Quarterly Highlights 1. Quarterly Highlights. 2nd Quarter, 2006

Transcription

1 Quarterly Highlights 1 Quarterly Highlights 2nd Quarter, 2006

2 Quarterly Highlights 2 9/F Building B Tongtai Plaza, No.33 Jinrong Street, Beijing, , China lizx@chinaamc.com Tel: August 1, 2006 Dear Sir or Madam: Please find enclosed Quarterly Highlights for the second quarter of 2006, including ChinaAMC News China 50 ETF Quarterly Report ChinaAMC Fund Family We hope that you will find them useful and we do very much appreciate your interest in our products and services. If you have any further inquiries regarding our company or our funds, please do not hesitate to contact me, or my colleague Ms. Pearl Chen at and chenh@chinaamc.com. Sincerely yours, John Li Chief International Business Officer ChinaAMC

3 Quarterly Highlights 3 ChinaAMC News ChinaAMC Xing Ye Fund to Convert into Open-end HOLDERS of ChinaAMC Xing Ye Fund, which is listed in Shanghai, approved a plan to convert it into an open-end fund on July 14, which is the first of the country s 54 closed-end funds to gain such approval. Holders representing 302 million units of Xing Ye Fund voted on the plan and 98.69% of them approved it. China Securities Regulatory Commission approved the plan soon afterwards. ChinaAMC Xing Ye Fund will be the first closed-end fund in China goes mature. Its maturity will be on Nov. 14, The ChinaAMC Large-cap Select Fund NAV Growth Exceeded 100% July 7, 2006 China Securities Journal According to China Galaxy Securities Fund Research Center s statistics, the year-to-date NAV growth of the ChinaAMC Large-cap Select Fund reached %, and this fund became the first fund in mainland China with NAV growth exceeding 100% within one year. In the first half of 2006, the NAV growth of the ChinaAMC Large-cap Select Fund was 91.45%, which was ranked No. 1 among all equity funds. Since July, the growth of its NAV speeded up and exceeded 10% within only four trading days. On July 6, its daily growth was 3.74%. Mr. Wang Yawei, the portfolio manager of the ChinaAMC Large-cap Select Fund and member of the Investment Decision Committee of ChinaAMC, introduced recently that the ChinaAMC Large-cap Select Fund focused on investment in military industry and aerospace industry in the first half of 2006, and was in leading position in research of machinery, new resources, food & beverage, commerce and other sectors, and this was the key reason for the outstanding performance of this fund. ChinaAMC Return Fund #2 ChinaAMC started launching the ChinaAMC Return Fund #2 on July 14, and the IPO period will end on August 9, This fund will replicate the investment objective, dividend policy, investment philosophy and strategy of ChinaAMC Return Fund, one of ChinaAMC s flagship funds. Since its inception in 2003, ChinaAMC Return Fund experienced both bearish and bullish market, and the accumulated NAV growth is 89.10%, ranked No. 3 among funds of the same type. The fund distributed dividend for seventeen times since inception, with accumulated dividend yield of 41.13%, and total dividend paid to investors of RMB 800 million.

4 Quarterly Highlights 4 China 50 ETF Quarterly Report Long-term Strategic Investment in China s Strongest Shares: Transparent Access to China s Growth Historical Performance April May June 3-month Since China 50 ETF listing (02/23/2005) China 50 ETF NAV 9.89% 13.92% 2.90% 28.83% 30.71% China 50 ETF Market Price 9.01% 11.90% 2.34% 24.84%/ 28.11% SSE 50 Index 9.80% 11.86% 2.21% 25.54% 24.31% SSE Composite Index 10.93% 13.96% 1.88% 28.80% 27.72% SSE 50 Index Constituent Stocks (as of June 30, 2006) Code Stock Weighting Code Stock Weighting Pudong Development Bank 2.99% ShanDong Aluminium 0.93% Baiyun Airport 0.89% Zijiang Enterprise 0.59% Wuhan Iron and Steel 2.29% Gan Yue Express Way 0.98% Shanghai Airport 3.51% Yantai Wanhua 1.79% Huaneng Power 0.84% Zhenhua Port Machinery 3.14% Hua Xia Bank 1.91% COSCOL 0.59% Minsheng Banking 5.69% Sinochem International 0.74% Shanghai Port Container 2.36% Kweichow Moutai 4.68% Baoshan Iron & Steel 5.99% Founder Technology 1.00% Zhongyuan Expressway 0.67% SVA Electron 0.45% China Shipping 1.00% Shenergy 1.83% Huadian Power 0.84% Shanghai Raw Water 1.10% China PetroChem 4.47% Fuyao Glass 1.06% Southern Airlines 0.92% Shanghai Petrochem 1.53% Citic Securities 2.46% Tianjin Harbor 1.54% Fujian Expressway 0.62% Top Energy 0.55% China Merchants Bank 9.77% GD Power 1.43% China Unicom 5.31% Insigam Technology 0.53% Minmetals Development 0.74% Maanshan Iron & Steel 0.71% Guangzhou Development 0.99% Shanghai Oriental Pearl 2.08% Tsinghua Tongfang 0.96% Changhong Electric 1.25% Shanghai Automotive 2.54% Long March Launch 1.41% Shanghai Belling 0.53% Yili Industrial 2.46% Youngor 1.78% Zhangjiang Hi-tech Park 0.70% Yanzhou Coal 1.11% Yangtze Power 5.74%

5 Quarterly Highlights 5 Price 1 and Trading Volume 400 Trading Volume[million shares] Price Trading Volume (million shares) Price (RMB) 0 3-Apr Apr Apr-06 9-May May May-06 7-Jun Jun Jun Tracking the SSE 50 Index 2 Since Listing SSE 50 Index/1000 China 50 ETF NAV (RMB) Feb Apr-05 8-Jun Jul Sep-05 9-Nov Dec Feb Apr Jun-06 Premium/Discount % 2.00% 1.00% 0.00% -1.00% -2.00% 3-Apr Apr Apr-06 9-May May May-06 7-Jun Jun Jun Based on closing price of China 50 ETF. 2. Based on closing price of SSE 50 Index. The tracking deviation is caused by dividend and non-tradable shares reform recently. 3. China 50 ETF distributed dividend on May 19, 2006 ((0.24 RMB /10 units). 4. Based on NAV and closing price of China 50 ETF.

6 Quarterly Highlights 6 ChinaAMC Fund Family I. Open-end Funds ChinaAMC Growth Fund (Equity Fund) ChinaAMC Large-cap Select Fund (Equity Fund) ChinaAMC Return Fund (Balanced Fund) ChinaAMC Dividend Fund (Balanced Fund) ChinaAMC Bond Fund (Pure Bond Fund) ChinaAMC Cash Income Fund (Money Market Fund) II. ETFs China 50 ETF China SEM ETF III. Closed-end Funds Xing Hua Fund (2bn) Xing He Fund (3bn, enhanced index fund) Xing Ke Fund (0.5bn) Xing An Fund (0.5bn) Xing Ye Fund (0.5bn)

7 Quarterly Highlights 7 Investment Fund Name China AMC Growth Fund ( ) Date of creation : 12/18/2001 Auditor of the Investment Fund : Price Waterhouse Coopers Fund Manager : China AMC Fund Manager Shareholders : Shareholder 1 Shareholder 2 Shareholder 3 Beijing Southwest Beijing Securities State-owned Asset Securities Management Co. Fee Structure : Fixed (RMB) Variable (%) - Subscription Fee : 0-1.8% back-load applicable - Management Fee : 1.50% - Custodian Fee : 0.25% - Redemption Fee <=0.5% - Performance Fee : - Type of Fund : Equity Fund(*) - Open-end Fund : X - Closed-end fund : Maturity Minimum Subscription : 1000 RMB Frequency of the NAV Calculation : - Daily : X - Weekly : - Monthly : Fund Financials 12/31/ /31/ /30/2006 Net Asset Value (RMB) : 2,801,847, ,030,420, ,168,980, Outstanding Units : 2,766,485, ,118,310, ,570,304, Investment Scope Domestic Max by issuer (**) - Investment Funds : - - Shares-listed : <80% <10% - Bonds : >=20% - Other (Cash) : >=5% Return (as of 06/30/2006)(***) : YTD 1 Year Period 3 Year Period NAV Growth 60.39% 66.64% 67.66% SSE Composite Index 44.02% 51.33% 11.70% (*) Investment in government bonds shall not be less than 20% of the assets (**) It is required by regulation that aggregated investment in one security by all funds from one fund manager shall not exceed 10% of the total shares of that security. (***) Data source: ChinaAMC and Tianxiang Securities Analysis System.

8 Quarterly Highlights 8 ChinaAMC Growth Fund Asset Allocation Industry Allocation Asset Type % of Net Asset Value Equity 66.34% Bond 16.99% Warrant - ABS - Cash & Other Asset 16.68% Top 10 Equity Holdings Rank Stock Code Percentage % % % % % % % % % % Code Industry Percentage 1 Agriculture, Forestry, Fishing and Hunting - 2 Mining 0.04% 3 Manufacturing, amongst 50.46% Food, Beverage 8.33% Textile, Apparel, Leather 0.30% Wood Product - Paper, Printing - Petroleum, Chemical Product, Plastics, Rubber 2.34% Electrical Equipment 0.48% Metal, Nonmetallic Mineral Product 8.39% Machinery, Equipment, Meter 21.64% Medicine, biologic Product 8.98% Other Manufacturing - 4 Electricity, Gas, Water Supply 0.25% 5 Construction 0.72% 6 Transport, Storage - 7 Information, Technology 6.06% 8 Wholesale and Retail Trade 11.48% 9 Finance, Insurance 2.10% 10 Real Estate 2.29% 11 Social Services 0.09% 12 Transmission, Culture 0.89% 13 Conglomerate 4.56% Total 78.94%

9 Quarterly Highlights 9 Investment Fund Name China AMC Large-cap Select Fund ( ) Date of creation : 08/11/2004 Auditor of the Investment Fund : Price Waterhouse Coopers Fund Manager : China AMC Fund Manager Shareholders : Shareholder 1 Shareholder 2 Shareholder 3 Beijing Southwest Beijing Securities State-owned Asset Securities Management Co. Fee Structure : Fixed (RMB) Variable (%) - Subscription Fee : 0-1.8% back-load applicable - Management Fee : 1.50% - Custodian Fee : 0.25% - Redemption Fee <=0.5% - Performance Fee : - Type of Fund : Equity Fund - Open-end Fund : X - Closed-end fund : Maturity Minimum Subscription : 1,000 RMB Frequency of the NAV Calculation : - Daily : X - Weekly : - Monthly : Fund Financials 12/31/ /31/ /30/2006 Net Asset Value (RMB) : 1,160,876, ,392, ,147,255, Outstanding Units : 1,157,220, ,592, ,425, Investment Scope Domestic Max by issuer (*) - Investment Funds : - - Shares-listed : 40-95% <10% - Bonds : - Other (Cash) : >=5% Return (as of 06/30/2006)(**) : YTD 1 Year Period NAV Growth 91.47% 99.64% SSE Composite Index 44.02% 51.33% (*) It is required by regulation that aggregated investment in one security by all funds from one fund manager shall not exceed 10% of the total shares of that security. (**) Data source: ChinaAMC and Tianxiang Securities Analysis System.

10 Quarterly Highlights 10 ChinaAMC Large-cap Select Fund Asset Allocation Industry Allocation Asset Type % of Net Asset Value Equity 79.89% Bond - Warrant - ABS - Cash & Other Asset 20.10% Code Industry Percentage 1 Agriculture, Forestry, Fishing and Hunting 2.94% 2 Mining 1.16% 3 Manufacturing, amongst 50.82% Food, Beverage 3.29% Textile, Apparel, Leather 4.60% Top 10 Equity Holdings Rank Stock Code Percentage % % % % % % % % % % Wood Product - Paper, Printing 3.96% Petroleum, Chemical Product, Plastics, Rubber 2.29% Electrical Equipment 2.33% Metal, Nonmetallic Mineral Product 15.93% Machinery, Equipment, Meter 16.80% Medicine, biologic Product 1.62% Other Manufacturing - 4 Electricity, Gas, Water Supply - 5 Construction 3.26% 6 Transport, Storage 7.73% 7 Information, Technology 3.56% 8 Wholesale and Retail Trade 1.71% 9 Finance, Insurance - 10 Real Estate 0.46% 11 Social Services 4.90% 12 Transmission, Culture 4.98% 13 Conglomerate 2.52% Total 84.03%

11 Quarterly Highlights 11 Investment Fund Name China AMC Return Fund ( ) Date of creation : 9/5/2003 Auditor of the Investment Fund : Price Waterhouse Coopers Fund Manager : China AMC Fund Manager Shareholders : Shareholder 1 Shareholder 2 Shareholder 3 Beijing State-owned Asset Management Co. Southwest Securities Beijing Securities Fee Structure Fixed (RMB) Variable (%) - Subscription Fee : 0-1.8% back-load applicable - Management Fee : 1.50% - Custodian Fee : 0.25% - Redemption Fee <=0.5% - Performance Fee : - Type of Fund : Balanced Fund - Open-end Fund : X - Closed-end fund : Maturity Minimum Subscription : 1000 RMB Frequency of the NAV Calculation : - Daily : X - Weekly : - Monthly : Fund Financials 12/31/ /31/ /30/2006 Net Asset Value (RMB) : 2,985,660, ,195,789, ,534,552, Outstanding Units : 3,058,992, ,134,679, ,783,003, Investment Scope Domestic Max by issuer (*) - Investment Funds : - - Shares-listed : <80% <10% - Bonds : >=20% - Other (Cash) : Return (as of 06/30/2006)(**) : YTD 1 Year Period 2 Year Period NAV Growth 69.49% 78.33% 86.53% SSE Composite Index 44.02% 51.33% 18.71% (*) It is required by regulation that aggregated investment in one security by all funds from one fund manager shall not exceed 10% of the total shares of that security. (**) Data source: ChinaAMC and Tianxiang Securities Analysis System.

12 Quarterly Highlights 12 ChinaAMC Return Fund Asset Allocation Industry Allocation Asset Type % of Net Asset Value Equity 76.62% Bond 19.54% Warrant 0.18% ABS - Cash and Other Asset 3.67% Top 10 Equity Holdings Rank Stock Code Percentage % % % % % % % % % % Code Industry Percentage 1 Agriculture, Forestry, Fishing and Hunting - 2 Mining 4.42% 3 Manufacturing, amongst 45.71% Food, Beverage 13.01% Textile, Apparel, Leather - Wood Product - Paper, Printing - Petroleum, Chemical Product, Plastics, Rubber 7.26% Electrical Equipment - Metal, Nonmetallic Mineral Product 13.12% Machinery, Equipment, Meter 9.83% Medicine, Biologic Product 2.50% Other Manufacturing - 4 Electricity, Gas, Water Supply 0.83% 5 Construction 0.00% 6 Transport, Storage 1.16% 7 Information, Technology 4.91% 8 Wholesale and Retail Trade 15.49% 9 Finance, Insurance 0.47% 10 Real Estate - 11 Social Services 0.08% 12 Transmission, Culture 1.02% 13 Conglomerate 5.03% Total 79.12%

13 Quarterly Highlights 13 Investment Fund Name China AMC Dividend Fund ( ) Date of creation : 6/24/2005 Auditor of the Investment Fund : Deloitte Touche Tohmatsu CPA Ltd. Fund Manager : China AMC Fund Manager Shareholders : Shareholder 1 Shareholder 2 Shareholder 3 Beijing State-owned Southwest Securities Beijing Securities Asset Management Co. Fee Structure Fixed (RMB) Variable (%) - Subscription Fee : 0-1.8% back-load applicable - Management Fee : 1.50% - Custodian Fee : 0.25% - Redemption Fee <=0.5% - Performance Fee : - Type of Fund : Balanced Fund - Open-end Fund : X - Closed-end fund : Maturity Minimum Subscription : 1000 RMB Frequency of the NAV Calculation : - Daily : X - Weekly : - Monthly : Fund Financials 12/31/ /30/2006 Net Asset Value (RMB) : 535,578, ,101, Outstanding Units : 532,763, ,235, Investment Scope Domestic Max by issuer (*) - Investment Funds : - - Shares-listed : 20%-95% <10% - Bonds : - Other (Cash) : =<80% Return (as of 06/30/2006)(**) : YTD 1 Year Period NAV Growth 67.65% 68.49% SSE Composite Index 44.02% 51.33% (*) It is required by regulation that aggregated investment in one security by all funds from one fund manager shall not exceed 10% of the total shares of that security. (**) Data source: ChinaAMC and Tianxiang Securities Analysis System.

14 Quarterly Highlights 14 ChinaAMC Dividend Fund Asset Allocation Industry Allocation Asset Type % of Net Asset Value Equity 83.49% Bond - Warrant 0.91% ABS - Cash and Other Asset 15.61% Top 10 Equity Holdings Rank Stock Code Percentage % % % % % % % % % % Code Industry Percentage 1 Agriculture, Forestry, Fishing and Hunting 2.92% 2 Mining 5.46% 3 Manufacturing, amongst 38.64% Food, Beverage 11.04% Textile, Apparel, Leather 0.89% Wood Product 0.86% Paper, Printing 4.90% Petroleum, Chemical Product, Plastics, Rubber 2.82% Electrical Equipment 1.21% Metal, Nonmetallic Mineral Product 8.00% Machinery, Equipment, Meter 7.84% Medicine, Biologic Product 1.08% Other Manufacturing - 4 Electricity, Gas, Water Supply 0.35% 5 Construction 2.65% 6 Transport, Storage 1.38% 7 Information, Technology 4.79% 8 Wholesale and Retail Trade 15.53% 9 Finance, Insurance 3.65% 10 Real Estate 1.83% 11 Social Services 2.20% 12 Transmission, Culture 2.17% 13 Conglomerate 6.25% Total 87.81%

15 Quarterly Highlights 15 Investment Fund Name China AMC Bond Fund ( ) Date of creation : 10/23/2002 Auditor of the Investment Fund : Price Waterhouse Coopers Fund Manager : China AMC Fund Manager Shareholders : Shareholder 1 Shareholder 2 Shareholder 3 Beijing State-owned Asset Management Co. Southwest Securities Beijing Securities Fee Structure : Fixed (RMB) Variable (%) - Subscription Fee : Back-load applicable - Management Fee : 0.60% - Custodian Fee 0.20% - Redemption Fee : 0 - Performance Fee : - Type of Fund : Bond Fund - Open-end Fund : X - Closed-end fund : Maturity Minimum Subscription : 1,000 RMB Frequency of the NAV Calculation : - Daily : X - Weekly : - Monthly : Fund Financials 12/31/ /31/ /30/2006 Net Asset Value (RMB) : 1,122,460, ,452,183, ,464,229, Outstanding Units : 1,135,862, ,428,652, ,415,379, Investment Scope Domestic Max by issuer (*) - Investment Funds : - - Shares-listed : - - Bonds : >=80% - Other (Cash) : <20% Return (as of 06/30/2006)(**) : YTD 1 Year Period 3 Year Period NAV Growth 5.87% 10.51% 14.26% (*) It is required by regulation that aggregated investment in one security by all funds from one fund manager shall not exceed 10% of the total shares of that security. (**) Data source: ChinaAMC and Tianxiang Securities Analysis System.

16 Quarterly Highlights 16 ChinaAMC Bond Fund Asset Allocation Sector Allocation Asset Type % of Net Asset Value Bond Instruments 91.25% ABS 5.02% Cash and Other Assets 3.73% Top 5 Bond Holdings Code Security Type Percentage 1 Treasury Bonds 28.76% 2 Agency Bonds 24.98% 3 Central Bank Notes 28.53% 4 Corporate Bonds 15.92% 5 Convertible Bonds 9.85% Total % Rank Bond Instruments Percentage 1 Bond % 2 Bond % 3 Bond % 4 Bond % 5 Bond %

17 Quarterly Highlights 17 Investment Fund Name China AMC Cash Income Fund ( ) Date of creation : 04/07/2004 Auditor of the Investment Fund : Price Waterhouse Coopers Fund Manager : China AMC Fund Manager Shareholders : Shareholder 1 Shareholder 2 Shareholder 3 Beijing State-owned Asset Southwest Beijing Securities Management Co. Securities Fee Structure : Fixed (RMB) Variable (%) - Subscription Fee : 0 - Management Fee : 0.33% - Custodian Fee 0.10% - Redemption Fee : 0 - Marketing and Sales Fee : 0.25% Type of Fund : Money Market Fund - Open-end Fund : X - Closed-end fund : Maturity Minimum Subscription : 1000 RMB Frequency of the NAV Calculation : - Daily : X - Weekly : - Monthly : Fund Financials 12/31/ /31/ /30/2006 Net Asset Value (RMB) : 4,771,634, ,299,686, ,096,848, Outstanding Units : 4,771,634, ,299,686, ,096,848, Investment Scope Domestic Max by issuer (*) - Shares-listed : - - Bonds : >=80% - Other (Cash) : <20% Return (as of 06/30/2006)(**) : Q Return Yield % (**) It is required by regulation that aggregated investment in one security by all funds from one fund manager shall not exceed 10% of the total shares of that security. (***) Data source: ChinaAMC and Tianxiang Securities Analysis System.

18 Quarterly Highlights 18 ChinaAMC Cash Income Fund (Money Market Fund) Asset Allocation Asset Type % of Net Asset Value Bond Instruments 66.63% ABS 1.01% REPO 8.03% Cash and Other Asset 24.32% Top 5 Bond Holdings Rank Bond Instruments Percentage 1 Bond % 2 Bond % 3 Bond % 4 Bond % 5 Bond % Sector Allocation Code Security Type Percentage 1 Treasury Bonds - 2 Agency Bonds 22.21% 3 Central Bank Notes 19.25% 4 Corporate Bonds 33.28% Total 87.71% Other 18.75%

19 Quarterly Highlights 19 Investment Fund Name China 50 ETF ( 50ETF) Date of creation : 12/30/2004 Auditor of the Investment Fund Fund Manager : China AMC : Deloitte Touche Tohmatsu CPA Ltd. Fund Manager Shareholders : Shareholder 1 Shareholder 2 Shareholder 3 Beijing State-owned Asset Management Co. Southwest Securities Beijing Securities Fee Structure Fixed (RMB) Variable (%) - Creation Fee : <=0.5% Charged by PD - Management Fee : 0.50% - Custodian Fee : 0.10% - Redemption Fee <=0.5% Charged by PD - Performance Fee : - Type of Fund : Equity Fund - Open-end Fund : X - Closed-end fund : Maturity Minimum Creation : 1,000,000 units Frequency of the NAV Calculation : - Daily : X - IOPV : Calculated every 15 seconds : Fund Financials 12/30/ /31/ /30/2006 Net Asset Value (RMB) : 5,435,331,306 6,601,139, ,826,505, Outstanding Units : 5,435,331,306 8,111,566, ,375,566,757 Investment Scope Domestic - Investment Funds : - - Shares-listed : X - Bonds : - Other (Cash) : Invest mainly in the constituent stocks and proxy stocks of the SSE 50 Index, enhancing with small quantities of new stocks and bonds. Return (as of 06/30/2006)(**) : YTD 1 Year Period NAV Growth 42.44% 49.99% SSE 50 Index 38.46% 42.83% SSE Composite Index 44.02% 51.33% (*) It is required by regulation that aggregated investment in one security by all funds from one fund manager shall not exceed 10% of the total shares of that security. (**) Data source: ChinaAMC and Tianxiang Securities Analysis System.

20 Quarterly Highlights 20 China 50 ETF Asset Allocation Industry Allocation Asset Type % of Net Asset Value Equity 96.19% Bond - Warrant 0.14% ABS Cash & Other Asset 3.68% Top 10 Equity Holdings Rank Stock Code Percentage % % % % % % % % % % Code Industry Percentage 1 Agriculture, Forestry, Fishing and Hunting - 2 Mining 6.23% 3 Manufacturing, amongst 33.19% Food, Beverage 6.87% Textile, Apparel, Leather 1.72% Wood Product - Paper, Printing - Petroleum, Chemical Product, Plastics, Rubber 3.17% Electrical Equipment 1.26% Metal, Nonmetallic Mineral Product 11.82% Machinery, Equipment, Meter 7.22% Medicine, Biologic Product 0.59% Other Manufacturing 0.54% 4 Electricity, Gas, Water Supply 12.14% 5 Construction - 6 Transport, Storage 12.48% 7 Information, Technology 7.92% 8 Wholesale and Retail Trade 1.36% 9 Finance, Insurance 23.36% 10 Real Estate - 11 Social Services - 12 Transmission, Culture - 13 Conglomerate 2.71% Total 99.40%

21 Quarterly Highlights 21 Investment Fund Name Date of creation : 4/28/1998 Xing Hua Fund ( ) Auditor of the Investment Fund : Price Waterhouse Coopers Fund Manager : China AMC Fund Manager Shareholders : Shareholder 1 Shareholder 2 Shareholder 3 Beijing State-owned Asset Management Co. Southwest Securities Beijing Securities Fee Structure : Fixed (RMB) Variable (%) - Subscription Fee : 1.00% - Management Fee : 1.50% - Custodian Fee : 0.25% - Redemption Fee n/a - Performance Fee : - Type of Fund : - Open-end Fund : Equity Fund(*) - Closed-end fund : X Maturity 28/4/2013 Minimum Subscription : n/a RMB Frequency of the NAV Calculation : - Daily : - Weekly : X - Monthly : Fund Financials 12/31/ /31/ /30/2006 Net Asset Value : 2,312,894, ,041,295, ,321,066, Number of Shares Issued : 2,000,000,000 2,000,000,000 2,000,000,000 Investment Scope Domestic Max by issuer (**) - Investment Funds : - - Shares-listed : <80% <10% - Bonds : >=20% - Other (Cash) : <20% Return (as of 06/30/2006)(***) : 1 Year Period 3 Year Period 5 Year Period NAV Growth 73.47% 78.17% 83.92% SSE Composite Index 51.33% 11.7% % (*) Investment in government bonds shall not be less than 20% of the assets (***) Data source: ChinaAMC and Tianxiang Securities Analysis System. (**) It is required by regulation that aggregated investment in one security by all funds from one fund manager shall not exceed 10% of the total shares of that security.

22 Quarterly Highlights 22 ChinaAMC Xing Hua Fund Asset Allocation Industry Allocation Asset Type % of Net Asset Value Equity 67.06% Bond 17.19% Warrant 0.06% ABS - Cash and Other Asset 15.70% Top 10 Equity Holdings Rank Stock Code Percentage % % % % % % % % % % Code Industry Percentage 1 Agriculture, Forestry, Fishing and Hunting - 2 Mining 4.63% 3 Manufacturing, amongst 46.55% Food, Beverage 12.08% Textile, Apparel, Leather - Wood Product - Paper, Printing - Petroleum, Chemical Product, Plastics, Rubber 4.06% Electrical Equipment 1.08% Metal, Nonmetallic Mineral Product 11.89% Machinery, Equipment, Meter 15.50% Medicine, biologic Product 1.94% Other Manufacturing - 4 Electricity, Gas, Water Supply 0.64% 5 Construction 1.31% 6 Transport, Storage 0.88% 7 Information, Technology 5.01% 8 Wholesale and Retail Trade 12.20% 9 Finance, Insurance 4.00% 10 Real Estate 1.38% 11 Social Services 0.06% 12 Transmission, Culture - 13 Conglomerate 2.47% Total 79.13%

23 Quarterly Highlights 23 Investment Fund Name Xing He Fund ( )optimized index fund Date of creation : 7/14/1999 Auditor of the Investment Fund : Price Waterhouse Cooper Fund Manager : China AMC Fund Manager Shareholders : Shareholder 1 Shareholder 2 Shareholder 3 Beijing Southwest Beijing Securities State-owned Asset Securities Management Co. Fee Structure : Fixed (RMB) Variable (%) - Subscription Fee : 1.00% - Management Fee : 1.25% - Custodian Fee : 0.25% - Redemption Fee n/a - Performance Fee : - Type of Fund : Equity Fund(*) - Open-end Fund : - Closed-end fund : X Maturity 13/7/2014 Minimum Subscription : n/a RMB Frequency of the NAV Calculation : - Daily : - Weekly : X - Monthly : Fund Financials 12/31/ /31/ /30/2006 Net Asset Value (RMB) : 2,916,479, ,830,865, ,191,030, Outstanding Units : 3,000,000,000 3,000,000,000 3,000,000,000 Investment Scope Max by issuer (**) - Investment Funds : - - Shares-listed : <80% <10% - Bonds : >=20% - Other (Cash) : <20% Return (as of 06/30/2006)(***) : 1 Year Period 3 Year Period 5 Year Period NAV Growth 55.27% 43.07% 30.66% SSE Composite Index 51.33% 11.70% % (*) Investment in government bonds shall not be less than 20% of the assets (**) It is required by regulation that aggregated investment in one security by all funds from one fund manager shall not exceed 10% of the total shares of that security. (***) Data source: ChinaAMC and Tianxiang Securities Analysis System.

24 Quarterly Highlights 24 ChinaAMC Xing He Fund Asset Allocation Industry Allocation Asset Type % of Net Asset Value Equity 68.15% Bond 17.51% Warrant - ABS - Cash and Other Asset 14.34% Top 5 Equity Holdings (Active Management) Rank Stock Code Percentage % % % % % Top 5 Equity Holdings (Index) Rank Stock Code Percentage % % % % % Code 1 Industry Percentage (Index) Percentage (Active Management) Agriculture, Forestry, Fishing and Hunting 0.35% 0.40% 2 Mining 5.46% - 3 Manufacturing, amongst 11.22% 14.50% 4 Food, Beverage 1.14% 3.07% Textile, Apparel, Leather 0.49% 0.84% Wood Product 0.03% 1.26% Paper, Printing 0.18% - Petroleum, Chemical Product, Plastics, Rubber 1.75% - Electrical Equipment 0.52% 0.30% Metal, Nonmetallic Mineral Product 3.19% - Machinery, Equipment, Meter 2.79% 3.37% Medicine, biologic Product 1.00% 5.67% Other Manufacturing 0.14% - Electricity, Gas, Water Supply 3.02% 2.95% 5 Construction 0.40% 2.02% 6 Transport, Storage 2.31% 4.07% 7 Information, Technology 1.24% 4.48% 8 Wholesale and Retail Trade 1.40% 7.33% 9 Finance, Insurance 4.28% 3.05% 10 Real Estate 0.71% 1.55% 11 Social Services 1.15% 0.81% 12 Transmission, Culture 0.18% - 13 Conglomerate 0.81% 5.60% Total 32.53% 46.75%

25 Quarterly Highlights 25 Investment Fund Name Xing Ke Fund ( ) Date of creation : 4/8/2000 Auditor of the Investment Fund : PriceWaterhouseCoopers Fund Manager : China AMC Fund Manager Shareholders : Shareholder 1 Shareholder 2 Shareholder 3 Beijing State-owned Asset Managemet Co. Southwest Securities Beijing Securities Fee Structure : Fixed (RMB) Variable (%) - Subscription Fee : 1.00% - Management Fee : 1.50% - Custodian Fee : 0.25% - Redemption Fee n/a - Performance Fee : - Type of Fund : Equity Fund(*) - Open-end Fund : - Closed-end fund : X Maturity 31/5/2007 Minimum Subscription : n/a RMB Frequency of the NAV Calculation : - Daily : - Weekly : X - Monthly : Fund Financials 12/31/ /31/ /30/2006 Net Asset Value (RMB) : 516,787, ,427, ,700, Outstanding Units : 500,000, ,000, ,000,000 Investment Scope Domestic Max by issuer (**) - Investment Funds : - - Shares-listed : <80% <10% - Bonds : >=20% - Other (Cash) : <20% Return (as of 06/30/2006)(***) : 1 Year Period 3 Year Period 5 Year Period NAV Growth 61.49% 69.67% 52.25% SSE Composite Index 51.33% 11.70% % (*) Investment in government bonds shall not be less than 20% of the assets (**) It is required by regulation that aggregated investment in one security by all funds from one fund manager shall not exceed 10% of the total shares of that security. (***) Data source: ChinaAMC and Tianxiang Securities Analysis System.

26 Quarterly Highlights 26 ChinaAMC Xing Ke Fund Asset Allocation Industry Allocation Asset Type % of Net Asset Value Equity 59.84% Bond 16.72% Warrant 0.20% ABS - Cash and Other Asset 23.24% Top 10 Equity Holdings Rank Stock Code Percentage % % % % % % % % % % Code Industry Percentage 1 Agriculture, Forestry, Fishing and Hunting - 2 Mining 0.13% 3 Manufacturing, amongst 37.06% Food, Beverage 16.52% Textile, Apparel, Leather - Wood Product - Paper, Printing - Petroleum, Chemical Product, Plastics, Rubber - Electrical Equipment 3.45% Metal, Nonmetallic Mineral Product 11.90% Machinery, Equipment, Meter 5.18% Medicine, biologic Product - Other Manufacturing - 4 Electricity, Gas, Water Supply - 5 Construction 2.26% 6 Transport, Storage 8.14% 7 Information, Technology 5.37% 8 Wholesale and Retail Trade 5.72% 9 Finance, Insurance 6.45% 10 Real Estate 0.64% 11 Social Services 0.73% 12 Transmission, Culture 3.11% 13 Conglomerate 3.00% Total 72.61%

27 Quarterly Highlights 27 Investment Fund Name Xing An Fund ( ) Date of creation : 7/20/2000 Auditor of the Investment Fund : Price Waterhouse Coopers Fund Manager : China AMC Fund Manager Shareholders : Shareholder 1 Shareholder 2 Shareholder 3 Beijing State-owned Asset Management Co. Southwest Securities Beijing Securities Fee Structure : Fixed (RMB) Variable (%) - Subscription Fee : 1.00% - Management Fee : 1.50% - Custodian Fee : Redemption Fee n/a - Performance Fee : - Type of Fund : Equity Fund(*) - Open-end Fund : - Closed-end fund : X Maturity 29/12/2007 Minimum Subscription : n/a RMB Frequency of the NAV Calculation : - Daily : - Weekly : X - Monthly : Fund Financials 12/31/ /31/ /30/2006 Net Asset Value (RMB) : 496,986, ,766, ,002, Outstanding Units : 500,000, ,000, ,000,000 Investment Scope Domestic Max by issuer (**) - Investment Funds : - - Shares-listed : <80% <10% - Bonds : >=20% - Other (Cash) : <20% Return (as of 06/30/2006)(***) : 1 Year Period 3 Year Period 5 Year Period NAV Growth 60.15% 76.14% 41.33% SSE Composite Index 51.33% 11.70% % (*) Investment in government bonds shall not be less than 20% of the assets (**) It is required by regulation that aggregated investment in one security by all funds from one fund manager shall not exceed 10% of the total shares of that security. (***) Data source: ChinaAMC and Tianxiang Securities Analysis System.

28 Quarterly Highlights 28 ChinaAMC Xing An Fund Asset Allocation Industry Allocation Asset Type % of Net Asset Value Equity 71.03% Bond 18.93% Warrant 0.04% ABS - Cash and Other Asset 9.99% Top 10 Equity Holdings Rank Stock Code Percentage % % % % % % % % % % Code Industry Percentage 1 Agriculture, Forestry, Fishing and Hunting - 2 Mining 2.02% 3 Manufacturing, amongst 34.26% Food, Beverage 8.92% Textile, Apparel, Leather 1.76% Wood Products - Paper, Printing 2.10% Petroleum, Chemical Product, Plastics, Rubber 3.79% Electrical Equipment 2.22% Metal, Nonmetallic Mineral Product 4.06% Machinery, Equipment, Meter 7.03% Medicine, biologic Product 4.37% Other Manufacturing - 4 Electricity, Gas, Water Supply 6.81% 5 Construction 0.88% 6 Transport, Storage 4.10% 7 Information, Technology 9.37% 8 Wholesale and Retail Trade 9.34% 9 Finance, Insurance 1.97% 10 Real Estate 1.60% 11 Social Services - 12 Transmission, Culture 1.86% 13 Conglomerate 3.54% Total 75.74%

29 Quarterly Highlights 29 Investment Fund Name Xing Ye Fund ( ) Date of creation : 8/18/2000 Auditor of the Investment Fund : Price Waterhouse Coopers Fund Manager : China AMC Fund Manager Shareholders : Shareholder 1 Shareholder 2 Shareholder 3 Beijing State-owned Asset Management Co. Southwest Securities Beijing Securities Fee Structure : Fixed (RMB) Variable (%) - Subscription Fee : 1.00% - Management Fee : 1.50% - Custodian Fee : 0.25% - Redemption Fee n/a - Performance Fee : - Type of Fund : Equity Fund(*) - Open-end Fund : - Closed-end fund : X Maturity 14/11/2006 Minimum Subscription : n/a RMB Frequency of the NAV Calculation : - Daily : - Weekly : X - Monthly : Fund Financials 12/31/ /31/ /30/2006 Net Asset Value (RMB) : 425,190, ,633, ,534, Outstanding Units : 500,000, ,000, ,000,000 Investment Scope Domestic Max by issuer (**) - Investment Funds : - - Shares-listed : <80% <10% - Bonds : >=20% - Other (Cash) : <20% Return (as of 06/30/2006)(***) : YTD 1 Year Period 3 Year Period NAV Growth 27.92% 36.23% 32.33% SSE Composite Index 44.02% 51.33% 11.7% (*) Investment in government bonds shall not be less than 20% of the assets (**) It is required by regulation that aggregated investment in one security by all funds from one fund manager shall not exceed 10% of the total shares of that security. (***) Data source: ChinaAMC and Tianxiang Securities Analysis System.

30 Quarterly Highlights 30 ChinaAMC Xing Ye Fund Asset Allocation Industry Allocation Asset Type % of Net Asset Value Equity 26.16% Bond 35.61% Warrant - ABS - Cash and 38.24% Top 10 Equity Holdings Rank Stock Code Percentage % % % % % % % % % % Code Industry Percentage 1 Agriculture, Forestry, Fishing and Hunting - 2 Mining 1.76% 3 Manufacturing, amongst 22.38% Food, Beverage 6.80% Textile, Apparel, Leather 2.85% Wood Product - Paper, Printing - Petroleum, Chemical Product, Plastics, Rubber 2.61% Electrical Equipment - Metal, Nonmetallic Mineral Product 5.43% Machinery, Equipment, Meter 4.45% Medicine, biologic Product 0.23% Other Manufacturing - 4 Electricity, Gas, Water Supply - 5 Construction - 6 Transport, Storage 1.53% 7 Information, Technology 0.36% 8 Wholesale and Retail Trade 5.42% 9 Finance, Insurance 2.80% 10 Real Estate - 11 Social Services 0.37% 12 Transmission, Culture - 13 Conglomerate - Total 34.62%