Bestinvest says
The fund has exceptionally low volatility given that this asset class is highly cyclical. Despite this over the long term performance has been less impressive that some of the direct competitors because the manager has failed to capture market rallies sufficiently. The manager has recently made a change to his process which is designed to rectify this and if this successful it would go some way to justifying the performance fee.
The mangers have two main beliefs which they try to reflect in the portfolio. The first is that the resources sector is very dynamic and changes occur at more than just the commodity price level. For instance emerging economies will often make important decisions that have distorting affects on local supply and demand. The second is that large companies are often structurally inefficient. They therefore try and focus on companies, often of medium size, that are well placed to benefit from this. A corollary of this is that they will often benefit from M&A or investing in companies that are spun out of larger ones where the full value of the asset has not been realised.
They do not try and predict commodity prices, instead they look for distortions along the supply chain. Unfortunately this means that they have missed significant turnings points in markets previously although they have demonstrated to us that they are developing their process specifically with this in mind.
Perhaps the most attractive aspect of the fund is the low volatility, especially given how volatile and cyclical the sector can.
This is a relatively safe fund for investors seeking general commodity exposure. Although there is a performance fee attached.