Iraqi-Focused Fund Faces First Losing Year

Dec 30 2008 | 12:35am ET

The Babylon Fund dropped 1.6% in November, bringing its year-to-date losses to 20.1%. The firm said odds are now strong that it might have to summarize 2008 as the first “loss-making year” since the fund’s inception in 2006.

Bjorn EnglundBjorn EnglundBut portfolio manager Björn Englund remains upbeat about the fund’s performance relative to the markets it invests in.

“While, of course it is never satisfying to add negative value in any month, it seems as Babylon faired extremely lucky, once again, compared to the heavy sell-offs experienced in the MENA, GCC and also in the global frontier markets,” he wrote, in a monthly investor letter.

Within Iraq, Englund noted that the steep fall of crude oil prices continued in November, taking a heavy toll on most oil companies in Iraq. Also, the general sell-off of risky debt resulted in the Iraqi bond trading briefly all the way into default territory—mainly due to liquidity concerns.

“We now buy these bonds on the dips as we see good value as well as relatively good diversification and liquidity characteristics,” he wrote.

Related Articles:

Babylon Fund Posts Modest Gain in April
Babylon Fund Gains Access To Iraqi Stock Exchange
Bridges To Babylon: New Fund Focuses On Iraq

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