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Last updateSat, 29 Jul 2017 12am

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Henderson Horizon China Fund

Henderson Horizon China Fund, a greater China fund that is UCITS III approved fund.  In other words, it is a mutual fund that can long and short - the fund can have up to 200% exposure in the market with 150 long and 50 short.  The fund adopts highly concentrated portfolio with average position size of 4-5%.  Due to its ability to long and short and concentrated portfolio, it exhibits high tracking error.

The chart below illustrates from the period 2011-01-03 to 2011-09-30, the fund's performance versus the classic long only fund such as First State Regional China fund.


This chart illustrates the fund performance since inception in 2008 to 2011-09-30:


From the charts, we may draw the following conclusions:

  1. It is a very volatile fund - it performs extremely well in a recovery market; likewise it performs badly in a down turn.
  2. In an uptrend market, as the fund could have 200% to the market, during the uptrend, the fund hit the low on 2009-03-02 and achieved more than 100% return on 2009-07-28, in 4 months' time.
  3. For the same reason, in a down turn, the fund peaked in 2010-11-08 and was down by 50% on 2011-09-26!

The diagram below summarized its risk-return trade off characteristics and compares with its peer:


And this diagram compares the fund's performance using Sharpe and Information ratio with its peer:


The diagrams affirm that the fund is able to deliver good return but with a greater volatility.