Fund Objective

The fund aims to provide capital growth over the long term.

View on Past Performance

The third quarter was a difficult one for natural resources. The fund fell heavily as the broad equity sell off impacted commodity-based equities. The fund lagged the broader sector as small cap suffered in the beginning of the quarter due to continued risk aversion. Commodities fell broadly during the period.The oil price fell sharply as investors unwound contract positions and demand weakened in the US. Gold also fell during the period, despite a rally in September, as the financial crisis caused investors to seek a safe haven. Gold equities did not reflect this rally, however, due to the broader equity sell off. Base metals fell further as the threat of a global slowdown persisted.Within the portfolio, the energy sector was the largest negative contributor to performance while the gold sector fared better.

Future Expectations

The natural resources sector now offers extraordinary value. Many fundamentally sound companies have been derated, providing compelling investment opportunities. We believe gold equities should provide a safe haven in volatile markets as production companies benefit from the rising gold price.We continue to look to the emerging markets to drive demand for commodities, and while growth expectations have weakened in China they remain robust. We review all our holdings on a continuous basis to ensure that the investment case remains intact. We expect that over the longer term, commodities with strong supplydemand fundamentals will rebound from any short-term downturns.

Fund Details