Copper and Silver Come Under Pressure Amid Rising US Yields


BAKERSTEEL Electrum Fund I Class Factsheet June 2021

The Electrum Fund fell -8.4% during the month (I2 EUR), compared with the EMIX Global Mining Index which fell -4.5% (in Euro terms).

The Electrum Fund lagged its Index during the month, primarily due to its exposure to silver and copper producers which underperformed the major iron ore miners represented in the Index. Higher US yields impacted investor sentiment towards both metals, while copper also came under pressure during the month from the announcement of Chinese state sales of reserves. The Fund’s exposure to copper has been reduced since the end of Q1 2021, limiting the impact of this decline on the portfolio, yet we have retained certain copper positions given the metal’s core role in green technology and electrification.


Electrum’s strategy remains positioned to offer exposure to the large-scale trends driving the mining sector at present. Alongside the supportive macroeconomic environment for precious metals, the “green recovery” from the COVID-19 crisis will boost demand for speciality metals, supported by historic levels of government spending unleashed to boost green industries and combat climate change. Overall, we believe we are in the early stages of a transformational bull market underway for speciality metals as the green revolution gains pace.

Our investment approach continues to be value-driven and focused on those companies with the best assets, effective management, attractive shareholder returns and that operate in an ethical and sustainable manner in line with our own ESG principles. We continue to see historic levels of fundamental undervaluation in mining equities, and our team has taken advantage of the recent pullback to rebalance between individual stocks to ensure the Fund is well-positioned to benefit from the sector’s recovery.

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