Celebrating 30 Years of the Global Resources Fund

On November 2, 1994, VanEck launched one of the first actively managed natural resources equity strategies.

30 years later it continues to play a crucial role in portfolio diversification.

Hi, I'm Sean Reynolds, the portfolio manager of the Global Resources Fund here at VanEck. And we're here in November of 2024 celebrating 30 years of the Global Resources Fund.

The Evolution of the Global Resources Fund

One of the very interesting things about the Global Resources Fund is that its objective has always been the same for 30 years. And that objective is inflation protection, leverage to global growth, diversification, and insurance against geopolitical risk events. And that is as relevant today as it's been over 30 years.

I think the longevity of the fund really relies on its flexibility. If we look back to 1994, when the fund first started, we had a very large and diversified exposure across all natural resources, but a very large exposure to paper and forest products. That went away in the 90s and in the early 2000s and even into the 2020s, it’s now back. At one point in the 2000s, you could have called this an energy fund.

But as we look at it right now, it's back to being very diversified. As I said, more paper and packaging, more ag, more diversified exposure right across the natural resources sector but also includes you kind of new things we have renewable energy we have more industrials so it's that flexibility that I think allows us to really maintain the position that we've had for over thirty years.

Looking Toward the Future

I think the future of natural resources is really what it's always been, is really relying on the fact that population is increasing and therefore consumption is increasing, therefore natural resources demand is increasing. As we approach 10 billion people by 2050, a lot of those people are going to be born in the global south and in lesser developed economies. Therefore, they're going to be increasing their consumption for sure.

If you look into the US, you look into the developed world, obviously, electricity and energy consumption is going to expand quite a bit really based on technology, on AI, on data centers, all electrification, even thinking about quantum computing.

And the demand for natural resources is more than just energy. When we really think again about an extra two billion people over next 25 years, that's definitely going to impact on the agriculture sector as we transition into more renewable energy. That's going to be very, very metals heavy.

Also just think about the incredible technology change that we've seen over the last 30 years.

It's also very interesting, if you go back to 30 years ago, and we really didn't talk about solar, I mean, it was out there, we didn't talk about wind, it was out there, but we didn't talk about it. Now, it's clearly a very important part of the energy mix, and it's going to be more important.

Nuclear, the United States is the largest nuclear power generation country in the world. Following Three Mile Island, nobody talked about nuclear back in the 90s. And now all of sudden, it's very, very kind of top of the list, everybody's very excited about it. And it's going to be an important part of the energy future, it has to be part. And we always kind of talk about all the above and when we really think about it, it is all of the above and nuclear is an important part of that.

Memorable Experiences and Lessons Learned

One of the interesting things about being in this market for such a long time, you've seen quite a few cycles. most of us go back well before the fund was started and worked in the industries that we follow. And so we've seen a lot of cycles. And those cycles have created some pretty interesting moments.

I think about all the travel that we did and do here as part of the Global Resources Fund. And that has saved us from a lot of situations, also created many, opportunities.

Certainly one of the greatest benefits of working on this fund for all this time has been the people we've met over the years. Starting with the team, our team is fantastic. We work very well together.

But also through the years, all the CEOs, all the mine managers, the petroleum engineers, the people who are working in the field, we spent many, many hours with everyday workers and trying to understand their business models, their business strategies, how it's being executed in the field, we've traveled all over the world.

It's just just fantastic. And that's been incredibly rewarding.

And I want to thank all of you for being part of that over the last 30 years.