Aim: Growth by investing globally in listed companies where earnings are derived from agricultural commodities
Minimum investment: Lump sum £2,000
Investment split: 100% in global agricultural equities
Isa link: Yes
Charges: Initial 5%, annual 1.5%, performance fee 15%
Commission: Subject to negotiation
Tel: 0845 082 2479
Baring global agriculture aims for growth by investing in companies that derive the majority of their earnings from agriculture or those that have the potential to benefit from this theme.
Albany Financial Consultants financial consultant Kelvin Lilywhite says: “The growing demand for soft commodities and agriculture is well documented. This fund gives clients exposure into niche market which may be good for those looking to diversify.”
He views the performance fee as an incentive to beat the index. “Clients are generally happy to pay higher fees if a fund strongly outperforms an index,” he says.
Discussing the potential drawbacks of the fund, Lilywhite says: “It is similar to the BlackRock gold & general fund in that it is a specialist equity fund, not a commodity fund. The idea that it will diversify from equities is a myth. It will simply diversify with an equity portfolio.”
Lilywhite thinks that a product such as the Marlborough ETF Commodity fund would actually track the underlying commodities better. He believes this fund will provide the main competition, but also expects specialist equity funds to compete. He suggests BlackRock gold & general and JPM natural resources.
He says the JPMorgan fund applies the same underlying concept as the Baring fund, but mainly to other commodities. “The Castlestone agriculture fund could provide some competition in the offshore arena,” he says.
Suitability to market: Average
Investment strategy: Good
Adviser remuneration: Good