12 June 2020
Please see attached brief commentary from Eden on an area of strong interest for us – sustainable finance and ESG-linked bonds.
The Eden Global Natural Resources Fund can invest both in equities on a long only basis and fixed income securities such as bonds to support the development of natural resources assets.
Eden is exploring opportunities in ESG related financing and we look forward to potentially participating in new sustainability linked bonds in the resources sector and seeing growth in the green financing market.
In Eden’s April market report, we discuss the ongoing impact of the global lockdown: market volatility has reduced, however remains at high levels; gold continues to outperform as a safe haven asset; and oil prices remain below accepted breakeven levels.
In Eden’s view, resource equities are at levels which present a compelling case for long-term positive returns.
27 April 2020
Australia’s resources export revenue has underpinned a 29 per cent improvement in the value of Australia’s goods exports in March compared with the previous month. Exports of goods increased to $36.1 billion in March 2020 from the revised February 2020 merchandise trade estimate of $28 billion.
The increase in March was predominantly driven by a $4.7 billion (20 per cent) increase in the value of exports of non-rural goods, including iron ore exports to support China’s rebounding economy, as well as increases in the value of Australia’s gold, coal and petroleum exports.
24 April 2020
We outlined the dramatic increase in gold demand currently experienced by the Perth Mint in our gold piece last week.
This article by Bloomberg elaborates on this and explains that the Perth Mint is now ramping up production of one kilogram bars to ease the supply squeeze in the U.S. that helped drive a surge in the premium for New York futures. At one point recently, the premium for New York futures over the London spot price rose above $70, the highest in four decades.
21 April 2020
A short reflection on a historic day for WTI oil prices. Storage capacity for WTI oil has been filled over the past few months causing a negative pricing environment as traders moved to avoid being caught out holding an expiring May US oil futures contract that would require the buyers to take delivery of the physical barrels of oil. Without the same storage constraints as WTI, Brent Crude is trading at around US$24/bbl, which is unsustainable in the long-term.
We expect to see a prolonged period of low oil prices over the next 1 – 2 years. This may present an opportunity for entry into selective global oil equities benefiting from an eventual recovery.
13 April 2020
In this short article we take a look at gold’s performance to date in 2020 amid COVID-19 and how gold continues to outperform, as a safe haven asset, during periods of economic uncertainty.
We examine the disproportionate performance in the gold price when compared to selected equities both pre and post crisis. EAM is positive on gold for the remainder of 2020 and we look forward to establishing several positions in attractive global gold equities with tier one production assets, leading ESG policies and strong balance sheets.
16 March 2020
EAM is pleased to share its quarterly investment report relating to the Eden Global Natural Resources Fund. In this edition, we provide summary analysis and commentary around our core focus areas of metals & mining (precious and base metals), bulks (iron ore and met coal), energy and agriculture. We have seen significant levels of volatility in global equity and commodity markets during the first quarter, adjusting to the constant developments and the impacts of COVID-19 pandemic. As at the time of writing this report, the S&P Global Resources Index (SPGSCI) had fallen 43% for the year-to-date and the 100 day volatility average climbed to circa 40% from its long term mid-teen average.
We believe that these circumstance present a significant opportunity for the Eden Global Natural Resources Fund to benefit from participating in equity price recoveries as the crisis eventually begins to ease. There has also been a prolonged period of underinvestment and underfunding into commodity related projects generally to weaken future supply, with compelling global demand factors ramping up, as seen recently, for example, the extent electrification and the growth of batteries will have on long-term demand.