Fund Objective

The investment objective of the Fund is to prioritise capital growth. It is intended that this objective will be achieved by the Fund investing in a portfolio of global commodity Exchange Traded Funds and other global commodity collective investment schemes.

View on Past Performance

Oil continued to fall back towards $110 a barrel and bottomed out around the middle of August. Due to oil being the largest component in most of the commodity indices they all fell back sharply. We saw other individual areas of the commodity market place also fall back sharply, including grains and precious metals.The agricultural sector has been mixed with some of the soft commodities such as sugar and cocoa putting in good rallies from low levels. Grains remain in a consolidation phase following the sharp retracement seen in July. Grain prices are clearly subject to the success or otherwise of the harvests in the major growing areas of the world.Given the acceleration in energy prices to very high levels in June we were clearly looking for a significant price correction and therefore focused on a strategy of aggressive profit taking on the first signs that the correction had commenced. Thus duly commenced in July and we sold positions aggressively and even implemented an energy hedge strategy to limit the downside effects. As a result our cash positions moved to significant levels during July and August.Whilst energy and grains continue to dominate the high ground in our matrix analysis, we have seen some improvement in the ranking of the soft commodities and livestock, which covers cattle and pigs. The latter have shown strong ranking improvement and we have therefore, for the first time in a long time, moved money back in to this area of the market.As the energy complex has found support over recent weeks aided by the Georgia conflict and hurricane Gustav we have therefore reinvested back into the energy sector focusing mainly on oil related areas such as gasoline and crude.

Future Expectations

It would not be surprising to see crude oil re-test the lows of its recent price range as concerns regarding global growth and subsequent demand continue to weigh on sentiment. If, however, China and India re-establish their super growth credentials than we can expect a significant rebound in energy prices.Agricultural prices particularly grain prices could be the area to watch most closely, as early reports would suggest that crop yields in the US maybe significantly reduced due to poor growing conditions post the spring flooding seen in many areas, only time will tell but it is an area we will watch closely.

Fund Details