FMG Rising 6 Fund gained +5.1% in the 1st Quarter of 2017
The FMG Rising 6 Fund had another very strong quarter in Q1 2017, on the back of another strong rally in Emerging Markets. We feel that our view on the cheapness of Emerging Markets as compared to the US and Europe has been finally vindicated.
The major positive contributors in the first quarter of 2017 were India, Brazil and China A. India had a record start to 2017 with the main indices rallying 17% in USD terms whilst Brazil continued its upward trajectory, which is now up a whopping 125% from 2016 lows.
During the month the major allocation change was to overweight China and underweight Russia as compared to the previous quarter, a decision which was related to profit-taking following a record rally in Russian equity markets in 2016. China is coming out strong from a difficult quarter 12 months ago.
For the remainder of 2017, bar any unforeseeable geo-political tensions, we continue seeing Emerging Markets as cheap compared to Developed Markets. We remain overweight in Brazil and India with a 20% allocation in each and we increased our China exposure to 20%. Whilst cutting Russia to 15%, we kept our allocation to MENA and Africa markets to a minimum of 10% each as these markets continue to lag.