In October, the Fund had a slightly negative performance of 1.85%, having gained almost +2% intra-month and been affected by a global sell-off in the last week of the month ending October 26th, which was the last valuation date in October due to the Fund’s weekly valuations each Friday. Nevertheless, the Fund’s portfolio was better protected than the “pure Russia” indices, such as the RTS Index, which dropped 2.33%, and MSCI Russia, which fell 2.65% in the same time period.
The better relative performance is attributable to a superior and favourable to the current market conditions security selection (not only in Russia and CIS, but globally, among Russia- and CIS-related investment universe companies), small but very targeted short positions (5% of the portfolio), and a significant gain on a tactical Rosneft trade, related to the Investment Advisor’s short-term view on the benefits of its TNK-BP acquisition.