Market CommentaryThe Mosaic Global Fund had a -1.78% estimated performance for the month of September with an estimated year-to-date return of 4.90% for the Euro share class. In September, we made money on our equity positions and commodities but lost money on our alternative investments, hedge funds and Managed Futures. The latter had a particularly difficult month. This resulted in an overall loss for the Fund.

More Quantitative Easing (QE) is here, yet again! Looking at the development of the situation in Europe and the US, maybe it was to be expected. Risk-on is back and instantly turned stock markets higher.

We are increasingly wary about the current situation and its sustainability. The reason: QE doesn’t work so well for long-term growth. Over the last few years, the US Fed has increased the monetary base, or money in circulation, from around $800 billion to just under $3 trillion. It has helped the economy but only marginally. We would argue that “biting the bullet” and reducing the debt would be a more rational tactic.

We have reduced our equity exposure during the month, both in developed and in emerging markets, having been bullish for quite some time now. The market has run a long way and we are seeing a high complacency with volatility index at historical lows. Instead, we have increased our holdings in bonds and commodities. We have reduced a few of our hedge fund positions and also increased the amount of cash we hold to take advantage of coming opportunities.

As usual we ook forward to speaking with you over the coming weeks. Please write to us at info@cardeainternational.com or visit us our webpage www.cardeainternational.com.

Happy Investing,

The Cardea Team

Per Olov Jansson
CEO Cardea International
perolov.jansson@cardeainternational.com

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