Investment Strategy

The Fund principally invests in a portfolio of listed (and proposed to be listed) Asia Pacific securities. The Fund may also invest in securities which are listed (and proposed to be listed) on exchanges outside the Asia Pacific region where the relevant entity has substantial operations in the Asia Pacific region. The Fund seeks to offer investors participation in the region’s superior growth with protection from short term volatility.

China and India have entered an era of economic transformation to become amongst the world’s most influential economies. This transformation is expected to drive the Asia Pacific region to produce much stronger economic growth in coming years compared to other regions. However, investing in Asian equity markets is often associated with high volatility due to the markets’ liquidity-driven nature and the region’s highly cyclical economic structure.

In order to generate long-term sustainable returns, the manager believes it is essential to understand how to protect against downside risks and reduce short-term volatility. Through prudent management of equity and currency exposure, the Fund aims to achieve its investment objective of generating sustainable returns through market cycles by reducing volatility during the market’s down-cycles whilst participating during the up-cycles.

Philosophically, the manager believes that markets behave irrationally at times, either under-or over-estimating the growth potential and risk profile of certain companies or sectors. This can lead to mispricing of listed securities, which may offer attractive opportunities for experienced and disciplined investors, with a strong focus on fundamentals and valuations, to establish either long or short positions.

The Fund employs a fundamental Long/Short equities strategy, combining a bottom-up fundamental approach for stock selection with a macro and technical overlay. In order to reduce short term volatility, the Fund may implement hedging strategies by short selling index futures and individual securities. Shorting of individual stocks is also used to generate alpha. The Manager may also make use of leverage. While the Fund does not systematically hedge its currency exposure, it does actively manage that exposure.

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Fund Managers

	Diane Lin - Fund Manager Diane joined Pengana to establish the Pengana Asian Equities Fund in 2008. Diane brings to Pengana over 17 years of experience in financial services and funds management, with a particular focus on Japanese and Asian equities. Prior to joining Pengana, Diane was the Head of Asian and Japanese Equities for Perennial Investment Partners where she led the Asian Equity Investment Team and managed the Perennial Japan Fund and Perennial Asia ex-Japan as well as the Rubicon Asia Fund, a Pan-Asia long short equity strategy. Before moving to Australia in 1998, Diane worked in London, UK, for five years, first with Nomura International plc, and then with Union Bank of Switzerland (UBS), responsible for managing Asia-related equity portfolios for private clients. After moving to Australia, Diane has continued to apply her in-depth understanding of Asia, its economies and its financial markets to the management of regional investment portfolios, first at Platinum Asset Management as an Equity Analyst/Portfolio Manager, responsible for financial market analysis and identification of investment opportunities in Japan, and then with Perennial Investment Partners. Dianes fluency in English, Japanese, Mandarin and Cantonese, combined with her cultural affinity with Japan and China continues to give her preferential access to major sources of investment information in regional markets, a key asset in the complex, idiosyncratic and rapidly evolving Asian investment environment. Diane holds a B.A. In Economics from Osaka University, Japan.
	Charles Stodart- Fund Manager Charles joined Pengana to establish the Pengana Asian Equities Fund with Diane in 2008. Charles brings to Pengana over 15 years of experience in global equities analysis and funds management, with a significant focus on Asia and Japan. Charles is responsible for the Technology, Telecom and Utility sectors. Prior to joining Pengana, Charles worked for Perennial Investment Partners initially as a Senior Investment Analyst researching International Equities, including Asia and with particular focus on the telecom and technology sectors. In 2004, Charles was given portfolio management responsibilities for some of Perennials international client portfolios, including the Rubicon Global Fund, a global long short equity strategy. Subsequently, Charles became deputy Portfolio Manager for the Asian Equity Investment Team, which managed the Perennial Japan Fund and Perennial Asia ex-Japan Fund as well as the Rubicon Asia Fund, a Pan-Asia long short equity strategy. Before coming to Australia in 2000, Charles spent five years at Murray Johnstone Ltd, a Glasgow-based investment firm. He initially spent two years on the North American team, before moving to the Japanese desk, first as an Assistant Investment Manager, analysing and researching companies across a wide range of industries, and then as Investment Manager, with regional responsibility for several funds, including the companys flagship International Trust. Charles is a CFA charterholder and has a Masters Degree from St Andrews University in Scotland.
	Tim Shaw - Fund Manager Tim Shaw joined Pengana in 2007, bringing with him 16 years of experience in investment banking and funds management. Tim is responsible for Financials (including Real Estate), Healthcare and Infrastructure. Prior to joining Pengana, Tim was Co-head of Real Estate Investment Banking, Australia at Deutsche Bank, where he was responsible for client coverage across the Australian listed real estate sector. Tim gained eight years experience in REIB at Deutsche Bank through his involvement in a broad range of M&A, Equity Capital Markets, Hybrid, FX and Rates transactions across a variety of real estate clients in the region. Prior to his role at Deutsche Bank, Tim was part of Macquarie Bank’s investment banking division, working in Sydney and Melbourne as well as in Singapore. During his career at Macquarie, Tim focussed on infrastructure, structured finance and real estate. From his experience Tim brings to the team comprehensive knowledge of bank operations and a broad understanding of real estate and infrastructure investment and development within the Asia-Pacific region. Combining this with relationships across management teams and financiers in the region, gives Tim strong insights into the future direction of the financial sector. Tim has a Bachelor of Commerce (Finance) and Bachelor of Laws from the University of New South Wales.
	Tobias Yao - Investment Analyst Tobias Yao was born and raised in Shanghai, China. He is fluent in Mandarin and has an intimate understanding of Asian business cultures and practices. In addition, Tobias has lived and studied in a number of other regions and countries, including the United Arab Emirates, South Africa and New Zealand. He now resides in Australia. Prior to joining Pengana, Tobias was a consultant in the Valuation and Business Modelling Division of Ernst & Young Transaction Advisory Services. In this role, he was involved in the valuation of companies and assets both in Australia and overseas. Tobias also took charge of building and reviewing financial models. In addition to his role at Ernst & Young, he gained hands-on investment experience working in the Asset Management division of Goldman Sachs. Tobias is a CFA charterholder. He graduated from the University of New South Wales with a Commerce Cooperative Scholarship, majoring in Accounting and Finance. He was also a recipient of the CFA Institute Student Scholarship. At Pengana, Tobias main role is to provide investment research, modelling and analysis. He is responsible for the internet services and game software sectors.
	Yan Zhang - Technical Analyst Yan Zhang joined the Pengana Asian Equities Fund investment team in 2011. Yan brings to the team significant research and derivatives trading experience, with particular expertise in technical analysis, derivatives pricing and trading strategy development. Yan is responsible for technical and quantitative research. Prior to joining Pengana, Yan was a trader of Nikkei and Hang Seng index options at Atlantic Trading Asia, one of the worlds largest market makers in exchange traded options. At Atlantic, in addition to trading, Yan developed automated options pricing models as well as options trading strategies. Before moving to Atlantic, Yan was an analyst at UBS, Sydney. Yan holds a Bachelor Degree in Commerce and Computer Engineering from the University of Melbourne, and a Master Degree in Operations Research from Columbia University, New York. Yan is a member of the Market Technicians Association (MTA), a global professional association for technical analysis, headquartered in New York. Yan has completed the CFA program and is fluent in Cantonese and Mandarin.
	Mengda Shu - Investment Analyst Mengda has extensive knowledge of Chinese business practices and her ability to speak fluent Chinese allows for the collation and interpretation of real-time local data and information. Prior to joining Pengana, Mengda was an analyst in NAB China and most recently worked in the Asset Management division of nabInvest. In this role, she was part of a project team that negotiated with Chinese partners to establish a Joint Venture funds management company in China. Mengda has conducted extensive research on the Chinese funds management industry as well as building financial models and facilitating the communication between NAB and the Chinese partners. In addition, she previously worked in a partnership program with nabAgri to facilitate agricultural business banking opportunities between China and Australia. In these roles, she was involved in numerous business tours and participated in over 85 company visits and business meetings with company management. Mengda graduated from the University of New South Wales with a Master of Accounting. She obtained a Bachelor of Medicine from Shanghai University of Traditional Chinese Medicine.

Reports

Unit Prices

Pengana Asian Equities Fund

Ratings and Independent Research

*To the extent that any ratings, opinions or other information of Standard & Poors Information Services (Australia) Pty Ltd (ABN: 17 096 167 556, Australian Financial Services Licence Number: 258896) (Standard & Poors) constitutes general advice, this advice has been prepared by Standard & Poors without taking into account any particular persons financial or investment objectives, financial situation or needs. Before acting on any advice, any person using the advice should consider its appropriateness having regard to their own or their clients objectives, financial situation and needs. You should obtain a Product Disclosure Statement relating to the product and consider the statement before making any decision or recommendation about whether to acquire the product. Past performance is not a reliable indicator of future performance. Ratings can change or cease at any time and should not be relied upon without referring to the meaning of the rating. For more information regarding ratings please call S&P Customer Service on 1300 792 553 and also refer to Standard & Poors Financial Services Guide at www.fundsinsights.com. Each analytic product or service of Standard & Poors is based on information received by the analytic group responsible for such product or service. S&P and Standard & Poors are trademarks of The McGraw-Hill Companies, Inc. 2010 Standard & Poors Information Services (Australia) Pty Limited.
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Bloomberg, 07/05/2011 – Asian Stocks Fall as U.S. Data, Commodity Prices Signal Recovery Weakening

BusinessWeek.com, 05/05/2011 – Hong Kong Stocks Drop in Longest Streak Since SARS, Iraq War

Bloomberg, 15/03/2011 – Japan Stock Valuations at Four-Month Low Lure AMP After Topix 7.5% Plunge

Bloomberg, 10/03/2011 – Tokyo Exchange Plans to Merge With Osaka Securities Amid Global Takeovers

Australian Financial Review, 05/03/2011 – Time to Look Beyond the Mining Boom

Investor Daily, 02/03/2011 – Chinese Economy at Turning Point: Pengana

Bloomberg, 28/02/2011 – Asian Stocks Advance, Reversing Loss, After Report of Libya Oil Shipments

Australian Financial Review, 09/10/2010 – Diane Lin Provides Chinese Economic Analysis

New Applications

1. Read the Financial Services Guide and then the current Product Disclosure Statement (PDS):

• Financial Services Guide
• Product Disclosure Statement

2. Complete the Application Form found in the PDS (choose from the list below)

• Application Form for Individuals and Sole Traders refer to pages 30-34
• Application Form for Australian Companies refer to pages 35-39
• Application Form for Australian Trusts and Self Managed Superannuation Funds refer to pages 40-48
• Application Form for Partnerships, Registered Companies and Government Bodies refer to pages 49-56

3. Send the completed Application Form and required Anti Money Laundering (AML) identification document(s) to the Administrator:

BNP Securities Services
PO Box R209
Royal Exchange NSW, 1225
Attention: Unit Registry,
Pengana Asian Equities Fund

Due to AML legislative requirements, we cannot accept an ‘Application Form for New Investment’ by facsimile or email.

4. Transfer funds to Pengana

Transfer your application monies:

• Cheques – payable to:
  “Cogent Nominees Pty Limited ACF Pengana Asian Equities Fund Applications Account”

• EFT or Direct Deposit:
  
  Acct name: Cogent Nominees Pty Limited ACF Pengana Asian Equities Fund Applications Account
  Bank: Westpac Banking Corporation
  BSB: 032002
  Acct number: 626433

In addition, if you are paying the application monies by EFT or direct deposit you must ensure your investor name is recorded as a narrative on the payment. You will also need to advise us prior to the processing cut-off time (4pm each business day) so that we can identify your money.

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