Element ONE


Issuer: ELEMENT ONE LTD 
ISIN Number: VGG299771086
Issue Description: USD CL B SHS
ISO CFI: CICXXX

Element ONE Fund in April 2020 showed a result of -5.77%.

SP500

In April, the SP500 index showed an upward trend after a deep fall in February - March and grew by 13.36%. At the end of the month, the price of the index was $2906, near its monthly maximum. The growth took place against the backdrop of unprecedented incentive measures taken by the US government: in April, Donald Trump signed into law on a new $500 billion support package.

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Global demand for the USD is gradually declining. The US Dollar Index Futures is trading at $ 100.The rates of the central banks of the United States and the ECB are at near zero levels and are likely to remain so for a long time to come.

Fed: 0.25% (PRE 0 - 0.25%)
ECB: 0% (PRE 0 - 0%)
CBR: 5.50% (PRED 6%).

The Central Bank of the Russian Federation may reduce the key rate to 5% in the summer.

Despite all efforts, the situation in the real sector is difficult. Everywhere there is high unemployment, a drop in industrial production and a decline in world trade. All countries' PMIs are critically low.

The US unemployment rate in April was 14.7%.

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US unemployment forecast:

• 2 kV. 2020 G. = 14%;
• 3 kV. 2020 G. = 16%.

The UN predicts a reduction of 195 million jobs due to COVID-19 in the 2nd quarter. 2020 in the world.

US GDP for the first quarter of 2020 amounted to -4.8%.

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US GDP Forecast:

• 2 kV. 2020 G. = -39.6%;
• 2020 G. = -5.6%.

Key Comments in April


The head of the US Federal Reserve Jerome Powell:

• The Fed has an unlimited amount of money.
• The level of debt makes you worry, but not now - not during a pandemic.
• We will never run out of money.

WHO head Tedros Gebreyesus: “The pandemic is far from over.”

US and China Trade War

The US is considering new restrictions on the export of goods from China. In addition, the United States is investigating the source of the distribution of COVID-19 and trying to blame China. If the United States succeeds in providing evidence of these investigations, it will have an extremely negative impact on current agreements between the countries.

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Brent brand oil

In April, a historic event took place in the oil market. Against the background of high levels of world reserves and weak oil demand, WTI futures before expiration went far into the negative zone.

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The price of Brent fell to $ 15.99 per barrel, but then recovered. The total decrease over the month was 2.77%.

Gold

Amid a pandemic, a slowdown in the global economy and rampant printing of money, gold is still in demand as a protective asset.

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In April, gold continued to grow from $ 1,589 to $ 1,694, thereby adding 6.59% to the price. The maximum in the moment reached $ 1788.

The general commodity market, represented by the DBC ETF (Invesco DB Commodity Index Tracking Fund) showed a neutral trend, falling 1.89% from 11.11 to 10.90.

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COVID-19

The graphs show that in most countries the peak of infections has already been passed.

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Change in portfolio positions

A positive result was not achieved in April. The stock price decreased by $ 93.36 (-5.57%) and amounted to $ 1524.04.

USO is the largest ETF in the oil sector, tracking the dynamics of oil.

The fund closed with a fall of more than 40%, despite the fact that ETF is shifted to the futures of the next month 2 weeks before the expiration of the current one. In other words, the USO had no position during the fall of the May futures in the negative zone. However, the NAV fund has been hit hard by the June futures drawdown. At the moment, the USO has made changes to the investment strategy and distributed the positions as follows:

Commodity Interests Target Weight*
WTI CRUDE OIL Jul20 15%
WTI CRUDE OIL Aug20 15%
WTI CRUDE OIL Sep20 15%
WTI CRUDE OIL Oct20 15%
WTI CRUDE OIL Nov20 5%
WTI CRUDE OIL Dec20 25%
WTI CRUDE OIL Jun21 10%

The new structure will be much less correlated with the current oil price, however, it will continue to be an indicator of the oil market as a whole.

In addition, the freight index (BDRY), which at the moment shows a yield of more than 50% per position, closed with a result of -13% for the month.

Disney shares added more than 4%.

QSR, after buying on April 22 at $ 45, rose to $ 49.3, showing a result of more than 9% per week.