| CHOU ASSOCIATES MANAGEMENT INC. | ||||||||||||||||||||||||||||||||
| Chou Asia Fund | ||||||||||||||||||||||||||||||||
Investment
Objectives
•
The Fund's objective is to provide long-term growth of capital by investing
primarily in the securities markets of Asia considered by the Manager
to be undervalued. Investments may be made in securities markets outside
of Asia.
• Investments may include common and preferred shares, convertible debentures, government and corporate bonds and short-term indebtedness. • Unitholder approval is required in order to change the fundamental investment objectives of the Fund. Investment
Strategies
The
investment process followed in selecting equity investments for the Funds
is a value-oriented approach to investing that focuses on the Asian market.
This involves a detailed analysis of the strengths of individual companies,
with much less emphasis on short-term market factors. Far greater importance
is placed upon an assessment of a company's balance sheet, cash flow characteristics,
profitability, industry position, special strengths, future growth potential
and management ability.
The investment strategy follows strong disciplines with regard to price paid to acquire portfolio investments. The level of investments in the company's securities is generally commensurate with the current price of the company's securities in relation to its intrinsic value as determined by the above factors. That approach is designed to provide an extra margin of safety, which in turn serves to reduce overall portfolio risk. Once an investment is made, the Fund is expected to be a patient, long-term investor, which results in low portfolio turnover, reduced transaction costs and deferred realization of accrued capital gains. Portfolio holdings are typically concentrated within a limited number of companies, usually 25 to 35 per Fund portfolio. This helps to maintain awareness of corporate developments and communication for each company. The Manager may decide to maintain a larger portion of the Fund's assets in short-term fixed income securities during periods of high market valuations and volatility. This temporary departure from the Fund's core investment strategy may be undertaken to protect capital while awaiting more favourable market conditions.
Geographic Profile as at March 31, 2008
Hanfeng Evergreen is listed on TSX but its business is primarily in Asia UTStarcom is listed on NASDAQ but it business is primarily in Asia Statement of Investment Portfolio as at March 31, 2008 Management Report of Fund Performance December 31, 2007
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