------------------------------------------------------------------------------- HSBC Investor Value Fund
(Class A Shares, B Shares, C Shares and I Shares)
by Jon D. Bosse, CFA
Chief Investment Officer
NWQ Investment Management Co., LLC The HSBC Investor Value Fund (the "Fund") seeks long-term growth of capital and
income by investing primarily in U.S. and foreign companies with large and
medium capitalizations that possess hidden opportunities underpriced by the
market. The Fund utilizes a two tier structure, commonly known as a
"master-feeder" and invests all of its assets in the HSBC Investor Value
Portfolio (the "Portfolio"), which acts as the master fund. The Portfolio
employs NWQ Investment Management Company, LLC ("NWQ") as sub-adviser. Investment Concerns Value-based investments are subject to the risk that the broad market may not
recognize their intrinsic value. Equity securities (stocks) are more volatile and carry more risk than other
forms of investments, including investments in high-grade fixed income
securities. The net asset value per share of this fund will fluctuate as the
value of the securities in the Portfolio changes. Market Commentary The Fund returned 13.42% (without sales charge) for the Class A Shares and
13.52% for the Class I Shares for the six month period ended April 30, 2006.
That compared to a 12.87% return for the Russell 1000'r' Value Index(4) and a
11.99% return for the Lipper Multi-Cap Value Funds Average(4).
Past performance does not guarantee future results. The Fund's absolute return benefited from strong stock-market performance.
Investor sentiment improved late in the period, as investors showed confidence
in market fundamentals and the Fed's ability to restrain inflation without
------------------------------------------------------------------------------- HSBC Investor Value Fund - As of April 30, 2006 -------------------------------------------------------------------------------
------------------------------------------------------------------------------------- HSBC Investor Value Fund Class A(1) 5/10/04 7.72 16.63 15.15
HSBC Investor Value Fund Class B(2) 5/10/04 8.95 17.80 15.99
HSBC Investor Value Fund Class C(3) 5/10/04 11.96 20.84 17.30
HSBC Investor Value Fund Class I 5/10/04 13.52 23.04 18.53
Russell 1000'r' Value Index(4) -- 12.87 18.30 N/A
Lipper Multi-Cap Value Funds Average(4) -- 11.99 18.21 N/A 'D' Aggregate Return. Past performance does not guarantee future results. The performance data quoted
represents past performance and current returns may be lower or higher. Total
return figures include change in share price, reinvestment of dividends and
capital gains and do not reflect the taxes that a shareholder would pay on fund
distributions or on the redemption of fund shares. The investment return and
principal value will fluctuate so that an investor's shares, when redeemed may
current to the most recent month end, please call 1-800-782-8183. (1) Reflects the maximum sales charge of 5.00%.
(2) Reflects the contingent deferred sales charge, maximum of 4.00%.
(3) Reflects the contingent deferred sales charge, maximum of 1.00%.
(4) For additional information, please refer to the Glossary of Terms. The Fund is measured against the Russell 1000'r' Value Index, an unmanaged index
comprised of the 1000 securities found in the Russell universe with a
less-than-average growth orientation. Companies in this index generally have low
price-to-book and price-to-earning ratios, higher dividend yields, and lower
forecasted growth values. The performance of the index does not reflect the
deduction of expenses associated with a mutual fund, such as investment
management and fund accounting fees. The Fund's performance reflects the
deduction of fees for these value-added services. Investors cannot invest
directly in an index, although they can invest in its underlying securities.
During the period shown, the Investment Manager waived and/or voluntarily
reimbursed fees for various expenses. Had these waivers and/or reimbursements
not been in effect, performance quoted would have been lower. HSBC INVESTOR FAMILY OF FUNDS 12
------------------------------------------------------------------------------- HSBC Investor Growth and Income Fund
(Class A Shares, B Shares, C Shares and I Shares)
by Gary U. Rolle, CFA, Principal/Chief Investment Officer and
Edward S. Han, Principal/Portfolio Manager and
Transamerica Investment Management, LLC The HSBC Investor Growth and Income Fund (the "Fund") normally invests at least
65% of its total assets in common stocks, preferred stocks, and convertible
securities. The Fund may invest the balance of its assets in various types of
fixed income securities and in money market instruments. The Fund employs
Transamerica Investment Management, LLC ("TIM") as the sub-adviser to the Fund. Investment Concerns Equity securities (stocks) are more volatile and carry more risk than other
forms of investments, including investments in high-grade fixed income
securities. The net asset value per share of this Fund will fluctuate as the
value of the securities in the portfolio changes. Bonds offer a relatively stable level of income, although bond prices will
fluctuate providing the potential for principal gain or loss. Intermediate-term,
higher-quality bonds generally offer less risk than longer-term bonds and a
lower rate of return. Market Commentary The Fund returned 12.21% (without sales charge) for the Class A Shares and
12.37% for the Class I Shares for the six month period ended April 30, 2006.
That compared to a 9.63% return for the Standard & Poor's 500 Index(4) and a
9.23% return for the Lipper Large-Cap Core Funds Average(4). Past performance does not guarantee future results. Transamerica Investment Management serves as the sub-advisor for the HSBC Growth
& Income Fund. The firm employs a bottom-up investment approach to identify
attractively valued shares of firms that generate strong free cash flow and have
high-quality management, good business plans and sound execution. The stock market posted strong returns for this six-month period, helping the
Fund post good absolute performance. Shares of particular industrial, energy,
telecommunications and financial firms especially boosted the Fund's gain.
Certain stocks in the consumer discretionary and technology sectors held back
Fund returns.* The sub-advisor's investment strategy led the Fund to hold an overweight
position in industrials stocks. Shares of industrial firms benefited from global
economic strength, so the Fund's relatively large stake in that sector boosted
returns against the benchmark. The Fund held an underweight allocation to
consumer staples. Stocks in that sector lagged the performance of the overall
index, so the Fund's small position also lifted relative returns.* An overweight position in consumer discretionary stocks hurt performance against
the S&P 500, as consumer stocks trailed the broad market. Likewise, the Fund's
relatively small weighting in the financials sector weighed on relative
performance, as financials out-gained the benchmark.* * Portfolio composition is subject to change. 13 HSBC INVESTOR FAMILY OF FUNDS
------------------------------------------------------------------------------- HSBC Investor Growth and Income Fund - As of April 30, 2006 -------------------------------------------------------------------------------
As of April 30, 2006 Date Month'D' Year Year Inception
----------------------------------------------------------------------------------------------------- HSBC Investor Growth and Income Fund Class A(1) 4/12/01 6.63 16.91 -0.40 0.84
HSBC Investor Growth and Income Fund Class B(2) 4/5/01 7.76 18.07 -0.13 1.67
HSBC Investor Growth and Income Fund Class C(3) 11/3/03 10.65 21.14 -- 10.78
HSBC Investor Growth and Income Fund Class I 4/2/01 12.37 23.41 0.88 2.76
Standard & Poor's 500 Index(4) -- 9.63 15.41 2.70 N/A
Lipper Large-Cap Core Funds Average(4) -- 9.23 15.51 1.35 N/A 'D' Aggregate Return. Past performance does not guarantee future results. The performance data quoted
represents past performance and current returns may be lower or higher. Total
return figures include change in share price, reinvestment of dividends and
capital gains and do not reflect the taxes that a shareholder would pay on fund
distributions or on the redemption of fund shares. The investment return and
principal value will fluctuate so that an investor's shares, when redeemed may
be worth more or less than the original cost. To obtain performance information
current to the most recent month end, please call 1-800-782-8183. (1) Reflects the maximum sales charge of 5.00%.
(2) Reflects the contingent deferred sales charge, maximum of 4.00%.
(3) Reflects the contingent deferred sales charge, maximum of 1.00%.
(4) For additional information, please refer to the Glossary of Terms. The Fund is measured against the Standard & Poor's 500 Index, an unmanaged index
that is generally representative of the U.S. stock market as a whole. The
performance of the index does not reflect the deduction of expenses associated
with a mutual fund, such as investment management and fund accounting fees. The
Fund's performance reflects the deduction of fees for these value-added
services. Investors cannot invest directly in an index, although they can invest
in its underlying securities. During the period shown, the Investment Manager
waived and/or voluntarily reimbursed fees for various expenses. Had these
waivers and/or reimbursements not been in effect, performance quoted would have
mid-sized companies with market capitalizations falling within the range of the
S&P MidCap 400 Index (between $270 million and $8.6 billion as of March 31,
2005) at the time of acquisition. Investments are primarily in domestic common
stocks but also may include, to a limited degree, preferred stocks, and
convertible securities. The Portfolio employs Munder Capital Management
("Munder") as sub-investment adviser. Investment Concerns Equity securities (stocks) are more volatile and carry more risk than other
forms of investments, including investments in high-grade fixed income
securities. The net asset value per share of this Fund will fluctuate as the
value of the securities in the portfolio changes. Mid capitalization funds typically carry additional risks since smaller
companies generally have a higher risk of failure, and historically, their
stocks have experienced a greater degree of market volatility than stocks on
average. Market Commentary The Fund's Class A Shares posted a return of 15.71% (without sales charge) and
15.86% for the Trust Shares for the six months ended April 30, 2006. That
compares to 15.26% and 16.41% for the Fund's benchmarks, the S&P MidCap 400
Index(4) and the Lipper Mid-Cap Growth Funds Average(4). Past performance does not guarantee future results. Mid-cap shares performed well on the strength of good earnings growth, high
productivity and healthy corporate balance sheets. Medium-sized stocks as
represented by the S&P 400 significantly outperformed the larger stocks in the
S&P 500(4) during the first five months of the period, continuing a long period
of superior gains. That environment helped the Fund's holdings in eight of ten
economic sectors generate gains, supporting a strong absolute return. The Fund's
consumer staples and utilities stakes both declined very slightly. Those sectors
accounted for less than 7% of assets, and their losses reduced the Fund's
overall absolute returns by less than 0.1 percentage points.* The Fund's sub-advisor, Munder Capital Management, focuses on attractively
valued shares of companies with high levels of profitability. That stock
selection approach helped the Fund's investments in a broad range of sectors
outperform the corresponding sectors in the benchmark. The HSBC Mid Cap Equity
Fund's consumer discretionary, industrials, materials and health care stakes
produced particularly strong relative performance. Losses for a handful of
stocks accounted for the only significant drag on the Fund's relative returns,
as certain stocks in the information technology and energy sectors weighed
modestly on returns against the mid-cap benchmarks.* * Portfolio composition is subject to change. 15 HSBC INVESTOR FAMILY OF FUNDS
------------------------------------------------------------------------------- HSBC Investor Mid-Cap Fund - As of April 30, 2006 -------------------------------------------------------------------------------
Russell MidCap'r' Growth Index(4) -- 15.18 28.27 5.77 8.92 N/A
Lipper Mid-Cap Growth Funds Average(4) -- 16.41 30.46 4.16 7.84 N/A 'D' Aggregate Return. Past performance does not guarantee future results. The performance data quoted
represents past performance and current returns may be lower or higher. Total
return figures include change in share price, reinvestment of dividends and
capital gains and do not reflect the taxes that a shareholder would pay on fund
distributions or on the redemption of fund shares. The investment return and
principal value will fluctuate so that an investor's shares, when redeemed may
be worth more or less than the original cost. To obtain performance information
current to the most recent month end, please call 1-800-782-8183. (1) Reflects the maximum sales charge of 5.00%.
(2) Reflects the contingent deferred sales charge, maximum of 4.00%.
(3) Reflects the contingent deferred sales charge, maximum of 1.00%.
(4) For additional information, please refer to the Glossary of Terms. (1) For periods prior to July 1, 2000, the performance shown above includes the
total return (adjusted for Fund expenses) generate by HSBC Investments (USA)