AsianInvestor, one of Asia's leading asset management publications, honored Morgan Stanley Investment Management's China A Share Fund its award for best QFII A-share one-year performance. The magazine presented the award at its annual gala in Hong Kong on May 22.

The Fund is the first — and still the only — U.S.-registered fund investing principally in China A shares. It is a closed-end, non-diversified fund, which was distributed primarily to individual investors in the U.S.

For the year ended December 31, 2007, the Fund's portfolio achieved an absolute return of 212.93 percent, based on net asset value, as compared to a return of 175.52 percent for the Fund's benchmark, MSCI China A Share Index.

Many other China-related ETFs listed in the U.S. only invest in Hong Kong's H-shares or Red Chip shares. Unlike those funds, which passively track H-share based indices, the Morgan Stanley China A Share Fund uses a bottom-up fundamental analysis to identify companies with strong earnings-growth potential and high-quality management. The Fund predominantly invested its assets in a diversified portfolio comprised of Chinese A-share securities in the coal, industrial and banking sectors — the market winners for 2007.

Morgan Stanley China A Share Fund was first launched on September 25, 2006 and was sold out within 45 minutes, raising a total of US$240mn. The Fund's asset grew to US$644.1mn by March 31, 2008. The Fund marked its first anniversary recently with a number-one ranking out of all China A-share mutual funds (open-end and closed-end) tracked by Lipper Analytical Services.