Benefits of a Natural Resources Strategy
The fundamental outlook for commodity prices and natural resource equities began to improve in the late 1990's. Twenty years of underinvestment in supply coupled with growing demand from developing economies resulted in a significant decline in spare capacity for many commodities. In addition, the marginal cost of supply for most commodities began to rise after falling in real terms for nearly three decades. This increase is being driven by the continued geological maturation of the supply base. For example, natural gas reserves per well have fallen 50% over the last decade while copper and gold grades have declined by roughly 40% over the same period. Future natural resource projects will require higher commodity prices to generate economic returns, meaning that the incentive price needed for incremental production to meet incremental demand will continue to rise. Thus, while commodity prices will remain cyclical, the secular outlook for commodity prices and natural resource equities, in particular, continues to be positive.
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Why RS Global Natural Resources
Investing in natural resources doesn't mean speculating on commodity prices. Since 1995, we have sought out those commodity-producing companies that are able to create value for shareholders independent of changes in commodity prices. Our investment objective is to provide our clients with superior risk-adjusted returns across a commodity price cycle. Read more...
Note: RS Global Natural Resources Fund is closed to most new investments. Please refer to the prospectus for more information.
Benefits of a Natural Resources Strategy
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Members of the RS Hard Assets team discuss RS' approach to extracting value from natural resource equities.
