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Alternative Market Briefing

Concentration on quality stocks help China fund beat indices, announces new fund to include more small-cap

Friday, March 16, 2007

The Golden China Fund, managed by Hong Kong based Greenwoods Asset Management, gained 2.48% net of fees in February 2007, compared with a rise of 2% in the MSCI China Free Index, a flat H-share Index and a mere 0.67% gain in the Shanghai B-share Index.

The firm said “it was all smooth sailing for the most part of February until a global equity market sell-off came on Feb 27. However, our relatively concentrated holdings on a few quality stocks, coupled with a below average net exposure helped mitigating the downside shock. The fund managed to finish the month with a decent performance both in absolute as well as relative terms.

On April 2, Greenwoods will launch a new fund – Golden China Plus Fund. The new fund is designed to provide long term investors the right investment vehicle to participate in the secular growth of the Chinese economy. Compared with the existing Golden China Fund which has an investment restriction on small-cap stocks (no more than 20% of the fund), the Golden China Plus Fund will take more exposure in smaller market-cap stocks which potentially have higher growth and greater return. Furthermore, the new fund will expand the mandate into illiquid stocks (PIPE) and unlisted companies (pre-IPO) for those investors who wishes to participate in the private securities, as we see greater and uncorrelated return potential from those types of alternative investment.

According to Greenwoods, the recent stock market sell-off has provided investors wit......................

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