The RAB global mining and resources Ucits fund follows the Cayman-based fund of the same name. It focuses on bigger companies in the natural resource sector.
RAB Capital sees the fund as a play on commodities, which in turn benefits from the themes of global urbanisation and industrialisation. The portfolio comprises 50 to 80 holdings and is constructed using bottom-up analysis, but top-down views determine options hedging in the fund.
The RAB gold and precious equities Ucits fund focuses on big and medium sized companies involved in the exploration or production of precious metals. RAB Capital says gold brings diversification to investment portfolios because the gold price tends to have a negative correlation to other asset classes, outperforming in times of financial distress or periods of high or low inflation when other asset classes have struggled.
The company thinks the price of gold is set to rise because due to increased demand while little new gold is being mined. But it has opted for gold equities rather than investment in physical gold because it believes there is scope to generate returns by taking advantage of valuations and mergers & acquisitions in the sector, rather than relying solely on the rising price of gold alone.
Both funds invest on the basis of looking at what appears interesting, is the price right and is it time to go long or short. They trade on Luxembourg Financial Group’s liquid alpha Ucits platform and hedge out risk using derivatives, which should protect capital and reduce volatility.
As Ucits III funds, these products are very liquid. However, recent coverage of investors finally being allowed to exit the firm’s special situations hedge fund, three years after the heavy losses that resulted from an investment in Northern Rock, may take the shine off these launches for some advisers.