ALLARD GROWTH FUND

Monthly Review
Investing in Asia
ALLARD February 2009
PARTNERS

Performance Commentar y

The Allard Growth Fund’s (AGF) unaudited unit The sudden downturn in the global economic
value, net of all fees, decreased by 6.6% during the environment since October is clearly having wide
month of February 2009. ranging repercussions.

Since inception at the end of 1995, the Fund has The Fund's performance has been negatively
achieved 10.0% net compound annual return affected in February by further weakness in the
(CAGR). continuing volatile equity markets and Asian
currencies.
AGF Net Performance1 Summary
While the current environment is tough we remain
US$ Unit Price (28/2/09) 28.7911 committed to our longer term perspective and we
believe the combination of owning carefully
Monthly Net Performance -6.6% selected companies at historically depressed prices
will produce good returns over a five to ten-year
Year-to-date -11.4%
time frame.
12-month rolling return -34.9%
We tightened the portfolio during the month,
CAGR selling holdings in a major telecom company in
Since inception end Dec ‘95 +10.0% India, a Japanese company which has a leading
Seven years +8.9% niche technology in the IT industry, and a Hong
Five years +2.6% Kong based conglomerate with a significant
Three years -6.4% investment in retail and office property. As a
result the Fund’s cash increased to 19.8%. We
Annualised Volatility continue to hold half of the Fund’s cash in
Since inception end Dec ‘95 12.8% Australian dollars.
Seven years 12.4%
Five years 13.0%
We stay in close contact with the companies in the
Three years 15.6%
One year 22.7% portfolio. What is clear is that whilst higher end
discretionary consumption has weakened
Total Net Performance since markedly, consumption of basic goods and
inception end Dec ‘95 251.6% services is holding up in the region, and the Fund’s
investments in basic consumer companies continue
Sharpe Ratio (assuming RFR 3.8%) 0.52 to do well.
__________________ ____
The internet based businesses we hold are
MSCI A/P ex Japan experiencing an acceleration in the shift of market
Monthly – Feb 09 -5.8%
share from traditional bricks and mortar
Year-to-date -12.9%
12-month rolling return -54.2% competitors. For example, an internet content
Performance since end Dec ‘95 16.2% service operator in Korea reported full year sales
CAGR since end Dec 1995 1.1% and operating profit up 31% and 26% respectively.
Annualised vol since end Dec ‘95 23.1% Top-line growth was driven by strong growth in
games and e-commerce. We expect this
MSCI A/P company’s online gaming business to continue to
Monthly – Feb 09 -9.3% grow as it provides one of the cheapest sources of
Year-to-date -15.8% entertainment in Korea.
12-month rolling return -47.6%
It is evident from our recent visits to manufacturers
1
All performance figures are net of all fees and 2009 figures in Hong Kong and China that there is significant
are subject to audit.

Page 1
 ALLARD GROWTH FUND
Monthly Review
February 2009
Investing in Asia

pressure on the weaker, smaller players. However,
those manufacturers with good management,
strong financial resources and tight quality control
are winning market share. In other words, the
strong are getting stronger. We are monitoring this
consolidation process with a view to investing at
some stage in the leaders that emerge.
they work to ensure the research process is
effectively integrated with portfolio management.
Following these changes we now have an
investment team of nine professionals and we
intend to add further to our research team in
Mumbai.

As we write we are currently visiting companies in

India. There is a clear slowdown in the growth Composition of AGF Portfolio
rate here but we remain excited about the country’s
long term potential and impressed by the quality of The following pie charts show the composition of
management in the companies we are invested in. the AGF portfolio as at the end of February 2009.

Overall we retain a firm view that the emerging

Asset Breakdown
markets of India and China are the main long term
stories in Asia. These markets are where we are
Preference Shares
focusing an increasing amount of our resources. 1.9% Cash & F.I. Securities
19.8%

Allard News

We are pleased to announce that Gerald Clough,

who oversees our operations and compliance
activities, will join the Board of the Allard
companies in Hong Kong and Sydney.
Equities
Kent Yeh will step down from the Board of Allard 78.3%
Partners Management Ltd. We sincerely thank
him for his contribution over the past five years.
Geographic Breakdown
Vera Wong, Dealing Manager, retired from Allard
Partners during the month. We thank Vera for all
Jap Thai
her efforts and wish her the best. We are pleased India 4.1% 1.1% Cash & F.I. Securities
19.8%
to be able to promote Amy Chen who will take on 12.1%
Indo
the dealing role. Amy has been with us for two 5.7% Aus
years, working closely with Vera over this time. 9.3%

We also advise that Ivan Ho has left the firm. We Kor

8.7%
thank him for his contribution to our investment
research efforts and analysis over the last five
Sing
years and we wish him all the best in the future. 13.6%
HK/China
25.6%

Finally, Sally King has been promoted to Research

Manager and Ariel Chiu (who joined us six months
ago) to Research Co-ordinator. These promotions
reflect their growing role in the investment team as

Allard Partners Limited Page 2

 ALLARD GROWTH FUND
Monthly Review
February 2009
Investing in Asia

Industry Breakdown
Disclaimer:
Utility FMCG H/Care
Fin Svs 0.4% Allard Partners Limited is a registered investment adviser regulated by
6.4% 6.6% Cash & F.I.
15.5% the Securities and Futures Commission of Hong Kong. The Allard
Securities
19.8% Growth Fund is a Cayman Islands unit trust fund - it is not authorized
Others by the SFC in Hong Kong. The investment performance has been
3.2% verified by the trustee of the Fund based on the actual performance of
the AGF and the performance of the relevant portion of its
predecessor fund. Past performance is no guarantee of future
performance. The above monthly review is prepared solely for
informational purposes and is furnished on a confidential basis only.
This report is not a solicitation, nor is it an official confirmation of
Retail terms.
Telco 11.8%
10.1% Conglom F&B
Divs
13.6% Indust Manuf 8.3%
Real 0.9% 3.2%
Estate 0.2%

Top 10 Holdings

THIS INFORMATION
ONLY AVAILABLE
TO CLIENTS

Concentration of Portfolio

THIS INFORMATION
ONLY AVAILABLE
TO CLIENTS

Allard Partners Limited Page 3

 ALLARD GROWTH FUND
Monthly Review
February 2009
Investing in Asia

Historical Performance

Year Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Year
-11.4
2009 -5.1 -6.6 - - - - - - - - - -
YTD
2008 -4.9 1.9 -2.0 3.5 -0.1 -5.1 -0.6 -1.5 -10.2 -16.6 -4.7 9.3 -28.8

2007 0.5 0.2 0.9 2.7 1.0 0.1 1.8 -0.3 4.7 3.9 -1.0 1.6 16.9

2006 1.6 1.2 0.5 2.1 -2.2 -0.6 1.9 1.1 1.5 1.9 1.6 3.1 14.5

2005 0.7 3.8 0.9 0.0 0.3 1.4 2.0 -1.0 0.5 -1.4 0.3 3.2 11.1

2004 3.0 -0.7 -0.1 -1.5 1.3 3.1 1.2 0.9 4.1 2.3 5.4 2.9 23.9

2003 2.6 2.2 -1.1 6.7 5.2 2.9 -1.0 2.1 2.4 5.0 -0.2 3.6 34.5

2002 2.2 0.7 5.1 1.4 6.4 -2.2 -2.1 4.5 -3.3 0.1 2.8 2.7 19.4

2001 2.2 2.5 -7.1 4.1 7.2 -0.8 0.4 3.6 -4.9 2.2 4.2 1.7 15.6

2000 -5.3 -2.6 5.1 -2.5 -1.6 6.2 5.3 -0.2 -4.6 -1.4 1.1 6.1 4.6

1999 0.2 -0.3 4.8 7.3 0.3 6.3 -1.4 -0.2 -1.0 -1.3 1.1 3.3 20.3

1998 -3.6 5.2 1.1 -0.2 -0.7 -3.4 1.0 -9.1 5.1 12.0 4.2 0.6 11.2

1997 -8.4 6.6 0 0.4 2.0 2.5 2.5 0.1 -0.1 -8.5 -1.4 0.7 -4.5

1996 4.8 3.0 1.3 2.7 -1.6 -2.3 0.2 4.4 0.1 2.2 5.5 0.2 22.1

All performance figures are net of all fees and measured in US$. The data is audited apart from 2009.

Return Distribution
60

50
No. of months

40

30

20

10

12
%
10
% -8% -6% o -4% o - 2% %
+ 2 o +4
% %
+6 o +8
% 0% 2%
n- o - % to % to t t to t to t +1 n +1
a t 0 to
st
h
- 8% -6 -4 -2% 0% +2 % +4 % +6 % 8 % tha
le s + re
mo

Contact Details:

Allard Partners Limited

Room 3106, 31/F Alexandra House, 18 Chater Road, Central, Hong Kong
Tel: +852 2526 9168 Fax: +852 2869 9087

Email: info@allardpartners.com Website: www.allardpartners.com