Tribeca Global LIC Stung by War, Recession Worries

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Tribeca Global Natural Resources‘ portfolio then grew 8.4% in July.

“The sectors which had been the greatest decorators during [the June quarter]including base metals, battery metals and uranium rebounded strongly,” the LIC said.

“The sharp rebound in support for commodity names was an indication that investor sentiment had become too bearish and divorced from fundamentals.”

The loss for the 2022 financial year comes after the company recorded a 46.7% increase in the value of assets in the portfolio in the previous period. The gain helped generate profit for fiscal year 2021 of $52.2 million.

Since then, the war in Ukraine and growing fears of a recession in developed economies, particularly in Europe and the United States, have weighed on portfolio holdings.

Russia’s invasion of Ukraine triggered a shift in focus among developed economies from reducing carbon emissions to securing energy supplies, which in turn boosted fossil fuels and weighed on the prospects of companies that should benefit from the energy transition.

“As tensions grew in Europe following the conflict in Ukraine, the political focus shifted quite rapidly from decarbonization to energy security, which had a negative impact on our portfolio,” Mr. Loveday.

“While concerns about energy security are not abruptly disappearing, we believe that commitments by most major economies to net zero carbon emissions by 2050 will become an increasingly dominant factor in global resource markets, and our portfolio continues to be positioned accordingly.”

Gains in some of the largest holdings in the portfolio were offset by losses in others. Switzerland’s Glencore is one of its largest positions and jumped a third over the year.

Others fell sharply. Shares of Develop Global, a locally listed mining company, fell by almost half during the year.

Santos, the Australian-listed oil and gas company, traded largely flat despite a tailwind in revenue and earnings thanks to higher energy prices.

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