Registration Nos. 033-07647
811-04782

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 28, 2020

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A

REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933		[X]
Pre-Effective Amendment No.		[_]
Post-Effective Amendment No. 248		[X]
and/or
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940		[X]
Amendment No. 255		[X]
(Check appropriate box or boxes)

HSBC FUNDS

(Exact name of registrant as specified in charter)

4400 Easton Commons, Suite 200

Columbus, Ohio 43219-3035

(Address of principal executive offices)

Registrant's Telephone Number, including area code: (800) 782-8183

Richard A. Fabietti, President

452 Fifth Avenue

New York, New York 10018-2786

(Name and address of agent for service)

Please send copies of all communications to:

David J. Harris, Esq.

Brenden P. Carroll, Esq.

Dechert LLP

1900 K Street, N.W.

Washington, D.C. 20006-2401

It is proposed that this filing will become effective:
[X]	immediately upon filing pursuant to paragraph (b) of Rule 485
[   ]	on [ date ] pursuant to paragraph (b) of Rule 485
[   ]	60 days after filing pursuant to paragraph (a)(1) of Rule 485
[   ]	on [date ] pursuant to paragraph (a)(1) of Rule 485
[   ]	75 days after filing pursuant to paragraph (a)(2) of Rule 485
[   ]	on [date] pursuant to paragraph (a)(2) of Rule 485
If appropriate, check the following box:
[   ]	this post-effective amendment designates a new effective date for a previously filed post-effective amendment.

---

HSBC Funds		Table of Contents
		Summary Section
This section summarizes each		3		HSBC U.S. Government Money Market Fund
Fund’s investment objectives,		8		HSBC U.S. Treasury Money Market Fund
strategies, fees, risks, and
past performance, and
provides other information
about your account.
		Additional Information About the Funds’ Investment Strategies and Risks
This section provides		13		More About Risks and Investment Strategies
additional details about		13		Investment Risks of the Funds
each Fund’s investment		16		Other Information
strategies and risks.		16		Who May Want to Invest?
		16		More Information About Fund Investments
		16		Portfolio Holdings
		Fund Management
Review this section for		17		The Investment Adviser
details on the organizations		18		The Distributor, Administrator and Sub-Administrator
that provide services to
the Funds.
		Shareholder Information
Review this section for		19		Pricing of Fund Shares
details on how		20		Purchasing and Adding to Your Shares
shares are valued, and		25		Selling Your Shares
how to purchase,		29		Distribution Arrangements/Sales Charges
sell and exchange shares.		31		Distribution and Shareholder Servicing Arrangements—
This section also describes				Revenue Sharing
related charges and		31		Exchanging Your Shares
payments of dividends		32		Delivery of Shareholder Documents
and distributions.		32		Other Information
		33		Dividends, Distributions and Taxes
		Financial Highlights
Review this section		36		HSBC U.S. Government Money Market Fund
for details on		38		HSBC U.S. Treasury Money Market Fund
selected financial
statements of the Funds.

 

2

HSBC U.S. Government Money Market Fund
Summary Section

 

Investment Objective

 

The investment objective of the HSBC U.S. Government Money Market Fund (the “Fund”) is to provide shareholders of the Fund with liquidity and as high a level of current income as is consistent with the preservation of capital.

 

Fees and Expenses of the Fund

 

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.

 

Shareholder Fees (fees paid directly from your investment)		Class A		Class C		Class D		Class E		Class I		Intermediary Class		Intermediary Service Class		Class Y
Maximum Sales Charge (load) Imposed on Purchases (as a % of offering price)		None		None		None		None		None		None		None		None
Maximum Deferred Sales Charge (load) (as a % of amount redeemed)		None		1.00%		None		None		None		None		None		None
Annual Fund Operating Expenses (expenses that you pay as a percentage of the value of your investment)		Class A		Class C*		Class D		Class E*		Class I		Intermediary Class		Intermediary Service Class		Class Y
Management Fee		0.10%		0.10%		0.10%		0.10%		0.10%		0.10%		0.10%		0.10%
Distribution (12b-1) Fee		0.00%		0.75%		0.00%		0.00%		0.00%		0.00%		0.00%		0.00%
Other Expenses:
Shareholder Servicing Fee		0.40%		0.25%		0.25%		0.10%		0.00%		0.05%		0.10%		0.00%
Other Operating Expenses		0.16%		0.16%		0.16%		0.06%		0.06%		0.16%		0.16%		0.16%
Total Other Expenses		0.56%		0.41%		0.41%		0.16%		0.06%		0.21%		0.26%		0.16%
Total Annual Fund
Operating Expenses		0.66%**		1.26%		0.51%		0.26%		0.16%		0.31%**		0.36%		0.26%
Fee Waiver and/or Expense Reimbursement***		0.00%		0.00%		0.00%		0.01%		0.02%		0.13%		0.16%		0.00%
Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement		0.66%		1.26%		0.51%		0.25%		0.14%		0.18%		0.20%		0.26%

 

*		During the Fund’s prior fiscal year, Class C Shares and Class E Shares were not operational. Therefore, these amounts have been estimated.
**		The Total Annual Fund Operating Expenses have been restated to reflect current expenses.
***		HSBC Global Asset Management (USA) Inc., the Fund’s investment adviser (the “Adviser”), has entered into a contractual expense limitation agreement with the Fund (“Expense Limitation Agreement”) under which it will limit total expenses of the Fund (excluding interest, taxes, brokerage commissions, extraordinary expenses and estimated indirect expenses attributable to the Fund’s investments in investment companies) to an annual rate of 0.25%, 0.14%, 0.18%, and 0.20% for Class E Shares, Class I Shares, Intermediary Shares, and Intermediary Service Shares, respectively. Any amounts contractually waived or reimbursed by the Adviser will be subject to repayment by the Fund to the Adviser within three years, calculated monthly from when the waiver or reimbursement was recorded, to the extent that the repayment will not cause the Fund’s operating expenses to exceed the contractual expense limit that was in effect at the time of such waiver or reimbursement. The expense limitation shall be in effect until March 1, 2021. The Expense Limitation Agreement shall terminate upon the termination of the Investment Advisory Contract between the Fund and the Adviser, or it may be terminated upon written notice to the Adviser by the Trust’s Board of Trustees.

 

3

HSBC U.S. Government Money Market Fund
Summary Section

 

Example

 

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. The Example takes the Fund’s Expense Limitation Agreement into account for the first year only. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

 

		1 Year		3 Years		5 Years		10 Years
Class A Shares		$67		$211		$368		$822
Class C Shares		$228		$400		$692		$1,133
Class D Shares		$52		$164		$285		$640
Class E Shares		$26		$83		$145		$330
Class I Shares		$14		$50		$88		$203
Intermediary Shares		$18		$87		$161		$380
Intermediary Service Shares		$20		$99		$186		$440
Class Y Shares		$27		$84		$146		$331

 

For the share class listed below, you would pay the following expenses if you did not redeem your shares:

 

		1 Year		3 Years		5 Years		10 Years
Class C Shares		$128		$400		$692		$1,133

 

Principal Investment Strategies

 

The Fund is a government money market fund and seeks to maintain a stable price of $1.00 per share. The Fund seeks to achieve its investment objective by investing at least 99.5% of its total assets in cash, securities issued or guaranteed by the United States or certain U.S. government agencies or instrumentalities (“U.S. Government Securities”) and/or repurchase agreements that are collateralized fully by these types of obligations. In addition, the Fund must invest, under normal circumstances, at least 80% of its net assets, plus any borrowings for investment purposes, in U.S. Government Securities and repurchase agreements collateralized fully by these types of obligations. The Fund will invest in securities with maturities of (or deemed maturities of) 397 days or less and will maintain a dollar-weighted average portfolio maturity of 60 days or less and a dollar-weighted average portfolio life of 120 days or less.

 

The Fund invests in issues of the U.S. Treasury, such as bills, notes and bonds, and issues of U.S. government agencies and instrumentalities established under the authority of an Act of Congress. This includes securities of various U.S. government agencies which, while chartered or sponsored by Acts of Congress, are neither issued nor guaranteed by the U.S. Treasury. The Fund may invest in, among other things, obligations that are supported by the “full faith and credit” of the United States (e.g., obligations guaranteed by the Government National Mortgage Association); supported by the right of the issuer to borrow from the U.S. Treasury (e.g., obligations of the Federal National Mortgage Association); or supported only by the credit of the agency or instrumentality (e.g., obligations of the Federal Farm Credit Bank). The Fund may also invest in repurchase agreements that are collateralized by U.S. Government Securities, as well as securities of other money market funds that primarily invest in U.S. Government Securities and repurchase agreements collateralized by U.S. Government Securities.

 

In purchasing and selling securities for the Fund, portfolio managers consider the credit analysis performed by HSBC Global Asset Management (USA) Inc., the Fund’s investment adviser (the “Adviser”). Portfolio managers select investments from an approved credit list compiled by the Adviser’s global credit analysts, who have conducted an independent qualitative and quantitative review of each issuer on the list. Safety is prioritized, with additional emphasis placed on liquidity and yield.

 

4

HSBC U.S. Government Money Market Fund
Summary Section

 

Principal Investment Risks

 

The Fund has the following principal investment risks:

 

·

Debt Instruments Risk: The risks of investing in debt instruments include:

 

·

Credit Risk: The Fund could lose money if an issuer or guarantor of a debt instrument is unable or unwilling to make or perceived to be unable or unwilling to make timely payments of interest or principal or enters bankruptcy. The issuer or guarantor could also suffer a rapid decrease in credit quality rating, which would adversely affect the volatility of the value and liquidity of the investment.

 

·

Interest Rate Risk: Fluctuations in interest rates may affect the yield, volatility, liquidity and value of investments in income producing or debt instruments. Generally, if interest rates rise, the value of such investments will fall. A low interest rate environment poses additional risks to the Fund, because low yields on the Fund’s portfolio holdings may have an adverse impact on the Fund’s ability to provide a positive yield to shareholders, pay expenses out of Fund assets, or minimize the volatility of the Fund’s net asset value (“NAV”) per share. The risks associated with changing interest rates may have unpredictable effects on the markets and the Fund’s investments.

 

·

Inventory Risk: The market-making capacity in debt markets has declined as a result of reduced broker-dealer inventories relative to fund assets, reduced broker-dealer proprietary trading activity and increased regulatory capital requirements for financial institutions such as banks. Because market makers provide stability to a market through their intermediary services, a significant reduction in dealer market-making capacity has the potential to decrease liquidity and increase volatility in the debt markets. A decrease in liquidity may affect the ability of the Fund to pay redemption proceeds within the allowable time period.

 

·

Market Risk: The value of the Fund’s investments may decline due to changing economic, political, social, regulatory or market conditions. Market risk may affect a single issuer, industry or section of the economy or it may affect the economy as a whole.

 

·

Repurchase Agreements: If the seller in a repurchase agreement defaults on its obligation to repurchase the underlying securities at a time when the value of these securities has declined, the Fund may incur a loss upon disposition of the securities. There is also a risk that the seller of the agreement may become insolvent and subject to liquidation.

 

·

Stable NAV Risk: The Fund may not be able to maintain an NAV per share of $1.00 (a “Stable NAV”) at all times. The failure of other money market funds to maintain a Stable NAV (or the perceived threat of such a failure) could adversely affect the Fund’s NAV. Shareholders of the Fund should not rely on or expect the Adviser or an affiliate to help the Fund maintain a Stable NAV.

 

·

U.S. Government Securities Risk: There are different types of U.S. Government Securities with different levels of credit risk. U.S. Government Securities issued or guaranteed by the U.S. Treasury and/or supported by the full faith and credit of the United States have the lowest credit risk. A U.S. government-sponsored entity, although chartered or sponsored by an Act of Congress, may issue securities that are neither insured nor guaranteed by the U.S. Treasury and are riskier than those that are.

 

Risk is inherent in all investing. You could lose money by investing in the Fund. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the Fund is not a deposit of HSBC Bank USA, N.A. and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Fund’s sponsor has no legal obligation to provide financial support to the Fund, and you should not expect that the sponsor will provide financial support to the Fund at any time.

 

5

HSBC U.S. Government Money Market Fund
Summary Section

 

Performance Bar Chart and Table

 

The bar chart and table below provide an indication of the risks of an investment in the Fund by showing changes in the Fund’s year to year performance. Past performance does not indicate how the Fund will perform in the future.

 

The bar chart below shows the Fund’s annual returns for Class I Shares and how performance has varied from year to year. The returns for the Fund’s other share classes will differ from the returns of the Class I Shares shown in the bar chart because the expenses of the classes differ.

 

Annual Total Returns as of 12/31 for Class I Shares
Bar chart assumes reinvestment of dividends and distributions

 

 

Best Quarter:		Q2 2019		0.58%
Worst Quarter:		Q3 2013		0.00%

 

The table below lists the average annual total returns for each class of shares for various time periods. As of December 31, 2019, the 7-day yields of the Fund’s Class A, Class D, Class I, Intermediary, Intermediary Service and Class Y Shares were 1.02%, 1.17%, 1.53%, 1.50%, 1.47% and 1.42%, respectively. The 7-day yield information is not provided for Class C and Class E Shares because there were no Class C or Class E shareholders as of December 31, 2019. For current yield information on the Fund, call 1-800-782-8183.

 

Past performance is not an indication of how the Fund will perform in the future.

 

Average Annual Total Returns^ (for the periods ended December 31, 2019)

 

		Inception Date		1 Year		5 Years		10 Years		Since Inception
Class A Shares		May 3, 1990		1.61%		0.64%		0.33%		2.43%
Class C Shares(1) (with applicable CDSC)		Nov. 20, 2006		N/A		N/A		N/A		1.39%
Class D Shares		Apr. 1, 1999		1.77%		0.73%		0.37%		1.56%
Class E Shares(1)		July 12, 2016		N/A		N/A		N/A		0.34%
Class I Shares(1)		Dec. 24, 2003		2.13%		0.99%		0.51%		1.11%
Intermediary Shares		July 12, 2016		2.10%		N/A		N/A		1.36%
Intermediary Service Shares		July 12, 2016		2.07%		N/A		N/A		1.33%
Class Y Shares		July 1, 1996		2.02%		0.90%		0.46%		2.11%

 

^		During the year ended December 31, 2007, the Fund received a one-time reimbursement from the Adviser related to past marketing arrangements. During the year ended December 31, 2010, the Fund also received a one-time payment in respect of a class action settlement. As a result, the Fund’s total returns for the years ended December 31, 2007 and 2010 were higher than they would have been had the Fund not received these payments.
(1)		Class C, Class E and Class I Shares were operational only during a portion of the period since inception. The “Since Inception” return performance is for the period of time the Classes had operations. The 1 year, 5 years and 10 years average annual return is not provided for Class C and Class E Shares because there were no Class C or Class E shareholders as of December 31, 2019.

 

6

HSBC U.S. Government Money Market Fund
Summary Section

 

Investment Adviser

 

HSBC Global Asset Management (USA) Inc. is the Fund’s investment adviser.

 

Purchasing and Selling Your Shares

 

Generally, you may purchase or redeem Fund shares on any business day by mail (HSBC Funds, P.O. Box 219691, Kansas City, MO 64121-9691), wire transfer, or telephone at 1-800-782-8183. Class C Shares are not offered for sale, but are offered as an exchange option for Class C shareholders of certain other HSBC Funds. Purchases and redemptions of Class I Shares, Class E Shares, Intermediary Shares and Intermediary Service Shares may only be made via wire transfer. Investors who wish to purchase, exchange or redeem Fund shares through a broker-dealer should contact the broker-dealer directly.

 

Class A and Class D Shares		Minimum Initial Investment				Minimum Subsequent Investment
Regular (non-retirement)		$	1,000			$	100
Retirement (IRA)		$	250			$	100
Automatic Investment Plan		$	250			$	25
Class C Shares		$	0			$	0
Class E Shares		$	10,000,000			$	0
Class I Shares		$	50,000,000			$	5,000,000
Intermediary Shares		$	20,000,000			$	0
Intermediary Service Shares		$	10,000,000			$	0
Class Y		$	5,000,000			$	0

 

Tax Information

 

The Fund intends to declare dividends from net investment income daily and pay such dividends monthly. Net long-term capital gains, if any, will be distributed on an annual basis. The Fund’s distributions are taxable, and will be taxed as ordinary income or capital gains, unless you are investing through a tax-deferred arrangement, such as a 401(k) plan or an individual retirement account. Such tax-deferred arrangements may be taxed later upon withdrawal of monies from those arrangements.

 

Payments to Broker-Dealers and Other Financial Intermediaries

 

If you purchase shares of the Fund through a financial intermediary, such as a broker-dealer or investment adviser, the Fund, the Adviser, the distributor and/or their affiliates may pay the intermediary for the sale of Fund shares and related services. These payments create a conflict of interest by influencing the broker-dealer or other financial intermediary and your salesperson to recommend the Fund over another investment. Ask your financial intermediary or visit your financial intermediary’s Web site for more information.

 

7

HSBC U.S. Treasury Money Market Fund
Summary Section

 

Investment Objective

 

The investment objective of the HSBC U.S. Treasury Money Market Fund (the “Fund”) is to provide as high a level of current income as is consistent with the preservation of capital and liquidity.

 

Fees and Expenses of the Fund

 

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.

 

Shareholder Fees (fees paid directly from your investment)		Class A		Class C		Class D		Class E		Class I		Intermediary Class		Intermediary Service Class		Class Y
Maximum Sales Charge (load) Imposed on Purchases (as a % of offering price)		None		None		None		None		None		None		None		None
Maximum Deferred Sales Charge (load) (as a % of amount redeemed)		None		1.00%		None		None		None		None		None		None
Annual Fund Operating Expenses (expenses that you pay as a percentage of the value of your investment)		Class A*		Class C*		Class D		Class E*		Class I		Intermediary Class		Intermediary Service Class		Class Y
Management Fee		0.10%		0.10%		0.10%		0.10%		0.10%		0.10%		0.10%		0.10%
Distribution (12b-1) Fee		0.00%		0.75%		0.00%		0.00%		0.00%		0.00%		0.00%		0.00%
Other Expenses:
Shareholder Servicing Fee		0.40%		0.25%		0.25%		0.10%		0.00%		0.05%		0.10%		0.00%
Other Operating Expenses		0.18%		0.18%		0.18%		0.08%		0.08%		0.18%		0.18%		0.18%
Total Other Expenses		0.58%		0.43%		0.43%		0.18%		0.08%		0.23%		0.28%		0.18%
Total Annual Fund
Operating Expenses		0.68%		1.28%		0.53%		0.28%		0.18%		0.33%		0.38%		0.28%
Fee Waiver and/or Expense Reimbursement**		0.00%		0.00%		0.00%		0.03%		0.04%		0.15%		0.18%		0.00%
Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement		0.68%		1.28%		0.53%		0.25%		0.14%		0.18%		0.20%		0.28%

*		During the Fund’s prior fiscal year, Class A Shares, Class C Shares and Class E Shares were not operational. Therefore, these amounts have been estimated.
**		HSBC Global Asset Management (USA) Inc., the Fund’s investment adviser (the “Adviser”), has entered into a contractual expense limitation agreement with the Fund (“Expense Limitation Agreement”) under which it will limit total expenses of the Fund (excluding interest, taxes, brokerage commissions, extraordinary expenses and estimated indirect expenses attributable to the Fund’s investments in investment companies) to an annual rate of 0.25%, 0.14%, 0.18%, and 0.20% for Class E Shares, Class I Shares, Intermediary Shares, and Intermediary Service Shares, respectively. Any amounts contractually waived or reimbursed by the Adviser will be subject to repayment by the Fund to the Adviser within three years, calculated monthly from when the waiver or reimbursement was recorded, to the extent that the repayment will not cause the Fund’s operating expenses to exceed the contractual expense limit that was in effect at the time of such waiver or reimbursement. The expense limitation shall be in effect until March 1, 2021. The Expense Limitation Agreement shall terminate upon the termination of the Investment Advisory Contract between the Fund and the Adviser, or it may be terminated upon written notice to the Adviser by the Trust’s Board of Trustees.

 

8

HSBC U.S. Treasury Money Market Fund
Summary Section

 

Example

 

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. The Example takes the Fund’s Expense Limitation Agreement into account for the first year only. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

 

		1 Year		3 Years		5 Years		10 Years
Class A Shares		$69		$218		$379		$847
Class C Shares		$230		$406		$702		$1,157
Class D Shares		$54		$170		$296		$665
Class E Shares		$26		$87		$154		$353
Class I Shares		$14		$54		$97		$226
Intermediary Shares		$18		$91		$170		$403
Intermediary Service Shares		$20		$104		$195		$463
Class Y Shares		$29		$90		$157		$356

 

For the share class listed below, you would pay the following expenses if you did not redeem your shares:

 

		1 Year		3 Years		5 Years		10 Years
Class C Shares		$130		$406		$702		$1,157

 

Principal Investment Strategies

 

The Fund is a government money market fund and seeks to maintain a stable price of $1.00 per share. The Fund seeks to achieve its investment objective by investing, under normal market conditions, exclusively in direct obligations of the U.S. Treasury. The Fund will invest in securities with maturities of (or deemed maturities of) 397 days or less and will maintain a dollar-weighted average portfolio maturity of 60 days or less and a dollar-weighted average portfolio life of 120 days or less.

 

The U.S. Treasury issues various types of marketable securities consisting of bills, notes, bonds and other debt securities. The Fund will not invest in securities issued or guaranteed by agencies or instrumentalities of the U.S. government, will not enter into loans of its portfolio securities and will not, under normal conditions, invest in repurchase agreements.

 

Under adverse market conditions, the Fund may temporarily invest in repurchase agreements collateralized by U.S. Treasury obligations. These securities may entail more risk than the types of securities in which the Fund typically invests. Additionally, as an alternative to investing in negatively yielding securities, the Fund may also elect to hold uninvested cash with the Fund’s custodian.

 

9

HSBC U.S. Treasury Money Market Fund
Summary Section

 

Principal Investment Risks

 

The Fund has the following principal investment risks:

 

·

Debt Instruments Risk: The risks of investing in debt instruments include:

 

·

Credit Risk: The Fund could lose money if an issuer or guarantor of a debt instrument is unable or unwilling to make or perceived to be unable or unwilling to make timely payments of interest or principal. The issuer or guarantor could also suffer a rapid decrease in credit quality rating, which would adversely affect the volatility of the value and liquidity of the investment.

 

·

Interest Rate Risk: Fluctuations in interest rates may affect the yield, volatility, liquidity and value of investments in income producing or debt instruments. Generally, if interest rates rise, the value of such investments will fall. A low interest rate environment poses additional risks to the Fund, because low yields on the Fund’s portfolio holdings may have an adverse impact on the Fund’s ability to provide a positive yield to shareholders, pay expenses out of Fund assets, or minimize the volatility of the Fund’s net asset value (“NAV”) per share. The risks associated with changing interest rates may have unpredictable effects on the markets and the Fund’s investments.

 

·

Inventory Risk: The market-making capacity in debt markets has declined as a result of reduced broker-dealer inventories relative to fund assets, reduced broker-dealer proprietary trading activity and increased regulatory capital requirements for financial institutions such as banks. Because market makers provide stability to a market through their intermediary services, a significant reduction in dealer market-making capacity has the potential to decrease liquidity and increase volatility in the debt markets. A decrease in liquidity may affect the ability of the Fund to pay redemption proceeds within the allowable time period.

 

·

Market Risk: The value of the Fund’s investments may decline due to changing economic, political, social, regulatory or market conditions. Market risk may affect a section of the economy or it may affect the economy as a whole.

 

·

Stable NAV Risk: The Fund may not be able to maintain an NAV per share of $1.00 (a “Stable NAV”) at all times. The failure of other money market funds to maintain a Stable NAV (or the perceived threat of such a failure) could adversely affect the Fund’s NAV. Shareholders of the Fund should not rely on or expect the Adviser or an affiliate to help the Fund maintain a Stable NAV.

 

Risk is inherent in all investing. You could lose money by investing in the Fund. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the Fund is not a deposit of HSBC Bank USA, N.A. and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Fund’s sponsor has no legal obligation to provide financial support to the Fund, and you should not expect that the sponsor will provide financial support to the Fund at any time.

 

10

HSBC U.S. Treasury Money Market Fund
Summary Section

 

Performance Bar Chart and Table

 

The bar chart and table below provide an indication of the risks of an investment in the Fund by showing changes in the Fund’s year to year performance. Past performance does not indicate how the Fund will perform in the future.

 

The bar chart below shows the Fund’s annual returns for Class Y Shares and how performance has varied from year to year. The returns for the Fund’s other share classes will differ from the returns of the Class Y Shares shown in the bar chart because the expenses of the classes differ.

 

Annual Total Returns as of 12/31 for Class Y Shares
Bar chart assumes reinvestment of dividends and distributions

 

 

 

Best Quarter:		Q1 2019		0.54%
Worst Quarter:		Q3 2015		0.00%

 

The table below lists the average annual total returns for each class of shares for various time periods. As of December 31, 2019, the 7-day yields of the Fund’s Class D, Class I, Intermediary, Intermediary Service and Class Y Shares were 1.15%, 1.51%, 1.49%, 1.47% and 1.40%, respectively. The 7-day yield information is not provided for Class A, Class C, and Class E Shares because there were no Class A, Class C, or Class E shareholders as of December 31, 2019. For current yield information on the Fund, call 1-800-782-8183.

 

Past performance is not an indication of how the Fund will perform in the future.

 

Average Annual Total Returns^ (for the periods ended December 31, 2019)

 

		Inception Date		1 Year		5 Years		10 Years		Since Inception
Class A Shares(1)		May 24, 2001		N/A		N/A		N/A		1.08%
Class C Shares (with applicable CDSC)(1)		Dec. 24, 2003		N/A		N/A		N/A		0.04%
Class D Shares		May 14, 2001		1.70%		0.69%		0.35%		1.00%
Class E Shares(1)		July 12, 2016		N/A		N/A		N/A		0.37%
Class I Shares(1)		Dec. 30, 2003		2.06%		0.94%		0.47%		1.19%
Intermediary Shares		July 12, 2016		2.04%		N/A		N/A		1.28%
Intermediary Service Shares		July 12, 2016		2.02%		N/A		N/A		1.31%
Class Y Shares		May 11, 2001		1.95%		0.85%		0.43%		1.15%

^		During the year ended December 31, 2007, the Fund received a one-time reimbursement from the Adviser related to past marketing arrangements. During the year ended December 31, 2010, the Fund also received a one-time payment in respect of a class action settlement. As a result, the Fund’s total returns for the years ended December 31, 2007 and 2010 were higher than they would have been had the Fund not received these payments.

(1)

Class A, Class C, Class E and Class I Shares were operational only during a portion of the period since inception. The “Since Inception” return performance is for the period of time the Classes had operations. The 1 year, 5 years and 10 years average annual return is not provided for Class A, Class C or Class E Shares because there were no Class A, Class C or Class E shareholders as of December 31, 2019.

 

11

HSBC U.S. Treasury Money Market Fund
Summary Section

 

Investment Adviser

 

HSBC Global Asset Management (USA) Inc. is the Fund’s investment adviser.

 

Purchasing and Selling Your Shares

 

Generally, you may purchase or redeem Fund shares on any business day by mail (HSBC Funds, P.O. Box 219691, Kansas City, MO 64121-9691), wire transfer, or telephone at 1-800-782-8183. Class C Shares are not offered for sale, but are offered as an exchange option for Class C shareholders of certain other HSBC Funds. Purchases and redemptions of Class I Shares, Class E Shares, Intermediary Shares and Intermediary Service Shares may only be made via wire transfer. Investors who wish to purchase, exchange or redeem Fund shares through a broker-dealer should contact the broker-dealer directly.

 

Class A and Class D Shares		Minimum Initial Investment				Minimum Subsequent Investment
Regular (non-retirement)		$	1,000			$	100
Retirement (IRA)		$	250			$	100
Automatic Investment Plan		$	250			$	25
Class C Shares		$	0			$	0
Class E Shares		$	10,000,000			$	0
Class I Shares		$	50,000,000			$	5,000,000
Intermediary Shares		$	20,000,000			$	0
Intermediary Service Shares		$	10,000,000			$	0
Class Y Shares		$	5,000,000			$	0

 

Tax Information

 

The Fund intends to declare dividends from net investment income daily and pay such dividends monthly. Net long-term capital gains, if any, will be distributed on an annual basis. The Fund’s distributions are taxable, and will be taxed as ordinary income or capital gains, unless you are investing through a tax-deferred arrangement, such as a 401(k) plan or an individual retirement account. Such tax-deferred arrangements may be taxed later upon withdrawal of monies from those arrangements.

 

Payments to Broker-Dealers and Other Financial Intermediaries

 

If you purchase shares of the Fund through a financial intermediary, such as a broker-dealer or investment adviser, the Fund, the Adviser, the distributor and/or their affiliates may pay the intermediary for the sale of Fund shares and related services. These payments create a conflict of interest by influencing the broker-dealer or other financial intermediary and your salesperson to recommend the Fund over another investment. Ask your financial intermediary or visit your financial intermediary’s Web site for more information.

 

12

Additional Information About the Funds’
Investment Strategies and Risks

 

More About Risks and Investment Strategies

 

Each Fund is a series of the HSBC Funds (the “Trust”). The investment objective and strategies of each Fund are non-fundamental and may be changed without shareholder approval. Shareholders will be given advance notice of material changes to a Fund’s investment objective or other non-fundamental investment policies. If there is a change in the investment objective or strategies of a Fund, shareholders should consider whether the Fund remains an appropriate investment in light of their current financial position and needs. There can be no assurance that the investment objective of a Fund will be achieved.

 

Each Fund intends to be a “government money market fund” under Rule 2a-7 under the Investment Company Act of 1940, as amended (“1940 Act”). “Government money market funds” are money market funds that invest at least 99.5% of their total assets in cash, securities issued or guaranteed by the United States or certain U.S. government agencies or instrumentalities (“U.S. Government Securities”), and/or repurchase agreements that are collateralized fully by these types of obligations. “Government money market funds” are exempt from provisions under Rule 2a-7 that: (1) require a four digit floating net asset value (“NAV”) per share and (2) permit the imposition of a “liquidity fee” and/or “redemption gate.” In addition, the U.S. Government Money Market Fund must invest, under normal circumstances, at least 80% of its net assets, plus any borrowings for investment purposes, in U.S. Government Securities and repurchase agreements collateralized fully by these types of obligations. The U.S. Treasury Money Market Fund must invest, under normal circumstances, at least 80% of its net assets, plus any borrowings for investment purposes, in direct obligations of the U.S. Treasury. However, under normal market conditions, the U.S. Treasury Money Market Fund intends to invest exclusively in direct obligations of the U.S. Treasury. The investment policies to invest at least 80% of net assets, plus any borrowings for investment purposes, in the particular type of securities suggested by a Fund’s name exclude cash. Moreover, these investment policies are not fundamental and may be changed by the Board of Trustees of the Trust upon 60 days’ notice to Fund shareholders.

 

Investment Risks of the Funds

 

Investments in the Funds are subject to investment risks, including the possible loss of the principal amount invested. This section provides more detailed information about the Funds’ principal investments and risks. This prospectus does not disclose all the types of securities or investment strategies that the Funds may use. The Funds’ Statement of Additional Information (“SAI”) provides more detailed information about the securities, investment policies and risks described in this prospectus.

 

Each Fund expects to use the amortized cost method of valuation to seek to maintain an NAV of $1.00 per share (a “Stable NAV”), but there is no assurance that the Funds will be able to do so on a continuous basis. The Funds’ performance per share will change daily based on many factors, including the quality of the instruments in each Fund’s investment portfolio, national and international economic conditions and general market conditions.

 

An investment in the Funds is neither insured nor guaranteed by the U.S. government. Shares of a Fund are not deposits or obligations of, or guaranteed or endorsed by, HSBC Bank USA, N.A. or any other bank, and are not federally insured by the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other agency. A Fund’s sponsor has no legal obligation to provide financial support to a Fund, and you should not expect that the sponsor will provide financial support to a Fund at any time.

 

As a government money market fund, each Fund must meet the requirements of Rule 2a-7 under the 1940 Act. This Rule imposes strict requirements on the investment quality, liquidity, maturity, and diversification of each Fund’s investments. Under Rule 2a-7, each Fund’s investments must have a remaining maturity of (or a deemed remaining maturity of) no more than 397 days and each Fund must maintain a dollar-weighted average maturity that does not exceed 60 days and a dollar-weighted average portfolio life of 120 days or less.

 

Institutional investors are encouraged to invest in the Funds. As a result, the Funds may have large inflows or outflows of cash from time to time. This could have adverse effects on a Fund’s performance if the Fund were required to sell securities or invest cash (or leave cash uninvested) at times when it otherwise would not do so. This activity could also accelerate the realization of capital gains or losses, increase a Fund’s transaction costs, and impact liquidity.

 

13

Additional Information About the Funds’
Investment Strategies and Risks

 

Investment Risks of the Funds (continued)

 

There can be no assurance that the investment objectives of each Fund will be achieved. In addition, each Fund’s investment policies, as well as the relatively short maturity of obligations purchased by the Funds, may result in frequent changes in each Fund’s portfolio, which may give rise to taxable gains or losses and reduce investment returns.

 

During adverse market conditions or when the Adviser believes there is an insufficient supply of appropriate money market instruments in which to invest, a Fund may temporarily hold uninvested cash in lieu of such investments. During periods when such temporary or defensive positions are held, a Fund may be unable to pursue its investment objective. Such positions may also subject a Fund to additional risks, such as increased exposure to cash held at a custodian bank, as well as fees and other costs.

 

Each of the Funds is subject to one or more of the following investment risks:

 

● Principal Risk		U.S. Government	U.S. Treasury
* Additional Risk		Money Market Fund	Money Market Fund
Risk
Debt Instruments Risk		●	●
Investments In Other Investment Companies		*
Large Shareholder Transactions Risk		*	*
Market Risk		●	●
Repurchase Agreements		●	*
Stable NAV Risk		●	●
U.S. Government Securities Risk		●

	·	Debt Instruments Risk: The risks of investing in debt instruments include:

 

·

Credit Risk: A Fund could lose money if an issuer or guarantor of a debt instrument is unable or unwilling to make timely payments of interest or principal or enters bankruptcy. Furthermore, the value of a debt instrument may decline if the market believes that the issuer or guarantor is unable or unwilling to make such payments on time. Changes in economic conditions could cause issuers or guarantors of these instruments to be unable or unwilling to meet their financial obligations.

 

Interest Rate Risk: Fluctuations in interest rates may affect the yield, volatility, liquidity and value of investments in income-producing or debt instruments. Generally, if interest rates rise, the value of such investments will fall. In addition, rising interest rates could lead to heightened investment volatility and decreased liquidity. During periods of falling interest rates, borrowers may pay off their debt sooner than expected, forcing the reinvestment of principal proceeds at lower interest rates, resulting in less interest income. Conversely, during periods of rising interest rates, borrowers may pay off their debt later than expected, thereby preventing reinvestment of principal proceeds at higher interest rates, increasing a Fund’s sensitivity to changes in interest rates and resulting in less income to the Fund than potentially available. A low interest rate environment poses additional risks to the Funds, because low yields on a Fund’s portfolio holdings may have an adverse impact on the Fund’s ability to provide a positive yield to shareholders, pay expenses out of Fund assets, or minimize the volatility of the Fund’s NAV per share. Interest rate changes can be sudden and unpredictable, and a Fund may lose money if these changes are not anticipated by the Adviser. A wide variety of factors can cause interest rates or yields of U.S. Treasury securities (or yields of other types of bonds) to rise or fall (e.g., central bank monetary policies, changing inflation or real growth rates, general economic conditions, etc.). The risks associated with changing interest rates may have unpredictable effects on the markets and a Fund’s investments.

 

·

Inventory Risk: The market-making capacity in debt markets has declined as a result of reduced broker-dealer inventories relative to fund assets, reduced broker-dealer proprietary trading activity and increased regulatory capital requirements for financial institutions such as banks. Because market makers provide stability to a market through their intermediary services, a significant reduction in dealer market-making capacity has the potential to decrease liquidity and increase volatility in the debt markets. A decrease in liquidity may negatively affect the ability of a Fund to pay redemption proceeds within the allowable time period.

 

·

Investments in Other Investment Companies: Subject to certain restrictions, the U.S. Government Money Market Fund may invest in securities issued by other money market funds that primarily invest in U.S. Government Securities and repurchase agreements collateralized by U.S. Government Securities. Such securities will be acquired by the Fund within the limits prescribed by the 1940 Act and the rules thereunder. Investors should recognize that the purchase of securities of other investment companies results in duplication of expenses such that investors indirectly bear a proportionate share of the operating expenses of such companies, including investment advisory and administrative services fees.

 

14

Additional Information About the Funds’
Investment Strategies and Risks

 

Investment Risks of the Funds (continued)

 

·

Large Shareholder Transactions: A Fund may be adversely impacted when certain large shareholders, including institutional investors, purchase or redeem large amounts of shares of the Fund, which may occur rapidly or unexpectedly. As a result, the Funds may experience redemptions resulting in large outflows of cash from time to time. This could have adverse effects on a Fund’s performance and/or portfolio construction if the Fund were required to sell securities at times when it otherwise would not do so. This activity could also accelerate the realization of capital gains or losses and increase a Fund’s transaction costs or decrease the liquidity of a Fund’s portfolio. Similarly, large purchases of Fund shares may adversely affect a Fund’s performance to the extent that the Fund is delayed in investing new cash or otherwise maintains a larger cash position than it ordinarily would. Large redemptions of Fund shares could also result in a Fund’s current expenses being allocated over a smaller asset base, leading to an increase in the Fund’s expense ratio. Although large shareholder transactions may be more frequent under certain circumstances, a Fund is generally subject to the risk that a large shareholder can purchase or redeem a significant percentage of Fund shares at any time. Moreover, a Fund is subject to the risk that other shareholders may make investment decisions based on the choices of a large shareholder, which could exacerbate any potential negative effects experienced by a Fund.

 

·

Market Risk: The value of a Fund’s investments may decline due to changing economic, political, social, regulatory or market conditions. Issuer, political, economic, regulatory, social or market developments can affect a single issuer, issuers within an industry or economic sector, or the market as a whole. In the short term, a Fund’s investments can fluctuate dramatically in response to these developments. Different parts of the market and different types of securities can react differently to these developments. Moreover, the conditions in one country or geographic region could adversely affect a Fund’s investments in a different country or geographic region due to increasingly interconnected global economies and financial markets.

 

·

Repurchase Agreements: The use of repurchase agreements, in which a party buys a security from another party (“seller”) and the seller agrees to repurchase the security at an agreed-upon date and price (which reflects a market rate of interest), involves certain risks. If the seller in a repurchase agreement defaults on its obligation to repurchase the underlying securities at a time when the value of these securities has declined, a Fund may incur a loss upon disposition of the securities. The Funds may also suffer time delays and incur expenses in connection with the disposition of the securities. There is also a risk that the seller of the agreement may become insolvent and subject to liquidation.

 

·

Stable NAV Risk: Each Fund expects to use the amortized cost method of valuation to seek to maintain a Stable NAV. However, the Funds may not be able to maintain a Stable NAV. If any money market fund fails to maintain a Stable NAV (or if there is a perceived threat of such a failure), other money market funds, including the Funds, could be subject to increased redemption activity, which could adversely affect the Funds’ NAV. Shareholders of the Funds should not rely on or expect the Adviser or an affiliate to purchase distressed assets from the Funds, make capital infusions into the Funds, enter into capital support agreements with the Funds or take other actions to help the Funds maintain a Stable NAV.

 

·

U.S. Government Securities Risk: There are different types of U.S. Government Securities with different levels of credit risk. Some U.S. Government Securities are issued or guaranteed by the U.S. Treasury and are supported by the full faith and credit of the United States. Other types of U.S. Government Securities are supported by the full faith and credit of the United States (but not issued by the U.S. Treasury). These securities have the lowest credit risk. Still other types of U.S. Government Securities are: (1) supported by the ability of the issuer to borrow from the U.S. Treasury; (2) supported only by the credit of the issuing agency, instrumentality or government-sponsored corporation; (3) supported by pools of assets (e.g., mortgage-backed securities); or (4) supported by the United States in some other way. Certain U.S. Government Securities are riskier than others. The relative level of risk depends on the nature of the particular security and government support. A U.S. government-sponsored entity, although chartered or sponsored by an Act of Congress, may issue securities that are neither insured nor guaranteed by the U.S. Treasury and are riskier than those that are. Regarding certain federal agency securities or government sponsored entity securities (such as debt securities or mortgage-backed securities issued by Federal National Mortgage Association (“Fannie Mae”), Federal Home Loan Mortgage Corporation (“Freddie Mac”), Federal Home Loan Banks, and other government sponsored agencies), investors should be aware that although the issuer may be chartered or sponsored by an Act of Congress, the issuer is not funded by congressional appropriations, and its securities are neither guaranteed nor insured by the U.S. Treasury. Fannie Mae and Freddie Mac have been operating under conservatorship, with the Federal Housing Finance Agency acting as their conservator, since September 2008. This risk does not apply to the HSBC U.S. Treasury Money Market Fund, which normally invests only in obligations of the U.S. Treasury and does not invest in obligations issued or guaranteed by agencies or instrumentalities of the U.S. government.

 

15

Additional Information About the Funds’
Investment Strategies and Risks

 

Other Information

 

To the extent authorized by law, each Fund reserves the right to discontinue offering shares at any time, merge, reorganize itself or any class of shares or cease operations and liquidate.

 

Who May Want To Invest?

 

Consider investing in the Funds if you are:

 

·

Seeking preservation of capital

 

·

Investing for short-term needs

 

·

Have a very low risk tolerance

 

·

Willing to accept lower potential returns in exchange for a higher degree of safety

 

The Funds will not be appropriate for anyone:

 

·

Seeking high total returns

 

·

Pursuing a long-term goal or investing for retirement

 

More Information About Fund Investments

 

This prospectus describes the Funds’ principal strategies, and the Funds will normally invest in the types of securities described in this prospectus. However, in addition to the investments and strategies described in this prospectus, each Fund also may invest in other securities and engage in other investment practices. These securities and investment practices, as well as those described in this prospectus, are described in detail in the Statement of Additional Information (“SAI”). Of course, a Fund cannot guarantee that it will achieve its investment goal.

 

Portfolio Holdings

 

A description of the Funds’ policies and procedures with respect to the disclosure of the Funds’ portfolio securities is available in the SAI and on the Funds’ website at https://investorfunds.us.hsbc.com. To request a copy of the SAI, please refer to the back cover of this prospectus.

 

16

Fund Management

 

The Investment Adviser

 

HSBC Global Asset Management (USA) Inc., 452 Fifth Avenue, New York, New York, 10018, is the investment adviser for the Funds, pursuant to an investment advisory contract (the “Investment Advisory Agreement”) with the Trust. The Adviser is a wholly-owned subsidiary of HSBC Bank USA, N.A., which is a wholly-owned subsidiary of HSBC USA, Inc., a registered bank holding company (collectively “HSBC”). HSBC currently provides investment advisory services for individuals, trusts, estates and institutions. As of September 30, 2019, the Adviser had approximately $98.9 billion in assets under management.

 

Through its portfolio management team, the Adviser makes the day-to-day investment decisions and continuously reviews, supervises and administers the Funds’ investment programs pursuant to the Investment Advisory Agreement. The Adviser also provides certain operational support services to the Funds at the annual rate of 0.10% of a Fund’s average daily net assets of Class A, Class C, Class D, Intermediary Class, Intermediary Service Class and Class Y (as applicable), pursuant to an Operational Support Services Agreement, but these fees are not charged to Class E Shares or Class I Shares.

 

The Trust and the Adviser have each received an exemptive order from the SEC that allows the Adviser to enter into new investment sub-advisory contracts and to make material changes to existing sub-advisory contracts with certain unaffiliated subadvisers with the approval of the Board of Trustees of the Trust, but without shareholder approval. None of the Funds currently use the services of a subadviser. However, the conditions under the exemptive order could be applied to the use of one or more unaffiliated subadvisers at a future time. In the future, the Trust and the Adviser may, on behalf of the Government Money Market Fund, receive an additional exemptive order that would allow the Adviser to implement new investment sub-advisory contracts and to make material changes to sub-advisory contracts that may be in effect at the time with subadvisers that are affiliated with the Adviser with the approval of the Board of Trustees, but without shareholder approval. As with the current order, the new order would be subject to certain conditions, including that the Government Money Market Fund would notify shareholders and provide them with certain information upon the hiring of a subadviser.

 

For advisory and operational support services, during the last fiscal year the Funds paid fees (net of fee waivers) as follows:

 

	Percentage of average net assets for Fiscal Year Ended 10/31/19
U.S. Government Money Market Fund	0.10%
U.S. Treasury Money Market Fund	0.12%

 

The Adviser may voluntarily waive fees from time to time. For example, the Adviser may voluntarily undertake to waive fees in the event that a Fund’s yield drops below a designated level. Once started, there is no guarantee that the Adviser will continue to voluntarily waive a portion of its fees following commencement of such a waiver. Such waivers will impact a Fund’s performance. The Adviser has entered into an Expense Limitation Agreement with each Fund with respect to the Class E Shares, Class I Shares, Intermediary Shares and Intermediary Service Shares under which it will limit the total expenses of each respective Fund (excluding interest, taxes, brokerage commissions, extraordinary expenses and estimated indirect expenses attributable to the Fund’s investments in investment companies) to the annual rates shown in the table below:

 

	E Shares	I Shares	Intermediary Shares	Intermediary Service Shares
U.S. Government Money Market Fund	0.25%	0.14%	0.18%	0.20%
U.S. Treasury Money Market Fund	0.25%	0.14%	0.18%	0.20%

 

Any amounts contractually waived or reimbursed by the Adviser will be subject to repayment by a Fund to the Adviser within three years, calculated monthly from when the waiver or reimbursement was recorded, to the extent that the repayment will not cause a Fund’s operating expenses to exceed the contractual expense limit that was in effect at the time of such waiver or reimbursement. The expense limitations shall be in effect until March 1, 2021. The Expense Limitation Agreement shall terminate upon the termination of the Investment Advisory Agreement between the Trust and the Adviser, or it may be terminated upon written notice to the Adviser by the Trust’s Board of Trustees.

 

A discussion regarding the basis for the Board of Trustees’ approval of the Investment Advisory Agreement is available in the Funds’ April 30, 2019 semi-annual report and will be available in the April 30, 2020 semi-annual report.

 

17

Fund Management

 

The Distributor, Administrator and Sub-Administrator

 

The Adviser also serves as the Trust’s administrator (the “Administrator”), and in that role oversees and coordinates the activities of other service providers, and monitors certain aspects of the Trust’s operations. The Administrator has retained Citi Fund Services Ohio, Inc., whose address is 4400 Easton Commons, Suite 200, Columbus, OH 43219, as sub-administrator to the Funds (the “Sub-Administrator”). Administrative services provided by the Administrator and Sub-Administrator include providing office space, equipment and clerical personnel to the Funds and supervising custodial, auditing, valuation, bookkeeping, regulatory and dividend disbursing services.

 

Foreside Distribution Services, L.P. (the “Distributor”), a member of the Financial Industry Regulatory Authority (“FINRA”), is the Trust’s principal underwriter and acts as the Trust’s distributor in connection with the offering of Fund shares. The Distributor may enter into agreements with banks, broker-dealers, or other financial intermediaries through which investors may purchase or redeem shares.

 

The SAI has more detailed information about the Adviser, Distributor, Administrator and Sub-Administrator, and other service providers. You can obtain a copy of the SAI on the Funds’ website at https://investorfunds.us.hsbc.com.

 

18

Shareholder Information

 

Pricing of Fund Shares

 

 

19

Shareholder Information

 

Purchasing and Adding to Your Shares

 

Purchasing Shares   You may purchase, redeem or exchange shares of the Funds through the Funds’ Transfer Agent or through banks, brokers and other investment representatives, which may charge additional fees and may require higher minimum investments or impose other limitations on buying and selling shares. If you purchase, redeem or exchange shares through a bank, broker or other investment representative, that party is responsible for transmitting orders to the Funds’ Transfer Agent and may have an earlier cut-off time for purchase, redemption and exchange orders. Purchase, redemption and exchange orders will be executed at the NAV next calculated after the Funds’ Transfer Agent has received and accepted the order in good order.   In addition, certain banks, brokers and other investment representatives are authorized to accept, on behalf of the Trust, purchase, redemption and exchange orders placed by or on behalf of their customers. If a bank, broker or other investment representative is authorized to accept, on behalf of the Trust, purchase, redemption and exchange orders (and provided such authorized agent complies with its agreement with the Trust or the Distributor), a Fund or the Funds’ Transfer Agent will be deemed to have received an order for the purchase, redemption or exchange of Fund shares when the order is received and accepted in good order by such authorized agent, and the order will be executed at the NAV next calculated. Each authorized agent’s agreement with the Trust or the Distributor allows orders to be executed at the NAV next calculated, after the order is received and accepted in good order by such authorized agent, although the order may not be transmitted to the Trust or the Funds’ Transfer Agent until after the time at which a Fund next calculates its NAV.   In general, “good order” means that payment for your purchase and all the information needed to complete your order must be received by a Fund, the Funds’ Transfer Agent or their authorized agents before your order is processed. Purchase proceeds must be received by 6:00 p.m. Eastern time.   You should contact the bank, broker or other investment representative through whom you purchase, redeem or exchange shares of the Funds to learn whether it is authorized to accept orders on behalf of the Trust. You should also consult such bank, broker or other investment representative for specific information about the purchase, redemption and/or exchange of Fund shares.

 

The Funds offer the eight classes of shares described below.

 

CLASS A SHARES and CLASS Y SHARES are offered to the public, and to customers of shareholder servicing agents and certain securities brokers that have a dealer or shareholder servicing agreement with the Distributor or the Trust, on a continuous basis.

 

CLASS C SHARES are not offered for sale, but are offered as an exchange option for Class C shareholders of the Trust’s other investment portfolios. See “Exchanging Your Shares.”

 

CLASS D SHARES are similar to Class A Shares, except that Class D Shares are offered to clients of the Adviser’s affiliates, certain retirement plans, certain institutional clients and some third party providers. Class D Shares are subject to lower shareholder servicing fees.

 

CLASS E SHARES are offered primarily for investment through portal providers, intermediaries (anyone facilitating the purchase of a Fund by its clients), and institutional direct clients, if they meet the investment minimums on the following page. Purchases and redemptions of Class E Shares may only be made via wire transfer.

 

CLASS I SHARES are offered primarily for direct investment by institutional investors, such as corporations, foundations, municipalities and other governmental entities, banks, and trust companies, as well as to other investors who meet the investment minimums on the following page. Class I Shares are also available for investment by other investment companies and products advised by the Adviser or its affiliates, employees of the Adviser, and members of the Trust’s Board of Trustees. Purchases and redemptions of Class I Shares may only be made via wire transfer.

 

20

Shareholder Information

  

Purchasing and Adding to Your Shares continued

 

 

Avoid 24% Tax Withholding   The Funds are required to withhold 24% of taxable dividends, capital gains distributions and redemptions paid to shareholders who have not provided the Funds with their certified taxpayer identification number in compliance with Internal Revenue Service (“IRS”) rules, or if you have been notified by the IRS that you are subject to backup withholding. Backup withholding is not an additional tax; rather, it is a way in which the IRS ensures that it will collect taxes otherwise due. Any amounts withheld may be credited against your U.S. federal income tax liability. To avoid tax withholding, make sure you provide your correct tax identification number (social security number for most investors) on your Account Application and required certifications.

 

21

Shareholder Information

 

Purchasing and Adding to Your Shares continued

 

Instructions for Opening or Adding to an Account

 

By Regular Mail or By Overnight Service

 

Initial Investment:

 

If purchasing through your financial advisor or brokerage account, simply tell your advisor or broker that you wish to purchase shares of the Funds and he or she will take care of the necessary documentation. For all other purchases, follow the instructions below.

 

1.	Carefully read, complete, and sign the Account Application. Establishing your account privileges now saves you the inconvenience of having to add them later. A copy of the application can be obtained on the Funds’ website at https://investorfunds.us.hsbc.com.
2.	Make your check payable to “HSBC Funds” and include the name of the appropriate Fund(s) on the check.
3.	Mail to: HSBC Funds, P.O. Box 219691, Kansas City, MO 64121-9691.

 

Subsequent Investment:

 

 

Electronic Purchases

 

Your bank must participate in the ACH and must be a U.S. bank. Your bank or broker may charge for this service.

 

Select the electronic purchase option on your Account Application or call 1-800-782-8183. Your account can generally be set up for electronic purchases within 15 days.

 

Call 1-800-782-8183 to arrange a transfer from your bank account.

 

By Wire Transfer

 

For information on how to request a wire transfer, call 1-800-782-8183.

 

22

Shareholder Information

  

Purchasing and Adding to Your Shares continued

 

 

To invest regularly from your paycheck or government check:

 

Call 1-800-782-8183 for an enrollment form.

 

Customer Identification Information

 

To help the U.S. Government fight the funding of terrorism and money laundering activities, federal law requires all financial institutions to obtain, verify and record information that identifies each person that opens a new account, and to determine whether such person’s name appears on U.S. Government lists of known or suspected terrorists and terrorist organizations.

 

As a result, the Funds must obtain the following information for each person that opens a new account:

 

	·	Name;
	·	Date of birth (for individuals);
	·	Residential or business street address (although post office boxes are still permitted for mailing); and
	·	Social security number, taxpayer identification number, or other identifying number.

 

You may also be asked for a copy of your driver’s license, passport or other identifying document in order to verify your identity. In addition, it may be necessary to verify your identity by cross-referencing your identification information with a consumer report or other electronic database. Additional information may be required to open accounts for corporations and other entities.

 

Federal law prohibits the Funds and other financial institutions from opening a new account unless they receive from an investor the minimum identifying information listed above. After an account is opened, the Funds may restrict your ability to purchase additional shares until your identity is verified. The Funds may close your account or take other appropriate action if they are unable to verify your identity within a reasonable time.

 

If your account is closed for this reason, your shares will be redeemed at the NAV next calculated after the account is closed.

 

23

Shareholder Information

  

Purchasing and Adding to Your Shares continued

 

Restrictions on Offers and Sales to Canadian Residents

 

The shares described in this prospectus may only be distributed in Canada through HSBC Global Asset Management (Canada) Limited, and this prospectus may not be used to solicit, and will not constitute a solicitation of, an offer to buy shares in Canada unless such solicitation is made by HSBC Global Asset Management (Canada) Limited. A distribution or solicitation may be deemed to occur in Canada where a distribution or solicitation is made to a person (including an individual, corporation, trust, partnership or other entity, or other legal person) resident or otherwise located in Canada at the applicable time. For these purposes, the following persons will generally be considered to be a Canadian resident:

 

	1	An individual, if
		·	the individual’s primary principal residence is located in Canada; or
		·	the individual is physically located in Canada at the time of the offer, sale or other relevant activity.
	2	A corporation, if
		·	the corporation’s head office or principal office is located in Canada; or
		·	securities of the corporation that entitle the holder to elect a majority of the directors are held by Canadian Resident individuals (as described above) or by legal persons resident or otherwise located in Canada; or
		·	the individuals that make investment decisions or provide instructions on behalf of the corporation are Canadian Resident individuals (as described above).
	3	A trust, if
		·	the principal office of the trust (if any) is located in Canada; or
		·	the trustee (or in the case of multiple trustees, the majority of trustees) are Canadian Resident individuals (as described above) or are legal persons resident or otherwise located in Canada; or
		·	the individuals that make investment decisions or provide instructions on behalf of the trust are Canadian Resident individuals (as described above).
	4	A partnership, if
		·	the partnership’s head office or principal office (if any) is located in Canada; or
		·	the holders of the majority of the interests of or in the partnership are held by Canadian Residents (as described above); or
		·	the general partner (if any) is a Canadian Resident (as described above); or
		·	the individuals that make investment decisions or provide instructions on behalf of the partnership are Canadian Resident individuals (as described above).

 

24

Shareholder Information

  

Selling Your Shares

 

 

Instructions for Selling Shares

 

If selling your Fund shares through your financial adviser or broker, ask him or her for redemption procedures. Your adviser and/or broker may have transaction minimums and/or transaction times that will affect your redemption. For all other sales transactions, follow the instructions below.

 

By Telephone

 

(unless you have declined telephone sales privileges)

 

1.

Call 1-800-782-8183 with instructions as to how you wish to receive your funds (mail, wire, electronic transfer). (See “Selling Your Shares—Verifying Telephone Redemptions”)

 

By Mail or Overnight Service

 

(See “Selling Your Shares—Redemptions in Writing Required”)

 

	1.	Call 1-800-782-8183 to request redemption forms or write a letter of instruction indicating:

	·	your Fund and account number
	·	amount you wish to redeem
	·	address where your check should be sent
	·	account owner’s signature

2.

Mail to: HSBC Funds, P.O. Box 219691, Kansas City, MO 64121-9691.

 

Wire Transfer

 

You must select this option on your Account Application. Call 1-800-782-8183 to request a wire transfer. If you call by the cut-off time for redemptions (at 5:00 p.m. Eastern Time for the U.S. Government Money Market Fund and at 2:00 p.m. Eastern Time for the U.S. Treasury Money Market Fund), your payment will normally be wired to your bank on the same business day. Otherwise, it normally will be wired on the following business day. A Fund may, in its sole discretion and subject to the needs of the Fund’s Portfolio Management team, seek to satisfy wire transfer requests on an intraday basis.

 

The Fund may charge a wire transfer fee.

 

NOTE: Your financial institution may also charge a separate fee.

 

25

Shareholder Information

 

Selling Your Shares continued

 

Electronic Redemptions

 

Call 1-800-782-8183 to request an electronic redemption.

 

Your bank must participate in the ACH and must be a U.S. bank. Your bank may charge for this service.

 

Systematic Withdrawal Plan

 

You can receive automatic payments from your account on a monthly, quarterly, semi-annual or annual basis. The minimum withdrawal is $50. To activate this feature:

 

	·	Make sure you have checked the appropriate box on the Account Application, or call 1-800-782-8183.
	·	Include a voided personal check.
	·	Your account must have a value of $10,000 or more to start withdrawals.

 

If the value of your account falls below $1,000, you may be asked to add sufficient funds to bring the account back to $1,000, or the Fund may close your account and mail the proceeds to you.

 

Redemptions In Writing Required

 

You must request redemptions in writing for certain types of redemptions from Individual Retirement Accounts (“IRAs”) and for redemption requests requiring a Medallion Signature Guarantee. A Medallion Signature Guarantee for all registered owners or their legal representative is needed in the following situations:

 

	·	You want to redeem shares with a value of $50,000 or more and you want to receive the proceeds in the form of a check;
	·	You want your payment sent to an address, bank account or payee other than the one currently designated on your account;
	·	You want the redemption proceeds to be transferred to another Fund account with a different registration; or
	·	Other unusual situations as determined by the Funds’ transfer agent.

 

You must obtain a Medallion Signature Guarantee from members of the STAMP (Securities Transfer Agents Medallion Program), MSP (New York Stock Exchange Signature Program) or SEMP (Stock Exchanges Medallion Program). Members are subject to dollar limitations that must be considered when requesting their guarantee. The transfer agent may reject any signature guarantee if it believes the transaction would otherwise be improper.

 

The transfer agent reserves the right to waive signature guarantee requirements, require a signature guarantee under other circumstances or reject or delay a redemption if the signature guarantee is not in good form. Faxed signature guarantees are generally not accepted. A notary public cannot provide a signature guarantee. The transfer agent reserves the right to reject a signature guarantee if it is not provided by a STAMP 2000 Medallion guarantor. The transfer agent may also request a letter from a surviving joint owner before fulfilling a redemption request.

 

26

Shareholder Information

 

Selling Your Shares continued

 

Non-Financial Transactions  

 

The transfer agent accepts a signature guarantee from a notary public in any of the following non-financial transactions:

 

	·	A change of name;
	·	Add or change banking instructions (the bank account must have at least one common owner with the owner of the Fund account);
	·	Add or change beneficiaries;
	·	Add or change authorized account traders;
	·	Add a Power of Attorney;
	·	Add or change a Trustee; or
	·	A UTMA/UGMA custodian change.

 

Verifying Telephone Redemptions

 

The Funds attempt to ensure that telephone redemptions are only made by authorized shareholders. All telephone calls are recorded for your protection and you will be asked for information to verify your identity. Proceeds of telephone redemption requests will be sent to your address of record or authorized account designated in the current records of the Transfer Agent (unless you provide written instructions and a Medallion signature guarantee, indicating another address or account). For the 15-day period following a change of account address, telephone redemptions will only be filled by a wire transfer to the authorized account designated in the current records of the transfer agent. In order to receive the redemption by check during this time period, the redemption request must be in the form of a written letter (a Medallion signature guarantee may be required). Given these precautions, unless you have specifically indicated on your Account Application that you do not want the telephone redemption feature, you may be responsible for any fraudulent telephone orders.

 

Redemptions Within 10 Days of Shares Purchased by Check

 

When you have made an investment by check and subsequently request a redemption you will not receive the redemption proceeds until the Funds’ transfer agent is satisfied that the check has cleared (which may require up to 10 business days).

 

Redemption Proceeds

 

The Funds typically expect that they will hold cash or cash equivalents to meet redemption requests. The Funds may also use the proceeds from the sale of portfolio securities to meet redemption requests. In addition, under stressed market conditions, as well as for temporary or emergency purposes, the Funds may distribute redemption proceeds in kind, access a line of credit or overdraft facility, or borrow through other sources to meet redemptions. Redemption proceeds are generally paid in cash, but the Funds reserve the right to pay, above certain limits, all or part of any redemption proceeds in kind, that is, in securities with a market value equal to the redemption price. If the Funds make a payment in kind, the securities will be valued in the same manner as NAV is calculated. The Funds may provide these securities in lieu of cash without prior notice. You would have to pay transaction costs to sell the securities distributed to you, as well as taxes on any capital gains you may realize from the sale, or from the sale of securities you receive. Additional information is available in the Funds’ SAI.

 

27

Shareholder Information

 

Selling Your Shares continued

 

Delay or Suspension in Payment of Redemption Proceeds

 

Upon receipt of a proper redemption request submitted in a timely manner and otherwise in accordance with the redemption procedures set forth in this prospectus, each Fund will redeem the requested shares and make a payment to you in satisfaction thereof no later than the business day following the redemption request. A Fund may postpone and/or suspend redemption and payment beyond one business day only as follows:

 

	·	For any period during which there is a non-routine closure of the Fedwire or applicable Federal Reserve Banks;
	·	For any period (1) during which the New York Stock Exchange is closed other than customary week-end and holiday closings or (2) during which trading on the New York Stock Exchange is restricted;
	·	For any period during which an emergency exists as a result of which (1) disposal of securities owned by a Fund is not reasonably practicable or (2) it is not reasonably practicable for a Fund to fairly determine the net asset value of its shares;
	·	For any period during which the SEC has, by rule or regulation, deemed that (1) trading shall be restricted or (2) an emergency exists;
	·	For any period that the SEC may by order permit for your protection; or
	·	For any period during which a Fund, as part of a necessary liquidation of the Fund, has properly postponed and/or suspended redemption of shares and payment in accordance with federal securities laws.

 

In addition, a temporary hold may be placed on the disbursement of redemption proceeds from an account if there is a reasonable belief that financial exploitation of a Specified Adult (as defined below) has occurred, is occurring, has been attempted, or will be attempted. Notice of such a delay will be provided in accordance with regulatory requirements. This temporary hold will be for an initial period of no more than 15 business days while an internal review of the facts and circumstances of the suspected financial exploitation is conducted, but the temporary hold may be extended for up to 10 additional business days if the internal review supports the belief that financial exploitation has occurred, is occurring, has been attempted, or will be attempted. Both the initial and additional hold on the disbursement may be terminated or extended by a state regulator or an agency or court of competent jurisdiction. For purposes of this paragraph, the term “Specified Adult” refers to an individual who is (1) a natural person age 65 and older; or (2) a natural person age 18 and older who is reasonably believed to have a mental or physical impairment that renders the individual unable to protect his or her own interests. 

 

Closing of Small Accounts

 

If your account falls below $50 due to redemptions, a Fund may ask you to increase your balance. If it is still below $50 after 30 days, a Fund may close your account and send you the proceeds at the current NAV.

 

Undeliverable or Uncashed Checks

 

Any check tendered in payment of a redemption transaction that cannot be delivered by the post office or which remains uncashed for more than six months may be reinvested in the shareholder’s account at the then-current NAV. No interest will accrue on amounts represented by uncashed redemption checks.

 

Any check tendered in payment of dividends or other distributions that cannot be delivered by the post office or which remains uncashed for more than six months may be reinvested in the shareholder’s account at the then-current NAV, and if a Fund cannot locate the shareholder, the dividend option may be changed from cash to reinvest. Distributions are reinvested on the pay date at the NAV determined at the close of business on that date.

 

Unclaimed Accounts

 

Per state requirements, property may be transferred to the appropriate state if no activity occurs in the account within the time period specified by state law.

 

28

Shareholder Information

 

Distribution Arrangements/Sales Charges

 

This section describes the sales charges and fees you will pay as an investor in different share classes offered by the Funds.

 

	Class A Shares	Class C Shares	Class D Shares	Class E Shares	Class I Shares	Intermediary Class Shares	Intermediary Service Class Shares	Class Y Shares
Sales Charge (Load)	No front-end sales charge.	No front-end sales charge. A CDSC may be imposed on shares redeemed within one year after purchase. Shares automatically convert to Class A Shares after 5 years.	No front-end sales charge.	No front-end sales charge.	No front-end sales charge.	No front-end sales charge.	No front-end sales charge.	No front-end sales charge.
Distribution (12b-1) and Servicing Fees	Subject to annual shareholder servicing fees of up to 0.60% of the Fund’s average daily net assets attributable to Class A Shares.	Subject to combined annual distribution and shareholder servicing fees of up to 1.00% of the Fund’s average daily net assets attributable to Class C Shares.	Subject to annual shareholder servicing fees of up to 0.25% of the Fund’s average daily net assets attributable to Class D Shares.	Subject to annual shareholder servicing fees of up to 0.10% of the Fund’s average daily net assets attributable to Class E Shares.	No distribution or servicing fees.	Subject to annual shareholder servicing fees of up to 0.05% of the Fund’s average daily net assets attributable to Intermediary Shares.	Subject to annual shareholder servicing fees of up to 0.10% of the Fund’s average daily net assets attributable to Intermediary Service Shares.	No distribution or servicing fees.
Fund Expenses	Lower annual expenses than C Shares.	Higher annual expenses than Class A, D, E, I, Intermediary, Intermediary Service or Y Shares.	Lower annual expenses than Class A or C Shares.	Lower annual expenses than Class A, C, D or Y Shares.	Lower annual expenses than Class A, C, D, E, Intermediary, Intermediary Service or Y Shares.	Lower annual expenses than Class A, C, D, E, Intermediary Service or Y Shares.	Lower annual expenses than Class A, C, D or E Shares.	Lower annual expenses than Class A, C or D Shares.

 

Distribution (12b-1) and Shareholder Servicing Fees

 

The Funds have adopted Distribution (“12b-1”) Plans for Class A, Class C, and Class D Shares. 12b-1 fees compensate the Distributor and other dealers and investment representatives for services and expenses relating to the sale and distribution of the Funds’ shares and/or for providing shareholder services. 12b-1 fees are paid from Fund assets on an ongoing basis, and will decrease the return on your investment and may cost you more than paying other types of sales charges. The Funds have also adopted a Shareholder Services Plan for Class A, Class C, Class D, Class E, Intermediary Shares and Intermediary Service Shares. The Shareholder Services Plan provides that certain financial institutions and securities brokers (“Shareholder Servicing Agents”) provide certain services to the shareholders of the Funds, including performing certain shareholder account, administrative and service functions.

 

29

Shareholder Information

 

Distribution Arrangements/Sales Charges continued

 

	·	The 12b-1 and shareholder servicing fees vary by share class as follows:
		·	Class A Shares may pay a 12b-1 fee of up to 0.25% of the average daily net assets of the Class A Shares of a Fund. Class A Shares have a non-compensatory 12b-1 Plan. No payments have been made under this plan and there is no current intention to charge this fee.
		·	Class C Shares pay a 12b-1 fee of up to 0.75% of the average daily net assets of the respective classes of a Fund. This will cause expenses for Class C Shares to be higher and dividends to be lower than for Class A, Class D, Class E, Class I, Intermediary, Intermediary Service and Class Y Shares.
		·	Class D Shares may pay a 12b-1 fee of up to 0.25% of the average daily net assets of Class D Shares of a Fund. Class D Shares have a non-compensatory 12b-1 Plan. No payments have been made under this plan and there is no current intention to do so.
		·	Class E, Class I, Intermediary, Intermediary Service and Class Y Shares do not pay a 12b-1 fee.
	·	The higher 12b-1 fees on Class C Shares, together with the CDSC, help sell Class C Shares without an “up-front” sales charge. In particular, these fees help to defray the costs of advancing brokerage commissions to investment representatives.
	·	In addition to the 12b-1 fees, Class A Shares are subject to a shareholder servicing fee of up to 0.60%. Class C and Class D Shares are subject to a shareholder servicing fee of up to 0.25%, Class E Shares are subject to a shareholder servicing fee of up to 0.10%, Intermediary Shares are subject to a shareholder servicing fee of up to 0.05%, and Intermediary Service Shares are subject to a shareholder servicing fee of up to 0.10%. To date, Shareholder Servicing Fees have not exceeded 0.40% for Class A Shares.
	·	The aggregate of the 12b-1 fees and shareholder servicing fees will not exceed 0.60% for the Class A Shares, 1.00% for the Class C Shares, and 0.25% for Class D Shares.

 

Long-term Class C shareholders may pay indirectly more than the equivalent of the maximum permitted front-end sales charge due to the recurring nature of 12b-1 distribution and shareholder service fees.

 

Class C Shares

 

Investors will only receive Class C Shares of the Funds by exchanging the Class C Shares of other HSBC Funds. If you purchase or exchange Class C Shares of other HSBC Funds for Class C Shares of the Funds and wish to sell your shares, your redemption may be subject to a 1.00% CDSC if the shares are redeemed less than one year after the original purchase of the Class C Shares. The CDSC will be assessed on the lesser of the NAV at the time of redemption or the NAV at the time of purchase.

 

If you sell some but not all of your Class C Shares, shares not subject to the CDSC (i.e., shares purchased with reinvested dividends) will be redeemed first.

 

Conversion Feature—Class C Shares

 

	·	Class C Shares of the Fund will convert automatically to Class A Shares of the same Fund after five years from the beginning of the calendar month in which the Class C Shares were originally purchased.
	·	After conversion, your shares will be subject to the lower combined distribution and shareholder servicing fees charged on Class A Shares which will increase your investment return compared to the Class C Shares.
	·	You will not pay any sales charge or fees when your shares convert, nor will the transaction be subject to any tax.
	·	If you purchased Class C Shares of one Fund which you exchanged for Class C Shares of another Fund, your holding period will be calculated from the time of your original purchase. The dollar value of Class A Shares you receive will equal the dollar value of the Class C Shares converted.

 

30

Shareholder Information

 

Distribution Arrangements/Sales Charges continued

 

Waiver of CDSC—Class C Shares

 

The following qualify for waivers of CDSC:

 

	·	Distributions following the death or disability of a shareholder.
	·	Redemptions representing the minimum distribution from an IRA or a Custodial Account to a shareholder who has reached age 70 1/2.
	·	Redemptions representing the minimum distribution from 401(k) retirement plans where such redemptions are necessary to make distributions to plan participants.

 

Distribution and Shareholder Servicing Arrangements—Revenue Sharing

 

The Adviser and/or its affiliates may, out of their own resources, and without cost to any Fund, assist in the sale, distribution and/or servicing of a Fund’s shares. Without limiting the foregoing, the Adviser and/or its affiliates may, out of their own resources, and without cost to any Fund, provide compensation to selected financial intermediaries for marketing and/or shareholder recordkeeping, processing, accounting and/or other administrative services in connection with the sale, distribution and/or servicing of shares and shareholders of the Fund. These payments, which may be significant, are not paid by the Funds, and therefore, do not increase Fund expenses. Accordingly, these payments are not included in the fee and expense tables in this Prospectus. In addition, these payments do not change the price paid by shareholders for the purchase of Fund shares, the amount the Funds receive as proceeds from such sales or the fees and expenses paid by the Funds. Historically, these payments have generally been structured as a percentage of average net assets attributable to the financial intermediary, but may also be structured as a fixed dollar amount, or a combination of the two, or may be calculated on another appropriate basis. These payments are in addition to commissions and 12b-1 fees, shareholder servicing fees and sales charges borne by shareholders. The making of these payments creates a conflict of interest for a financial intermediary receiving such payments to recommend the Funds over another investment. Shareholders should ask their financial intermediaries about how they will be compensated for investments made in the Funds. For additional information about these arrangements and payments, please see the “Payments to Financial Intermediaries” section of the SAI.

 

Exchanging Your Shares

 

If exchanging your shares through your financial adviser or broker, ask him or her for exchange procedures. Your adviser and/or broker may have transaction minimums and/or transaction times that will affect your exchange. For all other redemption transactions, follow the instructions below.

 

You can exchange your shares of a Fund for shares of the same class of another HSBC Fund, usually without paying additional sales charges (see “Notes on Exchanges”). Transaction fees are generally not charged for exchanges.

 

You must meet the minimum investment requirements for the HSBC Fund into which you are exchanging. Exchanges from one HSBC Fund to another are taxable.

 

Instructions for Exchanging Shares

 

Exchanges may be made by sending a written request to HSBC Funds, P.O. Box 219691, Kansas City, MO 64121-9691 or by calling 1-800-782-8183. Please provide the following information:

 

	·	Your name and telephone number
	·	The exact name on your account and account number
	·	Taxpayer identification number (usually your social security number)
	·	Dollar value or number of shares to be exchanged
	·	The name of the Fund from which the exchange is to be made
	·	The name of the Fund into which the exchange is being made

 

31

Shareholder Information

 

Exchanging Your Shares continued

 

See “Selling Your Shares” for important information about telephone transactions.

 

To prevent disruption in the management of the Funds due to market timing strategies, exchange activity may be limited.

 

Notes on Exchanges

 

The registration and tax identification numbers of the two accounts must be identical.

 

The Exchange Privilege (including automatic exchanges) may be changed or eliminated at any time upon a 60-day notice to shareholders.

 

See “Taxes” for important information about the tax consequences to you if you dispose of your shares in a Fund, including through exchange. Please also be sure to read carefully the prospectus of any HSBC Fund into which you wish to exchange shares.

 

Class A Shares of any Fund in the HSBC Funds may be exchanged for Class D Shares of the Funds only if you are otherwise eligible to receive them. In all other cases, you will receive Class A Shares of the Funds in exchange for your Class A Shares of any of the HSBC Funds.

 

Delivery of Shareholder Documents

 

In an effort to reduce the cost associated with the printing and mailing of prospectuses, annual reports and semi-annual reports as well as reduce the likelihood of our shareholders receiving duplicative mailings, the Funds intend to mail only one prospectus and shareholder report to shareholders having the same last name and residing at a common address. If you wish to receive separate copies of the prospectuses and shareholder reports, please contact your financial adviser or registered representative at the institution where you have your account.

 

If you are a client of HSBC Securities (USA) Inc., please send your request to the address below:

 

HSBC Securities (USA) Inc.
P.O. Box 4217
Buffalo, NY 14240-8929

 

If you have any questions about the delivery of shareholder documents, please call 1-800-662-3343.

 

If your account is held directly with a Fund, please mail your request to the address below:

 

HSBC Funds
P.O. Box 219691
Kansas City, MO 64121-9691

 

If you have any questions regarding the delivery of shareholder documents, please call 1-800-782-8183 for Retail Investors and 1-877-244-2424 for Institutional Investors.

 

The Funds will begin sending you individual copies of prospectuses and shareholder reports thirty days after receiving your request.

 

Other Information

 

The prospectus and SAI, related regulatory filings, and any other Fund communications or disclosure documents do not purport to create any contractual obligations between a Fund and shareholders. Each Fund may amend any of these documents or enter into (or amend) a contract on behalf of the Fund without shareholder approval except where shareholder approval is specifically required. Furthermore, shareholders are not intended to be third-party beneficiaries of any contracts entered into by (or on behalf of) a Fund, including contracts with the Adviser, Subadviser or other parties who provide services to the Fund.

 

32

Shareholder Information

 

Dividends, Distributions and Taxes

 

Dividends and Distributions

 

All dividends and distributions will be automatically reinvested unless you request otherwise. There are no sales charges for reinvested distributions. Dividends are higher for Class A Shares than for Class C Shares, because Class A Shares have lower operating expenses. Class D Shares receive a higher dividend than Class A Shares because Class D Shares have lower operating expenses. Class E Shares, Class I Shares, Intermediary Shares, Intermediary Service Shares and Class Y Shares receive the highest dividends because they have the lowest operating expenses. Net capital gains, if any, are distributed at least annually.

 

Net long-term capital gains distributions, if any, are made on a per share basis regardless of how long you’ve owned your shares. Therefore, if you invest shortly before the distribution date, some of your investment will be returned to you in the form of a distribution, which will generally be taxable. To the extent permitted by law, a Fund retains the right to temporarily suspend paying dividends if it is believed to be in the best interest of the Fund.

 

From time to time, a portion of a Fund’s distributions may constitute a return of capital for tax purposes, and/or may include amounts in excess of a Fund’s net investment income for the period calculated in accordance with generally accepted accounting principles.

 

Taxes

 

The following information related to tax matters is meant as a general summary for U.S. taxpayers. Please see the Funds’ SAI for more information. Because everyone’s tax situation is unique, you should rely on your own tax advisor for advice about the particular federal, state and local tax consequences to you of investing in a Fund.

 

	·	A Fund generally will not have to pay income tax on amounts it distributes to shareholders, although shareholders will be taxed on distributions they receive.
	·	Any income a Fund receives and any capital gain that a Fund realizes is paid out, less expenses, to its shareholders.
	·	A Fund will generally pay dividends from net investment income on a monthly basis and any net long-term capital gains will generally be distributed at least on an annual basis. Unless a shareholder elects to receive dividends and distributions in cash, dividends and distributions will be automatically invested in additional shares of the Fund. Dividends and distributions are treated in the same manner for federal and state income tax purposes whether you receive them in cash or in additional shares.
	·	Dividends from the Funds are generally not eligible for the reduced rate of tax that may apply to certain qualifying dividends on corporate stock.
	·	An additional 3.8% Medicare tax is imposed on certain net investment income (including ordinary dividends and capital gain distributions received from a Fund and net gains from redemptions or other taxable dispositions of Fund shares) of U.S. individuals, estates and trusts to the extent that such person’s “modified adjusted gross income” (in the case of an individual) or “adjusted gross income” (in the case of an estate or trust) exceeds certain threshold amounts.
	·	Dividends attributable to interest income are generally taxable as ordinary income.
	·	If a Fund reports a dividend as a capital gain distribution (e.g., when the Fund has a gain from the sale of an asset the Fund held for more than one year), you will pay tax on that distribution at the long-term capital gains tax rate, no matter how long you have held your Fund shares.
	·	Distributions of short-term capital gain (e.g., when the Fund has a gain from the sale of an asset it held for one year or less) are taxable at ordinary income tax rates.

 

33

Shareholder Information

 

Dividends, Distributions and Taxes continued

 

	·	Dividends are taxable in the year in which they are paid or deemed paid, even if they appear on your account statement the following year. If a Fund declares a dividend in October, November, or December of a year and distributes the dividend in January of the next year, you may be taxed as if you received it in the year declared rather than the year received.
	·	There may be tax consequences to you if you dispose of your shares in a Fund, for example, through redemption, exchange or sale. The amount of any gain or loss and the rate of tax will depend mainly upon how much you paid for the shares, how much you sell them for, and how long you held them.
	·	Because the Funds intend to maintain a stable NAV per share of $1.00, shareholders will typically not recognize gain or loss when they sell or exchange their shares because the amount realized will be the same as their tax basis in the shares.
	·	Information regarding the federal tax status of distributions made by the Funds will be mailed by February 15th of each year. The notice will tell you which dividends and redemptions must be treated as taxable ordinary income and which (if any) are short-term or long-term capital gain. Depending on your residence for tax purposes, distributions also may be subject to state and local taxes, including withholding taxes.
	·	Distributions in excess of a Fund’s current and accumulated earnings and profits are treated as a tax-free return of your investment to the extent of your basis in the shares, and generally as capital gain thereafter. A return of capital, which for tax purposes is treated as a return of your investment, reduces your basis in shares, thus reducing any loss or increasing any gain on a subsequent taxable disposition of shares. A distribution will reduce a Fund’s NAV per share and may be taxable to you as ordinary income or capital gain even though, from an economic standpoint, the distribution may constitute a return of capital.
	·	As with all mutual funds, the Funds may be required to withhold U.S. federal income tax at the rate of 24% of all taxable distributions payable to you if you fail to provide the Funds with your correct taxpayer identification number or to make required certifications, or if you have been notified by the IRS that you are subject to backup withholding. Backup withholding, which is applicable to all U.S. citizens, is not an additional tax, but is a method in which the IRS ensures that it will collect taxes otherwise due. Any amounts withheld may be credited against your U.S. federal income tax liability.
	·	Foreign shareholders are generally subject to special withholding requirements. If a Fund elects to report distributions of U.S. source interest and short term capital gains, such distributions may be paid to foreign shareholders free of withholding. A Fund has the option of not accepting purchase orders from non-U.S. investors.
	·	If you invest through a tax-deferred retirement account, such as an IRA, you generally will not have to pay tax on dividends or capital gains until they are distributed from the account. These accounts are subject to complex tax rules, and you should consult your tax adviser about investment through a tax-deferred account.
	·	There is a penalty on certain pre-retirement distributions from retirement accounts.
	·	The Funds are required to withhold U.S. tax (at a 30% rate) on payments of taxable dividends made to certain non- U.S. entities that fail to comply (or be deemed compliant) with extensive new reporting and withholding requirements designed to inform the U.S. Department of the Treasury of U.S.-owned foreign investment accounts. Shareholders may be requested to provide additional information to the Funds to enable the Funds to determine whether withholding is required.
	·	Because the Fund’s distributions relate to U.S. Treasury interest, the Fund’s distributions may be exempt from state or local income tax in certain jurisdictions. Please consult your tax advisor.

 

34

Financial Highlights

 

The financial highlights tables are intended to help you understand each Fund’s financial performance for the past five years, or, if shorter, the period of the Fund’s operations. Certain information reflects financial results for a single Fund share. The total returns in the table represent the rate that an investor would have earned or lost on an investment in the Fund (assuming reinvestment of all dividends and distributions). This information has been derived from information audited by PricewaterhouseCoopers LLP, whose reports, along with each of the Fund’s financial statements, is incorporated herein by reference and included in the Fund’s annual report, which is available upon request.

 

On June 24, 2016, the Funds, which were series of HSBC Funds, a Massachusetts business trust, reorganized with and into corresponding series of HSBC Funds, a Delaware statutory trust (the “Reorganization”). Upon completion of the Reorganization, the respective share classes of each Fund assumed the performance, financial and other historical information of those of the corresponding predecessor fund.

 

35

HSBC U.S. GOVERNMENT MONEY MARKET FUND

Financial Highlights

Selected data for a share outstanding throughout the periods indicated.

						Investment Activities												Distributions																				Ratios/Supplementary Data
		Net Asset Value, Beginning of Period				Net Investment Income				Net Realized and Unrealized Gains (Losses) from Investments				Total from Investment Activities				Net Investment Income				Net Realized Gains from Investment Transactions				Total Distributions				Net Asset Value, End of Period				Total Return(a)				Net Assets at End of Period (000’s)				Ratio of Net Expenses to Average Net Assets(b)				Ratio of Net Investment Income to Average Net Assets(b)				Ratio of Expenses to Average Net Assets (Excluding Fee Reductions)(b)
CLASS A SHARES
Year Ended October 31, 2019		$	1.00			$	0.02			$	—			$	0.02			$	(0.02	)		$	—			$	(0.02	)		$	1.00				1.71	%		$	2,923				0.63	%			1.70	%			0.63	%
Year Ended October 31, 2018			1.00				0.01				—				0.01				(0.01	)			—				(0.01	)			1.00				1.05	%			2,728				0.63	%			1.08	%			0.65	%
Year Ended October 31, 2017			1.00				—				—				—				—				—				—				1.00				0.22	%			1,998				0.59	%			0.23	%			0.68	%
Year Ended October 31, 2016			1.00				—				—				—				—				—				—				1.00				0.02	%			1,720				0.34	%			0.02	%			0.69	%
Year Ended October 31, 2015			1.00				—				—				—				—				—				—				1.00				0.03	%			929				0.08	%			0.03	%			0.69	%
CLASS D SHARES
Year Ended October 31, 2019		$	1.00			$	0.02				—			$	0.02			$	(0.02	)			—			$	(0.02	)		$	1.00				1.87	%		$	1,910,115				0.48	%			1.84	%			0.51	%
Year Ended October 31, 2018			1.00				0.01				—				0.01				(0.01	)			—				(0.01	)			1.00				1.20	%			1,648,226				0.48	%			1.19	%			0.51	%
Year Ended October 31, 2017			1.00				—				—				—				—				—				—				1.00				0.34	%			1,645,222				0.47	%			0.32	%			0.54	%
Year Ended October 31, 2016			1.00				—				—				—				—				—				—				1.00				0.02	%			1,949,225				0.34	%			0.02	%			0.54	%
Year Ended October 31, 2015			1.00				—				—				—				—				—				—				1.00				0.03	%			888,084				0.07	%			0.03	%			0.53	%
CLASS E SHARES
October 31, 2016 through
August 10, 2017(c)		$	1.00				—				—				—				—				—				—			$	1.00				0.26	%		$	—				0.23	%			0.33	%			0.29	%
July 12, 2016(d) through
October 31, 2016			1.00				—				—				—				—				—				—				1.00				0.11	%			2				0.06	%			0.32	%			0.31	%
CLASS I SHARES
Year Ended October 31, 2019		$	1.00			$	0.02				—			$	0.02			$	(0.02	)			—			$	(0.02	)		$	1.00				2.23	%		$	13,988,739				0.12	%			2.19	%			0.16	%
Year Ended October 31, 2018			1.00				0.02				—				0.02				(0.02	)			—				(0.02	)			1.00				1.57	%			6,400,700				0.12	%			1.52	%			0.16	%
Year Ended October 31, 2017			1.00				0.01				—				0.01				(0.01	)			—				(0.01	)			1.00				0.69	%			7,853,457				0.12	%			0.71	%			0.18	%
Year Ended October 31, 2016			1.00				—				—				—				—				—				—				1.00				0.21	%			4,687,197				0.14	%			0.23	%			0.19	%
Year Ended October 31, 2015			1.00				—				—				—				—				—				—				1.00				0.03	%			1,589,264				0.07	%			0.03	%			0.18	%
INTERMEDIARY CLASS SHARES
Year Ended October 31, 2019		$	1.00			$	0.02				—			$	0.02			$	(0.02	)			—			$	(0.02	)		$	1.00				2.20	%		$	504,329				0.15	%			2.09	%			0.30	%
Year Ended October 31, 2018			1.00				0.02				—				0.02				(0.02	)			—				(0.02	)			1.00				1.52	%			164,082				0.16	%			1.57	%			0.31	%
Year Ended October 31, 2017			1.00				0.01				—				0.01				(0.01	)			—				(0.01	)			1.00				0.63	%			19,694				0.18	%			0.65	%			0.33	%
July 12, 2016(d) through
October 31, 2016			1.00				—				—				—				—				—				—				1.00				0.11	%			10,121				0.18	%			0.26	%			0.37	%

36

HSBC U.S. GOVERNMENT MONEY MARKET FUND

Financial Highlights (continued)

						Investment Activities												Distributions																				Ratios/Supplementary Data
		Net Asset Value, Beginning of Period				Net Investment Income				Net Realized and Unrealized Gains (Losses) from Investments				Total from Investment Activities				Net Investment Income				Net Realized Gains from Investment Transactions				Total Distributions				Net Asset Value, End of Period				Total Return(a)				Net Assets at End of Period (000’s)				Ratio of Net Expenses to Average Net Assets(b)				Ratio of Net Investment Income to Average Net Assets(b)				Ratio of Expenses to Average Net Assets (Excluding Fee Reductions)(b)
INTERMEDIARY SERVICE
CLASS SHARES
Year Ended October 31, 2019		$	1.00			$	0.02			$	—			$	0.02			$	(0.02	)		$	—			$	(0.02	)		$	1.00				2.17	%		$	146,441				0.18	%			2.15	%			0.36	%
Year Ended October 31, 2018			1.00				0.01				—				0.01				(0.01	)			—				(0.01	)			1.00				1.50	%			184,921				0.18	%			1.70	%			0.36	%
Year Ended October 31, 2017			1.00				0.01				—				0.01				(0.01	)			—				(0.01	)			1.00				0.61	%			57,042				0.20	%			0.63	%			0.39	%
July 12, 2016(d) through
October 31, 2016			1.00				—				—				—				—				—				—				1.00				0.10	%			5,003				0.18	%			0.22	%			0.42	%
CLASS Y SHARES
Year Ended October 31, 2019		$	1.00			$	0.02				—			$	0.02			$	(0.02	)			—			$	(0.02	)		$	1.00				2.12	%		$	1,938,856				0.23	%			2.10	%			0.26	%
Year Ended October 31, 2018			1.00				0.01				—				0.01				(0.01	)			—				(0.01	)			1.00				1.45	%			1,757,925				0.23	%			1.43	%			0.26	%
Year Ended October 31, 2017			1.00				0.01				—				0.01				(0.01	)			—				(0.01	)			1.00				0.58	%			2,402,354				0.23	%			0.53	%			0.29	%
Year Ended October 31, 2016			1.00				—				—				—				—				—				—				1.00				0.12	%			3,891,299				0.23	%			0.11	%			0.28	%
Year Ended October 31, 2015			1.00				—				—				—				—				—				—				1.00				0.03	%			3,779,595				0.07	%			0.03	%			0.28	%

(a)	Not annualized for periods less than one year. Total return calculations do not include any sales or redemption charges.
(b)	Annualized for periods less than one year.
(c)	Closed operations on August 10, 2017.
(d)	Commencement of operations on July 12, 2016.
Amounts designated as “—” are $0.00 or have been rounded to $0.00.

37

HSBC U.S. TREASURY MONEY MARKET FUND

Financial Highlights

Selected data for a share outstanding throughout the periods indicated.

						Investment Activities												Distributions																				Ratios/Supplementary Data
		Net Asset Value, Beginning of Period				Net Investment Income				Net Realized and Unrealized Gains (Losses) from Investments				Total from Investment Activities				Net Investment Income				Net Realized Gains from Investment Transactions				Total Distributions				Net Asset Value, End of Period				Total Return(a)				Net Assets at End of Period (000’s)				Ratio of Net Expenses to Average Net Assets(b)				Ratio of Net Investment Income to Average Net Assets(b)				Ratio of Expenses to Average Net Assets (Excluding Fee Reductions)(b)
CLASS D SHARES
Year Ended October 31, 2019		$	1.00			$	0.02			$	—			$	0.02			$	(0.02	)		$	—			$	(0.02	)		$	1.00				1.79	%		$	143,506				0.50	%			1.79	%			0.53	%
Year Ended October 31, 2018			1.00				0.01				—				0.01				(0.01	)			—				(0.01	)			1.00				1.17	%			308,136				0.50	%			1.12	%			0.53	%
Year Ended October 31, 2017			1.00				—				—				—				—				—				—				1.00				0.29	%			257,062				0.49	%			0.28	%			0.55	%
Year Ended October 31, 2016			1.00				—				—				—				—				—				—				1.00				—	%			214,041				0.28	%			—	%			0.55	%
Year Ended October 31, 2015			1.00				—				—				—				—				—				—				1.00				—	%			280,032				0.06	%			—	%			0.54	%
CLASS E SHARES
October 31, 2016 through
August 10, 2017(c)		$	1.00				—				—				—				—				—				—			$	1.00				0.29	%		$	—				0.25	%			0.37	%			0.29	%
July 12, 2016(d) through
October 31, 2016			1.00				—				—				—				—				—				—				1.00				0.11	%			1				—	%			0.37	%			0.33	%
CLASS I SHARES
Year Ended October 31, 2019		$	1.00			$	0.02				—			$	0.02			$	(0.02	)			—			$	(0.02	)		$	1.00				2.16	%		$	879,396				0.14	%			2.13	%			0.18	%
Year Ended October 31, 2018			1.00				0.02				—				0.02				(0.02	)			—				(0.02	)			1.00				1.54	%			707,804				0.14	%			1.53	%			0.18	%
Year Ended October 31, 2017			1.00				0.01				—				0.01				(0.01	)			—				(0.01	)			1.00				0.64	%			861,944				0.14	%			0.65	%			0.19	%
Year Ended October 31, 2016			1.00				—				—				—				—				—				—				1.00				0.13	%			346,399				0.16	%			0.13	%			0.20	%
Year Ended October 31, 2015			1.00				—				—				—				—				—				—				1.00				—	%			384,363				0.05	%			—	%			0.19	%
INTERMEDIARY CLASS SHARES
Year Ended October 31, 2019		$	1.00			$	0.02				—			$	0.02			$	(0.02	)			—			$	(0.02	)		$	1.00				2.14	%		$	165,842				0.16	%			2.10	%			0.33	%
Year Ended October 31, 2018			1.00				0.01				—				0.01				(0.01	)			—				(0.01	)			1.00				1.49	%			169,827				0.16	%			1.54	%			0.33	%
Year Ended October 31, 2017			1.00				—				—				—				—				—				—				1.00				0.44	%			1				0.18	%			0.44	%			0.34	%
July 12, 2016(d) through
October 31, 2016			1.00				—				—				—				—				—				—				1.00				0.11	%			1				—	%			0.37	%			0.38	%
INTERMEDIARY SERVICE
CLASS SHARES
Year Ended October 31, 2019		$	1.00			$	0.02				—			$	0.02			$	(0.02	)			—			$	(0.02	)		$	1.00				2.12	%		$	86,073				0.18	%			2.10	%			0.38	%
Year Ended October 31, 2018			1.00				0.01				—				0.01				(0.01	)			—				(0.01	)			1.00				1.49	%			51,220				0.18	%			1.54	%			0.38	%
Year Ended October 31, 2017			1.00				0.01				—				0.01				(0.01	)			—				(0.01	)			1.00				0.58	%			22,016				0.20	%			0.58	%			0.40	%
July 12, 2016(d) through
October 31, 2016			1.00				—				—				—				—				—				—				1.00				0.10	%			18,108				0.20	%			0.14	%			0.48	%

38

(a)	Not annualized for periods less than one year. Total return calculations do not include any sales or redemption charges.
(b)	Annualized for periods less than one year.
(c)	Closed operations on August 10, 2017.
(d)	Commencement of operations on July 12, 2016.
Amounts designated as “—” are $0.00 or have been rounded to $0.00.

39

For more information about the Funds, the following documents are available free upon request:

 

Annual/Semi-annual Reports:

 

The Funds’ annual and semi-annual reports to shareholders contain additional information on the Funds’ investments. In the annual report, you will find a discussion of the market conditions and investment strategies that significantly affected the Funds’ performance during their last fiscal year.

 

Statement of Additional Information (SAI):

 

The SAI provides more detailed information about the Funds, including their operations and investment policies. It is incorporated by reference and legally considered a part of this prospectus.

 

You can get free copies of the Funds’ annual and semi-annual reports and the SAI and prospectuses of other funds in the HSBC Family of Funds from the Funds’ website at https://investorfunds.us.hsbc.com. You can also obtain these items or request other information, and discuss your questions about the Funds, by contacting a broker or bank through which shares of the Funds may be purchased or sold, or contact the Funds at:

 

		HSBC Funds P.O. Box 219691 Kansas City, MO 64121-9691
		Telephone:	1-800-782-8183 for Retail Investors
			1-877-244-2424 for Institutional Investors

 

You can review and copy the Funds’ annual and semi-annual reports and SAI for free from the SEC’s Website at www.sec.gov or you can obtain copies of this information, after paying a duplicating fee, by electronic request at the following email address: publicinfo@sec.gov.

 

 

Investment Company Act File No. 811-04782

 

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