October 2015: Altaica EUR-Asia Emerging Fund: -4.99%

We faced a bad month: high volatility and changing signals destroyed our performance. We started the month with a short positions in China and Turkey. During the month the signals for China, India and Turkey changed from sell to buy. On these kind of moments our positions are the most vulnerable. However we changed to long positions, halfway the month we recovered partly by rising markets. Last week we faced lower appetite for investing in Emerging Markets. Falling commodity prices hurt the Russian stock market and negative economic news from China was causing some damage to our China positions. This climate also caused pressure on the Indian and Turkish markets. Especially Turkey was volatile in the preparation to the elections on Sunday the first of November. The big win of the ruling AK party of president Erdogan was enthusiastically received by investors. On Monday the second of November the stock market indices opened more 5% higher as well as the Turkish Lyra. A good start of the new month. For all TRIC markets we have a bullish view.

Turkey can move forward after removing the uncertainty of the elections. The first day of trading after the elections proves that this view is shared by many investors.

Russia is still one of the most undervalued markets on the world and the Rouble is one of the most undervalued currencies on the world. The big energy companies prove that they are less vulnerable to the low oil prices than their western counterparts. The Russian economy has an incredible low level of unemployment, 0,6%. Besides this, the economy of Russia belongs also to the economies with the lowest level of debts. And still deleveraging, corporates are paying back their debts in an unknown pace. We spoke a manager of a Russian Debt fund. His main worry was how to keep invested. The combination of a high level of repayments in combination of no new bond issues makes their job challenging. Due to sanctions the economy is more and more diversifying. We believe that Russia will be the star market in the portfolio on the moment that either the sanctions are lifted or the oil prices will recover.

India is at the moment the market with the lowest volatility. The market is just following the world economy. We see not much new impulses at the moment. This is corresponding to the relative low volatility and directionlessness of the markets.

For China we see a lot of differences in views of analysts. Some expect the downturn earlier this year only as the first step before a total collapse, others say the markets already exaggerating the bad news. The signals of our system see potential for growth during the end of 2015. The medium to long term downtrend is broken. Due to this we expect a significant recovery of Chinese stock markets.