Over five years, the fund returned 62.22 per cent to investors, against the index’s 93.23 per cent return. Performance has picked up in the past year, though, with the fund returning 13.35 per cent, compared with a 7.81 per cent return by the index.
The fund actually uses a combination benchmark of 67 per cent in the DAX Global Agribusiness index and 33 per cent to the MSCI ACWI Food & Staples Retailing, Beverages, Food Products, Tobacco, and Water Utilities index.
Mr Agbabian puts this down to a change he made to the portfolio in the middle of 2013. “In the second quarter of 2013, we were coming to the realisation that we were going to have a crop-recovery year, so we started to shift our portfolio from a more upstream bias to a more downstream bias in the fund,” he says. “We reduced our fertiliser holdings, we bought more protein companies and we bought more ethanol companies. The change has really benefited the fund’s performance because in the first half of last year we were underperforming our benchmark.”
He has kept that downstream bias in the portfolio into 2014 as he points out that the companies the fund owns continue to benefit from greater crop volumes and lower animal feeding costs.
Turning his attention to next year, Mr Agbabian believes it is likely to be another crop-recovery year, which would favour his current positioning.
EXPERT VIEW
Ben Willis, head of research, Whitechurch Securities
Agriculture investing covers such a broad field that it is difficult to compare relative performance. Bryan Agbabian has certainly produced the goods in 2014, outperforming global equities, with a portfolio that invests in agricultural machinery, chemical fertilisers and food farmers. This is not a fund for all seasons, mind, and must be considered a long-term hold for those interested in investing in this area.
