Fund Objective

The objective of the Fund is to achieve long-term capital growth.

View on Past Performance

China's monetary policy reached a turning point in September, with the central bank implementing its fi rst interest rate cut in six years. The Chinese authorities are in the fortunate position of being able to manage the economic slowdown as they have an array of monetary, fi scal and administrative measures in their power.The government can increase spending without any budgetary constraints as it is moving rapidly towards a fi scal surplus. On several occasions in the last 10 years, public works have been mobilised to ensure positive economic growth and social stability.The performance of the Fund has been affected by its bias towards mid and smaller growth companies. Despite solid earnings prospects, this area of the market has been hit by growing risk aversion among investors. Valuations of growth companies have fallen to a level not seen since the SARS crisis in 2003, which proved to be an excellent opportunity to gain exposure to China's growth story.

Future Expectations

China's economy has become far more balanced now than in the past and should prove relatively resilient. Although the global economic slowdown is affecting the country's export growth and higher interest rates are slowing the property market, domestic consumption and fi xed asset investment remain strong. Infl ationary pressures are receding steadily after hitting a 12-year high of 8.7% in February 2008.

Fund Details