I know what you must be thinking. No, I haven't gone mad - and I do know that the banks are in a real mess. But I don't buy the notion that the eurozone is going to implode, or that Spain will be allowed to fail, and Spanish companies are in a different class to Greek or Portuguese ones.
Spain's benchmark Ibex 35 index is currently trading at about 9.2 times earnings with a yield of roughly the same. Now, I wouldn't trust those dividends as far as I could throw them, but I can see that the index is the stand-out dog among the main European bourses this year - down around 24 per cent and significantly underperforming the pan-European DJ EuroStoxx50.
Of course, the banks are a write-off - even allowing for last weekend's rescue package - but many of Spain's other big companies are well diversified and international, with plenty of links to thriving Latin America. There are two cost-effective ways to buy into this index, either via the db x-trackers IBEX 35 Index ETF (ticker DXIBX) or through the iShares MSCI Spain Index Fund, a US-listed exchange-traded fund (ticker EWF, more details here).
I admire the resilience of both the Spanish government and the wider Spanish population in dealing with their terrible problems, and while I have no doubt that the local real estate sector will continue to fall, Spain is making the brutal changes that are needed.
Regular readers will also be aware that I'm no "bull in a China shop". But nor do I subscribe to the notion that China will have a hard landing. And I agree with analysts at notoriously cautious Swiss private bank Lombard Odier, who have been bearish on Chinese equities for the past two years but say we have now reached the point where Chinese equities are starting to look cheap. Their price to 10-year average earnings stands 22 per cent below its historical average, close to February 2009 lows. Moreover, Chinese leading economic indicators have stabilised and seem to be turning up, from levels much more depressed than a year ago, while inflation pressures have eased.
My faith in China also helps underpin the view that we'll (narrowly) avoid a new global depression. When push comes to shove, I believe that the central bankers and governments will be keen to promote a co-ordinated and sustained growth package - although I accept that a global meltdown is a distinct and worrying possibility.
Given this more bullish macro view, I'm continuing to invest in the energy complex. The investment in specialist oil/energy fund New City Energy is my most disastrous recent foray into this sector - the fund's share price fell 15 per cent over the last month and since purchase a few months ago I've lost a whopping 35 per cent overall.
The oil equipment services sector also continues to disappoint, with the US sector tracker from iShares down 8.7 per cent over the month and US giant Noble falling just under 10 per cent over the month. But I still think shares in Cape are looking attractive, especially given the appointment of Hamworthy's old boss as the new chief executive. The 'mishaps' in North Africa that blighted the shares in this oil and gas services/contracting group are hugely regrettable but I think we've got the worst of it out in the open and more importantly, in the price.
So I'm becoming more and more optimistic about my exposure to risky energy equities - and thankful that I don't own poor old Lamprell, which has really collapsed after a double profit warning.
Oil's continued weakness has also hit Russian equities, which helps explain why private equity fund Aurora continues to motor ever lower in price - it's down 15 per cent this month and so far its lost me 43 per cent. Aurora is trading at an enormous discount to net asset value - anything between 70 and 40 per cent depending on how you do the sums. This small London-listed fund is focused on three major private-equity investments including a Russian version of DIY store Wates, a specialist document storage business and a Russian version of Western Union. All three of these businesses appear to be trading strongly and the new board at this closed-end fund seem very motivated to sell these businesses in 2012 for a decent price - all of which suggests that that cavernous discount might be a tad overdone.
The overall fall in my Sipp portfolio is less bad than the individual cases above partly because of the 25 per cent cash holding, which has cushioned the market falls over the past month. In addition to Spain, China and more energy, I'm mulling another quirky potential addition to my portfolio in the next few weeks.
It's is a new tracker based on the Quality and Income screens devised by Andrew Lapthorne at French bank Societe Generale. This is an internationally diversified bunch of quality companies that have passed various 'value' orientated measures, tracked in turn by an exchange-traded note (ETN) with the ticker SGQI. You can find more details about this low-cost fundamental tracker at tinyurl.com/bm8nvno, but note that it's not for widows and orphans, as it's more like a warrant than an exchange-traded fund.
I'll also be investing in a new hedge fund from BlueCrest called Bluetrend - the ticker for the sterling shares is BBTS. As with the SocGen ETN, this is really only for the adventurous - the closed-end fund invests in a master fund from BlueCrest that runs a respected, and successful CTA (commodity trading advisors) managed futures strategy. This hedge fund will be a useful adjunct to my existing hedge fund positions - BH Macro and the Barclays Celsius RADAR fund. I'll probably allocate about 2.5 per cent of my Sipp to each of these two ideas, with the equivalent of about £2,000 in each.
