HSBC Developed World Lower Carbon ESG Tilt Equity Index Fund

The Fund will invest in all of the companies that make up the FTSE Developed ESG Low Carbon Select Index and in the same or very similar proportions in which they are included in the Index.However, from time to time, the Fund may not hold all of the companies that make up the Index in order to:•manage the Fund’s transaction costs;•maintain the Fund’s characteristics during different market environments and differing levels of asset availability (i.e. poor liquidity); or•where there are investment restrictions due to regulations or the ACD’s banned weapons policy or other investment restrictions to which the ACD is bound. The investment restrictions are detailed in Part B of the Investment Powers and Restrictions section.The Fund’s performance is measured against the Index, because the Fund intends to track the performance of the Index.The Fund uses a tracking error to measure the consistency between the Fund’s performance and the performance of the Index. In general, the lower the tracking error, the more consistent the Fund’s performance is relative to the Index, and vice-versa.The anticipated tracking error for the Fund is expected to be up to 0.10%. The anticipated tracking error for the Fund is not a guide to future performance. The difference in timing between the Fund Valuation (12 noon UK time) and the Index calculation (close of business) can impact on the tracking error.Use of derivativesThe Fund may invest in exchange traded and over-the-counter derivatives in accordance with Part C and Part D of Appendix 3. In particular, exchange traded futures maybe used with the aim of generating returns that are consistent with the Index in respect of dividends and cash flowing into the Fund.