Country Weighting
Fund Review*
12/30/2011
Asian stock markets closed December lower, despite a pre-Christmas rally in European and US markets, on the back of hopes of a New Year European debt resolution.
The Asian Market Leaders Fund rose 0.2% against the benchmark's 1.3% return. The underperformance was mainly due to the Fund's Indian holdings, while exposure in the ASEAN markets of Thailand, Philippines and Indonesia aided the performance.
Liquidity continued to be withdrawn by investors from the Indian market. Indian banks and media companies in the Fund were underperformers, as slowing economic activity seems to cause worry over non-performing loans. Prospects of slower global growth dragged Korean and Taiwanese tech stocks. Chinese ADRs in the Fund also underperformed.
ASEAN holdings were among the Fund's top contributors, including a Thai telecommunication company which rallied after it announced a higher than expected special dividend. Thai home improvement and property developers also climbed higher as the Bank of Thailand cut interest rates by 25 basis points last month.
Indonesian property stocks surged after the country's parliament approved a land acquisition bill. Chinese financials and insurance names also contributed to gains, after the PBOC lowered the reserve requirement for the first time in 2-years.
The Fund added an Indonesian cement producer over the month, as the country's land reform bill should boost infrastructure demand. The Fund also increased its holding in Korean shipbuilding and tire makers which benefit from a weaker Korean won.
Sovereign debt issues of the Developed world and liquidity worries plagued Emerging Asian equity markets for most of 2011. With inflation no longer a concern and tightening having already taken place, leading economic indicators signal a recovery in early 2012. The Fund hopes the regional Asian equity markets can outperform developed markets in the first half of next year.
* Monthly commentary based on USD Class
^ The Fund has changed its index from MSCI AC Far East ex-Japan to MSCI Daily TR AC Far East ex-Japan Net with effect from 1 January 2007.
Important Information:
Investment involves risk. Past performance is not indicative to future performance. The fund may invest in emerging markets and derivative instruments and thus involve higher risk and volatility. Before investing, please refer to the offering document(s) for details, including the risk factors.
The document is issued by Hamon Investment Group and has not been reviewed by the SFC. It is not a recommendation, an offer or invitation to investment. Consult your financial advisor before making any investment decisions.
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