Analysis of the Ofi Invest Energy Strategic Metals Fund
28 JUN, 2024
By Andrea Sepúlveda from LatamSelf
The fund OFI Invest Energy Strategic Metals is a fund domiciled in France that offers its investors exposure to a set of real assets that synthetically replicate the Basket Energy Strategic Metals index, developed by the fund management team and composed of futures contracts on the main precious metals and industrial metals.
Characteristics of the OFI Invest Energy Strategic fund
This strategy was launched in May 2022, is classified as article 8 according to SFDR and currently manages almost 270 million EUR.
- Investment strategy: the OFI Invest Energy Strategic Metals fund is a way to gain indirect exposure to metals considered strategic for the development of global trends already underway and that will be crucial in the near future, as they are used in numerous industrial applications, some of which contribute to the energy and environmental transition. It is important to note that the strategy does not directly invest in shares or bonds in the sector.
- Benchmark index: The management company indicates that there is no benchmark index, but suggests that, if the investor wishes, they can use an index such as the S&P GSCI INDUSTRIAL METALS TR, as it can be considered representative of the investment universe in industrial metals, but does not have the same underlying assets as the reference used for the investment, i.e. the Basket Energy Strategic Metals Index.
- Investment team: the fund is managed by Benjamin Louvet, Olivier Daguin and Marion Balestier. This team has experience in the analysis of precious metals and commodities, as well as in identifying investment opportunities in this sector.
- Assets: as of the end of May 2024, the strategy managed almost 260 million EUR in assets.
- Investment company: OFI Invest is part of Aéma Groupe, is based in France and counts among its clients institutional investors, professionals, private individuals and members of the associated distribution network. OFI Invest Asset Management offers a wide range of responsible investment strategies with the aim, as they state, of allowing their clients to finance the development of a virtuous economy that is a source of opportunities and returns. In numbers, OFI Invest AM manages over 180 billion EUR, has over 130 investment professionals, has over 400 employees and over 60 funds with the SRI brand.
Evolution of the Ofi Invest Energy Strategic Metals fund
Past performance does not predict future performance. The fund's returns may increase or decrease due to exchange rate fluctuations.
The fund is less than three years old, so it is not easy to evaluate its long-term results or its consistency. What can be observed from the results so far is that it has a high volatility (perhaps typical of the sector) and has struggled to show good numbers in its bets on metals.
It is important to remember that the index to which the strategy synthetically replicates was developed by the management company and consists of futures contracts on the main precious metals and industrial metals, determined by the Investment Committee of Ofi Invest Group based on their strategic importance for the global energy transition.
According to the latest Advisory Committee, the fund is divided into underlying assets as follows: 30% Copper, 16% Silver, 16% Aluminum, 10% Platinum, 10% Nickel, 10% Zinc, 4% Palladium, 4% Lead.
Conclusions
Advantages
- Portfolio diversification, investment outside the specific world of Equity or Fixed Income.
- Exposure that replicates the performance of a set of metals, which can help mitigate the specific risks of a single metal.
Disadvantages
- Investment in metals is subject to macroeconomic and geopolitical factors.
- Strategy with little track record.
