Announcement on Warrant Investment of Soochow Jiahe Advantage Selection Hybrid Fund

In order to standardize the operation of the Fund and protect the legitimate rights and interests of fund share holders, in accordance with the provisions of the Notice of the China Securities Regulatory Commission on Issues Related to the Investment Warrants of Securities Investment Funds in the Split Share Structure Reform and the agreement of the Dongwu Jiahe Advantage Selection Hybrid Open ended Securities Investment Fund Contract, The Company has formulated the warrant investment plan of Soochow Jiahe Advantage Selection Hybrid Open ended Securities Investment Fund, and now the relevant matters are announced as follows:

1、 Proportion limit of investment warrants

The Fund Manager's use of fund assets for warrant investment will follow the following restrictions:

（1） The total amount of warrants purchased by the Fund on any trading day shall not exceed 0.5% of the net asset value of the Fund on the previous trading day;

（2） The market value of all warrants held by the Fund shall not exceed 3% of the net asset value of the Fund;

（3） The same warrant held by all funds managed by the Company shall not exceed 10% of the warrant;

（4） Comply with other proportion restrictions stipulated by the CSRC;

（5） Due to factors other than the fund manager, such as passive acquisition of warrants in the split share structure reform, fluctuations in the securities market, mergers of listed companies, and changes in fund size, the proportion of warrant investment does not meet the above proportion limit, and the fund manager will adjust and make it meet the proportion within ten trading days. Where laws and regulations provide otherwise, such provisions shall prevail.

（6） It shall not violate the provisions of the Fund Agreement on the investment scope, investment strategy and investment proportion.

2、 Investment strategy

（1） Asset allocation strategy: balance risk and return, grasp advantage growth

By evaluating the risk return level of each market segment, the allocation proportion of stocks, bonds, warrants and cash assets is dynamically adjusted according to the risk return target of the Fund. In terms of allocation, stocks have priority, followed by bonds.

The allocation of warrants is based on the allocation of positive shares in order to balance the risk return level of the fund portfolio.

（2） Warrant selection strategy: select warrants based on the positive stock selection model and the quantitative analysis model of warrants

The Fund constructs the stock pool of the Fund by analyzing and screening the comparative advantages of individual stocks in industry, enterprise and price through the stock selection model of industry, enterprise and price comparative advantages. On the basis of the stock pool, the Fund applies quantitative analysis models such as Black Scholes formula to select and determine the types of warrants and valuation intervals.

（3） Warrant holding strategy: comprehensive analysis, periodic holding

On the basis of comprehensive analysis of the fundamentals and operating trends of the positive shares, the Fund holds the warrants periodically according to the intrinsic value, market price and duration of the warrants.

3、 Information disclosure method

The information disclosure of the Fund's investment warrants shall comply with the Law of the People's Republic of China on Securities Investment Funds, the Administrative Measures for the Operation of Securities Investment Funds, the Administrative Measures for the Information Disclosure of Securities Investment Funds, the Fund Contract and other relevant provisions.

The information disclosure obligor of the Fund's investment warrants will disclose the fund information that should be disclosed through the national newspapers designated by the CSRC, the Internet website of the Fund Manager and the Fund Custodian and other media within the time limit specified by the CSRC, And ensure that fund investors can consult or copy the publicly disclosed information at the time and in the manner agreed in this Fund Contract.

The information publicly disclosed by the Fund's investment warrants shall be in Chinese. If a foreign language text is used at the same time, the Fund Information Disclosure Obligor shall ensure that the contents of the two texts are consistent. In case of ambiguity between the two versions, the Chinese version shall prevail.

The information publicly disclosed by the Fund's investment warrants shall be in Arabic numerals; Unless otherwise specified, the monetary unit is RMB.

4、 Risk control measures

The Fund consists of the Risk Management Committee, the Supervision and Audit Department and other specialized agencies for fund investment risk management to identify, prevent and control risks in all aspects of fund investment. The Supervision and Audit Department monitors the whole process of investment decisions and actual investments, and provides risk reports to the Risk Management Committee regularly and irregularly; The Risk Management Committee deliberates on risk matters and risk assessment reports and communicates with the Investment Decision making Committee to monitor whether the investment decision-making process and the exercise of decision-making authority at all levels are legal, compliant, scientific and reasonable, and uses the trading system to impose mandatory restrictions on the proportion of investment warrants.

In the process of warrant investment, the Fund mainly grasps the control risk from the following three aspects: (1) grasp the change trend of the intrinsic value of warrants through the fundamental analysis of underlying assets; (2) Control the risk return level of the fund through reasonable allocation of stocks, warrants, bonds and cash; (3) Real time monitoring of warrant investment risk is carried out through risk monitoring indicators, such as financing cost indicators (time value/(underlying asset price - warrant price)).

Soochow Fund Management Co., Ltd

August 20, 2005

(Securities Times)