Chinese equities have underperformed the rest of the world for two successive years, dragged down by inflationary pressures and a slew of tightening policies. However, 2012 (“Year of the Dragon” according to the Chinese zodiac) may finally be the year for the Chinese equity market to turn things around, propelled by strong domestic growth, extremely supportive valuations and a shift towards more accommodative monetary policies. Over 60% Upside for Chinese Stocks Among the various markets that Fundsupermart.com oversees, our Research Team favours China most for 2012. With fears rife over a potential "hard landing" in China, a reversal in monetary policy is imminent, which could help to quell growth concerns. Based on the current share price, we see over 50% upside for the Hang Seng Mainland 100 Index (HSML 100), which brings us to a 9,700 point target by end-2012. According to our estimates, the HSML 100’s 2012 and 2013 forward PE stands at 8.3X and 7.0X respectively (as of end-2011), a huge discount to its fair value of 14X, which makes the China market a good investment opportunity for medium- to long-term investors. Which Fund Should You Choose? Table 1: Cumulative Returns   Cumulative Returns (%) Fund 1 mth 3 mth 6 mth 1yr 3yr OSK-UOB Big Cap China Enterprise Fund 4.3 8.5 -14.6 -18.6 32.6 Manulife Investment – China Value Fund 7.4 8.4 -14.2 -18.1 - Prudential Dinasti Equity Fund 6.5 5.0 -9.2 -11.6 - Source: Fundsupermart compilations, based on 20 January 2012 prices. Performance figures in the table are in RM terms, calculated using NAV prices, with any income or dividend reinvested. Table 2: Calendar Year Returns   Calendar Year Returns (%) Fund 2011 2010 2009 2008 OSK-UOB Big Cap China Enterprise Fund -20.1 3.8 53.4 -33.8 Manulife Investment – China Value Fund -20.1 - - - Prudential Dinasti Equity Fund -12.3 3.8 - - Source: Fundsupermart compilations, based on 20 January 2012 prices. Performance figures in the table are in RM terms, calculated using NAV prices, with any income or dividend reinvested. The OSK-UOB Big Cap China Enterprise Fund is the only Chinese equity fund on our platform. Referring to a recent article written by our Research Analyst, OSK-UOB Big Cap China Enterprise Fund - Higher Resilience & Consistent Outperformance, this fund has consistent outperformance, higher level of resilience as well as better risk returns ratio and Sharpe ratio as compared to its benchmark – MSCI China Index (denominated in RM). The fund invests in equities and equity-linked securities issued by companies whose businesses are in China. Since the OSK-UOB Bog Cap China Enterprise Fund is the only Chinese equity fund on our platform, investors can also consider the Manulife Investment – China Value Fund and the Prudential Dinasti Equity Fund which have exposure to China. As of 30 November 2011, the Manulife Investment – China Value Fund has an asset allocation of 20.49% in basic materials and 17.42% in consumer goods while the Prudential Dinasti Equity Fund has 19.04% in the energy sector and 17.52% in the telecommunication services.  To find out more about the Manulife Investment – China Value Fund, read Manulife Investment – China Value Fund: Ride on Greater China’s Economic Boom. Promotions, Promotions, Promotions! For investors who are interested to invest in these three funds mentioned above, well, Fundsupermart.com has some good news for you. Up to 17th February 2012, you can purchase these three funds at a promotional discount of 1% sales charge. In fact, there are a total of 20 funds that are now offered at 1% sales charge till 17th February 2012. To find out more, click here. Related Articles OSK-UOB Big Cap China Enterprise Fund - Higher Resilience & Consistent Outperformance Manulife Investment – China Value Fund: Ride on Greater China’s Economic Boom Chart Talk: Manulife Investment - China Value Fund Key Investment Ideas: What & Where to Invest 2012 Promotion

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