Although Henderson TR Pacific invests across Asia, it also suits investors looking for significant exposure to China but in a well diversified, focused portfolio of companies. Investors should be prepared to accept some short term volatility in return for the
exciting long term growth of a region set to be the world leader in economic growth.

The Trust seeks a high rate of total return from companies operating primarily in the Pacific region including India, but excluding Japan and Australasia.

• The Fund Manager employs a concentrated portfolio and is looking to find the 40-60 best stock ideas in the region.
• The portfolio is constructed primarily on a stock picking basis and all other characteristics, such as geographic and sector breakdown come as a consequence of stocks selected.
• The Trust delivers diversified exposure to some of the fastest growing economies in the region including China, Hong Kong, Taiwan, India, South Korea, Singapore, Indonesia and Vietnam.

• Most of the investments in this portfolio are not made in Sterling, so exchange rates could affect the value of and income from your investment.
• Asian focused portfolios are exposed to Emerging Markets which tend to be less stable than more established markets and can be affected by local political and economic conditions, reliability of trading systems, buying and selling practices and financial reporting standards.
• This portfolio may hold 40-60 stocks. If one of these investments declines in value, this can reduce the portfolio's value more than if it held a larger number of investments. Full details of risks.

Asian markets were broadly flat in December with gradually improving economic data from the US offset by continuing problems in the eurozone. Within Asia, investors were attempting to balance the prospect of lower inflation and further policy easing against the negative impact of slower economic growth. India was the standout underperformer of the month as data indicated a sharp drop off in economic activity as well as sticky inflation and high interest rates. Malaysia, the Philippines and Indonesia were the best performing markets as they continued to benefit from strong domestic growth, relatively modest inflation and firm currencies.

Fund performance was behind the benchmark index largely on stock selection, with negative contributions from Chinese railway rolling stock company Zhuzhou CSR on disappointing 2012 government spending plans, as well as Hong-Kong-listed Prada, which was hurt by fears about tighter controls over Chinese consumers spending money overseas. The main positive contributions came from Taiwanese smartphone plays HTC and Foxconn, mainly in anticipation of significant growth in China over the next 12 months.

ICICI Bank in India was sold as it became clear that non-performing loans across the Indian banking sector were rising. The proceeds were spent in topping-up existing positions in Korean smartphone gaming company Gamevil, as well as Chinese property.

The first few months of 2012 are likely to remain volatile as economic uncertainty remains very high. As the extent of further problems in Europe becomes clear and policymakers in Asia react to slower growth in the region, we expect that markets should move higher over the remainder of the year.

Andrew Beal
December 2011