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Launched in January 2009, the Baring Global Agriculture Fund says it "invests in the business of feeding the world". Drawing on Baring's 15 years of experience investing in the global resource markets, the fund looks for investment themes and companies within the agriculture space with the potential to deliver long-term growth.
The fund's investment manager, Jonathan Blake, boasts 14 years' investment experience, and also runs the Baring Global Resources Funds. He is supported by analysts in London and Hong Kong who help generate investment ideas.
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The fund has a global focus which enables it to benefit from a broad opportunity set ranging from the supply of fertilisers and agrichemicals through to farming, fishing and the logistical infrastructure needed for delivery to distributors, processors and marketers. This flexibility means the fund does not have to rely on rising commodity prices to add value but has the potential to perform well across a range of market conditions.
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While the fund's track record, like most of its peers, is limited, it has managed to post a performance in excess of 10 per cent over one year and has outperformed its benchmark index, the MSCI All Countries World Total, on a gross-return basis since inception.
The portfolio is focused on the 'upstream' part of the industry such as seed, fertiliser and machinery as farmers are highly incentivised to invest in these. Positions in Potash-based fertiliser companies have recently been increased along with its holdings in US pork producer Smithfield, given expectations of increased exports to Asia.
Possible drawbacks include a high total expense ratio (1.9 per cent) and a performance fee although both tend to be common with specialist funds. The fund also has a high portfolio turnover - 62.4 per cent over the last 12 months to March.
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Source: Investors Chronicle