The Schroder agriculture fund has taken $1bn in assets in less than a year.
Schroders says the fund, which was launched last October, has returned 14.86 per cent since launch, outperforming the Rogers International Commodities Agriculture TR index by 8.39 per cent.
Fund manager Rodolphe Roche says he is confident that the agriculture sector is set for a strong run, saying food prices are only just starting to pick up.
He says: “Having endured a flat market for the last 25 years, explosive demand for biofuels and growing populations’ demand for food has placed immense pressure on the glo-bal supply of agriculture. We believe this pressure on supply will provide strong, sustainable returns in the long term.”
Chelsea Financial Services head of research Juliet Schooling says the fund is a good portfolio diversifier as the performance of soft commodities are more influenced by factors such as weather, water supply and pollution than stockmarket movements.
She says: “It provides an extra dimension to a portfolio and is an interesting area of investment because there is so much talk of climate change and water supply issues. It is an interesting place to invest at the moment.”