fp0004664_nq.htm
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number: 811-05617

Shelton Greater China Fund
(Exact name of registrant as specified in charter)

44 Montgomery Street, Suite 2100
San Francisco, California  94104-4708
(Address of principal executive offices)   (Zip code)

Teresa Axelson
44 Montgomery Street, Suite 2100
San Francisco, California  94104-4708
 (Name and address of agent for service)

Registrant’s telephone number, including area code: (800) 955-9988

Date of fiscal year end: December 31
Date of reporting period: March 31, 2012

 
 
 
 
ITEM 1. SCHEDULE OF INVESTMENTS
 
SHELTON GREATER CHINA FUND
            
Portfolio of Investments (Expressed in U.S. Dollars) (Unaudited) / March 31, 2012
        
             
Security Description  
Shares
    
Value
  
Common Stock (98.61%)
            
             
Basic Materials (4.69%)
            
Chemicals (4.69%)
            
China Petrochemical Development Corp
     300,000     $ 338,986  
Formosa Chemicals & Fibre Corp
     50,897       148,650  
Formosa Plastics Corp
     150,271       442,445  
Nan Ya Plastics Corp
     200,968       454,169  
              1,384,250  
                 
Total Basic Materials
             1,384,250  
                 
Communications (9.86%)
                
Internet (1.89%)
                
Tencent Holdings Ltd
     20,000       557,848  
                 
Telecommunications (7.97%)
                
China Mobile Ltd
     130,000       1,430,485  
China Unicom Hong Kong Ltd
     100,000       169,466  
Chunghwa Telecom Co Ltd
     80,000       246,387  
HTC Corp
     20,561       415,894  
Taiwan Mobile Co Ltd
     30,000       91,379  
              2,353,611  
                 
Total Communications
             2,911,459  
                 
Consumer, Cyclical (8.42%)
                
Auto Manufacturers (0.61%)
                
Dongfeng Motor Group Co Ltd
     100,000       180,541  
                 
Auto Parts & Equipment (0.62%)
                
Xinyi Glass Holdings Ltd
     300,000       183,116  
                 
Distribution/Wholesale (1.17%)
                
Li & Fung Ltd
     150,000       344,213  
                 
Home Furnishings (1.15%)
                
Haier Electronics Group Co Ltd*
     300,000       339,963  
                 
Lodging (0.66%)
                
Sands China Ltd
     50,000       195,414  
                 
Retail (3.70%)
                
Emperor Watch & Jewellery Ltd
     3,000,000       475,176  
Maoye International Holdings Ltd*
     1,000,000       266,562  
Sa Sa International Holdings Ltd
     100,000       57,948  
Sun Art Retail Group Ltd*
     100,000       135,470  
Taiwan FamilyMart Co Ltd
     30,000       157,550  
              1,092,706  
                 
Textiles (0.51%)
                
International Taifeng Holdings Ltd
     400,000       148,863  
                 
Total Consumer, Cyclical
             2,484,816  
                 
Consumer, Non-Cyclical (4.97%)
                
Cosmetics/Personal Care (1.05%)
                
Vinda International Holdings Ltd
     200,000       309,057  
 
 
 
 
 
SHELTON GREATER CHINA FUND
            
Portfolio of Investments (Expressed in U.S. Dollars) (Unaudited) / March 31, 2012
        
             
Security Description  
Shares
    
Value
  
Food (3.20%)
            
Shenguan Holdings Group Ltd
     500,000       296,180  
Standard Foods Corp
     100,500       342,213  
Uni-President Enterprises Corp
     60,000       83,044  
Want Want China Holdings Ltd
     200,000       223,551  
              944,988  
                 
Pharmaceuticals (0.72%)
                
TTY Biopharm Co Ltd
     50,000       213,454  
                 
Total Consumer, Non-Cyclical
             1,467,499  
                 
Diversified (1.69%)
                
Holding Companies (1.69%)
                
Hutchison Whampoa Ltd
     50,000       499,643  
                 
Total Diversified
             499,643  
                 
Energy (8.70%)
                
Coal (1.71%)
                
China Shenhua Energy Co Ltd
     120,000       506,081  
                 
Oil & Gas (6.99%)
                
China Petroleum & Chemical Corp
     300,000       326,828  
CNOOC Ltd
     500,000       1,027,616  
PetroChina Co Ltd
     500,000       706,969  
              2,061,413  
                 
Total Energy
             2,567,494  
                 
Financial (31.18%)
                
Banks (12.72%)
                
Bank of China Ltd
     1,500,000       604,593  
BOC Hong Kong Holdings Ltd
     200,000       552,440  
China Construction Bank Corp
     1,600,000       1,236,229  
Hang Seng Bank Ltd
     20,000       265,789  
Industrial & Commercial Bank of China
     1,700,000       1,096,767  
              3,755,818  
                 
Diversified Financial Services (5.01%)
                
Chinatrust Financial Holding Co Ltd
     271,965       170,931  
Fubon Financial Holding Co Ltd
     350,224       394,550  
Hong Kong Exchanges and Clearing Ltd
     30,000       504,150  
Mega Financial Holding Co Ltd
     200,000       141,286  
Taiwan Acceptance Corp
     50,000       104,186  
Yuanta Financial Holding Co Ltd*
     306,691       159,505  
              1,474,608  
                 
Insurance (6.44%)
                
AIA Group Ltd
     150,000       549,543  
China Life Insurance Co Ltd
     100,000       259,479  
China Pacific Insurance Group Co Ltd
     150,000       464,552  
PICC Property & Casualty Co Ltd
     20,000       23,797  
Ping An Insurance Group Co
     80,000       604,722  
              1,902,093  
 
 
 
 
 
SHELTON GREATER CHINA FUND
            
Portfolio of Investments (Expressed in U.S. Dollars) (Unaudited) / March 31, 2012
        
             
Security Description  
Shares
    
Value
  
Real Estate (7.01%)
                
China Overseas Land & Investment Ltd
     200,000       380,141  
Hang Lung Properties Ltd
     100,000       366,362  
Hysan Development Co Ltd
     70,000       280,341  
Kerry Properties Ltd
     60,000       270,039  
Link REIT
     60,000       223,294  
Sun Hung Kai Properties Ltd
     40,000       497,067  
Swire Properties Ltd*
     21,000       52,192  
              2,069,436  
                 
Total Financial
             9,201,955  
                 
Industrial (17.71%)
                
Electronics (10.82%)
                
AAC Technologies Holdings Inc
     400,000       1,086,852  
AU Optronics Corp
     300,000       138,745  
Hon Hai Precision Industry Co Ltd
     250,399       971,410  
Radiant Opto-Electronics Corp
     60,000       266,310  
Silitech Technology Corp
     80,500       184,923  
Taiwan Surface Mounting Technology Co Ltd
     150,000       344,576  
Tripod Technology Corp
     60,000       201,257  
              3,194,073  
                 
Engineering & Construction (3.01%)
                
Cheung Kong Infrastructure Holdings Ltd
     100,000       608,457  
China State Construction International Holdings Ltd
     300,000       279,311  
              887,768  
                 
Environmental Control (1.11%)
                
China Everbright International Ltd
     700,000       329,017  
                 
Machinery-Diversified (2.24%)
                
First Tractor Co Ltd
     150,000       151,052  
Shanghai Electric Group Co Ltd
     1,000,000       508,657  
              659,709  
                 
Miscellaneous Manufuring (0.53%)
                
Largan Precision Co Ltd
     8,000       157,211  
                 
Total Industrial
             5,227,778  
                 
Technology (9.86%)
                
Computers (2.83%)
                
Asustek Computer Inc
     60,000       566,162  
Lenovo Group Ltd
     300,000       270,039  
              836,201  
                 
Semiconductors (7.03%)
                
Chipbond Technology Corp
     306,000       396,568  
MediaTek Inc
     25,000       239,289  
Taiwan Semiconductor Manufacturing Co Ltd
     500,284       1,439,093  
              2,074,950  
                 
Total Technology
             2,911,151  
                 
Utilities (1.53%)
                
Electric (0.83%)
                
CLP Holdings Ltd
     20,000       172,557  
Power Assets Holdings Ltd
     10,000       73,401  
              245,958  
 
 
 
 
 
SHELTON GREATER CHINA FUND
            
Portfolio of Investments (Expressed in U.S. Dollars) (Unaudited) / March 31, 2012
        
             
Security Description  
Shares
    
Value
  
Gas (0.70%)
                
Hong Kong & China Gas Co Ltd
     80,000       205,008  
                 
Total Utilities
             450,966  
                 
Total Common Stock (Cost $27,329,812)
             29,107,011  
                 
Rights and Warrants (0.00%)
                
Financial (0.00%)
                
Chinatrust Financial Holding Co Ltd rights 04/03/12
     13,589       1,036  
                 
Total Rights and Warrants (Cost $0)
             1,036  
                 
Short-Term Investments (1.57%)
                
Time Deposit (1.57%)
                
HSBC Bank USA, Grand Cayman, 0.03%, Due 04/02/12
             462,473  
                 
Total Short-Term Investments (Cost $462,473)
             462,473  
                 
Total Investments (Cost $27,792,285) (a) (100.18%)
             29,570,520  
Liabilities in Excess of Other Assets (-0.18%)
             (52,425 )
Net Assets (100.00%)
           $ 29,518,095  
                 
                 
Security Description  
Contracts
    
Unrealized
Appreciation
  
Forward Foreign Currency Exchange Contract Short (0.02%)
                
USD, Brown Brothers Harriman & Co., settlement date 04/02/12 (cost $4,893; value $4,893)
  
HKD 38,000
     $ -  
                 
Total Forward Foreign Currency Exchange Contract Short (Cost $4,893; Value $4,893)
       -  
                 
* Non-income producing security.
                
 
(a)
Tax cost and unrealized appreciation are only calculated as of fiscal year end. Net unrealized depreciation on a tax basis as of December 31, 2011 was $3,629,055.
 
 
 
 
 
Fair Value Measurements -
 
In May 2011, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU") No. 2011-04 “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards (“IFRS”)”. ASU 2011-04 includes common requirements for measurement of and disclosure about fair value between U.S. GAAP and IFRS.

ASU 2011-04 requires reporting entities to disclose the following information for fair value measurements categorized within Level 3 of the fair value hierarchy; quantitative information about the unobservable inputs used in the fair value measurement, the valuation processes used by the reporting entity, and a narrative description of the sensitivity of the air value measurement to changes in unobservable inputs and the interrelationships between those unobservable inputs. In addition, ASU 2011-04 requires reporting entities to make disclosures about amounts and reasons for all transfers in and out of Level 1 and Level 2 fair value measurements. The new and revised disclosures are effective for interim and annual reporting periods beginning after December 15, 2011.

The Fund utilizes various methods to measure the fair value of most of its investments on a recurring basis. U.S. GAAP establishes a hierarchy that prioritizes inputs to valuation methods. The three levels of inputs are:

Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities that the company has the ability to access.

Level 2 - Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.

Level 3 - Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available.

The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.

The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

The following table summarizes the valuation of the Trust's securities at March 31, 2012 using fair value hierarchy:
 
   
Level 1(b)
    
Level 2(b)
    
Level 3(b)
    
Total
  
Investments, in securities
                        
  Common stocks (a)
   $ 29,107,011     $ -     $ -     $ 29,107,011  
  Rights and warrants
     -       1,036       -       1,036  
  Short term securities
     462,473       -       -       462,473  
Total investments in securities
   $ 29,569,484     $ 1,036     $ -     $ 29,570,520  
 
(a)
For a detailed breakout of common stocks by major industry classification, please refer to the Portfolio of Investments.

(b)
There were no transfers in or out of Level 1, Level 2 and Level 3 during the period ended March 31, 2012.
 
 
 
 
 
ITEM 2. CONTROLS AND PROCEDURES.

(a) Based on an evaluation of the disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940), the disclosure controls and procedures as of a date within 90 days prior to the filing date of this Form N-Q (the "Report"), are reasonably designed to ensure that information required to be disclosed by the Registrant in the Report is recorded, processed, summarized and reported by the filing date, including ensuring that information required to be disclosed in the Report is accumulated and communicated to the Registrant's management, including the Registrant's principal executive officer and principal financial officer. Based on such evaluation, the Registrant's Principal Executive Officer and Principal Financial Officer have determined that the disclosure controls and procedures are effective.

(b) There were no significant changes in the Registrant's internal controls over financial reporting or in other factors that could significantly affect these controls subsequent to the date of their evaluation, in connection with the preparations of this Quarterly Schedule of Portfolio of Investments.

ITEM 3. EXHIBITS.

Separate certifications for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2(a)) is attached hereto as Exhibit 99.CERT.

 
 
 
 
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Shelton Greater China Fund

By /s/ Stephen C. Rogers
Stephen C. Rogers,
President (as Principal Executive Officer)
Date: April 27, 2012
 
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By /s/ Stephen C. Rogers
Stephen C. Rogers,
President (as Principal Executive Officer)
Date: April 27, 2012
 
By /s/ William P. Mock
William P. Mock
Treasurer (as Principal Financial Officer)
Date: April 27, 2012