Hugh Hendry, Eclectica Asset Management, December 2013 letter to investors.
Also read – Hugh Hendry turns bullish [FULL LETTER]
The Fund finished the year strongly, returning 2.7% in December to close up 0.8% for 2013.
Baupost's investment process involves "never-ending" gleaning of facts to help support investment ideas Seth Klarman writes in his end-of-year letter to investors. In the letter, a copy of which ValueWalk has been able to review, the value investor describes the Baupost Group's process to identify ideas and answer the most critical questions about its potential Read More
• 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