Message #23 From:
NewsBot Date: April 11, 2008 09:51:58 PM
The Taiwan Greater China Fund's March 2008 Monthly Update
Market Environment -- March 2008
The Taiwan Greater China Fund's (NYSE: TFC) net
asset value (NAV) in March underperformed both its primary benchmark, the
Taiwan China Strategy Index (TCS Index) as computed by MSCI and the total
return in US$ terms of the Taiwan Stock Exchange Index (TAIEX). The Fund's
share price during the month, however, outperformed the TCS Index but
underperformed the TAIEX in US$ terms. The Fund's NAV increased 0.5% while
its share price increased by 2.1%, compared to a 0.8% increase in the TCS
Index and a 3.7% increase in US$ terms of the TAIEX. The Fund's discount
to net asset value averaged 11.2% during March, with a high of 13.6% and a
low of 7.7%, and a closing value of 11.3%. During the month, the Taiwan
dollar appreciated 1.8% against the U.S. dollar.
On the first trading day after the KMT's landslide win over the DPP in
Taiwan's presidential elections, the TWSE index shot up on opening to
9,049, its highest level since early November. The index, however, traded
down from its peak the rest of the day but still closed at its March high
of 8,885. The market reflected the widespread belief that the Ma
Ying-jeou's 58% to 42% win over Frank Hsieh will foster economic growth
through two-way investment, direct links and an overall improvement in
cross-strait relations. As could be expected, performance in the
construction, transport and tourism sectors led the market in March,
gaining 17.8%, 10.9% and 10.9% respectively in US$ terms. The larger
financial sector (16.1% of the index) was up 6.4% on news that Taiwan would
open up indirect investment in China for banks. The tech sector (46.8% of
the index) lagged overall, gaining only 0.81%, on nervousness about the
impact of NT$ appreciation and the likelihood that the US has entered a
recession. As expected, the Central Bank increased its benchmark rank for
the 15th straight quarter to 3.5% in an effort to quell the impacts of
inflation. This boosts the differential between the NT$ and the US$ to the
highest level in 14 years. The Central Bank at the same time is trying to
mitigate the impact on the export sector of the economy by moderate
intervention in the FX market to slow appreciation.
1 3 6 1 3 Since Total Return Month Month Months Year Years 2/27/2004 ------------ ----- ----- ------ ---- ----- ---------
* 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 March 31, 2008 as of March 31, 2008 % of Net % of Net Company Assets Ten Largest Sectors Assets ------- -------- ------------------- -------- Hon Hai Precision Ind. Co. 10.0% Computer Systems & Hardware 18.3% Nan Ya Plastic Corp. 7.4 Semiconductors 16.6 China Steel Corp. 6.2 Plastics & Petrochemicals 13.0 AU Optronics Corp 6.0 Flat Panel Displays 9.6 Taiwan Semiconductor Mfg. Co. 5.5 Electronic Components 9.0 Mediatek, Inc. 5.2 Steel 6.4 Asustek Computer 4.9 Food 5.1 Formosa Plastics Corp 3.5 Computer Peripherals/ODM 5.0 Taiwan Cement 3.0 Cement 4.9 Uni-President Enterprises 3.0 Textile 1.6
Per Share Standing at March 31, 2008: NAVNYSE ----- ----- $7.78 $6.90
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.
