Bestinvest says
The manager conducts numerous company meetings worldwide and has an impressive knowledge of his sector. The performance of the fund suffered from being launched just prior to the financial crisis but subsequently the managers' performance has been impressive. The managers style appears to be particularly effective in rising markets as he is able to capitalise on an emerging theme quickly.
The manager targets stocks that are well placed to exploit current commodity price trends. As crop rotations are typically 6m's for 'softs' such as corn the manager will blend his short term 12-18 month view with a medium term 3-5 year view. The fund will also have roughly 20% in special situation stocks.
The return characteristics of this fund is high volatility and a low correlation to the broader equity market. However this is a function of the area in which the fund invests as opposed to the manager himself for whilst he will take some reasonable relative positions is also very conscious of risk. Specifically he looks at 20 and 40 month moving averages for each stock position, trimming and adding to positions where appropriate, with hard limits of risk that he will not cross. The manager also has self imposed, stringent, 'worst case scenario' liquidity constraints.
Agricultural commodities are a volatile area but investors are buying into a space with good long term dynamics. World population growth, a rising Asian middle class consuming more value added food groups and, an area of which this manager put significant emphasis, supply shortages are all favourable for prices and especially companies who's revenue are dependant on these prices.