Beyond general information of the Funds, the portfolio reports offer a strategic overview on the latest performance.

The first capital-market topic of this year was the calming of the mood of panic that had arisen in relation to the debt struggles of the eurozone’s periphery. Due to the holding of some extreme positions, this resulted in a decline in Spanish, Greek, Irish and Portuguese CDS premiums throughout January. The Hungarian market has followed the fluctuations of the periphery almost by proxy in the past as well, so that Hungarian assets clearly outperformed this January, prompting a minor correction in February.

Investors’ attention has now turned from the debt crisis problems of European states to another process, namely the struggle of an ever-expanding number of developing economies against the influx of capital, moreover through only partly market-compliant means. Following Southeast Asia, Brazil and then Turkey began to draw investors’ appetite away from building positions. There are a variety of reasons for such restrictions on capital: arresting foreign currency appreciation, putting a brake on the outflow of domestic credit, and preventing the formation of bubbles on various niche markets or the general overheating of the economy. Open market intervention, the raising of reserve requirements and all manner of taxes are among the frequent methods. In the “most successful” Turkey, the action taken was to introduce a changing system of requirements for reserves placed at the central bank, which favours the influx of longer-term over shorter-term capital. In addition the key policy rate was cut back in order to make Turkish investments less attractive for foreigners, all with the undisguised intention of introducing shortterm volatility in asset prices, which in turn holds back the influx of capital. The result: a sharply weakening Turkish lira and suffering stock-market index…

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After two and a half years, the price of Brent crude is once again being quoted above the psychological barrier of 100 dollars per barrel. On the one hand, the reaching of the 100 dollar level chimes with our medium-term analyses following the disaster in the Gulf of Mexico, with the significant difference, however, that it happened a good deal more quickly than we had expected, and as such the increase was due less to declining yields from oilfields than to inflationary and political fears. Of the current events precipitating the ongoing price rise, a number of factors are making a return, such as those that led to the soaring of the price to 147 dollars per barrel in the summer of 2008. Witnessing the dynamic of the price increase, some economic players fear that it heralds another hot summer on the oil market similar to that of 2008; at the same time, in their judgement, there are significant apparent differences between the situation in 2008 and the current circumstances.

Looking at things purely on the basis of cost models, even oil prices in excess of 100 dollars might have seemed unjustifiably high two and a half years ago, and yet it must be said that in the summer of 2008 there were more short-term conditions in place than at present prompting a further temporary price rise once the 100 dollar mark had been reached. The cost models have been overridden by the low level of free capacities, while China’s demand for oil has increased due to state-regulated low prices of fuels and anticyclical government growth stimulus programmes. Aggravating these circumstances, the US has begun pumping an unprecedented amount of liquidity into the frozen financial system, while in the Middle East the spectre of armed conflict between Iran and Israel has emerged, a combination of factors pushing the price of crude to historical highs.

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