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According to the Notice on Issues Related to Investment Warrants of Securities Investment Funds in the Non tradable Share Reform issued by the CSRC, as well as the relevant provisions in the fund contracts of the Tiantong 180 Index Securities Investment Fund, Tiantong Capital Guaranteed Value added Securities Investment Fund, and Tiantong Public Utility Stock Securities Investment Fund currently managed by the Company, The above fund assets can actively invest in the warrants issued in the reform of non tradable shares. The following investment plan is hereby formulated with respect to the restrictions on the proportion of warrant investment, investment strategies, information disclosure methods and risk control measures:
According to the Notice on Issues Related to the Investment Warrants of Securities Investment Funds in the Non tradable Share Reform (ZJJJZ [2005] No. 138), and the relevant provisions in the fund contracts of the Tiantong 180 Index Securities Investment Fund, Tiantong Capital Guaranteed Value added Securities Investment Fund, and Tiantong Public Utility Stock Securities Investment Fund currently managed by the Company, The above fund assets can actively invest in the warrants issued in the reform of non tradable shares. The following investment plan is hereby formulated with respect to the restrictions on the proportion of warrant investment, investment strategies, information disclosure methods and risk control measures:
1、 Investment proportion limit
1. The total amount of warrants purchased by a 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 a fund shall not exceed 3% of the net asset value of the fund.
3. The same warrant held by all funds of Tiantong Fund Management Company shall not exceed 10% of the warrant.
If the fund investment does not meet the above investment proportion due to factors other than the fund manager, such as fluctuations in the securities market, changes in the size of the fund, and payment of consideration in the share trading reform, the adjustment will be completed within ten trading days.
2、 Investment strategy
The Fund Manager shall, on the premise of ensuring consistency with the investment objectives of the Fund, invest in the warrants in the principle of prudence and risk control. The basic strategies of investment warrants include: making investment under the trend of grasping the price of the underlying securities, and using leverage transactions of warrants to obtain income; Use portfolio insurance strategy to build a principal guaranteed portfolio.
3、 Decision making process
1. Research
The research department of the company is responsible for the research of warrant investment, establishing the pricing model and trading model of warrants, evaluating the returns and risks of warrants and putting forward investment suggestions.
2. Asset allocation decision
Within the allocation proportion of stocks, bonds and other assets determined by the company's investment decision-making committee, the fund manager shall determine the proportion of warrant investment or hedging according to the fund portfolio, market conditions and the warrant investment report submitted by the Research Department.
3. Warrant portfolio structure
The fund manager will, based on the warrant investment report of the Research Department and the warrant market transactions, combine his own research judgment, and under the premise of strict risk control, formulate the investment plan and portfolio of warrant varieties, and submit them to the Investment Decision making Committee for approval.
4、 Information disclosure method
The warrant investment of each fund will be separately disclosed in the quarterly report published by the fund in accordance with the Administrative Measures for Information Disclosure of Securities Investment Funds, the name, quantity, amount and proportion of the top five warrants in the fund's net assets; Detailed presentation shall be made in the semi annual report and annual report of the Fund.
5、 Risk control measures
1. Strictly implement the provisions on the proportion of warrant investment in the Notice on Issues Related to Securities Investment Fund Warrants in the Share trading Reform issued by the CSRC.
2. Strictly implement the fund warrant investment management system formulated by the investment decision-making committee, and fund managers must invest in warrants within the scope of authorization.
3. The Research Department is responsible for evaluating the pricing and risk of warrants and providing relevant investment reports.
4. The fund manager will formulate an investment plan based on the report provided by the Research Department and the Risk Control Group, and submit it to the investment decision-making committee of the company for approval.
5. The underlying securities corresponding to the warrants must be in the stock pool maintained by the Research Department, otherwise the fund manager may not invest.
6. The risk control team will provide risk control and performance evaluation reports for the investment of warrants.
7. The Central Trading Office is responsible for the specific transaction execution, while performing the responsibility of front-line monitoring.
8. According to the "Tiantong xRiskSuite risk management system" developed and used by Tiantong Fund, the supervision and audit personnel review the compliance of warrant investment every day and put forward supervision opinions to the investment director and fund manager.
It is hereby announced.
Tiantong Fund Management Company
August 26, 2005
Sina statement: The content of this article is purely the author's personal view, only for investors' reference, and does not constitute investment advice. Investors operate accordingly at their own risk.
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