Hugh Hendry (the one time bear) who turned bullish, had some poor timing  (at least, in the very short time frame since the switch). Below is the latest commentary from a February letter which Hugh Hendry sent to shareholders of Eclectica Asset Management, a copy of which was obtained by ValueWalk. The worst part! Although, the letter for March is not out yet, Hendry was down 6 percent during the month and is down in April as well!

(see January letter here).

Hugh Hendry
Hugh Hendry

The Fund returned 1.1% in February as global equity markets bounced back from January’s losses. The main beneficiaries of this move were positions within the Fund’s Long Developed Markets theme which returned 3.5% in aggregate.


The most significant contributions came from holdings in European pharmaceutical companies (+1.3%) and global internet stocks (+0.9%) where a position in Hong Kong listed Tencent was a standout performer, contributing 0.4% as investors reassessed the value of the company’s WeChat instant messaging platform on the back of Facebook’s acquisition of US peer WhatsApp.


Index exposure in the US and Europe, managed through option-based strategies, added a further +0.8% during the month as hedges that had been put in place to protect the Fund from further falls going into February were scaled back.


Despite the rally in local equity markets, the Fund’s Short China component ended flat as our “H-share index” short was lifted in a tactical intervention ahead of the major move upwards in the index during the second half of the month.


Japan bucked the trend in global equities, with the Nikkei falling 0.5% during February, bringing the year-to-date decline to -8.9%. Concomitant with this move, the Fund’s Long Japan theme gave back -0.7% on holdings in property companies and brokers as well as index options.


Having been the main driver of positive performance during January, the Fund’s Short Emerging Markets theme was the biggest drag in February (-0.9%) as currencies (the Indonesian rupiah and the Brazilian real, in particular) came back strongly from the January sell-off, while the Fund’s equity index shorts cost an additional 0.3%.




See more here Hugh Hendry: “Want to make real money? Make it in Japan”