Issuer: ELEMENT ONE LTD
ISIN Number: VGG299771086
IssueDescription: USD CL B SHS
ISO CFI: CICXXX
We are holding a large hedge position on the VIX, gold and gold miners to mitigate risks in the event of a correction. In 2020, we received a return below the SP500 index, but the risk mitigation strategy proved to be good. We allowed a portfolio drawdown of only 11% against the SP500 correction by 21% in March and by 35% at the lowest point in March.
The target profitability of the fund for 2021 is 13–15%. We intend to achieve this by increasing our positions in SPAC (up to 15–20% of the portfolio). At the same time, as before, we keep the hedging assets on the balance sheet.
In January S&P 500 index reached 3862 — another local maximum. However, the total return in January was -1,16% — from 3748,75 to 3705,25.
The USA Senate has approved the candidacy of Janet Yellen to become the 15th Chair of the Federal Reserve. Janet has earned the reputation of a politician that votes for soft monetary policy.
US Dollar index has increased by 0,78%.
Russian Ruble has appreciated by 2,84% against USD. The cross-rate at the end of the month was 76,165 ₽ / $.
Elvira Nabiullina, head of Russian Central bank:
- The potential for easing monetary policy has been exhausted;
- Russian Central Bank will start publishing the key rate forecast in April;
- The Central Bank of the Russian Federation expects the peak of annual inflation in February-March at 5.5%;
- Stabilization of annual inflation in the Russian Federation near 4% will be a signal for a return to a neutral monetary policy;
- The Russian economy is recovering faster than expected and further recovery is expected to be stable.
Central bank rates:
FED: 0.25% (PREV 0–0.25%)
ECB: 0% (PREV 0–0%)
Central Bank of the Russian Federation: 4.25% (PREV 4.25%)
Unemployment rate in the US: 6,3% (previous 6,7%).
Unemployment rate in Russia: 5,9% (previous 6,1%).
Unemployment rate in EU: 8,3% (previous 8,3%).
Unemployment rate in China: 5,2% (previous 5,3%).
Futures for WTI oil showed a steady growth of 7.85%, closing the month at a price of 52.2 $ / barrel.
In January, the price of a gold futures (GC) fell by 3.03%, reaching $ 1850.3 at the end of the month.