2009 was a great year for the resources sector and the CF Oceanic Australian Natural Resources Fund saw a strong recovery after a poor 2008.
Oceanic have been planning to consolidate their resources funds for some time and in February 2010, they merged their Global Resources Fund into the Australian Natural Resources Fund. They also changed the objectives of the latter fund to allow it to have a wider geographical focus. While it maintains a bias in Australian resources companies, the fund can invest in other global companies outside of Australia.
The fund has also shifted emphasis away from smaller companies, and there is now wider diversity allowing it to invest a greater proportion into larger companies. Currently, the fund has 80% exposure to the large and medium sized companies and 20% in smaller companies.
After a period of uncertainty for this fund, we believe these changes should prove beneficial for long term investors. Its wider remit, allowing it to invest in other global companies and a focus on larger companies should offer investors greater diversification. In times of uncertainty and when markets are volatile, the fund’s focus on larger companies should also provide it with greater liquidity than it previously did when the fund was smaller company focused. Investors should note however, that the fund remains high risk because of its focus on a single sector and short term volatility may prevail.
