Top 10 Asia Pac Ideas Quarterly: Summary of Performance

Research evidence excerpt

Top 10 Asia Pac Ideas Quarterly: Summary of Performance

position is closed out and the proceeds are held as non-interest bearing cash

in the currency of the list (USD) which is re-invested when the next quarter’s list is

identified and the list is rebalanced to equal weight. The performance does not reflect

transaction costs. If such costs were reflected the performance would be lower.

Changes to the Top 10 Asia Pac Ideas Quarterly List are announced via a published

research report. For the purposes of calculating performance, the addition or removal

price for a stock will be the closing price on the day the change is announced if the

research report is published before 6am Hong Kong local time, or the closing price

following trading day if the report is published after 6am Hong Kong local time. All

prices will be in USD and if conversion is necessary, stocks and dividend payments will

be converted using the published [WM/Reuters Closing Spot Rate] on the pricing date as

described above.

As the Top 10 Asia Pac Ideas Quarterly List comprises both long and short ideas, in our

view, its construction is closer to that of a hedge fund than a traditional long only list or

index. As such, we have chosen the Hedge Fund Research HFRX Asia with Japan Index or

“HFRXAWJ”, a USD denominated index as our benchmark.

The HFR Indices apply various methodologies to give a broad view of the total return of

hedge funds. These indices comprise funds meeting certain criteria, including criteria

related to the size of assets under management, length of manager track record, and

certain transparency standards. Funds that are closed to new investment are excluded.

The HFRX Asia with Japan Index is designed to reflect the performance of the Asia with

Japan region of the hedge fund universe.