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Matrix New Europe Fund increases exposure to Turkey

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The Matrix New Europe Fund is increasing its exposure to Turkey despite many commentators arguing that it is time to take profits from that market.

And fund manager David Thornton believes the country’s young, growing population, coupled with it’s geographical location at the crossroads of Europe the Middle East and Asia and recent political stability, means that, in investment opportunity terms, Turkey’s future is bright.

“Turkey’s GDP will have grown by over 7% in 2010 with around 4.5% expected this year," he says. "The corporate sector enjoys good standards of governance and is well placed to exploit this constructive environment, yet the market trades on a modest p/e of 10. As investors start to look beyond the BRIC countries, Turkey has the scale and growth prospects to become a strategically important component of the global emerging market scene.
  
“The core investment theme from the start has been to avoid the energy and resources sectors which dominate the regional indices. Tax policy and political interference in Russia mean that the extractive industries are managed in the state’s rather than the shareholders’ interests and investors can of course obtain oil and gas industry exposure in any number of markets around the world without taking the trouble to go to somewhere like Russia. 
 
“What is hard to get elsewhere, however, are the superior growth opportunities generated by the domestic economy as wealth builds and a middle class emerges: this is why we much prefer consumption and infrastructure as themes and this focus has driven our performance.  The recently announced acquisition of one of our holdings, Wimm-Bill-Dann Foods, by Pepsico adds weight to this thesis”.
 
Launched in December 2006 as an eastern European equity fund, the Matrix New Europe Fund has since outperformed the regional MSCI Eastern Europe Index by 52.8% as well as returning 24.3% for 2010 to 30t November. It originally invested throughout Central and Eastern Europe but has focused almost exclusively on Russia over the last two years only recently building up exposure to Turkey.

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