Best Fund Provider Commodities Fund
Ninety One
Best Fund Provider – Commodities Fund
Tom Nelson
head of Thematic Equity
“We are honoured and delighted to receive this award from Asian Private Banker, and would like to express our heartfelt appreciation for their ongoing recognition of asset management excellence.
2022 was a year of momentous change, and we are seeing a historic impetus away from fossil fuels, particularly in Europe, as a consequence of the Ukraine crisis. Inflation and geopolitics have placed the companies that harness natural resources under the spotlight as never before. Efforts to tackle climate change are driving powerful market trends for many natural resources — and in the equities of companies that produce them — creating opportunities for investors.
The world is moving from a fossil-fuel based energy system to a metals-based system, and the natural resources sector is well placed to help make the necessary transition. This shift is creating a new investment cycle across a wide range of natural resources.
Ninety One’s Thematic Equity Team has deep experience of the natural resources sector and the role that it needs to play in a decarbonised future, which enables us to view investment ideas from all angles and identify the most attractive opportunities.
We believe that corporate and stock price performance in this sector is directly affected by ESG factors. As active managers in this area, we have a responsibility to engage with management teams in terms of ESG, and are in a position to help make emissions-intensive industries fit for the future and enable positive change.
Looking ahead, our team will keep searching for high-quality equities exposed to the opportunities in the natural-resource sector — including both direct and indirect beneficiaries of the energy transition — with the aim of generating a significant rewards potential for investors, and a bright future for the planet.”
Winnersrationale
As commodity prices have risen significantly in the past 12 months, commodity strategies have become one of the options for investing in natural resources.
Ninety One has seen attractive opportunities in the sector of natural resources. Its Global Natural Resources Fund (the “Fund”)1 invests in energy, including renewables, together with base metals and bulks, precious metals, and agriculture through equities. The Fund allows investors to navigate volatile markets and gain exposure to selected areas with the most attractive characteristics.
The Fund invests in companies involved in mining, extracting, producing, processing, or transporting a natural resource or commodity, in addition to companies that provide services to the resources sector and the underlying commodities.
Amid market turmoil over the last 12 months, the Fund yielded 10.7% YTD as of the end of August 20222, thanks to a positive stock selection. In 1Q22, the Fund already delivered a positive absolute return of 22.5%2. Its exposure to the fertiliser and agricultural chemicals sector made a significant positive contribution to relative returns, as did its steel exposure3.
At the stock level, the main contributors to such resilient returns included an overweight3 in the German fertiliser group K+S4, whose shares gained on rising prices for its products as the war in Ukraine heightened concerns over the already tight fertiliser supply.
The investment philosophy of Ninety One is centred on three core beliefs: that companies which can generate a superior return on capital will outperform through commodity cycles; that the best investment performance in this sector comes from directionally accurate medium-term commodity price forecasts combined with in-depth fundamental stock analysis; and last but not least, that Ninety One has a clear responsibility to engage with management teams on ESG.
For its strong capability in managing the funds and delivering a positive return, Ninety One wins Best Fund Provider – Commodities Fund in Asian Private Banker’s 2023 Asset Management Awards for Excellence.
1 This Fund is a sub-fund of the Ninety One Global Strategy Fund.
2 Source: Morningstar, based on A Inc USD Share Class as at 31 August 2022, net of fees (NAV based, including ongoing charges, excluding initial charges), gross income reinvested, in USD. Calendar year performance – 2017: 13.8%; 2018: -17.8%; 2019: 19.6%; 2020: 4.1%; 2021: 28.3%. YTD= year to date.
3 Source: Ninety One, performance from 31 December 2021 to 31 March 2022, in USD gross of fees. Benchmark: MSCI AC World Select Natural Resources Capped Net Return.
4 This is not a buy, sell or hold recommendation for any particular security. Individual security performance does not represent the Fund performance. There is no guarantee that the Fund is currently investing and/or will invest in the securities in the future.
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