The USD29million fund uses a fundamental approach to stock picking, with Lin believing that it is smart stock selection combined with a strong on-the-ground team of analysts based in E Fund’s Guangzhou office that helps generate alpha. “Each week they discuss and evaluate companies and investment opportunities across the country,” said Lin, who visits the office weekly. The fund invests mostly in Hong Kong, Taiwan and US-listed Chinese companies, which it selects from a fund universe of roughly 500 companies. Key sectors include consumer discretionary and healthcare; the two biggest stock holdings being a pharmaceutical company and a meat processing company. As China slowly evolves into a more import-focused, domestic-driven economy, Lin confirmed that he would be keeping a close eye on the consumer sector, in addition to the green energy sector. “There could be some hidden jewels in small cap companies but these tend to be illiquid so we need to be careful.” Lin added that with respect to the two new funds (one an emerging market equity l/s fund, the other a Greater China long-only fund), USD50million in seed capital had been committed by the parent company just two days ago. Both are expected to launch in Q2 2011.