Monday, February 2, 2009

Commodities: New Jim Rogers Fund China

Jim Rogers has combined two of his favorite investment sectors in a new commodities index fund involving China and agriculture. He has teamed up with Australia's Macquarie Funds group to form the new Macquarie and Rogers China Agriculture Index.

With some commodities showing signs they're getting hot again, and food eventually being a major factor in providing for the masses, the new commodity index fund should be a great short and long term vehicle for investors looking to put their money in China and agriculture.

Well run commodities funds will do great in the years ahead, and the bull commodity market isn't near to coming to an end, even though the global economy has been sliding.

As an alternative investment, hedge funds related to commodities will outperform most investment vehicles on the financial market, and partnering with Macquarie Funds Group to provide a new hedge fund targeting China and its food market will be a winner.

Those wanting to put their money into commodity investing will find that the Macquarie and Rogers China Agriculture Index will represent agricultural commodities consumers in China primarily eat, and will track the basket of agricultural commodities through their index fund by focusing on food price changes.

The commodities fund was started in November, and gave a return of over 11 percent in December, doing better than most agricultural indices, and doing better than almost every stock market in that part of the world.

With that immediate success, the commodities fund was doing well enough to start to be heavily marketed by the Macquarie Group, the parent of the Macquarie Funds commodity index.

The food consumption habits of the Chinese people will probably be a bellwhether for food prices going forward, and so a index fund connected to Jim Rogers will do well in tracking the price fluctuations of food in the heavily populated country. It should rank among one of the top hedge funds going forward.

What will make the Macquarie and Rogers China Agriculture Index such a good place to invest in the hot commodities market is the way it tracks the components involved.

Most the current commodity index funds will use production or supply side factors as the key measurement which guides the performance of the top commodity hedge funds.

What's unique with the Macquarie and Rogers China Agriculture Index is it measures components by projected and current consumption of agricultural products in China.

Another benefit to those marketing and managing financial products to invest in, is the ability to create innovative products linked to the overall focus of the commodity index fund. How that happens is the exchange-traded futures contracts or commodity ETF future contracts it uses on physical commodities.

For Jim Rogers, this is a good opportunity to be involved with what he passionately believes is the key way to invest now and in the long term future. In the past Jim Rogers has worked with other groups lik Macquarie, but never in relationship to the Chinese market. In that sense, connecting to a hot commodity market like China with a agricultural raw materials fund will be a great way to profit for those interested in investing in a commodity or commodity index fund or ETF.

Jim Rogers recently said that the bull market that can be counted up over the next five to ten years is in agriculture, and of course that means China will be a major player in any commodity investment in connection to food, raw materials or agriculture. Rogers continues to be bullish on those two areas: China and commodities; especially agriculture.

He said one thing everyone can count on, no matter what happens in other sectors, is people will continue to eat, making agriculture a key part of any commodity investment portfolio.

While gold and silver have been looked upon as significant commodity investments for this year, we'll have to keep an eye on commodity hedge funds and commodity etfs that target agriculture. With agriculture prices plummeting in 2008, they will eventually turn around, and investing in a commodity index fund like Macquarie and Rogers China Agriculture Index should provide a good return when those prices start to go back up again.

Growth in agricultural demand will be interanational, and Asia and China is by far the fastest growing region economically and by population.

So those investing in agricultural commodities will enjoy solid profits for years ahead as massive demand for food continues, while over the short term valuations make the agriculture sector attractive. It's only a matter of when raw material funds start surging upward again, not if.

For December 2008, commodity funds were hot in contrast to the stock markets, and did much better than their counterparts. That will continue overall in 2009, as demand for grain and food continues to surge.

Much of the strategy for the new commodity index fund of tracking consumption patterns in China should make investing in hot commodities like agriculture beneficial to investors. Consumption patters are believed to be the key by the index fund, and tying in to the eating habits of the Chinese people should help it perform differently and better than their competitors; at least that's the hope, and it has a good chance of doing just that.

Consumption habits of the Chinese should be the key influence in connection to food prices around the world, and so the Macquarie and Rogers China Agriculture Index is made to move with that expected reality.

This should be a winner for Jim Rogers and Macquarie Funds, as their commodity index fund competitors are big players such as Citigroup's Japan's Nikko Asset Management unit, JPMorgan Chase & Co.’s (JPM) JF Asset Management division, ING Groep NV (ADR:ING), and Schroders PLC. This gives commodity index investors a real option and the ability to invest in commodities in a way that differentiates from the usual way of commodity funds tracking mechanism.

Jim Rogers of course has been a big player in the markets for years, primarily being discovered for his connection to The Quantum Fund and George Soros. He's also inked several books including the popular "Investment Biker" and his recently released "Bull in China."

If this new commodity index fund performs even close to the hot Quantum Fund, it'll be a huge success for Rogers again, as well as investors. Over a ten-year period the fund exploded for gains of around 4,200 percent, while the Standard & Poor’s 500 Index performed at a paltry, approximate 50 percent.

While food prices fell in the last half of 2008, that's probably going to change when the economy turns around and people start to spend again. When that happens, commodity index funds and commodity etfs will be major players in the success of investors for a long time to come.

This new fund in relationship to Jim Rogers will play a significant role for those investing in commodities and the hot commodities hedge fund sector.

22 comments:

Kelly said...

I do agree with Rogers that agriculture will be a strong performer going forwasd, as the middle classes of Asian countries like China and India create more and more demand for food they hadn't bought in the past - like sugar-related products.

the Macquarie Rogers fund should be a solid perfromer for those that indeed are in it for the long term.

Rich said...

How does one invest in Rogers-Macquarie China fund? What is the ticker symbol?

Anonymous said...

Production will be key - even with bad weather. New greenhouses built out of steel shipping containers may be one answer. view at bluegreenhouses.com

Anonymous said...

Macquarie Rogers fund -- Where to buy in Singapore?

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Thanks for putting this article together, I was thrilled to hear that you were working on it as I was one of the many readers wondering about this

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