The Taiwan market in US$ terms more than recovered its January losses, partially as a result of the strong appreciation of the NT$. Year-to-date returns for the TWSE are 3.7% in US$ and -1.1% in NT$. The Central Bank did not intervened and allowed the NT$ to appreciate as it tries to control inflation. Overall consumer prices rose 3.9% in February but food price increased 9.8% in February. It is likely the Central Bank will raise the discount rate again in March by 0.25% to 3.5%, which will increase the spread over comparable US$ rates, continuing to put upward pressure the NT$. Industrial sectors did very well during the month, with rubber and cement sectors leading the way, gaining 29.7% and 28.4%, respectively in US$ terms. Both candidates in the upcoming political elections for president are talking about loosening investment restrictions in China and that should help many companies in these and other industrial sectors who are at or are approaching the current investment limits. The tourism sector and the construction sector also performed well as Ma Ying-jeou, the KMT candidate who leading in the polls, has focused on increasing domestic growth and establishing a single common market with China which would also allow for Chinese investment in Taiwan.
Since
Total Return 1 Month 3 Months 6 Months 1 Year 3 Years 2/27/2004
------------ ------- -------- -------- ------ ------- ---------
Fund (NAV) ** 15.7% -4.6% -6.3% -3.5% 40.5% 40.3%
Fund (US$ Share Price) 8.0 -6.2 -5.7 -6.5 34.2 38.3
Taiwan China Strategy
Index 16.4 -3.7 -4.6 -2.7 45.0 43.7
TAIEX (US$) 16.3 2.2 0.1 3.7 52.2 52.8
NT$/US$ 4.0 4.3 6.7 6.7 0.5 7.9
Past results are not necessarily indicative of future performance of the Fund. Rates of return and principal value will fluctuate and you may have a gain or a loss when you sell shares. Performance figures reflect reinvested dividends and capital gains. Dividends and capital gains reinvested are on a net basis, after the deduction of applicable taxes. The returns shown above for the TCS Index are also calculated on a net basis but the TAIEX is measured on a gross return basis, with the full reinvestment of all dividends received. February 27, 2004 is a significant date for measurement as it is when the Fund fully implemented its China-focused investment strategy. Returns for the Fund, TCS Index and TAIEX are in US Dollars. Source: Bloomberg except MSCI for TCS Index. For more information and important disclosures on the TCS Index please see the Fund's website at http://www.taiwangreaterchinafund.com/. Returns, except 12-month period, are not annualized.
** Total returns reflect changes in NAV per share during each period and assume that dividends and capital gains distributions, if any, were reinvested. These percentages are not an indication of the performance of a shareholder's investment in the Fund based on market price
Portfolio Management
The Fund holds about 100% of its assets in equities. Such holdings are well diversified among top quality stocks, with investment decisions based on a fundamental approach to securities and economic analysis. Portfolio holdings and sector composition are subject to change.
Top Ten Holdings as of Industry Diversification as of
February 29, 2008 February 29, 2008
% of Net % of Net
Company Assets Ten Largest Sectors Assets
------- -------- ------------------- --------
Hon Hai Precision Ind. Co. 10.7% Computer Systems & Hardware 18.9%
Nan Ya Plastic Corp. 7.2 Semiconductors 15.7
AU Optronics Corp 6.9 Plastics & Petrochemicals 12.5
China Steel Corp. 6.0 Flat Panel Displays 10.8
Taiwan Semiconductor Mfg. Co. 5.3 Electronic Components 9.3
Asustek Computer 4.7 Steel 6.2
Mediatek, Inc. 4.6 Computer Peripherals/ODM 5.3
Formosa Plastics Corp 3.2 Food 5.0
Uni-President Enterprises 3.0 Cement 4.6
Delta Electronics 2.9 Textile 1.6
Per Share Standing at February 29, 2008:
NAV NYSE
----- -----
$7.74 $6.76
The opinions and forecasts expressed are those of the portfolio manager and may not actually come to pass. The information presented is subject to change at any time, based on market and other conditions and should not be construed as a recommendation of a particular security. Fund shares are not FDIC insured and are not deposits or other obligations of, or guaranteed by, any bank. Fund shares involve investment risk, including possible loss of principal.
The Taiwan Greater China Fund
Portfolio Management:
Steven R. Champion
President
Nanking Road Capital Management LLC
111 Gillett Street
Hartford, CT 06106
Tel: 1-860-278-7888
Shareholder Services:
Patricia Baronowski
The Altman Group
New York, NY 10165
Tel: 1-212-681-9600