Commentary Archive 2009

Commentary Archive 2009 background

Commentary Archive 2009

Disclosure

Performance results are based on estimates. Although the information contained in the commentary sections have been obtained from sources we believe to be reliable, the accuracy and completeness of such information and the opinions expressed herein cannot be guaranteed. Past performance is not necessarily indicative of future results. Different types of investments involve varying degrees of risk.

December 2009 Summary

Hanseatic’s Large Cap portfolio gained 3.70% in the month of December, outperforming the Russell 1000 Growth benchmark by 0.61% and outperforming the S&P 500 Total Return Index by 1.77%.

The principal reason for outPerformance in the Large Cap portfolio was the exposure to selected technology stocks. Consumer discretionary, energy and healthcare stocks also contributed to absolute and relative Performance. Financial and metals stocks subtracted from Performance.

November 2009 Summary

Hanseatic’s Large Cap portfolio gained 6.57% in the month of November, outperforming the Russell 1000 Growth benchmark by 0.43% and outperforming the S&P 500 Total Return Index by 0.57%.

The equity markets have traced similar patterns the last three months; directionally positive during the first half of the month - volatile correction/consolidation during the latter half of the month. November was notable in that the consolidation over the past two weeks was constructive relative to the sharp corrections experienced in September and October.

In the Large Cap portfolio, all market sectors contributed positively to absolute Performance with the exception of energy stocks. Technology, consumer discretionary and material stocks accounted for most of the portfolio’s relative outPerformance.

October 2009 Summary

Hanseatic’s Large Cap portfolio lost 4.17% in the month of October, underperforming the Russell 1000 Growth benchmark by 2.82% and underperforming the S&P 500 Total Return Index by 2.31%.

In direct contrast to September, all ten market sectors had negative absolute Performance. Relative portfolio underPerformance in the Large Cap portfolio was focused on technology, consumer discretionary and finance stocks, and occurred almost entirely on the two trap door decline days at the very end of the month.

September 2009 Summary

Hanseatic’s Large Cap portfolio gained 6.52% in the month of September, outperforming the Russell 1000 Growth benchmark by 2.27% and outperforming the S&P 500 Total Return Index by 2.79%.

For the third quarter of 2009, Hanseatic’s Large Cap product gained 18.85% outperforming the Russell 1000 Growth benchmark by 4.88% and outperforming the S&P 500 Total Return Index by 3.24%.

In the Large Cap portfolio, each of the market sectors contributed positively for the both the month of September and the third quarter. The Performance of technology stocks and consumer discretionary stocks in the portfolio was primarily responsible for outPerformance relative to the benchmarks for both time periods. Financial stocks, healthcare stocks and material stocks also contributed to positive relative Performance.

August 2009 Summary

Hanseatic’s Large Cap portfolio gained 2.40%, outperforming the Russell 1000 Growth benchmark by 0.33% and underperforming the S&P 500 Total Return Index by 1.21%.

Sector Performance narrowed in the month of August with financial, technology and consumer discretionary stocks performing well, and the healthcare and energy stocks in modestly negative territory. The outPerformance of the Large portfolio relative to the Russell 1000 Growth benchmark was due to exposure in technology stocks, especially semiconductor and computer manufacturers, and to the strong Performance of banks and insurers.

UnderPerformance of the portfolio relative to the S&P 500 Total Return index was due to the outsized impact of the financial sector. Though the index gained over 3% in August, only two (finance and industrial) of the ten sectors outperformed the benchmark. Eight of the top ten performing stocks in the index were financial stocks.

July 2009 Summary

Hanseatic’s Large Cap portfolio gained 8.96%, outperforming the Russell 1000 Growth benchmark by 1.86% and outperforming the S&P 500 Total Return Index by 1.40%.

All ten sectors had positive monthly Performance in the Large Cap portfolio. OutPerformance relative to the benchmarks was due primarily to positive trends in technology sectors, and also due to exposure in selected consumer discretionary, healthcare, materials and finance sector stocks.

June 2009 Summary

For the second quarter of 2009

Hanseatic’s Large Cap portfolio gained 7.47%, underperforming the Russell 1000 Growth benchmark by 8.85% and underperforming the S&P 500 Total Return Index by 8.46%.

Year to date, Hanseatic’s Large Cap portfolio lost 1.69%, underperforming the Russell 1000 Growth benchmark by 13.22% and underperforming the S&P 500 Total Return Index by 4.85%.

Global equity markets rebounded strongly in the second quarter, delivering the best quarterly Performance since 1998. Financial stocks performed the best after the prices of many were discounting the risk of bankruptcy. The perception of a global economic recovery led by emerging market economies buoyed energy and materials stocks. Technology stocks also rebounded sharply.

UnderPerformance in the Large Cap portfolio was due largely to being relatively underweight technology stocks and in particular those that are most heavily weighted in the index. All portfolio sectors performed positively with the exception of finance stocks where exposure to a couple individual issues penalized Performance.

May 2009 Summary

Hanseatic’s Large Cap portfolio gained 3.03%, underperforming the Russell 1000 Growth benchmark by 1.93% and underperforming the S&P 500 Total Return Index by 2.56%.

The Large Cap portfolio underperformace was due largely to cyclical corrections in selected consumer and information technology stocks, and modest underweighting in the energy and financial industry stocks that were the primary focus of the market’s appreciation in May.

April 2009 Summary

Hanseatic’s Large Cap portfolio gained 5.50%, underperforming the Russell 1000 Growth benchmark by 4.10% and underperforming the S&P 500 Total Return Index by 4.07%.

Year to Date

The Large Cap has lost 3.49% and lags the Russell 1000 Growth benchmark by 8.58% and trails the S&P 500 Total Return Index by 1.00%.

The Large Cap portfolio underperformace was due largely to exposure to Healthcare and Gold stocks. In both cases, the defensive diversification benefits of stocks in these sectors were far outweighed by significantly lagging the outsized gains of the Financial, Consumer Discretionary and Technology sectors.

March 2009 Summary

During the first quarter of 2009 Hanseatic’s Large Cap portfolio lost 8.56%, underperforming the Russell 1000 Growth benchmark by 4.44% and outperforming the S&P 500 Total Return Index by 2.45%.

The Large Cap portfolio was penalized by exposure to several stocks in the Healthcare (HMOs, Drugs and Biotech), Consumer Staples, Finance and Industrial sectors. Stocks in other sectors including Technology, Materials, Consumer Discretionary, Energy, Utilities and Telecom performed relatively well for the quarter.

February 2009 Summary

Hanseatic’s Large Cap portfolio lost 7.58% during February, underperforming the Russell 1000 Growth benchmark by 0.06% and outperforming the S&P 500 Total Return Index by 3.07%.

The Large Cap portfolio was penalized by exposure to several stocks in the Healthcare (HMOs and Drugs), Technology, and Industrial sectors. Consumer Discretionary did relatively well for the month. The retreat in former Healthcare leadership was most notable in February.

January 2009 Summary

Hanseatic’s Large Cap portfolio lost 5.83% during January, underperforming the Russell 1000 Growth benchmark by 1.02% and outperforming the S&P 500 Total Return Index by 2.60%.

The Large Cap portfolio was penalized by exposure to several stocks in the Consumer Discretionary, Staples, and Finance sectors. Most stocks in the portfolio performed relatively well, especially Healthcare, Energy and Utility stocks.