Aberdeen Life Asia Pacific Equity Fund

July 2010

Market review

• Asian markets fell in the second quarter, with the bulk of the losses incurred in May as benchmarks fell to their lowest level in 10 months. Sentiment was hurt by Europe’s debt crisis, particularly in the wake of rumours that China would review its Continental debt holdings, as well as the Eurozone’s fixation with austerity measures in spite of the still fragile global recovery. However, continued signs of buoyancy provided some respite, along with China’s move to de-peg the renminbi from the US dollar, even though it was largely viewed as a political ploy.

Fund review

• As bottom-up stock pickers, our country allocations are driven by where we can find quality companies with attractive valuations. This style may lead to significant deviations from the index. In the second quarter, we sold Hong Kong’s Giordano, as well as India’s GAIL because of concerns over its long-term prospects and the sharp run in its share price. Against this, we initiated a holding in leading Australian supermarket operator Woolworths.

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