<PAGE>
HSBC Funds Trust
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--------------------------------------------------------------------------------
[Logo of HSBC Asset Management Americas Inc. Appears Here]
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Cash Management Fund
Government Money Market Fund
U.S. Treasury Money Market Fund
New York Tax-Free Money Market Fund
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Portfolio Review
July 18, 2000
Dear Shareholder:
The first half of the year was highlighted by the Federal Reserve Open Market
Committee's continued desire to contain inflation and cool down an overheated
economy. On May 16th, they raised interest rates 50 basis points to 6.50%, the
most aggressive single tightening since 1995. Including this increase, the
Federal Reserve has in the past year raised interest rates six times for a
total of 175 basis points from 4.75% to 6.50%. With this aggressive interest
rate backdrop, the market was also expecting at least another 25-50 basis point
increase at the June 28th meeting but widespread economic evidence of a
slowdown in economic activity cooled down the Fed as the second quarter came to
a close.
Given our continued belief that inflation is still a threat and the economy has
only temporarily slowed down, we feel that the Federal Reserve will raise
interest rates 50 basis points during 2000 and 75 basis points over the next
year. Additionally, the Fed is very sensitive to the fact that once the end to
the tightening cycle is perceived, the markets will rally which could re-ignite
the economy so we expect continued tough talk from Fed Chairman Greenspan.
As in the past, our main objective is to ensure that the HSBC Money Market
Funds reflect the highest standards characterized by safety, stability, service
and performance. HSBC Asset Management values our relationship and we
appreciate this chance to work on your behalf.
<PAGE>
HSBC Funds Trust
For the six months ended June 30, 2000, the Class A Shares of the Cash
Management Fund, Government Money Market Fund, U.S. Treasury Money Market
Fund, and the New York Tax-Free Money Market Fund had total returns of 2.81%,
2.68%, 2.57%, and 1.63%, respectively.
Sincerely,
/s/ Edward J. Merkle
Edward J. Merkle
Managing Director, Fixed Income
--------
Past performance is not predictive of future performance as yields on money
market funds fluctuate daily. An investment in the Fund is neither guaranteed
nor insured by the FDIC or any other government agency. Although the Fund
strives to maintain the value of your investment at $1.00 per share, it is
possible to lose money by investing in the Fund.
The total returns set forth reflect the reduction of a portion of each Fund's
fees. Without such a reduction of fees, the total returns for the period would
have been lower.
Portfolio composition is subject to change.
The views expressed in this report reflect those of the portfolio manager for
the six months ended June 30, 2000. The manager's views are subject to change
at any time based on the market and other conditions.
2
<PAGE>
HSBC Funds Trust
Board of Trustees
JEFFREY J. HAAS Professor of Law, New York Law School
RICHARD J. LOOS Former Managing Director, HSBC Asset Management
Americas Inc.
CLIFTON H.W. MALONEY President, C.H.W. Maloney & Co. Inc.
JOHN C. MEDITZ President, Horizon Asset Management, Inc.
HARALD PAUMGARTEN Managing Director, Heritage Capital Corp.
JOHN P. PFANN Former Senior Vice President and Treasurer, ITT
ROBERT A. ROBINSON Trustee, Henrietta and B. Frederick H. Bugher
Foundation
--------------------------------------------------------------------------------
Officers
WALTER B. GRIMM President
ANTHONY J. FISCHER Vice President
CHARLES L. BOOTH Vice President
MARK L. SUTER Vice President
NADEEM YOUSAF Treasurer
STEVEN R. HOWARD Secretary
ALAINA V. METZ Assistant Secretary
ROBERT L. TUCH Assistant Secretary
3
<PAGE>
HSBC Funds Trust
Schedule of Portfolio Investments as of June 30, 2000 (Unaudited)
CASH MANAGEMENT FUND
<TABLE>
<CAPTION>
Maturity Principal Amortized
Security Description Rate Date Amount Cost
-------------------- ---- -------- ----------- ------------
<S> <C> <C> <C> <C>
COMMERCIAL PAPER (42.3%)
Banking and Financial Services (37.3%)
Andina Corp (LOC--Barclay Bank)...... 6.24% 7/6/00 $ 9,483,000 $ 9,474,373
Budget Funding....................... 4.99 7/7/00 21,000,000 20,976,199
Capital USA Funding.................. 6.32 7/13/00 14,442,000 14,410,228
Capital USA Funding.................. 6.41 7/20/00 6,500,000 6,477,187
Dollar Thrifty....................... 5.63 7/17/00 17,000,000 16,949,378
Eagle Funding........................ 6.30 7/7/00 11,480,000 11,467,429
Eagle Funding........................ 6.36 7/14/00 9,500,000 9,477,153
Enterprize Funding................... 6.21 7/6/00 16,000,000 15,985,378
Petro Brasilia INT'L................. 6.41 7/21/00 11,000,000 10,959,544
Province of Quebec Bank.............. 6.69 11/20/00 19,410,000 18,894,740
Sigma Finance........................ 6.56 8/25/00 19,500,000 19,302,183
------------
154,373,792
------------
Hotels (5.0%)
Accor SA............................. 6.48 8/7/00 21,000,000 20,856,471
------------
Total Commercial Paper (Amortized Cost - $175,230,263)......... 175,230,263
------------
YANKEE CERTIFICATES OF DEPOSIT (21.6%)
Banking and Financial Services (21.6%)
Bank of Nova Scotia.................. 6.71 2/12/01 20,000,000 19,994,715
Deutsche Bank........................ 7.05 5/2/01 19,000,000 18,995,494
Dresdner Bank NY*.................... 6.62 7/24/00 16,100,000 16,099,606
Svenska Handelsbank NY............... 6.72 2/12/01 14,300,000 14,296,641
Toronto Dominion..................... 6.68 2/8/01 20,000,000 19,995,382
------------
Total Yankee Certificates of Deposit (Amortized Cost -
$89,381,838)................................................. 89,381,838
------------
MEDIUM TERM NOTES (33.8%)
Banking and Financial Services (33.8%)
American Express Centurian*.......... 6.62 5/17/01 19,000,000 19,000,000
Bank of America NA*.................. 6.65 6/6/01 19,500,000 19,498,247
Bear Stearns Co., Inc.*.............. 6.75 7/24/00 7,000,000 7,000,000
Bear Stearns Co., Inc.*.............. 6.76 12/15/00 11,000,000 11,000,000
Fleet Bank NA*....................... 6.76 4/20/01 16,000,000 16,008,796
Ford Motor Credit Co*................ 6.74 8/18/00 12,000,000 11,999,431
Goldman Sachs Group, Inc.*........... 6.43 4/19/01 15,000,000 15,018,309
Harris Trust & Savings*.............. 6.85 8/10/00 14,500,000 14,499,683
</TABLE>
4
<PAGE>
HSBC Funds Trust
Schedule of Portfolio Investments as of June 30, 2000 (Unaudited) (continued)
CASH MANAGEMENT FUND
<TABLE>
<CAPTION>
Maturity Principal Amortized
Security Description Rate Date Amount Cost
-------------------- ---- -------- ----------- ------------
<S> <C> <C> <C> <C>
MEDIUM TERM NOTES (continued)
Banking and Financial Services
(continued)
Merrill Lynch & Co.*................. 6.24% 4/18/01 $20,000,000 $ 19,996,249
Prudential Funding*.................. 6.85 12/21/00 5,790,000 5,790,126
------------
Total Medium Term Notes (Amortized Cost - $139,810,841)........ 139,810,841
------------
U.S. GOVERNMENT AGENCY OBLIGATIONS
(2.2%)
Federal Home Loan Bank (2.2%)
Federal Home Loan Bank............... 6.75 3/1/01 5,000,000 5,000,000
Federal Home Loan Bank............... 7.40 6/6/01 4,000,000 4,005,015
------------
Total U.S. Government Agency Obligations (Amortized Cost -
$9,005,015).................................................. 9,005,015
------------
Total Investments (Amortized Cost - $413,427,957)--99.9%....... 413,427,957
Other assets in excess of liabilities--0.1%.................... 257,269
------------
NET ASSETS--100.0%............................................. $413,685,226
============
</TABLE>
--------
* Variable rate security. Rate represents rate in effect at June 30, 2000.
Date presented represents the next rate change date.
LOC - Letter of Credit
NA - National Association (National Bank)
SA - Societe Anonyme (French corporation)
See Notes to Financial Statements.
5
<PAGE>
HSBC Funds Trust
Schedule of Portfolio Investments as of June 30, 2000 (Unaudited)
GOVERNMENT MONEY MARKET FUND
<TABLE>
<CAPTION>
Maturity Principal Amortized
Rate Date Amount Cost
---- -------- ----------- -----------
<S> <C> <C> <C> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS
(101.8%)
Federal Farm Credit Bank (48.7%)
Federal Farm Credit Bank*............ 6.57% 9/14/00 $25,000,000 $25,000,000
-----------
Federal Home Loan Bank (29.2%)
Federal Home Loan Bank............... 5.92 10/13/00 4,000,000 3,999,284
Federal Home Loan Bank............... 6.60 1/26/01 5,000,000 5,000,000
Federal Home Loan Bank............... 6.66 4/6/01 5,000,000 5,002,098
Federal Home Loan Bank............... 7.40 6/6/01 1,000,000 1,000,000
-----------
15,001,382
-----------
Federal Home Loan Mortgage Corporation
(6.4%)
Federal Home Loan Mortgage
Corporation......................... 6.44 6/21/01 3,500,000 3,277,213
-----------
Federal National Mortgage Association
(7.8%)
Federal National Mortgage
Association......................... 5.62 8/9/00 4,000,000 3,999,740
-----------
Student Loan Marketing Association
(9.7%)
Student Loan Marketing Association*.. 6.59 8/2/00 5,000,000 4,999,956
-----------
Total U.S. Government Agency Obligations (Amortized Cost -
$52,278,291)................................................. 52,278,291
-----------
Total Investments (Amortized Cost - $52,278,291)--101.8%....... 52,278,291
-----------
Liabilities in excess of other assets--(1.8)%.................. (911,842)
-----------
NET ASSETS--100.0%............................................. $51,366,449
===========
</TABLE>
--------
* Variable rate security. Rate represents rate in effect at June 30, 2000.
Date presented represents the next rate change date.
See Notes to Financial Statements.
6
<PAGE>
HSBC Funds Trust
Schedule of Portfolio Investments as of June 30, 2000 (Unaudited)
U.S. TREASURY MONEY MARKET FUND
<TABLE>
<CAPTION>
Security Maturity Principal Amortized
Description Rate Date Amount Cost
----------- ---- -------- --------- ---------
<S> <C> <C> <C> <C>
U.S. TREASURY BILLS (17.1%)
U.S. Treasury Bills....................... 4.82% 12/7/00 $2,000,000 $1,948,237
U.S. Treasury Bills....................... 4.73 7/20/00 2,000,000 1,994,896
U.S. Treasury Bills....................... 4.96 11/9/00 4,500,000 4,409,374
----------
Total U.S. Treasury Bills (Amortized Cost - $8,352,507)........... 8,352,507
----------
U.S. TREASURY NOTES (12.2%)
U.S. Treasury Notes....................... 4.88 3/31/01 6,000,000 5,936,572
----------
Total U.S. Treasury Notes (Amortized Cost - $5,936,572)........... 5,936,572
----------
</TABLE>
<TABLE>
<CAPTION>
Cost
----
<S> <C> <C>
REPURCHASE AGREEMENTS (71.0%)
Bear Stearns & Co., 6.45% due 7/3/00, with a maturity
value of $13,006,988 (collateralized by $34,295,000
U.S. Treasury Strips, 8/15/15, market value
$13,213,117)........................................ 13,000,000 13,000,000
Donaldson, Lufkin & Jenrette Securities Corp., 6.47%
due 7/3/00, with a maturity value of $8,605,637
(collateralized by $15,357,000 U.S. Treasury Strips,
8/15/09, market value $8,777,395)................... 8,601,000 8,601,000
Lehman Brothers, Inc., 6.50% due 7/3/00, with a
maturity value of $13,007,042 (collateralized by
$10,120,000 U.S. Treasury Bonds, 8.88%, 2/15/19,
market value $13,228,320)........................... 13,000,000 13,000,000
-----------
Total Repurchase Agreements (Amortized Cost - $34,601,000)...... 34,601,000
-----------
Total Investments (Amortized Cost - $48,890,079)--100.3%........ 48,890,079
Liabilities in excess of other assets--(0.3)%................... (146,377)
-----------
NET ASSETS--100.0%.............................................. $48,743,702
===========
</TABLE>
--------
See Notes to Financial Statements.
7
<PAGE>
HSBC Funds Trust
Schedule of Portfolio Investments as of June 30, 2000 (Unaudited)
NEW YORK TAX-FREE MONEY MARKET FUND
<TABLE>
<CAPTION>
Security Maturity Principal Amortized
Description Rate Date Amount Cost
----------- ---- -------- --------- ---------
<S> <C> <C> <C> <C>
VARIABLE MUNICIPAL BONDS (57.4%)
Albany, New York Industrial Development
Agency, Civic Facility Revenue, Series
A (LOC - Keybank NA)*.................. 4.65% 7/6/00 $2,000,000 $ 2,000,000
Chemung County, New York Industrial
Development Agency, Civic Facility
Revenue Series A (LOC - Chase Manhattan
Bank)*................................. 4.65 7/6/00 2,805,000 2,805,000
Long Island Power Authority New York
Electric System Revenue, Sub-Series
1*..................................... 4.65 7/5/00 6,100,000 6,100,000
New York City Housing Development
Corporation Multifamily Rental Housing
Revenue, Series A, AMT (FNMA
Collateral)*........................... 4.45 7/5/00 2,000,000 2,000,000
New York City Housing Development
Corporation Multifamily Rental Housing
Revenue, Series A, AMT (LOC - Fannie
Mae)*.................................. 4.50 7/5/00 3,000,000 3,000,000
New York City Industrial Development
Agency Facilities Revenue, Callable
1/1/04 @ 100*.......................... 5.25 7/5/00 1,700,000 1,700,000
New York City Industrial Development
Agency, Civic Facilities Revenue
(LOC - Chase Manhattan Bank)*.......... 4.65 7/5/00 900,000 900,000
New York City Municipal Water Finance
Authority, Water & Sewer System
Revenue, Series A (FGIC Insured)*...... 4.45 7/3/00 500,000 500,000
New York City, Series D, GO (FGIC
Insured)*.............................. 4.75 7/5/00 2,100,000 2,100,000
New York City, Series F-4, GO
(LOC - Landesbank Hessen)*............. 4.65 7/5/00 1,225,000 1,225,000
New York City, Sub-Series A-6, GO
(LOC - Landesbank Hessen)*............. 4.65 7/5/00 900,000 900,000
New York City, Sub-Series A-6, GO
(LOC - Landesbank Hessen)*............. 4.75 7/5/00 1,000,000 1,000,000
New York City, Sub-Series E-2, GO
(LOC - Morgan Guaranty Trust)*......... 4.55 7/3/00 3,000,000 3,000,000
New York City, Sub-Series J-2, GO*...... 4.65 7/5/00 3,300,000 3,300,000
New York State Dormitory Authority
Revenue, Municipal Securities Trust
Receipts (LOC - Chase Manhattan
Bank)*................................. 4.80 7/5/00 4,300,000 4,300,000
New York State Dormitory Authority
Revenue, Series B*..................... 4.45 7/3/00 2,000,000 2,000,000
New York State Environmental Facilities
Corporation Pollution Control Revenue,
Series 9 (LOC - Bank of New York),
Callable 6/15/04 @ 102*................ 4.72 7/6/00 4,500,000 4,500,000
New York State Housing Finance Agency
Revenue, Series A, AMT (FNMA
Collateral)*........................... 4.45 7/5/00 4,500,000 4,500,000
</TABLE>
8
<PAGE>
HSBC Funds Trust
Schedule of Portfolio Investments as of June 30, 2000 (Unaudited) (continued)
NEW YORK TAX-FREE MONEY MARKET FUND
<TABLE>
<CAPTION>
Security Maturity Principal Amortized
Description Rate Date Amount Cost
----------- ---- -------- --------- ---------
<S> <C> <C> <C> <C>
VARIABLE MUNICIPAL BONDS (continued)
New York State Housing Finance Agency
Revenue, Series A, AMT (LOC - Chase
Manhattan Bank)*....................... 4.75% 7/5/00 $4,600,000 $ 4,600,000
New York State Housing Finance Agency
Revenue, Series A, AMT (LOC - Federal
Home Loan Bank, The Dime Savings
Bank of New York)*..................... 4.50 7/5/00 3,600,000 3,600,000
New York State Housing Finance Agency
Revenue, Series A, AMT (LOC - Fleet
Bank NA)*.............................. 4.70 7/5/00 2,100,000 2,100,000
New York State Housing Finance Agency
Revenue, Series A, AMT (LOC - Fleet
Bank NA)*.............................. 4.70 7/5/00 2,600,000 2,600,000
New York State Housing Finance Agency
Revenue, Series A, AMT (LOC - Fleet
Bank NA)*.............................. 4.70 7/5/00 1,000,000 1,000,000
New York State Housing Finance Agency
Revenue, Series A, AMT*................ 4.50 7/5/00 900,000 900,000
New York State Housing Finance Agency
Revenue, Series A, AMT*................ 4.75 7/19/00 2,000,000 2,000,000
New York State Local Assistance
Corporation Series B*.................. 4.35 7/5/00 1,900,000 1,900,000
New York State, Series A, GO
(LOC - Credit Local de France)*........ 4.40 6/8/01 4,400,000 4,400,000
Niagara County, New York Industrial
Development Agency, Solid Waste
Disposal Revenue, Series A
(LOC - Wachovia Bank of North
Carolina)*............................. 4.70 7/5/00 590,000 590,000
Yonkers, New York Industrial Development
Agency, Civic Facilities Revenue
(LOC - Credit Local de France)*........ 4.65 7/5/00 800,000 800,000
------------
Total Variable Municipal Bonds (Amortized Cost - $70,320,000)... 70,320,000
------------
NON-VARIABLE MUNICIPAL BONDS (31.1%)
Fulton County, New York Industrial
Development Agency Revenue (LOC - Fleet
Bank NA)............................... 5.00 12/1/00 230,000 230,000
Metropolitan Transit Authority New York
Service Contract, Series 4, Prerefunded
7/1/00 @ 101.5......................... 7.50 7/1/00 1,000,000 1,015,000
Monroe County, New York Industrial
Development Agency Revenue............. 4.20 9/1/00 3,150,000 3,148,384
Municipal Assistance Corporation for New
York City, Series D (AMBAC Insured).... 6.00 7/1/00 1,180,000 1,180,000
Nassau County, New York, GO............. 5.00 11/1/00 1,250,000 1,253,231
</TABLE>
9
<PAGE>
HSBC Funds Trust
Schedule of Portfolio Investments as of June 30, 2000 (Unaudited) (continued)
NEW YORK TAX-FREE MONEY MARKET FUND
<TABLE>
<CAPTION>
Security Maturity Principal Amortized
Description Rate Date Amount Cost
----------- ---- -------- --------- ---------
<S> <C> <C> <C> <C>
NON-VARIABLE MUNICIPAL BONDS
(continued)
New York City Housing Development
Corporation Multifamily Housing
Revenue, Series A..................... 4.65% 5/1/01 $2,265,000 $ 2,265,000
New York City Municipal Water Financial
Authority, Water & Sewer System
Revenue, Series A, Prerefunded 6/15/01
@ 100................................. 6.25 6/15/01 1,010,000 1,027,534
New York City Transitional Finance
Authority Revenue, Series B........... 4.00 11/15/00 1,000,000 999,789
New York City, Series A, GO............ 5.40 8/1/00 600,000 600,840
New York City, Series B, GO............ 5.30 8/15/00 700,000 701,213
New York City, Series F, GO............ 4.25 8/1/00 1,890,000 1,890,484
New York City, Series F, GO (MBIA
Insured).............................. 3.00 11/15/00 1,000,000 995,433
New York City, Series G, GO............ 5.40 2/1/01 2,020,000 2,033,181
New York City, Series H, GO............ 7.88 8/1/00 835,000 837,783
New York City, Series H, GO............ 6.90 2/1/01 505,000 512,017
New York State Dormitory Authority
Revenue, Series A, Prerefunded 7/1/00
@ 102................................. 7.63 7/1/00 500,000 510,000
New York State Dormitory Authority
Revenue, Series A-55, SPA (MBIA
Insured).............................. 4.85 2/5/00 4,200,000 4,200,001
New York State Dormitory Authority
Revenue, Series B..................... 5.00 8/15/00 1,000,000 1,001,130
New York State Dormitory Authority
Revenue, Series F (FGIC Insured),
Prerefunded 7/1/00 @ 102.............. 7.50 7/1/00 500,000 510,000
New York State Dormitory Authority
Revenue, Series F, Prerefunded 7/1/00
@ 102................................. 7.88 7/1/00 500,000 510,000
New York State Medical Care Facilities
Finance Agency Obligations, Series A.. 8.00 11/1/00 2,000,000 2,026,889
New York State Medical Care Facilities
Finance Agency Revenue, Prerefunded
8/15/00 @ 102......................... 7.88 8/15/00 775,000 794,178
New York State Medical Care Facilities
Financial Agency Revenue, Series F.... 5.00 2/15/01 1,800,000 1,803,772
New York State Projects Finance Agency,
Series A, (FSA Insured)............... 4.30 11/1/00 1,500,000 1,500,220
New York State Thruway Authority
Service Contract Revenue
(LOC - Highway & Bridge), Prerefunded
1/1/01 @ 102.......................... 7.25 1/1/01 845,000 873,804
New York State Urban Development
Corporation Revenue, Series 2,
Prerefunded 1/1/01 @ 100.............. 6.50 1/1/01 1,500,000 1,517,021
Port Authority New York & New Jersey... 4.88 8/1/00 400,000 400,402
</TABLE>
10
<PAGE>
HSBC Funds Trust
Schedule of Portfolio Investments as of June 30, 2000 (Unaudited) (continued)
NEW YORK TAX-FREE MONEY MARKET FUND
<TABLE>
<CAPTION>
Security Maturity Principal Amortized
Description Rate Date Amount Cost
----------- ---- -------- --------- ---------
<S> <C> <C> <C> <C>
NON-VARIABLE MUNICIPAL BONDS
(continued)
Port Authority New York & New Jersey... 3.90% 12/1/00 $1,500,000 $ 1,498,733
Port Authority New York & New Jersey,
AMT (MBIA Insured).................... 5.00 9/1/00 1,000,000 1,001,558
Triborough Bridge & Tunnel Authority
New York Revenue, Series A............ 5.00 1/1/01 500,000 502,062
Triborough Bridge and Tunnel Authority
New York Revenue, Series T,
Prerefunded 1/1/01 @ 102.............. 7.00 1/1/01 760,000 785,674
------------
Total Non-Variable Municipal Bonds (Amortized Cost -
$38,125,333)................................................. 38,125,333
------------
MUNICIPAL NOTES (9.4%)
Buffalo, New York, Series E, GO (FSA
Insured).............................. 5.00 12/1/00 495,000 496,963
Irvington, New York Union Free School
District, GO (State Aid Withholding
Insured).............................. 5.00 6/15/01 2,000,000 2,009,940
Kinderhook, New York Central School
District, GO.......................... 4.00 8/11/00 2,000,000 2,000,864
Liverpool, New York Central School
District (State Aid Withholding
Insured).............................. 5.00 7/12/01 1,875,827 1,883,893
Nassau County, New York, GO
(LOC - State Street B&T Co.,
Bayerische Landesbank)................ 6.00 3/20/01 3,000,000 3,031,768
New York State Dormitory Authority
Lease Revenue, Series C............... 4.50 7/1/00 890,000 890,000
New York State Dormitory Authority
Revenue (AMBAC Insured)............... 4.00 7/1/00 480,000 480,000
New York State Dormitory Authority
Revenue, Series D..................... 4.00 8/15/00 695,000 695,249
------------
Total Municipal Notes (Amortized Cost - $11,488,677)........... 11,488,677
------------
COMMERCIAL PAPER (5.3%)
New York State Power Authority......... 4.15 7/18/00 4,000,000 4,000,000
New York State, GO..................... 3.95 7/12/00 2,500,000 2,500,000
------------
Total Commercial Paper (Amortized Cost - $6,500,000)........... 6,500,000
------------
</TABLE>
11
<PAGE>
HSBC Funds Trust
Schedule of Portfolio Investments as of June 30, 2000 (Unaudited) (continued)
NEW YORK TAX-FREE MONEY MARKET FUND
<TABLE>
<CAPTION>
Security Maturity Net Asset
Description Rate Date Shares Value
----------- ---- -------- ------ ---------
<S> <C> <C> <C> <C>
INVESTMENT COMPANIES (0.2%)
New York Money Fund........................ 5.20% 7/3/00 213,235 $ 213,235
------------
Total Investment Companies (Cost - $213,235).................... 213,235
------------
Total Investments (Cost - $126,647,245)--103.4%................. 126,647,245
Liabilities in excess of other assets--(3.4)%................... (4,203,679)
------------
NET ASSETS--100.0%.............................................. $122,443,566
============
</TABLE>
--------
* Variable rate security. Rate represents rate in effect at June 30, 2000.
Date presented represents next rate change date.
AMBAC - American Municipal Bond Assurance Corp.
AMT - Alternative Minimum Tax Paper
FGIC - Financial Guaranty Insurance Corp.
FNMA - Federal National Mortgage Association
FSA - Financial Security Assurance, Inc.
GO - General Obligation
LOC - Letter of Credit
MBIA - Municipal Bond Insurance Association
NA - National Association (National Bank)
SPA - Standby Purchase Agreement
See Notes to Financial Statements.
12
<PAGE>
HSBC Funds Trust
Statements of Assets and Liabilities
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
New York
Cash Government U.S. Treasury Tax-Free
Management Money Market Money Market Money Market
Fund Fund Fund Fund
------------ ------------ ------------- ------------
<S> <C> <C> <C> <C>
Assets:
Investments, at value
(cost $413,427,957,
$52,278,291,
$14,289,079, and
$126,647,245,
respectively)......... $413,427,957 $52,278,291 $14,289,079 $126,647,245
Repurchase agreements.. -- -- 34,601,000 --
------------ ----------- ----------- ------------
Total Investments..... 413,427,957 52,278,291 48,890,079 126,647,245
Cash................... -- -- 673 --
Interest receivable.... 3,175,126 495,248 117,183 1,137,135
Dividends receivable... -- -- -- 6,470
Prepaid expenses....... 33,512 7,138 4,217 11,011
------------ ----------- ----------- ------------
Total Assets.......... 416,636,595 52,780,677 49,012,152 127,801,861
------------ ----------- ----------- ------------
Liabilities:
Payable to custodian... 588,211 1,115,762 -- --
Payable for investment
securities purchased.. -- -- -- 4,921,367
Dividends payable...... 2,121,199 271,471 238,751 356,907
Accrued expenses and
other liabilities:
Investment advisory.... 85,898 10,639 7,848 29,304
Administration......... 29,904 4,608 4,269 10,368
Service organization... 1,865 -- -- --
Distribution........... 49,362 1,829 2,771 3,630
Other.................. 74,930 9,919 14,811 36,719
------------ ----------- ----------- ------------
Total Liabilities..... 2,951,369 1,414,228 268,450 5,358,295
------------ ----------- ----------- ------------
Net Assets............ $413,685,226 $51,366,449 $48,743,702 $122,443,566
============ =========== =========== ============
Composition of Net
Assets:
Capital................ $413,690,898 $51,369,056 $48,745,805 $122,457,273
Accumulated net
realized losses from
investment
transactions.......... (5,672) (2,607) (2,103) (13,707)
------------ ----------- ----------- ------------
Net Assets.............. $413,685,226 $51,366,449 $48,743,702 $122,443,566
============ =========== =========== ============
Class A Shares:
Net assets............. $404,057,404 $51,366,449 $48,743,702 $122,443,566
Shares outstanding..... 404,059,943 51,369,923 48,744,179 122,452,358
------------ ----------- ----------- ------------
Net Asset Value,
Offering Price and
Redemption Price
per share............. $1.00 $1.00 $1.00 $1.00
============ =========== =========== ============
Class B Shares:
Net assets............. $ 10,241
Shares outstanding..... 10,241
------------
Net Asset Value,
Offering Price and
Redemption Price
per share*............ $1.00
============
Class C Shares:
Net assets............. $ 9,617,581
Shares outstanding..... 9,617,580
------------
Net Asset Value,
Offering Price and
Redemption Price
per share*............ $1.00
============
</TABLE>
--------
* Redemption Price per share varies based on the length of time shares are
held.
See Notes to Financial Statements.
13
<PAGE>
HSBC Funds Trust
Statements of Operations
For the six months ended June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
New York
Cash Government U.S. Treasury Tax-Free
Management Money Market Money Market Money Market
Fund Fund Fund Fund
----------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
Investment Income:
Interest................. $12,087,054 $1,802,633 $1,412,551 $2,252,616
Dividends................ 337,684 31,822 21,335 12,699
----------- ---------- ---------- ----------
Total Investment Income... 12,424,738 1,834,455 1,433,886 2,265,315
----------- ---------- ---------- ----------
Expenses:
Investment advisory...... 696,954 107,286 86,652 202,473
Administration........... 272,826 45,980 37,137 86,775
Service organization:
Class B Shares*......... 9 -- -- --
Class C Shares*......... 7,117 -- -- --
Distribution:
Class A Shares.......... 302,262 9,032 23,035 57,951
Class B Shares*......... 13 -- -- --
Class C Shares*......... 10,676 -- -- --
Custodian................ 22,800 3,446 3,185 11,310
Transfer agent........... 149,703 20,232 17,285 27,528
Other.................... 188,939 42,023 27,677 63,503
----------- ---------- ---------- ----------
Total expenses before
contractual fee
reductions and
reimbursements........ 1,651,299 227,999 194,971 449,540
Contractual fee
reductions and
reimbursements........ (335,170) (29,233) (34,997) (72,969)
----------- ---------- ---------- ----------
Net Expenses.............. 1,316,129 198,766 159,974 376,571
----------- ---------- ---------- ----------
Net Investment Income..... 11,108,609 1,635,689 1,273,912 1,888,744
----------- ---------- ---------- ----------
Net realized gains from
investment
transactions............ 32 -- -- --
----------- ---------- ---------- ----------
Change in net assets
resulting from
operations............... $11,108,641 $1,635,689 $1,273,912 $1,888,744
=========== ========== ========== ==========
</TABLE>
--------
* Class B Shares and Class C Shares commenced offering on July 1, 1999.
See Notes to Financial Statements.
14
<PAGE>
[This Page Intentionally Left Blank]
15
<PAGE>
HSBC Funds Trust
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Cash Management Fund
----------------------------------
For the For the
six months ended year ended
June 30, 2000 December 31, 1999
---------------- -----------------
(Unaudited)
<S> <C> <C>
Investment Activities:
Operations:
Net investment income...................... $ 11,108,609 $ 17,135,061
Net realized gains (losses) from investment
transactions.............................. 32 82
------------ ------------
Change in net assets resulting from
operations................................ 11,108,641 17,135,143
------------ ------------
Dividends:
From net investment income:
Class A Shares............................ (11,035,480) (17,134,825)
Class B Shares*........................... (182) (122)
Class C Shares*........................... (72,947) (114)
------------ ------------
Change in net assets from shareholder
dividends................................. (11,108,609) (17,135,061)
------------ ------------
Change in net assets from capital share
transactions.............................. 31,378,812 64,754,179
------------ ------------
Change in net assets....................... 31,378,844 64,754,261
------------ ------------
Net Assets:
Beginning of period........................ 382,306,382 317,552,121
------------ ------------
End of period.............................. $413,685,226 $382,306,382
============ ============
</TABLE>
--------
*Class B Shares and Class C Shares commenced offering on July 1, 1999.
See Notes to Financial Statements.
16
<PAGE>
<TABLE>
<CAPTION>
Government Money Market Fund U.S. Treasury Money Market Fund New York Tax-Free Money Market Fund
----------------------------------- ---------------------------------- ---------------------------------------
For the For the For the For the For the For the
six months ended year ended six months ended year ended six months ended year ended
June 30, 2000 December 31, 1999 June 30, 2000 December 31, 1999 June 30, 2000 December 31, 1999
---------------- ----------------- ---------------- ----------------- ----------------- ------------------
(Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C>
$ 1,635,689 $ 2,834,032 $ 1,273,912 $ 1,433,200 $ 1,888,744 $ 2,663,992
-- (1,539) -- (1,727) -- --
----------- ------------ ----------- ----------- ----------------- -----------------
1,635,689 2,832,493 1,273,912 1,431,473 1,888,744 2,663,992
----------- ------------ ----------- ----------- ----------------- -----------------
(1,635,689) (2,834,032) (1,273,912) (1,433,200) (1,888,744) (2,663,992)
-- -- -- -- -- --
-- -- -- -- -- --
----------- ------------ ----------- ----------- ----------------- -----------------
(1,635,689) (2,834,032) (1,273,912) (1,433,200) (1,888,744) (2,663,992)
----------- ------------ ----------- ----------- ----------------- -----------------
(1,681,588) (24,304,197) 16,291,557 6,578,132 15,550,309 12,633,917
----------- ------------ ----------- ----------- ----------------- -----------------
(1,681,588) (24,305,736) 16,291,557 6,576,405 15,550,309 12,633,917
----------- ------------ ----------- ----------- ----------------- -----------------
53,048,037 77,353,773 32,452,145 25,875,740 106,893,257 94,259,340
----------- ------------ ----------- ----------- ----------------- -----------------
$51,366,449 $ 53,048,037 $48,743,702 $32,452,145 $ 122,443,566 $ 106,893,257
=========== ============ =========== =========== ================= =================
</TABLE>
17
<PAGE>
HSBC Funds Trust
Notes to Financial Statements
June 30, 2000 (Unaudited)
1.Organization
HSBC Funds Trust (the "Trust") was organized in Massachusetts on October
31, 1985 as a Massachusetts business trust and is registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company with four investment portfolios; the Cash
Management Fund, the Government Money Market Fund, the U.S. Treasury Money
Market Fund and the New York Tax-Free Money Market Fund (individually a
"Fund," collectively the "Funds").
The Funds are authorized to issue three classes of shares as follows: Class
A Shares, Class B Shares, and Class C Shares. At June 30, 2000, the Funds
had not issued Class B Shares or Class C Shares with the exception of the
Cash Management Fund, which has Class B Shares and Class C Shares
outstanding. Each class has identical rights and privileges except with
respect to the fees paid under service organization and distribution plans,
voting matters affecting a single class of shares and the exchange
privileges of each class of shares.
2.Significant Accounting Policies
The following is a summary of significant accounting policies followed by
the Funds in the preparation of their financial statements. The policies
are in conformity with generally accepted accounting principles in the
United States of America. The preparation of financial statements requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial statements
and the reported amounts of income and expenses for the period. Actual
results could differ from those estimates.
Securities Valuation:
Bonds and other fixed-income securities (other than short-term obligations
but including listed issues) are valued on the basis of valuations
furnished by a pricing service, the use of which has been approved by the
Funds' Board of Trustees. In making such valuations, the pricing service
utilizes both dealer-supplied valuation and electronic data processing
techniques which take into account appropriate factors such as
institutional-size trading in similar groups of securities, yield, quality,
coupon rate, maturity, type of issue, trading characteristics other than
market data and without exclusive reliance upon quoted prices or exchanges
or over-the-counter prices, since such valuations are believed to reflect
more accurately the fair value of such securities. All debt securities with
a remaining maturity of 60 days or less are valued at amortized cost, which
approximates value. Under the amortized cost method, discount or premium,
if any, is accreted or amortized, respectively, on a constant (straight-
line) basis to the maturity of the security.
Security Transactions and Related Income:
Security transactions are recorded on the date the security is purchased or
sold ("trade date"). Dividend income is recorded on the ex-dividend date.
Interest income is recognized on the accrual basis and includes, where
applicable, the amortization of premium or accretion of discount.
Securities gains and losses are calculated on the identified cost basis.
18
<PAGE>
HSBC Funds Trust
Notes to Financial Statements (continued)
Expense Allocation:
Expenses directly attributed to each Fund in the Trust are charged to that
Fund's operations; expenses, which are applicable to all Funds, are
allocated among them on the basis of relative net assets or another
appropriate basis. Expenses specific to a class are charged to that class.
Repurchase Agreements:
The Funds may purchase instruments from financial institutions, such as
banks and broker-dealers, subject to the seller's agreement to repurchase
them at an agreed upon time and price ("repurchase agreements"). The
seller, under a repurchase agreement, is required to maintain the value of
the collateral held pursuant to the agreement with a market value equal to
the repurchase price (including accrued interest). Default by the seller
would, however, expose the relevant Funds to possible loss because of
adverse market action or delay in connection with the disposition of the
underlying obligations. Risks may arise from the potential inability of
counter parties to honor the terms of the repurchase agreements.
Accordingly, the Funds could receive less than the carrying value upon the
sale of the underlying collateral securities. Collateral subject to
repurchase agreements is held by the Funds' custodian, either physically or
in book entry form.
Concentration of Credit Risk:
The New York Tax-Free Money Market Fund invests primarily in debt
obligations issued by the State of New York and its respective political
subdivisions, agencies and public authorities. The Fund is more susceptible
to economic and political factors adversely affecting issuers of New York
specific municipal securities than is a municipal money market fund that is
not concentrated in these issuers to the same extent.
Federal Income Taxes and Dividends:
Each Fund is a separate taxable entity for federal tax purposes. Each Fund
has qualified and intends to qualify each year as a "regulated investment
company" under Subchapter M of the Internal Revenue Code, as amended.
Dividends from net investment income are declared daily and paid monthly.
Dividends from net realized gains, if any, are declared and paid at least
annually by the Funds. To the extent that net realized gains of a Fund can
be reduced by any capital loss carryovers of that Fund, such gains will not
be distributed. Additional distributions are also made to the Funds'
shareholders to the extent necessary to avoid the federal excise tax on
certain undistributed income and net realized gains of regulated investment
companies. Accordingly, no provision for federal or excise tax is required.
3.Related Party Transactions
Investment Adviser:
The Trust retains HSBC Asset Management Americas Inc. to act as Investment
Adviser (the "Investment Adviser") for the Funds. The Investment Adviser is
the North American investment management affiliate of HSBC Holdings plc
(Hong Kong and Shanghai Banking Corporation). As compensation for its
services the Investment Adviser is entitled to receive a fee, computed
daily, and paid monthly, at the following annual rates:
19
<PAGE>
HSBC Funds Trust
Notes to Financial Statements (continued)
<TABLE>
<CAPTION>
Investment
Portion of each Fund's Average Daily Net Assets Advisory Fee Rate
----------------------------------------------- -----------------
<S> <C>
Up to $500 million........................................ 0.350%
In excess of $500 million but not exceeding $1 billion.... 0.315%
In excess of $1 billion but not exceeding $1.5 billion.... 0.280%
In excess of $1.5 billion................................. 0.245%
</TABLE>
The Investment Adviser has agreed to contractually limit expenses through
December 31, 2000 by reimbursing its Investment Adviser fee to the extent
the ordinary operating expenses exceed 0.65% of average daily net assets
for Class A Shares and 1.50% for Class B Shares and Class C Shares for each
Fund.
Administrator:
BISYS Fund Services Ohio, Inc. ("BISYS"), a subsidiary of The BISYS Group,
Inc., with whom certain officers are affiliated, serves the Trust as
administrator. Such officers are not paid any fees directly by the Funds
for serving as officers of the Trust. In accordance with the terms of the
Management and Administration Agreement, BISYS is entitled to a fee accrued
daily, and paid monthly, at the following rate:
<TABLE>
<CAPTION>
Administration
Based on Average Daily Net Assets Fee Rate
--------------------------------- --------------
<S> <C>
Up to $200 million........................................... 0.150%
In excess of $200 million but not exceeding $400 million..... 0.125%
In excess of $400 million but not exceeding $600 million..... 0.100%
In excess of $600 million.................................... 0.080%
</TABLE>
BISYS is contractually reducing its Administration fee to 0.10% of each
Fund's average net assets.
Distribution:
The Trust has adopted a Distribution Plan and Agreement (the "Plan")
pursuant to Rule 12b-1 of the 1940 Act. BISYS Fund Services Limited
Partnership (the "Distributor") serves as distributor of the Funds. The
Plan provides for a monthly payment by a Fund to the Distributor for
expenses incurred in connection with distribution services provided to the
Fund not to exceed an annual rate of 0.20% of the average net assets of
Class A Shares and 0.75% of the average net assets of Class B Shares and
Class C Shares.
Service Organization:
The Funds may enter into agreements (the "Service Agreements") with certain
banks, financial institutions and corporations (the "Service Organization")
whereby each Service Organization provides record keeping and certain
administration services for its customers who invest in the Funds through
accounts maintained at that Service Organization. Each Service Organization
will receive monthly payments for the performance of its service under the
Service Agreement. The payments from the Funds on an annual basis will not
exceed 0.35% (Class A Shares) and 0.50% (Class B Shares and Class C Shares
each) of the average value of the Funds' shares held in the sub-accounts of
the Service Organizations. During the six months ended June 30, 2000, the
Funds Class A Shares did not participate in any service agreements.
20
<PAGE>
HSBC Funds Trust
Notes to Financial Statements (continued)
Fund Accountant, Transfer Agent, and Custodian:
BISYS provides fund accounting and transfer agent services for the Funds.
In addition, Bank of New York serves as custodian for the Funds. For these
services to the Funds, BISYS and Bank of New York receive an annual fee
accrued daily and paid monthly.
Legal Counsel:
A partner of the Trust's legal counsel served as Secretary of the Trust.
Paul, Weiss, Rifkind, Wharton and Garrison served as the Trust's legal
counsel for the six months ended June 30, 2000. For the six months ended
June 30, 2000, legal fees incurred by the Funds totaled $46,368 for the
Cash Management Fund, $6,797 for the Government Money Market Fund, $5,131
for the U. S. Treasury Money Market Fund and $14,047, for the New York Tax-
Free Money Market Fund, respectively.
Fee Reductions and Reimbursements:
Information regarding these transactions is as follows for the six months
ended June 30, 2000:
<TABLE>
<CAPTION>
Service
Organization
Fees
Investment Administration contractually
Advisory Fees Fees reduced
contractually contractually ---------------
reimbursed reduced Class B Class C
------------- -------------- ------- -------
<S> <C> <C> <C> <C>
Cash Management Fund.......... $232,043 $99,564 $ 4 $3,559
Government Money Market Fund.. 13,907 15,326 -- --
U.S. Treasury Money Market
Fund......................... 22,618 12,379 -- --
New York Tax-Free Money Market
Fund......................... 44,045 28,924 -- --
</TABLE>
4.Capital Share Transactions:
The Funds are authorized to issue an unlimited number of shares of
beneficial interest with a par value of $0.001 per share. Transactions in
dollars and shares for the six months ended June 30, 2000 were as follows:
21
<PAGE>
HSBC Funds Trust
Notes to Financial Statements (continued)
<TABLE>
<CAPTION>
Cash Management Fund Government Money Market Fund
-------------------------------- --------------------------------
For the For the
six months For the six months For the
ended year ended ended year ended
June 30, 2000 December 31, 1999 June 30, 2000 December 31, 1999
------------- ----------------- ------------- -----------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares:
Proceeds from shares
issued............... $911,529,034 $ 1,597,112,073 $ 76,191,015 $ 148,558,159
Dividends reinvested.. 8,639,020 13,695,775 532,079 1,046,797
Cost of shares
redeemed............. (898,406,746) (1,546,063,987) (78,404,682) (173,909,153)
------------ --------------- ------------ -------------
Class A Shares capital
transactions......... 21,761,308 64,743,861 (1,681,588) (24,304,197)
------------ --------------- ------------ -------------
Class B Shares:
Proceeds from shares
issued............... 5,000 5,000 -- --
Dividends reinvested.. 160 101 -- --
Cost of shares
redeemed............. -- (20) -- --
------------ --------------- ------------ -------------
Class B Shares capital
transactions......... 5,160 5,081 -- --
------------ --------------- ------------ -------------
Class C Shares:
Proceeds from shares
issued............... 38,052,626 5,555 -- --
Dividends reinvested.. 34,533 97 -- --
Cost of shares
redeemed............. (28,474,815) (415) -- --
------------ --------------- ------------ -------------
Class C Shares capital
transactions......... 9,612,344 5,237 -- --
------------ --------------- ------------ -------------
Change in net assets
from capital
transactions.......... $ 31,378,812 $ 64,754,179 $ (1,681,588) $ (24,304,197)
============ =============== ============ =============
SHARE TRANSACTIONS:
Class A Shares:
Issued................ 911,529,034 1,597,112,073 76,191,015 148,558,159
Reinvested............ 8,639,020 13,695,775 532,079 1,046,797
Redeemed.............. (898,406,746) (1,546,063,987) (78,404,682) (173,909,153)
------------ --------------- ------------ -------------
Change in Class A
Shares............... 21,761,308 64,743,861 (1,681,588) (24,304,197)
------------ --------------- ------------ -------------
Class B Shares:
Issued................ 5,000 5,000 -- --
Reinvested............ 160 101 -- --
Redeemed.............. -- (20) -- --
------------ --------------- ------------ -------------
Change in Class B
Shares............... 5,160 5,081 -- --
------------ --------------- ------------ -------------
Class C Shares:
Issued................ 38,052,626 5,555 -- --
Reinvested............ 34,533 97 -- --
Redeemed.............. (28,474,815) (415) -- --
------------ --------------- ------------ -------------
Change in Class C
Shares............... 9,612,344 5,237 -- --
------------ --------------- ------------ -------------
Change in shares from
share transactions.... 31,378,812 64,754,179 (1,681,588) (24,304,197)
============ =============== ============ =============
</TABLE>
22
<PAGE>
HSBC Funds Trust
Notes to Financial Statements (continued)
<TABLE>
<CAPTION>
New York Tax-Free
U.S. Treasury Money Market Fund Money Market Fund
------------------------------------ --------------------------------------
For the For the
six months For the six months For the
ended year ended ended year ended
June 30, 2000 December 31, 1999 June 30, 2000 December 31, 1999
------------- ----------------- ------------- -----------------
(Unaudited) (Unaudited)
<S> <C> <C> <C>
$ 247,849,497 $ 163,205,293 $ 129,624,504 $ 165,282,874
939,679 1,006,458 1,384,976 2,019,666
(232,497,619) (157,633,619) (115,459,171) (154,668,623)
------------- ------------- ------------- -------------
16,291,557 6,578,132 15,550,309 12,633,917
------------- ------------- ------------- -------------
-- -- -- --
-- -- -- --
-- -- -- --
------------- ------------- ------------- -------------
-- -- -- --
------------- ------------- ------------- -------------
-- -- -- --
-- -- -- --
-- -- -- --
------------- ------------- ------------- -------------
-- -- -- --
------------- ------------- ------------- -------------
$ 16,291,557 $ 6,578,132 $ 15,550,309 $ 12,633,917
============= ============= ============= =============
247,849,497 163,205,293 129,624,504 165,282,874
939,679 1,006,458 1,384,976 2,019,666
(232,497,619) (157,633,619) (115,459,171) (154,668,623)
------------- ------------- ------------- -------------
16,291,557 6,578,132 15,550,309 12,633,917
------------- ------------- ------------- -------------
-- -- -- --
-- -- -- --
-- -- -- --
------------- ------------- ------------- -------------
-- -- -- --
------------- ------------- ------------- -------------
-- -- -- --
-- -- -- --
-- -- -- --
------------- ------------- ------------- -------------
-- -- -- --
------------- ------------- ------------- -------------
16,291,557 6,578,132 15,550,309 12,633,917
============= ============= ============= =============
</TABLE>
23
<PAGE>
HSBC Funds Trust
FINANCIAL HIGHLIGHTS
CASH MANAGEMENT FUND
Selected per share data for a share outstanding throughout the period
indicated.
<TABLE>
<CAPTION>
Class A Shares*
-----------------------------------------------------------------
For the For the year ended December 31,
six months ended ------------------------------------------------
June 30, 2000 1999 1998 1997 1996 1995
---------------- -------- -------- -------- -------- --------
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- --------
Investment Activities:
Net investment income.. 0.03 0.05 0.05 0.05 0.05 0.05
-------- -------- -------- -------- -------- --------
Total from investment
activities............. 0.03 0.05 0.05 0.05 0.05 0.05
-------- -------- -------- -------- -------- --------
Dividends:
Net investment income.. (0.03) (0.05) (0.05) (0.05) (0.05) (0.05)
-------- -------- -------- -------- -------- --------
Total dividends......... (0.03) (0.05) (0.05) (0.05) (0.05) (0.05)
-------- -------- -------- -------- -------- --------
Net Asset Value, End
of Period.............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ========
Total Return............ 2.81%(a) 4.75% 5.15% 5.18% 5.00% 5.41%
Ratios/Supplemental
Data:
Net assets at end of
period (000's)........ $404,060 $382,296 $317,552 $184,205 $220,960 $170,869
Ratio of expenses to
average net assets.... 0.65%(b) 0.65% 0.65% 0.63% 0.68% 0.79%
Ratio of net investment
income to average
net assets............ 5.58%(b) 4.66% 5.01% 5.06% 4.88% 5.29%
Ratio of expenses to
average net assets**.. (c) 0.90% 0.87% 0.83% 0.80% 0.80%
</TABLE>
--------
(a) Not annualized.
(b) Annualized.
(c) For the six months ended June 30, 2000, there were no voluntary
reductions/reimbursements.
* Effective July 1, 1999, the Fund designated the existing shares as Class A
Shares.
** During the period, certain fees were contractually reduced. If such fee
reductions had not occurred, the ratios would have been as indicated.
Ratios for periods prior to January 1, 2000 were calculated including
voluntary and contractual fee reductions/reimbursements. Starting with the
six months ended June 30, 2000, ratios are calculated using voluntary
reductions/reimbursements only.
See Notes to Financial Statements.
24
<PAGE>
HSBC Funds Trust
FINANCIAL HIGHLIGHTS
CASH MANAGEMENT FUND
Selected per share data for a share outstanding throughout the period
indicated.
<TABLE>
<CAPTION>
Class B Shares* Class C Shares*
----------------------------- -----------------------------
For the For the For the For the
six months ended period ended six months ended period ended
June 30, December 31, June 30, December 31,
2000 1999 2000 1999
---------------- ------------ ---------------- ------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------
Investment Activities:
Net investment income.. 0.03 0.02 0.02 0.02
------ ------ ------ ------
Total from investment
activities............. 0.03 0.02 0.02 0.02
------ ------ ------ ------
Dividends:
Net investment income.. (0.03) (0.02) (0.02) (0.02)
------ ------ ------ ------
Total dividends......... (0.03) (0.02) (0.02) (0.02)
------ ------ ------ ------
Net Asset Value, End
of Period.............. $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ======
Total Return (excludes
redemption charge)(a).. 2.65% 2.47% 2.35% 2.28%
Ratios/Supplemental
Data:
Net assets at end of
period (000's)........ $ 10 $ 5 $9,618 $ 5
Ratio of expenses to
average
net assets(b)......... 1.10% 0.65% 1.51% 1.02%
Ratio of net investment
income to average
net assets(b)......... 5.23% 4.85% 5.12% 4.47%
Ratio of expenses to
average
net assets**(b)....... (c) 0.93% (c) 1.17%
</TABLE>
--------
(a) Not annualized.
(b) Annualized.
(c) For the six months ended June 30, 2000, there were no voluntary
reductions/reimbursements.
* Effective July 1, 1999, the Fund commenced offering Class B Shares and
Class C Shares.
** During the period, certain fees were contractually reduced. If such fee
reductions had not occurred, the ratios would have been as indicated.
Ratios for periods prior to January 1, 2000 were calculated including
voluntary and contractual fee reductions/reimbursements. Starting with the
six months ended June 30, 2000, ratios are calculated using voluntary
reductions/reimbursements only.
See Notes to Financial Statements.
25
<PAGE>
HSBC Funds Trust
FINANCIAL HIGHLIGHTS
GOVERNMENT MONEY MARKET FUND
Selected per share data for a share outstanding throughout the period
indicated.
<TABLE>
<CAPTION>
Class A Shares*
-------------------------------------------------------------
For the For the year ended December 31,
six months ended --------------------------------------------
June 30, 2000 1999 1998 1997 1996 1995
---------------- ------- ------- -------- ------- -------
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- -------- ------- -------
Investment Activities:
Net investment income.. 0.03 0.05 0.05 0.05 0.05 0.05
------- ------- ------- -------- ------- -------
Total from investment
activities............. 0.03 0.05 0.05 0.05 0.05 0.05
------- ------- ------- -------- ------- -------
Dividends:
Net investment income.. (0.03) (0.05) (0.05) (0.05) (0.05) (0.05)
------- ------- ------- -------- ------- -------
Total dividends......... (0.03) (0.05) (0.05) (0.05) (0.05) (0.05)
------- ------- ------- -------- ------- -------
Net Asset Value, End
of Period.............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======== ======= =======
Total Return............ 2.68%(a) 4.65% 5.01% 5.05% 4.87% 5.32%
Ratios/Supplemental
Data:
Net assets at end of
period (000's)........ $51,366 $53,048 $77,354 $100,862 $87,392 $86,850
Ratio of expenses to
average net assets.... 0.65%(b) 0.65% 0.62% 0.63% 0.72% 0.76%
Ratio of net investment
income to average
net assets............ 5.34%(b) 4.54% 4.86% 4.94% 4.75% 5.21%
Ratio of expenses to
average net assets**.. (c) 0.85% 0.80% 0.79% 0.84% 0.78%
</TABLE>
--------
(a) Not annualized.
(b) Annualized.
(c) For the six months ended June 30, 2000, there were no voluntary
reductions/reimbursements.
* Effective July 1, 1999, the Fund designated the existing shares as Class A
Shares.
** During the period, certain fees were contractually reduced. If such fee
reductions had not occurred, the ratios would have been as indicated.
Ratios for periods prior to January 1, 2000 were calculated including
voluntary and contractual fee reductions/reimbursements. Starting with the
six months ended June 30, 2000, ratios are calculated using voluntary
reductions/reimbursements only.
See Notes to Financial Statements.
26
<PAGE>
HSBC Funds Trust
FINANCIAL HIGHLIGHTS
U.S. TREASURY MONEY MARKET FUND
Selected per share data for a share outstanding throughout the period
indicated.
<TABLE>
<CAPTION>
Class A Shares*
------------------------------------------------------------
For the For the year ended December 31,
six months ended -------------------------------------------
June 30, 2000 1999 1998 1997 1996 1995
---------------- ------- ------- ------- ------- -------
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- ------- -------
Investment Activities:
Net investment income.. 0.03 0.04 0.05 0.05 0.05 0.05
------- ------- ------- ------- ------- -------
Total from investment
activities............. 0.03 0.04 0.05 0.05 0.05 0.05
------- ------- ------- ------- ------- -------
Dividends:
Net investment income.. (0.03) (0.04) (0.05) (0.05) (0.05) (0.05)
------- ------- ------- ------- ------- -------
Total dividends......... (0.03) (0.04) (0.05) (0.05) (0.05) (0.05)
------- ------- ------- ------- ------- -------
Net Asset Value, End
of Period.............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= ======= =======
Total Return............ 2.57%(a) 4.39% 4.86% 4.98% 4.68% 5.04%
Ratios/Supplemental
Data:
Net assets at end of
period (000).......... $48,744 $32,452 $25,876 $25,507 $28,962 $32,500
Ratio of expenses to
average net assets.... 0.65%(b) 0.65% 0.65% 0.65% 0.78% 0.82%
Ratio of net investment
income to average
net assets............ 5.15%(b) 4.30% 4.75% 4.86% 4.57% 4.94%
Ratio of expenses to
average net assets**.. (c) 0.91% 0.94% 0.94% 0.95% 0.84%
</TABLE>
--------
(a) Not annualized.
(b) Annualized.
(c) For the six months ended June 30, 2000, there were no voluntary fee
reductions/reimbursements.
* Effective July 1, 1999, the Fund designated the existing shares as Class A
Shares.
** During the period, certain fees were contractually reduced. If such fee
reductions had not occurred, the ratios would have been as indicated.
Ratios for periods prior to January 1, 2000 were calculated including
voluntary and contractual fee reductions/reimbursements. Starting with the
six months ended June 30, 2000, ratios are calculated using voluntary
reductions/reimbursements only.
See Notes to Financial Statements.
27
<PAGE>
HSBC Funds Trust
FINANCIAL HIGHLIGHTS
NEW YORK TAX-FREE MONEY MARKET FUND
Selected per share data for a share outstanding throughout the period
indicated.
<TABLE>
<CAPTION>
Class A Shares*
-------------------------------------------------------------
For the For the year ended December 31,
six months ended --------------------------------------------
June 30, 2000 1999 1998 1997 1996 1995
---------------- -------- ------- ------- ------- -------
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- ------- ------- ------- -------
Investment Activities:
Net investment income.. 0.02 0.03 0.03 0.03 0.03 0.03
-------- -------- ------- ------- ------- -------
Total from investment
activities............. 0.02 0.03 0.03 0.03 0.03 0.03
-------- -------- ------- ------- ------- -------
Dividends:
Net investment income.. (0.02) (0.03) (0.03) (0.03) (0.03) (0.03)
-------- -------- ------- ------- ------- -------
Total dividends......... (0.02) (0.03) (0.03) (0.03) (0.03) (0.03)
-------- -------- ------- ------- ------- -------
Net Asset Value, End
of Period.............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======= ======= ======= =======
Total Return............ 1.63%(a) 2.64% 2.83% 3.14% 2.92% 3.17%
Ratios/Supplemental
Data:
Net assets at end of
period (000).......... $122,444 $106,893 $94,259 $86,729 $70,339 $64,884
Ratio of expenses to
average net assets.... 0.65%(b) 0.65% 0.64% 0.52% 0.59% 0.69%
Ratio of net investment
income to average
net assets............ 3.27%(b) 2.61% 2.78% 3.09% 2.88% 3.13%
Ratio of expenses to
average net assets**.. (c) 0.88% 0.82% 0.80% 0.87% 0.85%
</TABLE>
--------
(a) Not annualized.
(b) Annualized.
(c) For the six months ended June 30, 2000, there were no voluntary fee
reductions/reimbursements.
* Effective July 1, 1999, the Fund designated the existing shares as Class A
Shares.
** During the period, certain fees were contractually reduced. If such fee
reductions had not occurred, the ratios would have been as indicated.
Ratios for periods prior to January 1, 2000 were calculated including
voluntary and contractual fee reductions/reimbursements. Starting with the
six months ended June 30, 2000, ratios are calculated using voluntary
reductions/reimbursements only.
See Notes to Financial Statements.
28
<PAGE>
HSBC Funds Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
[Logo of HSBC Asset Management
Americas Inc. Appears Here.]
--------------------------------------------------------------------------------
Cash Management Fund
Government Money Market Fund
U.S. Treasury Money Market Fund
New York Tax-Free Money Market
Fund
HSBC/SM/ Funds Trust
3435 Stelzer Road
Columbus, Ohio 43219
Information:
(800) 634-2536
Investment Adviser
HSBC Asset Management Americas Inc.
140 Broadway (6th Floor)
New York, New York 10005-1180
Distributor, Administrator, Transfer Agent
and Dividend Disbursing Agent
BISYS Fund Services
3435 Stelzer Road
Columbus, Ohio 43219
Custodian
The Bank of New York
90 Washington Street
New York, New York 10286
Independent Auditors
Ernst & Young LLP
787 Seventh Avenue
New York, New York 10019
Legal Counsel
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of Americas
New York, New York 10019
This report is for the information of the shareholders of HSBC Funds Trust. Its
use in connection with any offering of the Trust's shares is authorized only in
the case of a concurrent or prior delivery of the Trust's current prospectus.
Shares of the Funds are not an obligation of or guaranteed or endorsed by HSBC
Holdings plc or its affiliates. An investment in the Funds is neither insured
nor guaranteed by the FDIC or any other government agency. Although the trust
attempts to maintain the value of your investment at $1.00 per share, it is
possible to lose money by investing in these funds.
8/00
Semi-Annual Report
June 30, 2000
Managed by:
HSBC Asset Management Americas Inc.
Sponsored and distributed by:
BISYS Fund Services
