Update: Read Where to make a fortune in soft commodities for more expert advice on how to invest in soft commodities.
A few weeks ago, I complained that there were no funds about that allowed the average retail investor to get a relatively pure exposure to soft commodities. My one wish for 2006, I said, was that someone would launch one.
So I bring you good news: not only are soft commodities starting to move at speed (sugar has been “caning it”, says Capital Spreads), it seems that someone is going to launch one.
According to David Budworth, writing in The Sunday Times, Barclays Capital is to launch a pure agricultural commodities fund, linked to the Goldman Sachs commodities index, next month.
I don’t imagine this fund will be perfect for us – Budworth says it will offer an element of capital protection that will inevitably make it irritatingly expensive – but at least it shows that the fund-management industry is paying attention to the kind of thing today’s investors are interested in.
Budworth also points to two other funds for soft commodity fans – one just launched by Bespoke Financial Consulting, which will have about a 30% exposure to soft commodities, and another soon to come from BDO Stoy Hayward Investment Management, which is apparently to invest in softs alongside metals and energy.
But if you aren’t going to get pure exposure to softs, I wonder if these – again, expensive-sounding – funds are the ones to go for. Instead, it might be worth taking a look at some of the more established natural resources funds, or at the Aim-listed RAB Special Situations Company, which specialises in investing in commodities of all sorts. I suggested buying the shares in it in this column last June, and while they are up around 25% since, I still think that – if you are a commodity bull – they make a nice way into the market.
Anyone in any doubt about the bull market in commodities, and metals in particular, should keep an eye on the feature pages of the papers. A few years ago, as the steel price soared, there was a spate of stories about thefts of stainless-steel manhole covers.
Now, as the price of every other metal under the sun soars, the thieves appear to have upped their game rather. In the last two months, says The Times, at least four major bronze sculptures have been stolen in the southeast alone. The most recent thing to go was one third of The Watchers – which once consisted of three large abstract figures – by the late Lynn Chadwick. As a complete art work, The Watchers was worth around £600,000, but it seems unlikely that the new owners of the stolen section care much about that, say the police. Instead, the stolen figure has “almost certainly” been taken for its scrap value – around £2,000.