The Market Monitor provides fundamental and technical data about the markets in which the Derivative Funds are active. Read more
Intereffekt China Warrants is called Intereffekt Active Leverage China from 2 November 2015.
Intereffekt Active Leverage China invests in derivatives on the financial markets in China. 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 and the emerging markets of China. 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 China is a subsidiary fund of Intereffekt Investment Funds N.V. (IIF), established with a so-called umbrella structure.
During the month of January the HSCEI index went up 3.0 percent in euro terms. The fund price rose by 4.0 percent. The value of the Hong Kong dollar was down 2.3 percent. The trading model generated a positive signal in the first week of January and so the leverage in the fund was raised.
After a correction in December it was time for a recovery in January. The HSCEI index gradually reached the level of 9.850 points. Concerns about further rising interest rates in the US are somewhat decreased, since interest rates again fell slightly. Because the Hong Kong Dollar (HKD) is pegged to the US dollar, a rise of the US dollar increases the effects on the economy and the property market in HK. Unlike the HSCEI index, the Chinese domestic market performed slightly less well. The continuing pressure on the yuan ensures that investors currently prefer Chinese shares listed in HKD.
In the economic field, the news is quite positive. China's industry remains solid to grow. As production in January increased for the sixth consecutive month. The Purchasing Managers Index (PMI) for January came in at 51.3. The figure suggests that the recovery of the Chinese economy is in line with expectations. However, the Chinese economy since 1990 has not grown as slow as in 2016, although a growth of 6.7 percent is still high. Growth weakened slowly through a decline in exports, lower domestic investment and declining sales of state enterprises. The transformation of low-wage manufacturing to a service economy with a major internet commerce sector has influenced the growth rate. In addition, the Chinese government stimulates the economy less than in previous years. China is trying to stabilize its economy after years of robust growth, coupled with a strong build-up of debt and a devaluation of the yuan.
The value of the yuan has caused a capital flight from China. However, the downturn has also some benefits that are now visible. Thus, the export of China after months of contraction is again stabilizing.
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.