESTOR FAMILY OF FUNDS Commentary From the Investment Manager - (continued) - -------------------------------------------------------------------------------- HSBC Asset Management (Americas) Inc. Australia and New Zealand were relatively immune from the global economic slowdown, and their stock markets were two of the best-performing markets during the period. Japan performed poorly throughout the period, as that country continued to suffer the effects of a poorly managed and regulated banking sector. Markets in the Pacific Rim were hurt late in the period by investor fears about the implications of the SARS virus. Fixed-income securities benefited as investors concerned about the war and uncertain about the direction of the economy sought safety in bonds. Investors favored corporate bonds, which offered historically high yields relative to Treasury securities. High-yielding bonds with low credit ratings particularly benefited from investors' pursuit of higher yields. Municipal bonds and mortgage-backed bonds lagged other fixed-income sectors. Short-term bonds led the Treasury markets early in the period as they benefited from the Fed's interest-rate cuts, while investors sold longer-term bonds to participate in the short-lived stock rally. That trend reversed itself in early 2003, however, as skittish investors moved money back out of the stock market and into longer-term Treasuries. HSBC INVESTOR FAMILY OF FUNDS 3 Portfolio Reviews - -------------------------------------------------------------------------------- HSBC Investor Limited Maturity Fund (Class A (Investor) Shares, B Shares, C Shares and Y Shares) by John B. Cuccia Portfolio Manager HSBC Asset Management (Americas) Inc. The HSBC Investor Limited Maturity Fund (the "Fund") seeks to realize above-average total return, consistent with reasonable risk, by investing in a diversified investment grade portfolio of U.S. government obligations, corporate bonds and mortgage-backed securities. The Fund utilizes a two tier structure, commonly known as "master-feeder," in which the Fund invests all of its investable assets in the HSBC Investor Limited Maturity Portfolio (the "Portfolio"). The Fund returned 3.44%, (without sales charge) for the Class A (Investor) Shares and 3.47% for the Class Y shares during the six-month period ended April 30, 2003. That compared to a return of 3.52% for the Lehman Brothers Intermediate Aggregate Bonds Index.(1) The U.S. markets were taken by surprise on November 6, 2002 when the Fed decided to lower its target interest rate by a larger than expected 50 basis points to a rate of 1.25% at their scheduled FOMC meeting. They also decided to change their bias to neutral, indicating no further anticipated moves in the near term. The U.S. bond market initially responded with higher yields as the U.S. equity market rallied. However, as 2002 ended the fixed income market finished on a high note as yields declined. Additionally, investment-grade corporate bond spread's generated their best performance in many quarters. With the start of the new year, the U.S. economy proved weaker than previously anticipated as initial estimates for fourth quarter Gross Domestic Product(1) (the "GDP") grew at only a 0.7% pace. The U.S. dollar declined against a broad index of currencies. Bond yields moved higher as many investors abroad reduced their investments in dollar denominated assets. As the year progressed, the economy did show some signs of strength, mainly in the housing sector and in retail sales. Fourth quarter GDP was later revised upward to a reading of 1.4%, but many investors began to question whether the consumer would continue to spend in an economy with a deteriorating labor market, weakening consumer confidence and contracting manufacturing. Toward the end of the first quarter, heightened geo-political risk became the main driver as the countdown to and inception of the war in Iraq diminished economic expectations. The Fed again met and similar to their previous meeting at the beginning of year, decided to leave their target interest rate unchanged. However, this time they did not express an opinion on the balance of risk facing the economy. Through the remainder of the six-month review period ended April 2003, financial markets remained volatile, economic data remained weak as the war and severe winter weather hindered the consumer. Many investors felt the military campaign in Iraq would last two to four months, but then by the second week of April, Baghdad fell. Nonetheless, despite a swift conclusion to the war, not all was well. The economy did not get the instant post war bounce investors were hoping for. At the beginning of the review period, the Fund slightly increased its exposure to the corporate sector and to U.S. Treasury's, while decreasing its exposure to mortgage-backed-securities. The Fund also increased its duration profile in longer dated securities. Throughout the period, the Fund maintained an overweight in the corporate sector as well as a higher duration profile versus the benchmark. Both strategies helped to enhance the Fund's performance as the corporate sector outperformed and bond yields in general, finished the review period lower.* We feel the Fed will keep its target on the federal funds rates at current accommodative levels for an extended period. We believe that inflation may remain subdued and economic growth should pickup and return to around trend during the second half of 2003. In addition, the technical factors that drove significant spread contraction in the corporate market may continue, as they show no near terms signs of abatement. Over the longer term, we are likely to see pressure on yields rise as the economy is expected to show signs of improvement. We also anticipate an increase to the U.S. Treasury supply. As such, we feel the Fund's interest rate profile and credit exposure is positioned accordingly. Average Annual Total Return
Inception Six 1 Since As of April 30, 2003 Date Months Year Inception - ---------------------------------------------------------------------------------------------------------- HSBC Investor Limited Maturity Fund Class A (Investor)(2) 2/7/01 -1.47% 3.21% 4.71% HSBC Investor Limited Maturity Fund Class B(3) 2/15/01 -1.04% 3.58% 5.35% HSBC Investor Limited Maturity Fund Class C(4) 2/13/01 2.06% 6.68% 6.13% HSBC Investor Limited Maturity Fund Class Y 1/23/01 3.47% 8.65% 7.49% - ----------------------------------------------------------------------------------------------------------
(2) Reflects the maximum sales charge of 4.75%. (3) Reflects the contingent deferred sales charge maximum of 4.00%. (4) Reflects the contingent deferred sales charge maximum of 1.00%. - -------------------------------------------------------------------------------- (1) For additional information, please refer to the Glossary of Terms. * Portfolio composition is subject to change. The performance data quoted represents past performance and is not an indication of future results. The investment return and net asset value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. 4 HSBC INVESTOR FAMILY OF FUNDS Portfolio Reviews - -------------------------------------------------------------------------------- HSBC Investor Fixed Income Fund HSBC Investor Bond Fund (Class A (Investor) Shares, B Shares and C Shares) by Edward Merkle Senior Portfolio Manager, Managing Director HSBC Asset Management (Americas) Inc. The HSBC Investor Fixed Income Fund and the HSBC Investor Bond Fund (the "Funds") seek to provide investors with above-average total return, consistent with reasonable risk, through investments in a diversified portfolio of fixed-income securities. The Funds utilize a two-tier structure, commonly known as a "master-feeder,"in which the Funds invest all of their investable assets in the HSBC Investor Fixed Income Portfolio (the "Portfolio"). For the six-months ended April 30, 2003, the shares of the HSBC Investor Fixed Inome Fund produced a 5.19% total return, and the Class A (Investor) Shares of the HSBC Investor Bond Fund returned 4.98% (without sales charge). That compared to 4.41% and 5.40% total return for the Funds' benchmarks, the Citigroup Broad Investment-Grade Bond Fund Index and the Lipper General Bond Funds Average, respectively.(1) The past six-month period saw a number of monetary and geo-political events that caused both the stock and bond markets to react significantly. First off, the Fed's November 6, 2002 meeting ended with an announcement that they were lowering the fed funds rate by 50 basis points to a target of 1.25%. This decision caught most market observers by surprise as most were expecting either no change in rates or a 25 basis point increase. As 2003 began, it was more of the same as economic conditions continued mixed, unemployment stayed at high levels, consumer confidence remained muted and manufacturing did not break out of its slump. In the first quarter of 2003, the bond markets were driven by two significant events, namely the start of the war in Iraq and the Fed's meeting on March 18. The Federal Reserve meeting ended with no change in interest rates or a change in bias, which remained at neutral. However, what was unique was the Fed's statement that they decided not to express an opinion on the balance of risks facing the economy. In our opinion, the Fed was not sure which way the economy was headed because of the war in Iraq. As of April 30, 2003, the Fed changed its bias to weakness and the markets remained divided whether or not the Fed would ease further. Fund activity during this period touched on most sectors of the fixed income markets as we purchased U.S. Treasuries, U.S. agencies, corporate bonds and mortgage-backed securities. During this period, we maintained an overweight in investment-grade corporate bonds and an underweight in U.S. Treasury securities. We believe this strategy proved quite successful as corporate bonds had an outstanding six-month run. In the credit markets, we selectively reduced our holdings in BBB rated corporate securities during the rally as we felt that spread compression had pretty much run its course. Lastly, in the mortgage sector, we purchased 5.5% 30-year coupons that brought down our average coupon weighting. It also afforded the portfolio some relief from the rapid pace of monthly principal and interest payments that have effected this sector given the historic number of consumer refinancing over the past few years.* We believe no Fed activity will occur over the next 12 months, as economic data remains mixed with weakness continuing in unemployment data and strength remaining in the housing sector. Average Annual Total Return - --------------------------------------------------------------------------------
Inception Six 1 5 Since As of April 30, 2003 Date Months Year Year Inception - ---------------------------------------------------------------------------------------------------- HSBC Investor Fixed Income Fund 1/9/95 5.19% 9.88% 7.02% 8.18% HSBC Investor Bond Fund Class A (Investor)(2) 8/26/96 -0.03% 4.19% 5.37% 6.36% HSBC Investor Bond Fund Class B(3) 1/6/98 0.49% 4.47% 5.60% 5.41% HSBC Investor Bond Fund Class C(4) 11/4/98 3.50% 7.49% N/A 5.83% - ----------------------------------------------------------------------------------------------------
(2) Reflects the maximum sales charge of 4.75%. (3) Reflects the contingent deferred sales charge maximum of 4.00%. (4) Reflects the contingent deferred sales charge maximum of 1.00%. - -------------------------------------------------------------------------------- (1) For additional information, please refer to the Glossary of Terms. * Portfolio composition is subject to change. The performance data quoted represents past performance and is not an indication of future results. The investment return and net asset value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. HSBC INVESTOR FAMILY OF FUNDS 5 Portfolio Reviews - -------------------------------------------------------------------------------- HSBC Investor New York Tax-Free Bond Fund'D' (Class A (Investor) Shares, B Shares, C Shares and Y Shares) by Jerry Samet Senior Fixed Income Portfolio Manager HSBC Asset Management (Americas) Inc. The HSBC Investor New York Tax-Free Bond Fund (the "Fund") seeks to provide shareholders with income exempt from regular, federal, New York state and New York city personal income taxes. The HSBC Investor New York Tax-Free Bond Fund (the "Fund") delivered a total return of 3.69% (without sales charge) for Class A (Investor) Shares and 3.82% for Class Y Shares for the period ended April 30, 2003. That compared to 3.71% and 3.14% for the Fund's benchmarks, the Lehman Brothers 7-Year Municipal Bond Index and the Lipper New York Municipal Bond Funds Average, respectively.(1) During the period ended April 30, 2003, municipals performed firmly as the fixed income markets rallied with yields moving lower. In the process municipals underperformed taxable fixed income on a pretax basis by 72 basis points. Relative underperformance in the municipal market was a result of the strong market performance of the corporate bond sector, which outperformed municipals by an overwhelming 518 basis points. In fact, municipals were able to outperform all other investment-grade taxable fixed income sectors. Furthermore, yields in the municipal market were able to actually move lower than U.S. Treasury yields which is most unusual during a bond rally where municipals typically lag Treasury yields in a rallying market. The Fund's duration during the period began approximating the benchmark but over the period adapted a positioning that was about 15% longer than our benchmark and was one of the key factors that helped drive the Fund's performance. The portfolio also maintained a barbelled position, which helped performance as the long and short end of the curve outperformed the intermediate portion of the curve. Additionally the portfolio maintained its high credit quality profile as lower rated and high yield municipal credits continue to come under pressure due to reduced revenues at various municipal entities.* The outlook for the municipal market remains somewhat positive. Flow of funds into the asset class continues to remain strong although we would suspect that 'sticker shock' might set in if rates move lower from current low historical yields. However, we believe investor risk appetites are likely to remain tempered, as a return to the speculative investor of the late 1990's is not likely to occur. Currently, the municipal market continues to perform well despite budgetary concerns, record amounts of new issuance, and of course very low absolute yield levels. We believe credit selection, as well as sector selection could be the key driver of performance for the remainder of the year, as the spread between higher quality and lower quality paper should remain volatile. The tax-exempt market is feeling pressure from a credit standpoint from declining state and local revenues. The prospects of a Federal aid package remains uninspiring. However, many states have already adapted increases in taxes and fees that have helped increase their revenue base. The yield spread between 5 and 10-year municipals currently narrowed a bit to 110 basis points. This still remains relatively steep as the spread within the Treasury market stands at just 108 basis points. Going forward the Fund will continue to barbell along the yield curve as the incremental yield pick up remains near decade highs. Duration-wise we will approximate our benchmarks. The Funds will underweight the 10-year portion of the curve, as that portion is highly susceptible to large crossover selling while over weighing 'sweet spot' which we see as the 7-8 year portion. From a quality standpoint, the Funds will continue to overweigh insured paper.* Average Annual Total Return - --------------------------------------------------------------------------------
Inception Six 1 5 Since As of April 30, 2003 Date Months Year Year Inception - ---------------------------------------------------------------------------------------------------------------------- HSBC Investor New York Tax-Free Bond Fund Class A (Investor)(2) 5/1/95 -1.21% 3.15% 4.44% 5.48% HSBC Investor New York Tax-Free Bond Fund Class B(3) 1/6/98 -0.69% 3.52% 4.69% 4.30% HSBC Investor New York Tax-Free Bond Fund Class C(4) 11/4/98 2.29% 6.48% N/A 4.16% HSBC Investor New York Tax-Free Bond Fund Class Y 7/1/96 3.82% 8.58% 5.73% 6.20% - ----------------------------------------------------------------------------------------------------------------------
(2) Reflects the maximum sales charge of 4.75%. (3) Reflects the contingent deferred sales charge maximum of 4.00%. (4) Reflects the contingent deferred sales charge maximum of 1.00%. - -------------------------------------------------------------------------------- 'D' A fund's income may be subject to certain state and local taxes and, depending on your tax status, the federal alternative minimum tax. Regional funds may be subject to additional risks, since the issues they invest in are located in one geographical location. (1) For additional information, please refer to the Glossary of Terms. * Portfolio composition is subject to change. The performance data quoted represents past performance and is not an indication of future results. The investment return and net asset value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. 6 HSBC INVESTOR FAMILY OF FUNDS Portfolio Reviews - -------------------------------------------------------------------------------- HSBC Investor Balanced Fund (Class A (Investor) Shares, B Shares, C Shares and Y Shares) by Thomas D'Auria, CFA and Edward Merkle Chief Investment Officer and Senior Portfolio Manager, Managing Director HSBC Asset Management (Americas) Inc. The HSBC Investor Balanced Fund (the "Fund") seeks to provide current income and long-term growth of capital consistent with reasonable risk by investing in a broadly diversified portfolio of U.S. government securities, common stocks, preferred stocks and high-quality bonds. The Fund produced a total return of 3.66% (without sales charge) for Class A (Investor) Shares and 3.91% for the Class Y Shares for the six-months ended April 30, 2003. That compared to a 4.31%, 4.47% and 4.25% return for the Fund's benchmarks, the Lehman Brothers Aggregate Bond Index, the S&P 500 Index and the Lipper Balanced Funds Average, respectively.(1) The past six-month period saw a number of monetary and geo-political events that caused both the stock and bond markets to react significantly. First off, the Fed's November 6, 2002 meeting ended with an announcement that they were lowering the fed funds rate by 50 basis points to a target of 1.25%. This decision caught most market observers by surprise as most were expecting either no change in rates or a 25 basis point increase. As 2003 began, it was more of the same as economic conditions continued mixed, unemployment stayed at high levels, consumer confidence remained muted and manufacturing did not break out of its slump. In the first quarter of 2003, the bond markets were driven by two significant events, namely the start of the war in Iraq and the Fed's meeting on March 18. The Fed meeting ended with no change in interest rates or a change in bias, which remained at neutral. However, what was unique was the Fed's statement that they decided not to express an opinion on the balance of risks facing the economy. Simply put, the Fed was not sure which way the economy was headed because of the war in Iraq. As of April 30, 2003, the Fed changed their bias to weakness and the markets remained divided whether or not the Fed would ease further. Fund activity during this period touched on most sectors of the Fixed Income markets as we purchased U.S. Treasuries, U.S. agencies, corporate bonds and mortgage-backed securities. During this period, we maintained an overweight in investment-grade corporate bonds and an underweight in U.S. Treasury securities. This strategy proved quite successful as corporate bonds had an outstanding six-month run. In the credit markets, we selectively reduced our holdings in BBB rated corporate securities during the rally as we felt that spread compression had pretty much run its course. In the near future, we will look to purchase 5.5% 30-year coupons that will bring down our average coupon weighting. It also could afford the portfolio some relief from the rapid pace of monthly principal and interest payments that have effected this sector given the historic number of consumer refinancing over the past few years.* We belive no Fed activity will occur over the next 12 months, as economic data remains mixed with weakness continuing in unemployment data and strength remaining in the housing sector. The economic data has been mixed, shifting between positive and negative, and we do not anticipate clarity on the direction of the economy in the short-term. Consumer confidence has rebounded significantly with the end of the military conflict in Iraq, however, jobless claims remain high and unemployment has ticked up again. We believe lower energy prices could give the consumer a needed boost, and interest rates have remained quite low during the last month, which is giving some hope of yet another refinancing wave along with continued support to the housing industry. The significant rally since mid-March has brought valuations close to fair levels. High beta1 stocks have led the market rally and we think many stocks may be ahead of their fundamentals (particularly in Technology). With the first quarter earnings reporting season over, the next few weeks could be an "information void" that could lead to some volatility and the markets could pare some of the recent gains. We believe there is modest upside to the market from current levels. We have not made significant changes in the portfolio, after raising the beta to just above 1.0 earlier in the year. We continue to position the portfolio for a 12-18 month forecast, which we believe may include a rebound in global economies. However, we feel it is clear that volatility will continue and this should allow for moneymaking entry and exit points from individual stocks.* Average Annual Total Return - --------------------------------------------------------------------------------
Inception Six 1 Since As of April 30, 2003 Date Months Year Inception - ------------------------------------------------------------------------------------------------ HSBC Investor Balanced Fund Class A (Investor)(2) 2/20/01 -1.46% -9.00% -8.95% HSBC Investor Balanced Fund Class B(3) 2/9/01 -0.71% -8.67% -9.15% HSBC Investor Balanced Fund Class C(4) 2/13/01 2.39% -5.76% -8.33% HSBC Investor Balanced Fund Class Y 1/18/01 3.91% -3.90% -8.19% - ------------------------------------------------------------------------------------------------
(2) Reflects the maximum sales charge of 5.00%. (3) Reflects the contingent deferred sales charge maximum of 4.00%. (4) Reflects the contingent deferred sales charge maximum of 1.00%. - -------------------------------------------------------------------------------- (1) For additional information, please refer to the Glossary of Terms. * Portfolio composition is subject to change. The performance data quoted represents past performance and is not an indication of future results. The investment return and net asset value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. HSBC INVESTOR FAMILY OF FUNDS 7 Portfolio Reviews - -------------------------------------------------------------------------------- HSBC Investor Equity Fund (Class A (Investor) Shares, B Shares, C Shares and Y Shares) by John L. Blundin Portfolio Manager, Alliance Capital Management, L.P. and Robert H. Lyon Portfolio Manager, Institutional Capital Corporation The HSBC Investor Equity Fund (the "Fund") seeks to provide its shareholders with long-term growth of capital and income without excessive fluctuations in market value. The Fund invests at least 80% of its assets in equity securities of seasoned mid-sized and large companies whose shares are expected to show above-average price appreciation. The Fund employs two sub-investment advisers to achieve its investment objective. Each sub-investment adviser pursues a different investment style, and receives a fee for their services. Alliance Capital Management, L.P. pursues a growth style of investing, focusing on financially secure firms that have established operating histories and are proven leaders in their industries or market sectors. These companies may possess characteristics such as participation in expanding markets, increasing unit sales volume, growth in revenues and earnings per share or increasing return on investments. Institutional Capital Corporation pursues a value style of investing, focusing on shares of companies that are undervalued relative to the stock market as a whole. The firm employs a fundamentals-based, bottom-up stock-picking method to find these companies. The Fund returned 4.85% (without sales charge) for Class A (Investor) Shares and 4.91% for the Class Y Shares for the six-months ended April 30, 2003. That compared to a 4.28%, 4.75% and 2.96% return forthe Fund's benchmarks, the Russell 1000 Growth Index, the Russell 1000 Index and the Lipper Large-Cap Core Funds Average.(1) The economy during the period continued to experience a sluggish recovery characterized by weak corporate spending. Investors hopes for stronger economic growth fueled a stock-market rally in the beginning of the period, but weak corporate earnings at the end of 2002 caused stocks to give back much of those gains. The stock market remained volatile through the rest of the period, moving higher through April on positive news regarding the U.S. war with Iraq. Value stocks outperformed growth stocks, though both asset classes posted positive returns during the period. Although investors remained fairly risk-averse for much of the period, higher-beta(1) stocks performed well during the market rally in late 2002 as investors betting on a market rebound found the return potential of such stocks attractive. The Fund benefited from its consumer staples position, as many of its holdings delivered solid earnings growth. The Fund's technology holdings also performed well due to improved earnings and earnings forecasts in the sector. The Fund's health-care holdings hurt performance, as the Tenet Healthcare accounting scandal cast a pallor over such stocks. Among financial-services stocks, the Fund's brokerage holdings suffered from slow merger and acquisition activity, as well as weak brokerage commissions caused by low trading volume.* The value-oriented portion of the Fund's portfolio also benefited from individual stock selection during the period. The Fund's managers continued to invest in attractively valued shares of high-quality companies with strong and improving balance sheets. The Fund's investment in Citigroup boosted performance, and we found an attractive opportunity in February in shares of financial firm AIG.* The Fund's value allocation also benefited from its investments in drug manufacturer Wyeth and General Electric Co. Historically, General Electric, pegged by investors as a growth stock, had been beaten down during the past year. Therefore, its valuation had become much more attractive.* ICAP will maintain its emphasis on attractively valued shares of high-quality firms with strong and improving balance sheets, and will avoid large investments in companies that are dependent on a global economic recovery. Instead, ICAP will look for opportunities among shares of franchises that should benefit from a domestic economic recovery.* Average Annual Total Return - --------------------------------------------------------------------------------
Inception Six 1 5 Since As of April 30, 2003 Date Months Year Year Inception - --------------------------------------------------------------------------------------------------------- HSBC Investor Equity Fund Class A (Investor)(2) 8/1/95 -0.38% -20.47% -7.40% 3.42% HSBC Investor Equity Fund Class B(3) 1/6/98 0.48% -20.27% -7.14% -4.12% HSBC Investor Equity Fund Class C(4) 11/4/98 3.36% -17.84% N/A -7.64% HSBC Investor Equity Fund Class Y 7/1/96 4.91% -16.12% -6.22% 2.60% - ---------------------------------------------------------------------------------------------------------
(2) Reflects the maximum sales charge of 5.00%. (3) Reflects the contingent deferred sales charge maximum of 4.00%. (4) Reflects the contingent deferred sales charge maximum of 1.00%. - -------------------------------------------------------------------------------- (1) For additional information, please refer to the Glossary of Terms. The Fund was formerly compared with the Russell 1000 Growth Index. The Fund is now compared to the Russell 1000 Index, which better represents the type of securities in which the Fund may invest. * Portfolio composition is subject to change. The performance data quoted represents past performance and is not an indication of future results. The investment return and net asset value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. 8 HSBC INVESTOR FAMILY OF FUNDS Portfolio Reviews - -------------------------------------------------------------------------------- HSBC Investor Growth and Income Fund (Class A (Investor) Shares, B Shares, C Shares and Y Shares) by Thomas D'Auria, CFA Chief Investment Officer HSBC Asset Management (Americas) Inc. The HSBC Investor Growth and Income Fund (the "Fund") normally invests at least 65% of its total assets in common stocks, preferred stocks, and convertible securities. The Fund may invest the balance ofits assets in various types of fixed income securities and in money market instruments. The Fund returned 4.07% (without sales charge) for the Class A (Investor) Shares and 4.30% for the Class Y Shares for the six months ended April 30, 2003. That compared to a 4.47% return for the S&P 500 Index and a 2.96% return for the Lipper Large Cap Core Funds Average.(1) The U.S. equity markets rose during a volatile six-month period ended April 30, 2003, with the S&P 500 rising 4.5% on a total return basis, while the NASDAQ(1) increased 10.4%. Eight of the ten economic sectors in the S&P 500 advanced during the period, led by utilities (+12.4%), materials (+9.0%), and information technology (+7.9%). The consumer staples (-3.1%) and telecommunication services (-2.2%) sectors declined during the period. The U.S. equity markets began 2003 strongly, with the S&P rising 3.3% on the first trading day of the year, and increasing almost 6% by mid month. Encouraging economic data drove the market gains and news of President Bush's proposed economic package, which would accelerate tax cuts and eliminate the tax on dividends for individuals. However, the equity markets reversed course over the remainder of January as lingering concerns over a looming military conflict with Iraq, lackluster earnings results, and cautious comments from a few companies drove the equity markets lower. A successful beginning to the war in Iraq proved to be a catalyst for the equity markets during this stretch, and crude oil prices dropped significantly from a 12-year high reached in February, as coalition forces secured major oil fields in Iraq. The U.S. equity markets ended the period strongly due to optimism regarding the war in Iraq, as coalition forces quickly approached Baghdad. Above consensus first quarter corporate profit, growth also propelled the equity markets higher during April, with the S&P 500 reaching its highest level since mid-January by the latter part of the month. The economic data has been mixed, shifting between positive and negative, and we do not anticipate clarity on the direction of the economy short-term. Consumer confidence has rebounded significantly with the end of the military conflict in Iraq, however, jobless claims remain high and unemployment has ticked up again. We believe lower energy prices could give the consumer a needed boost, and interest rates have remained quite low during the last month, which is giving some hope of yet another refinancing wave along with continued support to the housing industry. The significant rally since mid-March has brought valuations close to fair levels. High-beta(1) stocks have led the market rally and we think many stocks may be ahead of their fundamentals (particularly in technology). With the first quarter earnings reporting season over, the next few weeks could be an "information void" that could lead to some volatility and the markets could pare some of the recent gains. We believe there is modest upside to the market from current levels. We have not made significant changes in the portfolio, after raising the beta to just above 1.0 earlier in the year. We continue to position the portfolio for a 12-18 month forecast, which includes a rebound in global economies. However, we believe that volatility will continue and this should allow for moneymaking entry and exit points from individual stocks.* Average Annual Total Return - --------------------------------------------------------------------------------
Inception Six 1 Since As of April 30, 2003 Date Months Year Inception - ------------------------------------------------------------------------------------------------------ HSBC Investor Growth and Income Fund Class A (Investor)(2) 4/12/01 -1.14% -18.26% -16.00% HSBC Investor Growth and Income Fund Class B(3) 4/5/01 -0.29% -18.00% -14.04% HSBC Investor Growth and Income Fund Class Y 4/2/01 4.30% -13.73% -12.10% - ------------------------------------------------------------------------------------------------------
(2) Reflects the maximum sales charge of 5.00%. (3) Reflects the contingent deferred sales charge maximum of 4.00%. - -------------------------------------------------------------------------------- (1) For additional information, please refer to the Glossary of Terms. * Portfolio composition is subject to change. The performance data quoted represents past performance and is not an indication of future results. The investment return and net asset value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. HSBC INVESTOR FAMILY OF FUNDS 9 Portfolio Reviews - -------------------------------------------------------------------------------- HSBC Investor Mid-Cap Fund (Class A Shares, B Shares, C Shares and Trust Shares) by Thomas D'Auria, CFA Chief Investment Officer HSBC Asset Management (Americas) Inc. The HSBC Investor Mid-Cap Fund (the "Fund") seeks to achieve a higher rate of return than that generated by the Russell MidCap Growth Index by investing at least 80% of its total assets in stocks of mid-sized companies with market capitalization, at the time of acquisition, falling within the range of the Russell MidCap Growth ($190 million to $13.3 billion). The Fund's Class A Shares posted a return of 2.70% (without sales charge) and 2.84% for the Trust Shares for the six months ended April 30, 2003. That compares to 3.98% and 4.04% for the Fund's benchmarks, the S&P Mid Cap 400, and the Lipper Mid-Cap Growth Funds Average.(1) The U.S. equity markets rose during a volatile six-month period ended April 30, 2003, with the S&P 500 rising 4.5% on a total return basis, while the NASDAQ(1) increased 10.4%. The U.S. equity markets began the period moving higher due to a larger than expected reduction in short-term interest rates by the Fed, and an election day victory by the Republican party, which gained control of both houses of Congress. We note that the market rally early in the period was narrow in breadth and concentrated in lower quality companies. The U.S. equity markets began 2003 strongly, with the S&P(1) rising 3.3% on the first trading day of the year, and increasing almost 6% by mid month. Encouraging economic data drove the market gains and news of President Bush's proposed economic package, which would accelerate tax, cuts and eliminate the tax on dividends for individuals. However, the equity markets reversed course over the remainder of January as lingering concerns over a looming military conflict with Iraq, lackluster earnings results, and cautious comments from a few companies drove the equity markets lower. A successful beginning to the war in Iraq proved to be a catalyst for the equity markets during this stretch, and crude oil prices dropped significantly from a 12-year high reached in February, as coalition forces secured major oil fields in Iraq. The U.S. equity markets ended the period strongly due to optimism regarding the war in Iraq, as coalition forces quickly approached Baghdad. Above consensus first quarter corporate profit growth also propelled the equity markets higher during April, with the S&P 500 reaching its highest level since mid-January by the latter part of the month. The economic data has been mixed, shifting between positive and negative, and we do not anticipate clarity on the direction of the economy short-term. Consumer confidence has rebounded significantly with the end of the military conflict in Iraq, however, jobless claims remain high and unemployment has ticked up again. We believe lower energy prices could give the consumer a needed boost, and interest rates have remained quite low during the last month, which is giving some hope of yet another refinancing wave along with continued support to the housing industry. The significant rally since mid-March has brought valuations close to fair levels. High-beta1 stocks have led the market rally and we think many stocks may be ahead of their fundamentals (particularly in technology). With the first quarter earnings reporting season over, the next few weeks could be an "information void" that could lead to some volatility and the markets could pare some of the recent gains. We believe there is modest upside to the market from current levels. We have not made significant changes in the portfolio, still maintaining an overweight position in financials, and an underweight position in information technology. Recent meaningful changes include an increase in the industrials weighting through the purchase of Tyco, while eliminating the exposure to the telecommunications industry. We continue to position the portfolio for a 12-18 month forecast, which, we believe may include a rebound in global economies. However, we feel it is clear that volatility may continue and this could allow for moneymaking entry and exit points from individual stocks.* Average Annual Total Return - --------------------------------------------------------------------------------
Inception Six 1 5 Since As of April 30, 2003 Date'D' Months Year Year Inception - --------------------------------------------------------------------------------------- HSBC Investor Mid-Cap Fund Class A2 7/1/93 -2.41% -25.12% -0.55% 8.60% HSBC Investor Mid-Cap Fund Class B3 7/1/93 -1.58% -24.86% -0.26% 8.37% HSBC Investor Mid-Cap Fund Class C4 7/1/93 1.26% -22.51% -0.26% 8.37% HSBC Investor Mid-Cap Fund Trust 7/1/93 2.84% -21.00% 0.71% 9.45% - ---------------------------------------------------------------------------------------
(2) Reflects the maximum sales charge of 5.00%. (3) Reflects the contingent deferred sales charge maximum of 4.00%. (4) Reflects the contingent deferred sales charge maximum of 1.00%. - -------------------------------------------------------------------------------- 'D' Prior to July 1, 2000, HSBC Asset Management (Americas), Inc. managed another pooled investment vehicle called a collective investment trust (CTF) with the same investment objective as the Fund since 1993. The assets from that CTF were converted into the HSBC Investor Mid-Cap Fund on July 1. The CTF was not registered with the Securities & Exchange Commission (SEC) and thus was not subject to certain investment restrictions that are imposed on the Fund. If the CTF had been registered with the SEC, its performance might have been adversely affected. Performance assumes reinvestment of dividends and distributions. (1) For additional information, please refer to the Glossary of Terms. The Fund was formerly compared with the S&P MidCap 400 Index. The Fund is now compared to the Russell MidCap Growth Index, which better represents the type of securities in which the Fund may invest. * Portfolio composition is subject to change. The performance data quoted represents past performance and is not an indication of future results. The investment return and net asset value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. 10 HSBC INVESTOR FAMILY OF FUNDS Portfolio Reviews - -------------------------------------------------------------------------------- HSBC Investor International Equity Fund HSBC Investor Overseas Equity Fund'D' (Class A (Investor) Shares, B Shares and C Shares) by David Fisher Portfolio Manager Capital Guardian Trust Company The HSBC Investor International Equity Fund and the HSBC Investor Overseas Equity Fund (the "Funds") seek to provide their shareholders with long-term growth of capital and future income by investing primarily in securities of non-U.S. issuers and securities of issuers whose principal markets are outside of the United States. The Funds employ a two-tier fund structure, known as "master-feeder," in which the Funds invest all of their investable assets in the HSBC Investor International Equity Portfolio (the "Portfolio"). The Portfolio employs Capital Guardian Trust Company as sub-investment adviser. The Portfolio invests primarily in equity securities of companies organized and domiciled in developed nations outside the U.S., or for which the principal trading market is outside the U.S., including Europe, Canada, Australia and the Far East. For the six months ended April 30, 2003, the shares of the HSBC Investor International Equity Fund produced a -0.22% return, and the Class A (Investor) Shares of the HSBC Investor Overseas Equity Fund returned -1.51% (without sales charge). That compared to a total return of 1.81% and 0.92% for the Funds' benchmarks, the Morgan Stanley Capital International, Europe, Australasia and Far East Index and the Lipper International Funds Average.(1) The global economy during the period continued its tentative recovery from the downturn that followed the 1990s economic expansion. Economic growth early in the period was relatively weak due to declining industrial production, high unemployment and low business confidence. Low valuations among battered technology, telecommunications, media and financial stocks fueled a November stock market rally. However, concerns about an U.S.-led invasion of Iraq contributed to investors' uncertainty, and international stock markets remained volatile for much of the period. The U.S. dollar weakened against most other major currencies. That development boosted the relative performance of foreign stock markets. European markets particularly benefited from the strong euro. The European Central Bank (ECB) cut key short-term interest rates twice during the period in an attempt to boost European economies. That strategy did not have the desired effect, as many of the large euro-zone economies, particularly Germany remained weak. Japan's GDP grew slightly in the fourth quarter of 2002, but the country's economy remained weak during the recent six-month period as the country's banking crisis continued. Poor-performing bank stocks led the Japanese equity market lower. We believe that the global economy will continue its halting recovery from the post-expansion downturn. We expect stronger corporate growth and improved economic conditions going forward, and we anticipate that corporate balance sheets could improve and earnings growth may accelerate. We will attempt to focus on attractively valued shares of high-quality firms that we feel are positioned to benefit from an improvement in economic growth. The bottom-up process allows us to find attractive investment opportunities in a variety of sectors and markets-including countries, such as Japan and Germany that face severe challenges. Average Annual Total Return - --------------------------------------------------------------------------------
Inception Six 1 5 Since As of April 30, 2003 Date Months Year Year Inception - -------------------------------------------------------------------------------------------------------- HSBC Investor International Equity Fund 1/9/95 -0.22% -19.86% -2.65% 4.66% HSBC Investor Overseas Equity Fund Class A (Investor)(2) 8/26/96 -6.44% -23.82% -4.43% 1.07% HSBC Investor Overseas Equity Fund Class B(3) 1/6/98 -5.68% -23.52% -4.21% -1.27% HSBC Investor Overseas Equity Fund Class C(4) 11/4/98 -2.68% -21.10% N/A -2.10% - --------------------------------------------------------------------------------------------------------
(2) Reflects the maximum sales charge of 5.00%. (3) Reflects the contingent deferred sales charge maximum of 4.00%. (4) Reflects the contingent deferred sales charge maximum of 1.00%. - -------------------------------------------------------------------------------- 'D' International investing involves increased risk and volatility. (1) For additional information, please refer to the Glossary of Terms. * Portfolio composition is subject to change. The performance data quoted represents past performance and is not an indication of future results. The investment return and net asset value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. HSBC INVESTOR FAMILY OF FUNDS 11 Portfolio Reviews - -------------------------------------------------------------------------------- HSBC Investor Small Cap Equity Fund HSBC Investor Opportunity Fund'D' (Class A (Investor) Shares, B Shares and C Shares) by William A. Muggia President-Chief Investment Officer Westfield Capital Managment The HSBC Investor Small Cap Equity Fund and the HSBC Investor Opportunity Fund ("the Funds") seek to provide their shareholders with long-term growth of capital by investing in equity securities of emerging small and medium-sized companies expected to deliver earnings growth well above the growth rate of the economy and the rate of inflation. The Funds employ a two-tier structure, commonly referred to as "master-feeder." The Funds invest all of their investable assets in the HSBC Investor Small Cap Equity Portfolio (the "Portfolio"). The Portfolio employs Westfield Capital Management, as sub-investment adviser. The Portfolio invests primarily in common stocks of small and medium-sized companies that may have the potential to become major enterprises. For the six months ended April 30, 2003, the shares of the HSBC Investor Small Cap Equity Fund produced a 2.80% return and the Class A (Investor) Shares of the HSBC Investor Opportunity Fund produced a 2.43% return (without sales charge). The Funds' benchmarks, the Russell 2000 Index and the Lipper Mid Cap Growth Funds Average, returned 7.55% and 4.04%, respectively.(1) Small-capitalization stocks lagged large-cap stocks during the period, and were highly volatile. Small-company shares rallied in November, as investors bought technology and telecommunications stocks on the hope that an economic recovery would boosts the prospects for firms in those industries. However, weak economic data in December, combined with the growing prospect of war with Iraq, clouded investors' outlooks. Investors became more cautious and moved money out of both small- and large-cap stocks. Early in the period the Portfolio held an underweight allocation in the technology sector and an overweight allocation in consumer discretionary stocks. Those positions caused the Fund to lag its benchmarks during November and December. As of January 19 Westfield Capital Management assumed management duties of the Fund. Westfield employs a fundamentals-based, bottom-up stock picking process to identify attractively valued shares of companies with the potential to produce strong earnings growth. Our investment process helped us take advantage of small-caps' volatility during the last several months of the period. We invested in a number of stocks that had declined significantly but still offered attractive business fundamentals. We also worked to position the portfolio to do well in an environment favorable for growth stocks. We avoided speculative stocks and instead focused on shares of solid, fast-growing medical-device makers and biotechnology companies. We added to the Fund's technology allocation during the period. We bought shares of promising firms such as technology-services company SRA International, videoconferencing company Polycom, video-game maker Electronic Arts and Internet advertiser Doubleclick. The Fund's technology stake underperformed the benchmark's technology position, but we continue to believe that the Fund's technology stocks have strong potential for gains.* We believe that the economy is likely to improve going forward. Companies have become much more efficient by reducing inventory and cutting costs. Those changes have increased corporate profits, and will help firms to benefit significantly from any increase in revenue growth. We believe that small-cap stocks offer more attractive valuations than large caps, as well as greater potential earnings growth. That said, we do not know which sectors are likely to lead the market during the coming months. We will continue to focus on company fundamentals, seeking out opportunities for growth at reasonable prices. That strategy is especially beneficial in the small-cap sector, which includes more overlooked or emerging companies with strong growth prospects than the more heavily followed large-cap sector. Average Annual Total Return - --------------------------------------------------------------------------------
Inception Six 1 5 Since As of April 30, 2003 Date Months Year Year Inception - -------------------------------------------------------------------------------------------------------- HSBC Investor Small Cap Equity Fund 9/3/96 2.80% -23.02% 0.67% 7.59% HSBC Investor Opportunity Fund Class A (Investor)(2) 9/23/96 -2.67% -27.29% -0.99% 4.85% HSBC Investor Opportunity Fund Class B(3) 1/6/98 -2.00% -27.05% -0.69% 2.61% HSBC Investor Opportunity Fund Class C(4) 11/4/98 0.98% -24.85% N/A 3.40% - --------------------------------------------------------------------------------------------------------
(2) Reflects the maximum sales charge of 5.00%. (3) Reflects the contingent deferred sales charge maximum of 4.00%. (4) Reflects the contingent deferred sales charge maximum of 1.00%. - -------------------------------------------------------------------------------- 'D' Small-capitalization funds typically carry additional risks, since smaller companies generally have a higher risk of failure. Historically, smaller companies' stocks have experienced a greater degree of market volatility than average. (1) For additional information, please refer to the Glossary of Terms. * Portfolio composition is subject to change. The performance data quoted represents past performance and is not an indication of future results. The investment return and net asset value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. 12 HSBC INVESTOR FAMILY OF FUNDS HSBC INVESTOR NEW YORK TAX-FREE BOND FUND - -------------------------------------------------------------------------------- SCHEDULE OF PORTFOLIO INVESTMENTS -- APRIL 30, 2003 (UNAUDITED) .................................................................................
- --------------------------------------------------------------- MUNICIPAL BONDS - 96.7% PRINCIPAL AMOUNT($) VALUE($) --------- ---------- GUAM - 0.1% Guam Economic Development Authority Revenue, 5.50%, 5/15/41............... 100,000 79,586 ---------- NEW YORK - 86.8% Brookhaven, New York GO (FGIC Insured), 5.50%, 10/1/12........................ 500,000 562,450 Corning City, New York School District GO (FSA Insured), 4.00%, 6/15/08...... 930,000 997,155 Corning City, New York School District GO (FSA Insured), 5.00%, 6/15/09...... 980,000 1,098,502 Erie County, New York GO (FGIC Insured), 5.375%, 6/15/07............. 250,000 270,150 Guilderland, New York Central School District GO (FSA Insured), 3.50%, 6/15/05............................... 250,000 261,140 Holland Patent, New York Central School District GO (FSA Insured), 2.625%, 6/15/03............................... 210,000 210,405 Honeoye, New York Central School District GO (FGIC Insured), 3.00%, 6/15/04............................... 310,000 316,439 Liverpool, New York Central School District GO (FSA Insured), 2.50%, 7/15/03............................... 55,000 55,163 Long Island, New York Power Authority Revenue (MBIA Insured), 4.50%, 4/1/11, Mandatory Tender 4/1/05 @ 100......... 1,075,000 1,135,157 Metropolitan Transportation Authority of New York Revenue (FGIC Insured), 5.25%, 7/1/17, Prerefunded 7/1/08 @ 100.5................................. 800,000 913,736 Metropolitan Transportation Authority of New York Revenue (FSA Insured), 5.00%, 11/15/32....................... 1,500,000 1,537,725 Metropolitan Transportation Authority of New York Revenue (MBIA Insured), 5.50%, 1/1/19......................... 480,000 532,450 Metropolitan Transportation Authority of New York Revenue, Escrowed to Maturity, 5.75%, 7/1/13............... 285,000 331,421 Monroe County, New York, Airport Authority Revenue, AMT (MBIA Insured), 5.625%, 1/1/10........................ 1,240,000 1,389,197 Monroe County, New York, Airport Authority Revenue, AMT (MBIA Insured), 5.75%, 1/1/14......................... 750,000 857,423 New Paltz, New York Central School District GO (FGIC Insured), 4.00%, 6/1/10................................ 200,000 210,432 New York City GO, Series G, 5.00%, 8/1/05................................ 1,000,000 1,065,800 New York City GO, Series H, 6.00%, 8/1/14................................ 1,000,000 1,112,520 New York City Housing Development Corp. Revenue (FHA Insured), 5.70%, 11/1/13............................... 330,000 336,640 New York City Housing Development Corp. Revenue, AMT, 5.60%, 11/1/19.......... 100,000 104,991 New York City Municipal Assistance Corp. Revenue, 6.00%, 7/1/06.......... 1,000,000 1,131,440 New York City Municipal Water Finance Authority Revenue, 5.00%, 6/15/34..... 1,300,000 1,323,933 New York City Municipal Water Finance Authority Revenue (FGIC Insured), 5.94%, 6/15/19 (b).................... 2,000,000 974,320 New York City Transitional Finance Authority Revenue, 6.00%, 8/15/15, Prerefunded 8/15/09 @ 101............. 1,000,000 1,198,169 New York City Transitional Finance Authority Revenue, 5.25%, 5/1/17...... 400,000 433,100
- --------------------------------------------------------------- MUNICIPAL BONDS, CONTINUED PRINCIPAL AMOUNT($) VALUE($) --------- ---------- New York City Transitional Finance Authority Revenue, 5.25%, 2/1/29...... 1,500,000 1,634,265 New York City Transitional Finance Authority Revenue, 5.00%, 5/1/30...... 1,500,000 1,528,410 New York State Dormitory Authority Revenue, 5.00%, 4/1/07................ 500,000 550,510 New York State Dormitory Authority Revenue, 6.50%, 8/15/11............... 225,000 270,293 New York State Dormitory Authority Revenue, 5.25%, 7/1/13................ 500,000 556,635 New York State Dormitory Authority Revenue, 6.25%, 5/15/17, Prerefunded 5/15/03 @ 102......................... 375,000 383,303 New York State Dormitory Authority Revenue, 5.50%, 8/15/17, Prerefunded 2/15/07 @ 102......................... 10,000 11,459 New York State Dormitory Authority Revenue, 5.50%, 8/15/17............... 990,000 1,053,320 New York State Dormitory Authority Revenue, 6.00%, 7/1/19................ 350,000 406,746 New York State Dormitory Authority Revenue, 5.25%, 8/15/19............... 1,000,000 1,087,250 New York State Dormitory Authority Revenue (AMBAC Insured), 4.00%, 7/1/04................................ 975,000 1,006,599 New York State Dormitory Authority Revenue (AMBAC Insured), 5.50%, 8/1/10................................ 750,000 856,290 New York State Dormitory Authority Revenue (AMBAC Insured), 5.625%, 7/1/16................................ 1,000,000 1,180,820 New York State Dormitory Authority Revenue (AMBAC Insured), 5.50%, 7/1/18................................ 500,000 582,780 New York State Dormitory Authority Revenue (FSA Insured), 5.25%, 7/1/18................................ 1,460,000 1,605,460 New York State Dormitory Authority Revenue (MBIA Insured), 5.50%, 7/1/23................................ 1,300,000 1,472,925 New York State Dormitory Authority Revenue, Series A (FSA Insured), 5.00%, 7/1/26......................... 500,000 515,250 New York State Environmental Facscorp, 5.70%, 1/15/14, Prerefunded 7/15/09 @ 101................................... 985,000 1,126,859 New York State Environmental Facscorp, 5.70%, 1/15/14, Prerefunded 7/15/09 @ 101................................... 15,000 17,699 New York State Housing Finance Agency Service Contract Obligation Revenue, 5.875%, 9/15/14....................... 840,000 862,025 New York State Housing Finance Agency Service Contract Obligation Revenue, 5.875%, 9/15/14, Prefunded 9/15/03 @ 102................................... 160,000 166,042 New York State Local Government Assistance Corp. Revenue, 6.00%, 4/1/16, Prerefunded 4/1/05 @ 102...... 1,000,000 1,108,510 New York State Mortgage Agency Revenue, AMT, 5.60%, 10/1/14................... 1,000,000 1,056,410 New York State Thruway Authority Revenue, 5.50%, 4/1/11................ 1,000,000 1,139,860 New York State Thruway Authority Revenue, 5.50%, 3/15/20............... 500,000 548,105 New York State Thruway Authority Revenue, Highway & Bridge (FGIC Insured), 5.25%, 4/1/07............... 300,000 334,413
See notes to financial statements. HSBC INVESTOR FAMILY OF FUNDS 13 HSBC INVESTOR NEW YORK TAX-FREE BOND FUND - -------------------------------------------------------------------------------- SCHEDULE OF PORTFOLIO INVESTMENTS -- APRIL 30, 2003 (UNAUDITED) (CONTINUED) .................................................................................
- --------------------------------------------------------------- MUNICIPAL BONDS, CONTINUED PRINCIPAL AMOUNT($) VALUE($) --------- ---------- New York State Thruway Authority Revenue, Highway & Bridge (FGIC Insured), 5.50%, 4/1/17............... 1,000,000 1,113,270 New York State Urban Development Corp., 5.00%, 3/15/33........................ 500,000 509,735 New York State Urban Development Corp. Revenue, 5.75%, 4/1/12................ 500,000 573,770 New York State Urban Development Corp. Revenue, 5.75%, 4/1/12................ 1,000,000 1,119,020 New York State Urban Development Corp. Revenue, Series A (MBIA Insured), 6.50%, 1/1/09......................... 500,000 592,590 Onondaga County, New York Water Authority Revenue (FSA Insured), 5.00%, 9/15/14........................ 300,000 327,249 Onondaga County, New York Water Authority Revenue (FSA Insured), 5.00%, 9/15/15........................ 665,000 720,913 Peru, New York Central School District (FGIC Insured), 4.00%, 6/15/04........ 225,000 232,180 Port Authority of New York & New Jersey Revenue, 5.375%, 3/1/28............... 1,100,000 1,207,722 Port Authority of New York & New Jersey Special Obligation Revenue, AMT, 5.75%, 12/1/22........................ 500,000 544,495 Triborough, New York Bridge & Tunnel Authority Revenue (MBIA Insured), 5.00%, 11/15/32....................... 2,600,000 2,670,746 ---------- 49,033,786 ---------- PUERTO RICO - 9.8% Puerto Rico Commonwealth (FGIC Insured), 5.25%, 7/1/17............... 500,000 557,970 Puerto Rico Commonwealth, Public Improvement, Series A (MBIA Insured), 5.125%, 7/1/31........................ 1,650,000 1,715,389 Puerto Rico Electric Power Authority Revenue, Series HH (FSA Insured), 5.25%, 7/1/29......................... 1,430,000 1,514,184 Puerto Rico Municipal Financial Agency (FSA Insured), 5.00%, 8/1/27.......... 250,000 259,513 Puerto Rico Public Buildings Authority Revenue, Government Facilities, Series D, 5.375%, 7/1/33.............. 900,000 931,212 Puerto Rico Publishing Finance Corp. Revenue (AMBAC Insured), 5.375%, 6/1/18................................ 500,000 576,060 ---------- 5,554,328 ---------- TOTAL MUNICIPAL BONDS.................. 54,667,700 ----------
- --------------------------------------------------------------- VARIABLE RATE DEMAND NOTES* - 0.5% SHARES OR PRINCIPAL AMOUNT($) VALUE($) --------- ---------- NEW YORK - 0.5% New York City GO (LOC Morgan Guaranty Trust), 1.26%, 8/1/20................. 300,000 300,000 ---------- TOTAL VARIABLE RATE DEMAND NOTES*...... 300,000 ---------- - --------------------------------------------------------------- INVESTMENT COMPANIES - 1.5% Provident New York Tax-Free Money Market Fund........................... 833,658 833,658 ---------- TOTAL INVESTMENT COMPANIES............. 833,658 ---------- TOTAL INVESTMENTS (COST $52,235,724) (A) - 98.7%....... 55,801,358 ---------- ----------
- -------------- Percentages indicated are based on net assets of $56,560,891. (a) Cost differs from value by net unrealized appreciation of securities as follows: Unrealized appreciation.......... $3,586,048 Unrealized depreciation.......... (20,414) ---------- Net unrealized appreciation...... $3,565,634 ---------- ---------- (b) Zero coupon bond. Rate presented represents the effective yield at time of purchase. * Variable rate security. The interest rate on these securities are adjusted periodically to reflect then-current short-term interest rates. The rate presented in this report represents the rate that was in effect on April 30, 2003. Each of these securities contains put or demand features that allow the fund to require the issuer to repurchase the security from the fund within various time periods, including daily, weekly, monthly, or semi-annually. AMT -- Interest on security is subject to Federal Alternative Minimum Tax FGIC -- Federal Guaranty Insurance Corporation FHA -- Federal Housing Administration FSA -- Financial Security Assurance GO -- General Obligation LOC -- Letter of Credit 14 HSBC INVESTOR FAMILY OF FUNDS See notes to financial statements. HSBC INVESTOR BALANCED FUND - -------------------------------------------------------------------------------- SCHEDULE OF PORTFOLIO INVESTMENTS -- APRIL 30, 2003 (UNAUDITED) .................................................................................
- --------------------------------------------------------------- COMMON STOCKS - 60.2% SHARES VALUE($) --------- ---------- AEROSPACE & DEFENSE - 0.7% Honeywell International, Inc........... 4,660 109,976 ---------- AIR FREIGHT & LOGISTICS - 0.5% United Parcel Service, Inc............. 1,190 73,923 ---------- BANKING - 3.6% Bank of America Corp................... 3,605 266,950 FleetBoston Financial Corp............. 4,040 107,141 Wells Fargo & Co....................... 3,800 183,388 ---------- 557,479 ---------- BIOTECHNOLOGY - 1.1% Amgen, Inc. (b)........................ 2,890 177,186 ---------- CHEMICALS - 1.3% Dow Chemical Co........................ 6,020 196,493 ---------- COMMERCIAL SERVICES - 0.5% Cendant Corp. (b)...................... 5,820 83,110 ---------- COMPUTER SOFTWARE - 4.4% Affiliated Computer Services, Inc. (b)................................... 2,180 103,986 First Data Corp........................ 2,290 89,837 Microsoft Corp......................... 12,920 330,365 Oracle Corp. (b)....................... 14,130 167,864 ---------- 692,052 ---------- COMPUTERS - 2.2% Dell Computer Corp. (b)................ 4,400 127,204 Hewlett-Packard Co..................... 6,500 105,950 International Business Machines Corp.................................. 1,300 110,370 ---------- 343,524 ---------- CONSUMER PRODUCTS - 4.7% Altria Group, Inc...................... 5,770 177,485 Anheuser-Busch Cos., Inc............... 1,674 83,499 PepsiCo, Inc........................... 4,450 192,596 The Coca-Cola Co....................... 2,570 103,828 The Pepsi Bottling Group, Inc.......... 2,841 58,354 The Procter & Gamble Co................ 1,400 125,790 ---------- 741,552 ---------- DIVERSIFIED MANUFACTURING OPERATIONS - 4.3% 3M Co.................................. 1,410 177,716 General Electric Co.................... 11,180 329,251 ITT Industries, Inc.................... 1,740 101,442 Tyco International Ltd................. 3,800 59,280 ---------- 667,689 ---------- ELECTRIC UTILITIES - 1.4% Consolidated Edison, Inc............... 1,560 60,637 Southern Co............................ 5,600 162,904 ---------- 223,541 ---------- ELECTRONIC COMPONENTS & SEMICONDUCTORS - 1.7% Applied Materials, Inc. (b)............ 6,000 87,600 Intel Corp............................. 10,000 184,000 ---------- 271,600 ---------- ENERGY EQUIPMENT & SERVICES - 0.5% Nabors Industries Ltd. (b)............. 2,120 83,104 ----------
- --------------------------------------------------------------- COMMON STOCKS, CONTINUED SHARES VALUE($) --------- ---------- FINANCIAL SERVICES - 5.4% Citigroup, Inc......................... 7,349 288,449 Fannie Mae............................. 2,148 155,494 J.P. Morgan Chase & Co................. 5,980 175,513 Lehman Brothers Holdings, Inc.......... 1,521 95,777 Merrill Lynch & Co., Inc............... 2,866 117,649 ---------- 832,882 ---------- FOREST PRODUCTS & PAPER - 0.6% International Paper Co................. 2,450 87,588 ---------- HEALTH CARE - 3.2% Cardinal Health, Inc................... 3,410 188,505 Caremark Rx, Inc. (b).................. 6,720 133,795 Laboratory Corp. of America Holdings (b)................................... 2,260 66,580 Medtronic, Inc......................... 2,480 118,395 ---------- 507,275 ---------- HOTELS & LODGING - 0.8% Starwood Hotels & Resorts Worldwide, Inc................................... 4,697 126,067 ---------- INSURANCE - 3.2% American International Group........... 3,050 176,747 The Allstate Corp...................... 4,520 170,811 The Hartford Financial Services Group, Inc................................... 1,130 46,059 Willis Group Holdings Ltd.............. 3,600 112,284 ---------- 505,901 ---------- LEISURE EQUIPMENT & PRODUCTS - 0.9% Mattel, Inc............................ 6,660 144,788 ---------- MEDIA - 2.0% AOL Time Warner, Inc. (b).............. 8,470 115,870 Viacom, Inc. Class B (b)............... 4,430 192,306 ---------- 308,176 ---------- METALS & MINING - 0.3% Alcoa, Inc............................. 2,110 48,382 ---------- OIL & GAS - 3.6% Exxon Mobil Corp....................... 11,600 408,320 Occidental Petroleum Corp.............. 5,210 155,519 ---------- 563,839 ---------- PHARMACEUTICALS - 5.2% Johnson & Johnson...................... 3,750 211,350 Merck & Co., Inc....................... 1,568 91,226 Pfizer, Inc............................ 11,960 367,770 Wyeth.................................. 3,208 139,644 ---------- 809,990 ---------- RETAIL - 5.0% Costco Wholesale Corp. (b)............. 2,620 90,731 CVS Corp............................... 3,510 84,977 Home Depot, Inc........................ 4,110 115,614 The Gap, Inc........................... 8,330 138,528 Wal-Mart Stores, Inc................... 6,160 346,931 ---------- 776,781 ---------- TELECOMMUNICATIONS - 3.1% BellSouth Corp......................... 4,200 107,058 Cisco Systems, Inc. (b)................ 10,740 161,530 Verizon Communications, Inc............ 5,580 208,580 ---------- 477,168 ---------- TOTAL COMMON STOCKS.................... 9,410,066 ----------
See notes to financial statements. HSBC INVESTOR FAMILY OF FUNDS 15 HSBC INVESTOR BALANCED FUND - -------------------------------------------------------------------------------- SCHEDULE OF PORTFOLIO INVESTMENTS -- APRIL 30, 2003 (UNAUDITED) (CONTINUED) .................................................................................
- --------------------------------------------------------------- U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - 19.3% PRINCIPAL AMOUNT($) VALUE($) --------- ---------- FEDERAL FARM CREDIT BANK - 4.5% 6.30%, 12/20/10........................ 600,000 696,530 ---------- FEDERAL NATIONAL MORTGAGE ASSOCIATION - 3.4% 7.00%, 1/1/31.......................... 506,208 535,064 ---------- U.S. TREASURY BONDS - 2.8% 8.00%, 11/15/21........................ 75,000 105,208 6.125%, 11/15/27....................... 110,000 129,409 5.25%, 11/15/28........................ 200,000 210,219 ---------- 444,836 ---------- U.S. TREASURY NOTES - 8.6% 3.00%, 1/31/04......................... 1,125,000 1,140,732 4.00%, 11/15/12........................ 200,000 202,555 ---------- 1,343,287 ---------- TOTAL U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS.................... 3,019,717 ----------
- --------------------------------------------------------------- CORPORATE OBLIGATIONS - 15.1% SHARES OR PRINCIPAL AMOUNT($) VALUE($) --------- ---------- BANKING - 2.8% Bank of America Corp., 5.25%, 2/1/07... 400,000 434,366 ---------- FINANCE - 12.3% Countrywide Home Loan, 5.50%, 2/1/07... 400,000 431,761 General Electric Capital Corp., 7.375%, 1/19/10............................... 1,000,000 1,180,808 General Motors Acceptance Corp., 6.125%, 9/15/06....................... 300,000 311,366 ---------- 1,923,935 ---------- TOTAL CORPORATE OBLIGATIONS............ 2,358,301 ---------- - --------------------------------------------------------------- INVESTMENT COMPANIES - 5.3% Dreyfus Cash Management Fund........... 612,207 612,207 Provident Temp Fund.................... 218,046 218,046 ---------- TOTAL INVESTMENT COMPANIES............. 830,253 ---------- TOTAL INVESTMENTS (COST $16,125,750) (a) - 99.9%....... 15,618,337 ---------- ----------
- -------------- Percentages indicated are based on net assets of $15,633,199. (a) Cost differs from value by net unrealized depreciation as follows: Unrealized appreciation............. $ 734,916 Unrealized depreciation............. (1,242,329) ------------ Net unrealized depreciation......... $ (507,413) ------------ ------------ (b) Represents non-income producing security. 16 HSBC INVESTOR FAMILY OF FUNDS See notes to financial statements. HSBC INVESTOR EQUITY FUND - -------------------------------------------------------------------------------- SCHEDULE OF PORTFOLIO INVESTMENTS -- APRIL 30, 2003 (UNAUDITED) .................................................................................
- --------------------------------------------------------------- COMMON STOCKS - 97.7% SHARES VALUE($) --------- ----------- AEROSPACE & DEFENSE - 1.9% Northrop Grumman Corp. ............... 28,338 2,492,327 United Technologies Corp. ............ 27,369 1,691,678 ----------- 4,184,005 ----------- AUTO PARTS & EQUIPMENT - 0.2% Johnson Controls, Inc. ............... 6,250 514,000 ----------- BANKING - 6.0% Bank of America Corp. ................ 64,050 4,742,903 Bank One Corp. ....................... 136,900 4,935,245 Wells Fargo & Co. .................... 72,700 3,508,502 ----------- 13,186,650 ----------- BIOTECHNOLOGY - 1.5% Amgen, Inc. (b)....................... 55,500 3,402,705 ----------- CHEMICALS - 0.6% Air Products and Chemicals, Inc. ..... 30,500 1,313,635 ----------- COMMERCIAL SERVICES - 1.8% Accenture Ltd. Class A (b)............ 86,450 1,384,929 Cendant Corp. (b)..................... 185,000 2,641,800 ----------- 4,026,729 ----------- COMPUTER SOFTWARE - 5.2% Affiliated Computer Services, Inc. (b).................................. 11,400 543,780 First Data Corp. ..................... 43,600 1,710,428 Intuit, Inc. (b)...................... 7,800 302,484 Microsoft Corp. ...................... 235,500 6,021,735 PeopleSoft, Inc. (b).................. 17,300 260,019 Symantec Corp. (b).................... 10,605 466,090 Veritas Software Corp. (b)............ 99,400 2,187,794 ----------- 11,492,330 ----------- COMPUTERS - 2.5% Dell Computer Corp. (b)............... 120,000 3,469,200 Hewlett-Packard Co. .................. 121,000 1,972,300 ----------- 5,441,500 ----------- CONSUMER MANUFACTURING - 1.4% American Standard Cos., Inc. (b)...... 6,900 491,211 Harley-Davidson, Inc. ................ 59,500 2,644,180 ----------- 3,135,391 ----------- CONSUMER PRODUCTS - 7.6% Anheuser-Busch Cos., Inc. ............ 25,100 1,251,988 Avon Products, Inc. .................. 32,500 1,890,525 Colgate-Palmolive Co. ................ 32,250 1,843,733 Diageo PLC ADR........................ 77,750 3,460,652 Newell Rubbermaid, Inc. .............. 10,660 324,917 PepsiCo, Inc. ........................ 76,350 3,304,427 The Clorox Co. ....................... 23,100 1,044,582 The Estee Lauder Cos., Inc. Class A... 22,850 742,625 The Procter & Gamble Co. ............. 28,150 2,529,278 Tiffany & Co. ........................ 10,500 291,270 ----------- 16,683,997 ----------- - --------------------------------------------------------------- COMMON STOCKS, CONTINUED SHARES VALUE($) --------- ----------- DIVERSIFIED MANUFACTURING OPERATIONS - 4.1% Danaher Corp. ........................ 23,000 1,586,540 General Electric Co. ................. 223,513 6,582,458 SPX Corp. (b)......................... 27,250 921,050 ----------- 9,090,048 ----------- ELECTRONIC COMPONENTS & SEMICONDUCTORS - 4.1% Altera Corp. (b)...................... 42,100 665,601 Applied Materials, Inc. (b)........... 31,100 454,060 Flextronics International Ltd. (b).... 96,290 842,538 Intel Corp. .......................... 118,540 2,181,136 Koninklijke (Royal) Philips Electronics NV ADR................... 169,781 3,171,508 Linear Technology Corp. .............. 10,900 375,723 Maxim Integrated Products, Inc. ...... 30,400 1,194,416 Texas Instruments, Inc. .............. 5,950 110,016 ----------- 8,994,998 ----------- FINANCIAL SERVICES - 10.5% Citigroup, Inc. ...................... 239,074 9,383,654 Fannie Mae............................ 67,450 4,882,705 Goldman Sachs Group, Inc. ............ 26,050 1,977,195 MBNA Corp. ........................... 165,050 3,119,445 Merrill Lynch & Co., Inc. ............ 17,900 734,795 Morgan Stanley Dean Witter & Co. ..... 64,700 2,895,325 ----------- 22,993,119 ----------- FOREST PRODUCTS & PAPER - 0.7% Weyerhaeuser Co. ..................... 30,900 1,532,331 ----------- GAS & ELECTRIC UTILITY - 1.8% Entergy Corp. ........................ 42,500 1,980,925 Public Service Enterprise Group, Inc. ................................ 49,950 1,921,577 ----------- 3,902,502 ----------- HEALTH CARE - 6.4% Anthem, Inc. (b)...................... 18,650 1,280,136 Boston Scientific Corp. (b)........... 23,900 1,028,895 Cardinal Health, Inc. ................ 38,650 2,136,572 Express Scripts, Inc. (b)............. 3,700 218,152 HCA, Inc. ............................ 80,750 2,592,075 Health Management Associates, Inc. ... 86,200 1,470,572 Medtronic, Inc. ...................... 54,500 2,601,830 St. Jude Medical, Inc. (b)............ 14,600 765,916 UnitedHealth Group, Inc. ............. 7,000 644,910 Wellpoint Health Networks, Inc. (b)... 16,500 1,253,010 ----------- 13,992,068 ----------- INSURANCE - 6.2% ACE Ltd. ............................. 12,300 406,884 American International Group.......... 134,600 7,800,069 Loews Corp. .......................... 2,700 111,429 MetLife, Inc. ........................ 94,450 2,713,549 Travelers Property Casualty Corp. .... 161,268 2,617,380 ----------- 13,649,311 ----------- INTERNET RELATED - 0.0% Ebay, Inc. (b)........................ 1,100 102,047 -----------
See notes to financial statements. HSBC INVESTOR FAMILY OF FUNDS 17 HSBC INVESTOR EQUITY FUND - -------------------------------------------------------------------------------- SCHEDULE OF PORTFOLIO INVESTMENTS -- APRIL 30, 2003 (UNAUDITED) (CONTINUED) .................................................................................
- --------------------------------------------------------------- COMMON STOCKS, CONTINUED SHARES VALUE($) --------- ----------- LEISURE - 0.3% Carnival Corp. ....................... 26,400 728,376 ----------- MACHINERY & EQUIPMENT - 0.8% Caterpillar, Inc. .................... 31,550 1,659,530 ----------- MEDIA - 5.8% Clear Channel Communications, Inc. (b).................................. 72,100 2,819,831 Cox Communications, Inc. Class A (b).................................. 37,000 1,224,700 Gannett Co., Inc. .................... 23,040 1,744,589 Liberty Media Corp. Class A (b)....... 353,800 3,891,800 Viacom, Inc. Class B (b).............. 73,500 3,190,635 ----------- 12,871,555 ----------- OIL & GAS - 4.7% Apache Corp. ......................... 3,600 206,100 ConocoPhillips........................ 56,712 2,852,614 Devon Energy Corp. ................... 4,400 207,900 EnCana Corp. ......................... 63,627 2,093,328 Occidental Petroleum Corp. ........... 53,600 1,599,960 Total Fina Elf SA ADR................. 36,900 2,424,330 Transocean, Inc. ..................... 52,700 1,003,935 ----------- 10,388,167 ----------- PHARMACEUTICALS - 9.2% Allergan, Inc. ....................... 14,380 1,010,195 Forest Laboratories, Inc. (b)......... 20,900 1,080,948 Johnson & Johnson..................... 75,700 4,266,452 Pfizer, Inc. ......................... 293,500 9,025,124 Wyeth................................. 108,250 4,712,123 ----------- 20,094,842 ----------- REAL ESTATE - 0.1% Centex Corp. ......................... 1,700 112,234 Lennar Corp. ......................... 2,000 108,480 ----------- 220,714 ----------- - --------------------------------------------------------------- COMMON STOCKS, CONTINUED SHARES VALUE($) --------- ----------- RETAIL - 6.2% Bed Bath & Beyond, Inc. (b)........... 26,600 1,050,966 Kohl's Corp. (b)...................... 48,470 2,753,096 Lowe's Cos., Inc. .................... 32,200 1,413,258 Target Corp. ......................... 88,300 2,952,752 Wal-Mart Stores, Inc. ................ 61,800 3,480,576 Walgreen Co. ......................... 66,200 2,042,932 ----------- 13,693,580 ----------- TELECOMMUNICATIONS - 7.1% Cisco Systems, Inc. (b)............... 128,500 1,932,640 Comcast Corp. Class A (b)............. 97,152 3,100,120 Comcast Corp. Special Class A (b)..... 102,600 3,084,156 EchoStar Communications Corp. Class A (b).................................. 16,400 491,344 Juniper Networks, Inc. (b)............ 50,400 515,088 Nokia Oyj ADR......................... 160,070 2,652,360 Verizon Communications, Inc. ......... 104,746 3,915,406 ----------- 15,691,114 ----------- TRANSPORTATION - 1.0% Union Pacific Corp. .................. 36,450 2,169,504 ----------- TOTAL COMMON STOCKS................... 215,154,748 ----------- - --------------------------------------------------------------- INVESTMENT COMPANIES - 2.2% Dreyfus Cash Management Fund.......... 4,746,979 4,746,979 ----------- TOTAL INVESTMENT COMPANIES............ 4,746,979 ----------- TOTAL INVESTMENTS (COST $227,006,280) (a) - 99.9%...... 219,901,727 ----------- -----------
- -------------- Percentages indicated are based on net assets of $220,122,961. (a) Cost differs from value by net unrealized depreciation as follows: Unrealized appreciation............. $ 8,778,116 Unrealized depreciation............. (15,882,669) ------------ Net unrealized depreciation......... $ (7,104,553) ------------ ------------
(b) Represents non-income producing security. ADR -- American Depositary Receipt 18 HSBC INVESTOR FAMILY OF FUNDS See notes to financial statements. HSBC INVESTOR GROWTH AND INCOME FUND - -------------------------------------------------------------------------------- SCHEDULE OF PORTFOLIO INVESTMENTS -- APRIL 30, 2003 (UNAUDITED) .................................................................................
- --------------------------------------------------------------- COMMON STOCKS - 99.5% SHARES VALUE($) --------- ----------- AEROSPACE & DEFENSE - 1.1% Honeywell International, Inc.......... 88,730 2,094,028 ----------- AIR FREIGHT & LOGISTICS - 0.7% United Parcel Service, Inc............ 20,300 1,261,036 ----------- BANKING - 5.8% Bank of America Corp.................. 69,420 5,140,551 FleetBoston Financial Corp............ 74,800 1,983,696 Wells Fargo & Co...................... 73,330 3,538,906 ----------- 10,663,153 ----------- BIOTECHNOLOGY - 1.9% Amgen, Inc. (b)....................... 55,680 3,413,741 ----------- CHEMICALS - 2.1% Dow Chemical Co....................... 117,520 3,835,853 ----------- COMMERCIAL SERVICES - 1.0% Cendant Corp. (b)..................... 126,420 1,805,278 ----------- COMPUTER SOFTWARE - 7.5% Affiliated Computer Services, Inc. (b).................................. 42,680 2,035,836 First Data Corp....................... 46,110 1,808,895 Microsoft Corp........................ 252,430 6,454,635 Oracle Corp. (b)...................... 278,720 3,311,194 ----------- 13,610,560 ----------- COMPUTERS - 3.7% Dell Computer Corp. (b)............... 87,200 2,520,952 Hewlett-Packard Co.................... 125,930 2,052,659 International Business Machines Corp................................. 25,200 2,139,480 ----------- 6,713,091 ----------- CONSUMER PRODUCTS - 7.8% Altria Group, Inc..................... 112,770 3,468,805 Anheuser-Busch Cos., Inc.............. 30,300 1,511,364 PepsiCo, Inc.......................... 87,130 3,770,987 The Coca-Cola Co...................... 50,300 2,032,120 The Pepsi Bottling Group, Inc......... 48,600 998,244 The Procter & Gamble Co............... 26,680 2,397,198 ----------- 14,178,718 ----------- DIVERSIFIED MANUFACTURING OPERATIONS - 7.0% 3M Co................................. 29,370 3,701,795 General Electric Co................... 201,490 5,933,880 ITT Industries, Inc................... 33,110 1,930,313 Tyco International Ltd................ 76,970 1,200,732 ----------- 12,766,720 ----------- ELECTRIC UTILITIES - 2.4% Consolidated Edison, Inc.............. 28,760 1,117,901 Southern Co........................... 110,200 3,205,718 ----------- 4,323,619 ----------- ELECTRONIC COMPONENTS & SEMICONDUCTORS - 2.9% Applied Materials, Inc. (b)........... 117,782 1,719,617 Intel Corp............................ 189,500 3,486,800 ----------- 5,206,417 ----------- ENERGY EQUIPMENT & SERVICES - 0.9% Nabors Industries Ltd. (b)............ 43,440 1,702,848 ----------- FINANCIAL SERVICES - 8.8% Citigroup, Inc........................ 141,408 5,550,263 Fannie Mae............................ 41,071 2,973,130 J.P. Morgan Chase & Co................ 113,640 3,335,334 Lehman Brothers Holdings, Inc......... 30,419 1,915,484 Merrill Lynch & Co., Inc.............. 56,855 2,333,898 ----------- 16,108,109 ----------- FOREST PRODUCTS & PAPER - 0.9% International Paper Co................ 47,030 1,681,323 ----------- - --------------------------------------------------------------- COMMON STOCKS, CONTINUED SHARES VALUE($) --------- ----------- HEALTH CARE - 5.4% Cardinal Health, Inc.................. 66,620 3,682,753 Caremark Rx, Inc. (b)................. 131,690 2,621,948 Laboratory Corp. of America Holdings (b).................................. 43,863 1,292,204 Medtronic, Inc........................ 48,600 2,320,164 ----------- 9,917,069 ----------- HOTELS & LODGING - 1.3% Starwood Hotels & Resorts Worldwide, Inc.................................. 85,660 2,299,114 ----------- INSURANCE - 5.4% American International Group.......... 57,990 3,360,521 The Allstate Corp..................... 90,950 3,437,000 The Hartford Financial Services Group, Inc.................................. 21,980 895,905 Willis Group Holdings Ltd............. 69,430 2,165,522 ----------- 9,858,948 ----------- LEISURE EQUIPMENT & PRODUCTS - 1.6% Mattel, Inc........................... 130,580 2,838,809 ----------- MEDIA - 3.2% AOL Time Warner, Inc. (b)............. 161,540 2,209,867 Viacom, Inc. Class B (b).............. 83,800 3,637,758 ----------- 5,847,625 ----------- METALS & MINING - 0.5% Alcoa, Inc............................ 41,150 943,570 ----------- OIL & GAS - 6.0% Exxon Mobil Corp...................... 225,810 7,948,512 Occidental Petroleum Corp............. 101,630 3,033,656 ----------- 10,982,168 ----------- PHARMACEUTICALS - 8.4% Johnson & Johnson..................... 72,400 4,080,464 Merck & Co., Inc...................... 28,400 1,652,312 Pfizer, Inc........................... 230,700 7,094,024 Wyeth................................. 59,530 2,591,341 ----------- 15,418,141 ----------- RETAIL - 8.2% Costco Wholesale Corp. (b)............ 51,490 1,783,099 CVS Corp.............................. 65,010 1,573,892 Home Depot, Inc....................... 79,130 2,225,927 The Gap, Inc.......................... 161,580 2,687,075 Wal-Mart Stores, Inc.................. 118,680 6,684,058 ----------- 14,954,051 ----------- TELECOMMUNICATIONS - 5.0% BellSouth Corp........................ 84,000 2,141,160 Cisco Systems, Inc. (b)............... 200,200 3,011,008 Verizon Communications, Inc........... 105,200 3,932,376 ----------- 9,084,544 ----------- TOTAL COMMON STOCKS................... 181,508,533 ----------- - --------------------------------------------------------------- INVESTMENT COMPANIES - 0.7% Dreyfus Cash Management Fund.......... 1,285,765 1,285,765 ----------- TOTAL INVESTMENT COMPANIES............ 1,285,765 ----------- TOTAL INVESTMENTS (COST $175,138,321) (a) - 100.2%........................ 182,794,298 ----------- -----------
- -------------- Percentages indicated are based on net assets of $182,511,464. (a) Cost differs from value by net unrealized appreciation of securities as follows: Unrealized appreciation............. $ 20,129,803 Unrealized depreciation............. (12,473,826) ------------ Net unrealized appreciation......... $ 7,655,977 ------------ ------------
(b) Represents non-income producing security. See notes to financial statements. HSBC INVESTOR FAMILY OF FUNDS 19 HSBC INVESTOR MID CAP FUND - -------------------------------------------------------------------------------- SCHEDULE OF PORTFOLIO INVESTMENTS -- APRIL 30, 2003 (UNAUDITED) .................................................................................
- --------------------------------------------------------------- COMMON STOCKS - 88.6% SHARES VALUE($) --------- ----------- AEROSPACE & DEFENSE - 1.2% Level 3 Communications, Inc. (b)...... 35,000 1,554,000 ----------- BANKING - 2.5% Astoria Financial Corp................ 44,000 1,100,880 New York Community Bancorp, Inc....... 35,000 1,215,200 TCF Financial Corp.................... 25,000 990,000 ----------- 3,306,080 ----------- BIOTECHNOLOGY - 5.8% Cephalon, Inc. (b).................... 20,000 816,800 Genzyme Corp. (b)..................... 50,000 2,014,000 Gilead Sciences, Inc. (b)............. 35,000 1,614,900 IDEC Pharmaceuticals Corp. (b)........ 42,500 1,391,875 Medimmune, Inc. (b)................... 50,000 1,763,500 ----------- 7,601,075 ----------- CHEMICALS - 2.1% Hercules, Inc. (b).................... 110,000 1,116,500 Lyondell Chemical Co.................. 110,000 1,600,500 ----------- 2,717,000 ----------- COMMERCIAL SERVICES - 2.3% Cendant Corp. (b)..................... 145,000 2,070,600 H & R Block, Inc...................... 25,000 965,500 ----------- 3,036,100 ----------- COMPUTER SERVICES - 1.4% SunGard Data Systems, Inc. (b)........ 85,000 1,827,500 ----------- COMPUTER SOFTWARE - 9.3% Affiliated Computer Services, Inc. (b).................................. 55,000 2,623,500 BEA Systems, Inc. (b)................. 95,000 1,017,450 Electronic Arts, Inc. (b)............. 15,000 889,050 Factset Research Systems, Inc......... 40,000 1,392,000 Intuit, Inc. (b)...................... 45,000 1,745,100 Mercury Interactive Corp. (b)......... 11,000 373,340 Network Associates, Inc. (b).......... 60,000 685,800 Symantec Corp. (b).................... 50,000 2,197,500 Veritas Software Corp. (b)............ 45,000 990,450 ----------- 11,914,190 ----------- COMPUTERS - 1.4% Lexmark International Group, Inc. (b).................................. 18,000 1,341,180 Network Appliance, Inc. (b)........... 40,000 531,200 ----------- 1,872,380 ----------- CONSUMER MANUFACTURING - 2.4% Harley-Davidson, Inc.................. 70,000 3,110,800 ----------- CONSUMER PRODUCTS - 3.0% Constellation Brands, Inc. (b)........ 50,000 1,340,500 RJ Reynolds Tobacco Holdings, Inc..... 92,000 2,591,640 ----------- 3,932,140 ----------- DIVERSIFIED MANUFACTURING OPERATIONS - 3.8% Danaher Corp.......................... 12,000 827,760 SPX Corp. (b)......................... 39,000 1,318,200 Textron, Inc.......................... 30,000 884,700 Tyco International Ltd................ 125,000 1,950,000 ----------- 4,980,660 -----------
- --------------------------------------------------------------- COMMON STOCKS, CONTINUED SHARES VALUE($) --------- ----------- ELECTRIC UTILITIES - 1.1% Southern Co........................... 50,000 1,454,500 ----------- ELECTRONIC COMPONENTS & SEMICONDUCTORS - 6.0% Altera Corp. (b)...................... 45,000 711,450 American Power Conversion Corp. (b)... 120,000 1,869,600 Arrow Electronics, Inc. (b)........... 60,000 1,012,800 Jabil Circuit, Inc. (b)............... 60,000 1,122,000 Microchip Technology, Inc............. 50,000 1,039,500 Novellus Systems, Inc. (b)............ 35,000 981,400 Tech Data Corp. (b)................... 45,000 1,080,000 ----------- 7,816,750 ----------- ENERGY EQUIPMENT & SERVICES - 2.9% Nabors Industries Ltd. (b)............ 50,000 1,960,000 Weatherford International Ltd. (b).... 45,000 1,810,350 ----------- 3,770,350 ----------- FINANCIAL SERVICES - 3.2% J.P. Morgan Chase & Co................ 48,000 1,408,800 Lehman Brothers Holdings, Inc......... 25,000 1,574,250 MBNA Corp............................. 65,000 1,228,500 ----------- 4,211,550 ----------- HEALTH CARE - 15.9% Cardinal Health, Inc.................. 95,000 5,251,600 Caremark Rx, Inc. (b)................. 245,000 4,877,950 DENTSPLY International, Inc........... 43,000 1,610,350 Edwards Lifesciences Corp. (b)........ 20,000 577,400 Health Management Associates, Inc..... 75,000 1,279,500 Laboratory Corp. of America Holdings (b).................................. 100,000 2,946,000 Oxford Health Plans, Inc. (b)......... 25,000 731,750 STERIS Corp. (b)...................... 26,000 590,200 Wellpoint Health Networks, Inc. (b)... 20,000 1,518,800 Zimmer Holdings, Inc. (b)............. 25,000 1,172,500 ----------- 20,556,050 ----------- HOTELS & LODGING - 1.0% Starwood Hotels & Resorts Worldwide, Inc.................................. 50,000 1,342,000 ----------- HOUSEHOLD DURABLES - 2.0% Black & Decker Corp................... 45,000 1,856,250 Furniture Brands International, Inc. (b).................................. 30,000 712,500 ----------- 2,568,750 ----------- INSURANCE - 1.4% Willis Group Holdings Ltd............. 60,000 1,871,400 ----------- LEISURE EQUIPMENT & PRODUCTS - 1.7% Mattel, Inc........................... 100,000 2,174,000 ----------- MEDIA - 4.3% Liberty Media Corp. Class A (b)....... 170,000 1,870,000 New York Times Co..................... 20,000 927,600 Scholastic Corp. (b).................. 55,000 1,562,550 Westwood One, Inc. (b)................ 35,000 1,221,500 ----------- 5,581,650 ----------- OIL & GAS - 1.0% Occidental Petroleum Corp............. 42,000 1,253,700 -----------
20 HSBC INVESTOR FAMILY OF FUNDS See notes to financial statements. HSBC INVESTOR MID CAP FUND - -------------------------------------------------------------------------------- SCHEDULE OF PORTFOLIO INVESTMENTS -- APRIL 30, 2003 (UNAUDITED) (CONTINUED) .................................................................................
- --------------------------------------------------------------- COMMON STOCKS, CONTINUED SHARES VALUE($) --------- ----------- PHARMACEUTICALS - 1.2% Forest Laboratories, Inc. (b)......... 30,000 1,551,600 ----------- RETAIL - 9.9% Abercrombie & Fitch Co. (b)........... 40,000 1,315,200 Barnes & Noble, Inc. (b).............. 75,000 1,477,500 Brinker International, Inc. (b)....... 50,000 1,587,500 Chico's FAS, Inc. (b)................. 105,000 2,555,700 Micheal Stores, Inc. (b).............. 50,000 1,562,000 Office Depot, Inc. (b)................ 125,000 1,582,500 PETsMART, Inc. (b).................... 90,000 1,361,700 The Gap, Inc.......................... 75,000 1,247,250 ----------- 12,689,350 ----------- TELECOMMUNICATIONS - 0.5% Adelphia Business Solutions, Inc. (b).................................. 19,923 518 Netscreen Technologies, Inc. (b)...... 35,000 709,800 ----------- 710,318 ----------- TEXTILES APPAREL & LUXURY GOODS - 1.3% Coach, Inc. (b)....................... 40,000 1,740,400 ----------- TOTAL COMMON STOCKS................... 115,144,293 -----------
- --------------------------------------------------------------- COMMERCIAL PAPER - 4.6% SHARES OR PRINCIPAL AMOUNT($) VALUE($) --------- ----------- Long Lane Master Trust, 1.34%, 5/1/03............................... 6,000,000 5,999,777 ----------- TOTAL COMMERCIAL PAPER................ 5,999,777 ----------- - --------------------------------------------------------------- INVESTMENT COMPANIES - 9.7% Dreyfus Cash Management Fund.......... 4,194,236 4,194,236 MidCap S&P Depositary Receipt Trust Series 1............................. 30,000 2,406,300 Provident Temp Fund................... 6,000,000 6,000,000 ----------- TOTAL INVESTMENT COMPANIES............ 12,600,536 ----------- TOTAL INVESTMENTS (COST $128,143,363) (A) - 102.9%.... 133,744,606 ----------- -----------
- -------------- Percentages indicated are based on net assets of $130,033,499. (a) Cost differs from value by net unrealized appreciation as follows: Unrealized appreciation......... $14,678,011 Unrealized depreciation......... (9,111,773) ----------- Net unrealized appreciation..... $ 5,566,238 ----------- -----------
(b) Represents non-income producing security. (c) Rate presented indicates the effective yield at time of purchase. Written call options open at April 30, 2003:
SHARES EXPIRATION EXERCISE SUBJECT DESCRIPTION DATE PRICE TO CALL VALUE($) ----------- ---- ----- ------- -------- Genzyme Corp. ............... May 37.50 20,000 (78,000) Harley-Davidson, Inc. ....... May 40.00 15,000 (67,500) Medimmune, Inc. ............. June 35.00 20,000 (44,000) Nabors Industries Ltd. ...... June 42.50 15,000 (12,750) -------- Total (premiums received $167,245)................... (202,250) -------- --------
See notes to financial statements. HSBC INVESTOR FAMILY OF FUNDS 21 HSBC INVESTOR FAMILY OF FUNDS STATEMENTS OF ASSETS AND LIABILITIES -- APRIL 30, 2003 (UNAUDITED) .................................................................................
LIMITED FIXED NEW YORK MATURITY INCOME TAX-FREE FUND FUND BOND FUND BOND FUND -------------- -------------- --------------- --------------- ASSETS: Investments, at value (Note 2) $130,162,270 $342,846,940 $21,665,273 $55,801,358 Cash -- -- -- -- Interest and dividends receivable -- -- -- 674,817 Receivable for capital shares issued 60,708 514,614 159,284 204,321 Receivable for investments sold -- -- -- -- Receivable from Investment Adviser -- -- 1,214 -- Prepaid expenses 8,250 6,669 10,286 5,949 ------------ ------------ ----------- ----------- TOTAL ASSETS 130,231,228 343,368,223 21,836,057 56,686,445 ------------ ------------ ----------- ----------- LIABILITIES: Dividends payable 207,374 655,210 33,924 77,216 Payable for investments purchased -- -- -- -- Payable for capital shares redeemed 16,203 490,369 1,950 -- Accrued expenses and other liabilities: Investment management -- -- -- 11,581 Administration 4,278 11,756 725 3,980 Distribution 6,360 -- 7,936 11,403 Shareholder servicing 2,039 -- 4,380 7,562 Other 7,254 28,162 25,467 13,812 ------------ ------------ ----------- ----------- TOTAL LIABILITIES 243,508 1,185,497 74,382 125,554 ------------ ------------ ----------- ----------- NET ASSETS $129,987,720 $342,182,726 $21,761,675 $56,560,891 ------------ ------------ ----------- ----------- ------------ ------------ ----------- ----------- ................................................................................................................... COMPOSITION OF NET ASSETS: Capital $125,946,885 $328,028,259 $21,196,630 $53,143,058 Accumulated net investment income (80,919) (706,161) (45,799) 10,749 Accumulated net realized losses from investment and futures transactions (232,995) (3,283,429) (427,450) (158,550) Unrealized appreciation (depreciation) from investments 4,354,749 18,144,057 1,038,294 3,565,634 ------------ ------------ ----------- ----------- NET ASSETS $129,987,720 $342,182,726 $21,761,675 $56,560,891 ------------ ------------ ----------- ----------- ------------ ------------ ----------- ----------- ................................................................................................................... CLASS A (INVESTOR) SHARES Net Assets $ 1,735,067 $ -- $13,707,254 $18,745,012 Shares Outstanding 163,888 -- 1,284,986 1,658,759 Net Asset Value and Redemption Price per share $ 10.59 $ -- $ 10.67 $ 11.30 ------------ ------------ ----------- ----------- ------------ ------------ ----------- ----------- Maximum sales charge 4.75% -- 4.75% 4.75% ------------ ------------ ----------- ----------- ------------ ------------ ----------- ----------- Maximum Offering Price per share (Net Asset Value/(100%-maximum sales charge)) $ 11.12 $ -- $ 11.20 $ 11.86 ------------ ------------ ----------- ----------- ------------ ------------ ----------- ----------- ................................................................................................................. CLASS B SHARES Net Assets $ 5,908,110 $ -- $ 7,193,913 $15,973,762 Shares Outstanding 557,267 -- 674,106 1,414,721 Net Asset Value, Offering Price and Redemption Price per share* $ 10.60 $ -- $ 10.67 $ 11.29 ------------ ------------ ----------- ----------- ------------ ------------ ----------- ----------- ................................................................................................................. CLASS C SHARES Net Assets $ 2,431,835 $ -- $ 860,508 $ 3,339,836 Shares Outstanding 229,455 -- 80,712 294,661 Net Asset Value, Offering Price and Redemption Price per share* $ 10.60 $ -- $ 10.66 $ 11.33 ------------ ------------ ----------- ----------- ------------ ------------ ----------- ----------- ................................................................................................................. CLASS Y SHARES Net Assets $119,912,708 $ -- $ -- $18,502,281 Shares Outstanding 11,309,229 -- -- 1,637,278 Net Asset Value, Offering Price and Redemption Price per share $ 10.60 $ -- $ -- $ 11.30 ------------ ------------ ----------- ----------- ------------ ------------ ----------- ----------- .................................................................................................................. ADVISOR SHARES Net Assets $ -- $342,182,726 $ -- $ -- Shares Outstanding -- 31,328,984 -- -- Net Asset Value, Offering Price and Redemption Price per share $ -- $ 10.92 $ -- $ -- ------------ ------------ ----------- ----------- ------------ ------------ ----------- ----------- Investments, at cost $ -- $ -- $ -- $52,235,724 ------------ ------------ ----------- ----------- ------------ ------------ ----------- ----------- BALANCED EQUITY FUND FUND -------------- -------------- ASSETS: Investments, at value (Note 2) $15,618,337 $219,901,727 Cash -- 131,915 Interest and dividends receivable 78,902 145,721 Receivable for capital shares issued 65 164,372 Receivable for investments sold 91,883 959,313 Receivable from Investment Adviser 13,709 -- Prepaid expenses 7,952 16,290 ----------- ------------ TOTAL ASSETS 15,810,848 221,319,338 ----------- ------------ LIABILITIES: Dividends payable -- -- Payable for investments purchased 154,394 1,094,104 Payable for capital shares redeemed 49 12,636 Accrued expenses and other liabilities: Investment management 9,203 44,791 Administration 1,097 15,800 Distribution 1,342 1,469 Shareholder servicing 466 3,852 Other 11,098 23,725 ----------- ------------ TOTAL LIABILITIES 177,649 1,196,377 ----------- ------------ NET ASSETS $15,633,199 $220,122,961 ----------- ------------ ----------- ------------ ............................................................................. COMPOSITION OF NET ASSETS: Capital $19,714,837 $280,225,429 Accumulated net investment income 84,267 64,981 Accumulated net realized losses from investment and futures transactions (3,658,492) (53,062,896) Unrealized appreciation (depreciation) from investments (507,413) (7,104,553) ----------- ------------ NET ASSETS $15,633,199 $220,122,961 ----------- ------------ ----------- ------------ ........................................................................... CLASS A (INVESTOR) SHARES Net Assets $ 484,062 $ 17,153,898 Shares Outstanding 61,900 1,594,809 Net Asset Value and Redemption Price per share $ 7.82 $ 10.76 ----------- ------------ ----------- ------------ Maximum sales charge 5.00% 5.00% ----------- ------------ ----------- ------------ Maximum Offering Price per share (Net Asset Value/(100%-maximum sales charge)) $ 8.23 $ 11.33 ----------- ------------ ----------- ------------ ........................................................................... CLASS B SHARES Net Assets $ 1,760,226 $ 1,875,468 Shares Outstanding 226,479 178,803 Net Asset Value, Offering Price and Redemption Price per share* $ 7.77 $ 10.49 ----------- ------------ ----------- ------------ ........................................................................... CLASS C SHARES Net Assets $ 100,752 $ 493,442 Shares Outstanding 12,933 46,798 Net Asset Value, Offering Price and Redemption Price per share* $ 7.79 $ 10.54 ----------- ------------ ----------- ------------ ........................................................................... CLASS Y SHARES Net Assets $13,288,159 $200,600,153 Shares Outstanding 1,685,057 18,660,542 Net Asset Value, Offering Price and Redemption Price per share $ 7.89 $ 10.75 ----------- ------------ ----------- ------------ ........................................................................... ADVISOR SHARES Net Assets $ -- $ -- Shares Outstanding -- -- Net Asset Value, Offering Price and Redemption Price per share $ -- $ -- ----------- ------------ ----------- ------------ Investments, at cost $16,125,750 $227,006,280 ----------- ------------ ----------- ------------
- -------------- * Redemption Price per share varies by length of time shares are held. 22 HSBC INVESTOR FAMILY OF FUNDS See notes to financial statements. HSBC INVESTOR FAMILY OF FUNDS STATEMENTS OF ASSETS AND LIABILITIES -- APRIL 30, 2003 (UNAUDITED) (CONTINUED) .................................................................................
GROWTH AND MID-CAP INTERNATIONAL OVERSEAS INCOME FUND FUND EQUITY FUND EQUITY FUND -------------- -------------- -------------- --------------- ASSETS: Investments, at value (Note 2) $182,794,298 $133,744,606 $257,942,398 $ 7,552,694 Cash 110 -- -- -- Interest and dividends receivable 101,769 12,000 -- -- Receivable for capital shares issued 1,016 431,535 7,817,747 1,770,777 Receivable for investments sold 1,780,812 1,692,068 -- -- Receivable from Investment Adviser -- -- -- 7,346 Tax reclaims receivable -- -- 364,821 18,759 Prepaid expenses 16,298 7,799 14,775 10,194 ------------ ------------ ------------ ----------- TOTAL ASSETS 184,694,303 135,888,008 266,139,741 9,359,770 ------------ ------------ ------------ ----------- LIABILITIES: Call options written, at value (premium received $167,245) -- 202,250 -- -- Payable for investments purchased 2,075,019 5,572,276 -- -- Payable for capital shares redeemed 4,652 550 -- 7,212 Accrued expenses and other liabilities: Investment management 79,941 50,111 -- -- Administration 16,068 8,294 7,818 293 Distribution 970 2,807 -- 759 Shareholder servicing 521 1,122 -- 1,571 Other 5,668 17,099 22,426 12,552 ------------ ------------ ------------ ----------- TOTAL LIABILITIES 2,182,839 5,854,509 30,244 22,387 ------------ ------------ ------------ ----------- NET ASSETS $182,511,464 $130,033,499 $266,109,497 $ 9,337,383 ------------ ------------ ------------ ----------- ------------ ------------ ------------ ----------- ................................................................................................................... COMPOSITION OF NET ASSETS: Capital $231,918,849 $163,540,369 $315,120,518 $11,384,536 Accumulated net investment income 474,540 (7,067) 647,837 (13,335) Accumulated net realized losses from investment, option and foreign currency transactions (57,537,902) (39,066,041) (23,293,294) (901,144) Unrealized appreciation (depreciation) from investments, options and foreign currencies 7,655,977 5,566,238 (26,365,564) (1,132,674) ------------ ------------ ------------ ----------- NET ASSETS $182,511,464 $130,033,499 $266,109,497 $ 9,337,383 ------------ ------------ ------------ ----------- ------------ ------------ ------------ ----------- ................................................................................................................... CLASS A (INVESTOR) SHARES Net Assets $ 1,083,330 $ 1,075,795 $ -- $ 8,545,177 Shares Outstanding 145,013 166,168 -- 888,710 Net Asset Value and Redemption Price per share $ 7.47 $ 6.47 $ -- $ 9.62 ------------ ------------ ------------ ----------- ------------ ------------ ------------ ----------- Maximum sales charge 5.00% 5.00% -- 5.00% ------------ ------------ ------------ ----------- ------------ ------------ ------------ ----------- Maximum Offering Price per share (Net Asset Value/(100%-maximum sales charge)) $ 7.86 $ 6.81 $ -- $ 10.13 ------------ ------------ ------------ ----------- ------------ ------------ ------------ ----------- ................................................................................................................... CLASS B SHARES Net Assets $ 1,577,627 $ 4,647,136 $ -- $ 698,829 Shares Outstanding 213,140 733,316 -- 74,822 Net Asset Value, Offering Price and Redemption Price per share* $ 7.40 $ 6.34 $ -- $ 9.34 ------------ ------------ ------------ ----------- ------------ ------------ ------------ ----------- ................................................................................................................... CLASS C SHARES Net Assets $ 7** $ 20,830 $ -- $ 93,377 Shares Outstanding 1 3,286 -- 9,823 Net Asset Value, Offering Price and Redemption Price per share* $ 7.46*** $ 6.34 $ -- $ 9.51 ------------ ------------ ------------ ----------- ------------ ------------ ------------ ----------- ................................................................................................................... CLASS Y SHARES Net Assets $179,850,500 $ -- $ -- $ -- Shares Outstanding 24,052,419 -- -- -- Net Asset Value, Offering Price and Redemption Price per share $ 7.48 $ -- $ -- $ -- ------------ ------------ ------------ ----------- ------------ ------------ ------------ ----------- ................................................................................................................... ADVISOR SHARES Net Assets $ -- $ -- $266,109,497 $ -- Shares Outstanding -- -- 25,284,712 -- Net Asset Value, Offering Price and Redemption Price per share $ -- $ -- $ 10.52 $ -- ------------ ------------ ------------ ----------- ------------ ------------ ------------ ----------- ................................................................................................................... TRUST SHARES Net Assets $ -- $124,289,738 $ -- $ -- Shares Outstanding -- 19,087,638 -- -- Net Asset Value, Offering Price and Redemption Price per share $ -- $ 6.51 $ -- $ -- ------------ ------------ ------------ ----------- ------------ ------------ ------------ ----------- Investments, at cost $175,138,321 $128,143,363 $ -- $ -- ------------ ------------ ------------ ----------- ------------ ------------ ------------ ----------- SMALL-CAP OPPORTUNITY EQUITY FUND FUND -------------- -------------- ASSETS: Investments, at value (Note 2) $211,687,880 $13,837,376 Cash -- -- Interest and dividends receivable -- -- Receivable for capital shares issued 708,927 43,862 Receivable for investments sold -- -- Receivable from Investment Adviser -- 9,854 Tax reclaims receivable -- Prepaid expenses 14,795 10,467 ------------ ----------- TOTAL ASSETS 212,411,602 13,901,559 ------------ ----------- LIABILITIES: Call options written, at value (premium received $167,245) -- -- Payable for investments purchased -- -- Payable for capital shares redeemed -- 3,021 Accrued expenses and other liabilities: Investment management -- -- Administration 6,831 510 Distribution -- 814 Shareholder servicing -- 2,697 Other 18,769 16,064 ------------ ----------- TOTAL LIABILITIES 25,600 23,106 ------------ ----------- NET ASSETS $212,386,002 $13,878,453 ------------ ----------- ------------ ----------- ............................................................................. COMPOSITION OF NET ASSETS: Capital $284,066,999 $18,486,570 Accumulated net investment income (645,256) (96,757) Accumulated net realized losses from investment, option and foreign currency transactions (77,211,524) (4,957,773) Unrealized appreciation (depreciation) from investments, options and foreign currencies 6,175,783 446,413 ------------ ----------- NET ASSETS $212,386,002 $13,878,453 ------------ ----------- ------------ ----------- ............................................................................. CLASS A (INVESTOR) SHARES Net Assets $ -- $10,952,888 Shares Outstanding -- 1,365,187 Net Asset Value and Redemption Price per share $ -- $ 8.02 ------------ ----------- ------------ ----------- Maximum sales charge -- 5.00% ------------ ----------- ------------ ----------- Maximum Offering Price per share (Net Asset Value/(100%-maximum sales charge)) $ -- $ 8.44 ------------ ----------- ------------ ----------- ............................................................................. CLASS B SHARES Net Assets $ -- $ 2,632,665 Shares Outstanding -- 343,660 Net Asset Value, Offering Price and Redemption Price per share* $ -- $ 7.66 ------------ ----------- ------------ ----------- ............................................................................. CLASS C SHARES Net Assets $ -- $ 292,900 Shares Outstanding -- 37,918 Net Asset Value, Offering Price and Redemption Price per share* $ -- $ 7.72 ------------ ----------- ------------ ----------- ............................................................................. CLASS Y SHARES Net Assets $ -- $ -- Shares Outstanding -- -- Net Asset Value, Offering Price and Redemption Price per share $ -- $ -- ------------ ----------- ------------ ----------- ............................................................................. ADVISOR SHARES Net Assets $212,386,002 $ -- Shares Outstanding 22,277,231 -- Net Asset Value, Offering Price and Redemption Price per share $ 9.53 $ -- ------------ ----------- ------------ ----------- ............................................................................. TRUST SHARES Net Assets $ -- $ -- Shares Outstanding -- -- Net Asset Value, Offering Price and Redemption Price per share $ -- $ -- ------------ ----------- ------------ ----------- Investments, at cost $ -- $ -- ------------ ----------- ------------ -----------
- -------------- * Redemption Price per share varies by length of time shares are held. ** Net assets of the Growth and Income Fund Class C Shares represent seed money only. As of April 30, 2003 the class has not commenced operations. *** Due to rounding, Net Assets divided by Shares Outstanding does not equal the NAV. See notes to financial statements. HSBC INVESTOR FAMILY OF FUNDS 23 HSBC INVESTOR FAMILY OF FUNDS STATEMENTS OF OPERATIONS -- FOR THE SIX MONTHS ENDED APRIL 30, 2003 (UNAUDITED) .................................................................................
NEW YORK LIMITED FIXED INCOME BOND TAX-FREE MATURITY FUND FUND FUND BOND FUND --------------- --------------- ---------------- --------------- INVESTMENT INCOME: Interest $ -- $ -- $ -- $1,195,249 Dividend -- -- -- 5,677 Investment income from portfolio 2,641,602 7,734,988 493,689 -- Expenses from portfolio (297,434) (735,039) (46,846) -- ---------- ----------- -------- ---------- TOTAL INVESTMENT INCOME 2,344,168 6,999,949 446,843 1,200,926 ---------- ----------- -------- ---------- ---------- ----------- -------- ---------- ................................................................................................................... EXPENSES: Investment management -- -- -- 66,990 Administration 21,744 58,811 3,748 20,076 Distribution: Class B Shares 18,203 -- 24,641 51,701 Class C Shares 7,473 -- 3,369 11,070 Shareholder servicing: Class A (Investor) Shares 2,540 -- 15,675 21,343 Class B Shares 6,068 -- 8,214 17,234 Class C Shares 2,491 -- 1,123 3,690 Accounting 17,878 4,469 13,405 34,414 Custodian -- -- -- 8,031 Registration 5,318 5,432 7,078 3,496 Transfer agent 29,407 14,410 24,384 33,590 Trustee 718 1,912 130 403 Other 14,504 40,466 2,395 9,192 ---------- ----------- -------- ---------- Total expenses before fee reductions 126,344 125,500 104,162 281,230 Fees reduced by Investment Adviser -- -- (12,853) -- ---------- ----------- -------- ---------- NET EXPENSES 126,344 125,500 91,309 281,230 ---------- ----------- -------- ---------- ................................................................................................................... NET INVESTMENT INCOME 2,217,824 6,874,449 355,534 919,696 ---------- ----------- -------- ---------- ................................................................................................................. NET REALIZED/UNREALIZED GAINS (LOSSES) FROM INVESTMENTS: Net realized gains (losses) from investment transactions 534,064 275,508 8,976 235,153 Change in unrealized appreciation/depreciation from investments 1,257,412 8,834,121 576,416 804,807 ---------- ----------- -------- ---------- ................................................................................................................... Net realized/unrealized gains from investment transactions 1,791,476 9,109,629 585,392 1,039,960 ---------- ----------- -------- ---------- CHANGE IN NET ASSETS RESULTING FROM OPERATIONS $4,009,300 $15,984,078 $940,926 $1,959,656 ---------- ----------- -------- ---------- ---------- ----------- -------- ---------- BALANCED FUND EQUITY FUND --------------- --------------- INVESTMENT INCOME: Interest $131,311 $ -- Dividend 79,793 1,423,239 Investment income from portfolio -- -- Expenses from portfolio -- -- -------- ------------ TOTAL INVESTMENT INCOME 211,104 1,423,239 -------- ------------ -------- ------------ ............................................................................. EXPENSES: Investment management 40,062 473,515 Administration 5,457 77,311 Distribution: Class B Shares 5,748 6,413 Class C Shares 365 2,019 Shareholder servicing: Class A (Investor) Shares 545 20,394 Class B Shares 1,916 2,138 Class C Shares 122 673 Accounting 31,818 41,880 Custodian 5,783 42,501 Registration 5,041 8,141 Transfer agent 31,297 44,757 Trustee 110 1,493 Other 2,216 28,829 -------- ------------ Total expenses before fee reductions 130,480 750,064 Fees reduced by Investment Adviser (52,552) -- -------- ------------ NET EXPENSES 77,928 750,064 -------- ------------ ............................................................................. NET INVESTMENT INCOME 133,176 673,175 -------- ------------ ............................................................................. NET REALIZED/UNREALIZED GAINS (LOSSES) FROM INVESTMENTS: Net realized gains (losses) from investment transactions (496,450) (15,784,545) Change in unrealized appreciation/depreciation from investments 926,208 25,021,365 -------- ------------ ............................................................................. Net realized/unrealized gains from investment transactions 429,758 9,236,820 -------- ------------ CHANGE IN NET ASSETS RESULTING FROM OPERATIONS $562,934 $ 9,909,995 -------- ------------ -------- ------------
24 HSBC INVESTOR FAMILY OF FUNDS See notes to financial statements. HSBC INVESTOR FAMILY OF FUNDS STATEMENTS OF OPERATIONS -- FOR THE SIX MONTHS ENDED APRIL 30, 2003 (UNAUDITED) (CONTINUED) .................................................................................
GROWTH AND INCOME MID-CAP INTERNATIONAL OVERSEAS FUND FUND EQUITY FUND EQUITY FUND --------------- --------------- --------------- ---------------- - ------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME: Interest $ -- $ 223 $ -- $ -- Dividend 1,535,007 491,519 -- -- Investment income from portfolio -- -- 2,413,394 88,334 Tax reclaims -- -- 163,108 5,325 Foreign tax withholding from portfolio -- -- (385,199) (14,030) Expenses from portfolio -- -- (984,270) (36,282) ---------- ----------- ---------- -------- TOTAL INVESTMENT INCOME 1,535,007 491,742 1,207,033 43,347 ---------- ----------- ---------- -------- .............................................................................................................. EXPENSES: Investment management 475,388 300,087 -- -- Administration 64,756 40,877 38,530 1,420 Distribution: Class B Shares 4,791 16,246 -- 2,338 Class C Shares -- 75 -- 347 Shareholder servicing: Class A (Investor) Shares 1,471 1,216 -- 8,583 Class B Shares 1,597 5,415 -- 779 Class C Shares -- 25 -- 116 Accounting 31,850 31,217 4,469 13,406 Custodian 27,062 27,888 -- -- Registration 8,823 4,537 10,808 6,189 Transfer agent 33,167 52,939 15,155 29,167 Trustee 1,285 799 1,178 49 Other 28,057 17,488 27,021 940 ---------- ----------- ---------- -------- Total expenses before fee reductions 678,247 498,809 97,161 63,334 Fees reduced by Investment Adviser -- -- -- (25,026) ---------- ----------- ---------- -------- NET EXPENSES 678,247 498,809 97,161 38,308 ---------- ----------- ---------- -------- .............................................................................................................. NET INVESTMENT INCOME (LOSS) 856,760 (7,067) 1,109,872 5,039 ---------- ----------- ---------- -------- .............................................................................................................. NET REALIZED/UNREALIZED GAINS (LOSSES) FROM INVESTMENTS, OPTIONS AND FOREIGN CURRENCIES: Net realized losses from investment, option and foreign currency transactions (9,385,152) (7,418,038) (4,732,884) (222,407) Change in unrealized appreciation/depreciation from investments, options and foreign currencies 15,858,895 10,352,889 5,801,392 237,467 ---------- ----------- ---------- -------- .............................................................................................................. Net realized/unrealized gains from investment, options and foreign currency transactions 6,473,743 2,934,851 1,068,508 15,060 ---------- ----------- ---------- -------- CHANGE IN NET ASSETS RESULTING FROM OPERATIONS $7,330,503 $ 2,927,784 $2,178,380 $ 20,099 ---------- ----------- ---------- -------- ---------- ----------- ---------- --------
SMALL CAP OPPORTUNITY EQUITY FUND FUND --------------- --------------- INVESTMENT INCOME: Interest $ -- $ -- Dividend -- -- Investment income from portfolio 308,736 22,686 Tax reclaims -- -- Foreign tax withholding from portfolio -- -- Expenses from portfolio (866,189) (63,525) ----------- ---------- TOTAL INVESTMENT INCOME (557,453) (40,839) ----------- ---------- .......................................................................... EXPENSES: Investment management -- -- Administration 33,796 2,484 Distribution: Class B Shares -- 8,927 Class C Shares -- 1,123 Shareholder servicing: Class A (Investor) Shares -- 13,226 Class B Shares -- 2,976 Class C Shares -- 374 Accounting 4,469 13,405 Custodian -- -- Registration 9,120 6,501 Transfer agent 14,967 42,946 Trustee 1,102 73 Other 24,349 2,216 ----------- ---------- Total expenses before fee reductions 87,803 94,251 Fees reduced by Investment Adviser -- (38,333) ----------- ---------- NET EXPENSES 87,803 55,918 ----------- ---------- .......................................................................... NET INVESTMENT INCOME (LOSS) (645,256) (96,757) ----------- ---------- .......................................................................... NET REALIZED/UNREALIZED GAINS (LOSSES) FROM INVESTMENTS, OPTIONS AND FOREIGN CURRENCIES: Net realized losses from investment, option and foreign currency transactions (13,078,484) (877,423) Change in unrealized appreciation/depreciation from investments, options and foreign currencies 18,585,304 1,290,340 ----------- ---------- ......................................................................... Net realized/unrealized gains from investment, options and foreign currency transactions 5,506,820 412,917 ----------- ---------- CHANGE IN NET ASSETS RESULTING FROM OPERATIONS $ 4,861,564 $ 316,160 ----------- ---------- ----------- ----------
See notes to financial statements. HSBC INVESTOR FAMILY OF FUNDS 25 HSBC INVESTOR FAMILY OF FUNDS STATEMENTS OF CHANGES IN NET ASSETS .................................................................................
LIMITED MATURITY FUND FIXED INCOME FUND --------------------------------- --------------------------------- FOR THE SIX FOR THE SIX MONTHS ENDED FOR THE MONTHS ENDED FOR THE APRIL 30, 2003 YEAR ENDED APRIL 30, 2003 YEAR ENDED (UNAUDITED) OCTOBER 31, 2002 (UNAUDITED) OCTOBER 31, 2002 - --------------------------------------------------------------------------------------------------------------------------- INVESTMENT ACTIVITIES: OPERATIONS: Net investment income $ 2,217,824 $ 3,687,229 $ 6,874,449 $ 12,199,896 Net realized gains (losses) from investment transactions 534,064 (696,711) 275,508 877,629 Change in unrealized appreciation/depreciation from investments 1,257,412 526,764 8,834,121 1,637,228 ------------ ------------ ------------ ------------ CHANGE IN NET ASSETS RESULTING FROM OPERATIONS 4,009,300 3,517,282 15,984,078 14,714,753 ------------ ------------ ------------ ------------ ........................................................................................................................... DIVIDENDS: NET INVESTMENT INCOME: Class A (Investor) Shares (38,192) (51,982) -- -- Class B Shares (72,686) (82,791) -- -- Class C Shares (29,910) (29,109) -- -- Class Y Shares (2,151,678) (3,587,497) -- -- Advisor Shares -- -- (7,506,438) (13,256,763) NET REALIZED GAINS: Class A (Investor) Shares -- (4,520) -- -- Class B Shares -- (4,356) -- -- Class C Shares -- (718) -- -- Class Y (Adviser) Shares -- (302,276) -- -- ------------ ------------ ------------ ------------ CHANGE IN NET ASSETS FROM SHAREHOLDER DIVIDENDS (2,292,466) (4,063,249) (7,506,438) (13,256,763) ------------ ------------ ------------ ------------ CHANGE IN NET ASSETS FROM CAPITAL SHARE TRANSACTIONS 25,839,689 33,628,772 48,864,424 132,803,103 CHANGE IN NET ASSETS 27,556,523 33,082,805 57,342,064 134,261,093 ........................................................................................................................... NET ASSETS: Beginning of period 102,431,197 69,348,392 284,840,662 150,579,569 ------------ ------------ ------------ ------------ End of period $129,987,720 $102,431,197 $342,182,726 $284,840,662 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ Accumulated net investment income $ (80,919) $ (6,277) $ (706,161) $ (74,172) ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
26 HSBC INVESTOR FAMILY OF FUNDS See notes to financial statements. HSBC INVESTOR FAMILY OF FUNDS STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) .................................................................................
LIMITED MATURITY FUND FIXED INCOME FUND ------------------------------ ------------------------------ - ------------------------------------------------------------------------------------------------------------------------------ FOR THE SIX FOR THE SIX MONTHS ENDED FOR THE MONTHS ENDED FOR THE APRIL 30, 2003 YEAR ENDED APRIL 30, 2003 YEAR ENDED (UNAUDITED) OCTOBER 31, 2002 (UNAUDITED) OCTOBER 31, 2002 - ------------------------------------------------------------------------------------------------------------------------------ CAPITAL TRANSACTIONS: CLASS A (INVESTOR) SHARES: Proceeds from shares issued $ 2,119,568 $ 690,236 $ -- $ -- Dividends reinvested 35,739 53,853 -- -- Cost of shares redeemed (2,063,596) (110,071) -- -- ----------- ----------- ------------ ------------- Class A (Investor) Shares capital transactions 91,711 634,018 -- -- ----------- ----------- ------------ ------------- ............................................................................................................................... CLASS B SHARES: Proceeds from shares issued 2,070,094 3,542,800 -- -- Dividends reinvested 60,984 72,882 -- -- Cost of shares redeemed (472,729) (377,321) -- -- ----------- ----------- ------------ ------------- Class B Shares capital transactions 1,658,349 3,238,361 -- -- ----------- ----------- ------------ ------------- ............................................................................................................................... CLASS C SHARES: Proceeds from shares issued 893,634 1,659,670 -- -- Dividends reinvested 26,453 26,924 -- -- Cost of shares redeemed (277,892) (118,452) -- -- ----------- ----------- ------------ ------------- Class C Shares capital transactions 642,195 1,568,142 -- -- ----------- ----------- ------------ ------------- ............................................................................................................................... CLASS Y SHARES: Proceeds from shares issued 26,856,828 32,116,873 -- -- Dividends reinvested 1,962,347 3,764,345 -- -- Cost of shares redeemed (5,371,741) (7,692,967) -- -- ----------- ----------- ------------ ------------- Class Y Shares capital transactions 23,447,434 28,188,251 -- -- ----------- ----------- ------------ ------------- ............................................................................................................................... ADVISOR SHARES: Proceeds from shares issued -- -- 99,078,031 312,915,542 Dividends reinvested -- -- 1,627,859 4,745,964 Cost of shares redeemed -- -- (51,841,466) (184,858,403) ----------- ----------- ------------ ------------- Advisor Shares capital transactions -- -- 48,864,424 132,803,103 ----------- ----------- ------------ ------------- Change in net assets from capital transactions $25,839,689 $33,628,772 $ 48,864,424 $ 132,803,103 ----------- ----------- ------------ ------------- ----------- ----------- ------------ ------------- ............................................................................................................................... SHARE TRANSACTIONS: CLASS A (INVESTOR) SHARES: Issued 202,852 67,284 -- -- Reinvested 3,407 5,236 -- -- Redeemed (196,493) (10,737) -- -- ----------- ----------- ------------ ------------- Change in Class A (Investor) Shares 9,766 61,783 -- -- ----------- ----------- ------------ ------------- ............................................................................................................................... CLASS B SHARES: Issued 196,348 344,798 -- -- Reinvested 5,805 7,140 -- -- Redeemed (44,843) (36,553) -- -- ----------- ----------- ------------ ------------- Change in Class B Shares 157,310 315,385 -- -- ----------- ----------- ------------ ------------- ............................................................................................................................... CLASS C SHARES: Issued 84,863 162,291 -- -- Reinvested 2,518 2,611 -- -- Redeemed (26,392) (11,656) -- -- ----------- ----------- ------------ ------------- Change in Class C Shares 60,989 153,246 -- -- ----------- ----------- ------------ ------------- ............................................................................................................................... CLASS Y SHARES: Issued 2,553,959 3,107,329 -- -- Reinvested 186,707 365,786 -- -- Redeemed (512,843) (746,625) -- -- ----------- ----------- ------------ ------------- Change in Class Y Shares 2,227,823 2,726,490 -- -- ----------- ----------- ------------ ------------- ............................................................................................................................... ADVISOR SHARES: Issued -- -- 9,182,271 29,905,358 Reinvested -- -- 151,037 449,538 Redeemed -- -- (4,803,093) (17,491,684) ----------- ----------- ------------ ------------- Change in Advisor Shares -- -- 4,530,215 12,863,212 ----------- ----------- ------------ -------------
See notes to financial statements. HSBC INVESTOR FAMILY OF FUNDS 27 HSBC INVESTOR FAMILY OF FUNDS STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) .................................................................................
NEW YORK BOND FUND TAX-FREE BOND FUND ------------------------------ ------------------------------ - ------------------------------------------------------------------------------------------------------------------------------ FOR THE SIX FOR THE SIX MONTHS ENDED FOR THE MONTHS ENDED FOR THE APRIL 30, 2003 YEAR ENDED APRIL 30, 2003 YEAR ENDED (UNAUDITED) OCTOBER 31, 2002 (UNAUDITED) OCTOBER 31, 2002 - ------------------------------------------------------------------------------------------------------------------------------ INVESTMENT ACTIVITIES: OPERATIONS: Net investment income $ 355,534 $ 609,977 $ 919,696 $ 1,523,914 Net realized gains (losses) from investment transactions 8,976 (125,841) 235,153 230,884 Change in unrealized appreciation/depreciation from investments 576,416 134,884 804,807 606,908 ------------ ------------ ------------ ------------ CHANGE IN NET ASSETS RESULTING FROM OPERATIONS 940,926 619,020 1,959,656 2,361,706 ------------ ------------ ------------ ------------ ............................................................................................................................... DIVIDENDS: NET INVESTMENT INCOME: Class A (Investor) Shares (266,890) (476,334) (301,724) (536,951) Class B Shares (114,821) (161,790) (191,766) (249,302) Class C Shares (15,908) (35,707) (40,812) (52,534) Class Y Shares -- -- (375,528) (684,658) ------------ ------------ ------------ ------------ CHANGE IN NET ASSETS FROM SHAREHOLDER DIVIDENDS (397,619) (673,831) (909,830) (1,523,445) ------------ ------------ ------------ ------------ CHANGE IN NET ASSETS FROM CAPITAL SHARE TRANSACTIONS 2,058,174 10,511,328 4,109,707 10,709,100 ------------ ------------ ------------ ------------ CHANGE IN NET ASSETS 2,601,481 10,456,517 5,159,533 11,547,361 ............................................................................................................................... NET ASSETS: Beginning of period 19,160,194 8,703,677 51,401,358 39,853,997 ------------ ------------ ------------ ------------ End of period $ 21,761,675 $ 19,160,194 $ 56,560,891 $ 51,401,358 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ Accumulated net investment income $ (45,799) $ (3,714) $ 10,749 $ 883 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
28 HSBC INVESTOR FAMILY OF FUNDS See notes to financial statements. HSBC INVESTOR FAMILY OF FUNDS STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) .................................................................................
NEW YORK BOND FUND TAX-FREE BOND FUND ------------------------------ ------------------------------ - ------------------------------------------------------------------------------------------------------------------------------ FOR THE SIX FOR THE SIX MONTHS ENDED FOR THE MONTHS ENDED FOR THE APRIL 30, 2003 YEAR ENDED APRIL 30, 2003 YEAR ENDED (UNAUDITED) OCTOBER 31, 2002 (UNAUDITED) OCTOBER 31, 2002 - ------------------------------------------------------------------------------------------------------------------------------ CAPITAL TRANSACTIONS: CLASS A (INVESTOR) SHARES: Proceeds from shares issued $ 2,944,859 $ 8,793,395 $ 3,377,292 $ 8,641,241 Dividends reinvested 247,670 438,217 279,922 517,840 Cost of shares redeemed (1,878,059) (3,793,983) (1,604,444) (10,712,477) ----------- ----------- ----------- ------------ Class A (Investor) Shares capital transactions 1,314,470 5,437,629 2,052,770 (1,553,396) ----------- ----------- ----------- ------------ ............................................................................................................................... CLASS B SHARES: Proceeds from shares issued 1,191,168 4,883,502 3,384,218 7,565,354 Dividends reinvested 95,760 130,482 148,896 189,995 Cost of shares redeemed (396,268) (402,978) (537,129) (866,052) ----------- ----------- ----------- ------------ Class B Shares capital transactions 890,660 4,611,006 2,995,985 6,889,297 ----------- ----------- ----------- ------------ ............................................................................................................................... CLASS C SHARES: Proceeds from shares issued 3,000 789,595 764,079 1,745,774 Dividends reinvested 11,644 32,561 31,522 44,081 Cost of shares redeemed (161,600) (359,463) (123,413) (743,128) ----------- ----------- ----------- ------------ Class C Shares capital transactions (146,956) 462,693 672,188 1,046,727 ----------- ----------- ----------- ------------ ............................................................................................................................... CLASS Y SHARES: Proceeds from shares issued -- -- 4,900,632 15,051,732 Dividends reinvested -- -- 118,645 258,502 Cost of shares redeemed -- -- (6,630,513) (10,983,762) ----------- ----------- ----------- ------------ Class Y Shares capital transactions -- -- (1,611,236) 4,326,472 ----------- ----------- ----------- ------------ CHANGE IN NET ASSETS FROM CAPITAL TRANSACTIONS $ 2,058,174 $10,511,328 $ 4,109,707 $ 10,709,100 ----------- ----------- ----------- ------------ ----------- ----------- ----------- ------------ ............................................................................................................................... SHARE TRANSACTIONS: CLASS A (INVESTOR) SHARES: Issued 279,438 852,357 303,548 793,327 Reinvested 23,526 42,473 25,095 47,508 Redeemed (178,972) (367,469) (143,937) (988,665) ----------- ----------- ----------- ------------ Change in Class A (Investor) Shares 123,992 527,361 184,706 (147,830) ----------- ----------- ----------- ------------ ............................................................................................................................... CLASS B SHARES: Issued 112,909 474,356 303,223 693,973 Reinvested 9,093 12,636 13,356 17,430 Redeemed (37,532) (38,903) (48,310) (79,697) ----------- ----------- ----------- ------------ Change in Class B Shares 84,470 448,089 268,269 631,706 ----------- ----------- ----------- ------------ ............................................................................................................................... CLASS C SHARES: Issued 284 76,684 68,280 159,355 Reinvested 1,108 3,159 2,817 4,018 Redeemed (15,400) (35,037) (10,972) (67,865) ----------- ----------- ----------- ------------ Change in Class C Shares (14,008) 44,806 60,125 95,508 ----------- ----------- ----------- ------------ ............................................................................................................................... CLASS Y SHARES: Issued -- -- 439,011 1,388,804 Reinvested -- -- 10,643 23,646 Redeemed -- -- (594,005) (1,002,656) ----------- ----------- ----------- ------------ Change in Class Y Shares -- -- (144,351) 409,794 ----------- ----------- ----------- ------------
See notes to financial statements. HSBC INVESTOR FAMILY OF FUNDS 29 HSBC INVESTOR FAMILY OF FUNDS STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) ................................................................................
BALANCED FUND EQUITY FUND ------------------------------ ------------------------------ - ------------------------------------------------------------------------------------------------------------------------------ FOR THE SIX FOR THE SIX MONTHS ENDED FOR THE MONTHS ENDED FOR THE APRIL 30, 2003 YEAR ENDED APRIL 30, 2003 YEAR ENDED (UNAUDITED) OCTOBER 31, 2002 (UNAUDITED) OCTOBER 31, 2002 - ------------------------------------------------------------------------------------------------------------------------------ INVESTMENT ACTIVITIES: OPERATIONS: Net investment income $ 133,176 $ 296,118 $ 673,175 $ 1,072,599 Net realized losses from investment transactions (496,450) (1,733,733) (15,784,545) (29,117,568) Change in unrealized appreciation/depreciation from investments 926,208 (90,459) 25,021,365 (27,338,527) ----------- ----------- ------------ ------------ CHANGE IN NET ASSETS FROM OPERATIONS 562,934 (1,528,074) 9,909,995 (55,383,496) ----------- ----------- ------------ ------------ ............................................................................................................................... DIVIDENDS: NET INVESTMENT INCOME: Class A (Investor) Shares (7,857) (3,748) (42,980) (36,107) Class B Shares (23,037) (5,763) -- -- Class C Shares (1,471) (813) -- -- Class Y Shares (257,635) (179,777) (793,658) (842,473) ----------- ----------- ------------ ------------ CHANGE IN NET ASSETS FROM SHAREHOLDER DIVIDENDS (290,000) (190,101) (836,638) (878,580) ----------- ----------- ------------ ------------ CHANGE IN NET ASSETS FROM CAPITAL SHARE TRANSACTIONS 775,680 90,197 18,155,544 102,470,636 ----------- ----------- ------------ ------------ CHANGE IN NET ASSETS 1,048,614 (1,627,978) 27,228,901 46,208,560 ............................................................................................................................... NET ASSETS: Beginning of period 14,584,585 16,212,563 192,894,060 146,685,500 ----------- ----------- ------------ ------------ End of period $15,633,199 $14,584,585 $220,122,961 $192,894,060 ----------- ----------- ------------ ------------ ----------- ----------- ------------ ------------ Accumulated net investment income $ 84,267 $ 241,091 $ 64,981 $ 228,444 ----------- ----------- ------------ ------------ ----------- ----------- ------------ ------------
30 HSBC INVESTOR FAMILY OF FUNDS See notes to financial statements. HSBC INVESTOR FAMILY OF FUNDS STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) ................................................................................
BALANCED FUND EQUITY FUND ------------------------------ ------------------------------ - ------------------------------------------------------------------------------------------------------------------------------ FOR THE SIX FOR THE SIX MONTHS ENDED FOR THE MONTHS ENDED FOR THE APRIL 30, 2003 YEAR ENDED APRIL 30, 2003 YEAR ENDED (UNAUDITED) OCTOBER 31, 2002 (UNAUDITED) OCTOBER 31, 2002 - ------------------------------------------------------------------------------------------------------------------------------ CAPITAL TRANSACTIONS: CLASS A (INVESTOR) SHARES: Proceeds from shares issued $ 71,578 $ 254,543 $ 1,969,117 $ 11,957,002 Dividends reinvested 6,663 3,367 41,888 35,456 Cost of shares redeemed (23,646) (103,414) (2,464,949) (8,621,362) ------------ ------------ ------------ ------------ Class A (Investor) Shares capital transactions 54,595 154,496 (453,944) 3,371,096 ------------ ------------ ------------ ------------ ............................................................................................................................... CLASS B SHARES: Proceeds from shares issued 359,251 1,077,745 259,302 1,081,923 Dividends reinvested 22,644 5,589 -- -- Cost of shares redeemed (136,576) (97,724) (169,447) (279,702) ------------ ------------ ------------ ------------ Class B Shares capital transactions 245,319 985,610 89,855 802,221 ------------ ------------ ------------ ------------ ............................................................................................................................... CLASS C SHARES: Proceeds from shares issued 2,498 2,500 5,340 31,580 Dividends reinvested 1,471 813 -- -- Cost of shares redeemed (2,501) (821) (99,717) (63,795) ------------ ------------ ------------ ------------ Class C Shares capital transactions 1,468 2,492 (94,377) (32,215) ------------ ------------ ------------ ------------ ............................................................................................................................... CLASS Y SHARES: Proceeds from shares issued 1,218,205 2,172,114 36,807,407 120,030,391 Dividends reinvested 257,635 179,778 743,937 769,198 Cost of shares redeemed (1,001,542) (3,404,293) (18,937,334) (22,470,055) ------------ ------------ ------------ ------------ Class Y Shares capital transactions 474,298 (1,052,401) 18,614,010 98,329,534 ------------ ------------ ------------ ------------ CHANGE IN NET ASSETS FROM CAPITAL TRANSACTIONS $ 775,680 $ 90,197 $ 18,155,544 $102,470,636 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ............................................................................................................................... SHARE TRANSACTIONS: CLASS A (INVESTOR) SHARES: Issued 9,550 30,620 190,708 986,765 Reinvested 881 390 4,170 3,050 Redeemed (3,096) (13,028) (240,701) (672,658) ------------ ------------ ------------ ------------ Change in Class A (Investor) Shares 7,335 17,982 (45,823) 317,157 ------------ ------------ ------------ ------------ ............................................................................................................................... CLASS B SHARES: Issued 48,108 130,189 25,970 86,551 Reinvested 3,003 647 -- -- Redeemed (18,160) (12,342) (17,234) (25,209) ------------ ------------ ------------ ------------ Change in Class B Shares 32,951 118,494 8,736 61,342 ------------ ------------ ------------ ------------ ............................................................................................................................... CLASS C SHARES: Issued 328 298 530 2,531 Reinvested 195 94 -- -- Redeemed (328) (108) (9,933) (6,145) ------------ ------------ ------------ ------------ Change in Class C Shares 195 284 (9,403) (3,614) ------------ ------------ ------------ ------------ ............................................................................................................................... CLASS Y SHARES: Issued 159,780 261,958 3,535,548 8,983,553 Reinvested 33,766 20,688 74,035 64,275 Redeemed (132,506) (417,055) (1,838,877) (1,940,804) ------------ ------------ ------------ ------------ Change in Class Y Shares 61,040 (134,409) 1,770,706 7,107,024 ------------ ------------ ------------ ------------
See notes to financial statements. HSBC INVESTOR FAMILY OF FUNDS 31 HSBC INVESTOR FAMILY OF FUNDS STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) ................................................................................
GROWTH AND INCOME FUND MID-CAP FUND ------------------------------ ------------------------------ - ------------------------------------------------------------------------------------------------------------------------------ FOR THE SIX FOR THE SIX MONTHS ENDED FOR THE MONTHS ENDED FOR THE APRIL 30, 2003 YEAR ENDED APRIL 30, 2003 YEAR ENDED (UNAUDITED) OCTOBER 31, 2002 (UNAUDITED) OCTOBER 31, 2002 - ------------------------------------------------------------------------------------------------------------------------------ INVESTMENT ACTIVITIES: OPERATIONS: Net investment income (loss) $ 856,760 $ 1,337,897 $ (7,067) $ (304,696) Net realized losses from investment and options transactions (9,385,152) (24,672,615) (7,418,038) (18,552,349) Change in unrealized appreciation/depreciation from investments and options 15,858,895 (17,117,988) 10,352,889 (8,355,049) ------------ ------------ ------------ ------------ CHANGE IN NET ASSETS FROM OPERATIONS 7,330,503 (40,452,706) 2,927,784 (27,212,094) ------------ ------------ ------------ ------------ ............................................................................................................................... DIVIDENDS: NET INVESTMENT INCOME: Class A (Investor) Shares (5,810) (2,986) -- -- Class B Shares (858) -- -- -- Class Y Shares (1,197,478) (799,787) -- -- ------------ ------------ ------------ ------------ CHANGE IN NET ASSETS FROM SHAREHOLDER DIVIDENDS (1,204,146) (802,773) -- -- ------------ ------------ ------------ ------------ CHANGE IN NET ASSETS FROM CAPITAL SHARE TRANSACTIONS 5,113,568 (8,951,741) 23,625,496 (3,472,044) ------------ ------------ ------------ ------------ CHANGE IN NET ASSETS 11,239,925 (50,207,220) 26,553,280 (30,684,138) ............................................................................................................................... NET ASSETS: Beginning of period 171,271,539 221,478,759 103,480,219 134,164,357 ------------ ------------ ------------ ------------ End of period $182,511,464 $171,271,539 $130,033,499 $103,480,219 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ Accumulated net investment income $ 474,540 $ 821,926 $ (7,067) $ -- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
32 HSBC INVESTOR FAMILY OF FUNDS See notes to financial statements. HSBC INVESTOR FAMILY OF FUNDS STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) ................................................................................
GROWTH AND INCOME FUND MID-CAP FUND ------------------------------ ------------------------------ - ------------------------------------------------------------------------------------------------------------------------------ FOR THE SIX FOR THE SIX MONTHS ENDED FOR THE MONTHS ENDED FOR THE APRIL 30, 2003 YEAR ENDED APRIL 30, 2003 YEAR ENDED (UNAUDITED) OCTOBER 31, 2002 (UNAUDITED) OCTOBER 31, 2002 - ------------------------------------------------------------------------------------------------------------------------------ CAPITAL TRANSACTIONS: CLASS A (INVESTOR) SHARES: Proceeds from shares issued $ 167,324 $ 601,471 $ 163,280 $ 577,280 Dividends reinvested 5,561 2,897 -- -- Cost of shares redeemed (426,714) (899,525) (124,298) (212,541) ------------ ------------ ------------ ------------ Class A (Investor) Shares capital transactions (253,829) (295,157) 38,982 364,739 ------------ ------------ ------------ ------------ ............................................................................................................................... CLASS B SHARES: Proceeds from shares issued 425,669 1,229,558 396,254 2,417,457 Dividends reinvested 846 -- -- -- Cost of shares redeemed (64,532) (120,487) (251,106) (592,594) ------------ ------------ ------------ ------------ Class B Shares capital transactions 361,983 1,109,071 145,148 1,824,863 ------------ ------------ ------------ ------------ ............................................................................................................................... CLASS C SHARES: Proceeds from shares issued -- -- -- 26,336 Cost of shares redeemed -- -- -- (21,556) ------------ ------------ ------------ ------------ Class C Shares capital transactions -- -- -- 4,780 ------------ ------------ ------------ ------------ ............................................................................................................................... CLASS Y SHARES: Proceeds from shares issued 21,305,230 16,872,208 -- -- Dividends reinvested 242,845 178,816 -- -- Cost of shares redeemed (16,542,661) (26,816,679) -- -- ------------ ------------ ------------ ------------ Class Y Shares capital transactions 5,005,414 (9,765,655) -- -- ------------ ------------ ------------ ------------ ............................................................................................................................... TRUST SHARES: Proceeds from shares issued -- -- 32,176,483 42,412,795 Cost of shares redeemed -- -- (8,735,117) (48,079,221) ------------ ------------ ------------ ------------ Trust Shares capital transactions -- -- 23,441,366 (5,666,426) ------------ ------------ ------------ ------------ CHANGE IN NET ASSETS FROM CAPITAL TRANSACTIONS $ 5,113,568 $ (8,951,741) $ 23,625,496 $ (3,472,044) ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ............................................................................................................................... SHARE TRANSACTIONS: CLASS A (INVESTOR) SHARES: Issued 23,560 69,737 26,086 71,687 Reinvested 775 308 -- -- Redeemed (60,421) (105,318) (20,083) (28,927) ------------ ------------ ------------ ------------ Change in Class A (Investor) Shares (36,086) (35,273) 6,003 42,760 ------------ ------------ ------------ ------------ ............................................................................................................................... CLASS B SHARES: Issued 60,530 140,389 65,246 305,404 Reinvested 119 -- -- -- Redeemed (9,057) (16,034) (40,904) (85,941) ------------ ------------ ------------ ------------ Change in Class B Shares 51,592 124,355 24,342 219,463 ------------ ------------ ------------ ------------ ............................................................................................................................... CLASS C SHARES: Issued -- -- -- 3,391 Redeemed -- -- -- (2,753) ------------ ------------ ------------ ------------ Change in Class C Shares -- -- -- 638 ------------ ------------ ------------ ------------ ............................................................................................................................... CLASS Y SHARES: Issued 2,981,498 1,990,822 -- -- Reinvested 33,922 19,925 -- -- Redeemed (2,328,268) (3,209,191) -- -- ------------ ------------ ------------ ------------ Change in Class Y Shares 687,152 (1,198,444) -- -- ------------ ------------ ------------ ------------ ............................................................................................................................... TRUST SHARES: Issued -- -- 5,003,203 5,158,172 Redeemed -- -- (1,402,123) (6,022,361) ------------ ------------ ------------ ------------ Change in Trust Shares -- -- 3,601,080 (864,189) ------------ ------------ ------------ ------------
See notes to financial statements. HSBC INVESTOR FAMILY OF FUNDS 33 HSBC INVESTOR FAMILY OF FUNDS STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) ................................................................................
INTERNATIONAL EQUITY FUND OVERSEAS EQUITY FUND ------------------------------ ------------------------------ - ------------------------------------------------------------------------------------------------------------------------------ FOR THE SIX FOR THE SIX MONTHS ENDED FOR THE MONTHS ENDED FOR THE APRIL 30, 2003 YEAR ENDED APRIL 30, 2003 YEAR ENDED (UNAUDITED) OCTOBER 31, 2002 (UNAUDITED) OCTOBER 31, 2002 - ------------------------------------------------------------------------------------------------------------------------------ INVESTMENT ACTIVITIES: OPERATIONS: Net investment income (loss) $ 1,109,872 $ 1,520,651 $ 5,039 $ (20,655) Net realized losses from investment and foreign currency transactions (4,732,884) (14,464,908) (222,407) (570,945) Change in unrealized appreciation/depreciation from investments and foreign currencies 5,801,392 (13,761,843) 237,467 (753,586) ------------ ------------ ------------ ------------ CHANGE IN NET ASSETS RESULTING FROM OPERATIONS 2,178,380 (26,706,100) 20,099 (1,345,186) ------------ ------------ ------------ ------------ ............................................................................................................................... DIVIDENDS: NET INVESTMENT INCOME: Class A (Investor) Shares -- -- (71,236) (83,152) Class B Shares -- -- (3,341) (894) Class C Shares -- -- (54) -- Advisor Shares (3,705,000) (2,797,529) -- -- NET REALIZED GAINS FROM INVESTMENT AND FOREIGN CURRENCY TRANSACTIONS: Class A (Investor) Shares -- -- -- (189,407) Class B Shares -- -- -- (7,926) Class C Shares -- -- -- (3,527) ------------ ------------ ------------ ------------ CHANGE IN NET ASSETS FROM SHAREHOLDER DIVIDENDS (3,705,000) (2,797,529) (74,631) (284,906) ------------ ------------ ------------ ------------ CHANGE IN NET ASSETS FROM CAPITAL SHARE TRANSACTIONS 72,932,384 39,713,366 1,505,116 2,143,644 ------------ ------------ ------------ ------------ CHANGE IN NET ASSETS 71,405,764 10,209,737 1,450,584 513,552 ............................................................................................................................... NET ASSETS: Beginning of period 194,703,733 184,493,996 7,886,799 7,373,247 ------------ ------------ ------------ ------------ End of period $266,109,497 $194,703,733 $ 9,337,383 $ 7,886,799 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ Accumulated net investment income $ 647,837 $ 3,242,965 $ (13,335) $ 56,257 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
34 HSBC INVESTOR FAMILY OF FUNDS See notes to financial statements. HSBC INVESTOR FAMILY OF FUNDS STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) .................................................................................
INTERNATIONAL EQUITY FUND OVERSEAS EQUITY FUND --------------------------------- --------------------------------- - ------------------------------------------------------------------------------------------------------------------------------ FOR THE SIX FOR THE SIX MONTHS ENDED FOR THE MONTHS ENDED FOR THE APRIL 30, 2003 YEAR ENDED APRIL 30, 2003 YEAR ENDED (UNAUDITED) OCTOBER 31, 2002 (UNAUDITED) OCTOBER 31, 2002 - ------------------------------------------------------------------------------------------------------------------------------ CAPITAL TRANSACTIONS: CLASS A (INVESTOR) SHARES: Proceeds from shares issued $ -- $ -- $ 9,170,601 $ 6,142,944 Dividends reinvested -- -- 69,478 270,064 Cost of shares redeemed -- -- (7,856,543) (4,650,406) ------------ ------------ ----------- ----------- Class A (Investor) Shares capital transactions -- -- 1,383,536 1,762,602 ------------ ------------ ----------- ----------- ............................................................................................................................... CLASS B SHARES: Proceeds from shares issued -- -- 167,672 436,595 Dividends reinvested -- -- 3,234 8,694 Cost of shares redeemed -- -- (48,642) (40,890) ------------ ------------ ----------- ----------- Class B Shares capital transactions -- -- 122,264 404,399 ------------ ------------ ----------- ----------- ............................................................................................................................... CLASS C SHARES: Proceeds from shares issued -- -- 2,420 8,840 Dividends reinvested -- -- 54 3,527 Cost of shares redeemed -- -- (3,158) (35,724) ------------ ------------ ----------- ----------- Class C Shares capital transactions -- -- (684) (23,357) ------------ ------------ ----------- ----------- ............................................................................................................................... ADVISOR SHARES: Proceeds from shares issued 278,663,298 638,506,248 -- -- Dividends reinvested 2,711,050 1,765,422 -- -- Cost of shares redeemed (208,441,964) (600,558,304) -- -- ------------ ------------ ----------- ----------- Advisor Shares capital transactions 72,932,384 39,713,366 -- -- ------------ ------------ ----------- ----------- CHANGE IN NET ASSETS FROM CAPITAL TRANSACTIONS $ 72,932,384 $ 39,713,366 $ 1,505,116 $ 2,143,644 ------------ ------------ ----------- ----------- ------------ ------------ ----------- ----------- ............................................................................................................................... SHARE TRANSACTIONS: CLASS A (INVESTOR) SHARES: Issued -- -- 982,813 534,842 Reinvested -- -- 7,075 22,454 Redeemed -- -- (831,239) (422,514) ------------ ------------ ----------- ----------- Change in Class A (Investor) Shares -- -- 158,649 134,782 ------------ ------------ ----------- ----------- ............................................................................................................................... CLASS B SHARES: Issued -- -- 18,399 38,648 Reinvested -- -- 339 744 Redeemed -- -- (5,463) (3,888) ------------ ------------ ----------- ----------- Change in Class B Shares -- -- 13,275 35,504 ------------ ------------ ----------- ----------- ............................................................................................................................... CLASS C SHARES: Issued -- -- 248 885 Reinvested -- -- 6 299 Redeemed -- -- (326) (3,453) ------------ ------------ ----------- ----------- Change in Class C Shares -- -- (72) (2,269) ------------ ------------ ----------- ----------- ............................................................................................................................... ADVISOR SHARES: Issued 27,195,678 53,518,520 -- -- Reinvested 255,518 134,868 -- -- Redeemed (20,310,668) (50,202,271) -- -- ------------ ------------ ----------- ----------- Change in Advisor Shares 7,140,528 3,451,117 -- -- ------------ ------------ ----------- -----------
See notes to financial statements. HSBC INVESTOR FAMILY OF FUNDS 35 HSBC INVESTOR FAMILY OF FUNDS STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) .................................................................................
SMALL CAP EQUITY FUND OPPORTUNITY FUND --------------------------------- --------------------------------- - ------------------------------------------------------------------------------------------------------------------------------ FOR THE SIX FOR THE SIX MONTHS ENDED FOR THE MONTHS ENDED FOR THE APRIL 30, 2003 YEAR ENDED APRIL 30, 2003 YEAR ENDED (UNAUDITED) OCTOBER 31, 2002 (UNAUDITED) OCTOBER 31, 2002 - ------------------------------------------------------------------------------------------------------------------------------ INVESTMENT ACTIVITIES: OPERATIONS: Net investment loss $ (645,256) $ (1,827,171) $ (96,757) $ (244,098) Net realized losses from investment transactions (13,078,484) (49,966,937) (877,423) (3,360,778) Change in unrealized appreciation/depreciation from investments 18,585,304 2,106,990 1,290,340 230,012 ------------ ------------ ----------- ----------- CHANGE IN NET ASSETS RESULTING FROM OPERATIONS 4,861,564 (49,687,118) 316,160 (3,374,864) ------------ ------------ ----------- ----------- CHANGE IN NET ASSETS FROM CAPITAL SHARE TRANSACTIONS 16,838,779 60,107,797 (524,132) 3,847,236 ------------ ------------ ----------- ----------- CHANGE IN NET ASSETS 21,700,343 10,420,679 (207,972) 472,372 ------------ ------------ ----------- ----------- ............................................................................................................................... NET ASSETS: Beginning of period 190,685,659 180,264,980 14,086,425 13,614,053 ------------ ------------ ----------- ----------- End of period $212,386,002 $190,685,659 $13,878,453 $14,086,425 ------------ ------------ ----------- ----------- ------------ ------------ ----------- ----------- Accumulated net investment income $ (645,256) $ -- $ (96,757) $ -- ------------ ------------ ----------- ----------- ------------ ------------ ----------- -----------
36 HSBC INVESTOR FAMILY OF FUNDS See notes to financial statements. HSBC INVESTOR FAMILY OF FUNDS STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) .................................................................................
SMALL CAP EQUITY FUND OPPORTUNITY FUND ------------------------------ ------------------------------ - ------------------------------------------------------------------------------------------------------------------------------ FOR THE SIX FOR THE SIX MONTHS ENDED FOR THE MONTHS ENDED FOR THE APRIL 30, 2003 YEAR ENDED APRIL 30, 2003 YEAR ENDED (UNAUDITED) OCTOBER 31, 2002 (UNAUDITED) OCTOBER 31, 2002 - ------------------------------------------------------------------------------------------------------------------------------ CAPITAL TRANSACTIONS: CLASS A (INVESTOR) SHARES: Proceeds from shares issued $ -- $ -- $ 878,737 $ 4,308,030 Cost of shares redeemed -- -- (1,563,954) (2,279,481) ------------ ------------- ----------- ----------- Class A (Investor) Shares capital transactions -- -- (685,217) 2,028,549 ------------ ------------- ----------- ----------- ............................................................................................................................... CLASS B SHARES: Proceeds from shares issued -- -- 337,799 2,185,532 Cost of shares redeemed -- -- (136,474) (368,574) ------------ ------------- ----------- ----------- Class B Shares capital transactions -- -- 201,325 1,816,958 ------------ ------------- ----------- ----------- ............................................................................................................................... CLASS C SHARES: Proceeds from shares issued -- -- 6,418 109,966 Cost of shares redeemed -- -- (46,658) (108,237) ------------ ------------- ----------- ----------- Class C Shares capital transactions -- -- (40,240) 1,729 ------------ ------------- ----------- ----------- ............................................................................................................................... ADVISOR SHARES: Proceeds from shares issued 87,810,677 166,252,280 -- -- Cost of shares redeemed (70,971,898) (106,144,483) -- -- ------------ ------------- ----------- ----------- Advisor Shares capital transactions 16,838,779 60,107,797 -- -- ------------ ------------- ----------- ----------- CHANGE IN NET ASSETS FROM CAPITAL TRANSACTIONS $ 16,838,779 $ 60,107,797 $ (524,132) $ 3,847,236 ------------ ------------- ----------- ----------- ------------ ------------- ----------- ----------- ............................................................................................................................... SHARE TRANSACTIONS: CLASS A (INVESTOR) SHARES: Issued -- -- 114,387 456,632 Redeemed -- -- (202,361) (241,867) ------------ ------------- ----------- ----------- Change in Class A (Investor) Shares -- -- (87,974) 214,765 ------------ ------------- ----------- ----------- ............................................................................................................................... CLASS B SHARES: Issued -- -- 46,285 217,277 Redeemed -- -- (18,851) (42,806) ------------ ------------- ----------- ----------- Change in Class B Shares -- -- 27,434 174,471 ------------ ------------- ----------- ----------- ............................................................................................................................... CLASS C SHARES: Issued -- -- 829 10,963 Redeemed -- -- (6,342) (11,072) ------------ ------------- ----------- ----------- Change in Class C Shares -- -- (5,513) (109) ------------ ------------- ----------- ----------- ............................................................................................................................... ADVISOR SHARES: Issued 9,532,361 14,288,390 -- -- Redeemed (7,823,619) (9,644,921) -- -- ------------ ------------- ----------- ----------- Change in Advisor Shares 1,708,742 4,643,469 -- -- ------------ ------------- ----------- -----------
See notes to financial statements. HSBC INVESTOR FAMILY OF FUNDS 37 HSBC INVESTOR FUNDS -- LIMITED MATURITY FUND - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS ................................................................................. SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
INVESTMENT ACTIVITIES ------------------------------------------ NET REALIZED AND NET ASSET UNREALIZED GAINS TOTAL VALUE, NET (LOSSES) FROM FROM BEGINNING INVESTMENT INVESTMENT INVESTMENT OF PERIOD INCOME TRANSACTIONS ACTIVITIES - -------------------------------------------------------------------------------------------- CLASS A (INVESTOR) SHARES Period ended October 31, 2001 (b) $10.04 0.33 0.54 0.87 Year ended October 31, 2002 10.58 0.44 (0.10) 0.34 Six months ended April 30, 2003 (Unaudited) 10.43 0.19 0.17 0.36 - -------------------------------------------------------------------------------------------- CLASS B SHARES Period ended October 31, 2001 (g) $10.07 0.25 0.52 0.77 Year ended October 31, 2002 10.59 0.36 (0.09) 0.27 Six months ended April 30, 2003 (Unaudited) 10.45 0.15 0.16 0.31 - -------------------------------------------------------------------------------------------- CLASS C SHARES Period ended October 31, 2001 (i) $10.07 0.26 0.51 0.77 Year ended October 31, 2002 10.58 0.36 (0.09) 0.27 Six months ended April 30, 2003 (Unaudited) 10.44 0.15 0.17 0.32 - -------------------------------------------------------------------------------------------- CLASS Y SHARES Period ended October 31, 2001 (j) $10.00 0.37 0.59 0.96 Year ended October 31, 2002 10.59 0.46 (0.09) 0.37 Six months ended April 30, 2003 (Unaudited) 10.45 0.20 0.16 0.36 - -------------------------------------------------------------------------------------------- DIVIDENDS ------------------------------------- NET REALIZED NET GAINS FROM INVESTMENT INVESTMENT TOTAL INCOME TRANSACTIONS DIVIDENDS - --------------------------------------------------------------------------- CLASS A (INVESTOR) SHARES Period ended October 31, 2001 (b) (0.33) -- (0.33) Year ended October 31, 2002 (0.44) (0.05) (0.49) Six months ended April 30, 2003 (Unaudited) (0.20) -- (0.20) - --------------------------------------------------------------------------- CLASS B SHARES Period ended October 31, 2001 (g) (0.25) -- (0.25) Year ended October 31, 2002 (0.36) (0.05) (0.41) Six months ended April 30, 2003 (Unaudited) (0.16) -- (0.16) - --------------------------------------------------------------------------- CLASS C SHARES Period ended October 31, 2001 (i) (0.26) -- (0.26) Year ended October 31, 2002 (0.36) (0.05) (0.41) Six months ended April 30, 2003 (Unaudited) (0.16) -- (0.16) - --------------------------------------------------------------------------- CLASS Y SHARES Period ended October 31, 2001 (j) (0.37) -- (0.37) Year ended October 31, 2002 (0.46) (0.05) (0.51) Six months ended April 30, 2003 (Unaudited) (0.21) -- (0.21) - --------------------------------------------------------------------------- NET ASSET VALUE, END TOTAL OF PERIOD RETURN - -------------------------------------------------------------- CLASS A (INVESTOR) SHARES Period ended October 31, 2001 (b) $10.58 8.78%(c)(d) Year ended October 31, 2002 10.43 3.34%(d) Six months ended April 30, 2003 (Unaudited) 10.59 3.44%(c)(d) - -------------------------------------------------------------- CLASS B SHARES Period ended October 31, 2001 (g) $10.59 8.02%(c)(h) Year ended October 31, 2002 10.45 2.65%(h) Six months ended April 30, 2003 (Unaudited) 10.60 2.96%(c)(h) - -------------------------------------------------------------- CLASS C SHARES Period ended October 31, 2001 (i) $10.58 7.80%(c)(h) Year ended October 31, 2002 10.44 2.65%(h) Six months ended April 30, 2003 (Unaudited) 10.60 3.06%(c)(h) - -------------------------------------------------------------- CLASS Y SHARES Period ended October 31, 2001 (j) $10.59 9.78%(c) Year ended October 31, 2002 10.45 3.69% Six months ended April 30, 2003 (Unaudited) 10.60 3.47%(c) - -------------------------------------------------------------- RATIOS/SUPPLEMENTARY DATA ------------------------------------------------------------------------ RATIO OF NET RATIO OF INVESTMENT RATIO OF NET ASSETS AT EXPENSES INCOME TO EXPENSES END OF TO AVERAGE AVERAGE TO AVERAGE PORTFOLIO PERIOD(000'S) NET ASSETS NET ASSETS NET ASSETS TURNOVER(a) - ------------------------------------------------------------------------------------------------------------ CLASS A (INVESTOR) SHARES Period ended October 31, 2001 (b) $ 977 1.10%(e) 4.27%(e) 1.49%(e)(f) 102.01% Year ended October 31, 2002 1,608 0.96% 4.14% 0.96% 44.04% Six months ended April 30, 2003 (Unaudited) 1,735 0.92%(e) 3.64%(e) 0.92%(e) 32.10% - ------------------------------------------------------------------------------------------------------------ CLASS B SHARES Period ended October 31, 2001 (g) $ 896 1.85%(e) 3.52%(e) 7.59%(e)(f) 102.01% Year ended October 31, 2002 4,178 1.70% 3.30% 1.70% 44.04% Six months ended April 30, 2003 (Unaudited) 5,908 1.66%(e) 2.86%(e) 1.66%(e) 32.10% - ------------------------------------------------------------------------------------------------------------ CLASS C SHARES Period ended October 31, 2001 (i) $ 161 1.85%(e) 3.60%(e) 17.61%(e)(f) 102.01% Year ended October 31, 2002 1,759 1.70% 3.26% 1.70% 44.04% Six months ended April 30, 2003 (Unaudited) 2,432 1.66%(e) 2.87%(e) 1.66%(e) 32.10% - ------------------------------------------------------------------------------------------------------------ CLASS Y SHARES Period ended October 31, 2001 (j) $ 67,315 0.85%(e) 4.59%(e) 0.85%(e) 102.01% Year ended October 31, 2002 94,886 0.71% 4.42% 0.71% 44.04% Six months ended April 30, 2003 (Unaudited) 119,913 0.67%(e) 3.88%(e) 0.67%(e) 32.10% - ------------------------------------------------------------------------------------------------------------
(a) Portfolio turnover is calculated on the basis of the respective Portfolio in which the Fund invests all of its investable assets. (b) Class A (Investor) Shares commenced operations on February 7, 2001. (c) Not annualized. (d) Excludes sales charge. (e) Annualized. (f) During the period certain fees were reduced. If such fee reductions had not occurred, the ratio would have been as indicated. (g) Class B Shares commenced operations on February 15, 2001. (h) Excludes redemption charge. (i) Class C Shares commenced operations on February 13, 2001. (j) Class Y Shares commenced operations on January 23, 2001. See notes to financial statements. 38 HSBC INVESTOR FAMILY OF FUNDS HSBC ADVISOR FUNDS TRUST -- FIXED INCOME FUND - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS ................................................................................. SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
INVESTMENT ACTIVITIES ------------------------------------------ NET REALIZED AND NET ASSET UNREALIZED GAINS PERIOD (LOSSES) FROM TOTAL VALUE, NET INVESTMENT AND FROM BEGINNING OF INVESTMENT FUTURES INVESTMENT PERIOD INCOME TRANSACTIONS ACTIVITIES - ---------------------------------------------------------------------------------------------- ADVISOR SHARES Year ended October 31, 1998 $10.92 0.65 0.02 0.67 Year ended October 31, 1999 10.81 0.62 (0.51) 0.11 Year ended October 31, 2000 10.01 0.69 (0.02) 0.67 Year ended October 31, 2001 9.99 0.67 0.80 1.47 Year ended October 31, 2002 10.81 0.55 (0.14) 0.41 Six months ended April 30, 2003 (Unaudited) 10.63 0.24 0.31 0.55 - ---------------------------------------------------------------------------------------------- DIVIDENDS --------------------------------------- NET REALIZED GAINS FROM NET ASSET NET INVESTMENT VALUE, INVESTMENT AND FUTURES TOTAL END OF TOTAL INCOME TRANSACTIONS DIVIDENDS PERIOD RETURN - -------------------------------------------------------------------------------------------------- ADVISOR SHARES Year ended October 31, 1998 (0.65) (0.13) (0.78) $10.81 6.26% Year ended October 31, 1999 (0.62) (0.29) (0.91) 10.01 1.01% Year ended October 31, 2000 (0.69) -- (0.69) 9.99 6.98% Year ended October 31, 2001 (0.65) -- (0.65) 10.81 15.11% Year ended October 31, 2002 (0.59) -- (0.59) 10.63 3.94% Six months ended April 30, 2003 (Unaudited) (0.26) -- (0.26) 10.92 5.19%(b) - -------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTARY DATA -------------------------------------------------------- RATIO OF NET NET ASSETS RATIO OF INVESTMENT AT END OF EXPENSES INCOME TO PERIOD TO AVERAGE AVERAGE NET PORTFOLIO (000'S) NET ASSETS ASSETS TURNOVER(a) - --------------------------------------------------------------------------------------------- ADVISOR SHARES Year ended October 31, 1998 $97,728 0.78% 5.87% 126.40% Year ended October 31, 1999 114,405 0.69% 6.31% 433.26% Year ended October 31, 2000 134,458 0.61% 6.66% 440.49% Year ended October 31, 2001 150,580 0.63% 6.45% 341.26% Year ended October 31, 2002 284,841 0.56% 5.06% 77.82% Six months ended April 30, 2003 (Unaudited) 342,183 0.55%(c) 4.37%(c) 30.68% - ---------------------------------------------------------------------------------------------
(a) Portfolio turnover is calculated on the basis of the respective Portfolio in which the Fund invests all of its investable assets. (b) Not annualized. (c) Annualized. See notes to financial statements. HSBC INVESTOR FAMILY OF FUNDS 39 HSBC INVESTOR FUNDS -- BOND FUND - ------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS ................................................................................. SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
INVESTMENT ACTIVITIES DIVIDENDS ------------------------------------------ ---------- NET REALIZED AND UNREALIZED GAINS NET ASSET (LOSSES) FROM TOTAL VALUE, NET INVESTMENT AND FROM NET BEGINNING INVESTMENT FUTURES INVESTMENT INVESTMENT OF PERIOD INCOME TRANSACTIONS ACTIVITIES INCOME - -------------------------------------------------------------------------------------------------------- CLASS A (INVESTOR) SHARES Year ended October 31, 1998 $10.50 0.59 0.01 0.60 (0.59) Year ended October 31, 1999 10.51 0.57 (0.49) 0.08 (0.57) Year ended October 31, 2000 9.78 0.61 (0.01) 0.60 (0.62) Year ended October 31, 2001 9.76 0.60 0.77 1.37 (0.58) Year ended October 31, 2002 10.55 0.49 (0.14) 0.35 (0.52) Six months ended April 30, 2003 (Unaudited) 10.38 0.20 0.31 0.51 (0.22) - -------------------------------------------------------------------------------------------------------- CLASS B SHARES Period ended October 31, 1998 (f) $10.63 0.41 (0.12) 0.29 (0.41) Year ended October 31, 1999 10.51 0.49 (0.49) -- (0.49) Year ended October 31, 2000 9.78 0.54 (0.01) 0.53 (0.54) Year ended October 31, 2001 9.77 0.52 0.76 1.28 (0.50) Year ended October 31, 2002 10.55 0.41 (0.13) 0.28 (0.44) Six months ended April 30, 2003 (Unaudited) 10.39 0.16 0.30 0.46 (0.18) - -------------------------------------------------------------------------------------------------------- CLASS C SHARES Period ended October 31, 1999 (h) $10.46 0.47 (0.45) 0.02 (0.47) Year ended October 31, 2000 9.77 0.55 (0.01) 0.54 (0.55) Year ended October 31, 2001 9.76 0.51 0.77 1.28 (0.50) Year ended October 31, 2002 10.54 0.41 (0.13) 0.28 (0.44) Six months ended April 30, 2003 (Unaudited) 10.38 0.16 0.30 0.46 (0.18) - -------------------------------------------------------------------------------------------------------- DIVIDENDS -------------------------- NET REALIZED GAINS FROM INVESTMENT AND FUTURES TOTAL TRANSACTIONS DIVIDENDS - ---------------------------------------------------------------- CLASS A (INVESTOR) SHARES Year ended October 31, 1998 -- (0.59) Year ended October 31, 1999 (0.24) (0.81) Year ended October 31, 2000 -- (0.62) Year ended October 31, 2001 -- (0.58) Year ended October 31, 2002 -- (0.52) Six months ended April 30, 2003 (Unaudited) -- (0.22) - ---------------------------------------------------------------- CLASS B SHARES Period ended October 31, 1998 (f) -- (0.41) Year ended October 31, 1999 (0.24) (0.73) Year ended October 31, 2000 -- (0.54) Year ended October 31, 2001 -- (0.50) Year ended October 31, 2002 -- (0.44) Six months ended April 30, 2003 (Unaudited) -- (0.18) - ---------------------------------------------------------------- CLASS C SHARES Period ended October 31, 1999 (h) (0.24) (0.71) Year ended October 31, 2000 -- (0.55) Year ended October 31, 2001 -- (0.50) Year ended October 31, 2002 -- (0.44) Six months ended April 30, 2003 (Unaudited) -- (0.18) - ---------------------------------------------------------------- NET ASSET VALUE, END OF TOTAL PERIOD RETURN - ---------------------------------------------------------------- CLASS A (INVESTOR) SHARES Year ended October 31, 1998 $10.51 5.83 %(c) Year ended October 31, 1999 9.78 0.68 %(c) Year ended October 31, 2000 9.76 6.39 %(c) Year ended October 31, 2001 10.55 14.41 %(c) Year ended October 31, 2002 10.38 3.44 %(c) Six months ended April 30, 2003 (Unaudited) 10.67 4.98 %(c)(d) - ---------------------------------------------------------------- CLASS B SHARES Period ended October 31, 1998 (f) $10.51 2.84 %(d)(g) Year ended October 31, 1999 9.78 (0.01)%(f) Year ended October 31, 2000 9.77 5.67 %(f) Year ended October 31, 2001 10.55 13.43 %(f) Year ended October 31, 2002 10.39 2.76 %(f) Six months ended April 30, 2003 (Unaudited) 10.67 4.49 %(d)(f) - ---------------------------------------------------------------- CLASS C SHARES Period ended October 31, 1999 (h) $ 9.77 0.11 %(d)(f) Year ended October 31, 2000 9.76 5.71 %(f) Year ended October 31, 2001 10.54 13.44 %(f) Year ended October 31, 2002 10.38 2.77 %(f) Six months ended April 30, 2003 (Unaudited) 10.66 4.50 %(d)(f) - ---------------------------------------------------------------- RATIOS/SUPPLEMENTARY DATA ---------------------------------------------------------------------- RATIO OF NET NET ASSETS RATIO OF INVESTMENT RATIO OF AT END OF EXPENSES INCOME TO EXPENSES TO PERIOD TO AVERAGE AVERAGE NET AVERAGE NET PORTFOLIO (000'S) NET ASSETS ASSETS ASSETS(a) TURNOVER(b) - ----------------------------------------------------------------------------------------------------------- CLASS A (INVESTOR) SHARES Year ended October 31, 1998 $ 4,826 1.10% 5.51% 1.61% 126.40% Year ended October 31, 1999 4,331 1.07% 5.84% 2.62% 433.26% Year ended October 31, 2000 3,828 1.10% 6.13% 3.31% 440.49% Year ended October 31, 2001 6,683 1.10% 5.92% 2.61% 341.26% Year ended October 31, 2002 12,053 1.10% 4.52% 1.47% 77.82% Six months ended April 30, 2003 (Unaudited) 13,707 1.10%(e) 3.83%(e) 1.23%(e) 30.68% - ----------------------------------------------------------------------------------------------------------- CLASS B SHARES Period ended October 31, 1998 (f) $ 364 1.85%(e) 4.76%(e) 2.36%(e) 126.40% Year ended October 31, 1999 345 1.79% 5.13% 3.37% 433.26% Year ended October 31, 2000 279 1.85% 5.38% 4.03% 440.49% Year ended October 31, 2001 1,494 1.85% 5.04% 3.32% 341.26% Year ended October 31, 2002 6,124 1.85% 3.66% 2.18% 77.82% Six months ended April 30, 2003 (Unaudited) 7,194 1.85%(e) 3.07%(e) 1.98%(e) 30.68% - ----------------------------------------------------------------------------------------------------------- CLASS C SHARES Period ended October 31, 1999 (h) $ 152 1.95%(e) 4.96%(e) 3.50%(e) 433.26% Year ended October 31, 2000 138 1.85% 5.38% 4.05% 440.49% Year ended October 31, 2001 526 1.85% 5.11% 3.34% 341.26% Year ended October 31, 2002 983 1.85% 3.75% 2.21% 77.82% Six months ended April 30, 2003 (Unaudited) 861 1.85%(e) 3.13%(e) 1.99%(e) 30.68% - -----------------------------------------------------------------------------------------------------------
(a) During the period certain fees were reduced. If such fee reductions had not occurred, the ratio would have been as indicated. (b) Portfolio turnover is calculated on the basis of the respective Portfolio in which the Fund invests all of its investable assets. (c) Excludes sales charge. (d) Not annualized. (e) Annualized. (f) Class B Shares commenced operations on January 6, 1998. (g) Excludes redemption charge. (h) Class C Shares commenced operations on November 4, 1998. See notes to financial statements. 40 HSBC INVESTOR FAMILY OF FUNDS HSBC INVESTOR FUNDS -- NEW YORK TAX-FREE BOND FUND - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS ................................................................................. SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
INVESTMENT ACTIVITIES ------------------------------------------ NET REALIZED AND UNREALIZED GAINS NET ASSET (LOSSES) FROM VALUE, NET INVESTMENT AND TOTAL FROM BEGINNING OF INVESTMENT FUTURES INVESTMENT PERIOD INCOME TRANSACTIONS ACTIVITIES - ---------------------------------------------------------------------------------------------- CLASS A (INVESTOR) SHARES Year ended October 31, 1998 $10.64 0.47 0.33 0.80 Year ended October 31, 1999 10.93 0.46 (0.83) (0.37) Year ended October 31, 2000 10.08 0.46 0.33 0.79 Year ended October 31, 2001 10.39 0.41 0.54 0.95 Year ended October 31, 2002 10.93 0.38 0.16 0.54 Six months ended April 30, 2003 (Unaudited) 11.09 0.20 0.21 0.41 - ---------------------------------------------------------------------------------------------- CLASS B SHARES Period ended October 31, 1998 (f) $10.81 0.37 0.11 0.48 Year ended October 31, 1999 10.92 0.38 (0.83) (0.45) Year ended October 31, 2000 10.07 0.39 0.33 0.72 Year ended October 31, 2001 10.38 0.33 0.54 0.87 Year ended October 31, 2002 10.92 0.30 0.16 0.46 Six months ended April 30, 2003 (Unaudited) 11.08 0.15 0.21 0.36 - ---------------------------------------------------------------------------------------------- CLASS C SHARES Period ended October 31, 1999 (h) $10.90 0.34 (0.77) (0.43) Year ended October 31, 2000 10.11 0.39 0.33 0.72 Year ended October 31, 2001 10.42 0.33 0.54 0.87 Year ended October 31, 2002 10.96 0.30 0.16 0.46 Six months ended April 30, 2003 (Unaudited) 11.12 0.15 0.21 0.36 - ---------------------------------------------------------------------------------------------- CLASS Y SHARES Year ended October 31, 1998 $10.64 0.49 0.33 0.82 Year ended October 31, 1999 10.93 0.48 (0.84) (0.36) Year ended October 31, 2000 10.07 0.49 0.34 0.83 Year ended October 31, 2001 10.39 0.44 0.54 0.98 Year ended October 31, 2002 10.93 0.41 0.16 0.57 Six months ended April 30, 2003 (Unaudited) 11.09 0.21 0.21 0.42 - ---------------------------------------------------------------------------------------------- DIVIDENDS --------------------------------------- NET REALIZED GAINS FROM NET ASSET NET INVESTMENT AND VALUE, INVESTMENT FUTURES TOTAL END OF TOTAL INCOME TRANSACTIONS DIVIDENDS PERIOD RETURN - ------------------------------------------------------------------------------------------------------- CLASS A (INVESTOR) SHARES Year ended October 31, 1998 (0.47) (0.04) (0.51) $10.93 7.65 %(b) Year ended October 31, 1999 (0.46) (0.02) (0.48) 10.08 (3.62)%(b) Year ended October 31, 2000 (0.46) (0.02) (0.48) 10.39 8.03 %(b) Year ended October 31, 2001 (0.41) -- (0.41) 10.93 9.26 %(b) Year ended October 31, 2002 (0.38) -- (0.38) 11.09 5.08 %(b) Six months ended April 30, 2003 (Unaudited) (0.20) -- (0.20) 11.30 3.69 %(b)(d) - ------------------------------------------------------------------------------------------------------- CLASS B SHARES Period ended October 31, 1998 (f) (0.37) -- (0.37) $10.92 4.50 %(d)(g) Year ended October 31, 1999 (0.38) (0.02) (0.40) 10.07 (4.30)%(g) Year ended October 31, 2000 (0.39) (0.02) (0.41) 10.38 7.27 %(g) Year ended October 31, 2001 (0.33) -- (0.33) 10.92 8.44 %(g) Year ended October 31, 2002 (0.30) -- (0.30) 11.08 4.30 %(g) Six months ended April 30, 2003 (Unaudited) (0.15) -- (0.15) 11.29 3.31 %(d)(g) - ------------------------------------------------------------------------------------------------------- CLASS C SHARES Period ended October 31, 1999 (h) (0.34) (0.02) (0.36) $10.11 (4.10)%(d)(g) Year ended October 31, 2000 (0.39) (0.02) (0.41) 10.42 7.23 %(g) Year ended October 31, 2001 (0.33) -- (0.33) 10.96 8.40 %(g) Year ended October 31, 2002 (0.30) -- (0.30) 11.12 4.28 %(g) Six months ended April 30, 2003 (Unaudited) (0.15) -- (0.15) 11.33 3.29 %(d)(g) - ------------------------------------------------------------------------------------------------------- CLASS Y SHARES Year ended October 31, 1998 (0.49) (0.04) (0.53) $10.93 7.87 % Year ended October 31, 1999 (0.48) (0.02) (0.50) 10.07 (3.45)% Year ended October 31, 2000 (0.49) (0.02) (0.51) 10.39 8.41 % Year ended October 31, 2001 (0.44) -- (0.44) 10.93 9.53 % Year ended October 31, 2002 (0.41) -- (0.41) 11.09 5.34 % Six months ended April 30, 2003 (Unaudited) (0.21) -- (0.21) 11.30 3.82 %(d) - ------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTARY DATA --------------------------------------------------------------------------- RATIO OF NET NET ASSETS RATIO OF INVESTMENT RATIO OF AT END OF EXPENSES INCOME EXPENSES TO PERIOD TO AVERAGE TO AVERAGE AVERAGE NET PORTFOLIO (000'S) NET ASSETS NET ASSETS ASSETS TURNOVER(a) - ---------------------------------------------------------------------------------------------------------------- CLASS A (INVESTOR) SHARES Year ended October 31, 1998 $23,153 0.95% 4.28% 1.20%(c) 100.35% Year ended October 31, 1999 17,568 0.96% 4.22% 1.21%(c) 46.56% Year ended October 31, 2000 12,401 0.93% 4.60% 1.06%(c) 34.12% Year ended October 31, 2001 17,722 0.95% 3.91% 1.07%(c) 0.00% Year ended October 31, 2002 16,341 0.95% 3.52% 0.95% 30.70% Six months ended April 30, 2003 (Unaudited) 18,745 0.91%(e) 3.57%(e) 0.91%(e) 12.42% - ---------------------------------------------------------------------------------------------------------------- CLASS B SHARES Period ended October 31, 1998 (f) $ 618 1.70%(e) 3.53%(e) 1.95%(c)(e) 100.35% Year ended October 31, 1999 564 1.71% 3.48% 1.96%(c) 46.56% Year ended October 31, 2000 828 1.70% 3.81% 1.74%(c) 34.12% Year ended October 31, 2001 5,619 1.70% 3.05% 1.82%(c) 0.00% Year ended October 31, 2002 12,699 1.70% 2.74% 1.70% 30.70% Six months ended April 30, 2003 (Unaudited) 15,974 1.65%(e) 2.82%(e) 1.65%(e) 12.42% - ---------------------------------------------------------------------------------------------------------------- CLASS C SHARES Period ended October 31, 1999 (h) $ 256 1.70%(e) 3.46%(e) 2.02%(c)(e) 46.56% Year ended October 31, 2000 416 1.71% 3.77% 1.73%(c) 34.12% Year ended October 31, 2001 1,523 1.70% 3.04% 1.83%(c) 0.00% Year ended October 31, 2002 2,608 1.70% 2.74% 1.70% 30.70% Six months ended April 30, 2003 (Unaudited) 3,340 1.65%(e) 2.80%(e) 1.65%(e) 12.42% - ---------------------------------------------------------------------------------------------------------------- CLASS Y SHARES Year ended October 31, 1998 $ 8,641 0.70% 4.53% 0.95%(c) 100.35% Year ended October 31, 1999 8,619 0.71% 4.49% 0.96%(c) 46.56% Year ended October 31, 2000 9,514 0.69% 4.82% 0.78%(c) 34.12% Year ended October 31, 2001 14,989 0.70% 4.19% 0.83%(c) 0.00% Year ended October 31, 2002 19,753 0.70% 3.76% 0.70% 30.70% Six months ended April 30, 2003 (Unaudited) 18,502 0.66%(e) 3.83%(e) 0.66%(e) 12.42% - ----------------------------------------------------------------------------------------------------------------
(a) Portfolio turnover is calculated on the basis of the fund as a whole, without the distinguishing between the classes of shares issued. (b) Excludes sales charge. (c) During the period certain fees were reduced. If such fee reductions had not occurred, the ratio would have been as indicated. (d) Not annualized. (e) Annualized. (f) Class B Shares commenced operations on January 6, 1998. (g) Excludes redemption charge. (h) Class C Shares commenced operations on November 4, 1998. See notes to financial statements. HSBC INVESTOR FAMILY OF FUNDS 41 HSBC INVESTOR FUNDS -- BALANCED FUND - ------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS ................................................................................. SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
INVESTMENT ACTIVITIES DIVIDENDS ---------------------------------------- ---------------------- NET REALIZED AND UNREALIZED NET ASSET GAINS (LOSSES) TOTAL NET ASSET VALUE, NET FROM FROM NET VALUE, BEGINNING INVESTMENT INVESTMENT INVESTMENT INVESTMENT TOTAL END OF OF PERIOD INCOME TRANSACTIONS ACTIVITIES INCOME DIVIDENDS PERIOD - ------------------------------------------------------------------------------------------------------------------------------ CLASS A (INVESTOR) SHARES Period ended October 31, 2001 (c) $ 9.55 0.11 (1.02) (0.91) (0.09) (0.09) $8.55 Year ended October 31, 2002 8.55 0.15 (0.92) (0.77) (0.09) (0.09) 7.69 Six months ended April 30, 2003 (Unaudited) 7.69 0.06 0.22 0.28 (0.15) (0.15) 7.82 - ------------------------------------------------------------------------------------------------------------------------------ CLASS B SHARES Period ended October 31, 2001 (g) $ 9.80 0.08 (1.25) (1.17) (0.08) (0.08) $8.55 Year ended October 31, 2002 8.55 0.13 (0.97) (0.84) (0.07) (0.07) 7.64 Six months ended April 30, 2003 (Unaudited) 7.64 0.03 0.22 0.25 (0.12) (0.12) 7.77 - ------------------------------------------------------------------------------------------------------------------------------ CLASS C SHARES Period ended October 31, 2001 (i) $ 9.78 0.07 (1.24) (1.17) (0.06) (0.06) $8.55 Year ended October 31, 2002 8.55 0.12 (0.96) (0.84) (0.06) (0.06) 7.65 Six months ended April 30, 2003 (Unaudited) 7.65 0.04 0.22 0.26 (0.12) (0.12) 7.79 - ------------------------------------------------------------------------------------------------------------------------------ CLASS Y SHARES Period ended October 31, 2001 (j) $10.00 0.16 (1.45) (1.29) (0.09) (0.09) $8.62 Year ended October 31, 2002 8.62 0.16 (0.93) (0.77) (0.10) (0.10) 7.75 Six months ended April 30, 2003 (Unaudited) 7.75 0.07 0.23 0.30 (0.16) (0.16) 7.89 - ------------------------------------------------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTARY DATA -------------------------------------------------------------------- RATIO OF NET NET ASSETS RATIO OF INVESTMENT RATIO OF AT END OF EXPENSES TO INCOME TO EXPENSES TO PERIOD AVERAGE NET AVERAGE NET AVERAGE NET PORTFOLIO TOTAL RETURN (000'S) ASSETS ASSETS ASSETS(a) TURNOVER(b) - ------------------------------------------------------------------------------------------------------------------------- CLASS A (INVESTOR) SHARES Period ended October 31, 2001 (c) (9.04)%(d)(e) $ 313 1.20%(f) 1.88%(f) 2.05%(f) 39.95% Year ended October 31, 2002 (9.07)%(e) 419 1.20% 1.71% 1.88% 58.06% Six months ended April 30, 2003 (Unaudited) 3.66 %(d)(e) 484 1.20%(f) 1.69%(f) 1.92%(f) 21.99% - ------------------------------------------------------------------------------------------------------------------------- CLASS B SHARES Period ended October 31, 2001 (g) (11.41)%(d)(h) $ 641 1.95%(f) 1.14%(f) 2.78%(f) 39.95% Year ended October 31, 2002 (9.93)%(h) 1,479 1.95% 0.97% 2.63% 58.06% Six months ended April 30, 2003 (Unaudited) 3.29 %(d)(h) 1,760 1.95%(f) 0.94%(f) 2.67%(f) 21.99% - ------------------------------------------------------------------------------------------------------------------------- CLASS C SHARES Period ended October 31, 2001 (i) (11.46)%(d)(h) $ 107 1.95%(f) 1.19%(f) 2.71%(f) 39.95% Year ended October 31, 2002 (9.85)%(h) 97 1.95% 0.96% 2.63% 58.06% Six months ended April 30, 2003 (Unaudited) 3.39 %(d)(h) 101 1.95%(f) 0.95%(f) 2.67%(f) 21.99% - ------------------------------------------------------------------------------------------------------------------------- CLASS Y SHARES Period ended October 31, 2001 (j) (12.95)%(d) $15,152 0.95%(f) 2.29%(f) 1.58%(f) 39.95% Year ended October 31, 2002 (9.02)% 12,589 0.95% 1.96% 1.63% 58.06% Six months ended April 30, 2003 (Unaudited) 3.91 %(d) 13,288 0.95%(f) 1.95%(f) 1.67%(f) 21.99% - -------------------------------------------------------------------------------------------------------------------------
(a) During the period certain fees were reduced. If such fee reductions had not occurred, the ratio would have been as indicated. (b) Portfolio turnover is calculated on the basis of the fund as a whole, without the distinguishing between the classes of shares issued. (c) Class A (Investor) Shares commenced operations on February 20, 2001. (d) Not annualized. (e) Excludes sales charge. (f) Annualized. (g) Class B Shares commenced operations on February 9, 2001. (h) Excludes redemption charge. (i) Class C Shares commenced operations on February 13, 2001. (j) Class Y Shares commenced operations on January 18, 2001. See notes to financial statements. 42 HSBC INVESTOR FAMILY OF FUNDS HSBC INVESTOR FUNDS -- EQUITY FUND - ------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS ................................................................................. SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
INVESTMENT ACTIVITIES ---------------------------------------- NET REALIZED AND UNREALIZED GAINS (LOSSES) NET ASSET FROM TOTAL VALUE, NET INVESTMENT FROM BEGINNING INVESTMENT AND FUTURES INVESTMENT OF PERIOD INCOME TRANSACTIONS ACTIVITIES - ------------------------------------------------------------------------------------------ CLASS A (INVESTOR) SHARES Year ended October 31, 1998 $15.00 0.05 2.80 2.85 Year ended October 31, 1999 16.95 0.05 3.32 3.37 Year ended October 31, 2000 19.89 0.06 (0.51) (0.45) Year ended October 31, 2001 17.48 0.03 (4.48) (4.45) Year ended October 31, 2002 13.01 0.07 (2.76) (2.69) Six months ended April 30, 2003 (Unaudited) 10.29 0.03 0.47 0.50 - ------------------------------------------------------------------------------------------ CLASS B SHARES Period ended October 31, 1998 (e) $14.88 (0.01) 2.07 2.06 Year ended October 31, 1999 16.92 (0.08) 3.30 3.22 Year ended October 31, 2000 19.74 (0.07) (0.52) (0.59) Year ended October 31, 2001 17.26 (0.08) (4.40) (4.48) Year ended October 31, 2002 12.78 (0.04) (2.70) (2.74) Six months ended April 30, 2003 (Unaudited) 10.04 (0.01) 0.46 0.45 - ------------------------------------------------------------------------------------------ CLASS C SHARES Period ended October 31, 1999 (g) $17.08 -- 3.19 3.19 Year ended October 31, 2000 19.83 (0.07) (0.51) (0.58) Year ended October 31, 2001 17.36 (0.10) (4.42) (4.52) Year ended October 31, 2002 12.84 (0.05) (2.69) (2.74) Six months ended April 30, 2003 (Unaudited) 10.10 (0.01) 0.45 0.44 - ------------------------------------------------------------------------------------------ CLASS Y SHARES Year ended October 31, 1998 $15.01 0.08 2.79 2.87 Year ended October 31, 1999 16.95 0.10 3.32 3.42 Year ended October 31, 2000 19.89 0.10 (0.51) (0.41) Year ended October 31, 2001 17.48 0.06 (4.47) (4.41) Year ended October 31, 2002 13.01 0.12 (2.78) (2.66) Six months ended April 30, 2003 (Unaudited) 10.29 0.03 0.47 0.50 - ------------------------------------------------------------------------------------------ DIVIDENDS ------------------------------------- NET REALIZED GAINS FROM NET ASSET NET INVESTMENT VALUE, INVESTMENT AND FUTURES TOTAL END OF INCOME TRANSACTIONS DIVIDENDS PERIOD - -------------------------------------------------------------------------------------- CLASS A (INVESTOR) SHARES Year ended October 31, 1998 (0.05) (0.85) (0.90) $16.95 Year ended October 31, 1999 (0.04) (0.39) (0.43) 19.89 Year ended October 31, 2000 (0.07) (1.89) (1.96) 17.48 Year ended October 31, 2001 (0.02) -- (0.02) 13.01 Year ended October 31, 2002 (0.03) -- (0.03) 10.29 Six months ended April 30, 2003 (Unaudited) (0.03) -- (0.03) 10.76 - -------------------------------------------------------------------------------------- CLASS B SHARES Period ended October 31, 1998 (e) (0.02) -- (0.02) $16.92 Year ended October 31, 1999 (0.01) (0.39) (0.40) 19.74 Year ended October 31, 2000 -- (1.89) (1.89) 17.26 Year ended October 31, 2001 -- -- -- 12.78 Year ended October 31, 2002 -- -- -- 10.04 Six months ended April 30, 2003 (Unaudited) -- -- -- 10.49 - -------------------------------------------------------------------------------------- CLASS C SHARES Period ended October 31, 1999 (g) (0.05) (0.39) (0.44) $19.83 Year ended October 31, 2000 -- (1.89) (1.89) 17.36 Year ended October 31, 2001 -- -- -- 12.84 Year ended October 31, 2002 -- -- -- 10.10 Six months ended April 30, 2003 (Unaudited) -- -- -- 10.54 - -------------------------------------------------------------------------------------- CLASS Y SHARES Year ended October 31, 1998 (0.08) (0.85) (0.93) $16.95 Year ended October 31, 1999 (0.09) (0.39) (0.48) 19.89 Year ended October 31, 2000 (0.11) (1.89) (2.00) 17.48 Year ended October 31, 2001 (0.06) -- (0.06) 13.01 Year ended October 31, 2002 (0.06) -- (0.06) 10.29 Six months ended April 30, 2003 (Unaudited) (0.04) -- (0.04) 10.75 - -------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTARY DATA ----------------------------------------------------------------------- RATIO OF NET INVESTMENT NET ASSETS RATIO OF INCOME RATIO OF AT END OF EXPENSES TO (LOSS) TO EXPENSES TO PERIOD AVERAGE AVERAGE AVERAGE NET PORTFOLIO TOTAL RETURN (000'S) NET ASSETS NET ASSETS ASSETS TURNOVER(a) - ---------------------------------------------------------------------------------------------------------------------------- CLASS A (INVESTOR) SHARES Year ended October 31, 1998 19.98 %(b) $ 23,559 1.03% 0.30% 1.03% 176.34% Year ended October 31, 1999 20.23 %(b) 27,942 0.94% 0.26% 0.94% 70.85% Year ended October 31, 2000 (2.38)%(b) 22,558 0.93% 0.34% 0.93% 91.81% Year ended October 31, 2001 (25.49)%(b) 17,223 1.01% 0.14% 1.01% 51.65% Year ended October 31, 2002 (20.74)%(b) 16,881 0.96% 0.34% 0.96% 62.60% Six months ended April 30, 2003 (Unaudited) 4.85 %(b)(c) 17,154 0.95%(d) 0.44%(d) 0.95%(d) 32.49% - ---------------------------------------------------------------------------------------------------------------------------- CLASS B SHARES Period ended October 31, 1998 (e) 13.84 %(c)(f) $ 956 1.78%(d) (0.45)%(d) 1.78%(d) 176.34% Year ended October 31, 1999 19.32 %(f) 1,775 1.69% (0.50)% 1.69% 70.85% Year ended October 31, 2000 (3.13)%(f) 1,604 1.65% (0.40)% 1.65% 91.81% Year ended October 31, 2001 (25.96)%(f) 1,389 1.76% (0.61)% 1.76% 51.65% Year ended October 31, 2002 (21.44)%(f) 1,708 1.70% (0.41)% 1.70% 62.60% Six months ended April 30, 2003 (Unaudited) 4.48 %(c)(f) 1,875 1.70%(d) (0.31)%(d) 1.70%(d) 32.49% - ---------------------------------------------------------------------------------------------------------------------------- CLASS C SHARES Period ended October 31, 1999 (g) 19.05 %(c)(f) $ 1,626 1.33%(d) (0.16)%(d) 1.33%(d) 70.85% Year ended October 31, 2000 (3.11)%(f) 1,204 1.65% (0.37)% 1.65% 91.81% Year ended October 31, 2001 (26.04)%(f) 768 1.75% (0.60)% 1.75% 51.65% Year ended October 31, 2002 (21.34)%(f) 568 1.71% (0.43)% 1.71% 62.60% Six months ended April 30, 2003 (Unaudited) 4.36 %(c)(f) 493 1.70%(d) (0.31)%(d) 1.70%(d) 32.49% - ---------------------------------------------------------------------------------------------------------------------------- CLASS Y SHARES Year ended October 31, 1998 20.16 % $210,498 0.78% 0.55% 0.78% 176.34% Year ended October 31, 1999 20.59 % 245,342 0.69% 0.51% 0.69% 70.85% Year ended October 31, 2000 (2.19)% 204,772 0.68% 0.58% 0.68% 91.81% Year ended October 31, 2001 (25.27)% 127,306 0.75% 0.40% 0.75% 51.65% Year ended October 31, 2002 (20.53)% 173,738 0.70% 0.60% 0.70% 62.60% Six months ended April 30, 2003 (Unaudited) 4.91 %(c) 200,600 0.70%(d) 0.68%(d) 0.70%(d) 32.49% - ----------------------------------------------------------------------------------------------------------------------------
(a) Portfolio turnover is calculated on the basis of the fund as a whole, without the distinguishing between the classes of shares issued. (b) Excludes sales charge. (c) Not annualized. (d) Annualized. (e) Class B Shares commenced operations on January 6, 1998. (f) Excludes redemption charge. (g) Class C Shares commenced operations on November 4, 1998. See notes to financial statements. HSBC INVESTOR FAMILY OF FUNDS 43 HSBC INVESTOR FUNDS -- GROWTH AND INCOME FUND - ------------------------------------------------------------------------------ FINANCIAL HIGHLIGHTS ............................................................................... SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
INVESTMENT ACTIVITIES ------------------------------------------ NET REALIZED AND NET ASSET NET UNREALIZED GAINS VALUE, INVESTMENT (LOSSES) FROM TOTAL FROM BEGINNING OF INCOME INVESTMENT INVESTMENT PERIOD (LOSS) TRANSACTIONS ACTIVITIES - ------------------------------------------------------------------------------------------------ CLASS A (INVESTOR) SHARES Period ended October 31, 2001 (b) $10.06 0.01 (1.15) (1.14) Year ended October 31, 2002 8.91 0.04 (1.73) (1.69) Six months ended April 30, 2003 (Unaudited) 7.21 0.03 0.26 0.29 - ------------------------------------------------------------------------------------------------ CLASS B SHARES Period ended October 31, 2001 (f) $ 9.54 (0.01) (0.64) (0.65) Year ended October 31, 2002 8.88 (0.00)* (1.74) (1.74) Six months ended April 30, 2003 (Unaudited) 7.14 (0.01) 0.27 0.26 - ------------------------------------------------------------------------------------------------ CLASS Y SHARES Period ended October 31, 2001 (h) $10.00 0.02 (1.09) (1.07) Year ended October 31, 2002 8.92 0.06 (1.73) (1.67) Six months ended April 30, 2003 (Unaudited) 7.22 0.04 0.27 0.31 - ------------------------------------------------------------------------------------------------ DIVIDENDS ---------------------- NET ASSET NET VALUE, INVESTMENT TOTAL END OF INCOME DIVIDENDS PERIOD - ------------------------------------------------------------------------ CLASS A (INVESTOR) SHARES Period ended October 31, 2001 (b) (0.01) (0.01) $8.91 Year ended October 31, 2002 (0.01) (0.01) 7.21 Six months ended April 30, 2003 (Unaudited) (0.03) (0.03) 7.47 - ------------------------------------------------------------------------ CLASS B SHARES Period ended October 31, 2001 (f) (0.01) (0.01) $8.88 Year ended October 31, 2002 -- -- 7.14 Six months ended April 30, 2003 (Unaudited) (0.00)* (0.00)* 7.40 - ------------------------------------------------------------------------ CLASS Y SHARES Period ended October 31, 2001 (h) (0.01) (0.01) $8.92 Year ended October 31, 2002 (0.03) (0.03) 7.22 Six months ended April 30, 2003 (Unaudited) (0.05) (0.05) 7.48 - ------------------------------------------------------------------------ RATIOS/SUPPLEMENTARY DATA --------------------------------------------------------- RATIO OF NET NET ASSETS RATIO OF INVESTMENT AT END OF EXPENSES TO INCOME (LOSS) PERIOD AVERAGE NET TO AVERAGE PORTFOLIO TOTAL RETURN (000'S) ASSETS NET ASSETS TURNOVER(a) - ----------------------------------------------------------------------------------------------------------------- CLASS A (INVESTOR) SHARES Period ended October 31, 2001 (b) (12.65)%(c)(d) $ 1,927 1.11%(e) 0.15 %(e) 43.13% Year ended October 31, 2002 (18.97)%(d) 1,306 1.01% 0.39 % 59.85% Six months ended April 30, 2003 (Unaudited) 4.07 %(c)(d) 1,083 1.02%(e) 0.76 %(e) 31.60% - ----------------------------------------------------------------------------------------------------------------- CLASS B SHARES Period ended October 31, 2001 (f) (10.52)%(c)(g) $ 330 1.84%(e) (0.64)%(e) 43.13% Year ended October 31, 2002 (19.59)%(g) 1,154 1.76% (0.30)% 59.85% Six months ended April 30, 2003 (Unaudited) 3.71 %(c)(g) 1,578 1.77%(e) (0.03)%(e) 31.60% - ----------------------------------------------------------------------------------------------------------------- CLASS Y SHARES Period ended October 31, 2001 (h) (9.71)%(c) $219,221 0.82%(e) 0.38 %(e) 43.13% Year ended October 31, 2002 (18.76)% 168,812 0.76% 0.66 % 59.85% Six months ended April 30, 2003 (Unaudited) 4.30 %(c) 179,851 0.78%(e) 1.00 %(e) 31.60% - -----------------------------------------------------------------------------------------------------------------
* Less than $0.005 per share. (a) Portfolio turnover is calculated on the basis of the fund as a whole, without the distinguishing between the classes of shares issued. (b) Class A (Investor) Shares commenced operations on April 12, 2001. (c) Not annualized. (d) Excludes sales charge. (e) Annualized. (f) Class B Shares commenced operations on April 5, 2001. (g) Excludes redemption charge. (h) Class Y Shares commenced operations on April 2, 2001. See notes to financial statements. 44 HSBC INVESTOR FAMILY OF FUNDS HSBC INVESTOR FUNDS -- MID-CAP FUND - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS ................................................................................. SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
INVESTMENT ACTIVITIES DIVIDENDS ------------------------------------------ ------------------------- NET REALIZED AND UNREALIZED GAINS (LOSSES) NET REALIZED NET ASSET FROM TOTAL GAINS FROM VALUE, NET INVESTMENT FROM INVESTMENT BEGINNING INVESTMENT AND OPTION INVESTMENT AND OPTION TOTAL OF PERIOD LOSS TRANSACTIONS ACTIVITIES TRANSACTIONS DIVIDENDS - ------------------------------------------------------------------------------------------------------------- CLASS A (INVESTOR) SHARES Period ended October 31, 2000 (b) $10.27 (0.01) (0.19) (0.20) -- -- Year ended October 31, 2001 10.07 (0.03) (2.00) (2.03) (0.14) (0.14) Year ended October 31, 2002 7.90 (0.03) (1.57) (1.60) -- -- Six months ended April 30, 2003 (Unaudited) 6.30 (0.01) 0.18 0.17 -- -- - ------------------------------------------------------------------------------------------------------------- CLASS B SHARES Period ended October 31, 2000 (f) $10.72 (0.02) (0.64) (0.66) -- -- Year ended October 31, 2001 10.06 (0.08) (2.02) (2.10) (0.14) (0.14) Year ended October 31, 2002 7.82 (0.08) (1.55) (1.63) -- -- Six months ended April 30, 2003 (Unaudited) 6.19 (0.03) 0.18 0.15 -- -- - ------------------------------------------------------------------------------------------------------------- CLASS C SHARES Period ended October 31, 2000 (h) $10.04 (0.01) 0.03 (j) 0.02 -- -- Year ended October 31, 2001 10.06 (0.09) (2.01) (2.10) (0.14) (0.14) Year ended October 31, 2002 7.82 (0.08) (1.54) (1.62) -- -- Six months ended April 30, 2003 (Unaudited) 6.20 (0.03) 0.17 0.14 -- -- - ------------------------------------------------------------------------------------------------------------- TRUST SHARES Period ended October 31, 2000 (i) $10.00 (0.01) 0.09 (j) 0.08 -- -- Year ended October 31, 2001 10.08 (0.01) (2.02) (2.03) (0.14) (0.14) Year ended October 31, 2002 7.91 (0.02) (1.56) (1.58) -- -- Six months ended April 30, 2003 (Unaudited) 6.33 -- 0.18 0.18 -- -- RATIOS/SUPPLEMENTARY DATA ------------------------------------------------------------ RATIO OF NET NET ASSET NET ASSETS RATIO OF INVESTMENT VALUE, AT END OF EXPENSES LOSS TO END OF TOTAL PERIOD TO AVERAGE AVERAGE NET PORTFOLIO PERIOD RETURN (000'S) NET ASSETS ASSETS TURNOVER(a) - ------------------------------------------------------------------------------------------------------------------------ CLASS A (INVESTOR) SHARES Period ended October 31, 2000 (b) $10.07 (1.95)%(c)(d) $ 445 1.28%(e) (0.42)%(e) 57.69% Year ended October 31, 2001 7.90 (20.37)%(d) 927 1.13% (0.40)% 112.67% Year ended October 31, 2002 6.30 (20.25)%(d) 1,010 1.08% (0.46)% 140.23% Six months ended April 30, 2003 (Unaudited) 6.47 2.70 %(c)(d) 1,076 1.12%(e) (0.22)%(e) 53.50% - ------------------------------------------------------------------------------------------------------------------------ CLASS B SHARES Period ended October 31, 2000 (f) $10.06 (6.16)%(c)(g) $ 1,557 2.02%(e) (1.17)%(e) 57.69% Year ended October 31, 2001 7.82 (21.09)%(g) 3,827 1.88% (1.16)% 112.67% Year ended October 31, 2002 6.19 (20.84)%(g) 4,391 1.83% (1.21)% 140.23% Six months ended April 30, 2003 (Unaudited) 6.34 2.42 %(c)(g) 4,647 1.87%(e) (0.97)%(e) 53.50% - ------------------------------------------------------------------------------------------------------------------------ CLASS C SHARES Period ended October 31, 2000 (h) $10.06 0.20 %(c)(g) $ 18 2.11%(e) (1.29)%(e) 57.69% Year ended October 31, 2001 7.82 (21.09)%(g) 21 1.87% (1.13)% 112.67% Year ended October 31, 2002 6.20 (20.72)%(g) 20 1.83% (1.20)% 140.23% Six months ended April 30, 2003 (Unaudited) 6.34 2.26 %(c)(g) 21 1.87%(e) (0.98)%(e) 53.50% - ------------------------------------------------------------------------------------------------------------------------ TRUST SHARES Period ended October 31, 2000 (i) $10.08 0.80 % $108,487 1.01%(e) (0.22)%(e) 57.69% Year ended October 31, 2001 7.91 (20.34)% 129,390 0.87% (0.13)% 112.67% Year ended October 31, 2002 6.33 (19.97)% 98,059 0.82% (0.18)% 140.23% Six months ended April 30, 2003 (Unaudited) 6.51 2.84 %(c) 124,290 0.87%(e) 0.03%(e) 53.50% - ------------------------------------------------------------------------------------------------------------------------
(a) Portfolio turnover is calculated on the basis of the fund as a whole, without the distinguishing between the classes of shares issued. (b) Class A (Investor) Shares commenced operations on July 10, 2000. (c) Not annualized. (d) Excludes sales charge. (e) Annualized. (f) Class B Shares commenced operations on July 17, 2000. (g) Excludes redemption charge. (h) Class C Shares commenced operations on August 9, 2000. (i) Trust Shares commenced operations on July 1, 2000. (j) The amount shown for a share outstanding throughout the period does not accord with the change in aggregate gains and losses in the portfolio of securities during the period because of the timing of sales and purchases of fund shares in relation to fluctuating market values during the period. See notes to financial statements. HSBC INVESTOR FAMILY OF FUNDS 45 HSBC ADVISOR FUNDS TRUST -- INTERNATIONAL EQUITY FUND - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS ................................................................................. SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
INVESTMENT ACTIVITIES --------------------------------------------- NET REALIZED AND UNREALIZED GAINS (LOSSES) FROM NET ASSET INVESTMENT TOTAL VALUE, NET AND FOREIGN FROM BEGINNING INVESTMENT CURRENCY INVESTMENT OF PERIOD INCOME TRANSACTIONS ACTIVITIES - ------------------------------------------------------------------------------------------------ ADVISOR SHARES Year ended October 31, 1998 $13.76 0.11 0.32 0.43 Year ended October 31, 1999 13.24 0.09 5.87 5.96 Year ended October 31, 2000 18.58 0.11 0.75 (b) 0.86 Year ended October 31, 2001 18.13 0.09 (4.38) (4.29) Year ended October 31, 2002 12.56 0.07 (1.72) (1.65) Six months ended April 30, 2003 (Unaudited) 10.73 0.04 (0.06)(b) (0.02) - ------------------------------------------------------------------------------------------------ DIVIDENDS ----------------------------------------------------------------------- NET REALIZED GAINS FROM INVESTMENT NET ASSET NET AND FOREIGN VALUE, INVESTMENT CURRENCY TOTAL END OF TOTAL INCOME TRANSACTIONS DIVIDENDS PERIOD RETURN - ------------------------------------------------------------------------------------------------- ADVISOR SHARES Year ended October 31, 1998 (0.27) (0.68) (0.95) $13.24 3.49 % Year ended October 31, 1999 (0.15) (0.47) (0.62) 18.58 46.92 % Year ended October 31, 2000 (0.11) (1.20) (1.31) 18.13 4.05 % Year ended October 31, 2001 -- (1.28) (1.28) 12.56 (25.42)% Year ended October 31, 2002 (0.19) -- (0.19) 10.73 (13.32)% Six months ended April 30, 2003 (Unaudited) (0.19) -- (0.19) 10.52 (0.22)%(c) - ------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTARY DATA ------------------------------------------------------- RATIO OF NET NET ASSETS RATIO OF INVESTMENT AT END OF EXPENSES INCOME TO PERIOD TO AVERAGE AVERAGE NET PORTFOLIO (000'S) NET ASSETS ASSETS TURNOVER(a) - -------------------------------------------------------------------------------------------- ADVISOR SHARES Year ended October 31, 1998 $120,250 1.09% 0.75% 40.47% Year ended October 31, 1999 172,004 1.05% 0.54% 34.26% Year ended October 31, 2000 219,837 0.90% 0.51% 27.81% Year ended October 31, 2001 184,494 0.99% 0.51% 26.90% Year ended October 31, 2002 194,704 0.99% 0.70% 31.63% Six months ended April 30, 2003 (Unaudited) 266,109 0.89%(d) 1.08%(d) 8.88% - --------------------------------------------------------------------------------------------
(a) Portfolio turnover is calculated on the basis of the respective Portfolio in which the Fund invests all of its investable assets. (b) The amount shown for a share outstanding throughout the period does not accord with the change in aggregate gains and losses in the portfolio of securities during the period because of the timing of sales and purchases of fund shares in relation to fluctuating market values during the period. (c) Not annualized. (d) Annualized. See notes to financial statements. 46 HSBC INVESTOR FAMILY OF FUNDS HSBC INVESTOR FUNDS -- OVERSEAS EQUITY FUND - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS ................................................................................. SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
INVESTMENT ACTIVITIES ----------------------------------------- NET REALIZED AND UNREALIZED GAINS (LOSSES) NET ASSET NET FROM INVESTMENT VALUE, INVESTMENT AND FOREIGN TOTAL FROM BEGINNING INCOME CURRENCY INVESTMENT OF PERIOD (LOSS) TRANSACTIONS ACTIVITIES - ------------------------------------------------------------------------------------------ CLASS A (INVESTOR) SHARES Year ended October 31, 1998 $11.57 (0.01) 0.23 0.22 Year ended October 31, 1999 11.64 (0.04) 5.32 5.28 Year ended October 31, 2000 16.90 (0.11) 0.64 0.53 Year ended October 31, 2001 17.21 (0.04) (4.05) (4.09) Year ended October 31, 2002 11.66 (0.04) (1.34) (1.38) Six months ended April 30, 2003 (Unaudited) 9.87 0.01 (0.16) (0.15) - ------------------------------------------------------------------------------------------ CLASS B SHARES Period ended October 31, 1998 (f) $11.45 (0.07) 0.19 0.12 Year ended October 31, 1999 11.57 (0.12) 5.24 5.12 Year ended October 31, 2000 16.69 (0.10) 0.48 0.38 Year ended October 31, 2001 16.85 (0.14) (3.95) (4.09) Year ended October 31, 2002 11.30 (0.08) (1.34) (1.42) Six months ended April 30, 2003 (Unaudited) 9.56 (0.03) (0.14) (0.17) - ------------------------------------------------------------------------------------------ CLASS C SHARES Period ended October 31, 1999 (h) $11.88 (0.08) 5.04 4.96 Year ended October 31, 2000 16.84 (0.14) 0.52 0.38 Year ended October 31, 2001 17.00 (0.18) (3.95) (4.13) Year ended October 31, 2002 11.41 (0.08) (1.36) (1.44) Six months ended April 30, 2003 (Unaudited) 9.68 (0.02) (0.14) (0.16) - ------------------------------------------------------------------------------------------ DIVIDENDS --------------------------- NET REALIZED GAINS FROM INVESTMENT NET AND FOREIGN INVESTMENT CURRENCY INCOME TRANSACTIONS --------------------------- CLASS A (INVESTOR) SHARES Year ended October 31, 1998 (0.08) (0.07) Year ended October 31, 1999 (0.02) -- Year ended October 31, 2000 -- (0.22) Year ended October 31, 2001 -- (1.46) Year ended October 31, 2002 (0.12) (0.29) Six months ended April 30, 2003 (Unaudited) (0.10) -- - ------------------------------------------------------------- CLASS B SHARES Period ended October 31, 1998 (f) -- -- Year ended October 31, 1999 -- -- Year ended October 31, 2000 -- (0.22) Year ended October 31, 2001 -- (1.46) Year ended October 31, 2002 (0.03) (0.29) Six months ended April 30, 2003 (Unaudited) (0.05) -- - ------------------------------------------------------------- CLASS C SHARES Period ended October 31, 1999 (h) -- -- Year ended October 31, 2000 -- (0.22) Year ended October 31, 2001 -- (1.46) Year ended October 31, 2002 -- (0.29) Six months ended April 30, 2003 (Unaudited) (0.01) -- - ------------------------------------------------------------- DIVIDENDS RATIOS/SUPPLEMENTARY DATA --------- ---------------------------------------------- RATIO OF NET RATIO OF INVESTMENT NET ASSET NET ASSETS EXPENSES TO LOSS TO TOTAL VALUE, END TOTAL AT END OF AVERAGE NET AVERAGE NET DIVIDENDS OF PERIOD RETURN PERIOD (000'S) ASSETS ASSETS --------------------------------------------------------------------------------------- CLASS A (INVESTOR) SHARES Year ended October 31, 1998 (0.15) $11.64 1.96 %(c) $6,070 1.77% (0.08)% Year ended October 31, 1999 (0.02) 16.90 45.41 %(c) 8,138 1.86% (0.30)% Year ended October 31, 2000 (0.22) 17.21 3.05 %(c) 7,252 1.85% (0.49)% Year ended October 31, 2001 (1.46) 11.66 (25.93)%(c) 6,940 1.85% (0.35)% Year ended October 31, 2002 (0.41) 9.87 (12.42)%(c) 7,203 1.85% (0.18)% Six months ended April 30, 2003 (Unaudited) (0.10) 9.62 (1.51)%(c)(d) 8,545 1.85%(e) 0.20%(e) - ---------------------------------------------------------------------------------------------------------------------------- CLASS B SHARES Period ended October 31, 1998 (f) -- $11.57 1.05 %(d)(g) $ 42 2.52%(e) (0.83)%(e) Year ended October 31, 1999 -- 16.69 44.25 %(g) 90 2.59% (1.04)% Year ended October 31, 2000 (0.22) 16.85 2.18 %(g) 358 2.60% (1.17)% Year ended October 31, 2001 (1.46) 11.30 (26.52)%(g) 294 2.60% (1.09)% Year ended October 31, 2002 (0.32) 9.56 (13.07)%(g) 588 2.60% (0.87)% Six months ended April 30, 2003 (Unaudited) (0.05) 9.34 (1.77)%(d)(g) 699 2.60%(e) (0.48)%(e) - ---------------------------------------------------------------------------------------------------------------------------- CLASS C SHARES Period ended October 31, 1999 (h) -- $16.84 41.84 %(d)(g) $ 98 2.57%(e) (1.01)%(e) Year ended October 31, 2000 (0.22) 17.00 2.10 %(g) 248 2.60% (1.14)% Year ended October 31, 2001 (1.46) 11.41 (26.53)%(g) 139 2.60% (1.10)% Year ended October 31, 2002 (0.29) 9.68 (13.08)%(g) 96 2.60% (1.00)% Six months ended April 30, 2003 (Unaudited) (0.01) 9.51 (1.70)%(d)(g) 93 2.60%(e) (0.57)%(e) - ---------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTARY DATA --------------------------------------------- RATIO OF EXPENSES TO AVERAGE NET PORTFOLIO ASSETS(a) TURNOVER(b) ---------------------------------------------- CLASS A (INVESTOR) SHARES Year ended October 31, 1998 1.86% 40.47% Year ended October 31, 1999 2.44% 34.26% Year ended October 31, 2000 2.43% 27.81% Year ended October 31, 2001 2.44% 26.90% Year ended October 31, 2002 2.28% 31.63% Six months ended April 30, 2003 (Unaudited) 2.55%(e) 8.88% - --------------------------------------------------------------------- CLASS B SHARES Period ended October 31, 1998 (f) 2.61%(e) 40.47% Year ended October 31, 1999 3.24% 34.26% Year ended October 31, 2000 2.96% 27.81% Year ended October 31, 2001 3.18% 26.90% Year ended October 31, 2002 3.04% 31.63% Six months ended April 30, 2003 (Unaudited) 3.31%(e) 8.88% - --------------------------------------------------------------------- CLASS C SHARES Period ended October 31, 1999 (h) 3.15%(e) 34.26% Year ended October 31, 2000 2.96% 27.81% Year ended October 31, 2001 3.16% 26.90% Year ended October 31, 2002 3.04% 31.63% Six months ended April 30, 2003 (Unaudited) 3.31%(e) 8.88% - ---------------------------------------------------------------------
(a) During the period certain fees were reduced. If such fee reductions had not occurred, the ratio would have been as indicated. (b) Portfolio turnover is calculated on the basis of the respective Portfolio in which the Fund invests all of its investable assets. (c) Excludes sales charge. (d) Not annualized. (e) Annualized. (f) Class B Shares commenced operations on January 6, 1998. (g) Excludes redemption charge. (h) Class C Shares commenced operations on November 4, 1998. See notes to financial statements. HSBC INVESTOR FAMILY OF FUNDS 47 HSBC ADVISOR FUNDS TRUST -- SMALL CAP EQUITY FUND - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS ................................................................................. SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
INVESTMENT ACTIVITIES ------------------------------ NET REALIZED AND NET ASSET UNREALIZED GAINS VALUE, NET (LOSSES) FROM BEGINNING OF INVESTMENT INVESTMENT PERIOD INCOME TRANSACTIONS - ---------------------------------------------------------------------------------- ADVISOR SHARES Year ended October 31, 1998 $13.44 (0.09) (0.49) Year ended October 31, 1999 11.48 (0.09) 2.65 Year ended October 31, 2000 12.56 (0.10) 6.73 Year ended October 31, 2001 17.81 (0.10) (3.65) Year ended October 31, 2002 11.32 (0.09) (1.96) Six months ended April 30, 2003 (Unaudited) 9.27 (0.03) 0.29 - ---------------------------------------------------------------------------------- INVESTMENT ACTIVITIES DIVIDENDS ---------------------- ----------------------- TOTAL NET REALIZED NET ASSET FROM GAINS FROM VALUE, INVESTMENT INVESTMENT TOTAL END OF TOTAL ACTIVITIES TRANSACTIONS DIVIDENDS PERIOD RETURN ---------------------------------------------------------- ADVISOR SHARES Year ended October 31, 1998 (0.58) (1.38) (1.38) $11.48 (4.27)% Year ended October 31, 1999 2.56 (1.48) (1.48) 12.56 24.63 % Year ended October 31, 2000 6.63 (1.38) (1.38) 17.81 55.59 % Year ended October 31, 2001 (3.75) (2.74) (2.74) 11.32 (22.98)% Year ended October 31, 2002 (2.05) -- -- 9.27 (18.11)% Six months ended April 30, 2003 (Unaudited) 0.26 -- -- 9.53 2.80 %(c) - ----------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTARY DATA ------------------------------------------------------------------------- RATIO OF NET NET ASSETS RATIO OF INVESTMENT RATIO OF AT END OF EXPENSES LOSS TO EXPENSES PERIOD TO AVERAGE AVERAGE NET TO AVERAGE PORTFOLIO (000'S) NET ASSETS ASSETS NET ASSETS TURNOVER(a) ------------------------------------------------------------------------- ADVISOR SHARES Year ended October 31, 1998 $112,935 1.14% (0.68)% 1.16%(b) 154.69% Year ended October 31, 1999 148,538 1.18% (0.81)% 1.18% 77.74% Year ended October 31, 2000 253,724 1.05% (0.68)% 1.05% 79.51% Year ended October 31, 2001 180,265 1.07% (0.74)% 1.07% 52.47% Year ended October 31, 2002 190,686 1.07% (0.87)% 1.07% 103.90% Six months ended April 30, 2003 (Unaudited) 212,386 1.06%(d) (0.71)%(d) 1.06%(d) 124.49% - ---------------------------------------------------------------------------------------------------------------
(a) Portfolio turnover is calculated on the basis of the respective Portfolio in which the Fund invests all of its investable assets. (b) During the period certain fees were reduced. If such fee reductions had not occurred, the ratio would have been as indicated. (c) Not annualized. (d) Annualized. See notes to financial statements. 48 HSBC INVESTOR FAMILY OF FUNDS HSBC INVESTOR FUNDS -- OPPORTUNITY FUND - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS ................................................................................. SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
INVESTMENT ACTIVITIES ------------------------------------------ NET REALIZED AND NET ASSET UNREALIZED GAINS TOTAL VALUE, NET (LOSSES) FROM FROM BEGINNING INVESTMENT INVESTMENT INVESTMENT OF PERIOD LOSS TRANSACTIONS ACTIVITIES - ------------------------------------------------------------------------------------------- CLASS A (INVESTOR) SHARES Year ended October 31, 1998 $12.37 (0.13) (0.46) (0.59) Year ended October 31, 1999 11.33 (0.19) 2.78 2.59 Year ended October 31, 2000 13.19 (0.26) 7.13 6.87 Year ended October 31, 2001 18.75 (0.14) (3.58) (3.72) Year ended October 31, 2002 9.60 (0.13) (1.64) (1.77) Six months ended April 30, 2003 (Unaudited) 7.83 (0.05) 0.24 0.19 - ------------------------------------------------------------------------------------------- CLASS B SHARES Period ended October 31, 1998 (f) $11.65 (0.09) (0.25) (0.34) Year ended October 31, 1999 11.31 (0.23) 2.71 2.48 Year ended October 31, 2000 13.06 (0.28) 6.93 6.65 Year ended October 31, 2001 18.40 (0.23)* (3.47) (3.70) Year ended October 31, 2002 9.27 (0.20)* (1.56) (1.76) Six months ended April 30, 2003 (Unaudited) 7.51 (0.07) 0.22 0.15 - ------------------------------------------------------------------------------------------- CLASS C SHARES Period ended October 31, 1999 (h) $11.55 (0.10) 2.41 2.31 Year ended October 31, 2000 13.13 (0.32) 7.01 6.69 Year ended October 31, 2001 18.51 (0.24)* (3.49) (3.73) Year ended October 31, 2002 9.35 (0.21)* (1.57) (1.78) Six months ended April 30, 2003 (Unaudited) 7.57 (0.08) 0.23 0.15 DIVIDENDS ------------------------ NET REALIZED GAINS FROM INVESTMENT TOTAL TRANSACTIONS DIVIDENDS ------------------------ CLASS A (INVESTOR) SHARES Year ended October 31, 1998 (0.45) (0.45) Year ended October 31, 1999 (0.73) (0.73) Year ended October 31, 2000 (1.31) (1.31) Year ended October 31, 2001 (5.43) (5.43) Year ended October 31, 2002 -- -- Six months ended April 30, 2003 (Unaudited) -- -- - ------------------------------------------------------------- CLASS B SHARES Period ended October 31, 1998 (f) -- -- Year ended October 31, 1999 (0.73) (0.73) Year ended October 31, 2000 (1.31) (1.31) Year ended October 31, 2001 (5.43) (5.43) Year ended October 31, 2002 -- -- Six months ended April 30, 2003 (Unaudited) -- -- - ------------------------------------------------------------- CLASS C SHARES Period ended October 31, 1999 (h) (0.73) (0.73) Year ended October 31, 2000 (1.31) (1.31) Year ended October 31, 2002 (5.43) (5.43) Year ended October 31, 2002 -- -- Six months ended April 30, 2003 (Unaudited) -- -- RATIOS/SUPPLEMENTARY DATA --------------------------------------------------------------------- RATIO OF NET NET ASSET NET ASSETS RATIO OF INVESTMENT RATIO OF VALUE, AT END OF EXPENSES LOSS TO EXPENSES TO END OF TOTAL PERIOD TO AVERAGE AVERAGE NET AVERAGE NET PORTFOLIO PERIOD RETURN (000'S) NET ASSETS ASSETS ASSETS(a) TURNOVER(b) ---------------------------------------------------------------------------------------------- CLASS A (INVESTOR) SHARES Year ended October 31, 1998 $11.33 (4.68)%(c) $ 13,137 1.63% (1.17)% 1.64% 154.69% Year ended October 31, 1999 13.19 23.80 %(c) 13,015 1.75% (1.38)% 2.14% 77.74% Year ended October 31, 2000 18.75 54.54 %(c) 15,415 1.65% (1.29)% 1.84% 79.51% Year ended October 31, 2001 9.60 (23.65)%(c) 11,892 1.65% (1.32)% 1.97% 52.47% Year ended October 31, 2002 7.83 (18.44)%(c) 11,384 1.65% (1.45)% 2.08% 103.90% Six months ended April 30, 2003 (Unaudited) 8.02 2.43 %(c)(d) 10,953 1.65%(e) (1.31)%(e) 2.23%(e) 124.49% - ----------------------------------------------------------------------------------------------------------------------------- CLASS B SHARES Period ended October 31, 1998 (f) $11.31 (2.92)%(d)(g) $ 349 2.38%(e) (1.92)%(e) 2.39%(e) 154.69% Year ended October 31, 1999 13.06 22.93 %(g) 536 2.48% (2.12)% 2.92% 77.74% Year ended October 31, 2000 18.40 53.30 %(g) 1,273 2.40% (2.02)% 2.49% 79.51% Year ended October 31, 2001 9.27 (24.16)%(g) 1,315 2.40% (2.08)% 2.73% 52.47% Year ended October 31, 2002 7.51 (18.99)%(g) 2,374 2.40% (2.18)% 2.86% 103.90% Six months ended April 30, 2003 (Unaudited) 7.66 2.00 %(d)(g) 2,633 2.40%(e) (2.06)%(e) 2.97%(e) 124.49% - ------------------------------------------------------------------------------------------------------------------------------ CLASS C SHARES Period ended October 31, 1999 (h) $13.13 21.00 %(d)(g) $ 289 2.38%(e) (2.02)%(e) 2.77%(e) 77.74% Year ended October 31, 2000 18.51 53.32 %(g) 707 2.40% (2.02)% 2.46% 79.51% Year ended October 31, 2001 9.35 (24.17)%(g) 407 2.40% (2.06)% 2.71% 52.47% Year ended October 31, 2002 7.57 (19.04)%(g) 329 2.40% (2.20)% 2.83% 103.90% Six months ended April 30, 2003 (Unaudited) 7.72 1.98 %(d)(g) 293 2.40%(e) (2.06)%(e) 2.98%(e) 124.49% - ------------------------------------------------------------------------------------------------------------------------------
* Calculated using average shares. (a) During the period certain fees were reduced. If such fee reductions had not occurred, the ratio would have been as indicated. (b) Portfolio turnover is calculated on the basis of the respective Portfolio in which the Fund invests all of its investable assets. (c) Excludes sales charge. (d) Not annualized. (e) Annualized. (f) Class B Shares commenced operations on January 6, 1998. (g) Excludes redemption charge. (h) Class C Shares commenced operations on November 4, 1998. See notes to financial statements. HSBC INVESTOR FAMILY OF FUNDS 49 HSBC INVESTOR FAMILY OF FUNDS - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2003 (UNAUDITED) ................................................................................. 1. ORGANIZATION: The HSBC Investor Funds (the 'Trust'), a Massachusetts business trust organized on April 22, 1987, and the HSBC Advisor Funds Trust (the 'Advisor Trust'), a Massachusetts business trust organized on April 5, 1996, are registered under the Investment Company Act of 1940, as amended (the 'Act'), as open-end management investment companies. The Trust and Advisor Trust (collectively the 'Trusts') contain the following funds (individually a 'Fund,' collectively the 'Funds'):
FUND SHORT NAME TRUST - ---- ---------- ----- HSBC Investor Limited Maturity Fund Limited Maturity Fund Trust HSBC Investor Fixed Income Fund Fixed Income Fund Advisor Trust HSBC Investor Bond Fund Bond Fund Trust HSBC Investor New York Tax-Free Bond Fund New York Tax-Free Bond Fund Trust HSBC Investor Balanced Fund Balanced Fund Trust HSBC Investor Equity Fund Equity Fund Trust HSBC Investor Growth and Income Fund Growth and Income Fund Trust HSBC Investor Mid-Cap Fund Mid-Cap Fund Trust HSBC Investor International Equity Fund International Equity Fund Advisor Trust HSBC Investor Overseas Equity Fund Overseas Equity Fund Trust HSBC Investor Small Cap Equity Fund Small Cap Equity Fund Advisor Trust HSBC Investor Opportunity Fund Opportunity Fund Trust
The Funds are separate series of the Trusts and are part of the HSBC Investor Family of Funds. Financial statements for all other series of HSBC Investor Family of Funds are published separately. The Limited Maturity Fund, Fixed Income Fund, Bond Fund, International Equity Fund, Overseas Equity Fund, Small Cap Equity Fund, and the Opportunity Fund (individually a 'Feeder Fund,' collectively the 'Feeder Funds') utilize the Master Feeder Fund Structure and seek to achieve their investment objectives by investing all of their investable assets in their respective Portfolios (as defined below), per the following schedule:
PROPORTIONATE INTEREST ON FUND RESPECTIVE PORTFOLIO APRIL 30, 2003 - ---- -------------------- -------------- Limited Maturity Fund HSBC Investor Limited Maturity Portfolio 74.4% Fixed Income Fund HSBC Investor Fixed Income Portfolio 77.7% Bond Fund HSBC Investor Fixed Income Portfolio 4.9% International Equity Fund HSBC Investor International Equity Portfolio 80.6% Overseas Equity Fund HSBC Investor International Equity Portfolio 2.4% Small Cap Equity Fund HSBC Investor Small Cap Equity Portfolio 74.3% Opportunity Fund HSBC Investor Small Cap Equity Portfolio 4.8%
The HSBC Investor Limited Maturity Portfolio, HSBC Investor Fixed Income Portfolio, HSBC Investor International Equity Portfolio, and the HSBC Investor Small Cap Equity Portfolio (individually a 'Portfolio,' collectively the 'Portfolios'), are diversified series of the HSBC Investor Portfolio Trust (the 'Portfolio Trust'), and like each Feeder Fund, are open-end management investment companies. The financial statements of the Portfolios, including the Schedules of Portfolio Investments, are included in this report. The financial statements of the Portfolios should be read in conjunction with the financial statements of the Feeder 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 Limited Maturity Fund, New York Tax-Free Bond Fund, Balanced Fund, Equity Fund, and the Growth and Income Fund each offers four classes of shares, Class A (Investor) Shares, Class B Shares, Class C Shares and Class Y Shares. The Mid-Cap Fund offers four classes of shares, Class A Shares, Class B Shares, Class C Shares, and Trust Shares. The Fixed Income Fund, International Equity Fund, and the Small Cap Equity Fund each offers one class of shares. The Bond Fund, Overseas Equity Fund, and the Opportunity Fund each offers three classes of shares, 50 HSBC INVESTOR FAMILY OF FUNDS HSBC INVESTOR FAMILY OF FUNDS - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2003 (UNAUDITED) (CONTINUED) ................................................................................. Class A (Investor) Shares, Class B Shares and Class C Shares. Each class of shares in the Funds has identical rights and privileges except with respect to fees paid under shareholder servicing or distribution plans, voting rights on matters affecting a single class of shares, and the exchange privilege of each class of shares. 2. SIGNIFICANT ACCOUNTING POLICIES: 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 accounting principles generally accepted in the United States of America ('GAAP'). The preparation of financial statements requires management to make 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 income and expenses for the period. Actual results could differ from those estimates. SECURITIES VALUATION: A. NEW YORK TAX-FREE BOND FUND, BALANCED FUND, EQUITY FUND, GROWTH AND INCOME FUND, AND MID-CAP FUND Bonds and other fixed income securities (other than short-term obligations but including listed issues) are valued 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 the use of matrix techniques which take into account appropriate factors such as institutional-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics other than market data and without exclusive reliance upon quoted prices or exchanges or over-the-counter prices, since such valuations are believed to reflect more accurately the fair value of such securities. All debt portfolio securities with a remaining maturity of 60 days or less are valued at amortized cost. Under the amortized cost method, premium or discount, if any, is amortized or accreted, respectively, on a constant (straight-line) basis to the maturity of the security. The value of each equity security is based either on the last sale price on a national securities exchange, or in the absence of recorded sales, at the closing bid prices on such exchanges, or at the quoted bid price in the over-the-counter market. Securities or other assets for which market quotations are not readily available are valued by or at the direction of the Funds' Board of Trustees. B. FEEDER FUNDS The Feeder Funds record their investments in their respective Portfolios at value. Securities of the Portfolios are recorded at value as more fully discussed in the notes to those financial statements. SECURITIES TRANSACTIONS AND RELATED INCOME: A. NEW YORK TAX-FREE BOND FUND, BALANCED FUND, EQUITY FUND, GROWTH AND INCOME FUND, AND MID-CAP FUND Security transactions are accounted for on the date the security is purchased or sold. Securities 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. B. FEEDER FUNDS The Feeder Funds record daily their pro-rata share of their respective Portfolio's income, expenses and realized and unrealized gains and losses. In addition, the Feeder Funds accrue their own expenses daily as incurred. Realized gains or losses and changes in unrealized appreciation or depreciation represent the Feeder Fund's share of such elements allocated from the Portfolio. HSBC INVESTOR FAMILY OF FUNDS 51 HSBC INVESTOR FAMILY OF FUNDS - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2003 (UNAUDITED) (CONTINUED) ................................................................................. FUTURES CONTRACTS: The New York Tax-Free Bond Fund and Equity Fund invest in financial futures contracts for the purpose of hedging their existing portfolio securities or securities they intend to purchase against fluctuations in fair value caused by changes in prevailing market interest rates. Upon entering into a financial futures contract, the New York Tax-Free Bond Fund and Equity Fund 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 each day, depending on the daily fluctuations in the fair value of the underlying security. A gain or loss equal to the daily variation margin is recognized on a daily basis. Futures contracts may also be entered into for non-hedging purposes. A 'sale' of futures contract means a contractual obligation to deliver the securities or foreign currency called for by the contract at a fixed price at a specified time in the future. A 'purchase' of a futures contract means a contractual obligation to acquire the securities or foreign currency at a fixed price at a specified time in the future. Should market conditions move unexpectedly, the New York Tax-Free Bond Fund and the Equity Fund may not achieve the anticipated benefits of the financial futures contracts and may realize a loss. The use of futures transactions involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates and the underlying hedged assets. OPTIONS: The Growth and Income Fund and the Mid-Cap Fund write covered call options against some of the securities in their portfolios provided the securities are listed on a national securities exchange. A call option is 'covered' if the Fund owns the underlying securities covered by the call. The premium received is recorded as a liability and is subsequently adjusted to the current fair value of the option written. Premiums received from writing options that expire unexercised are treated on the expiration date as realized gains from investments. The difference between the premium and the amount paid on effecting a closing purchase transaction, including brokerage commissions, is also treated as a realized gain or loss. If the call option is exercised, the premium is added to the proceeds from the sale of the underlying security in determining a realized gain or loss. EXPENSE ALLOCATION: Expenses directly attributable to a Fund are charged to that Fund. Expenses not directly attributable to a Fund are allocated proportionately among various or all Funds within the HSBC Investor Family of Funds in relation to the net assets of each Fund or on another reasonable basis. Expenses specific to a class are charged to that class. DIVIDENDS TO SHAREHOLDERS: The Limited Maturity Fund, Fixed Income Fund, Bond Fund, and the New York Tax-Free Bond Fund declare all net investment income daily as dividends to their shareholders and distribute such dividends monthly. Dividends from net investment income, if any, are declared and distributed quarterly in the case of the Equity Fund, semiannually in the case of the Balanced Fund, Growth and Income Fund, Small Cap Equity Fund, and the Opportunity Fund and annually in the case of the Mid-Cap Fund, International Equity Fund and Overseas Equity Fund. 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 amount of dividends from net investment income and net realized gains 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 (i.e. reclassification of market discounts, gain/loss, paydowns, and distributions), such amounts are reclassified to paid-in capital; temporary differences 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. 52 HSBC INVESTOR FAMILY OF FUNDS HSBC INVESTOR FAMILY OF FUNDS - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2003 (UNAUDITED) (CONTINUED) ................................................................................. FEDERAL INCOME TAXES: Each Fund is a separate taxable entity for federal income tax purposes. Each Fund has qualified and intends 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 their taxable net investment income and net realized gains, if any, to their shareholders. Accordingly, no provision for federal income or excise tax is required. 3. CALL OPTIONS WRITTEN: The following is a summary of covered call option activity for the Growth and Income Fund for the six months ended April 30, 2003:
NUMBER OF PREMIUMS CONTRACTS RECEIVED --------- -------- Options outstanding at October 31, 2002..................... 252 $ 45,988 Options written............................................. 252 87,567 Options terminated in closing purchase transactions......... (504) (133,555) ---- --------- Options outstanding at April 30, 2003....................... -- $ -- ---- --------- ---- ---------
The following is a summary of covered call option activity for the Mid-Cap Fund for six months ended April 30, 2003:
NUMBER OF PREMIUMS CONTRACTS RECEIVED --------- -------- Options outstanding at October 31, 2002..................... 1,700 $ 297,713 Options written............................................. 3,090 662,215 Options terminated in closing purchase transactions......... (4,090) (792,683) ------ --------- Options outstanding at April 30, 2003....................... 700 $ 167,245 ------ --------- ------ ---------
4. RELATED PARTY TRANSACTIONS: INVESTMENT MANAGEMENT: HSBC Asset Management (Americas) Inc. ('HSBC' or the 'Investment Adviser'), a wholly owned subsidiary of HSBC Bank USA, a New York State chartered bank, acts as Investment Adviser to the New York Tax-Free Bond Fund, Balanced Fund, Growth and Income Fund and Mid-Cap Fund. As Investment Adviser, HSBC manages the investments of the Funds and continuously reviews, supervises and administers the Funds' investments. For its services as Investment Adviser, HSBC is entitled to receive a fee, computed daily and paid monthly, based on average daily net assets, at an annual rate of:
FUND FEE RATE - ---- -------- New York Tax-Free Bond Fund................................. 0.25% Balanced Fund............................................... 0.55% Growth and Income Fund...................................... 0.55% Mid-Cap Fund................................................ 0.55%
HSBC also serves as Investment Adviser to the Equity Fund. Alliance Capital Management L.P. and Institutional Capital Corporation serve as Sub-Investment Advisers to the Equity Fund and are paid for their services directly by HSBC. For their services as Investment Adviser and Sub-Investment Advisers to the Equity Fund, HSBC, Alliance HSBC INVESTOR FAMILY OF FUNDS 53 HSBC INVESTOR FAMILY OF FUNDS - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2003 (UNAUDITED) (CONTINUED) ................................................................................. Capital Management and Institutional Capital Corporation receive in aggregate a fee accrued daily and paid monthly at an annual rate of:
BASED ON AVERAGE DAILY NET ASSETS FEE RATE - --------------------------------- -------- Up to $50 million........................................... 0.500% In excess of $50 million but not exceeding $100 million..... 0.425% In excess of $100 million but not exceeding $200 million.... 0.375% In excess of $200 million................................... 0.325%
ADMINISTRATION: BISYS Fund Services Ohio, Inc. ('BISYS Ohio'), who serves the Trusts as Administrator, is a wholly-owned subsidiary of The BISYS Group, Inc., with whom certain officers of the Trusts are affiliated. Such officers are paid no fees directly by the Funds for serving as officers of the Trusts. Under the terms of the administration agreement, BISYS Ohio receives from the Funds a fee accrued daily and paid monthly at an annual rate of:
BASED ON AVERAGE DAILY NET ASSETS FEE RATE - --------------------------------- -------- Up to $8 billion............................................ 0.075% In excess of $8 billion but not exceeding $9.25 billion..... 0.070% In excess of $9.25 billion but not exceeding $12 billion.... 0.050% In excess of $12 billion.................................... 0.030%
The fee breakpoints are determined on the basis of the aggregate average daily net assets of the HSBC Investor Family of Funds. The fee is allocated to each of the HSBC Investor Family of Funds based upon its pro-rata share of net assets. DISTRIBUTION PLAN: BISYS Fund Services Limited Partnership ('BISYS'), a wholly-owned subsidiary of The BISYS Group, Inc., serves the Funds as Distributor (the 'Distributor'). The Trusts have adopted a non-compensatory Distribution Plan and Agreement (the 'Plan') pursuant to Rule 12b-1 of the Act. The Plan provides for a monthly payment of actual expenses by the Funds to the Distributor at a rate not to exceed 0.25% of the average daily net assets of Class A (Investor) Shares (currently not being charged) and 0.75% of the average daily net assets of Class B Shares and Class C Shares of the Funds. This payment represents expenses incurred by the Distributor for marketing costs and services rendered in distributing the Funds' shares. BISYS, as the Funds' distributor, recovered $506,409 in commissions from sales of the funds of which $345 was reallowed to affiliated brokers and dealers. The Distributor also receives the proceeds of any CDSC imposed on redemptions of Class B Shares and Class C Shares. In addition, the Distributor retains a portion of the front-end sales charge of Class A (Investor) Shares. For the six months ended April 30, 2003, the Distributor retained $87 from dealer commissions. SHAREHOLDER SERVICING: The Trusts have entered into a Shareholder Servicing Agreement with its shareholder servicing agents (which currently consists of HSBC and its affiliates) for providing various shareholder services. The aggregate fees paid to the Distributor pursuant to the Distribution Plan and to shareholder servicing agents pursuant to the Shareholder Servicing Agreement may not exceed 0.25% of the average daily net assets of Class A (Investor) Shares, and 1.00% of the average daily net assets of Class B Shares and Class C Shares. FEE REDUCTIONS: The Investment Adviser has agreed to limit the total expenses, exclusive of taxes, brokerage commissions and extraordinary expenses, of the Limited Maturity Fund, Bond Fund, New York Tax-Free Bond Fund, Balanced Fund, 54 HSBC INVESTOR FAMILY OF FUNDS HSBC INVESTOR FAMILY OF FUNDS - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2003 (UNAUDITED) (CONTINUED) ................................................................................. Overseas Equity Fund and Opportunity Fund. Each Fund Class has it's own expense limitations based on average daily net assets for any full fiscal year as follows:
EXPENSE FUND CLASS LIMITATION - ---- ----- ---------- Limited Maturity Fund....................................... A 1.10% Limited Maturity Fund....................................... B 1.85 Limited Maturity Fund....................................... C 1.85 Limited Maturity Fund....................................... Y 0.85 Bond Fund................................................... A 1.10 Bond Fund................................................... B 1.85 Bond Fund................................................... C 1.85 New York Tax-Free Bond Fund................................. A 0.95 New York Tax-Free Bond Fund................................. B 1.70 New York Tax-Free Bond Fund................................. C 1.70 New York Tax-Free Bond Fund................................. Y 0.70 Balanced Fund............................................... A 1.20 Balanced Fund............................................... B 1.95 Balanced Fund............................................... C 1.95 Balanced Fund............................................... Y 0.95 Overseas Equity Fund........................................ A 1.85 Overseas Equity Fund........................................ B 2.60 Overseas Equity Fund........................................ C 2.60 Opportunity Fund............................................ A 1.65 Opportunity Fund............................................ B 2.40 Opportunity Fund............................................ C 2.40
FUND ACCOUNTING, TRANSFER AGENCY AND CUSTODIAN: BISYS Ohio provides fund accounting and transfer agency services for all classes of each Fund. In addition, HSBC serves as custodian for the New York Tax-Free Bond Fund, Equity Fund, Balanced Fund and Growth and Income Fund. For services to the Funds, BISYS Ohio receives an annual fee from each fund accrued daily and paid monthly. 5. INVESTMENT TRANSACTIONS: Purchases of and proceeds from sales, excluding short-term securities, for the Funds for the six months ended April 30, 2003, totaled:
PURCHASES SALES --------- ----- New York Tax-Free Bond Fund................................. $10,620,526 $ 6,461,706 Balanced Fund............................................... 3,243,508 3,121,695 Equity Fund................................................. 83,480,277 65,793,153 Growth and Income Fund...................................... 60,214,787 54,388,796 Mid-Cap Fund................................................ 68,002,979 57,977,681
HSBC INVESTOR FAMILY OF FUNDS 55 HSBC INVESTOR FAMILY OF FUNDS - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2003 (UNAUDITED) (CONTINUED) ................................................................................. Contributions and withdrawals of the respective Portfolios for the six months ended April 30, 2003, totaled:
CONTRIBUTIONS WITHDRAWALS ------------- ----------- Limited Maturity Fund..................................... $ 31,881,430 $ 8,481,511 Fixed Income Fund......................................... 99,245,786 57,371,603 Bond Fund................................................. 4,008,430 2,565,022 International Equity Fund................................. 272,291,718 209,383,802 Overseas Equity Fund...................................... 7,601,775 7,959,901 Small Cap Equity Fund..................................... 87,108,478 71,074,035 Opportunity Fund.......................................... 1,231,458 1,836,932
6. CONCENTRATION OF CREDIT RISK: The New York Tax-Free Bond Fund invests primarily in debt obligations issued by the State of New York and its respective political subdivisions, agencies and public authorities. The Fund is more susceptible to economic and political factors adversely affecting issuers of New York specific municipal securities than are municipal bond funds that are not concentrated in these issuers to the same extent. 56 HSBC INVESTOR FAMILY OF FUNDS HSBC INVESTOR LIMITED MATURITY PORTFOLIO - -------------------------------------------------------------------------------- SCHEDULE OF PORTFOLIO INVESTMENTS -- APRIL 30, 2003 (UNAUDITED) .................................................................................
- --------------------------------------------------------------- U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - 64.9% PRINCIPAL AMOUNT($) VALUE($) --------- ----------- FEDERAL HOME LOAN BANK - 9.4% 1.625%, 4/15/05....................... 5,000,000 5,000,080 3.25%, 8/15/05........................ 3,000,000 3,095,928 5.125%, 3/6/06........................ 4,000,000 4,327,640 4.50%, 11/15/12....................... 4,000,000 4,091,088 ----------- 16,514,736 ----------- FEDERAL HOME LOAN MORTGAGE CORP. - 16.4% 6.875%, 1/15/05....................... 2,000,000 2,178,826 6.00%, 6/15/11........................ 3,000,000 3,422,448 Pool #E92282, 5.50%, 11/1/17.......... 7,199,933 7,486,217 Pool #C01188, 7.00%, 6/1/31........... 3,244,492 3,421,794 Pool #C75371, 6.00%, 1/1/33........... 4,899,537 5,102,084 Series 40 HA, 6.50%, 8/17/21.......... 6,800,000 7,112,709 ----------- 28,724,078 ----------- FEDERAL NATIONAL MORTGAGE ASSOCIATION - 17.7% 5.75%, 2/15/08........................ 3,500,000 3,928,106 6.40%, 5/14/09........................ 2,000,000 2,091,110 4.625%, 5/1/13........................ 2,500,000 2,514,810 Pool #535063, 6.50%, 12/1/14.......... 2,071,284 2,195,999 Pool #535933, 6.50%, 5/1/31........... 2,528,958 2,642,319 Pool #593187, 7.00%, 11/1/31.......... 5,923,685 6,258,781 Pool #695204, 5.50%, 3/1/33........... 3,980,531 4,095,717 Pool #694985, 6.00%, 3/1/33........... 6,992,441 7,286,707 ----------- 31,013,549 ----------- U.S. TREASURY BONDS - 3.2% 8.00%, 11/15/21....................... 4,000,000 5,611,092 ----------- U.S. TREASURY NOTES - 18.2% 5.875%, 11/15/04...................... 3,000,000 3,207,069 1.625%, 1/31/05....................... 5,000,000 5,018,945 5.625%, 2/15/06....................... 5,400,000 5,952,657 3.25%, 8/15/07........................ 2,000,000 2,054,532 4.75%, 11/15/08....................... 5,000,000 5,436,915 5.00%, 2/15/11........................ 4,000,000 4,388,124 4.375%, 8/15/12....................... 2,500,000 2,610,255 4.00%, 11/15/12....................... 3,000,000 3,038,319 ----------- 31,706,816 ----------- TOTAL U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS................... 113,570,271 ----------- - --------------------------------------------------------------- CORPORATE OBLIGATIONS - 28.9% AEROSPACE & DEFENSE - 0.9% Honeywell International, Inc., 5.125%, 11/1/06.............................. 1,500,000 1,621,551 ----------- AUTO MANUFACTURERS - 0.9% General Motors Corp., 7.20%, 1/15/11.............................. 1,500,000 1,537,934 ----------- BANKING - 3.1% Bank of America Corp., 4.875%, 1/15/13.............................. 2,000,000 2,053,323 Citigroup, Inc., 6.50%, 1/18/11....... 1,500,000 1,714,862 Washington Mutual, Inc., 6.25%, 5/15/06.............................. 1,500,000 1,649,324 ----------- 5,417,509 ----------- - --------------------------------------------------------------- CORPORATE OBLIGATIONS, CONTINUED PRINCIPAL AMOUNT($) VALUE($) --------- ----------- BROKERAGE SERVICES - 5.1% Goldman Sachs Group, Inc., 5.70%, 9/1/12............................... 2,000,000 2,130,196 Goldman Sachs Group, Inc., 6.125%, 2/15/33.............................. 1,500,000 1,551,200 Lehman Brothers Holdings Inc., 4.00%, 1/22/08.............................. 2,000,000 2,042,782 Lehman Brothers Holdings, Inc., 6.25%, 5/15/06.............................. 1,000,000 1,108,454 Merrill Lynch & Co., 5.70%, 2/6/04.... 2,000,000 2,064,198 ----------- 8,896,830 ----------- CONSUMER PRODUCTS - 4.0% Anheuser-Busch Cos, Inc., 6.00%, 4/15/11.............................. 1,500,000 1,674,452 Archer Daniels Midland Co., 5.935%, 10/1/32.............................. 1,000,000 1,047,968 PepsiCo, Inc., 5.75%, 1/15/08......... 1,500,000 1,650,309 The Procter & Gamble Co., 4.00%, 4/30/05.............................. 2,500,000 2,616,302 ----------- 6,989,031 ----------- FINANCE - 8.9% CIT Group, Inc., 4.125%, 2/21/06...... 2,000,000 2,041,934 Countrywide Home Loan, Inc., 5.50%, 8/1/06............................... 2,500,000 2,690,579 Ford Motor Credit Co., 6.50%, 1/25/07.............................. 2,500,000 2,555,482 General Electric Capital Corp., 3.50%, 5/1/08............................... 2,000,000 2,009,100 General Electric Capital Corp., 6.75%, 3/15/32.............................. 1,500,000 1,735,781 General Electric Co., 5.00%, 2/1/13... 1,000,000 1,033,579 Household Finance Corp., 6.50%, 1/24/06.............................. 500,000 556,279 Household Finance Corp., 6.375%, 10/15/11............................. 1,000,000 1,095,250 John Deere Capital Corp., 5.10%, 1/15/13.............................. 2,000,000 2,054,846 ----------- 15,772,830 ----------- GOVERNMENTS (FOREIGN) - 0.6% United Mexican States, 4.625%, 10/8/08.............................. 1,000,000 1,014,000 ----------- HEALTH CARE - 0.3% United Healthcare Corp., 5.20%, 7/17/07.............................. 500,000 533,698 ----------- INSURANCE - 0.3% Travelers Property Casualty Corp., 6.375%, 3/15/33 (b).................. 500,000 532,376 ----------- MEDIA - 0.6% AOL Time Warner, Inc., 6.125%, 4/15/06.............................. 1,000,000 1,064,509 ----------- PHARMACEUTICALS - 1.2% Pfizer, Inc., 3.625%, 11/1/04......... 2,000,000 2,054,538 ----------- RETAIL - 1.8% Wal-Mart Stores, Inc., 3.25%, 9/29/03.............................. 2,000,000 2,015,968 Wal-Mart Stores, Inc., 4.375%, 7/12/07.............................. 1,000,000 1,057,228 ----------- 3,073,196 ----------- TELECOMMUNICATIONS - 1.2% Verizon Virginia, Inc., 4.625%, 3/15/13.............................. 1,000,000 993,458 Vodafone Group PLC, 5.375%, 1/30/15... 1,000,000 1,042,116 ----------- 2,035,574 ----------- TOTAL CORPORATE OBLIGATIONS........... 50,543,576 -----------
See notes to financial statements. HSBC INVESTOR PORTFOLIOS 57 HSBC INVESTOR LIMITED MATURITY PORTFOLIO - -------------------------------------------------------------------------------- SCHEDULE OF PORTFOLIO INVESTMENTS -- APRIL 30, 2003 (UNAUDITED) (CONTINUED) .................................................................................
- --------------------------------------------------------------- ASSET BACKED SECURITIES - 4.7% PRINCIPAL AMOUNT($) VALUE($) --------- ----------- American Express Credit Account Master Trust 99 2 A, 5.95%, 12/15/06........ 1,500,000 1,570,975 CIT Equipment Collateral 01 A A3, 4.32%, 5/20/05....................... 1,578,452 1,599,959 Honda Auto Receivables Owner Trust 03 1 A4, 2.48%, 7/18/08................. 5,000,000 5,037,837 ----------- TOTAL ASSET BACKED SECURITIES......... 8,208,771 ----------- - --------------------------------------------------------------- COMMERCIAL PAPER - 2.9% FINANCE - 2.9% ED&F Treasury Management, 1.27%, 5/6/03*.............................. 2,500,000 2,499,383 UBS Finance, 1.26%, 5/5/03*........... 2,500,000 2,499,475 ----------- TOTAL COMMERCIAL PAPER................ 4,998,858 ----------- - --------------------------------------------------------------- INVESTMENT COMPANIES - 1.7% PRINCIPAL AMOUNT($) VALUE($) --------- ----------- Dreyfus Cash Management Fund.......... 3,050,008 3,050,008 ----------- TOTAL INVESTMENT COMPANIES............ 3,050,008 ----------- TOTAL INVESTMENTS (COST $173,713,092) (a) - 103.1%.... 180,371,484 ----------- -----------
- -------------- Percentages indicated are based on net assets of $174,929,213. (a) Cost differs from value by net unrealized appreciation as follows: Unrealized appreciation............ $6,658,743 Unrealized depreciation............ (351) ---------- Net unrealized appreciation........ $6,658,392 ---------- ----------
(b) Security exempt from registration under Rule 144a of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. These securities have been deemed liquid by the investment manager based on procedures approved by the Board of Trustees. * Rate presented indicates the effective yield at time of purchase. 58 HSBC INVESTOR PORTFOLIOS See notes to financial statements. HSBC INVESTOR FIXED INCOME PORTFOLIO - -------------------------------------------------------------------------------- SCHEDULE OF PORTFOLIO INVESTMENTS -- APRIL 30, 2003 (UNAUDITED) .................................................................................
- ---------------------------------------------------------------- U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - 52.8% PRINCIPAL AMOUNT($) VALUE($) ---------- ----------- FEDERAL HOME LOAN BANK - 12.5% 4.40%, 11/20/06....................... 9,000,000 9,577,890 3.85%, 1/17/08........................ 8,000,000 8,043,536 5.05%, 2/6/13......................... 11,585,000 11,783,474 5.00%, 2/7/13......................... 12,165,000 12,476,996 5.10%, 4/24/13........................ 8,000,000 7,976,000 6.20%, 8/21/17........................ 5,000,000 5,058,975 ----------- 54,916,871 ----------- FEDERAL HOME LOAN MORTGAGE CORP. - 10.5% 2.625%, 5/13/05....................... 10,000,000 10,004,351 4.125%, 1/17/06....................... 5,000,000 5,080,460 5.75%, 9/15/10........................ 4,910,000* 6,112,482 Pool #180881, 10.50%, 10/1/11......... 16,860 19,164 Pool #308433, 10.50%, 11/1/18......... 9,226 10,671 Pool #555201, 11.00%, 9/1/16.......... 12,382 14,295 Pool #555283, 10.00%, 9/1/17.......... 55,742 62,695 Pool #A00814, 10.00%, 11/1/20......... 107,948 122,904 Pool #A01417, 10.00%, 3/1/21.......... 93,247 105,675 Pool #A01521, 9.50%, 12/1/16.......... 31,208 34,829 Pool #A01663, 10.00%, 11/1/16......... 111,595 126,084 Pool #A01706, 10.00%, 6/1/17.......... 144,831 164,134 Pool #C00368, 8.50%, 10/1/24.......... 285,166 310,511 Pool #C00922, 8.00%, 2/1/30........... 2,803,363 3,029,254 Pool #C01081, 8.50%, 10/1/30.......... 214,061 230,478 Pool #C38572, 8.00%, 5/1/30........... 288,959 311,959 Pool #C39168, 8.00%, 6/1/30........... 94,510 102,033 Pool #C39291, 8.00%, 6/1/30........... 51,253 55,332 Pool #C39320, 8.00%, 6/1/30........... 193,924 209,360 Pool #C39745, 8.00%, 6/1/30........... 96,609 104,299 Pool #C41005, 8.50%, 8/1/30........... 197,041 212,152 Pool #C41562, 8.00%, 8/1/30........... 156,610 169,076 Pool #C41674, 8.00%, 8/1/30........... 122,852 132,631 Pool #C41797, 8.00%, 9/1/30........... 129,169 139,451 Pool #C42016, 8.00%, 9/1/30........... 78,656 84,916 Pool #C42095, 8.00%, 9/1/30........... 233,236 251,801 Pool #C42343, 8.00%, 9/1/30........... 91,448 98,727 Pool #C43224, 8.50%, 10/1/30.......... 30,425 32,759 Pool #C43803, 8.50%, 10/1/30.......... 74,145 79,832 Pool #C54447, 7.00%, 7/1/31........... 1,144,234 1,206,763 Pool #C60712, 6.50%, 11/1/31.......... 9,016,529 9,413,792 Pool #C80387, 6.50%, 4/1/26........... 362,345 379,363 Pool #D18976, 10.00%, 3/1/20.......... 133,415 150,201 Pool #D57038, 9.00%, 10/1/24.......... 24,153 26,937 Pool #G00951, 6.00%, 7/1/28........... 3,309,739 3,450,908 Pool #G01317, 7.00%, 10/1/31.......... 3,818,050 4,026,696 Pool# D62926, 6.50%, 8/1/25........... 339,113 355,329 ----------- 46,422,304 ----------- FEDERAL NATIONAL MORTGAGE ASSOCIATION - 16.8% 6.75%, 1/25/08........................ 4,926,091 5,080,330 4.625%, 5/1/13........................ 6,600,000 6,639,098 6.25%, 5/15/29........................ 5,995,000 6,822,718 7.25%, 5/15/30........................ 1,730,000 2,224,046 Pool #124783, 10.50%, 12/1/16......... 13,360 15,138 Pool #250202, 8.50%, 11/1/14.......... 207,503 226,606 Pool #250282, 8.50%, 3/1/15........... 60,389 65,878 Pool #253438, 8.50%, 9/1/30........... 695,639 750,780 Pool #253461, 8.50%, 7/1/20........... 82,673 89,271 - ---------------------------------------------------------------- U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS, CONT'D. PRINCIPAL AMOUNT($) VALUE($) ---------- ----------- Pool #253517, 8.50%, 11/1/30.......... 90,000 97,134 Pool #253576, 8.50%, 10/1/20.......... 129,543 139,882 Pool #253774, 8.50%, 4/1/31........... 192,490 207,438 Pool #253872, 8.50%, 5/1/31........... 101,642 109,535 Pool #303157, 10.00%, 5/1/22.......... 14,189 16,137 Pool #323073, 10.50%, 10/1/18......... 90,625 104,393 Pool #323166, 9.50%, 8/1/22........... 189,300 210,984 Pool #323559, 10.00%, 6/1/20.......... 154,222 176,816 Pool #328970, 7.00%, 11/1/25.......... 170,033 180,461 Pool #329530, 7.00%, 12/1/25.......... 711,747 755,399 Pool #329655, 7.00%, 11/1/25.......... 563,209 597,751 Pool #356905, 4.32%, 10/1/36 (b)...... 1,312,239 1,343,671 Pool #398509, 6.50%, 10/1/12.......... 35,176 37,359 Pool #398958, 6.50%, 10/1/12.......... 575,065 610,747 Pool #418458, 10.00%, 11/1/18......... 263,168 300,325 Pool #427683, 10.50%, 6/1/09.......... 285,854 318,540 Pool #44176, 10.00%, 6/1/20........... 22,342 25,640 Pool #513942, 8.50%, 9/1/29........... 253,054 273,259 Pool #535332, 8.50%, 4/1/30........... 579,418 625,682 Pool #535440, 8.50%, 8/1/30........... 712,364 768,830 Pool #535608, 9.50%, 4/1/30........... 862,270 961,501 Pool #536285, 8.50%, 8/1/30........... 5,157 5,566 Pool #548965, 8.50%, 7/1/30........... 427,532 461,420 Pool #551989, 8.50%, 10/1/30.......... 168,931 182,321 Pool #556565, 8.50%, 10/1/30.......... 51,008 55,051 Pool #559452, 8.50%, 1/1/31........... 41,078 44,334 Pool #560796, 8.50%, 10/1/30.......... 38,706 41,774 Pool #560880, 8.50%, 3/1/31........... 87,924 94,752 Pool #562204, 8.50%, 12/1/30.......... 30,730 33,166 Pool #562338, 8.50%, 1/1/31........... 120,063 129,579 Pool #563935, 8.50%, 1/1/31........... 10,796 11,651 Pool #568486, 7.00%, 1/1/31........... 643,272 679,941 Pool #572688, 8.50%, 2/1/31........... 32,489 35,012 Pool #573601, 8.50%, 3/1/31........... 234,318 252,513 Pool #573718, 8.50%, 2/1/31........... 79,304 85,590 Pool #573752, 8.50%, 2/1/31........... 587,211 633,757 Pool #575328, 6.50%, 4/1/31........... 1,476,614 1,542,804 Pool #575689, 8.50%, 10/1/30.......... 15,253 16,471 Pool #576146, 8.50%, 1/1/31........... 64,498 69,610 Pool #577306, 8.50%, 4/1/31........... 77,165 83,157 Pool #583128, 8.50%, 2/1/31........... 98,645 106,465 Pool #623129, 6.50%, 1/1/32........... 7,363,576 7,693,651 Pool #651901, 6.00%, 8/1/32........... 10,187,110 10,615,692 Pool #694655, 5.50%, 4/1/33........... 15,000,003 15,434,066 Pool #695777, 5.50%, 4/1/33........... 5,500,000 5,659,156 Pool #83435, 10.00%, 11/1/19.......... 18,021 20,661 Pool #83880, 10.00%, 11/1/19.......... 1,788 2,050 Pool #84964, 10.00%, 11/1/19.......... 5,860 6,709 Pool #87291, 10.00%, 1/1/20........... 1,405 1,612 ----------- 73,773,880 ----------- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 6.2% Pool #120587, 13.50%, 11/15/14........ 11,791 14,335 Pool #136224, 10.00%, 11/15/15........ 18,574 21,284 Pool #150312, 11.50%, 2/15/16......... 9,551 11,249 Pool #164353, 10.50%, 6/15/16......... 20,545 23,827 Pool #164356, 10.50%, 6/15/16......... 29,489 34,200 Pool #199010, 10.00%, 1/15/17......... 13,506 15,506
See notes to financial statements. HSBC INVESTOR PORTFOLIOS 59 HSBC INVESTOR FIXED INCOME PORTFOLIO - -------------------------------------------------------------------------------- SCHEDULE OF PORTFOLIO INVESTMENTS -- APRIL 30, 2003 (UNAUDITED) .................................................................................
- ---------------------------------------------------------------- U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS, CONT'D. PRINCIPAL AMOUNT($) VALUE($) ---------- ----------- Pool #208701, 9.50%, 4/15/20.......... 6,507 7,345 Pool #227192, 10.00%, 6/15/19......... 6,289 7,226 Pool #253821, 10.00%, 10/15/18........ 11,299 12,977 Pool #257153, 10.00%, 11/15/18........ 6,936 7,967 Pool #265085, 10.00%, 4/15/19......... 6,305 7,244 Pool #271874, 10.00%, 4/15/19......... 6,157 7,074 Pool #278742, 10.50%, 9/15/19......... 37,202 43,312 Pool #282210, 10.50%, 11/15/19........ 13,323 15,511 Pool #301274, 10.00%, 1/15/21......... 18,194 20,912 Pool #346406, 7.50%, 2/15/23.......... 717,801 771,369 Pool #39798, 11.00%, 6/15/10.......... 12,807 14,682 Pool #412530, 7.50%, 12/15/25......... 900,591 965,973 Pool #587112, 6.00%, 6/15/32.......... 13,555,950 14,198,696 Pool #780047, 9.00%, 12/15/17......... 255,007 288,243 Pool #780066, 10.50%, 12/15/20........ 110,393 128,206 Pool #780081, 10.00%, 2/15/25......... 34,446 39,550 Pool #780127, 10.50%, 4/15/25......... 31,939 37,066 Pool #780164, 10.00%, 12/15/17........ 65,175 74,691 Pool #780203, 9.50%, 12/15/17......... 174,740 196,826 Pool #780311, 9.50%, 12/15/21......... 118,872 134,147 Pool #780377, 9.00%, 12/15/19......... 229,815 256,636 Pool #780378, 11.00%, 1/15/19......... 65,532 76,310 Pool #780384, 11.00%, 12/15/17........ 74,114 86,251 Pool #780472, 10.00%, 3/15/25......... 104,599 120,105 Pool #780517, 10.50%, 1/15/18......... 22,921 26,552 Pool #780614, 11.00%, 3/15/18......... 178,038 208,686 Pool #780784, 10.00%, 8/15/21......... 166,342 191,098 Pool #780804, 10.00%, 12/15/20........ 481,941 553,298 Pool #780826, 9.50%, 5/15/18.......... 293,174 330,320 Pool #780904, 9.50%, 7/15/18.......... 214,194 241,216 Pool #780991, 9.00%, 11/15/24......... 217,663 243,044 Pool #781300, 7.00%, 6/15/31.......... 2,655,503 2,818,158 Pool #781345, 6.00%, 10/15/31......... 3,205,215 3,359,499 Pool #80094, 5.75%, 7/20/27 (b)....... 39,516 40,352 Pool #80106, 5.75%, 8/20/27 (b)....... 112,411 114,787 Pool #80114, 5.75%, 9/20/27 (b)....... 73,481 75,034 Pool #80123, 5.625%, 10/20/27 (b)..... 131,670 134,575 Pool #80137, 5.625%, 11/20/27 (b)..... 135,107 138,081 Pool #80145, 5.625%, 12/20/27 (b)..... 32,812 33,534 Pool #80156, 5.375%, 1/20/28 (b)...... 43,988 44,840 Pool #8599, 5.375%, 2/20/25 (b)....... 56,576 57,882 Pool #8613, 5.375%, 3/20/25 (b)....... 146,223 149,601 Pool #8619, 5.375%, 4/20/25 (b)....... 33,980 34,825 Pool #8621, 5.375%, 4/20/25 (b)....... 163,757 167,830 Pool #8623, 5.375%, 4/20/25 (b)....... 120,499 123,255 Pool #8624, 5.375%, 4/20/25 (b)....... 267,104 274,579 Pool #8628, 5.375%, 5/20/25 (b)....... 34,095 34,943 Pool #8631, 5.375%, 5/20/25 (b)....... 75,327 77,201 Pool #8634, 5.375%, 5/20/25 (b)....... 42,958 44,161 Pool #8643, 5.375%, 6/20/25 (b)....... 107,182 109,849 Pool #8646, 5.375%, 6/20/25 (b)....... 70,201 72,167 Pool #8663, 5.75%, 7/20/25 (b)........ 36,011 36,809 Pool #8686, 5.75%, 8/20/25 (b)........ 131,351 134,257 ----------- 27,509,153 ----------- U.S. TREASURY BONDS - 1.9% 5.25%, 11/15/28....................... 8,100,000 8,513,861 ----------- - ---------------------------------------------------------------- U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS, CONT'D. PRINCIPAL AMOUNT($) VALUE($) ---------- ----------- U.S. TREASURY NOTES - 4.9% 5.75%, 8/15/03........................ 2,000,000 2,026,876 3.00%, 11/15/07....................... 5,000,000 5,068,555 5.00%, 8/15/11........................ 2,400,000 2,628,000 4.375%, 8/15/12....................... 11,400,000 11,902,763 ----------- 21,626,194 ----------- TOTAL U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS................... 232,762,263 ----------- - ---------------------------------------------------------------- CORPORATE OBLIGATIONS - 35.1% AEROSPACE & DEFENSE - 1.4% Lockheed Martin Corp., 8.20%, 12/1/09.............................. 2,500,000 3,102,782 Lockheed Martin Corp., 7.75%, 5/1/26............................... 1,750,000 2,146,921 Lockheed Martin Corp., 8.50%, 12/1/29.............................. 600,000 804,952 ----------- 6,054,655 ----------- COMPUTER SOFTWARE & SYSTEMS - 0.0% Hyundai Semiconductor, 8.25%, 5/15/04 (c).................................. 75,000 60,883 Hyundai Semiconductor, 8.625%, 5/15/07 (c).......................... 220,000 148,334 ----------- 209,217 ----------- DIVERSIFIED OPERATIONS - 1.5% Hertz Corp., 1.88%, 8/13/04 (b)....... 7,000,000 6,745,389 ----------- ELECTRIC - INTEGRATED - 1.3% Ontario Electricity Financial, 6.10%, 1/30/08.............................. 5,000,000 5,670,340 ----------- FINANCE - 21.1% AIG SunAmerica Global Financing VI, 6.30%, 5/10/11 (c)................... 1,285,000 1,445,823 Anthem Insurance, 9.125%, 4/1/10 (c).................................. 410,000 499,322 Anthem Insurance, 9.00%, 4/1/27 (c)... 610,000 793,883 Associates Corp. NA, 5.75%, 11/1/03... 5,000,000 5,107,805 AXA Financial, Inc., 6.50%, 4/1/08.... 330,000 362,492 CIT Group, Inc., 7.375%, 4/2/07....... 9,450,000 10,584,519 Citigroup Inc., 5.625%, 8/27/12....... 5,000,000 5,396,300 Citigroup, Inc., 7.25%, 10/1/10....... 1,315,000 1,558,918 EOP Operating LP, 7.50%, 4/19/29...... 325,000 370,860 Farmers Exchange Capital, 7.05%, 7/15/28 (c).......................... 775,000 600,400 Farmers Insurance Exchange, 8.625%, 5/1/24 (c)........................... 475,000 418,000 Florida Property & Casualty, 7.375%, 7/1/03 (c)........................... 250,000 252,341 Florida Windstorm, 7.125%, 2/25/19 (c).................................. 1,215,000 1,415,820 General Electric Capital Corp., 8.75%, 5/21/07.............................. 2,600,000 3,140,678 General Electric Capital Corp., 7.375%, 1/19/10...................... 895,000 1,056,823 General Electric Capital Corp., 6.875%, 11/15/10..................... 4,000,000 4,656,596 General Electric Capital Corp., 6.75%, 3/15/32.............................. 10,800,000 12,497,619 General Motors Acceptance Corp., 8.00%, 11/1/31....................... 6,000,000 6,249,228 Goldman Sachs Group, Inc., 6.875%, 1/15/11.............................. 6,160,000 7,082,528 Hutchison Whampoa Ltd., 7.45%, 8/1/17 (c)........................... 805,000 849,865
60 HSBC INVESTOR PORTFOLIOS See notes to financial statements. HSBC INVESTOR FIXED INCOME PORTFOLIO - -------------------------------------------------------------------------------- SCHEDULE OF PORTFOLIO INVESTMENTS -- APRIL 30, 2003 (UNAUDITED) .................................................................................
- ---------------------------------------------------------------- CORPORATE OBLIGATIONS, CONTINUED PRINCIPAL AMOUNT($) VALUE($) ---------- ----------- J.P. Morgan Chase & Co., 5.25%, 5/30/07.............................. 7,000,000 7,595,035 Jet Equipment Trust, 10.00%, 6/15/12 (c).................................. 175,000 54,250 Lehman Brothers, 7.875%, 8/15/10...... 7,500,000 9,020,843 Metropolitan Life Insurance Co., 7.45%, 11/1/23 (c)................... 625,000 678,436 Metropolitan Life Insurance Co., 7.80%, 11/1/25 (c)................... 550,000 639,090 Morgan Stanley, 5.80%, 4/1/07......... 5,000,000 5,450,045 New York Life Insurance, 7.50%, 12/15/23 (c)......................... 500,000 520,551 Oil Purchase Co. II, 10.73%, 1/31/04 (c).................................. 60,967 60,928 PNC Institutional Capital Trust A, 7.95%, 12/15/26 (c).................. 375,000 421,564 Prime Property Funding II, 7.00%, 8/15/04 (c).......................... 420,000 445,129 Prudential Insurance Co., 8.30%, 7/1/25 (c)........................... 1,095,000 1,335,238 Travelers Property Casualty Corp., 7.75%, 4/15/26....................... 2,000,000 2,330,378 ----------- 92,891,307 ----------- FOOD - DIVERSIFIED - 1.7% Kellogg Co., 6.60%, 4/1/11............ 6,500,000 7,432,393 ----------- GOVERNMENTS (FOREIGN) - 1.1% United Mexican States, 8.125%, 12/30/19............................. 495,000 558,608 United Mexican States, 7.50%, 4/8/33............................... 4,000,000 4,170,000 ----------- 4,728,608 ----------- HEALTH CARE - 0.7% American Home Products Corp., 6.70%, 3/15/11.............................. 960,000 1,102,272 Health Net, Inc., 8.375%, 4/15/11..... 590,000 694,277 Pharmacia Corp., 6.60%, 12/1/28....... 1,025,000 1,213,604 ----------- 3,010,153 ----------- HOTELS & LODGING - 0.1% Harrahs Operating Co., Inc., 8.00%, 2/1/11............................... 575,000 661,227 ----------- MEDIA - 0.2% CSC Holdings, Inc., 8.125%, 7/15/09... 110,000 116,600 Viacom, Inc., 6.625%, 5/15/11......... 785,000 904,335 ----------- 1,020,935 ----------- OIL & GAS - 0.9% Anadarko Finance Co., 6.75%, 5/1/11 (c)(f)........................ 2,500,000 2,847,940 Conoco, Inc., 6.95%, 4/15/29.......... 1,130,000 1,321,807 ----------- 4,169,747 ----------- REFUSE SYSTEMS - 0.1% Waste Management, Inc., 7.375%, 5/15/29.............................. 320,000 370,095 ----------- RETAIL - 3.2% Sears Roebuck Acceptance, 4.23%, 1/7/04 (b)........................... 10,160,000 10,229,972 Wal-Mart Stores, Inc., 5.45%, 8/1/06............................... 3,700,000 4,055,485 ----------- 14,285,457 ----------- TELECOMMUNICATIONS - 1.4% AT&T Broadband Corp., 8.375%, 3/15/13.............................. 4,400,000 5,368,312 Lenfest Communications, 7.625%, 2/15/08.............................. 660,000 747,778 ----------- 6,116,090 ----------- - ---------------------------------------------------------------- CORPORATE OBLIGATIONS, CONTINUED PRINCIPAL AMOUNT($) VALUE($) ---------- ----------- TRANSPORTATION - 0.1% Continental Airlines, 6.65%, 9/15/17.............................. 326,805 279,107 ----------- UTILITIES - 0.3% PSEG Energy Holdings, 9.125%, 2/10/04.............................. 430,000 445,050 RAS Laffan Liquid Natural Gas, 8.29%, 3/15/14 (c).......................... 695,000 753,658 ----------- 1,198,708 ----------- TOTAL CORPORATE OBLIGATIONS........... 154,843,428 ----------- - ---------------------------------------------------------------- COLLATERALIZED MORTGAGE OBLIGATIONS - 3.4% American Southwest Financial Securities Corp. 93 2 A1, 7.30%, 1/18/09.............................. 60,322 67,683 Banc of America Commercial Mortgage, Inc. 00 2 A2, 7.20%, 5/15/10......... 1,350,000 1,591,944 Chase Commercial Mortgage Securities Corp. 99 2 A2, 7.20%, 11/15/09....... 1,400,000 1,643,643 DLJ Mortgage Acceptance Corp. IO 97 CF1 S, 0.98%, 5/15/30 (b) (c)..... 2,025,064 48,854 Fannie Mae IE 92 89 SQ, 18.31%, 7/25/22 (e).......................... 99 13,525 Fannie Mae IE 97 30 SP, 22.18%, 4/25/22 (e).......................... 292 40,419 Fannie Mae IO 00 16 PS, 7.28%, 10/25/29 (b)......................... 1,011,049 84,971 Fannie Mae IO 01 4 SA, 6.23%, 2/17/31 (b).......................... 1,900,821 207,482 Fannie Mae IO 200 32 SV, 7.27%, 3/18/30 (b).......................... 635,426 61,213 Fannie Mae IO 270 2, 8.50%, 9/1/23.... 495,240 89,232 Fannie Mae IO 296 2, 8.00%, 4/1/24.... 586,665 94,513 Fannie Mae IO 306, 8.00%, 5/1/30...... 1,053,239 162,134 Fannie Mae IO 307, 8.00%, 6/1/30...... 60,633 8,913 FHA Weyerhauser, 7.43%, 1/1/24 (f).... 184,269 184,844 First Union-Chase Commercial Mortgage 99 C2 A2, 6.645%, 6/15/31............ 1,195,000 1,363,737 Freddie Mac IO 1534 K, 6.09%, 6/15/23 (b).......................... 1,861,570 139,489 Freddie Mac IO 207, 7.00%, 4/1/30..... 276,294 31,781 Freddie Mac IO 2141 SD, 6.84%, 4/15/29 (b).......................... 1,397,164 132,631 Freddie Mac IO 2247 SC, 6.19%, 8/15/30 (b).......................... 889,755 70,002 GE Capital Commercial Mortgage Corp. 01 1 A1, 6.08%, 5/15/33.............. 619,268 675,796 GMAC Commercial Mortgage Securities, Inc. 98 C2 A2, 6.42%, 5/15/35........ 1,175,000 1,329,084 GMAC Commercial Mortgage Securities, Inc. IO 97 C2 X, 1.80%, 10/15/28 (b).................................. 1,073,606 44,555 Government National Mortgage Association IO 99 29 SD, 6.69%, 3/16/26 (b).......................... 1,012,167 68,932 Government National Mortgage Association IO 99 30 S, 7.29%, 8/16/29 (b).......................... 1,065,671 95,308 Government National Mortgage Association IO 99 30 SA, 6.69%, 4/16/29 (b).......................... 1,295,727 117,286 Government National Mortgage Association IO 99 32 SB, 6.69%, 7/16/27 (b).......................... 937,688 76,802 Government National Mortgage Association IO 99 44 SA, 7.24%, 12/16/29 (b)......................... 1,068,909 135,629 GS Mortgage Securities Corp. IO 97 GL X2, 1.01%, 7/13/30 (b)............... 1,118,799 25,260
See notes to financial statements. HSBC INVESTOR PORTFOLIOS 61 HSBC INVESTOR FIXED INCOME PORTFOLIO - -------------------------------------------------------------------------------- SCHEDULE OF PORTFOLIO INVESTMENTS -- APRIL 30, 2003 (UNAUDITED) .................................................................................
- ---------------------------------------------------------------- COLLATERALIZED MORTGAGE OBLIGATIONS, CONTINUED PRINCIPAL AMOUNT($) VALUE($) ---------- ----------- LB-UBS Commercial Mortgage Trust 00 C3 A1, 7.95%, 7/15/09................... 646,253 732,690 LB-UBS Commercial Mortgage Trust 00 C4 A2, 7.37%, 8/15/26................... 1,200,000 1,426,787 Morserv, Inc. 96 2 1A1, 2.17%, 11/25/26 (b)......................... 529 529 Norwest Mortgage, 13.25%, 12/1/03 (f).................................. 261 261 PNC Mortgage Acceptance Corp. 00 C2 A2, 7.30%, 9/12/10................... 1,200,000 1,420,785 Ryland Mortgage Securities Corp. 94 4 C1 4.84%, 9/25/30.................... 1,265,494 1,263,836 Salomon Brothers Mortgage Securities VII 00 C3 A2, 6.59%, 10/18/10........ 1,300,000 1,486,919 ----------- TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS.......................... 14,937,469 ----------- - ---------------------------------------------------------------- ASSET BACKED SECURITIES - 3.9% Citibank Credit Card Issuance Trust 00 A3 A3, 6.875%, 11/15/09.............. 2,230,000 2,567,980 Connecticut RRB Special Purpose Trust CL&P-1 01 1 A5, 6.21%, 12/30/11...... 1,400,000 1,595,150 Detroit Edison Securitization Funding LLC 01 1 A3, 5.875%, 3/1/10.......... 715,000 792,734 Detroit Edison Securitization Funding LLC 01 1 A5, 6.42%, 3/1/15........... 835,000 959,881 Global Rated Eligible Asset Trust 1998-A, 7.33%, 3/16/06 (d)........... 234,399 0 MBNA Master Credit Card Trust 00 E A 7.80%, 10/15/12...................... 1,200,000 1,447,503 MBNA Master Credit Card Trust 99 B A 5.90%, 8/15/11....................... 1,055,000 1,178,115 Peco Energy Transition Trust 00 A A3 7.625%, 3/1/10....................... 1,200,000 1,435,749 Peco Energy Transition Trust 01 A A1 6.52%, 12/31/10...................... 1,100,000 1,265,801 PSE&G Transition Funding LLC 01 1 A6 6.61%, 6/15/15....................... 710,000 826,494 Smart (CFS) 97 6 A1, 7.71%, 4/15/06 (d).................................. 250,136 0 Union Acceptance Corp. 01 C B, 4.73%, 11/9/09.............................. 5,000,000 5,201,173 ----------- TOTAL ASSET BACKED SECURITIES......... 17,270,580 ----------- - ---------------------------------------------------------------- RIGHTS & WARRANTS - 0.0% SHARES OR PRINCIPAL AMOUNT($) VALUE($) ---------- ----------- GOVERNMENTS (FOREIGN) - 0.0% United Mexican States Value Recovery, 0.00%, 6/30/03....................... 1,046,000 0 ----------- TOTAL RIGHTS AND WARRANTS............. 0 ----------- - ---------------------------------------------------------------- INVESTMENT COMPANIES - 3.8% Dreyfus Cash Management Fund.......... 16,789,475 16,789,475 ----------- TOTAL INVESTMENT COMPANIES............ 16,789,475 ----------- TOTAL INVESTMENTS (COST $412,604,152) (a) - 99.0%..... 436,603,215 ----------- -----------
- --------- Percentages indicated are based on net assets of $441,136,239. (a) Cost differs from value by net unrealized appreciation of securities as follows: Unrealized appreciation......... $26,805,392 Unrealized depreciation......... (2,806,329) ----------- Net unrealized appreciation..... $23,999,063 ----------- -----------
(b) Variable rate security. The interest rate on these securities is adjusted periodically to reflect then-current short-term interest rates. The rate presented in this report represents the rate that was in effect on April 30, 2003. Each of these securities contains put or demand features that allow the fund to require the issuer to repurchase the security from the fund within various time periods, including daily, weekly, monthly, or semi-annually. (c) Security exempt from registration under Rule 144a of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. These securities have been deemed liquid by the investment manager based on procedures approved by the Board of Trustees. (d) Represents an illiquid security, valued in good faith by the investment manager. The Portfolio has received partial payment for this security. (e) Rate presented indicates the effective yield at time of purchase. (f) Security valued at fair value as determined in good faith under procedures applied under the general supervision of the Board of Trustees. * The principal amount of the security is denominated in Euro. IE -- ('IOette') Represents the right to receive interest payments on an underlying pool of mortgages with similar risks as those associated with IO securities. Unlike IO's, the owner also has a right to receive a very small portion of principal. IO -- Interest Only security 62 HSBC INVESTOR PORTFOLIOS See notes to financial statements. HSBC INVESTOR INTERNATIONAL EQUITY PORTFOLIO - -------------------------------------------------------------------------------- SCHEDULE OF PORTFOLIO INVESTMENTS -- APRIL 30, 2003 (UNAUDITED) .................................................................................
- ----------------------------------------------------------------- COMMON STOCKS - 81.7% SHARES VALUE($) --------- ----------- AUSTRALIA - 2.6% Australia & New Zealand Bank Group Ltd.................................... 101,921 1,189,062 BHP Billiton Ltd........................ 611 3,455 BHP Billiton Ltd. ADR................... 90,055 1,004,113 Brambles Industries Ltd................. 69,300 223,256 Fosters Brewing Group Ltd............... 305,394 855,856 National Australia Bank Ltd............. 53,106 1,079,665 News Corp. Ltd.......................... 97,369 693,146 QBE Insurance Group Ltd................. 120,000 641,064 WMC Ltd................................. 189,200 516,024 WMC Resources Ltd. (b).................. 189,200 473,416 Woolworths Ltd.......................... 221,300 1,788,570 ----------- 8,467,627 ----------- BRAZIL - 0.5% Companhia Vale do Rio Doce ADR.......... 29,000 810,840 Companhia Vale do Rio Doce ADR.......... 31,800 839,520 ----------- 1,650,360 ----------- CANADA - 3.1% Abitibi-Consolidated, Inc............... 93,100 652,206 BCE, Inc................................ 115,700 2,286,418 Bombardier, Inc. Class B................ 457,000 1,105,388 Placer Dome, Inc........................ 49,000 490,137 Suncor Energy, Inc...................... 45,600 750,120 TELUS Corp.............................. 94,500 1,271,330 The Thomson Corp........................ 46,800 1,382,861 The Thomson Corp. ADR................... 68,300 2,012,118 ----------- 9,950,578 ----------- DENMARK - 0.1% Novo Nordisk A/S Class B................ 12,800 463,695 ----------- FINLAND - 1.7% Nokia Oyj............................... 265,000 4,483,418 UPM-Kymmene Oyj......................... 75,000 1,096,470 ----------- 5,579,888 ----------- FRANCE - 9.8% Accor SA................................ 16,400 540,470 BNP Paribas SA.......................... 94,600 4,440,426 Bouygues SA............................. 104,390 2,553,663 Essilor International SA................ 21,900 896,718 France Telecom SA....................... 35,900 829,333 France Telecom SA (b)................... 32,000 736,024 Groupe Danone........................... 11,900 1,683,955 L'Air Liquide SA........................ 13,150 1,991,452 L'Oreal SA.............................. 16,200 1,157,973 Pechiney SA Class A..................... 11,500 331,759 Renault SA.............................. 48,100 2,080,085 Sanofi-Synthelabo SA.................... 143,120 8,537,136 Schneider Electric SA................... 42,200 1,997,778 Societe Generale Class A................ 9,500 580,990 Societe Television Francaise............ 4,400 123,595 Vivendi Universal SA.................... 167,200 2,724,290 ----------- 31,205,647 ----------- GERMANY - 3.8% Aixtron AG.............................. 8,400 28,498 Allianz Holdings AG..................... 14,100 991,343 Bayerische Motoren Werke AG............. 23,672 789,897 Daimler Chrysler AG..................... 32,400 1,044,978 Deutsche Telekom AG..................... 157,700 2,108,398 - ----------------------------------------------------------------- COMMON STOCKS, CONTINUED SHARES VALUE($) --------- ----------- Epcos AG (b)............................ 20,600 314,958 Infineon Technologies AG (b)............ 57,900 426,468 Metro AG................................ 30,000 823,608 MG Technologies......................... 34,000 314,176 Muenchener Rueckversicher AG............ 10,400 1,035,291 SAP AG.................................. 8,500 864,175 SAP AG ADR.............................. 6,500 165,815 Siemens AG.............................. 67,900 3,356,894 ----------- 12,264,499 ----------- HONG KONG - 2.4% Cheung Kong Holdings Ltd................ 208,000 1,149,473 China Mobile Ltd........................ 209,000 419,391 Hang Lung Properties Ltd................ 619,000 535,738 Hang Seng Bank Ltd...................... 130,200 1,289,637 Hong Kong Land Holdings Ltd............. 356,000 398,720 Hutchison Whampoa Ltd................... 209,600 1,166,378 Johnson Electric Holdings............... 919,000 989,813 Li & Fung Ltd........................... 836,000 937,935 Sun Hung Kai Properties................. 78,000 366,045 Swire Pacific Ltd. Class A.............. 125,500 497,234 ----------- 7,750,364 ----------- IRELAND - 0.5% CRH PLC................................. 101,675 1,560,203 ----------- ITALY - 1.3% Assicurazioni Generali SpA.............. 28,000 643,396 ENI SpA................................. 240,400 3,426,018 ----------- 4,069,414 ----------- JAPAN - 12.9% Acom Co., Ltd........................... 4,050 113,764 Advantest Corp.......................... 25,000 838,504 AEON Co., Ltd........................... 104,000 2,363,241 Aiful Corp.............................. 12,945 486,279 Canon, Inc.............................. 30,000 1,212,477 Chugai Pharmaceutical Co., Ltd.......... 74,500 780,857 Dai Nippon Printing Co., Ltd............ 55,000 534,043 Daiwa Securities Group, Inc............. 205,000 806,180 Hirose Electronics Co., Ltd............. 29,400 2,102,817 Hitachi, Ltd............................ 131,000 437,179 Hoya Corp............................... 19,000 1,123,176 Japan Airlines System Corp. (b)......... 260,000 462,183 Japan Telecom Co., Ltd.................. 226 617,776 Kansai Electric Power Co., Inc.......... 43,400 726,002 Keyence Corp............................ 3,993 641,840 Mitsubishi Estate Co.................... 130,000 760,859 Mitsubishi Heavy Industries, Ltd........ 496,000 1,102,130 Mitsubishi Motors Corp. (b)............. 368,000 783,767 Mitsui Fudosan Co., Ltd................. 196,000 1,055,106 Mitsui Sumitomo Insurance Co., Ltd...... 127,370 598,082 Murata Manufacturing Co., Ltd........... 10,800 384,873 NEC Corp................................ 243,000 760,012 Nikko Cordial Securities Co., Ltd....... 299,000 802,281 Nikon Corp. (b)......................... 76,000 506,624 Nissan Motor Co., Ltd................... 380,000 2,915,480 Nitto Denko Corp........................ 22,000 632,735 Nomura Holdings, Inc.................... 117,000 1,158,620 NTT DoCoMo, Inc......................... 532 1,097,367 Orix Corp............................... 26,100 1,192,730 Rohm Co., Ltd........................... 18,300 1,885,854
See notes to financial statements. HSBC INVESTOR PORTFOLIOS 63 HSBC INVESTOR INTERNATIONAL EQUITY PORTFOLIO - -------------------------------------------------------------------------------- SCHEDULE OF PORTFOLIO INVESTMENTS -- APRIL 30, 2003 (UNAUDITED) (CONTINUED) .................................................................................
- ----------------------------------------------------------------- COMMON STOCKS, CONTINUED SHARES VALUE($) --------- ----------- Sekisui House, Ltd...................... 167,000 1,226,664 Shimamura Co., Ltd...................... 7,900 437,196 Shionogi & Co., Ltd..................... 130,000 1,543,518 Sony Corp............................... 48,010 1,167,441 Suzuki Motor Corp....................... 166,000 1,965,387 TDK Corp................................ 22,500 781,067 Tokyo Electron, Ltd..................... 61,200 2,293,845 Tokyu Corp.............................. 213,000 576,882 Toray Industries, Inc................... 390,000 941,808 Tostem Inax Holding Corp................ 17,000 181,318 Yahoo Japan Corp. (b)................... 43 483,146 Yamato Transport Co., Ltd............... 33,000 369,126 ----------- 40,850,236 ----------- LUXEMBOURG - 0.1% SES Global FDR.......................... 57,400 336,307 ----------- MEXICO (1.3%) America Movil........................... 81,800 1,371,786 Telefonos De Mexico ADR................. 91,400 2,761,194 ----------- 4,132,980 ----------- NETHERLANDS - 9.0% ABN Amro Holding NV..................... 183,300 3,097,081 Aegon NV................................ 394,576 4,011,560 ASM Lithography Holding NV (b).......... 75,800 654,748 Hagemeyer NV............................ 7,000 33,904 Heineken Holding NV..................... 33,375 968,037 Heineken NV............................. 91,625 3,401,974 ING Groep NV............................ 105,600 1,714,712 Koninklijke (Royal) KPN NV (b).......... 395,400 2,629,948 Koninklijke (Royal) Philips Electronics NV..................................... 61,300 1,140,408 Koninklijke Numico NV................... 24,800 231,378 Royal Dutch Petroleum Co................ 172,200 7,043,221 Royal Dutch Petroleum Co. ADR........... 10,500 429,240 STMicroelectronics NV................... 95,700 1,977,958 STMicroelectronics NV ADR............... 2,000 41,180 Unilever NV -- CVA...................... 10,600 667,781 VNU..................................... 29,839 865,808 ----------- 28,908,938 ----------- NEW ZEALAND - 0.2% Telecom Corporation of New Zealand Ltd.................................... 276,769 741,543 ----------- NORWAY - 1.0% Norsk Hydro ASA......................... 33,300 1,408,557 Statoil ASA............................. 215,900 1,712,317 ----------- 3,120,874 ----------- PORTUGAL - 0.2% Portugal Telecom SA..................... 82,400 589,453 ----------- RUSSIA - 0.2% LUKOIL ADR.............................. 9,000 619,200 ----------- SINGAPORE - 1.8% DBS Group Holdings Ltd. ADR (c)......... 375,000 1,838,250 Singapore Airlines Ltd.................. 73,000 388,517 Singapore Press Holdings Ltd............ 64,370 598,167 Singapore Telecommunications Ltd........ 3,466,520 2,830,848 ----------- 5,655,782 ----------- SOUTH KOREA - 1.1% Samsung Electronics Ltd................. 28,475 3,559,375 ----------- - ----------------------------------------------------------------- COMMON STOCKS, CONTINUED SHARES VALUE($) --------- ----------- SPAIN - 2.4% Altadis SA.............................. 18,800 484,447 Banco Bilbao Vizcaya Argentina.......... 309,700 3,117,539 Industria de Diseno Textil, SA (Inditex).............................. 106,400 2,120,739 Repsol YPF SA........................... 53,500 779,163 Telefonica SA (b)....................... 106,427 1,177,036 ----------- 7,678,924 ----------- SWEDEN - 1.3% Assa Abloy AB Class B................... 131,900 1,257,772 ForeningsSparbanken AB.................. 129,200 1,753,267 Sandvik AB.............................. 22,000 559,434 Svenska Handelsbanken Class A........... 44,500 707,239 ----------- 4,277,712 ----------- SWITZERLAND - 8.0% Compagnie Financiere Richemont AG Class A................................ 166,715 2,464,525 Credit Suisse Group (b)................. 85,411 2,040,342 Holcim Ltd. Class B..................... 12,173 2,284,176 Nestle SA............................... 16,157 3,293,822 Novartis AG............................. 112,955 4,455,573 Roche Holding AG........................ 17,700 1,126,233 Swiss Reinsurance....................... 66,838 4,366,178 Swisscom AG............................. 11,447 3,540,527 Synthes-Stratec, Inc.................... 918 578,699 UBS AG.................................. 33,300 1,579,927 ----------- 25,730,002 ----------- TAIWAN - 0.3% Taiwan Semiconductor Manufacturing Co. Ltd. ADR (b)........................... 119,057 996,507 ----------- UNITED KINGDOM - 16.1% ARM Holdings PLC (b).................... 278,000 284,361 AstraZeneca PLC......................... 58,800 2,307,138 AstraZeneca PLC......................... 191,851 7,599,266 Barclays PLC............................ 188,000 1,298,786 BG Group PLC............................ 462,000 1,847,825 BHP Billiton PLC........................ 312,804 1,599,805 BOC Group PLC........................... 64,700 815,879 Brambles Industries PLC................. 165,400 491,692 British Aerospace PLC................... 910,062 1,847,223 Centrica PLC............................ 244,500 649,659 Compass Group PLC....................... 108,000 497,120 Glaxosmithkline PLC..................... 25,200 505,060 HBOC PLC................................ 127,800 1,497,199 Marks & Spencer Group PLC............... 127,904 595,892 mm02 PLC (b)............................ 830,000 739,550 National Grid Group PLC................. 222,900 1,464,187 Pearson PLC............................. 251,400 2,095,387 Prudential Corp. PLC.................... 226,200 1,384,638 Reckitt Benckiser PLC................... 29,600 522,046 Reuters Group PLC....................... 298,266 643,550 Royal Bank Of Scotland Group PLC........ 174,500 4,576,660 Smiths Group PLC........................ 254,900 2,725,465 Standard Chartered PLC.................. 172,000 1,918,795 Unilever PLC............................ 179,800 1,767,297 Vodafone Group PLC...................... 5,807,653 11,463,370 ----------- 51,137,850 ----------- TOTAL COMMON STOCKS..................... 261,297,958 -----------
64 HSBC INVESTOR PORTFOLIOS See notes to financial statements. HSBC INVESTOR INTERNATIONAL EQUITY PORTFOLIO - -------------------------------------------------------------------------------- SCHEDULE OF PORTFOLIO INVESTMENTS -- APRIL 30, 2003 (UNAUDITED) (CONTINUED) .................................................................................
- ----------------------------------------------------------------- CONVERTIBLE BONDS - 0.3% SHARES OR PRINCIPAL AMOUNT($) VALUE($) ----------- ----------- JAPAN - 0.2% SMFG Finance (Cayman) Ltd., 2.25%, 7/11/05 (c)(d)(e).................... 36,000,000 206,020 SMFG Finance (Cayman) Ltd., 2.25%, 7/11/05 (c)(e)....................... 81,000,000 463,547 ----------- SWITZERLAND -- 0.1% Credit Suisse Group Finance (Guernsey), 6.00%, 12/23/05.......... 461,000 355,700 ----------- TOTAL CONVERTIBLE BONDS............... 1,025,267 ----------- - ----------------------------------------------------------------- RIGHTS & WARRANTS - 0.0% UNITED KINGDOM -- 0.0% TI Automotive Ltd. (b)................ 190,000 0 ----------- TOTAL RIGHTS & WARRANTS............... 0 ----------- - ----------------------------------------------------------------- INVESTMENT COMPANIES - 17.7% UNITED STATES - 17.7% Investors Cash Reserve................ 56,637,776 56,637,776 ----------- TOTAL INVESTMENT COMPANIES............ 56,637,776 ----------- TOTAL INVESTMENTS (COST $355,092,629) (a) - 99.7%..... 318,961,001 ----------- -----------
Percentages indicated are based on net assets of $319,798,405. (a) Cost differs from value by net unrealized depreciation as follows: Unrealized appreciation........... $ 21,177,166 Unrealized depreciation........... (57,308,794) ------------ Net unrealized depreciation....... $(36,131,628) ------------ ------------
(b) Represents non-income producing security. (c) Security valued at fair value as determined in good faith under procedures applied under the general supervision of the Board of Trustees. (d) Security exempt from registration under Rule 144a of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. These securities have been deemed liquid by the investment manager based on procedures approved by the Board of Trustees. (e) Step-up bond; coupon rate is zero until step-up date. Step-up rate is provided. * The principle amount of each security is denominated in the local currency of each respective country. ADR -- American Depositary Receipt CVA -- Certificate van aandelen (share certificates) FDR -- Fiduciary Depositary Receipt See notes to financial statements. HSBC INVESTOR PORTFOLIOS 65 HSBC INVESTOR INTERNATIONAL EQUITY PORTFOLIO - -------------------------------------------------------------------------------- SCHEDULE OF PORTFOLIO INVESTMENTS -- APRIL 30, 2003 (UNAUDITED) .................................................................................
PERCENT OF INDUSTRY NET ASSETS - -------- ---------- Aerospace & Defense......................................... 0.6% Airlines.................................................... 0.3% Automotive.................................................. 4.1% Banking & Financial Services................................ 12.0% Building Materials.......................................... 1.6% Business Services........................................... 0.2% Chemicals................................................... 1.5% Computer Related............................................ 1.5% Diversified Manufacturing Operations........................ 8.5% Drugs -- Medical............................................ 2.7% Electrical.................................................. 0.2% Electronic Components & Semiconductors...................... 4.2% Food & Beverage............................................. 4.4% Insurance................................................... 4.4% Leisure..................................................... 1.4% Metals & Mining............................................. 1.8% Manufacturing............................................... 4.2% Multimedia.................................................. 7.5% Oil & Gas................................................... 6.5% Paper Products.............................................. 0.5% Real Estate................................................. 1.5% Retail...................................................... 3.1% Telecommunications.......................................... 8.4% Textiles.................................................... 0.1% Tobacco..................................................... 0.2% Transportation.............................................. 0.3% Wholesale Distribution...................................... 0.3% Investment Companies........................................ 17.7% ------ Total Investments........................................... 99.7% Other assets in excess of liabilities....................... 0.3% ------ Net Assets.................................................. 100.0% ------ ------
66 HSBC INVESTOR PORTFOLIOS See notes to financial statements. HSBC INVESTOR INTERNATIONAL EQUITY PORTFOLIO - -------------------------------------------------------------------------------- SCHEDULE OF PORTFOLIO INVESTMENTS -- APRIL 30, 2003 (UNAUDITED) (CONTINUED) ................................................................................. At April 30, 2003, the portfolio's open forward currency contracts were as follows:
CURRENCY CONTRACT UNREALIZED DELIVERY AMOUNT VALUE APPRECIATION/ CURRENCY DATE (LOCAL CURRENCY) (U.S. DOLLAR) VALUE (DEPRECIATION) - -------- ---- ---------------- ------------- ----- -------------- LONG CONTRACTS Canadian Dollar.................................. 7/14/2003 2,289,265 $ 1,564,022 $ 1,588,897 $ 24,875 Canadian Dollar.................................. 7/17/2003 3,054,126 2,086,141 2,119,374 33,233 Euro............................................. 5/2/2003 24,593 26,999 27,446 447 Euro............................................. 5/5/2003 24,725 27,261 27,587 326 Euro............................................. 5/5/2003 33,620 37,180 37,512 332 Euro............................................. 5/21/2003 1,365,105 1,461,012 1,522,090 61,078 Euro............................................. 5/27/2003 16,382 17,323 18,261 938 Euro............................................. 6/4/2003 1,254,774 1,347,822 1,398,284 50,462 Euro............................................. 6/9/2003 1,141,468 1,133,614 1,271,792 138,178 Euro............................................. 9/12/2003 343,457 377,198 381,496 4,298 Euro............................................. 9/30/2003 4,811,181 5,124,918 5,341,012 216,094 Euro............................................. 10/16/2003 1,651,085 1,736,016 1,831,986 95,970 ----------- ----------- --------- TOTAL LONG CONTRACTS............................................................ $14,939,506 $15,565,737 $ 626,231 ----------- ----------- --------- ----------- ----------- --------- SHORT CONTRACTS British Pound.................................... 5/2/2003 6,361 $ 10,137 $ 10,167 $ (30) British Pound.................................... 5/2/2003 43,611 69,288 69,702 (414) Canadian Dollar.................................. 5/21/2003 2,223,483 1,461,012 1,548,047 (87,035) Euro............................................. 5/2/2003 26,087 28,639 29,113 (474) Euro............................................. 5/5/2003 15,634 17,290 17,444 (154) Hong Kong Dollar................................. 10/16/2003 13,488,043 1,736,016 1,727,287 8,729 Japanese Yen..................................... 6/9/2003 140,571,760 1,133,614 1,180,677 (47,063) Japanese Yen..................................... 7/17/2003 248,941,800 2,086,142 2,093,796 (7,654) Japanese Yen..................................... 9/12/2003 43,735,770 377,198 368,586 8,612 Japanese Yen..................................... 9/30/2003 609,576,660 5,124,918 5,140,408 (15,490) Mexican Nuevo Peso............................... 6/4/2003 15,198,700 1,347,822 1,469,876 (122,054) Swiss Franc...................................... 7/14/2003 2,166,789 1,564,022 1,601,530 (37,508) ----------- ----------- --------- TOTAL SHORT CONTRACTS........................................................... $14,956,097 $15,256,632 $(300,535) ----------- ----------- --------- ----------- ----------- ---------
See notes to financial statements. HSBC INVESTOR PORTFOLIOS 67 HSBC INVESTOR SMALL CAP EQUITY PORTFOLIO - -------------------------------------------------------------------------------- SCHEDULE OF PORTFOLIO INVESTMENTS -- APRIL 30, 2003 (UNAUDITED) .................................................................................
- ----------------------------------------------------------------- COMMON STOCKS - 87.0% SHARES VALUE($) ---------- ----------- BANKING - 4.5% East West Bancorp, Inc................. 199,700 6,759,845 Southwest Bancorporation of Texas, Inc. (b)................................... 175,400 5,960,092 ----------- 12,719,937 ----------- BIOTECHNOLOGY - 2.3% Celgene Corp. (b)...................... 248,200 6,604,602 ----------- COMPUTER SOFTWARE - 5.7% Electronic Arts, Inc. (b).............. 102,700 6,087,029 SRA International, Inc. (b)............ 218,500 5,167,525 Synopsys, Inc. (b)..................... 103,300 5,024,512 ----------- 16,279,066 ----------- EDUCATIONAL SERVICES - 4.4% Apollo Group, Inc. (b)................. 105,700 4,665,598 Career Education Corp. (b)............. 129,800 7,804,874 ----------- 12,470,472 ----------- ELECTRONIC COMPONENTS & SEMICONDUCTORS - 6.9% Power Integrations, Inc. (b)........... 211,800 4,687,558 Semtech Corp. (b)...................... 243,200 3,866,880 Thermo Electron Corp. (b).............. 280,400 5,094,868 Varian Semiconductor Equipment Associates, Inc. (b).................. 263,800 6,080,590 ----------- 19,729,896 ----------- E-MARKETING & INFORMATION - 0.3% DoubleClick, Inc. (b).................. 111,100 955,460 ----------- ENVIRONMENTAL SERVICES - 3.6% Republic Services, Inc. (b)............ 251,800 5,403,628 Waste Connections, Inc. (b)............ 145,500 4,894,620 ----------- 10,298,248 ----------- FINANCIAL SERVICES - 2.8% CheckFree Corp. (b).................... 285,400 7,868,478 ----------- HEALTH CARE - 17.2% Becton Dickinson & Co.................. 196,000 6,938,400 Cross Country, Inc. (b)................ 465,500 5,274,115 CTI Molecular Imaging, Inc. (b)........ 260,200 4,777,272 Express Scripts, Inc. (b).............. 102,600 6,049,296 Humana, Inc. (b)....................... 548,200 6,057,610 Integra LifeSciences Holdings Corp. (b)................................... 187,200 4,996,368 Lincare Holdings, Inc. (b)............. 169,690 5,153,485 Manor Care, Inc. (b)................... 270,500 5,261,225 NDCHealth Corp......................... 229,400 4,415,950 ----------- 48,923,721 ----------- HOSPITALS - 2.1% Community Health Systems, Inc. (b)..... 308,800 5,867,200 ----------- HUMAN RESOURCES - 0.0% Employee Solutions, Inc. (b)........... 2,483 0 -----------
COMMON STOCKS, CONTINUED
SHARES VALUE($) ---------- ----------- INSURANCE - 5.5% Philadelphia Consolidated Holding Corp. (b)................................... 148,800 5,804,688 Platinum Underwriter Holdings Ltd...... 185,300 4,901,185 RenaissanceRe Holdings Ltd............. 56,600 2,506,814 Willis Group Holdings Ltd.............. 80,400 2,507,676 ----------- 15,720,363 ----------- MEDIA - 2.9% Entravision Communications Corp. (b)... 503,400 3,830,874 The E.W. Scripps Co. Class A........... 57,500 4,556,875 ----------- 8,387,749 ----------- OIL & GAS - 6.1% Chesapeake Energy Corp................. 815,400 6,572,124 Helmerich & Payne, Inc................. 193,900 4,989,047 Varco International, Inc. (b).......... 338,200 5,948,938 ----------- 17,510,109 ----------- PHARMACEUTICALS - 8.6% Biogen, Inc. (b)....................... 123,800 4,703,162 Caremark Rx, Inc. (b).................. 409,900 8,161,109 King Pharmaceuticals, Inc. (b)......... 446,400 5,629,104 United Therapeutics Corp. (b).......... 341,900 6,136,763 ----------- 24,630,138 ----------- RETAIL - 10.3% Abercrombie & Fitch Co. (b)............ 204,800 6,733,824 Cost Plus, Inc. (b).................... 202,900 6,235,117 Dollar Tree Stores, Inc. (b)........... 227,500 5,789,875 P.F. Chang's China Bistro, Inc. (b).... 120,000 5,028,000 Williams-Sonoma, Inc. (b).............. 214,300 5,546,084 ----------- 29,332,900 ----------- TELECOMMUNICATIONS EQUIPMENT - 3.8% Advanced Fibre Communications, Inc. (b)................................... 353,080 5,402,124 Polycom, Inc. (b)...................... 546,300 5,364,666 ----------- 10,766,790 ----------- TOTAL COMMON STOCKS.................... 248,065,129 ----------- - ----------------------------------------------------------------- INVESTMENT COMPANIES - 5.3% Dreyfus Cash Management Fund........... 15,025,272 15,025,272 ----------- TOTAL INVESTMENT COMPANIES............. 15,025,272 ----------- TOTAL INVESTMENTS (COST $254,578,660) (a) - 92.3%...... 263,090,401 ----------- -----------
- --------- Percentages indicated are based on net assets of $285,009,643. (a) Cost differs from value by net unrealized appreciation Unrealized appreciation.......... $ 20,298,937 Unrealized depreciation.......... (11,787,196) ------------ Net unrealized appreciation...... $ 8,511,741 ------------ ------------
(b) Represents non-income producing security. 68 HSBC INVESTOR PORTFOLIOS See notes to financial statements. [THIS PAGE INTENTIONALLY LEFT BLANK] HSBC INVESTOR PORTFOLIOS 69 HSBC INVESTOR PORTFOLIOS STATEMENTS OF ASSETS AND LIABILITIES -- APRIL 30, 2003 (UNAUDITED)
INTERNATIONAL LIMITED MATURITY FIXED INCOME EQUITY SMALL CAP EQUITY PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO ------------------ ------------------ ------------------ ----------------- ASSETS: Investments, at value $180,371,484 $436,603,215 $318,961,001 $263,090,401 Cash -- -- -- 24,840,953 Foreign currency -- -- 237,460 -- Interest and dividends receivable 1,710,707 4,706,544 1,122,479 30,093 Receivable for investments sold 2,206,588 1,698 211,837 2,587,339 Unrealized appreciation on forward foreign currency contracts -- -- 643,572 -- Prepaid expenses 38 111 144 141 ------------ ------------ ------------ ------------ TOTAL ASSETS 184,288,817 441,311,568 321,176,493 290,548,927 ------------ ------------ ------------ ------------ ............................................................................................................................... LIABILITIES: Payable for investments purchased 9,294,030 -- 794,863 5,342,061 Unrealized depreciation on forward foreign currency contracts -- -- 317,876 -- Accrued expenses and other liabilities: Investment management 57,279 136,426 155,420 161,054 Administration 5,995 15,420 10,272 9,637 Other 2,300 23,483 99,657 26,532 ------------ ------------ ------------ ------------ TOTAL LIABILITIES 9,359,604 175,329 1,378,088 5,539,284 ------------ ------------ ------------ ------------ .............................................................................................................................. NET ASSETS: Applicable to investors' beneficial interest $174,929,213 $441,136,239 $319,798,405 $285,009,643 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ Investments, at cost $173,713,092 $412,604,152 $355,092,629 $254,578,660 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
70 HSBC INVESTOR PORTFOLIOS See notes to financial statements. HSBC INVESTOR PORTFOLIOS STATEMENTS OF OPERATIONS -- FOR THE SIX MONTHS ENDED APRIL 30, 2003 (UNAUDITED) ................................................................................
LIMITED MATURITY FIXED INCOME INTERNATIONAL SMALL CAP EQUITY PORTFOLIO PORTFOLIO EQUITY PORTFOLIO PORTFOLIO - --------------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME: Interest $3,638,163 $10,074,185 $ 29,944 $ 18,005 Dividend 51,898 120,986 3,086,637 410,911 Foreign tax withholding -- -- (496,935) -- ---------- ----------- ----------- ------------ TOTAL INVESTMENT INCOME 3,690,061 10,195,171 2,619,646 428,916 ---------- ----------- ----------- ------------ ............................................................................................................................ EXPENSES: Investment management 324,672 786,608 945,045 1,048,294 Administration 30,373 77,472 49,909 46,902 Accounting 28,263 43,162 42,446 30,410 Custodian 25,713 44,268 226,107 69,227 Trustee 1,005 2,571 1,537 1,506 Other 5,243 13,987 13,344 6,447 ---------- ----------- ----------- ------------ TOTAL EXPENSES 415,269 968,068 1,278,388 1,202,786 ---------- ----------- ----------- ------------ ............................................................................................................................ NET INVESTMENT INCOME (LOSS) 3,274,792 9,227,103 1,341,258 (773,870) ---------- ----------- ----------- ------------ ............................................................................................................................ NET REALIZED/UNREALIZED GAINS (LOSSES) FROM INVESTMENTS, FUTURES AND FOREIGN CURRENCIES: Net realized gains (losses) from investment, futures and foreign currency transactions 837,977 385,177 (6,578,235) (18,162,085) Change in unrealized appreciation/depreciation from investments, futures and foreign currencies 1,647,156 11,623,042 7,550,053 25,721,387 ---------- ----------- ----------- ------------ ............................................................................................................................ Net realized/unrealized gains from investment, futures and foreign currency transactions 2,485,133 12,008,219 971,818 7,559,302 ---------- ----------- ----------- ------------ CHANGE IN NET ASSETS RESULTING FROM OPERATIONS $5,759,925 $21,235,322 $ 2,313,076 $ 6,785,432 ---------- ----------- ----------- ------------ ---------- ----------- ----------- ------------
See notes to financial statements. HSBC INVESTOR PORTFOLIOS 71 HSBC INVESTOR PORTFOLIOS STATEMENTS OF CHANGES IN NET ASSETS .................................................................................
LIMITED MATURITY PORTFOLIO FIXED INCOME PORTFOLIO - ----------------------------------------------------------------------------------------------------------------------------- FOR THE SIX FOR THE SIX MONTHS ENDED FOR THE MONTHS ENDED FOR THE APRIL 30, 2003 YEAR ENDED APRIL 30, 2003 YEAR ENDED (UNAUDITED) OCTOBER 31, 2002 (UNAUDITED) OCTOBER 31, 2002 - ----------------------------------------------------------------------------------------------------------------------------- INVESTMENT ACTIVITIES: OPERATIONS: Net investment income $ 3,274,792 $ 6,131,946 $ 9,227,103 $ 17,602,568 Net realized gains (losses) from investment and futures transactions 837,977 (787,558) 385,177 1,531,345 Change in unrealized appreciation/depreciation from investments and futures 1,647,156 429,535 11,623,042 215,590 ------------ ------------ ------------ ------------ CHANGE IN NET ASSETS RESULTING FROM OPERATIONS 5,759,925 5,773,923 21,235,322 19,349,503 ------------ ------------ ------------ ------------ ............................................................................................................................ Proceeds from contributions 34,205,629 53,476,926 105,516,797 353,082,260 Fair value of withdrawals (14,851,232) (24,615,925) (71,418,157) (229,543,187) ------------ ------------ ------------ ------------ CHANGE IN NET ASSETS FROM TRANSACTIONS IN INVESTORS' BENEFICIAL INTEREST 19,354,397 28,861,001 34,098,640 123,539,073 ------------ ------------ ------------ ------------ CHANGE IN NET ASSETS 25,114,322 34,634,924 55,333,962 142,888,576 ............................................................................................................................ NET ASSETS: Beginning of period 149,814,891 115,179,967 385,802,277 242,913,701 ------------ ------------ ------------ ------------ End of period $174,929,213 $149,814,891 $441,136,239 $385,802,277 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
72 HSBC INVESTOR PORTFOLIOS See notes to financial statements. HSBC INVESTOR PORTFOLIOS STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) .................................................................................
INTERNATIONAL EQUITY SMALL CAP EQUITY PORTFOLIO PORTFOLIO - ----------------------------------------------------------------------------------------------------------------------------- FOR THE SIX FOR THE SIX MONTHS ENDED FOR THE MONTHS ENDED FOR THE APRIL 30, 2003 YEAR ENDED APRIL 30, 2003 YEAR ENDED (UNAUDITED) OCTOBER 31, 2002 (UNAUDITED) OCTOBER 31, 2002 - ----------------------------------------------------------------------------------------------------------------------------- INVESTMENT ACTIVITIES: OPERATIONS: Net investment income (loss) $ 1,341,258 $ 1,884,444 $ (773,870) $ (2,357,766) Net realized losses from investment and foreign currency transactions (6,578,235) (20,223,366) (18,162,085) (68,582,200) Change in unrealized appreciation/depreciation from investments and foreign currencies 7,550,053 (17,088,070) 25,721,387 4,212,403 ------------- ------------- ------------ ------------- CHANGE IN NET ASSETS RESULTING FROM OPERATIONS 2,313,076 (35,426,992) 6,785,432 (66,727,563) ------------- ------------- ------------ ------------- ............................................................................................................................ Proceeds from contributions 282,479,379 651,096,825 91,978,150 187,109,547 Fair value of withdrawals (221,609,772) (634,901,691) (79,971,330) (119,737,618) ------------- ------------- ------------ ------------- CHANGE IN NET ASSETS FROM TRANSACTIONS IN INVESTORS' BENEFICIAL INTEREST 60,869,607 16,195,134 12,006,820 67,371,929 ------------- ------------- ------------ ------------- CHANGE IN NET ASSETS 63,182,683 (19,231,858) 18,792,252 644,366 ............................................................................................................................ NET ASSETS: Beginning of period 256,615,722 275,847,580 266,217,391 265,573,025 ------------- ------------- ------------ ------------- End of period $ 319,798,405 $ 256,615,722 $285,009,643 $ 266,217,391 ------------- ------------- ------------ ------------- ------------- ------------- ------------ -------------
See notes to financial statements. HSBC INVESTOR PORTFOLIOS 73 HSBC INVESTOR PORTFOLIOS - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS .................................................................................
RATIOS/SUPPLEMENTARY DATA -------------------------------------------------------------------------------- RATIO OF NET NET ASSETS AT RATIO OF INVESTMENT END OF EXPENSES INCOME (LOSS) RATIO OF EXPENSES PERIOD TO AVERAGE TO AVERAGE TO AVERAGE PORTFOLIO (000'S) NET ASSETS NET ASSETS NET ASSETS TURNOVER - ----------------------------------------------------------------------------------------------------------------------------- LIMITED MATURITY PORTFOLIO Period ended October 31, 2001 (a) $115,180 0.55%(b) 4.97%(b) 0.55%(b) 102.01% Year ended October 31, 2002 149,815 0.51% 4.60% 0.51% 44.04% Six months ended April 30, 2003 (Unaudited) 174,929 0.51%(b) 4.03%(b) 0.51%(b) 32.10% - ----------------------------------------------------------------------------------------------------------------------------- FIXED INCOME PORTFOLIO Year ended October 31, 1998 $173,073 0.62% 6.03% 0.62% 126.40% Year ended October 31, 1999 196,871 0.56% 6.43% 0.56% 433.26% Year ended October 31, 2000 226,366 0.51% 6.74% 0.51% 440.49% Year ended October 31, 2001 242,914 0.53% 6.53% 0.53% 341.26% Year ended October 31, 2002 385,802 0.48% 5.14% 0.48% 77.82% Six months ended April 30, 2003 (Unaudited) 441,136 0.47%(b) 4.45%(b) 0.47%(b) 30.68% - ----------------------------------------------------------------------------------------------------------------------------- INTERNATIONAL EQUITY PORTFOLIO Year ended October 31, 1998 $205,737 0.97% 0.80% 0.97% 40.47% Year ended October 31, 1999 288,830 0.91% 0.61% 0.91% 34.26% Year ended October 31, 2000 332,325 0.84% 0.53% 0.84% 27.81% Year ended October 31, 2001 275,848 0.90% 0.54% 0.90% 26.90% Year ended October 31, 2002 256,616 0.91% 0.63% 0.91% 31.63% Six months ended April 30, 2003 (Unaudited) 319,798 0.96%(b) 1.00%(b) 0.96%(b) 8.88% - ----------------------------------------------------------------------------------------------------------------------------- SMALL CAP EQUITY PORTFOLIO Year ended October 31, 1998 $186,517 1.03% (0.57%) 1.06%(c) 154.69% Year ended October 31, 1999 237,305 1.04% (0.68%) 1.04% 77.74% Year ended October 31, 2000 369,166 0.97% (0.60%) 0.97% 79.51% Year ended October 31, 2001 265,573 0.98% (0.65%) 0.98% 52.47% Year ended October 31, 2002 266,217 0.99% (0.78%) 0.99% 103.90% Six months ended April 30, 2003 (Unaudited) 285,010 0.96%(b) (0.62%)(b) 0.96%(b) 124.49% - -----------------------------------------------------------------------------------------------------------------------------
(a) Limited Maturity Portfolio commenced operations on January 24, 2001. (b) Annualized. (c) During the period, certain fees were voluntarily reduced. If such voluntary fee reductions had not occurred, the ratio would have been as indicated. See notes to financial statements. 74 HSBC INVESTOR PORTFOLIOS HSBC INVESTOR PORTFOLIOS - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2003 (UNAUDITED) ................................................................................. 1. ORGANIZATION: The HSBC Investor Portfolios (the 'Portfolio Trust'), is an open-end management investment company organized as a master trust fund under the laws of the State of New York on November 1, 1994. The Portfolios operate as master funds in master-feeder arrangements. The Declaration of Trust permits the Board of Trustees to issue an unlimited number of beneficial interests in the Portfolios. The Portfolio Trust contains the following (individually a 'Portfolio,' collectively the 'Portfolios'):
PORTFOLIO SHORT NAME - --------- ---------- HSBC Investor Limited Maturity Portfolio Limited Maturity Portfolio HSBC Investor Fixed Income Portfolio Fixed Income Portfolio HSBC Investor International Equity Portfolio International Equity Portfolio HSBC Investor Small Cap Equity Portfolio Small Cap Equity Portfolio
The Portfolios are diversified series of the Portfolio Trust and are part of the HSBC Investor Family of Funds. Financial Statements for all other series of the HSBC Investor Family of Funds are published separately. 2. SIGNIFICANT ACCOUNTING POLICIES: The following is a summary of the significant accounting policies followed by the Portfolios in the preparation of their financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America ('U.S.'). The preparation of financial statements requires management to make 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 income and expenses for the period. Actual results could differ from those estimates. SECURITIES VALUATION: Bonds and other fixed income securities (other than short-term obligations but including listed issues) are valued on the basis of valuations furnished by a pricing service, the use of which has been approved by the Portfolios' Board of Trustees. In making such valuations, the pricing service utilizes both dealer-supplied valuations and the use of matrix techniques which take into account appropriate factors such as institutional-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics other than market data and without exclusive reliance upon quoted prices or exchanges or over-the-counter prices, since such valuations are believed to reflect more accurately the fair value of such securities. All debt portfolio securities with a remaining maturity of 60 days or less are valued at amortized cost. Under the amortized cost method, premium or discount, if any, is amortized or accreted, respectively, on a constant (straight-line) basis to the maturity of the security. The value of each equity security is based either on the last sale price on a national securities exchange, or in the absence of recorded sales, at the closing bid prices on such exchanges, or at the quoted bid price in the over-the-counter market. Securities or other assets for which market quotations are not readily available are valued by or at the direction of the Portfolios' Board of Trustees. SECURITIES TRANSACTIONS AND RELATED INCOME: Security transactions are accounted for on the date the security is purchased or sold. Securities 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. FOREIGN CURRENCY TRANSLATION: The accounting records of the Portfolios 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 Portfolios do not isolate that portion of the results of operations resulting from changes HSBC INVESTOR PORTFOLIOS 75 HSBC INVESTOR PORTFOLIOS - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2003 (UNAUDITED) (CONTINUED) ................................................................................. 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. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS: The Portfolios may enter into forward foreign currency exchange contracts in connection with planned purchases or sales of securities or to hedge the U.S. dollar value of portfolio securities denominated in a particular currency. The Portfolios could be exposed to risks if the counter-parties 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 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. FUTURES CONTRACTS: Each Portfolio may invest in financial futures contracts for the purpose of hedging their existing portfolio securities or securities it intends to purchase against fluctuations in fair value caused by changes in prevailing market interest rates. Upon entering into a financial futures contract, the Portfolio is 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 by the Portfolio each day, depending on the daily fluctuations in the fair value of the underlying security. The Portfolio recognizes a gain or loss equal to the daily variation margin. Should market conditions move unexpectedly, the Portfolio may not achieve the anticipated benefits of the financial futures contracts and may realize a loss. The use of futures transactions involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates and the underlying hedged assets. MORTGAGE DOLLAR ROLL TRANSACTIONS: The Fixed Income Portfolio may engage in dollar roll transactions with respect to mortgage securities issued by the Government National Mortgage Association, the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation. In a dollar roll transaction, the Portfolio sells a mortgage-backed security and simultaneously agrees to repurchase a similar security on a specified future date at an agreed upon price. During the roll period, the Portfolio will not be entitled to receive any interest or principal paid on the securities sold. The Portfolio is compensated for the lost interest on the securities sold by the difference between the sales price and the lower price for the future repurchase as well as by the interest earned on the reinvestment of the sales proceeds. The Portfolio may also be compensated by receipt of a commitment fee. When the Portfolio enters into a mortgage dollar roll transaction, liquid assets in an amount sufficient to pay for the future repurchase are segregated with the custodian. EXPENSE ALLOCATION: Expenses incurred by the HSBC Investor Family of Funds with respect to any two or more funds within the HSBC Investor Family of Funds are allocated in proportion to the net assets of each fund within the HSBC Investor Family of Funds, except when allocations of direct expenses to each Portfolio can otherwise be made fairly. Expenses directly attributable to a Portfolio are charged to that Portfolio. FEDERAL INCOME TAXES: Each Portfolio will be treated as a partnership for U.S. Federal income tax purposes. Accordingly, each Portfolio passes through all of its net investment income and gains and losses to its Feeders, and is therefore not subject to U.S. Federal income tax. As such, an investor in the Portfolios will be taxed on their share of the Portfolios' ordinary income and realized gains. It is intended that the Portfolios will be managed in such a way that an investor will be able to satisfy the requirements of the Internal Revenue Code applicable to regulated investment companies. 76 HSBC INVESTOR PORTFOLIOS HSBC INVESTOR PORTFOLIOS - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2003 (UNAUDITED) (CONTINUED) ................................................................................. 3. RELATED PARTY TRANSACTIONS: INVESTMENT MANAGEMENT: HSBC Asset Management (Americas) Inc. ('HSBC' or the 'Investment Adviser'), a wholly owned subsidiary of HSBC Bank USA, a New York State chartered bank, acts as the Investment Adviser to the Portfolios pursuant to an investment management contract with the Portfolio Trust. As Investment Adviser, HSBC manages the investments of the Portfolios and continuously reviews, supervises and administers the Portfolios' investments. Capital Guardian Trust Company and Westfield Capital Management, LLC serve as Sub-Investment Advisers for the International Equity Portfolio and the Small Cap Equity Portfolio, respectively, and are paid for their services directly by HSBC. On January 20, 2003, Westfield Capital Management replaced MFS Institutional Advisors, Inc. as Sub-Investment Adviser for the Small Cap Equity Portfolio. For its services as Investment Adviser, HSBC receives a fee, accrued daily and paid monthly, at an annual rate of 0.40% of the Limited Maturity Portfolio's average daily net assets. For its services as Investment Adviser, HSBC receives, from the Fixed Income Portfolio, a fee accrued daily and paid monthly at an annual rate of:
BASED ON AVERAGE DAILY NET ASSETS OF FEE RATE - ------------------------------------ -------- Up to $50 million........................................... 0.575% In excess of $50 million but not exceeding $95 million...... 0.450% In excess of $95 million but not exceeding $150 million..... 0.200% In excess of $150 million but not exceeding $250 million.... 0.400% In excess of $250 million................................... 0.350%
For their services as Investment Adviser and Sub-Investment Adviser, respectively, HSBC and Capital Guardian Trust Company receive in aggregate, from the International Equity Portfolio, a fee accrued daily and paid monthly at an annual rate of:
BASED ON AVERAGE DAILY NET ASSETS OF FEE RATE - ------------------------------------ -------- Up to $25 million........................................... 0.950% In excess of $25 million but not exceeding $50 million...... 0.800% In excess of $50 million but not exceeding $250 million..... 0.675% In excess of $250 million................................... 0.625%
For their services as Investment Adviser and Sub-Investment Adviser, respectively, HSBC and Westfield Capital Management LLC receive in aggregate, a fee accrued daily and paid monthly at an annual rate of 0.80% of the Small Cap Equity Portfolio's average daily net assets. ADMINISTRATION: BISYS Fund Services Ohio, Inc. ('BISYS Ohio'), a wholly-owned subsidiary of The BISYS Group, Inc., with whom certain officers of the Portfolio Trust are affiliated, serves the Portfolio Trust as Administrator. Such officers are paid no fees directly by the Portfolios for serving as officers of the Portfolio Trust. Under the terms of the administration agreement with the Portfolios, BISYS Ohio receives, from the Portfolios, a fee accrued daily and paid monthly at an annual rate of:
BASED ON AVERAGE DAILY NET ASSETS OF FEE RATE - ------------------------------------ -------- Up to $8 billion............................................ 0.0375% In excess of $8 billion but not exceeding $9.25 billion..... 0.0350% In excess of $9.25 billion but not exceeding $12 billion.... 0.0250% In excess of $12 billion.................................... 0.0150%
The fee breakpoints are determined on the basis of the aggregate average daily net assets of the HSBC Investor Family of Funds. The fee is allocated to each of the Portfolios based upon its pro-rata share of net assets. HSBC INVESTOR PORTFOLIOS 77 HSBC INVESTOR PORTFOLIOS - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2003 (UNAUDITED) (CONTINUED) ................................................................................. FUND ACCOUNTING AND CUSTODIAN: BISYS provides fund accounting services for the Portfolios. For its services to the Portfolios, BISYS receives an annual fee from each Portfolio accrued daily and paid monthly. HSBC serves as custodian to the Fixed Income Portfolio, Small Cap Equity Portfolio and Limited Maturity Portfolio. Investor's Bank & Trust Company serves as custodian to the International Equity Portfolio. 4. INVESTMENT TRANSACTIONS: For the six months ended April 30, 2003, each Portfolio purchased and sold securities, excluding short-term securities, in the following amounts:
PURCHASES SALES --------- ----- Limited Maturity Portfolio................................ $ 77,587,064 $ 49,921,307 Fixed Income Portfolio.................................... 157,199,029 115,724,450 International Equity Portfolio............................ 31,322,244 22,485,382 Small Cap Equity Portfolio................................ 304,914,855 321,482,905
78 HSBC INVESTOR PORTFOLIOS HSBC INVESTOR FAMILY OF FUNDS: INVESTMENT ADVISER HSBC Asset Management (Americas) Inc. 452 Fifth Avenue New York, NY 10018 SUB-ADVISERS HSBC Investor Equity Fund Alliance Capital Management, L.P. 1345 Avenue of the Americas New York, NY 10105 Institutional Capital Corporation 225 West Wacker Drive Chicago, IL 60606 HSBC Investor International Equity Portfolio Capital Guardian Trust Company 11100 Santa Monica Boulevard Los Angeles, CA 90025 HSBC Investor Small Cap Equity Portfolio Westfield Capital Management One Financial Center Boston, MA 02111 SHAREHOLDER SERVICING AGENTS For HSBC Bank USA and HSBC Brokerage (USA) Inc. Clients HSBC Bank USA 452 Fifth Avenue New York, NY 10018 1-888-525-5757 For All Other Shareholders HSBC Investor Funds P.O. Box 182845 Columbus, OH 43218-2845 1-800-782-8183 ADMINISTRATOR, TRANSFER AGENT, DISTRIBUTOR, AND SPONSOR BISYS Fund Services 3435 Stelzer Road Columbus, OH 43219 CUSTODIANS HSBC Investor Limited Maturity Portfolio HSBC Investor Fixed Income Portfolio HSBC Investor New York Tax-Free Bond Fund HSBC Investor Balanced Fund HSBC Investor Equity Fund HSBC Investor Growth and Income Fund HSBC Investor Mid-Cap Fund HSBC Investor Small Cap Equity Portfolio HSBC Bank USA 452 Fifth Avenue New York, NY 10018 HSBC Investor International Equity Portfolio Investors Bank & Trust Company 200 Clarendon Street - 16th Floor Boston, MA 02116 INDEPENDENT AUDITORS KPMG LLP 191 West Nationwide Blvd., Suite 500 Columbus, OH 43215 LEGAL COUNSEL Dechert 1775 Eye Street, N.W. Washington, D.C. 20006 The HSBC Investor Family of Funds are distributed by BISYS Fund Services. This document must be preceded or accompanied by a current prospectus for the HSBC Investor Funds, which you should read carefully before you invest or send money. 6/03 Item 2. Code of Ethics. Not applicable. Item 3. Audit Committee Financial Expert. Not applicable. Item 4. Principal Accountant Fees and Services. Not applicable. Items 5-6. [Reserved] Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. Not applicable. Item 8. [Reserved] Item 9. Controls and Procedures. (a) In the opinion of the principal executive officer and principal financial officer, based on their evaluation, the registrant's disclosure controls and procedures are adequately designed and are operating effectively to ensure (i) that material information relating to the registrant, including its consolidated subsidiaries, is made known to them by others within those entities, particularly during the period in which this report is being prepared; and (ii) that information required to be disclosed by the registrant in the reports it files or submits under the Securities Exchange Act of 1934 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 significant changes in the registrant's internal controls or in other factors that could significantly affect these controls subsequent to the date of the evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Item 10. Exhibits. (a) Not applicable. (b) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2 under the Act (17 CFR 270.30a-2) in the exact form set forth below: Attached hereto. SIGNATURES 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. HSBC Advisor Funds Trust By: /s/ Walter B. Grimm ----------------------------------------------------------------------- Walter B. Grimm President Date: July 7, 2003 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. By: /s/ Nadeem Yousaf ----------------------------------------------------------------------- Nadeem Yousaf Treasurer Date: July 7, 2003 By: /s/ Walter B. Grimm ----------------------------------------------------------------------- Walter B. Grimm President Date: July 7, 2003 STATEMENT OF DIFFERENCES The dagger symbol shall be expressed as....................................'D' The section symbol shall be expressed as....................................'SS' EX-99.906CERT 3 ex99b1.txt EXHIBIT (B)(1) This certification is provided pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. 'SS' 1350, and accompanies the report on Form N-CSR for the period ended April 30, 2003 of HSBC Advisor Funds Trust (the "Registrant"). I, Nadeem Yousaf, certify that, to the best of my knowledge,: 1. the Form N-CSR fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 ( 15 U.S.C. 78m(a) or 78o(d); and 2. the information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant. July 7, 2003 - -------------------------------------------- Date /s/ Nadeem Yousaf - -------------------------------------------- Nadeem Yousaf, Treasurer 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. This certification is provided pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. 'SS' 1350, and accompanies the report on Form N-CSR for the period ended April 30, 2003 of HSBC Advisor Funds Trust (the "Registrant"). I, Walter B. Grimm, certify that, to the best of my knowledge,: 3. the Form N-CSR fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 ( 15 U.S.C. 78m(a) or 78o(d); and 4. the information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant. July 7, 2003 - -------------------------------------------- Date /s/ Walter B. Grimm - -------------------------------------------- Walter B. Grimm, President 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. EX-99.CERT 4 ex99b2.txt EXHIBIT (B)(2) CERTIFICATIONS I, Nadeem Yousaf, certify that: 1. I have reviewed this report on Form N-CSR of HSBC Advisor Funds Trust (the "registrant"); 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in rule 30a-2(c) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the "Evaluation Date"); and c) presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. July 7, 2003 /s/ Nadeem Yousaf - ----------------------- ----------------------------------- Date Nadeem Yousaf, Treasurer I, Walter B. Grimm, certify that: 1. I have reviewed this report on Form N-CSR of HSBC Advisor Funds Trust (the "registrant"); 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in rule 30a-2(c) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the "Evaluation Date"); and c) presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. July 7, 2003 /s/ Walter B. Grimm - ----------------------- ----------------------------------- Date Walter B. Grimm, President -----END PRIVACY-ENHANCED MESSAGE-----