Multi Currency Portfolio Update #12
Here is the updated performance of the six global investment
portfolios that Jyske Bank created with our direction. We
have been tracking them for educational purposes beginning
November 1, 2007.
These portfolios are all still down.
2008 Dec 14 Jan 21 Feb 19 Mar 20
Infrastructure -20.97% -68.47% -69.39% -79.79%
Emerg Mkt - 9.80% -36.78% -44.27% -53.75%
Danish Health -32.51% -61.62% -78.99% -79.55%
Green -14.31% -54.29% -45.23% -58.78%
$ Short Non - 9.08% -15.42% -18.99% -19.69%
Blue Chip - 5.14% -37.68% -24.98% -47.55%
There are several lessons we can derive from a quick glance.
First the non leveraged portfolio is performing best.
This portfolio is invested in three funds and Jyske Bank
CCY Investment Invested Current Value Invested Todays Value
EUR JI European Equities 25,000.00 20,608.00
EUR JIFavourite Equities 25,000.00 21,136.23
USD JIFar East Equities 25,000.00 18,264.61
DKK Jyske Bank 25,000.00 20,309.62
The bank shares like so many equities in the financial sector
have taken a hard hit. Plus the Far East is down further
than the major markets funds held in this portfolio.
Yet the second lesson is that the emerging market fund is the
least hurt of the leveraged portfolios.
This to is a lesson about the power of leverage to lose as
well as gain. This portfolio is leveraged only one time
($100,000 invested and $100,0000 borrowed). The other
leveraged portfolios are leveraged two times ($100,000
invested and $200,000 borrowed).
CCY Investment Invested Value Invested Todays Value
USD JI Chinese Equities 50,000.00 31,869.27
USD JI Latin American Equities 50,000.00 45,609.84
EUR JI Eastern European Equities 50,000.00 45,168.75
EUR JI Turkish Equities 50,000.00 33,939.33
Today’s focus is on the infrastructure portfolio shown below.
The portfolio with $300,000 invested is worth $248,94 down
17.16%...about par for the course in the equity markets of
the last four months.
However the leverage turns this downturn into a much bigger
loss. $100,000 was originally invested and $200,000 borrowed.
So the loss on the $200,000 loan goes against the $100,000
Plus the borrowed Swiss francs and yen have appreciated against
the invested currencies. The loan payoff, even before interest
due, is $226,329, a 22.6% loss on the original $100,0000
Add the loss on the $100,000, plus the loss on the $200,000
borrowed and the loss on the forex and only $20, 213 is left,
a downturn of 79.7%
CCY Name Invested Amount Todays Value
DKK D/S Torm 50,000.00 35,063.85
DKK FLSmidth & Co. 50,000.00 44,655.50
SEK ABB Ltd 50,000.00 43,123.17
EUR Siemens AG 50,000.00 46,563.97
JPY Komatsu Ltd. 50,000.00 36,362.87
EUR Veolia Environt 50,000.00 42,725.16
Borrowed Payback Interest Due
JPY Loan 2.750 100,000.00 112,407.75 1,210.73
CHF Loan 4.375% 100,000.00 113,921.46 1,952.09 226,329.21
Total Debt 228,281.30
There are however solutions...right now mainly in bonds.
Our next update looks at my personal portfolio which
I am pleased to say is up because I stuck to bonds.
Until the next update…good global investing!
You can see Jyske Bank's bond list at www.JBPB.com
You can contact Jyske Bank through their manager of
client relations Thomas Fischer at FISCHER@JBPB.DK
You can join me with Thomas Fischer of Jyske Bank at
our upcoming International Investment & Business course
in North Carolina this May 23 to 25 at Merrily Farms.
See NC Course