0
GAM Star China Equity
May 2010




This document is confidential and intended solely for the use of the person to whom it ...
A glimpse on performance
Performance from 9 Jul 2007 to 5 May 2010




Source: GAM, MSCI, Financial Times                 ...
GAM Star China Equity
Fund features




                                                     Capital appreciation. A portf...
Asian Equity Investment Team
An experienced team of specialists




                                                Michae...
Investment philosophy
Market inefficiencies can be exploited by skilled bottom-up stock pickers




   ●   Asian markets a...
Investment philosophy
An illustration of market inefficiency



                          Variance between high and low EP...
Investment approach
Seeks a deep understanding of Chinese markets




   ●   Relatively immature region with inefficient c...
Investment approach




                                                                       Market cycle/        Credit...
GAM Star China Equity – Process overview




                   Top-Down                                     Bottom-Up    ...
Step 1 – Top-down theme identification: Overview
Themes bring together macro-economic and company research




           ...
Step 2 – Bottom-up company analysis: Overview
Company research is the backbone of the investment process




             ...
Step 2 – Bottom-up company analysis
Seek to identify good medium-term investments




    ●   Fundamental analysis seeks t...
Step 3 – Portfolio construction and monitoring: Overview




                 Portfolio Construction           ●   Truly a...
Risk parameters and sell decision




       Sell down positions for a variety of reasons                                 ...
External research resources




  ●   The team draws on external resources to gain insights and develop their strategies:
...
Asia’s prospects for 2010




This document is confidential and intended solely for the use of the person to whom it is gi...
Structural virtues – low gearing / healthy corporate balance sheet
From 1995 to 2011




    75 %                66% in 19...
Well-capitalised banking systems
As at end of Dec 2009




  150 %




  100 %




   50 %




                           ...
Healthy fiscal deficits




            0%


           -2 %


           -4 %
% of GDP




           -6 %


           -...
Outlook for China – Asia’s Achilles’ heel?




This document is confidential and intended solely for the use of the person...
China’s Dubai moment?



                                                                    Infrastructure
              ...
Credit growth has been targeted to selected provinces and cities
The centre overtakes coastal areas


                    ...
Nontheless, China
Performance from 1 Dec 1997 to 1 Mar 2010
  % year-on-year




Source: CEIC, UBS                        ...
Government policy having desired effect – housing sales cooling
Year-on-year residential sales volume growth by property f...
Construction as a share of GDP is stable in China, unlike the neighbours before
the Asian crisis



              Construc...
GAM Star China Equity – USD
Industry Analysis as at 5 May 2010




Source: GAM, MSCI Note: Totals may not add to 100% due ...
Consumption delta is moving East
USD change in annual household consumption




                        500


            ...
Consumer sector – improving EBIT margins




   13 %


   12 %


   11 %


   10 %


     9%


     8%

                  ...
Crisis creating opportunities
Telecoms equipment and service revenues – main vendors, 2008*




   Ericsson

   Nokia Siem...
Alternative energy -
BYD Co Ltd P/E relative from 31 Dec 2004 to 30 Apr 2010




             50




             40




 ...
Telecom services sector – declining EBIT margin




   26 %


   24 %


   22 %


   20 %


   18 %


   16 %
            ...
Chinese banks - risks priced in?
P/BV vs ROE relative to the region from 30 Jun 2005 to 30 Apr 2010




Source: Company da...
Summary




 ●   Asia stands at an extremely strong point in the cycle
 ●   The region has few areas of vulnerability
 ●  ...
Performance and Analysis
GAM Star China Equity – USD




This document is confidential and intended solely for the use of ...
GAM Star China Equity – USD
Performance from 9 Jul 2007 to 5 May 2010




Source: GAM, MSCI, Financial Times              ...
GAM Star China Equity – USD
Top 10 holdings (of 36) as at 5 May 2010




Source: GAM                                      ...
GAM Star China Equity – Investments
Geographic allocation as at 5 May 2010




Source: GAM, MSCI Note: Totals may not add ...
GAM Star China Equity – Investments
Industry Analysis as at 5 May 2010




Source: GAM, MSCI Note: Totals may not add to 1...
GAM Star China Equity Investments
Aggregate statistics as at 31 Mar 2010




     1.20                                    ...
GAM Star China Equity
Morningstar – peer group rankings as at 31 Mar 2010




  GAM Star China Equity is ranked Top Quarti...
GAM Star China Equity
Simple performance versus peer group average since 9 Jul 2007 (inception) to 31 Mar 2010




       ...
GAM Star China Equity
Simple performance versus peers since 9 Jul 2007 (inception) to 31 Mar 2010



        100 %


     ...
Why GAM Star China Equity?




 ●   Truly active, unconstrained approach
 ●   Early and deep insight into industry trends
...
Appendix




This document is confidential and intended solely for the use of the person to whom it is given or sent
and m...
Michael Lai




  Investment Director
  Michael Lai is the Investment Director responsible for GAM's Asian funds and co-ma...
Mansfield Mok




  Senior Investment Manager
  Mansfield Mok is a Senior Investment Manager in GAM’s Pacific team respons...
John Jay Lee




  Investment Manager
  John Jay Lee is an Investment Manager in GAM’s Pacific team responsible for analys...
Michelle Lam




  Manager
  Michelle Lam is a Manager - Asia Pacific ex Japan Investment Department. Her responsibilities...
GIPS Supplemental Information




  All GAM's discretionary assets have been allocated to appropriate GIPS composites. GAM...
GAM China Equity Composite (G274)



                                                       Aug 07                        ...
Disclaimer



  Source: GAM unless otherwise stated. (Unless otherwise noted, where shown, performance is shown net of fee...
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Transcript of "Gam star china equity citywire zurich 2010"

  1. 1. GAM Star China Equity May 2010 This document is confidential and intended solely for the use of the person to whom it is given or sent and may not be reproduced, copied or given, in whole or in part, to any other person.
  2. 2. A glimpse on performance Performance from 9 Jul 2007 to 5 May 2010 Source: GAM, MSCI, Financial Times 2 Past performance is not indicative of future performance. Performance is provided net of fees. Funds do not have the security of capital which is characteristic of a bank deposit. Presented as supplemental information only. Please refer to the relevant GIPS compliant report and the GIPS supplemental text.
  3. 3. GAM Star China Equity Fund features Capital appreciation. A portfolio focusing on quoted equity and equity related securities of companies with assets in, or revenues derived Fund Objective from, China and Hong Kong. A fundamental stock-picker with a macro overlay. Fund Type FSA Recognised Irish UCITS Fund Manager Michael Lai Inception Date 9 July 2007 Currency Classes* USD Index MSCI China Free Minimum Initial Investment USD 10,000 Dividend Policy Net income will be distributed annually** Dealing Day Any business day Purchase Fee Up to 5.00% Annual Fee 1.35%*** 3 * Currency hedging may be employed to protect against exchange rate risk ** Distributor status will be applied for. *** Excludes administration and custodian fees – please see Prospectus for further details on fees.
  4. 4. Asian Equity Investment Team An experienced team of specialists Michael Lai Overall strategy and portfolio construction Top Down/Bottom Up, Research focus: India, Australia, ASEAN Mansfield Mok John Jay Lee Michelle Lam Greater China Korea, Taiwan Dealing, Greater (Tech) China 4
  5. 5. Investment philosophy Market inefficiencies can be exploited by skilled bottom-up stock pickers ● Asian markets are immature and inefficient ● Significant mispricings exist ● Thereby creating significant opportunities for stock pickers with local knowledge 5
  6. 6. Investment philosophy An illustration of market inefficiency Variance between high and low EPS estimates as % of mean estimate Asian Supermarkets & Retail Giants Western Counterparts 70% 70% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% Shinsegae Lianhua Prez Chain Ramayana Wal-Mart Tesco (Korea) Supermarket Store (Taiwan) (Indonesia) (China) Number of analysts 38 38 16 15 20 19 14 14 28 28 33 33 covering the stock 2009 2010F 2010F 2011F Source: Bloomberg 6
  7. 7. Investment approach Seeks a deep understanding of Chinese markets ● Relatively immature region with inefficient capital markets – Equity markets remain inefficient in reaction to information as some sectors remain under-researched ● Seek to pick stocks through understanding the dynamics of the Chinese market – Top down macro-economic analysis tied to our philosophy – Bottom-up fundamental analysis – Comprehensive and disciplined company visits enhance our market knowledge and timing facilitating early insights ● Seek to identify opportunities and barriers for growth of different industries – Identify the inflection points and catalysts for change continuously 7
  8. 8. Investment approach Market cycle/ Credit Macro/Top Down Analysis Industry dynamics Government policy Mean revision environment Deep value Approach/Strategy Market dominators Secular trend GARP Small/Mid caps IT IT Telco equipment Banks Autos Consumer staples Materials SOE Themes/Sectors Packaging restructurings Consumer Properties/ Financials discretionary conglomerates Materials Alternative energy Telco services Insurance 8
  9. 9. GAM Star China Equity – Process overview Top-Down Bottom-Up Portfolio Construction 1 2 3 Theme Identification Company Analysis and Monitoring Universe Buy list Portfolio Construction ~2,000 stocks 50–75 stocks • Global, regional and country macro • Thematic portfolio framework research • Stock positions sized on • 12-month conviction • Company visits price targets • Portfolio of 25-50 positions • Company visits for • Valuation competitive Monitoring screens advantages • Ongoing company dialogue • Technical analysis for • Development of themes relative positions • Portfolio risk modeling • Compliance oversight • Proprietary fundamental analysis 100–150 stocks across three to five themes 9 Allocations and holdings are subject to change.
  10. 10. Step 1 – Top-down theme identification: Overview Themes bring together macro-economic and company research Top-Down ● Constant monitoring of global and regional market dynamics 1 Theme Identification ● Country specialists form views on their areas of expertise focusing on: – GDP growth – Interest rates Universe – Credit cycle – Politics ~2,000 stocks – Earnings growth – Valuations • Global, regional and country macro ● Regular company visits give insight into industry sector, domestic research attitudes and political sentiment ● Develop potential themes • Company visits ● Earnings valuation screens used to: • Valuation – Test and validate themes screens – Identify core of 100–150 stocks for research focus 100–150 stocks across three to five themes 10 Allocations and holdings are subject to change.
  11. 11. Step 2 – Bottom-up company analysis: Overview Company research is the backbone of the investment process Bottom-Up ● Focus on mid-cap segment overlooked by market 2 Company Analysis – Fundamental analysis seeks improving fundamentals and strong working capital ratios Buy list – Technical analysis for relative strength to domestic and 50–75 stocks cross-border peers ● Over 300 company visits annually focus on working capital management and earnings growth • 12-month ● Rolling price targets set based on broad valuation parameters price targets ● Seek companies: • Company visits for – Well placed to play out themes – With strong valuation signals competitive – In restructuring or turnarounds – Undervalued relative to their peers advantages – Mis-pricing below intrinsic value – Neglected by market • Technical analysis for relative positions ● Produces buy-list of 50–75 stocks • Proprietary fundamental analysis 11 Allocations and holdings are subject to change.
  12. 12. Step 2 – Bottom-up company analysis Seek to identify good medium-term investments ● Fundamental analysis seeks to identify companies ● Company visits focus on: with: – Management experience and shareholder focus – Improving fundamentals – Working capital management – Strong working capital ratios – Earnings growth strategy – Good cashflow growth to price – Company strategy – Positive earnings revisions – Competitive positioning – Clear catalysts for value realisation – Target profit margins ● Strong relationships with companies built over time as 2–3 year investors – Form close relationships with management to help enact positive change over time ● Buy-listed companies have: – Robust business franchises – Superior cashflow generation – Sustainable competitive advantages – Shareholder friendly dividend policies – Growing market shares – Quality management – Attractive returns on capital – Strong corporate governance controls – Sustainable profitability trends 12
  13. 13. Step 3 – Portfolio construction and monitoring: Overview Portfolio Construction ● Truly active approach to investment management 3 and Monitoring – Not structured around benchmarks – Invest in instruments outside indices – Take significant relative stock and sector positions Portfolio Construction ● Thematic views form portfolio framework • Thematic portfolio framework ● Populated with stocks from buy lists • Stock positions sized on conviction – Positions sized according to conviction • Portfolio of 25-50 positions Monitoring ● Ongoing company monitoring alerts for signs of change or company news early • Ongoing company dialogue • Development of themes ● Macroeconomic research highlights evolution of markets, changes • Portfolio risk modeling in trends and new opportunities • Compliance oversight 13 Allocations and holdings are subject to change.
  14. 14. Risk parameters and sell decision Sell down positions for a variety of reasons Risk management embedded in portfolio ● Changing sector dynamics ● Risk defined as the risk of drawdown – Fundamental shift in portfolio away from ● Monitor risk/return trade-off of all invested stocks sector – Changes in momentum a key indicator ● Guideline portfolio limits: – No limits on investment in a single country ● Undesirable change in company management – < 30% in a single industry targets/attitudes or change in management altogether – < 10% in securities of single issuer* – < 10% of free float of the share capital of ● Change in working capital ratios triggers price single issuer target review ● Able to liquidate ~90% of positions within ● Potential in share price realised 1–4 days with minimal market impact – Fair value is achieved ● Vestek risk model and UBS PAS platform used to – No prospect of further upward revisions measure and monitor portfolio characteristics 14 * Note: individual positions may exceed this limit for reasons of share appreciation from time to time.
  15. 15. External research resources ● The team draws on external resources to gain insights and develop their strategies: – Government agencies – Selected brokers – Local economists – Country specialists – Respected sources of industry information ● External broker research is efficient way to enhance understanding of major industry trends – Allows team to focus on own fundamental and technical analysis and company meetings ● GAM Weekly Investment Meeting facilitates discussion and development of themes with other managers 15
  16. 16. Asia’s prospects for 2010 This document is confidential and intended solely for the use of the person to whom it is given or sent and may not be reproduced, copied or given, in whole or in part, to any other person.
  17. 17. Structural virtues – low gearing / healthy corporate balance sheet From 1995 to 2011 75 % 66% in 1998 (Asian financial crisis) 65 % 55 % 44% in 2000 (TMT bubble) 45 % 35 % 27% in 2008 (Sub-prime crisis) 18% in 2010 (Sovereign debt crisis) 25 % 15 % 5% Asia ex Japan - net debit to equity E E 95 07 96 99 03 04 09 97 98 00 01 02 05 06 08 11 10 19 20 19 19 20 20 20 19 19 20 20 20 20 20 20 20 20 Source: Credit Suisse 17
  18. 18. Well-capitalised banking systems As at end of Dec 2009 150 % 100 % 50 % Loan-to-deposit ratio Hong Kong India China US UK Australia Source: Haver, IMF, UBS estimates 18
  19. 19. Healthy fiscal deficits 0% -2 % -4 % % of GDP -6 % -8 % -10 % Fiscal deficits 2010F l s ly sia in a US d s ia e d ia a in ga ne ec la n It a ay Ch ne r tu In Sp re pi ai al do i lip G Po Th M In Ph Source: CEIC, BoFa Merrill Lynch Global Research calculations 19
  20. 20. Outlook for China – Asia’s Achilles’ heel? This document is confidential and intended solely for the use of the person to whom it is given or sent and may not be reproduced, copied or given, in whole or in part, to any other person.
  21. 21. China’s Dubai moment? Infrastructure 140% expansion 55% WTO entry 130% manufacturing 50% expansion Share of GDP (%) Share of GDP (%) 120% 45% 110% 40% 100% 35% 90% Bank credit 80% 30% Gross investment (RHS) 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010E Source: CEIC, UBS estimates 21
  22. 22. Credit growth has been targeted to selected provinces and cities The centre overtakes coastal areas First half 2009 (annual % change) Hubei Chongqing 11.3% 12.5% Zhejiang Sichuan 6.3% 11.8% Shanghai 5.6% Hunan Guangdong 10.5% GDP growth below 10% 7.1% GDP growth above 10% Source: FT, World Bank, UN, ITU, Earthtrends, International Energy Agency, China’s National Bureau of Statistics 22
  23. 23. Nontheless, China Performance from 1 Dec 1997 to 1 Mar 2010 % year-on-year Source: CEIC, UBS 23
  24. 24. Government policy having desired effect – housing sales cooling Year-on-year residential sales volume growth by property from 1 Jan 2007 to 1 Mar 2010 % year-on-year Source: BofA Merrill Lynch estimate 24
  25. 25. Construction as a share of GDP is stable in China, unlike the neighbours before the Asian crisis Construction and real estate value-added share in GDP (%) from 1980 to 2008 20% 18% 16% 14% 12% China 10% Korea Taiwan 8% Malaysia Thailand 6% 1980 1985 1990 1995 2000 2005 Source: CEIC, Haver, UBS estimates 25
  26. 26. GAM Star China Equity – USD Industry Analysis as at 5 May 2010 Source: GAM, MSCI Note: Totals may not add to 100% due to rounding of data at source. 26 Allocations and holdings are subject to change. Presented as supplemental information only. Please refer to the relevant GIPS compliant report and the GIPS supplemental text.
  27. 27. Consumption delta is moving East USD change in annual household consumption 500 400 USD billion increase 300 200 100 0 China -100 USA 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source: CEIC, CLSA Asia-Pacific Markets 27
  28. 28. Consumer sector – improving EBIT margins 13 % 12 % 11 % 10 % 9% 8% Consumer sector EBIT margin 2005 2006 2007 2008 2009E 2010E 2011E Source: Merrill Lynch 28
  29. 29. Crisis creating opportunities Telecoms equipment and service revenues – main vendors, 2008* Ericsson Nokia Siemens Networks Alcatel-Lucent Huawei Cisco Motorola Nortel ZTE 0 5 10 15 20 25 30 USD billion Source: BDA, The Economist 29 * Financial year .
  30. 30. Alternative energy - BYD Co Ltd P/E relative from 31 Dec 2004 to 30 Apr 2010 50 40 30 +1 standard deviation 20 Mean 10 -1 standard deviation 0 BYD Co Ltd - 12m fwd PE 2005 2006 2007 2008 2009 Source: Credit Suisse Source: Credit Suisse 30
  31. 31. Telecom services sector – declining EBIT margin 26 % 24 % 22 % 20 % 18 % 16 % Telecom sector EBIT margin 2005 2006 2007 2008 2009E 2010E 2011E Source: Merrill Lynch 31
  32. 32. Chinese banks - risks priced in? P/BV vs ROE relative to the region from 30 Jun 2005 to 30 Apr 2010 Source: Company data, Credit Suisse estimates, 32
  33. 33. Summary ● Asia stands at an extremely strong point in the cycle ● The region has few areas of vulnerability ● However, China’s economy faces short term challenges ● We continue to favour secular growth areas such as consumer/IT 33
  34. 34. Performance and Analysis GAM Star China Equity – USD This document is confidential and intended solely for the use of the person to whom it is given or sent and may not be reproduced, copied or given, in whole or in part, to any other person.
  35. 35. GAM Star China Equity – USD Performance from 9 Jul 2007 to 5 May 2010 Source: GAM, MSCI, Financial Times 35 Past performance is not indicative of future performance. Performance is provided net of fees. Funds do not have the security of capital which is characteristic of a bank deposit. Presented as supplemental information only. Please refer to the relevant GIPS compliant report and the GIPS supplemental text.
  36. 36. GAM Star China Equity – USD Top 10 holdings (of 36) as at 5 May 2010 Source: GAM 36 Allocations and holdings are subject to change. Presented as supplemental information only. Please refer to the relevant GIPS compliant report and the GIPS supplemental text.
  37. 37. GAM Star China Equity – Investments Geographic allocation as at 5 May 2010 Source: GAM, MSCI Note: Totals may not add to 100% due to rounding of data at source. 37 Allocations and holdings are subject to change. Presented as supplemental information only. Please refer to the relevant GIPS compliant report and the GIPS supplemental text.
  38. 38. GAM Star China Equity – Investments Industry Analysis as at 5 May 2010 Source: GAM, MSCI Note: Totals may not add to 100% due to rounding of data at source. 38 Allocations and holdings are subject to change. Presented as supplemental information only. Please refer to the relevant GIPS compliant report and the GIPS supplemental text.
  39. 39. GAM Star China Equity Investments Aggregate statistics as at 31 Mar 2010 1.20 18 MSCI China 16 Fund 1.00 Free Index 14 0.80 12 Growth 10 Historic Earnings Growth 20.4 18.9 0.60 8 Forecast Earnings Growth 9.9 21.4 0.40 6 4 Forecast Dividend Growth 20.1 20.6 0.20 2 Quality 0.00 0 03/09 05/09 07/09 09/09 11/09 01/10 03/10 Return on Equity 14.8 19.9 Beta (Left Scale) Tracking Error (Right Scale) Dividend Cover 2.9 2.9 MSCI China Fund Debt / Equity Ratio -7.4 17.5 Free Index Value Risk P/E 16.9 13.2 Tracking error 10.8 - Yield 2.0 2.6 Beta 0.9 1.0 Price/Book 2.0 2.6 No of Stocks 36 122 EV/EBIT 14.1 13.3 Percentage in Cash 5.2 - Source: GAM/UBS PAS 39 Holdings and allocations are subject to change. Performance is provided net of fees. Presented as supplemental information only. Please refer to the relevant GIPS compliant report and the GIPS supplemental text.
  40. 40. GAM Star China Equity Morningstar – peer group rankings as at 31 Mar 2010 GAM Star China Equity is ranked Top Quartile over 1-month, 3-month, 6-month, 1-year, 2-year and since inception periods 1 month 3 months 6 months 1 Year 2 Years Since Inception Quartile 1st 1st 1st 1st 1st 1st Total Return (%) 8.58 8.18 37.34 125.39 86.25 90.29 S&P Fund Management Rating A Past performance is not indicative of future performance. 40 Source: Standard & Poor’s, Offshore and International Fund – Equity China. Nav-Nav, USD, unadjusted income. Presented as supplemental information only. Please refer to the relevant GIPS compliant report and the GIPS supplemental text.
  41. 41. GAM Star China Equity Simple performance versus peer group average since 9 Jul 2007 (inception) to 31 Mar 2010 100 90.29% 80 60 40 20 0.48% 0 -1.32% -20 -40 -60 Jul-07 Nov-07 Mar-08 Jul-08 Nov-08 Mar-09 Jul-09 Nov-09 Mar-10 GAM Star China Equity USD Acc MSCI China TR USD Peer group average Source: GAM, MSCI, Lipper. Peer group shown is the Lipper Global Equity China. 41 Past performance is not indicative of future performance. Performance is provided net of fees. Performance shown since launch date of GAM Star China Equity - USD Acc : 9 July 2007. Presented as supplemental information only. Please refer to the relevant GIPS compliant report and the GIPS supplemental text.
  42. 42. GAM Star China Equity Simple performance versus peers since 9 Jul 2007 (inception) to 31 Mar 2010 100 % 80 % 60 % 40 % 20 % 0% -20 % -40 % -60 % -80 % -100 % Jul 2007 Jan 2008 Jul 2008 Jan 2009 Jul 2009 Jan 2010 GAM Star China Equity USD Acc First State China Growth I International Opps Fds China Equity A Allianz RCM China - A - USD Fidelity Funds - China Focus A Fortis Primera Equity China B ACC Allianz RCM China Fund - A - USD JKC China Value Schroder ISF China Opportunities A Acc MSCI China TR USD APS China A Share Aberdeen Global - Chinese Equity A2 Acc Jyske Invest Chinese Equities iShares Dow Jones China Offshore 50 (DE) JF China A Dist USD Invesco PRC Equity USD A Nomura Funds-China Opportunities I USD iShares FTSE/Xinhua China 25 USD db x-trackers FTSE/XINHUA CHINA 25 ETF Vontobel Fund China Stars Eq B USD HSBC GIF Chinese Equity AD USD Callander Fund China Universe C1 Parvest China C FIT Galileo China Source: GAM, MSCI, Lipper. Peer group shown is the Lipper Global Equity China. 42 Past performance is not indicative of future performance. Performance is provided net of fees. Performance shown since 31 July 2007, actual launch date of GAM Star China Equity - USD Acc was 9 July 2007. Presented as supplemental information only. Please refer to the relevant GIPS compliant report and the GIPS supplemental text.
  43. 43. Why GAM Star China Equity? ● Truly active, unconstrained approach ● Early and deep insight into industry trends ● Experienced in defending portfolios against the periodic market volatility ● Volatility tempered with diversification guidelines aims to produce consistent returns ● Highly experienced Hong Kong-based team ● S&P A rated 43
  44. 44. Appendix This document is confidential and intended solely for the use of the person to whom it is given or sent and may not be reproduced, copied or given, in whole or in part, to any other person.
  45. 45. Michael Lai Investment Director Michael Lai is the Investment Director responsible for GAM's Asian funds and co-manager of GAM's Pacific funds with Lesley Kaye. Before joining GAM in 1998, he was Senior Vice President at Trust Company of the West (Asia) responsible for Asian portfolios. Prior to this, he was an investment manager at BZW Investment Management (HK). Michael Lai holds an MSc in Econometrics from the London School of Economics and is a CFA charterholder. He is based in Hong Kong. 45
  46. 46. Mansfield Mok Senior Investment Manager Mansfield Mok is a Senior Investment Manager in GAM’s Pacific team responsible for investments in Hong Kong and China for GAM’s Asia-Pacific portfolios. Prior to joining GAM in August 2007, he helped to set up the first Asian equity fund for Munich Re in 2000, where he managed Asian balanced portfolios and co-managed Asian equity portfolios. Mansfield Mok started his career as a mid-cap analyst with Hoare Govett in 1990, where he spent two years, moving on to ING Barings Securities HK Ltd. Mansfield Mok holds an MSc in Financial Engineering from City University, Hong Kong, and an MBA and a BSc in Industrial Engineering. Mansfield Mok is based in Hong Kong. 46
  47. 47. John Jay Lee Investment Manager John Jay Lee is an Investment Manager in GAM’s Pacific team responsible for analysing and recommending investments in Korea and Taiwan for inclusion in GAM’s Asia-Pacific portfolios. Prior to joining GAM, John Jay Lee served as a Director of Equity Sales at BNP Paribas Securities, selling Korean equities to foreign investors. Prior to this, he worked as a Management Associate for Citibank in New York and Singapore. He holds a BSE in Electrical Engineering and a BA in Economics from the University of Pennsylvania. John Jay Lee is based in Hong Kong. 47
  48. 48. Michelle Lam Manager Michelle Lam is a Manager - Asia Pacific ex Japan Investment Department. Her responsibilities include dealing, providing timely market news, fund flow information and updates on market movements and monitoring orders and executions. Prior to joining GAM in 2004, Michelle worked in research, sales and sales trading with Barings, Deutsche Morgan Grenfell, HSBC and JP Morgan. She is an Ordinary Member of the HK Securities Institute. Michelle is based in Hong Kong. 48
  49. 49. GIPS Supplemental Information All GAM's discretionary assets have been allocated to appropriate GIPS composites. GAM's funds often are structured as investment pools with underlying currency classes and it is at the investment pool level that GIPS composite allocations have been made. Supplemental information shown in GAM's materials, including performance, geographic/industrial asset allocations, attribution details and other statistical analyses are based on a sample account of the relevant composite that represents the management style. Other accounts in the composite may have slightly different portfolio characteristics. In some cases sample accounts have history that pre-dates GAM's compliance with GIPS of 30 June 1996. Indices other than the benchmark are sometimes used in presentations for illustrative purposes. Please refer to the relevant GIPS compliant report. 49
  50. 50. GAM China Equity Composite (G274) Aug 07 GAM has prepared and presented this report Composite Performance 2008 2009 YTD in compliance with the Global Investment Dec 07 Performance Standards (GIPS®). A Composite Returns % 24.74 -35.12 100.67 8.90 complete list and description of composites is Benchmark Returns* % 23.89 -50.83 62.63 -1.57 available on request. Number of Portfolios in Composite <6 <6 <6 <6 Composite Asset value (USDm) 36 22 338 495 * The benchmark shown is for comparative Total Firm Assets (USDm) 75,783 39,207 49,372 49,372 purposes only. The composite is not High Return % N/A N/A N/A N/A managed to a specific benchmark. Low Return % N/A N/A N/A N/A 1: Established in 1983, GAM delivers active investment management to private clients, institutions and intermediaries. All GAM's assets are included in the GIPS definition of the firm. 2: Deloitte & Touche LLP have carried out a verification of the firm's compliance with GIPS for the period from 30 Jun 1996 to 31 Dec 2008. A verification includes obtaining an understanding of the policies and procedures applied by management in compiling performance reports. 3: The composite consists of actively managed long-only portfolios of quoted equity and equity related securities issued by companies with principal offices or significant business activities in the People's Republic of China and Hong Kong. 4: Derivatives may be used in the portfolios within the composite to gain market exposure as well as for hedging purposes. 5: Composite results are presented gross of investment management fees and net of trading expenses and net of withholding taxes on dividends, capital gains and interest. For some of the constituent accounts the presented gross of fee returns are also net of administrative expenses. Benchmarks are gross of withholding taxes on dividends. 6: The composite was created in Aug 2007. 7: High and low returns (for those constituents present in the composite throughout each period) are presented above to demonstrate dispersion within the composite. Dispersion information is only required by GIPS where there are 6 or more portfolios in the composite. 8: The benchmark shown is MSCI China Free Index in USD. 9: Additional information regarding policies for calculating and reporting returns is available on request. 10: The maximum investment management fee for accounts is 1.5% per annum. Management fees may vary by product and jurisdiction. 11: Prior to Nov 2002 GAM's compliance with GIPS was restricted to the institutional and private client assets which were defined as two separate firms for GIPS purposes. 12: In 2005 GAM changed its methodology for calculating its Total Firm Assets to follow the principles and guidelines of The Swiss Financial Market Supervisory Authority (FINMA). This change in methodology resulted in Total Firm Assets as of Nov 2005 being increased by 38%. In May 2009, GAM acquired Augustus Assets Managers Limited resulting in an increase of 22% in GAM's AUM. Please note that the year to date total firm asset data is as at 31 Dec 2009. 13: FX rates used for valuation of funds and portfolios within the composite are those at 23:00 hours GMT. FX rates for benchmark and composition calculation are those at 16:00 hours GMT. Source: GAM as at 31 Mar 2010 50
  51. 51. Disclaimer Source: GAM unless otherwise stated. (Unless otherwise noted, where shown, performance is shown net of fees, on a NAV to NAV basis). This material is confidential and is intended solely for the use of the person or persons to whom it is given or sent and may not be reproduced, copied or given, in whole or in part, to any other person. Nothing contained herein constitutes investment, legal, tax or other advice nor is it to be solely relied on in making an investment or other decision. It is not an invitation to subscribe and is by way of information only. The fund is a sub-fund of GAM Star Fund plc. GAM Star Fund plc is an umbrella fund with segregated liability between sub-funds. GAM Star Fund plc is authorised as a UCITS pursuant to the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2003 (S.I. No.211 of 2003) and is a recognised scheme under the Financial Services and Markets Act 2000. The fund is managed by GAM Fund Management Limited which is regulated by the Financial Regulator in Ireland. Subscriptions will only be received and shares or units (‘Shares’) issued on the basis of the current prospectus for the fund. Copies of the fund’s prospectus, simplified prospectus and financial statements can be obtained free of charge from GAM Fund Management Limited, George’s Court, 54-62 Townsend Street, Dublin 2, from the German information agent, Bank Julius Baer Europe AG, An der Welle 1, D-60322 Frankfurt am Main, from the Austrian representative, UniCredit Bank Austria AG, Schottengasse 6-8, A-1010 Wien, or from its representative in Switzerland, GAM Anlagefonds AG, Klausstrasse 10, CH - 8034 Zurich. Shares are not available for sale in any state or jurisdiction in which such sale would be prohibited. The Shares of the fund have not been registered under the US Securities Act of 1933, as amended (the “Securities Act”), and the fund is not registered under the US Investment Company Act of 1940, as amended (the “Company Act”). Accordingly, unless an exemption is available, such shares may not be offered, sold or distributed in the United States or to US persons. However, pursuant to an exemption from registration under the Securities Act and the Company Act, the shares may be sold or resold in the United States or to certain qualified US investors in transactions that do not constitute a public offering. The views expressed herein are those of the manager at the time and are subject to changes. The price of Shares may go down as well as up and the price will depend on fluctuations in financial markets outside GAM's control, as a result an investor may not get back the amount invested. Past performance is not indicative of future performance and reference to a security is not a recommendation to buy or sell that security. Prices quoted refer to accumulation Shares unless otherwise stated. Historic data may be subject to restatement from time to time. In the United Kingdom, this material has been issued and approved by GAM London Ltd, 12 St James's Place, London SW1A 1NX, authorised and regulated by the Financial Services Authority. In Switzerland, issued by GAM Anlagefonds AG, Klausstrasse 10, CH-8034 Zurich. 51
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