CPR Invest - Global Resources - O USD - Acc ISIN : LU1989770984

On the geopolitical front, tensions between the United States and Iran were the main theme of the month. American strikes on Iranian territory, followed by threats to close the Strait of Hormuz, fueled a risk premium on energy commodities, leading to a sharp rebound in oil prices in mid-July before a partial retreat when President Trump temporarily softened his statements. Furthermore, the Houthis claimed an attack on a tanker off the Saudi coast, opening a new front in the regional conflict and reviving fears over supply routes in the Red Sea. 

After their significant decline last month, non-ferrous metal prices recovered in July. Aluminum prices, which had fallen significantly in hopes of a resolution to the Middle East situation, rebounded sharply. Copper prices, which also benefit from increased demand linked to the acceleration of digitalization and electrification of the economy, remained very firm. In contrast, lithium prices continued to decline, and iron ore prices were also poorly oriented. Gold prices were relatively stable in July, supported around the $4000/oz level, prompting the return of some investors.

The resumption of hostilities in the Middle East caused a sharp rebound in oil prices, rising more than 20% in July. The same situation occurred with gas prices, which surged over 30% in Europe and Asia. However, gas prices in the United States contracted significantly by more than 15%. 

On the agricultural side, weather conditions could lead to poor harvests. After their sharp decline last month, prices rebounded very significantly before retreating during the last week. Fertilizer prices were relatively stable in July, except for urea, which is highly exposed to the Middle East situation and whose prices appreciated significantly. 

In this environment, the natural resources theme showed a noticeably positive overall performance, exceeding that of global equities. While the energy sector ranked clearly at the top, metals and mining only managed to save face at the end of the period. As for the agriculture sector, its performance was close to the thematic average. 

In this context, the fund recorded a positive performance, but below that of its benchmark index. Materials were the main detractor from performance, notably through industrial metals including diversified miners (Lynas Rare Earths, MP Materials, Standard Lithium, Osisko Metals), lithium producers (Albemarle, SQM), copper producers (Firefly Metals, Faraday Copper), and aluminum producers (Alcoa Corp). The lack of exposure to Zijin Mining in gold and the underexposure to the paper industry also weighed on performance. Conversely, the contribution from steel (Nucor, ArcelorMittal) was positive. The energy sector also weighed on performance, notably through oil services (Technip Energies, Saipem) and integrated companies (TotalEnergies). The overexposure to the uranium sector also had a negative impact. In contrast, refining contributed positively thanks to the overweighting of American companies compared to the absence of exposure to the Indian Reliance Industries. 

Regarding portfolio management, exposure to the gold sector was increased with the strengthening of senior companies Kinross Gold, Gold Fields, AngloGold Ashanti, and Agnico Eagle, the intermediate producer Alamos Gold, the streaming company Wheaton Precious Metals, and the silver producer Pan American Silver. Agrochemicals were also reinforced through Nutrien Ltd and Mosaic Co. Within energy, exposure to BP Plc, whose top management was replaced, was increased, while ENI Spa was reduced. Among industrial miners, Allied Critical Metals, which is developing a nickel deposit in Portugal, was strengthened against a reduction in Freeport McMoRan and BHP Group. Exposure to Saipem, in oil services, was reduced after a results release deemed disappointing.