“Spare a thought for farmers as you enjoy the warm weather,” says Henry Boucher, manager of the Sarasin AgriSar Fund. Droughts aren’t a problem limited to Britain alone. “At this time of year the soft commodity markets are sensitive to every weather report and swing between optimism and pessimism about the current crop.” That leads to one of the big problems with investing in agriculture: volatility. While the long-term trend is for rising food prices on the back of increasing global demand, over the short term the weather can play havoc with prices.
So you need to be prepared to invest for at least five years, says Gavin Haynes, managing director of Whitechurch Securities in The Daily Telegraph.
Boucher’s Sarasin AgriSar Fund invests ‘field-to-fork’ from tractors to food retailers. The fund is particularly focused on food-consumption trends in emerging markets – holdings include Tat Konserve, which processes tomatoes and peppers in Turkey that are supplied in 73 countries to the likes of Burger King and Pizza Hut.
This fund has certainly given investors a “hairy ride”, says James Coney in The Daily Mail. Anyone invested at the fund’s launch three years ago saw it plunge 20%, but since then it has delivered growth of 17% a year. It offers “an excellent opportunity for adventurous investors to add exposure to a key long-term growth theme”, says Ben Yearsley of Hargreaves Lansdown (HL).
The total expense ratio is a hefty 2.85%. But you can bring that down to 1.83% if you invest via HL, which can also reduce the initial charge from 5% to 0.5%.
Contact: 020-7038 7002
Sarasin AgriSar Fund top ten holdings
|Name of holding||% of assets|
|Sarasin AgriSar Fund||3.2|
|Potash Corp of Saskatchewan||2.8|
|Yara International Asa||2.7|
|Marine Harvest Asa||2.6|
|Archer Daniels Midland Co||2.5|
|Uralkali-Spon GDR-REG S||2.4|