During the year we had to cope with the second worst emerging market crash of the decade from March through July 2006. Despite this we have came through the year satisfied with the results of these real time, case studies. The performances of the five portfolios are:
Emerging Asia + 110.48%
Emerging Currencies + 42.86%
US dollar Hedge + 10.60%
US dollar Long + 8.81%
US dollar Short + 7.32%
The Emerging Asia and Emerging Currencies portfolios strongly over performed their projections. The three dollar portfolios gained less than projected, but still beat any US dollar, Euro or Western European currency bond yield or CD interest. The price for this extra performance was volatility.
Most of the growth in all the portfolios came from four funds.
Jyske Invest China Fund – Up from $75,000 to $117,498.05
Jyske Invest India Fund – Up from $75,000 to $115,343.40
Jyske Invest Eastern European Equity Fund – Up from $51,000 to $76,115.82
Jyske Invest Latin America Equity Fund – Up from $51,000 to $70,049.75
Had we taken an aggressive view and invested $100,000 (plus $200,000 borrowed) and invested $75,000 each in these four funds, our return would have been much higher.
Had we been more conservative and invested just in safer bonds instead we would have lost money for the year. Look, for example, at the emerging markets portfolio. Half the portfolio is in equities and half in bonds. The 42% performance came from just the equity half of the portfolio. The equities performed so well that they lifted the performance despite the fact that all the bond element lost money.
We’ll see this exactly in our next and final review of these particular portfolios which comes at month end with an in depth analysis of what went right and what also could have gone very wrong…and why it did for some investors.
Until then good global investing, Gary