Henry Boucher describes the investment theme of his Sarasin AgriSar Fund as “from field to fork”. Where most agriculture fund managers invest purely in “softs”, such as corn, grain and wheat, he buys into the entire supply chain, from machinery to supermarkets. This makes his fund “considerably less volatile” than other agriculture funds, says Emma Wall in The Daily Telegraph.
Long-term trends of population growth and climate change will “increase the strain” on our agricultural resources, says Rob Morgan of Hargreaves Lansdown. Boucher’s fund is “an interesting way to invest in the theme as farmers look to invest in better technology and equipment to raise productivity.”
Rising wheat prices, higher prices for animal feed, and cuts to inventory forecasts all helped the AgriSar Fund return 4.2% in July. Another boost came from agricultural machinery stocks. “If credit is available and crop prices are firm, the impulse purchase of shiny new combines and tractors is quickly made,” says Boucher. Farmers have been making these “emotional purchases”.
They are also due to spend more on fertiliser and crop nutrients after cutting back during the recession, says Mark Dampier of Hargreaves Lansdown. This fund is “positioned to take advantage” and has enough diversity to “capture growth prospects throughout the food chain.”
Watch out, though – this is a high-risk fund operating in a volatile market. And if it beats the MSCI World Equity Index it levies a 15% performance fee. The fund returned 16.7% last year compared to 4% growth in the index. Buy via Hargreaves Lansdown before 30 September 2010 and you won’t pay the 5% initial charge.
Contact: 020-7038 7002
Sarasin AgriSar Fund top ten holdings
| Name of holding | % of assets |
|---|---|
| Jain Irrigation | 4.2 |
| Olam International Ltd | 2.9 |
| Cosan SA Industria Comercio | 2.8 |
| Quimica Y Minera Chil-SP ADR | 2.5 |
| Archer-Daniels-Midland Co | 2.4 |
| Novozymes A/S-B Shares | 2.4 |
| Kubota Corp | 2.4 |
| Deere & Co | 2.4 |
| Yara International ASA | 2.3 |
| Bunge Ltd | 2.3 |