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Sarasin may be an unfamiliar name to many investors but they have been investing for many years with particular expertise
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The Sarasin AgriSar Fund will be a global portfolio focusing on what the manager, Henry Boucher, believes to be key “certainties” in the agricultural industry. These are: the agricultural economy must grow wealthier; that technology is the only long term solution; the strategic necessity of securing supply; and that commodity prices will remain volatile. It will just be exposed to the agriculture sector and the risks of investing in one sector are greater than a fund which spreads itself more widely.
The world’s population has risen by more than one billion over the last twelve years and it is likely to do the same over the next. This means that there is and will be a massive demand for food and after decades of underinvestment, agricultural industries are likely to struggle to keep pace with the demand. This is why the sector is presenting many interesting investment opportunities.
The fund itself will invest in 50 to 60 shares of companies across the whole supply chain including fertiliser, pest control, irrigation mechanisation, storage, processing and distribution. Above all, the fund will invest using Sarasin’s thematic approach with themes including companies displaying excellence in their field, those with pricing power or businesses likely to benefit from restructuring to name a few.
The fund can also invest in actual agricultural commodities although this exposure is not expected to be more than 15% of the overall portfolio. It can also gain exposure to agricultural land through investing in Real Estate Investment Trusts so this fund has some diversity and looks to harness the opportunities in all areas on the agricultural market.
Like any investment in commodities, this is a higher risk fund. However, we believe the growth of the agricultural industry is likely to be an investment opportunity for decades to come. With Sarasin’s long experience in thematic investing and an experienced team under Henry Boucher, we believe the Sarasin AgriSar Fund’s long term prospects are compelling and the fund merits a place on our Wealth 150 list of favourite funds in each sector.
Key Features of the Sarasin AgriSar Fund
Fund research is provided by Hargreaves Lansdown. Hargreaves Lansdown is an independent broker offering unit trust, stockbroking and other pension and investment services. No news or research item is a personal recommendation to deal.