The Market Monitor provides fundamental and technical data about the markets in which the Derivative Funds are active. Read more
Intereffekt Brazil Warrants is called Intereffekt Active Leverage Brazil from 2 November 2015.
Intereffekt Active Leverage Brazil invests in derivatives on the financial markets in Brazil. The fund is aiming at a leverage of 2 to 3 times the return on the underlying values. Its investment policy will be aimed primarily at achieving capital growth (the fund will not pay any dividends). The risk profile is high, due to investments being channeled into derivatives. The manager will not use a benchmark as a gauge for the purposes of determining investment policy or comparing the results achieved by the fund.
Intereffekt Active Leverage Brazil is a subsidiary fund of Intereffekt Investment Funds N.V. (IIF), established with a so-called umbrella structure.
The upward trend of the Bovespa Index at the end of 2016 has continued during January. The index encountered little resistance from sellers to continue its rally. From the start in January the index hiccupped against a resistance and that resistance was taken easily on January 3. After this resistance was taken the index went higher to above the highest level of 2016. At the end of the month the index took a step back. Investors took profits on their positions, which was mainly driven by broad global sales, after US President Trump proclaimed immigration for seven Islamic countries. Ultimately the Bovespa Index closed at 64671 points. On a monthly basis, an increase of 7.4% in local currencies and 7.6% in euro. The fund rose by 14.8% in the same period. From the start of the year the fund has leverage because of the positive signal that the trading model gave late December. Until the trading model gives a negative signal, the leverage will be maintained.
Although the financial markets made a nice rally in January, there still needs to be done a lot. Especially on the economic front. Encouraging were the retail sales for November which were announced in January. An increase of 2% MoM, whereas 0.3% was expected. The most eye-catching reform that still needs to be made is the new pension plan. In addition, there is the "Spending Cap"; that should keep control on spending by the government. The current account deficit was 2.7% of GDP. It is expected that the deficit will shrink due to reforms from 2.1% in 2017 to 0.7% in 2018 and then to equilibrate. Politicians seems to be aware of the necessity of implementing reforms and act accordingly. It is uncertain what the US will do under President Trump. There is a chance that his policy leads to outflow of investments in emerging markets, what also will be felt in Brazil. This will weaken the currency and represent a delay for the economic recovery. If US foreign policy has no extreme consequences for emerging countries, it is quite possible that the interest rate (SELIC) drops to 10% in late 2017. Currently, the SELIC is 13%; 1.25% lower than the highest level in recent years. With the further decline in inflation, the road should be free for the Central Bank to further expand its monetary policy.
Market Monitor / Trading model
No rights may be derived from this publication. You are referred to the prospectus and Key Investor Information Document for the fund's terms and conditions. These documents may be obtained from the website or the address mentioned below. The manager of IIF has obtained a licence for this fund from the Netherlands Authority for the Financial Markets in accordance with the provisions of the Financial Supervision.