RDR Capital’s MENA portfolio is down 0.9% in 2017 and up 14.9% since inception (the portfolio was incepted on the 1st of October 2016). Our global portfolio is up 1.6% in 2017 in GBP terms (up 11.6% in USD terms) and since inception (the portfolio was incepted on the 1st of January 2017).
Geopolitics weighed (again) on the MENA portfolio’s performance during the fourth quarter of 2017
The Middle East and North Africa (MENA) portfolio was under pressure during the fourth quarter of 2017 mainly due to an increase in geopolitical risk in the gulf region, especially in Saudi Arabia, on the back of the arrests of senior Saudi political and business figures. Political stability in Saudi Arabia has always been taken for granted, not any more. The heightened risk was reflected in higher bond yields in Saudi Arabia and across the region.
We were defensively positioned during the 4th quarter of 2017 (4Q17) with a cash balance of c40%, which caused a significant cash drag at the end of the quarter when markets recovered in the region, especially in Saudi Arabia. The Saudi Tadawul benefited from a year-end rally on the back of positive news regarding next year’s expansionary budget. Our portfolio is well positioned to benefit from the improvement in consumer confidence in the kingdom in 2018.