The Strategy is grounded in a repeatable and scalable investment process that uses extensive fundamental research to identify attractive natural resource-related investment opportunities. The investment team utilises an active, unconstrained approach combines commodity cycle analysis with fundamental stock picking to extract untapped alpha from dynamic commodities and their associated equity universe. The Strategy is style agnostic – value, growth, momentum, contrarian as well as other factors are used to generate alpha in different market environments based on the portfolio manager’s extensive experience in the natural resource sector. Developing variant views and targeting asymmetric risk/reward profiles are a key feature of the Strategy.

The investment process is anchored on alpha generation that is generated from multiple levels and based on holistic framework that combines top-down and bottom-up research: 1) top-down commodity viewpoint, 2) sub-sector selection, 3) bottom-up fundamental stock picking. Natural research equities are driven by the underlying commodities that are governed by physical supply and demand. While prices may temporarily diverge from fundamentals, the physical market acts as an effective check that drives prices back to market fundamentals. Temporary market volatility and noise creates opportunities for the fundamental process which seeks to identify mispriced investments.

Top-down commodity viewpoint

Commodities can be a significant source of overlooked alpha. As each commodity is driven by a unique set of supply and demand dynamics, the investment process aims to identify cyclical and secular inflections and trends.

Sub-sector selection

As different parts of the supply/value chain offer different value at various points of the cycle, the investment process seeks to identify the optimum risk/reward return potential across various sub-sectors.

Bottom-up fundamental stock picking

Combining stock picking with the correct top-down commodity view can be a powerful combination. Identifying idiosyncratic and company specific exposures and catalysts with the correct top-down commodity view is a powerful combination, in the investment team’s view. Stock selection is grounded in in-depth fundamental analysis that leverages Man Group’s vast resources including fundamental equity, fixed income, systematic commodity and macro/multi-asset investment platforms.