After the extremely strong close in 2019 (December +14.42%) and a small minus in January (-1.18%), February showed extreme volatility. The market sentiment was very positive in the first half of the month, ignoring the dangers of an advancing corona pandemic. In the last ten days, sentiment turned completely and we saw large selling pressure in almost all markets, even among precious metal producers. As a result, almost all positions in the portfolio were under great pressure, which resulted in a 11.15% lower net asset value for our fund. Despite positive reports from China, according to which the authorities are currently unable to report any new cases of infection, concern about Covid-19 has now taken hold of global markets. The disease appears to be the needle that bursts the "everything bubble". There is now a major risk of further global market correction. The commodity sector remains vulnerable to the economic fallout and has now dropped even more. In relation to the S&P 500, the undervaluation has now reached the lowest point of the past 100 years.
In February, we continued to make the portfolio more defensive. This was done by taking a profit in a number of positions that have risen strongly, which meant that the cash position rose to almost 10% in the course of the month. In addition to cash, around 30% of the portfolio is in the more defensive categories, such as precious metal producers. The BlackRock World Mining Fund, for example, shows a YTD loss of 18%, partly due to a 12% lower zinc price last month. We continue to keep a strong focus on investments in a number of special new discoveries. The position in DeGrey Mining, for example, has been further expanded after very good drilling results in the Australian Pilbara. Unfortunately, many core positions, such as SolGold and Great Bear Resources suffered from large sales pressure. Many exploration companies fell by more than 20% in a movement that is strongly reminiscent of a capitulation phase.