Investment Strategy
Greater Asia Investments Limited has appointed Atlas Capital Management Pty Ltd as its Manager. The investment strategies being implemented by Atlas Capital are targeted at delivering a 7% p.a. distribution stream (paid/offered half yearly) to investors with a proposed return of the Defined Net Tangible Assets after 5 years (subject to an extension of up to 9 months). To this end the Manager will focus on:
- maintaining a Listed Equities Portfolio exposed to the equity markets of China and India;
- achieving positive benefits through the low correlation of returns between China and India;
- monitoring opportunities for Other Asian Investment Companies; and
- prudently managing an acceptable level of liquidity for the Company.
The Manager has selected the IOF Dragon Peacock fund which has the following key characteristics:
- was established on 17 October 2005;
- has an investment objective that aims to maximise long-term total return by investing primarily in equity and equity-related instruments of corporations, which are incorporated in, or listed in, or operating principally from, or carrying on significant business in, or derive substantial revenue from, or whose subsidiaries, related or associated corporations derive substantial revenue from the People's Republic of China and India;
- holds investments including, but are not limited to, listed securities in the recognised markets, depository receipts including American Depository Receipts (ADRs) and Global Depository Receipts (GDRs), debt securities convertible into common shares, preference shares and warrants;
- while its performance is benchmarked against 50% MSCI China Index + 50% MSCI India Index, the exposure to each country may vary by ±25%;
- seeks to outperform the benchmark by 2% p.a.;
- targets a tracking error of 30% to 60%;
- targets holding 40-50 stocks;
- maximum individual company exposure of 10%;
- maximum cash exposure 10%;
- any derivative activity is for efficient portfolio management purposes only;
- currency exposures are unhedged; and
- daily redemption of funds is available, subject to a limit of 10% of the number of shares in each sub-fund.
The performance of the IOF Dragon Peacock fund to 31 December 2009 is as follows:
