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NESTOR Australia - Quarterly Report 4/2020

Nestor Australia continued the strong performance of the previous quarter, rising 20.85%. It again outperformed the index, which rose 16.5%.

The recovery of the world's stock markets continued, with the expectation that pronounced stimulus programmes and an unchanged accommodative central bank policy will result in a pronounced recovery of the global economy in 2021. In this context, commodities and their producers have once again been the focus of investor interest for a long time. This includes the topics of electrification and renewable energies - these topics will continue to keep interest in various commodities such as copper, nickel or lithium - just to name a few examples - high, especially since major impulses are also expected from the new US administration.

The growing interest of financial investors will probably bring even greater volatility to the commodity complex. However, it should lead to a continued firm market as the year progresses.

The volatile environment of the market and many individual stocks again made it necessary to manage the fund very actively. Positions in Chalice Gold, Caravel Minerals, Flight Centre, Breaker Resources, Nine Entertainment, Marley Spoon, Black Dragon and Telix Pharmatheuticals were sold outright, in some cases with large profits, while Nuix Ltd, Dusk Group, BHP, Fortescue, Redbubble, Warrego Energy, Centaurus Metals and Inghams Group were added. The focus was always on not letting the exposure to the commodities sector become unduly large - after all, Nestor Australia wants to show the overall market - despite an overweight in the sector.

Our self-imposed target of holding no more than 5% of the fund in any one stock, if possible, led to repeated sales of companies such as Foran Mining in particular, one of 2 non-Australian companies in the portfolio, which repeatedly hit this limit due to strong performance.

Basically, the mood in Australia remains positive, especially as the country seems to have the Corona virus well under control. The economy is expected to recover strongly in the current year, and the commodities sector will contribute strongly to this. We therefore see good potential for Nestor Australia to continue its strong performance at the start of 2021, subject to fluctuations!

Wilhelm Schröder, Schröder Equities GmbH