Nevsky reporting until 31 December 2014

If you are an investor with Nevsky Capital then it is perfectly natural that you should wish to understand the nature of the fund, in order to define reportable income. This is a core piece of information that is made available in a public manner, helping to keep you on top of the requirements that come your way.

If we look at the specifics here, then we begin with the Sterling Class Shares, which have an ISIN of IE00B400QV09 and a HMRC Reference of N0026-0002. As the same suggests, these shares have a currency of GBP and the declaration to 31 December 2014 shows a per unit excess reportable income over distributions in respect of the reporting period of 0.0000. All per-share figures are reported, as can be seen, to four decimal places, using the relevant currency.

The fund distribution date is recorded as 30 June 2015, while the fund is marked as remaining a reporting fund at the date when this distribution is made. The fund does not, however, meet the definition of a bond fund at the date when this report is made available.

How does this compare with other funds within the Nevsky Capital umbrella? First, let’s turn our attention here to the Euro Class Share, with an ISIN of IE00B3W1G920. Make a note of the unique HMRC Reference, which is showing as N0026-0003. The currency of this share class is Euros (EUR), while that excess reportable income is shown as 0.000 here too. You need to be aware that this fund is also a reporting fund at the date when the distribution is made, but that it does not meet the definition of a bond fund. The distribution date is declared as 30 June 2015.

Finally, we take a closer look at the US Dollar Class Shares, which have an ISIN of IE00B42ZNM31. The HMRC Reference that you’ll need here is N0026-0001, with the currency of the Class Share obviously being US dollars (USD).

Once again, the excess reportable income is recorded as 0.0000 and the distribution date is 30 June 2015.

The senior managers at Nevsky Capital, including Nick Barnes, are well known to many within the industry and beyond.

Martin Taylor - Nevsky Capital

Leading financial analysts

When considering which investment companies to use, many people like to follow individual fund managers and analysts. Knowing that there is a track record of success can make a real difference. Although it may not be a guarantee of future performance, it can certainly be helpful in ensuring that you are investing your money, without having that sense that you are stepping into the great unknown.

But how can you go about producing the best results on a consistent basis, when it comes to looking at getting maximum concerns at a risk level that you are happy with. Sticking with those fund managers who produce strong results time and again can certainly work well.

When considering the success of Nevsky Capital, to take an obvious example within the marketplace, there is no doubt that many investors would associate that record of success with the individual input that comes from Nick Barnes and Martin Taylor.

Martin Taylor & Nick Barnes

Martin Taylor and Nick Barnes have worked hard to build up a dedicated following of investors who trust their judgement and ability to make reliable returns on an ongoing basis.

Nevsky Capital

How might we describe the key to their success? Inevitably, investors tend to follow the data and the numbers. A great reputation is built, as a result, on a solid performance that can be measured via particularly visible metrics. Without that sort of information, it would simply be impossible to imagine investors relying on key individuals in this way.

Nevsky's Nick Barnes

For Nick Barnes, there will certainly be interest in continuing to maintain those excellent standards that have been set over a period of many years. It’s only through dedication and consistency that investors can be retained. There is no temptation to look elsewhere, as long as confidence is in place that performance will continue to meet the high expectations that have been set.

It’s natural that other analysts and professionals should wish to replicate what has been achieved by Nick Barnes and Martin Taylor at Nevsky Capital. But will they be able to scale the heights in the same way? One thing is certain: many will continue to follow in the footsteps of those who lead the way. They will do so because they hope to reap the rewards.

Emerging markets: where will they head this year?

It’s tempted to think about emerging markets as offering the best prospects for growth in 2014. It’s certainly been the case that many positive investors have been happy to buy shares in India and associated countries.

But there are also fears, particularly surrounding Asian economies. In recent years, many countries in the region have been able to reap the benefits offered by foreign investment. What happens, however, if that capital starts to get removed? It’s an interesting question and one that is causing some concern right now.

We should also probably stop at this point to state that there is also an issue surrounding just how positive all that investment has been. The exploitation of natural resources, for example, has not always been welcomed by environmental groups. Although we may primarily, within the pages of this blog, concern ourselves with finance and investment issues, it’s also clear that we can’t ignore wider problems.

So what may happen? The fears are not restricted to a single nation and it’s noted that there are worries surrounding the value of Argentina’s currency. Should we be any less concerned about the sort of political instability that is to be found in Egypt? What happens if the commodities produced in Brazil see a fall in value?

Of course, having the confidence to answer such questions almost immediately means that you will be involved with making predictions and deciding on individual investments. It’s an area that some of us are rather wary of. After all, there are often other events that take over.

This may help to explain why many Fund Managers find themselves spending a lot time thinking about politics. A failure to understand the risks that are associated with political decisions would mean that it would be absolutely impossible to make informed decisions about investing in those very markets.

If you want to buy shares in a company in Turkey, for example, then how could you seek to do that without knowing how the central bank in that country has been behaving? This is probably a good argument for making use of the expertise offered by those in senior positions at Nevsky Capital and other such investors.

What it does mean is that we seem to be facing a period of some uncertainty. It’s often stated that markets are rarely keen on uncertainty and this can certainly be seen to be true. How you go about thinking about these issues may be rather central to your own aims for the coming year.

Eastern European Fund performance in June

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?

Nevsky Capital's Nick Barnes

Nick Barnes and Martin Taylor provide leadership, directing operations.

Martin Taylor

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.

Eastern European Fund Investment Process

For individual investors, the process of choosing the markets, sectors and companies to invest in can seem incredibly confusing. For more of us, the truth is that we will always struggle to understand what’s involved.

In a sense, it’s this fact that ensures that there will always be a demand for professional investors. Those who manage significant funds are clearly expected to make use of their experience and expertise.

With this in mind, it seems clear that out-performing the market requires a level of knowledge that is not available to most of us.

Employees of Nevsky

So how do the professionals make judgements? Looking at information provided on the Nevsky Capital website, it’s clear that there is a structured process in place for making decisions. This can be broken down into a number of areas and involves the following steps:

Primary Inputs

There is a mass of data involved in carrying out proper analysis, including company accounts and broader macro-economic data. Into this mix is put the results of meetings with those involved in particular businesses, together with individuals who are responsible for setting policy.

Analysis

Having all of the above information must be useful, but it would not lead anywhere, without having the knowledge and tools to carry out proper analysis. Here, it seems that Nevsky have a framework in place that always looks to consider management quality and strategy, prospects for growth and the liquidity of any business.

The latter involves considering a diverse range of elements, including balance sheet data.

Forecasts

In order to produce forecasts, specialist software is used. Although it’s impossible to see what the future may hold, it’s presumed that such software is based on the previous performance of companies and that it also takes into account specific knowledge that is held by the team of analysts.

Decision Making

Finally, there’s the need to come to a decision on when to invest and when to let go of a particular investment. The timing must be critical in some cases and it’s likely that such decisions are taken by a team in most cases.

The above is based on reading between the lines on the work done for a particular fund. It’s likely that most fund managers will look to undertake a similar process, although there will be variations from one to the next.

In the case of the Eastern European Fund, it’s clear that there’s a need to hold specific information on different countries. That means knowing what’s happening in the Czech Republic, for instance, in political, economic and social terms.

In some of the countries that are considered, it’s presumably the case that the situation can be quite fluid. Understanding the changes that are taking place will be a key part of the challenge.

The job of a fund manager must be fun at times, but it’s clear that there’s scope for considerable levels of stress. Making the right decisions certainly won’t be easy on all occasions, but the drive here must be to get things right on the majority of occasions, maintaining a certain competitive advantage.

That’s why funds are measured against peers, in order to see whether the right decisions are being taken frequently and whether it’s possible to stay ahead of the game.

The Eastern European Fund is managed by Martin Taylor and Nick Barnes.

Nicholas Barnes adjusts tie

The Standard & Poor’s View

We’ve been taking a look at the S&P report that covers the Nevsky Capital Eastern European Fund. It makes for interesting reading and we thought that it might be useful to present some of the highlights here at Nevsky News, where they will be available to individuals and those looking to learn more.

Nevsky Capital Martin Taylor

The report was produced in August 2011 and the opinion offered in the report is dated July 2011. It begins by discussing the fact that the Nevsky team focuses on two funds, with the Eastern European Fund obviously being one of them. It’s remarked upon that there have been substantial inflows into the fund – meaning that more people were looking to invest in this fund. That will certainly have pleased Martin Taylor and Nick Barnes of Nevsky Capital, giving them more scope.

Nevsky Capital Nick Barnes

Indeed, it’s noted that the team had taken the decision to soft close the fund. At the time, the team consisted of two fund managers, two economists and no fewer than 6 sector-specific analysts. It’s to be expected that a substantial team would be required.

In general, between 25 and 40 holdings are reckoned to be held at any one time. S&P suggest that a very active approach is taken to management, with a concentration of time and effort on studying the fundamentals of countries, sectors and individual companies.

The fund is awared a AAA rating from S&P. What that means is that the fund is seen to demonstrate the highest measures of quality within its sector. This information is based upon the investment process, although this only tells part of the story.

There is also a view taken on the consistency of performance achieved by the management, with specific consideration given to how such levels of performance compare with other funds that operate with similar objectives.

Reading through the report, it’s clear that S&P have given the fund something of a “thumbs up”, but it’s clearly for each of us to observe and to research, prior to making investment decisions.

When you carry out your own research, you may regard such analysts’ reports as being part of the wider package of information that’s made available to you. They may be informative, or you may feel that they are simply to be ignored. That choice is very much your own, leaving you to make the right decisions for your own, personal circumstances.

Behind the scenes

When we look behind the scenes at any investment fund, we tend to find the full story. In truth, producing results is rarely the work of one or two individuals. The reality is that it would be difficult for such a small team to compile the amount of information that’s necessary to really judge the potential value offered by differing investments.

Nick Barnes Nevsky Capital

This means that it needs a group of real analysts to sit down and to look at specific countries, markets and companies. To begin with, it’s fair to say that this must involve a lot of graphs. For those of us who may not have been great at school, that probably doesn’t sound like a lot of fun!

Martin Taylor Nevsku Capital

That’s right, it means a lot of addition, subtraction, multiplication and division. Although there will certainly be computer programs available at Nevsky Capital to make such data transformations easier, the team led by Martin Taylor and Nick Barnes must still find themselves relying heavily on mental arithmetic in the first instance. That’s the way that many of us look to narrow down options.

Nick Barnes Nevsky Capital

It’s only once those initial, near-immediate, calculations have been carried out that we can seek to move on. That may well be the same for you, depending upon your own chosen role. Admittedly, you may not be focused on managing an investment fund, but it’s easy to see how the same rules might generally apply.

Nevsky Capital Martin Taylor

Ultimately, the team will be looking for signs that particular investments offer value. By the same token, they will be attempting to identify those that should be avoided. Using computer programs and algorithms will only take things so far. Beyond a certain point, it clearly becomes necessary to use the experience that must come from years of investing.

What can the rest of us learn by watching such teams in action? Although we may be investing on a smaller scale, it seems clear that we can also look to make informed decisions. That must be at the heart of all that we do.

Nevsky Capital – Eastern European Fund – February 2013

We take a look back at the performance of the Nevsky Capital Eastern European Fund during the course of February 2013. Regular updates of this nature are also available via the official Nevsky Capital website (https://www.nevskycapital.com) and are distributed via a variety of financial publications – both online and offline.

Overview

During February 2013, emerging markets were seen to under-perform global market. This particular region suffered more than most, partly due to the continuing uncertainty surrounding the Euro and oil prices, both of which slipped during the course of the month.

As a result of these conditions, the Fund fell by 3.2% over the month. This still reflects an over-performance of 0.5%, when compared to the peer-group average.

Individual markets

Given the spread of associated investments, the headline figures only tell part of the story. Of the markets that are represented, Turkey saw the best overall performance. When measured in US$ terms, there was a decrease in value of 1.6%.

When examining why Turkey performed more strongly than other markets, a number of factors can be identified:

  • There was a relative improvement in trade data.
  • There were continued portfolio inflows.
  • There were advantages as a result of the declining oil price.

The Fund may be seen as being slightly under-weight within Turkey, but investments in telecommunications and the financial sector have paid results here.

Russia was seen to under-perform, although individual stock picks once again brought benefits. In particular, telecoms holdings offered opportunities within the Russian market.

Financial facts

At present, cash stands at 5%. The total value of the fund is $598.6 million and the annualised rate of growth is 19.3%. The top 10 holdings include Gazprom, Sberbank, Rosneft and Novatek.

Martin Taylor of Nevsky Capital

Martin Taylor is one of the Fund Managers, helping to keep the Eastern European Fund on track. As can be seen, from the reports that we reproduce and analyse here at Nevsky Capital News, any fund can see increases and decreases in value.

To a certain extent, it can be said that the success or failure of any Fund Manager will be defined by the ability to out-perform direct competitors. Although the overall value may rise or fall, depending upon the performance of specific businesses, sectors and broader market sentiments, the key is to provide better returns than the alternatives.

When the overall value is falling, does it fall at a slower rate than competitors? That’s something that we are continually looking to observe. The same can be said to be true when thinking about rising prices: are things better than others? Or is a fund simply seeming to perform well due to a wider rise in stock market positioning. Is there, in other words, the opportunity to actually make more by investing elsewhere?

As might be expected, our own reports and reviews seek to answer such questions. It’s likely that you’ll have your own views here too.

Martin Taylor Photographs

Martin Taylor of Nevsky

 

Martin Taylor

 

Martin Taylor of Nevsky adjusts his tie

About Martin Taylor

The establishment of the Eastern European Fund has seen Martin oversee investments in a range of countries in central and Eastern Europe. Such investments, as carried out on behalf of Nevsky Capital, would clearly not be possible without a considerable degree of knowledge.

As with any investment fund, there’s a reliance on a dedicated team of analysts and specialists. There’s a need to understand what is going on within specific countries, industries and companies.

If a changing politicial environment within Russia, to take one example. means that opportunities are emerging there, then it’s clear that there are advantages associated with understanding that situation and seeking to move quickly. As with so much, it’s all about competitive advantages.

The ability to make the first move can often ensure better returns for investors. It can also be seen that this works in reverse, with the requirement to act quickly in order to reduce some holdings. This may come about as a result of changes within an individual industry.

Predicting such changes would simply not be possible, without having the dedicated team of experts that are available to Martin. As a result of this association, the Eastern European Fund undoubtedly aims to make investments that are sensible and should be cost-effective over time.

Here at Nevsky Capital News, we see part of our role as being to identify how well the fund is performing and also to bring you the critical facts. We follow up on releases and look to answer questions that you may have.

When you are pondering investment decisions, it’s clear that there is a necessity for you to carry out your research. When large sums of money are involved, you may (quite rightly) feel that there is little scope for error. With this background in mind, it’s so important that you should have the opportunity to review as much information as is feasible and possible at any point in time.

Nevsky Capital

The Nevsky Eastern European Fund continues to focus on a range of investments in companies based in the key states of Eastern Europe.

Martin Taylor Nevsky

So what does the future hold for the fund? That’s clearly something that’s of interest to visitors and that many analysts will be looking to consider. This blog largely focuses on the historic performance of this Nevsky Capital fund, but it’s certainly believed that the factsheet information that is displayed here can also give an insight into the future.

By studying past performance, it’s obviously possible to get an indication of the investments that are made and the approach that the fund managers make to such investments. Is it possible to predict future performance, based on this evidence?

Making such claims would appear to be a step too far. Past performance is exacty that: it relates to the past. It doesn’t necessarily paint a picture of what the future has in store.

Without the benefit of a crystal ball, however, it’s impossible to know what the future may hold for businesses in Russia, the Czech Republic, or elsewhere in Europe. When investing in a fund, we are all essentially relying on the knowledge of the fund managers to get us the results that we require.

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