About The Fund
The Taiwan Greater China Fund is a New York Stock Exchange-traded, diversified, closed-end investment management company (Ticker: TFC). The Fund’s investment objective is long-term capital appreciation through investment primarily in publicly traded equities of Taiwan issuers. Since early 2004, the Fund’s investment strategy to achieve that objective has been focused on investing primarily in Taiwan-listed companies that derive or are expected to derive a substantial portion of their revenues by exporting to or operating in mainland China. The strategy reflects the Fund’s belief that Taiwan-listed companies offer a uniquely attractive way to invest in China’s economic growth.
The rapid growth of China is one of the great economic success stories of our times, and Taiwan-based companies are playing an important role in this process as they shift their manufacturing operations to the mainland. Although statistics are somewhat imprecise, direct investment by Taiwan companies in mainland China is estimated at $100 billion. Approximately one million citizens of Taiwan are living and working in China, and the mainland has become Taiwan’s largest export market. Taiwan-invested companies represent seven of China's top 10 foreign-invested exporters and account for approximately 15% of total Chinese exports, with levels as high as 60-70% of total exports in information technology hardware.
Cultural and linguistic advantages have contributed to the success of Taiwan firms in the mainland. But the Fund also believes that Taiwan-based companies generally benefit from better corporate governance and transparency as compared to their Chinese counterparts. Additionally, it is our view that the regulatory and legal systems governing the operations of Taiwan companies provide a superior risk control mechanism when compared to Chinese companies. All of these factors combine to offer investors an attractive alternative to capitalize on the China story.
Since listing in the U.S. in May 1989, through the end of 2003, the Fund traded on the New York Stock Exchange as The R.O.C. Taiwan Fund (Ticker: ROC). The name and ticker change became effective on January 2, 2004, as the first step in conjunction with the implementation of the Fund's new investment strategy. At that time, the Fund also underwent a reorganization of its status in Taiwan, where it cancelled its longstanding investment contract with International Investment Trust Company and ceased to be regulated as a fund managed by a local Taiwan Securities Investment Trust Enterprise. Under its new structure, the Fund is self-managed and regulated in Taiwan as a Foreign Institutional Investor. The Fund received cash from the old fund during the last week in February 2004, reinvested the proceeds over the next few trading days, and was substantially reinvested in accordance with the new investment strategy by March 1, 2004.
