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Hargreaves Lansdown weeds out Eclectica aggie

Hargreaves Lansdown has cut the £109m Eclectica agriculture fund from its Wealth 150 list of recommended funds.

The fund was to be managed by Hugh Hendry at launch in June 2007, with the support of George Lee. Lee now has overall responsibility for the fund.

Hargreaves Lansdown says despite a difficult period for markets, the fund was expected to produce more resilient returns, particularly as the long-term demand for food has been largely unaffected.

Morningstar says the Eclectica agriculture fund has fallen by 4.3 per cent in value in the past three years but the past 12 months have seen the fund rise by 18.5 per cent. The fund saw heavy losses amid the global financial crisis in 2008 when it fell by 34.6 per cent.

Hargreaves Lansdown senior analyst Meera Patel says the cornerstone of the fund’s approach is to tap into the rising price of commodities such as wheat and corn by investing in the likes of fertiliser companies and others involved in the harvesting of crops.

She says: “It has struggled because it does not focus on the upstream end of the chain. This effectively makes it a product that invests at the niche end of a niche market. As food prices rise, there is bound to be positive improvement in the long term but for now we feel a focus on a broader-based agricultural fund is needed in the shorter term.”

Patel says that given the calibre of the fund management team at Eclectica, the decision to remove the fund from its Wealth 150 is not an indication to sell the fund.

Eclectica was unavailable for comment.

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