When we conclude the first quarter of 2010, we observe that the S&P500 has seen its strongest start of a year since 1998. Also Europe was strong. Developed markets have performed far better than emerging markets. Leading indices in India and Brazil is only barely in positive terrain, while China is negative year-to-date after a couple of tightening moves on the credit market due to inflationary pressures.

The single most important event for the fund’s investment universe was the success of the health care reform in the USA. This success gives President Obama the opportunity to negotiate the legislation on carbon emission trade and a lowering of carbon emissions of 17% by 2020. Ironically enough, Obama offers to re-open oil and gas fields that have been closed for 20 years – to win Republican votes for the new climate legislation. This offer is looked at with some skepticism by national climate lobbyists. We believe that a positive outcome of these negotiations is of great importance to the environmental movement. The stock market is not pricing in any success in this respect.

During the month we increased the fund´s exposure to Asia. We believe that its weak performance has created a buying opportunity since both Europe and the USA will tighten their credit markets and money markets, as China has already done, and this may create overperformance in Asia.

Read the monthly report here.

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