Hugh Hendry, Eclectica Asset Management, December 2013 letter to investors.

Also read – Hugh Hendry turns bullish [FULL LETTER]

hugh hendry

The Fund finished the year strongly, returning 2.7% in December to close up 0.8% for 2013.

• Equities were the biggest contributor, accounting for 2.8%. Index call options spread across the US, Japan and Germany made 1.6% whilst US-listed holdings within robotics and credit card companies added a combined 52bps. Elsewhere Japanese property shares contributed 34bps.

• On the short side, a position in Turkish equity index futures made 20bps, although this gain was cancelled out by losses on other EM index shorts.

• FX made 81bps as “good versus bad” EM relative trades generated a return of 71bps.

• Fixed income was the main drag on performance costing 64bps. Losses came primarily from long exposure to short-end European interest rates (48bps) and “steepener” packages in Australia and the UK, although a similar strategy in Korea proved the exception and posted a gain of 10 bps.

Full pdf below

Hugh Hendry letters