Structured Solutions Lithium Index Strategy Fund will be Structured Solutions Next Generation Resources Fund
The Structured Solutions Next Generation Resources Fund was created through the expansion of the Structured Solutions Lithium Index Strategy Fund. It is an actively managed equity fund and invests in companies from the raw materials sector, which produce and extract "next generation" resources. Next generation resources are mainly the commodities, that are used for renewable technologies, medical advancement or for products needed in demographic change.
Lithium fund with expanded investment universe and new name
Share price commodity fund from 2016 more than doubled
Luxembourg / Zurich, 8 March 2017 - Von der Heydt Invest and Commodity Capital expanded the investment universe of the successful Structured Solutions Lithium Index Strategy Fund (WKN HAFX4V) and changed the name to "Structured Solutions Next Generation Resources Fund" on 1st of March 2017. In addition to lithium, the fund will also be investing in other commodities, such as graphite, magnesium or cobalt, which are particularly needed to produce lithium-ion batteries. The basic investment strategy has proved itself and will continue to exist.
Because of strong growth of the lithium price, the share prices of the lithium companies increased dramatically in the last year due to the strong worldwide demand for lithium. Many of the manufacturing companies were taken over by car companies or other large industrial companies. The main reason of these acquisitions was rarely the productivity or the long-term profitability of the lithium producers but more a strategic factor for securing the supply of the commodity. This massively restricted the investment universe of the Structured Solutions Lithium Index Strategy Fund.
In order to continue the above-average performance, the fund management continues to rely on lithium, but will add further future-oriented resources like graphite or magnesium, which are also required for the production of lithium-ion batteries, but so far have been less focused by investors. In Addition, commodities such as Lithium, Graphite or Magnesium show a shortage of supply. Therefor we see a great potential in for further increasing share prices for the producng companies.
Cobalt is another interesting resource which, for example, is required for the anode of a lithium-ion battery and ensures a much faster charging process. Currently about 60 percent of the world's available cobalt comes from the Democratic Republic of Congo. However, due to inhumanic working conditions, child labor and a striking lack of legal certainty, most battery makers boycotted mines in the African state. As a result, the cobalt price has risen sharply. Sustainable mining companies profit with new resources in stable countries, which are currently going into production. They will compensate the incidental shortage of supply.
"There are always commoditiies that are needed for new technologies or due to demographic developments, or that are very interesting over a certain period of time. Or others that are temporarily not available due to insufficient exploration or strong demand, "said Tobias Tretter, Commodity Capital's fund manager and responsible for final investment decisions. "As in the case of lithium, commodity prices can therefore become much more expensive and the stock prices of commodity producers can also rise enormously."
The basic investment strategy to invest in medium-sized producers with a sustainable approach will continue. In addition, the fund management team around Tobias Tretter and Abid Mukhtar visits the mining companies on site. "Only in this way it is possible to separate well-managing, sustainably operating companies from environmental polluters or even exploiters," says Abid Mukhtar, a fund manager from Team North America of Commodity Capital AG.
The further performance of the Structured Solutions Next Generation Resources Fund is expected to be fundamentally similar to last year's, when the fund beat all oher commodity funds and won the Lipper Fund Award 2017.