Element Global Value

April 2013

The Element Global Value Portfolio has the mandate to go anywhere in pursuit of attractive investment opportunities, using a bottom-up investment approach. Being equity focused, the portfolio has at least 70% of its assets invested in international equity markets. The portfolio uses as benchmark the MSCI World (Local) but it does not seek to mimic or track this index in any way.

Portfolio Details
Net Asset Value (NAV) : 105.74 Launch date: Portfolio Manager: 14-January-2011 Filipe Alves da Silva, CAIA
115 110 105
100 95

Weekly Performance Chart

90 85 80 Jan/11 Feb/12
MSCI World Local Portfolio

Feb/13

Monthly Performance
Jan 2011 2012 2013 -1,11% 7,06% 2,90% Feb 1,61% 5,19% 0,47% Mar -2,05% 1,62% 1,33% Apr 3,30% May Jun Jul Aug Sep Oct 8,70% -1,50% Nov Dec YTD -1,25% -1,72% -1,37% -7,23% -7,20% 2,62% 0,62% 2,67% 1,35% -2,83% -1,18% -12,57% 0,97% 0,87% 13,73% 6,33%

-0,86% -6,98% 1,51%

Investment Highlights

The portfolio followed global equity markets in another month of gains, albeit at a slower pace, lagging by -1.03%. In February I wrote about the portfolio's persisting underperformance relative to the global equity markets, two months have passed and the underperformance persists. Back then I exposed that the three major factors behind the underperformance were the poor performance in the shares of Apple, Microsoft and the mining related companies, as well as the fact that the portfolio was not fully invested. It turns out that there is another very important factor: Japan. The Nikkei, driven by Japans successful efforts in weakening its currency, advanced by 33.3% in the first four months of the year (as of the time of this writing, it is up by more than 45%). As Japan accounts for roughly 10% of the benchmark, and Element has no significant exposure to Japanese stocks, the opportunity cost of deviating from the benchmark is 3.3% (or 4.5% as of the time of this writing). Only time will tell how Japans massive gamble with its currency and colossal debt load will payout in the long-run. There are now new positions and no changes were made to existing positions during the month.

Element Global Value

Investment Guidelines
Max. Long Exposure: Min. Long Exposure: Position Sizing (Long): Use of Derivatives: 130% 70% Max Position 10% (at purchase) May use options or warrants (Max notional exposure of 20%) Max individual position 2.5% Max gross short exposure 30% Hedged on a best effort basis

Largest Positions
Name
i Sha res MSCI Worl d ETF Hedged IBM Mi cros oft Corpora ti on Fi del i ty Chi na Speci a l Si tua ti ons Appl e Inc Peps i Co Berks hi re Ha tha wa y BMW Archer Da ni el s Mi dl a nds Bl a ckRock

Weight
10,3% 9,5% 6,7% 6,0% 5,9% 5,8% 4,7% 4,1% 3,7% 3,5%

Ability to Short:

Currency Hedging:

Total TOP 10 Positions

60,1%

Allocation by Sector
Cash Other Utilities Telecommunication Services Materials Health Care Consumer Staples Consumer Discretionary Energy Industrials 2,4% 1,3% 29,2% 12,2% 0% 5% 10% 15% 20% 25% 30% 35% 0,4% 5,4% 3,4% 5,4% 12,7% 17,1% 5,2% 5,1%
Cash Others Switzerland Australia Japan Kazakhstan United Kingdom Brazil Ukraine Israel Spain Germany France Canada China United States 0% 5,2% 1,9% 0,4% 0,4% 0,9% 0,9% 1,0% 1,1% 1,5% 3,3% 4,5% 4,4% 4,7% 4,9% 7,5%

Allocation by Country

Information Technology
Financials

57,3% 10% 20% 30% 40% 50% 60% 70%

Currency Exposure
120% 100% 80%
98,5%

Contacts
For more information please contact Filipe Alves da Silva directly or send anemail to element.cap@gmail.com

60% 40% 20%

0% -20%
-15,7% 6,5%

Disclaimer
1,1%
4,7% 1,4%

1,5%

1,1%

This report is based on my portfolio. Reference to specific securities should not be construed as a recommendation to buy or sell these securities. You should always conduct the due diligence yourself.

-40%
EUR USD CNY BRL CAD GBP UAH HKD

E L E M E N T

Element Global Value

Complete List of Holdings

Name
iShares MSCI World ETF Hedged IBM Microsoft Corporation Fidelity China Special Situations Apple Inc PepsiCo Berkshire Hathaway BMW Archer Daniels Midlands BlackRock Teva Pharmaceuticals Lowe's Chatham Lodging Trust Alternative Asset Opportunities Telefnica Societe d'Edition de Canal+ Renault Amadeus IT Holdings Corning Inc Avangard IMAX Corporation OPAP MRV Engenharia Monument Mining PAX Global Technology Jakks Pacific Veris Gold Corp KazMunaiGas E&P Energold Drilling Cninsure Calfrac Well Services Patient Safety Technologies GAP Inc Ted Baker Addvantage Technologies Cash

Weight
10,3% 9,5% 6,7% 6,0% 5,9% 5,8% 4,7% 4,1% 3,7% 3,5% 3,3% 3,1% 2,6% 2,5% 2,3% 2,2% 2,1% 2,1% 2,1% 1,5% 1,2% 1,1% 1,1% 0,9% 0,9% 0,9% 0,9% 0,9% 0,6% 0,6% 0,4% 0,4% 0,3% 0,3% 0,2% 5,2% 100,0%

Total

Note: Reference to specific securities should not be construed as a recommendation to buy or sell these securities. You should always conduct the due diligence yourself.