Diamond Age Russia Fund: Monthly Letter to Investors – February 2014

The “Shattered Hopes Edition: Russia gets even cheaper”

In February, the Fund was able to outperform the continued collapse of the Russian stock market. While in January the RTS Index dropped 9.99% and the MSCI Russia Index tumbled 10.12%, February brought no relief. The RTS Index fell by another 2.59% in February, while the MSCI Russia Index fared no better, with a 2.40% drop. However, the Fund outperformed and was down only marginally by 0.85%.

In the January Letter to Investors the Investment Advisor outlined several compelling reasons why its portfolio had a long bias stance at such valuations. Precisely the same rationale applies to the current month on a 12-month horizon, while the Investment Advisor would also like to emphasize the following: due to a significant rouble devaluation since the start of the year, some companies will be massive winners, and some companies will be massive losers. It is obviously the Fund’s task to buy long the former and to sell short the latter. As just one example…


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