DNCA FINANCE announces the launch of a new commodities strategy.

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.

The Management Team:
A complementary management team, in synergy with DNCA Finance's expertise:

Thomas Planell, CFA
Analyst-Portfolio Manager
12 years' experience (IG Group, Marsh & McLennan, DNCA Finance)
Former co-pm of the DNCA Evolutif strategy
Raw materials specialist

Alexandre Carrier, CFA
Analyst-Portfolio Manager
15 years' experience (Edmond de Rothschild AM, Ostrum AM, DNCA Finance)
Member of the DNCA Global Emerging Equity and DNCA Invest Global New World management teams. Specialist in emerging markets

Management objective
The Sub-Fund's investment objective is to outperform its benchmark, the Goldman Sachs Metals Index, by gaining exposure to commodities through at least one Total Return Swap(s) (as described below) over the recommended minimum investment period of 5 years. At the same time, the Sub-Fund implements an extra-financial approach, aiming in particular to integrate the challenges of energy and ecological transition (sustainable transition opportunities and main negative ESG impacts). Through active and discretionary management, the Sub-Fund aims to achieve the investment objective by seeking exposure to a varied range of indices representing commodities (mainly, but not limited to, metals, organic materials or minerals) whose components are commodity futures contracts listed on organised markets (such as, but not limited to, CBOT, NYME, COMEX LME, LBMA, ICE...). The strategy will be based on medium- and long-term forward-looking fundamental analysis of commodity supply and demand.

Investment strategy
- The investment universe is made up of various commodities, including but not limited to metals (industrial, precious, etc.).
- Allocation will be actively managed on a discretionary basis. It will be tactically adjusted according to the managers' expectations based on their fundamental analysis (assessment of supply and demand for commodities, economic context, etc.).
- Exposure to commodities will be obtained through swaps on diversified commodity indices, the performance of which is indexed to that of commodity futures contracts.

Risk Indicator

Risks

Commodities risk

Risk of investing in over-the-counter derivatives

Discretionary management risk

Liquidity risk

Operational risk

Counterparty risk

Total Return Swaps risk

Risk of loss of capital

Interest rate risk

Currency risk

Credit risk

Emerging markets risk

ESG risk

Sustainability risk