CF Eclectica

Agriculture Fund
The Fund returned 0.1% in February, taking the years
performance to 3.6%. The main winners were protein
stocks, contributing 0.6% led by Hormel Foods who
reported very strong earnings on the back of widening
margins on consumer pork products as commodity hog
prices softened. Otherwise small gains in machinery, mostly
from Japanese tractor company Kubota whose margins
benefit from a weakening yen, were offset by modest losses
in food processing and agribusiness.
There were no huge moves in crop prices over the month.
The initial planting estimates from the USDA were
announced, and showed the expected decline in corn
acreage (89m acres compared with last years 90.6m) but
surprisingly didnt allocate these acres to soybeans where
predicted acreage came in roughly flat at 83.5m acres,
below the expected 86m. The theory here is that lower crop
prices should encourage farmers to plant those crops which
require lower upfront expenditure. This would mean less
corn, which has very expensive seed and require enormous
amounts of fertiliser and chemical support, and more crops
like soybeans or wheat. This is especially relevant in parts
of the Midwest where farmers have been planting corn year
after year, encouraged to reject agronomic theories of crop
rotation by the exceptional economics offered from planting
corn. The November 2015 soybean future rallied 5% in the
month on this, although we would caution that the USDA
hasnt yet allocated these acres to any crop, and we
wouldnt be surprised to see soybean acreage increased as
the planting season gets going.

Performance (%) - A shares net of fees and expenses

EAGF

MSCI World*

Relative

1 Month

+0.1

+3.0

-2.9

3 Months

+2.2

+3.5

-1.3

1 Year

+10.4

+16.9

-6.5

Year to date

+3.6

+4.9

-1.3

Since launch

+11.8

+67.3

-55.4

CAGR since inception

+1.5

+6.9

-5.4

Calendar Years
2007 (from 08 June)

+14.2

0.0

+14.2

2008

-34.6

-19.3

-15.3

2009

+21.1

+17.3

+3.8

2010

+27.4

+15.8

+11.6

2011

-18.1

-5.0

-13.1

2012

+4.7

+10.6

-5.9

2013

+6.1

+24.2

-18.1

2014

+3.0

+11.6

-8.6

Agriculture Fund

180
160
140
120
100
80
60

MSCI TR World Net Index*

Past performance is not a guide to future returns

Calculation on NAV basis with net income reinvested. Excludes the effect of initial charge.

A quiet month for crop prices meant that we see little need
to change the overall plan for the portfolio. It is worth
highlighting USDA expectations that cash receipts for the
major US crops were down 17% in the 2014/15 crop year
(thats last year) and are currently forecast to be down
another 11% this year. In such an environment, we expect
farm spending to be restrained and so continue to prefer
stocks nearer the consumer end of the food universe and
less at the upstream end.

A Shares

172.21

111.84

153.92

C Shares

176.77

115.64

NAV

Step forward to 2015 and following another disappointing

season of rains across much of Australia the market is
xxxxxx

$37.3m
Exchange Rate /$: 1/1.5440. Source: Bloomberg.

SECTOR ALLOCATION (% NAV)

Protein

Stock Insight: Graincorp

Long term holders of the Fund may remember Australian
grain handler GrainCorp. We last wrote about it when we
owned shares back in 2012. Back then the consolidation of
the global grain business was in full swing, and agribusiness
giant ADM paid $11.75/share for a 10% stake in what
looked like the last remaining independent listed grain
transporter. We had thought they might need to pay as
much as $15 for the whole thing, but the final offer of $13.20
looked likely to do the job and we offloaded our stock.
Unfortunately for ADM, the Australian government stepped
in and prevented ADM from taking over the whole business,
and with that the acquisition premium fell out of the stock.

158.96

AUM

23.2

Agribusiness

20.1

Fertilizer

19.0

Seeds

18.7

Defensive

9.7

Machinery

5.7

Palm Oil

3.5
0

10

15

20

25

TOP 10 HOLDINGS (% NAV)

1

CF Industries

6.2

Hormel Foods

4.6

Monsanto

6.0

Potash Corp

4.5

Amsterdam Comms.

5.5

Tyson Foods

4.4

ADM

4.7

Syngenta

4.3

Bayer

4.6

10

BRF

4.3

Total number of holdings: 47

*Source: All index/sector/stock performance from Bloomberg

CF Eclectica
Agriculture Fund
once again taking down its numbers for GrainCorp and
the stock is trading at $9.50. Back in 2012, our analysis
suggested that this business could earn EBIT of $300350m. This still stands. But in fact, a 20% decline in the
Australian dollar means that their global competitiveness
has massively improved as this group exports globally
priced commodities like grain, oils, malt and flour from
Australia. Much of the currency impact will of course be a
pass through to farmers, but some, especially on the
processed goods side, can be captured by GrainCorp.
With rains seemingly improving we would expect 2016
volumes to be back to normal (if indeed there is a normal
in Australian agriculture). Adding in the better export
competitiveness and operational assistance from 20%
owner ADM, we see a better potential for GrainCorp in
the future and at this knockdown price have built up a 2%
holding in the stock (with the currency hedged, of
course).

COUNTRY BREAKDOWN (% NAV)

US
Canada
Germany
Netherlands
Brazil
Switzerland
Japan
Malaysia
Indonesia
UK
China
Australia
Singapore
Norway
Russian
0

54.2
8.0
6.2
5.8
4.7
4.6
4.3
2.9
2.7
1.6
1.5
1.2
1.0
0.7
0.5
5

10

MANAGER DETAILS
Investment manager

Eclectica Asset Management LLP

ACD

Capita Financial Managers Ltd

Administrator

Capita Asset Services Administrators Ltd

Fund Manager

George Lee

Benchmark

MSCI TR World Net Index

Launched

08 June 2007

FUND DETAILS
Share classes

//$

Structure

UCITS IV sub fund of CF Eclectica Funds

Dividends

Accumulated

ISA/PEP eligible

Yes

Price reporting

Daily in the Financial Times

Prospectus & KIID

www.capitaassetservices.com

FUND IDENTIFIERS
ISIN

SEDOL

A Shr ()

GB00B1XGDS05

B1XGDS0

A Shr ()

GB00B1XGDP73

B1XGDP7

A Shr ($)

GB00B39WY943

B39WY94

C Shr ()

GB00B3B02F88

B3B02F8

C Shr ()

GB00B3B02P86

B3B02P8

C Shr ($)

GB00B39WYQ11

B39WYQ1

FEES, COSTS AND REDEMPTION STRUCTURE

15

20

25

30

35

40

45

50

55

Initial charges

Up to 5% (class A); up to 1% (class C)

Anti-dilution levy

Up to 0.75% on subs/reds over 5% of NAV

Annual charges

1.75% (class A); 1.25% (class C)

Minimum investment

5,000 (class A); 2m (class C)

(equivalent for and $)

60

Dealing

Daily at 12pm

Dealing line

0845 608 0941

SERVICE PROVIDERS
Depository

BNY Mellon

Auditors

Ernst & Young

Accounts date

Financial year-end 31 December

INVESTOR RELATIONS
IR@eclectica-am.com
+44 (0)20 7068 9969

This document is being issued by Eclectica Asset Management LLP ("EAM"), which is authorised and regulated by the Financial Conduct Authority. CF Eclectica Agriculture Fund ("the Fund) is a recognised collective investment
scheme in the UK under section 243 of the Financial Services and Markets Act 2000 ("FSMA"). The promotion of the Fund and the distribution of this document however may be restricted by law in other jurisdictions. No recipient of
this document may distribute it to any other person. This communication is directed only at professional clients or eligible counterparties as defined by the Financial Conduct Authority in the United Kingdom. No representation,
warranty or undertaking, express or implied, is given as to the accuracy or completeness of, and no liability is accepted for, the information or opinions contained in this document by any of EAM, any of the funds managed by EAM or
their respective directors. This does not exclude or restrict any duty or liability that EAM has to its customers under the UK regulatory system. This document does not constitute or form part of any offer to issue or sell, or any
solicitation of any offer to subscribe or purchase, any securities mentioned herein nor shall it or the fact of its distribution form the basis of, or be relied on in connection with, any contract therefor. Recipients of this document who
intend to apply for securities are reminded that any such application may be made solely on the basis of the Full Prospectus and the Key Investor Information Document. Past performance is not a guide to future performance. Values
may fall as well as rise and you may not get back the amount you invested. Income from investments may fluctuate. Changes in rates of exchange may have an adverse effect on the value, price or income of investments. You should
obtain professional advice on the risks of the investment and its tax implications, where appropriate, before proceeding with any investment. All charts are sourced from Eclectica Asset Management LLP unless otherwise stated. Net
Asset Values are as at the date of the document. (c) 2005-15 Eclectica Asset Management LLP; Registration No. OC312442; registered office at 4th Floor, Reading Bridge House, Reading RG1 8LS..