Asia Value Fund 2014 Full Year Review by Tee Leng, Value Edge

Dear Shareholders,

Asia Value Fund

Initial Net Asset Value (per unit): $10,000

Net Asset Value as of January 2015 (per unit): $13,197

Asia Value Fund

For the period of 4Q2014, the Asia Value Fund was down by 1.5%. Relative to the benchmarks, the Asia Value Fund has displayed resilience during current market conditions outperforming the Vanguard Pacific ETF by 2.4%. During this period, we have underperformed the STI ETF by 4.5%. This would mainly be due to our exposure to the Hong Kong and Japan markets. Since inception, the NAV of the fund has increased by $3,197, which translates to an increase of 31.97%, outperforming the STI ETF by 7.43% and Vanguard Pacific ETF by 15.40% during this period. This translates to an 3-year annualised return of 10.66%.

During this period, various macro events occurred such as the disappointing manufacturing surveys from China, UK and US, driving sentiments down. Furthermore, there were the geopolitical worries from the protests in Hong Kong, air strikes in Isis and news of diagnosed Ebola cases in US. More recently, we see the huge slump in oil prices hitting a USD56, a 5-year low. This resulted in repercussions throughout the economy throwing big oil exporters such as Russia and Venezuela into disarray, and forcing oil companies to re-examine their investment plans and looking for ways to reduce costs.

Going forward, we are still in no hurry in deploying our cash given how we see Wall Street is setting new highs as the world’s largest economy continues to strengthen. Furthermore, we believe markets would be volatile in the coming months as the Federal Reserve prepares to raise interest rates. Hence, we decided to adopt a ‘wait and see’ approach, in the event that opportunities come our way. That said, we expect the performance of the Asia Fund to be relatively muted given how many of our current positions were recently initiated.

As always, please feel free to let us know if you have any clarifications regarding the investments in the ValueEdge Asia Value Fund.