788 Leveraged China Smaller Cap Fund

  FINAL NAV and Performance as at  31st MARCH 2010     NAV  31.77  + 19.12 % year to date

MANAGER'S COMMENT 

The 788 Leveraged Chinese Smaller Cap Fund progressed well in Q1 2010 despite the negative performance of Chinese equities ( -3.01 % ) thanks to the right timing of the asset allocation process. The fund is still held back slightly by legacy positions in small cap stocks that have not yet recovered, but it is only a matter of time before the liquidity wave reaches the shores of these smaller issues as well.

In the current strong growth, inflation and liquidity environment, banks, real estate, automobile and infrastructure plays have outperformed substantially and the fund has benefitted frome these allocation choices.

We are extremely positive for the remainder of 2010 and expect to reach our Dec 2007 highs this year. we are still below the indexes, but our use of Leverage enables us to maximize the upside in a very substantial way. 

31st March 2010

 

 
 
folder   ABOUT THE
FUND		  
 
 
Management Fee 2%
Incentive Fee 20%
High Water Mark 1
Subscription Quarterly
Redemption Quarterly
Redemption Notice 5 day
   
 
Currency USD
Reporting Frequency Quarterly
Investor Type institutions
Minimum Account 100000
Strategy Details CHINA Small caps
Lockup None
   
 
Advisor Michel Artaud
Domicile Cayman Islands
Portfolio Manager Michel Artaud
Custodian Bank of China (Suisse) SA
Bloomberg Ticker 788CSCF KY
Valor
ISIN KYG8069F100
 
monthly-cal   QUARTERLY NET PERFORMANCE
(USD)		  
 
Year Mar JunSep Dec Yearly
 
2010 + 19.12% + 19.12%2010
 
2009 -42.36%+ 143.29%-6.59%-15.7% + 10.22%2009
 
2008 -14.18%-10.86%-56.9%-26.6% -75.8%2008
 
 
31st MARCH 2010+19.12% NAV31.77
 

788 Leveraged China Smaller Cap Fund LTD

The objective of the 788 Leveraged China Smaller Cap Fund Ltd is to achieve maximum long term growth by investing in Chinese small and mid-cap stocks using leverage.

The 788 Leveraged China Smaller Cap Fund Ltd is designed to provide global investors with a unique vehicle through which they can invest in Chinese small & mid cap companies in a leveraged way, and capitalize on the upside potential of this segment of the Chinese market.

The Fund is constructed as a Leveraged Fund. It is not linked to any particular benchmark and the structure of its investments has the ability to evolve in tune with the evolution of the Chinese financial markets.

A key feature of the Fund is the Manager’s ability to hedge the portfolio or go in cash in the event of extreme market conditions, in order to preserve the assets of the Fund. However, investors should be fully aware of the HIGH VOLATILITY of the fund as it uses up to 3 times leverage.

The 788 Leveraged China Smaller Cap Fund Ltd. offers three unique characteristics:
  • A Leveraged exposure to the high growth Chinese Small & Mid Cap equity market.
  • Non Benchmarked; the Manager is free to invest in markets and sectors offering the best risk/reward profile without the constraint of tracking error management.
  • The ability for the manager to go short the indexes to protect the portfolio or even to generate alpha on the downside.

This unique combination provides global investors with THE ONLY LEVERAGED FUND investing in the CHINESE SMALL CAPITALISATION UNIVERSE

Investment Manager 788 Asset Management Ltd Currency USD Management Fees 2%
Sub-Advisor Michel Artaud Liquidity Quarterly with 35 days notice Performance Fees 20%
Administrator UBS Fund Services (Cayman) Minimum initial amount USD 100,000 High Water Mark Yes
Custodian Bank Bank of China (Suisse) SA Additional amount USD 50,000 ISIN Code KYG8069F1000
Domicile Cayman Islands Lock-up None Bloomberg Ticker 788CSCF KY

 

As of 31st March 2010, the 788 Leveraged China Smaller Cap Fund had a leverage of 1.67 x.

Its expsoure was mainly the the HSCEI index, the HSI Index and about 32 % to individual stock positions.

The HSCEI index is about to break out after an eight month lateral consolidation. On confirmation of the break, the manager will increase its positions to take full advantage of its leveraging capabilities.

In terms of currency expsoure, the fund is Long HKD and Short the JPY. We expect a de-pegging of the HKD to the USD ( 7.75 ) and re-pegging to the RMB ( 6.83) that would generate 13.6 % appreciation overnight, and we expect the JPY to depreciate from 93 to 111 over the next 12 months,  a - 19 % depreciation against the USD.

HSCEI
folder 2009 DOCUMENTS 
 
 
DateNameDownload
6/8/2009 12:00:00 AM788LCSCFL - OM - March 2009.DOCarrow