Now feels like a good time to look back on the performance record of the Eastern European Fund back in June. This Nevsky Capital fund had a launch price of $10 back on 13 October 2000.
During the course of June, there was an overall fall in value of 1.4% and some of this figure can certainly be attributed to the relatively poor performance of markets in Turkey during this period. Indeed, Turkish investments saw a loss of 3.9%.
This is a situation where wider influences are undoubtedly having something of an impact. Public unrest looks to have unsettled the markets and the Fund managers at Nevsky will clearly be required to monitor that situation carefully.
An enormous amount will rely on the reaction of Turkey’s government. A situation that could have been controlled has clearly demonstrated what can happen when things get out of hand. That’s something that can have an impact on the Fund, given that there’s an exposure of around 16%.
Better news came from Hungary, with a rise of some 4.7% during the month. This may be seen, to a certain extent, as defying expectations. There appears to be a general weakness in the Hungarian economy that won’t be solved until there are improvements in the situation facing western European economies. That’s reflected in the relatively small holdings at this point in time.
Indeed, Hungary represents only 1.7% of the Fund. The largest holding remains Russia, with more than 50% of total investments. The Financials and Energy sectors represent the markets with greatest levels of exposure.
Meeting the team
With any Fund, there’s a certain level of interest in examining how the situation is developing over time. How are decisions being made and how frequently are those decisions having positive results?
Nick Barnes and Martin Taylor provide leadership, directing operations.
The decision making process obviously needs to be controlled and analytical. With a suitable knowledge base, it’s possible to make the right decisions. Given the investment strategy that’s being pursued, this means having a thorough understanding of the political situation in central and Eastern Europe, as well as being briefed on changes within companies and markets.