2010  
Nexus Capital Management 
Annual report 
 
 Nexus Capital Management ​Annual Report 2010 

Nexus Capital Management presents its first annual report covering the company’s activities in the 
global stock and commodity markets. As these markets demonstrate the highest yield, they are 
considered the top priority realms. In this paper, we explain what was done in 2010 and what were 
the results of those activities. 
 
The year 2010 was the second year of recovery for most markets after the 2008 crisis. However, the 
beginning of the year was the time of ambivalent moods. On the one hand, growing state debt, risk of 
accelerating inflation, and probability of the second recession cycle were the factors that gave rise to 
negative expectations. On the other hand, positive expectations, triggered by stabilization of financial 
markets and economic growth recovery, panned out. In particular, 37 countries out of 45 that are 
subject to the MSCI index demonstrated growth both in local currencies and the US dollar. 

Stock Market 
In 2010, globally diversified investors saw fairly high yield. The good news included the following: 
 
● economic expansion in the US and eurozone; 
● growth of production orders and production activity; 
● recovery of automobile sales and car manufacturers’ profit; 
● slowdown in growth of insolvencies in the US; 
● decrease in foreclosures on pledged property; 
● improvements in the financial services sector. 
 
Though  the  housing  and  commercial  estate  sector  remains  languishing,  property  market  securities 
outpaced the stock market across the globe. 
 

 
 
S&P 500, 2010 

Page 2
 Nexus Capital Management ​Annual Report 2010 

Let  us  look  into  major  stock  indices  such  as  Dow  Jones,  S&P  500,  NASDAQ,  etc.  By  the  year-end, S&P 
500,  the  index  that  spans  growth  dynamics  of  the  500  top-capitalized  companies  of  the  US  stock 
market,  demonstrated  12.80%  growth.  Dow  Jones,  in  its  turn,  gained  11.09%.  NASDAQ  Composite, 
which includes stocks of tech and rapidly growing companies, showed an increase of 17.32%. 
 

Dow Jones, 2010 

 

NASDAQ Composite, 2010 

Page 3
 Nexus Capital Management ​Annual Report 2010 

Russell  2000,  the  index  reflecting  stock  growth  of  low-capitalization  companies,  gained  25.31%.  This 
means that stocks of smaller companies grew in price more than stocks of larger enterprises. 
 
Now,  take  a  look  at  MSCI  World  ex  USA  Index  that  reflects  growth  of  developed  stock  markets, 
excluding  the  US.  Based  on  2010  results,  investments  in  the  non-US  markets  returned  investors 
income  of  9.43%,  which  is  slightly  lower  than  growth  of  the  American  markets.  MSCI  Emerging 
Markets  Index  rose  by  a  considerable  18.88%,  which  suggests  that  the  stock  markets  of  developing 
countries experienced a larger effect from positive driving factors in 2010. 
 
Diversifying  investments  by  their  size  and  value  risk  turned  out  to  be  profitable  both  in  the  US  and 
other markets, especially among the stocks on developing markets and stocks of small US companies. 
 
Not  only  could  Nexus  Capital  Management  achieve  positive  yield  comparable  to  the  growth  of  major 
indices,  but  it  also  managed  to  outperform  stock  indices.  The  yield  amounted  to  95%  per  annum, 
which  bespeaks  high  corporate  standards  and  was  possible  because  of  a  portfolio  assembled  of 
scrupulously selected assets that demonstrated the best yield in 2010. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Page 4
 Nexus Capital Management ​Annual Report 2010 

Commodity Market 
In  2010,  commodity  prices  grew,  with  most  sectors  having  achieved  price  levels  that  had  been 
unattainable  for  them  for  decades.  Specifically,  the  price  of  copper,  the  leader  in  terms  of  economic 
activity,  gained  33%,  and  the  price  of  crude  oil  increased  by  15%  and  exceeded  $91  per  barrel. 
Agricultural raw materials, a traditionally volatile sector, were characterized by even more abrupt price 
fluctuations. 
 
Concerns  regarding  dollar  weakening  led  to  a 
surge  in  prices  of  precious  metals.  In  this  regard, 
gold  exceeded  $1400  per  ounce,  and  silver  got
81% more expensive. 
 
High  volatility  in  the  commodity  markets  helped 
Nexus  Capital  Management  reach  considerable 
positive yield—107%—by the year-end. 
 
 
   
 
Copper price chart, 2010 
 

WTI crude oil price chart, 2010  Gold price chart, 2010
 
 

Page 5
 Nexus Capital Management ​Annual Report 2010 

Nexus Capital Management Annual Performance 

 
According to the performance results in 
2010, the Nexus Capital Management 
showed a total return of 81.2%. Such areas of 
performance as stock and commodity 
markets showed a return of 95% and 107%, 
respectively. 
 

Total revenue for each Nexus Capital 

Management field of activity 
 
 
Target markets, such as the stock and 
commodity markets, accounted share of 
Nexus Capital Management revenue. They 
brought 50.9% and 49.1% of total revenue. 

 
Revenue distribution by Nexus Capital 
Management key field of activity 
 
 
 
The  year 2010 encapsulated recovery and return to growth across all the markets after the 2008 crisis. 
Reliable  economic  performance  and  production  growth  helped  the  stock  market  and  commodity 
prices  to  rise.  The  investment  strategy that prescribed diversifying investments by their size and value 
risk  paid  off  well  in  the  reporting  period.  Stocks  of  small  American  enterprises  and  companies  on 
stock markets of developing countries demonstrated the highest growth. 
 

Page 6
 Nexus Capital Management ​Annual Report 2010 

 
Nexus Capital Management capital distribution during 2010 
 
To evaluate its performance, Nexus Capital Management compares the fund’s returns with respect to 
other popular investment instruments, such as US Treasury bonds, Dow Jones and S&P 500 market 
indices, and derivatives, such as ETFs. The figure below shows the profitability of these instruments in 
comparison with the profitability of Nexus Capital Management. 
 

 
Nexus Capital Management profitability comparison for 2010 
 

Page 7