Eclectica Agriculture Fund

Overview

Long-only agricultural equity fund.

Key Facts

Why an agriculture fund? The sector is emerging from a generation long bear market, during which low crop prices stopped farmers investing. Now that crop inventories are at critically low levels, prices have risen dramatically and farmers are again incentivised to spend. Global demand for soft commodities continues to trend higher and until global inventories are at sufficiently secure levels, high prices will remain. Reasons for this increase in demand are: diet change in emerging markets, global population growth and the rise of biofuels

Investment Universe There are over 500 listed agricultural companies globally, which include fertiliser, seed and farm machinery companies

Investment Process Top-down analysis followed by individual stock selection

Portfolio Construction The Fund typically holds about 60-80 positions, which will have exposure to around five top-down themes

Fund Manager

George Lee has managed the Fund since inception in June 2007, making it the first UK domiciled agricultural equity fund. Following a degree in classics from Cambridge he became the agriculture analyst at Odey Asset Management for five years before joining Eclectica Asset Management in 2005. He has been looking at the agriculture sector for over 10 years, long before it became a popular investment theme. Although this fund is an equity only play, he does trade specific soft commodity contracts in other Eclectica funds

Why the Eclectica Agriculture Fund?

The Fund is characterised by a much purer exposure to the theme than many of its competitors, because it invests exclusively in the more upstream agriculture stocks, whose performance is closely correlated to the underlying soft commodity prices. This allows the Fund to be more geared into the theme when agricultural prices are rising and tends to make it less correlated to broader equity markets. By investing via equities rather than the futures market it also avoids the negative roll yield which is a consequence of the soft commodities often being in contango

Literature

Fact sheet – April ’13

Fact sheet March ’13

KIID Documents

Full Prospectus

Fund Facts

Fund Type: UCITS IV OEIC

Domicile: UK

Currency: £/€/$

Dividends: Accumulated

Benchmark:
MSCI TR World Net Index

Fund Inception: 08 June 2007