By MARCEL PORCHERON 14/09/2006
Investing in equities in the resources sector, this fund is run by a mostly Australia based team of seven, some of whom have scientific backgrounds. The team focus on quality assets, with typically 80% of the portfolio considered large cap/ higher quality based on assets and cost of production. However, there is also some exposure to Exploration & Production companies and companies with unproven reserves through smaller, higher risk positions which explain the long tail to the portfolio. The universe of companies includes precious and base metals, energy and energy related and also pulp and forestry. Valuation is done using net present value (based on long run prices). Risks to the portfolio primarily come on the upside where the focus on the lower cost producers is likely to impact performance because these companies are less geared in to rising markets. Because of this focus we see this as offering more defensive commodity company exposure and a late cycle alternative to JPM Natural Resources.
Awarded 3 stars