The Company will invest mainly in a portfolio of equities, but may also invest in equity related instruments issued by companies located in The Peoples Republic of China (PRC) or deriving a preponderant part of their income and/or assets from the PRC. The Company may also invest in investment grade debt securities and money market instruments, certificates of deposit, commercial paper, Chinese depository receipts,and/or ADR, Regulated and unregulated Collective Investment Schemes. The securities which the Company will invest in will be principally listed or traded on one or more Recognised Exchanges located in the PRC or Hong Kong. To a lesser extent the Company will also invest in securities listed or traded on Recognised Exchanges located outside these areas. A substantial proportion of assets will be invested in securities issued by smaller and medium-sized Chinese companies, i.e. companies with a market capitalisation not exceeding the equivalent of US$1.25 billion or such higher capitalisation as is, in the opinion of the Directors, appropriate to reflect changes in capitalisation levels of companies quoted on permitted stock exchanges.