Presented by: Group 1

A group of retail investors from Hong Kong Introduce abt iShares & ETFs Energy index ETFs ( objectives, strategy, holding, fee structure, performance, why invest)

An Exchange-Traded Fund (ETF) is an investment fund traded on stock exchanges An ETF is traded like a stock An ETF usually tracks an index Investors pay brokerage commissions trading ETFs Investors also pay annual management fees

Exchange-traded fund established in Hong Kong

constituted in the form of unit trust

Investment objective:
return before fees and expenses is closely correspond to the performance of the CSI 300 Energy Index.

Fund manager
BlackRock Asset Management North Asia Limited

Trustee
Keep collaterals from Issuers HSBC Institutional Trust Services Asia Limited

Synthetic ETF Gains access to the A share market by investing into China A-share Access Products (CAAPs) Derivative instruments linked to an A share or the Index issued by CAAP Issuers
Citigroup Global Market Holding Inc UBS AG London Branch Credit Suisse AG Nassau Branch

24 holdings Provide the economic performance equivalent to holding the underlying A Shares.

Tracks the CSI 300 Energy Index

The CSI 300 Energy index is a free- float market capitalization weighted index, compiled and published by China Securities Index Co, LTD. since 31 Dec 2004. It measures the performance of the energy sector of the CIS 300 index, which represents 8.40% of the CSI 300 index as at 14 Oct 2011. Return calculated daily by using the official closing price of each stock exchange on which the constituent stocks are listed and assumes reinvestment of dividends

Rank 1

Name China Shenhua Energy Co., Ltd.

Market Cap (HKD equivalent) 81,852,557

Percentage of Assets (%) 21.08

2
3 4 5 6 7

PetroChina Co,. Ltd.

Shanxi Xishan Coal and Electricity Power Co., Ltd. China Petroleum and Chemistry Corp. (Sinopec) Yangquan Coal Industry (Group) Co,. Ltd Shanxi Luan Environmental Co,. Ltd China Coal Energy Co,. Ltd

34,777,045
28,799,992 28,602,609 22,959,590 22,503,023 16,408,694

8.96
7.42 7.08 6.34 5.80 4.32

8
9 10 11

Yanzhou Coal Mining Co,. Ltd

Pingdingshan Tianan Coal Co,. Ltd Shanxi Lanhua Sci- tech Venture Co,. Ltd Pingdingshan Tianan Coal Mining Co,.Ltd

15,473,938
14,981,432 13,607,805 13,046,120

3.99
3.86 3.50 3.36

Total expense ratio

1.39%

Management fee
.99%

Transaction levy
0.003%

Trading fee
0.005%

Stamp duty
Nil

o Cumulative return as of Sep 30, 2011 Performance Monthly Fund (%) -3.74 Index (%) -4.11

Quarterly
Semi- annually

-9.0
-11.15

-9.04
-10.43

o Annual return for 2009- 2010

Year
2009 2010

Fund
-10.6 3.61

index
-7.83 3.99

Exposure to Chinas Energy market

Energy market is becoming more important (energy market)

Cost efficient (compared to other products in China) Transparency Diversification

Multiple CAAP Issuers Collateral posted by Issuers ( reduce counter party risks)

Tax efficient ( tax treatment) High liquidity ( because ETFs are traded like stock) No minimum investment requirement
Detail number required investment of mutual funds,