At the end of March, all of the company’s available funds were deployed though risk exposure was deliberately low during a period of ongoing volatility in emerging markets.
APQ added that its dividend is well covered by economic income in the portfolio.
“Breaking down our dividend funding, 2.9% comes from the company’s equity positions, 1.7% is derived from the credit positions with the remainder coming from APQ Global’s strategic, government & corporate bond and currency portfolios.”
The company’s credit exposure is 22.5% of book value, net emerging markets equity exposure is 11.9% while net currency and fixed income exposure in emerging markets account for -1.1% and 12% respectively.
The largest equity positions remain concentrated in Russia, due to a bullish view on commodities and belie that the current tension in relations between Russia and the United States will gradually improve on the back of a shared interest to restore stability in the Middle East.
APQ also believes the central bank in Brazil will continue to cut official interest rates by a further 250bps in 2017 and provide a boost to the currency and local markets.
From a sector perspective, the bulk of the company’s exposure is in energy, industrials and financials, taking into account the sector composition of index exposure in Russia, India and global emerging markets.
Book value at the end of the quarter was 97.2p.