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Highlights
- Resources funds recover following policy shifts from China and the US.
- Tribeca, Ausbil, and Perennial benefit from commodity demand resurgence.
- Key holdings in copper, uranium, and battery materials lead performance.
Resources funds are experiencing a resurgence after significant economic policy changes from China and the US. Fund managers are optimistic about commodity markets, buoyed by a strong rally in raw materials prices in September.
The prices of commodities like iron ore and base metals have rebounded, driven by China’s stimulus measures and the first interest rate cut from the US Federal Reserve since 2020. This has improved market sentiment toward resources, which had been facing downward pressure due to rising interest rates and recession concerns.
Tribeca’s Global Natural Resources Fund (ASX:TGF) was one of the main beneficiaries, returning 12.2% in September, boosting its year-to-date gain. According to Tribeca portfolio manager Ben Cleary, the sector had been struggling for two years despite favorable supply and demand conditions, but recent policy shifts have led to a revival.
Ausbil’s Global Resources Fund (ASX:AGF) also saw positive performance, returning 7.7% in September. The fund's exposure to uranium stocks such as Paladin Energy (ASX:PDN) and Boss Energy (ASX:BOE) helped drive gains. However, the fund remains down over the past year, partly due to challenges in the battery materials sector. The managers, however, expect improving fundamentals for battery materials, particularly in China.
Pilbara Minerals (ASX:PLS), a lithium producer, remains one of Ausbil’s key positions. Despite being highly shorted, the company has seen strong demand from China’s battery market. The fund also saw mixed results in iron ore, with gains in BHP (ASX:BHP) and Rio Tinto (ASX:RIO) offsetting losses from short positions.
Perennial’s Natural Resources Trust (ASX:PNRT) continues its strong performance with a 6.6% return in September. Portfolio managers Sam Berridge and Ewan Galloway positioned the fund aggressively to take advantage of an expected recovery in China’s manufacturing sector. Key holdings, such as Firefly Metals (ASX:FFM) and Metro Mining (ASX:MMI), posted significant gains during the month.
Argonaut’s Natural Resources Fund (ASX:ARGF) also benefited from the rally in copper, with Sandfire Resources (ASX:SFR) and Metals Acquisition (ASX:MAC) contributing to a 7.2% return. However, the fund’s performance was tempered by losses in oil producer Karoon Energy (ASX:KAR) and gold producer Westgold Resources (ASX:WGX).
Meanwhile, Janus Henderson’s Global Natural Resources Fund (ASX:JNHR) saw a modest 1.3% gain in September, aided by its exposure to copper stocks such as Freeport-McMoRan (ASX:FCX) and Glencore (ASX:GLEN). The fund’s manager, Darko Kuzmanovic, has added to its positions in Anglo American (ASX:AAL) and Antofagasta (ASX:ANTO), anticipating further demand for base metals.
The recovery in resources funds signals growing optimism in the commodities sector as policy shifts from major global economies inject renewed life into markets.
