BAKERSTEEL Electrum Fund fell -1.5% during the month (D EUR) , compared with the EMIX Global Mining Index which fell -0.7% (in Euro terms).
A strong end to the year saw the BAKERSTEEL Electrum Fund (“the Fund”) finish 2022 in positive territory, having gained +0.9%, however the fund lagged behind its Index, which rose +6.3%, during the year (in Euro terms). Despite gaining ground relative to the Index during the second half of the year, the Fund’s lag during the course of the year was primarily the result of outperformance by the iron ore sector, which is heavily represented in the Index, relative to battery metals and precious metals, during the early months of 2022, a trend we believe has now run its course.
Recent months have seen a recovery for speciality and precious metals equities, boosted by signs that the US rate hike cycle is nearing completion, inflation is tempering (yet remains high) and the US dollar has peaked. At the start of 2023 the metals and mining industry is backed by secular growth trends, most notably the historic levels of investment in green infrastructure and technology, as well as near-term thematic trends including supply chain reorganisation, inflation and geopolitics. Mining equities are uniquely linked to the key themes facing investors at present, both as producers of the critical raw materials which enable green technology, and as a source of wealth protection at a time of economic upheaval.
We believe there is a growing recognition amongst investors, business and policymakers that there can be no Net Zero without mining. The Fund remains focused on the critical metals which enable green technology, with a focus on value, margins and shareholder returns. As the sector moves into a recovery phase, the Fund offers exposure to those sub-sectors of the mining industry which are poised to benefit from the secular growth trends of electrification, the clean energy transition and the green revolution.