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Back to the future, may 2011: Nobles Crus and Earth Element Fund

Yesterday they were introduced as innovatives products. Today, How far have they got and what are the prospects for tomorrow ? Two products in the spotlight this month: Nobles Crus or the blend of passion for wine and financial investment, and a quantitative systematic long-short strategy on commodities, Earth Element Fund.

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Next-Finance will now issue a monthly review of a set of preselected innovative products that have been featured on the website at least one year ago. Today, special focus on asset management with two funds discovered in 2009.

NOBLES CRUS: wine as an investment vehicule

Nobles Crus, the perfect blend of wine and finance

Launched in 2008, Nobles Crus is a Luxembourg Sicav investing in the top graded wines and that has registered since launch a performance of 27.65%.

In December 2009, we published an article, whose preview is available on the right side of this text, about a fund that smartly combines a passion for a tangible and understandable asset and a long-term financial investment. At the time, the innovative concept of the product had already been rewarded by specialists. Above all, Nobles Crus was positioning itself as a true alternative investment with 20.39 percent returns delivered in 2008 and 9.79 percent in 2009!

Today, we can say that Nobles Crus is undoubtely in line with expectations with 13.41 percent returns delivered in 2010 and, moreover, it showed as of march end an impressive sequence of 25 consecutive months with positive returns! With nearly 19,000 bottles in the portfolio, assets under management that have more than doubled in 2010, a performance since inception of 52 percent and a 5-star Morningstar rating, the fund Nobles Crus is so far a success for its management company, Elite Advisers.

Nobles Crus offers an investment plan in line with our grandparents' understanding of savings, an investment in a product that we know
Véronique Cioli

Véronique Cioli, Partner at Elite Advisers, commented: "Very far from any idea of speculation, purchase of pure marketing products or wines that do not earn value over time, we are long-term investors who place assets of our clients in the world best wines, those that are produced in small quantities and that everyone wants to acquire and to taste. It is nothing but the quality and rarity that lead to a gradual rise in prices even in times of crisis."

"Like artists who value Mother Nature, Nobles Crus is designed to support the market and preciously hold these fine and rare wines until they mature" added Veronica Cioli.

As for outlook, the 2011 investment policy of Nobles Crus is firstly to sell some mature products in the Asian market, particularly in China, secondly to select carefully the 2010 Bordeaux primeurs with higher quality and finally to acquire positions in the 2009 Bourgogne vintage wines. Another on-going theme is to continue the consolidation process of past millesimes, if possible in large intermediary formats that are the most sought after by amateurs and will certainly be also sought after by the Chinese in a few years.

EARTH ELEMENT FUND, a quantitative long-short strategy on commodities

Lionel Semonin: «Earth Element is a commodity fund using long-short strategies! »

Ex-BNP Paribas and former head of JP Morgan’s Commodity Investor Solutions, Lionel Semonin has launched Four Elements Captial, an asset management firm with a focus on commodity markets.

Still in December 2009, we interviewed Lionel Semonin who, in an article available on the left side, introduced his newly created firm, Four Elements Capital, and more specifically the fund Earth Element Fund. The fund innovative approach relied on an investment process based on quantitative analysis of market’s fundamentals of each of the 30 commodity markets of the investment universe. The output was a set of long and short positions somewhat similar to equity long-short positions. At the time, the fund was not yet open to investors and was still in the process of building a trackrecord.

Today, the fund is open to investor with a soft close at $150 Mio and hard close at $200 Mio. The fund’s strategy has been evolving as usually the case for any full quantitative and systematic process, adding new signals and expanding the investment universe to 36 commodities. We can mention the use of intra-day trading capabilities on selected contracts in order to add more reactive, shorter term strategies to the existing short and medium term approach.

Performances are rather on track with a good run in 2010 (about 16%) and a very strong beginning of 2011 (around 10% year to date). However, marketing efforts must be intensified as the assets under management are still significantly below target. The fund is domiciled in the Cayman Islands and Listed in the ISE (Dublin), which is usually considered as the standard offshore HF format.

Next Finance , May 2011

Article also available in : English EN | français FR

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