Baring Hong Kong China Fund

93.31 percent year-to-date return with an August-end Sharpe ratio of 2.75, which is the highest in the Morningstar China Equity Category.

As Chinese shares are soaring, the Fund becomes more China centric despite of its name "Hong Kong China". As of July end 2007, the Fund holds around 87 percent China plays. As for non-China plays, the Fund focuses on financials and consumption stocks, like HKEx (5.65 percent), Esprit (1.74 percent), Lifestyle International (1.14 percent) and SHK (0.16 percent). The Fund used to have some exposure to Taiwan market while it sold out the position this March after Taiwan underperforming.

The investment style of the Fund is relatively aggressive as it holds around 75.7 percent of assets in growth stocks as of July end. The growth-biased style helped the Fund outperform its peers in the past. This year the Fund has also purchased some stocks with short listing history, like CSR Times Electric and Anta Sport. Amid a bull market, IPO valuation is not cheap. In addition, the "half new stocks" have short track record, which may add more investment risk. Of course, risky investments come with rosy returns but such strategy should be also closely watched.

Sectorwise, the Fund had no exposure in tech stocks and oil stocks but it was overweight in financials and material stocks. Besides, the Fund is positive with containerboard producers like Nine Dragons and Lee& Man Paper. Given a rosy prospect of containerboard industry, Nine Dragons and Lee& Man Paper have become frequenters of mutual funds' investment universe, but it is somewhat rare for the Fund to purchase both with heavy weights. It is worth noting that these moves are made under Lilian Co's management but not Agnes Deng's, thus a management style shift may be seen in the near-term, where investors should pay particular attention to.