De-sheng Stable Fund

1. Name of the fund: De-sheng Stable Securities Investment Fund
Name in short: De-sheng Stable
Trading Code: 255010
Operational Mode: Contractual Open-ended fund
Inception Date of Fund Contract: 8th August, 2003
2. Fund investment summary
Investment Target： The fund is of balance type, and the fund managers shall make full use of the successful experiences of fund management at home and abroad to throw deep light on the value driving factor of China's economic development, adopt the active investment strategy, apply the whole-course risk management technology and seek the long-term stable investment return in order to offer the secure and reliable financial service for the fund investors. Investment Strategy： The fund strictly follows the scientific investment management procedure. Firstly, Top down method is adopted to work out the asset allocation and industry allocation strategy of fund assets; secondly, bottom up analysis of the fundamentals shall be adopted to exploit the excellent listed companies with sound financial performance, great development potentials and special competitive status and the bonds with high expected yield. Taking advantage of our deep understanding of the global investment experiences and domestic market, the fund conducts the active strategic and tactic asset allocation and adjustment and form the optimal investment portfolio under the vested investment risk on the premise of the correct judgment of market trend. Benchmark： Over-all performance comparison benchmark = GTJA Index*65% + SSE Treasury-Bond Index*35%.

De-sheng Small Cap Selective Securities Investment Fund

1. Name of the fund: De-sheng Small Cap Selective Securities Investment Fund
Name in short: De-sheng Small Cap
Trading Code: 257010
Operational Mode: Contractual Open-ended fund
Inception Date of Fund Contract: 12th April, 2004
Total Fund Units as at the End of Reporting Period: 8,324,975,786.82
2. Fund investment summary
Investment Target：The fund is of active growth type, it attaches importance to the investment in small caps with growth potentials in China's A-share market. Taking full advantage of the successful fund management experiences at home and abroad, the fund manager shall adopt the active investment strategy on the principle of strict risk control and fully exploit the investment opportunity caused by the potential growth of the small caps through the multi-directional and multi-layer analysis of the fundamentals and seek the relatively high investment profit by means of timing strategy of short-term trading in order to achieve the long-term increase in investors' assets.
Investment Strategy：The management of the fund investment shall be divided into two layers: the first layer is the security choice from bottom to top. Generally speaking, with respect to the small caps focused by the fund investment, the method from bottom to top shall be adopted to elaborately choose the individual security by applying lots of methods such as the quantitative financial engineering model, scientific and strict financial analysis, in-depth investigation and research of listed companies and special grass-root research and form the security investment portfolio on the basis of the aforementioned methods. The second layer is the risk management at the level of the portfolio of asset categories, that is, the real-time monitoring of the fund assets portfolio shall be carried out among three asset categories of stock, bond and cash, and the asset portfolio shall be adjusted according to the current macro-economic situation and security market quotations in order to achieve the aim of fund risk control. Generally speaking, the fund at every level of fund management organically combines the quantitative and qualitative researches in order to guarantee the optimality of risk return structure and the rationality of investment decision-making.
Benchmark：Over-all performance comparison benchmark = (Tianxiang small cap index * 60% + Tianxiang medium cap index 40%)60% + SSE treasury bond index*40%.
Feature of Risk Return：It is an actively managed growth equity fund, and its risk and expected return are higher than the fund of balanced type due to the focus of investment on small caps. As a result, the fund is among the type of medium and high risk in security investment fund. The fund endeavors tomake the return per unit risk higher than that of performance benchmark in the long term.

Desheng Reliable Growth Securities Investment Fund

1. Name of the fund: Desheng Reliable Growth Securities Investment Fund
Name in short: Desheng Reliable Growth
Trading Code: 253010
Operational Mode: Contractual Open-ended fund
Inception Date of Fund Contract: 13th July, 2005

2. Fund investment summary
Investment Target： Share benefits from economic growth, seek for absolute return
Investment Strategy： Investment strategies for the Fund have two tiers. First tier, to estimate risk from overall perspective combined with financial engineering model and consideration of fund investment return to allocate asset. Second tier, for equity investment, on the basis of value selection of stocks, to select those stocks with good fundamentals, high liquidity which are under valued, and manage portfolio based on sector allocation; For fixed income investment, focus will be on risk management, seeking stable return, having duration management and sector allocation depending on analysis of medium and long-term macro economic situation and interest trends, and holding appropriate level of convertible bonds to construct fixed income portfolio.
Benchmark： Reliable Growth Line. The determination of Reliable Growth Line: value at the date of inception was 0.9, with value increasing over time, slope coefficient on any day will be after-tax one year deposit interest rates in the same period divided by 365.
Feature of Risk Return： Medium-to-low risk fund product seeking long-term stable return

De-sheng Selective Equity Fund

1. Name of the fund:
De-sheng Selective Equity Fund Name in short: De-sheng Selective Trading Code: 257020 （front end load） 257021(back end load) Operational Mode: Contractual Open-ended fund Inception Date of Fund Contract: 28th December, 2005
2. Fund investment summary
Investment Target： Investors who are willing to participate in the recovery of stock market and to share the return of the growth of Chinese economy. Investment Strategy： When analyzing companies, we evaluate the profitability by ROIC and cost of capital by WACC, to establish stock pool consisting of companies that create added value to shareholders. The second step is to measure the growth potential and valuation level of the stocks in the stock pool, to build up the portfolio. Benchmark：
Shanghai and Shenzhen Stock Exchange 300 Index×85%+Shanghai Stock Exchange Government Bond Index×15%

De-sheng Advantage Equity Fund

1. Name of the fund: De-sheng Advantage Equity Fund
Name in short: De-sheng Advantage Trading Code: 257030 (front end load) 257031(back end load) Operational Mode: Contractual Open-ended fund. Inception Date of Fund Contract: 24th January, 2007 2. Fund investment summary
Investment Target：
The fund will be invested in domestic public stocks that have competitive advantages as well as bonds.
Investment Strategy：
1) Asset allocation strategy: This fund is an equity fund. During the operation, with full consideration of factors including macro economy, policies, money supply and demand, market fluctuations, as well as relative variations of equity risk-return, the proportion of stocks, bonds and monetary tools will be adjusted properly.
2) Sector allocation strategy:
This fund is operated by the analysis and forecast of market fluctuations, industrial environment and policies, competition patterns. We also consider the growth potential, investment opportunities and carries on the fund asset distribution in stock investment to assure the positive changes in our opportunities to investments.
3) Stock investment strategy:
The fund manager investigates and studies the newly established companies entering the market through the thorough comprehensive comparative analysis, excavating their competitive advantages. We only pay attention to promising companies that are superior in natural resources, Chinese culture growth, and/or have unique management patterns.
Benchmark：Shanghai and Shenzhen Stock Exchange 300 Index×70%+Shanghai Stock Exchange Government Bond Index×30%

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