Eastern European Fund – November 2012

Looking back on October 2012, there’s a clear impression of a relatively quiet month on the markets. Overall, the fund saw growth of 0.74%, which compared favourably with the peer group average (a fall of 0.49%).

The best performing market was Turkey, where a rise of 10.4% during the course of the month was of benefit to the fund.

At the other end of the spectrum, the performance of the Russian market was disappointing, with a decrease of some 3.4% (in US$ terms). Fortunately, the fund was able to take advantage of strong stock selection within the oil sector.

The announcement that Rosneft (the state-backed company) was buying TNK from BP and its Russian owners, brought welcome news.

Overall, the fund holds 56.7% within Russia, 13.9% within Turkey and 9.9% in Poland. Further holdings are present in Hungary, the Czech Republic and Kazakhstan. A further 9% of the overall allocation is in the form of cash.

Looking at key metrics for the fund, it can be seen that an annualised return of 19% has been produced since the launch of the fund in 2000. The fund has a total size of almost $585 million and almost 36% of holdings are within the Energy sector.

Eastern European Fund Report – June 2011

A difficult month for global markets saw the MSCI Emerging European Index fall by some 6.8% (in US$ terms). By comparison, the Eastern European Fund, from Nevsky Capital, saw a fall of 6.3%.

Taking the region in its entirety, it’s clear that Central Europe saw the best performance, with the Polish market stronger than elsewhere. Indeed, the fall of 3.7% in Poland during the month of May is something that really catches the eye.

The fund managers have decided to increase the Polish exposure, although there is still a feeling that the market is not particularly attractively valued. The increasing exposure can mainly be seen as a case of identifying selected companies with more attractive valuations.

One disappointing market was Turkey, which saw a fall of 13.3% during the month. This may be seen to be reflection of domestic economic policies that have led to rising prices domestically, with inflation hitting a rate of 7.2% in May. Given this situation, the fund managers reacted by decreasing exposure to this market.

Overall in May 2011, the fund had 59% of investment allocated to the Russian market, with 12.3% allocated to Poland.

Since the foundation of the fund, an annualised return of almost 23% has been achieved, based on US$ terms.