DNCA Finance, an affiliate of Natixis Investment Managers, is extending its global multi-asset expertise to commodities with the launch of DNCA Invest Strategic Resources. This new strategy will provide exposure to price fluctuations in strategic metals, energy transition metals and precious metals through the use of swaps on diversified commodity indices. In addition to analysing long-term commodity supply and demand, the new centre of expertise will draw on DNCA’s macroeconomic analysis to actively and tactically manage the allocation between industrial metals and precious metals. The flexibility of this investment process is a differentiating innovation in keeping with the active management DNA of DNCA Finance, which has 169 professionals spread between its offices in Paris, Milan and Luxembourg.
Why DNCA Invest Strategic Resources and an allocation focused on metals?
Between 1970 and 2019, population growth, global urbanisation and industrialisation in China have led to a 300% increase in demand for metals and a 200% increase in demand for energy raw materials.
Between now and 2050, four major challenges lie ahead:
- To meet the needs of a world population of more than 10 billion people by 2050, 6.6 billion of whom will be urban dwellers.
- Responding to the growing energy intensity of new technologies.
- Ensuring the security of energy independence: a survival issue.
- Achieving zero net greenhouse gas emissions to limit global warming to +1.5°C.
Energy independence, decarbonisation and technological revolution go hand in hand. They are speeding up the transition to an in-depth electrification of the economy. They are already creating unprecedented demand for conductive materials, particularly in energy generation, network infrastructures, storage and conversion systems. After 70 years of oil’s golden age, the challenges of the next 25 years will require more metals than ever before in human history. Governments now regard many of these resources as critical or strategic.
This new cycle is taking place against a backdrop reminiscent of the 1970-1980s: geopolitical crises, inflationary risks and high public deficits. During this decade, commodities outperformed US equities. Today, DNCA Finance is convinced that investors should consider commodities in order to :
- Incorporate the challenges of the next 25 years into their long-term strategy;
- Access to the wealth of precious metals,
- Incorporate the diversifying nature of the commodities asset class.
These ambitions are underpinned by our conviction that these resources will be as critical to tomorrow’s world as they will be strategic in an allocation. Our solution: DNCA Invest Strategic Resources.
