Have you considered replacing a portion of your Canadian equity allocation with a global diversified natural resources strategy? Pier 21 Asset Management has launched a new strategy with an impressive guarantee that might coax plan sponsors into adjusting their portfolios.
The Pier 21 Global Resources Strategy reflects the true complexity of global resources sectors and insulates against the threat of inflation with a zero investment management fee guarantee if the strategy doesn’t outperform its benchmark.
“The majority of the Canadian equity stock market is comprised of resource-related equities, and investors in Canada that hold 30% to 35% of their total portfolios in Canadian equities are therefore some 20% invested in Canadian resources automatically,” says David Star, president and CEO of Pier 21 Asset Management Inc.
“These portfolios are exposed to very specific commodity, currency, stock and to a lesser extent, country risks. We believe that allocating part of investors’ Canadian equity holdings to a global resources strategy is a natural extension of Canadian investing and diversification logic.”
Although Canada is resource-rich, more than two thirds of the world’s natural resources lie in emerging markets. And, despite the inherent commodity base in Canada, there are many resources, such as iron ore, that are not widely available. The company says its new strategy allows for participation around the world, wherever the most compelling opportunities exist.
This strategy is also unique because it invests primarily in equity-related commodities, and not in commodity futures and is a low-risk entry point for investors.
The Pier 21 Global Resources Strategy will be available via three different vehicles: a Canadian-domiciled institutional pooled fund, a separate account for investors with more than $20 million in assets, and as a model portfolio.