Bestinvest says
This fund offers investors exposure to a diversified group of commodities right through the value chain. Given that the structure of the fund has a substantial proportion in large cap liquid holdings we would not expect the fund to deviate significantly from the benchmark in the short term. What the investor is really buying is Warners' team skill at identifying fantastic opportunities in early stage developments.
Warner herself has a long track record and fairly impressive track record. The team as a whole are also highly experienced and are qualified in natural sciences rather than analysts which makes them appropriate for assessing these early stage developments.
The aim of the fund is to achieve long term capital growth by investing in equities across the mining universe. The benchmark is the HSBC Global Mining. The fund will invest in both metal, both industrial and precious, as well as energy. The split will generally be in favour of metals. the discovery, development, extraction, processing or distribution of natural mineral resources.
The top ten holdings will consist of approaching 50% of the fund, although this will vary, and will largely consist of big diversified companies. In this space the focus is primarily on companies with the lowest cost of production and are therefore more robust when prices fall. This means that in the short term performance is unlikely to diverge significantly from the benchmark.
The remainder of the fund will invest in companies principally engaged in companies that are conducting earlier stage developments. This will include companies who are drilling or, in some cases, still conducting seismic testing. Investors are therefore buying the skill of the manager and her team. The team have a largely scientific background, as opposed to equity analysts looking at the resource space, which means they are qualified to examine these early stage investments.