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Eclectica January Performance Update

Tyler Durden's picture





 

The latest from Hugh Hendry: key holdings EUR/LVL pair, USD/GBP pair, Bund and OZ notes, MetroPCS bonds, and a bunch of tobacco equity position.

Key points from the letter:

In a volatile and ultimately difficult month for global equity markets, the Fund returned a profit of 1.2%.

As the market got off to a strong start we took the opportunity to reduce our equity exposure, particularly in the agricultural and mining sectors. With these areas up around 7% in the opening week of January the Fund was able to lock in profits enabling the equity book to contribute almost 1% for the month.

Clearly the portfolio was conservatively positioned for the month. Long equity holdings constituted just 25% of NAV and this was dominated by defensive, high yielding sectors such as tobacco, pharmaceuticals, utilities and telecoms. The Fund also allocated 30bps to Eurostoxx 50 put options providing a 3% delta’d short position, which yielded 20bps profit for the month.

In fixed income the Fund’s 15% weighting in government bonds, split equally between Australian 10yr and German 30yr, contributed 38bps. This was marginally offset by a 9bp loss on the Fund’s 5% of NAV holdings in corporate debt.

In commodities the Fund has a 2% exposure to corn, which cost the Fund 28bps.

The Fund also made 10bps from its currency positions with profits in a 2% of NAV long US Dollar/short Hungarian Forint position and a 1% long Sterling short/New Zealand Dollar position. During the month the Fund added a 20% position long Euro/short Latvian Lat, which is currently a pegged exchange rate.

Going into February the Fund has increased its government bond exposure with an additional 7.5% points in the German 30yr Bund. The Fund has also added to the currency holdings with a 3% long US Dollar/short South African Rand position.

The current portfolio is 25% of NAV long equity, 1.5% short equity (via Eurostoxx put options), 24% government bonds, 4.5% corporate bonds, 1.8% commodities and 29% currency.

Full letter

 

 

h/t Juicer

 


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Tue, 02/23/2010 - 16:54 | Link to Comment Anonymous
Tue, 02/23/2010 - 17:15 | Link to Comment 4shzl
4shzl's picture

That's a little shrill.  I think he's pretty well-positioned in terms of forex and coupons, but the love affair with tobacco is difficult to fathom.  Maybe he just he's betting on extension of the self-destructive trend that is the dominant theme in finacial markets these days -- you gotta go with the zeitgeist, right?

Tue, 02/23/2010 - 17:05 | Link to Comment Anonymous
Tue, 02/23/2010 - 17:19 | Link to Comment godfader
godfader's picture

Hugh will probably blow up in spectacular style at some point, but heck you gotta love this cocky Scottish bastard with his accent and toungue-in-cheek style.

Tue, 02/23/2010 - 20:25 | Link to Comment Anonymous
Tue, 02/23/2010 - 20:41 | Link to Comment jdrose1985
jdrose1985's picture

roughly 500m

Tue, 02/23/2010 - 20:29 | Link to Comment Anonymous
Sat, 04/17/2010 - 10:14 | Link to Comment Tom123456
Tom123456's picture

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