The Fund's investment objective is to achieve long-term capital appreciation. The Fund seeks to achieve its investment objective by investing substantially all of its assets in listed equity securities of companies which derive, or which are expected to derive, a significant proportion (at least 50%) of their revenues from goods produced or sold, investments made or services performed in China, referred to herein as China companies. Under normal market conditions, as a fundamental policy, the Fund invests at least 65% of its total assets in equity securities of China companies listed on stock exchanges in China or Hong Kong. The Fund may also invest in equity securities of China companies listed on stock exchanges located elsewhere, including, but not limited to, exchanges in Korea, Singapore or Taiwan. The Investment Manager anticipates that, under normal market conditions, at least 80% of the Fund's assets is invested in listed equity securities of China companies. Up to 15% of the Fund's total assets may be invested in unlisted equity securities of China companies for which there is no public trading market. The Fund may also invest to a limited degree (up to 20% of its total assets) in debt obligations of China companies, which may be lower-rated or non-rated. Although, in general, the Fund's equity investments consist primarily of common stock of China companies, the Fund may also invest in other equity securities, including preferred stock, rights or warrants to purchase common stock or preferred stock and debt securities convertible into common stock or preferred stock.

During periods in which the Investment Manager believes changes in economic, financial or political conditions make it advisable, the Fund may for temporary defensive purposes reduce its holdings in China companies and invest in certain short-term (less than twelve months to maturity) debt securities. The short-term debt securities in which the Fund may invest consist of (1) bank deposits and bank obligations (including certificates of deposit, time deposits and bankers' acceptances) of U.S. or foreign banks denominated in any currency; (2) commercial paper and other short-term debt obligations of U.S. and foreign corporate or governmental entities; and (3) repurchase agreements with respect to such securities. The Fund intends to invest only in short-term debt securities that the Investment Manager determines to be of high quality, i.e., rated in one of the two highest rating categories by Moody's Investors Service, Inc. ("Moody's") or Standard & Poor's Ratings Group ("S&P") or, if unrated, determined by the Investment Manager or the Fund's Board of Directors to be comparable in credit quality. The Fund will also invest in the instruments described above pending investment of the net proceeds of the offering made hereby and at any other time reserves are required for expenses or dividend and other distributions to shareholders, provided that all such investments made as reserves for expenses or dividend and other distributions to shareholders may not exceed 35% of the Fund's total assets. Under the 1940 Act, the Fund may invest up to 10% of its assets in the aggregate in shares of other investment companies and up to 5% of its assets in any one investment company, as long as that investment does not represent more than 3% of the voting stock of the acquired investment company at the time such shares are purchased. The Fund reserves the right to invest in other investment companies to the full extent permitted by the 1940 Act, as it may be amended. As a shareholder in any investment company, the Fund will bear its ratable share of that investment company's expenses, and would remain subject to payment of the Fund's investment management, administrative, custodial and other fees with respect to assets so invested.

The Investment Manager seeks to identify and invest in China companies it believes offer potential for long-term capital appreciation. In evaluating prospective investments, the Investment Manager utilizes its own internal financial, economic and credit analysis resources as well as information obtained from other sources. The Fund invests and intends to invest in China companies involved in a broad spectrum of categories, including, as conditions warrant or permit from time to time, automotive, chemicals, consumer products, construction, electric generating, electronics, finance, food and beverage, household goods, international trading, machinery, mining, real estate development, retail trade, tourism and textiles. The Fund does not invest 25% or more of its total assets in the securities of companies in the same industry. In selecting industries and companies for investment, the Investment Manager seeks investments in industries and companies that it believes to have overall growth prospects and a strong competitive position in domestic and/or export markets. In evaluating whether industries and companies meet these criteria, the Investment Manager considers factors such as technology, research and development, productivity, capital resources, labor costs, raw material costs and sources, profit margins, return on investment, government regulation, management and price of the securities, among other factors. In particular, securities of China companies that are believed to be the likely beneficiaries of China's increased economic contacts with foreign markets will be identified for investment by the Fund.

The Fund is designed primarily for long-term investment and investors should not consider it a trading vehicle. There can be no assurance that the Fund's investment objective will be achieved.