The FMG Rising 3 Fund had yet another outstanding year relatively speaking, closing the year up 13.6% versus the MSCI BRIC’s performance of 9.5%.We are proud to remind investors that this is the 5th calendar year in a row that the Fund ended in positive territory. This track record is impressive when one considers that during the same period, MSCI BRIC only ended in positive territory in 2 out of 5 years.
We continued delivering alpha this year through good manager selection and timing the markets using our long-term quantitative models. By overweighting Russia (which ended up 52% for 2016), we made the right call at the beginning of the year where we chose to max 40% allocation to Russia.
Over the last 5 years the Fund is up 41% versus the MSCI BRIC index, which was down 10% for the same period.
Our outlook for 2017 is still bullish. Despite Russia having rebounded in 2016, there is still room for a recovery in equity prices, as valuations remain cheap versus peers. Without entering into discussions related to when sanctions will be lifted, it is clear that the Trump leadership will be more accomodative towards Russia, than towards China.