Sarasin AgriSar Accumulation

We often talk about growing prosperity in emerging markets and potential ways for investors to benefit. One of the most interesting themes is the growth and change in food consumption - not just meats and grains but the whole supply chain, "from field to fork" as Henry Boucher, manager of the Sarasin AgriSar Fund likes to say.

The world's population is growing. It is predicted that by 2050 there will be over 2 billion more mouths to feed. It's not just that the number of mouths to feed is increasing, the changes in what they are eating also present significant opportunities to investors.

Sales growth for McDonald's Indian enterprises is 35% per annum. 169 outlets are now open and this figure is set to double in the next five years. This is just one example of the enormous trend of changing food consumption across emerging markets. In 1961, Brazil consumed 27kg of meat per person, in China they ate just 3kg each. By 2003 these amounts had grown massively to 81kg and 54kg respectively and, whatever happens in the global economy, this is likely to rise further as these nations grow in prosperity.

Increasing demand for meat also increases demand for crops to feed the animals, fertiliser to boost the growth of those crops, machinery to harvest the crops and transport to move all these extra goods around. Everything is inter-linked - this shows how growing demand for one product can influence a long supply chain.

This growth follows a period of significant underinvestment. For 30 years up to 2006 the global agriculture industry appeared moribund. Persistently volatile prices for food caused by weather, disease and currency fluctuations were a big part of the problem. Whilst these are still issues, I believe that a combination of other factors make the sector much more attractive today.

Consumption and investment are rising throughout the sector. Henry Boucher can invest at every stage; from seeds and irrigation, to fertiliser and pest control, to refrigeration, storage and distribution; offering the chance to make money all the way along the supply chain.

In conclusion, I think this is a theme that will develop over the next 20 years. It is a specialist, higher risk area and at times the fund will fall in value, so you could get back less than you invest. Investors should also note that this fund has a performance fee; see the Key Features for details. If you are prepared to accept the risks, in my view the Sarasin AgriSar Fund is a fascinating long-term opportunity.