Close Investments launch the Agricultural Commodities Trust

Close Investments introduce a new commodities fund to investors, the Agricultural Commodities Trust (“ACT”).

The supply and demand dynamic for agricultural commodities is just beginning. There are three key drivers for this:

Climate Change: Following unusual weather conditions, droughts (Australia, Europe), flooding (UK, Africa), ice storms (USA) yields are at a 26 year low for wheat and other grains. Source: USDA, September 2007

Food: The World Bank estimates that cereal production will have to rise by nearly 50 percent between 2000 and 2030 to meet projected global demand . Source: FT October 2007.

Bio-fuel: Agricultural commodities are benefiting from the global trend of increased demand for bio-fuels. (Another cause of reduced food supply as land previously utilised for food is utilised for the production of bio-fuels instead.)

Commodities offer attractive growth opportunities, but they also offer investors an excellent source of diversification. Uncorrelated to equities and bonds, commodities maintain yields when bear market conditions kick in elsewhere and because commodities have a global market they tend to be unaffected by country specific local events.

ACT will invest equally in Wheat, Red Wheat, Sugar, Corn and Soybeans, which offer an exciting growth opportunity for investors. Investors will benefit from enhanced growth of 125% of the growth in the basket of commodities with unlimited upside and 85% capital protection. It is anticipated that the Fund will list on the London Stock Exchange providing investors with secondary market liquidity.

ACT is the latest addition to the successful Close Commodities closed ended fund range, which includes the Close Enhanced Commodities Fund (oil, gold, aluminium, copper, zinc) and the Close Enhanced Commodities II Fund (oil, copper, aluminium, zinc, nickel, sugar, corn, wheat).

Sales & Marketing Director at Close Investments Roland Kitson comments: “The Agricultural Commodities Trust represents an exciting opportunity for investors to access a sector which has hitherto been restricted to a small number of specialist funds aimed at professional investors. We’ve witnessed the high levels of growth of industrial metals, oil and gold – the fundamentals suggest that we are on the cusp of similar growth for agricultural commodities and we believe now is an excellent time to invest. The Agricultural Commodities Trust will offer exposure to this specialist asset class, with the added benefit of the peace of mind that the 85% capital protection offers. The risks involved in investing in commodities may be offset, in part, by the peace of mind that this protection offers.”