ASIAN closed-end funds provided investors with the best average returns for the 12 months to the end of February as measured by changes in net asset value and share price, according to the Lipper International Closed-end Funds Service. Closed-end funds are collective investment companies with a limited share issue. Unlike an open-end fund, such as a unit trust or mutual fund, the shares of a closed-end trust are traded upon issue at prices that are set by the market forces of investor demand and share supply. Open-end funds trade at net asset value as fund units are opened or cancelled as and when investors buy or redeem units. Asian closed-end funds took the top five slots for best returns by sector over the period, out of 29 sectors covering the globe. The Philippines was the best performing sector, returning 33.74 per cent by net asset value and 71.34 per cent in share terms over the period. Next came Thailand with a return of 35.14 per cent by net asset value and 39.09 per cent in share terms over the period. China funds returned 27.23 per cent in net asset value terms. No figure was available for performance in share terms. Malaysia and Singapore closed-end funds returned 11.7 per cent by net asset value and 33.53 by share price change. In fifth place were Asian regional funds which returned 11.4 per cent by net asset value and 20.06 per cent in share price change. The worst performing sectors were Japan, with losses in excess of 20 per cent for both performance measures, and Spain, with similar magnitudes of loss, followed by Latin American countries, with percentage losses in the high single digits and mid-teens. Interest in Asian closed-end funds has seen the average discount of these funds close over six months to 14.27 per cent from 25.15 per cent. The discount is shown when the share price of the fund is less than the total value of the fund's net asset value per share. However, some of the largest discounts in the industry remain in Asia. Of the top 10 largest discounts, six are in Asia, excluding Japan. In 10th place is JF Pacific Warrant Company, with a discount of 27.02 per cent. Eighth, seventh and sixth place are taken by Asian funds. They are the Genesis Malaysia Maju fund, with a discount of 28.27 per cent, the Southeast Asian Warrant fund, with a discount of 28.81 per cent, and the SHK Indonesia fund, with a discount of 28.96 per cent. JF Asia Select and Thai Development Capital come fourth and third with discounts of 33.04 per cent and 41.58 per cent, respectively. The largest discount is on the Hungarian Investment Company, at 47.18 per cent. The largest premium is on the Korea Fund Inc, with a share price 29 per cent ahead of the fund's net asset value. As a sector, China closed-end funds show a number of deep discount funds including the Hongkong-listed China Fund, with a discount of 20.89 per cent, and the China and Eastern Investment Company, with a discount of 15.33 per cent. The Cayman Island-based Shanghai fund is on a discount of 19.05 per cent and the Lloyd George Standard Chartered China Fund was on a deep discount of 35.83 per cent at the end of January.