Germany-based asset manager DWS has launched an actively managed equity fund that provides investors with access to companies in the essential materials sector. The fund invests exclusively in listed securities and offers daily liquidity.
The focus is particularly on producers and developers in the mining sector, for example in the areas of material extraction, production and processing. At least 70 per cent of the fund’s assets are invested in shares of global companies that are constituents of relevant benchmark indices (S&P TSX Energy Transition Materials Index and S&P Global Essential Metals Producers Index) and operate along the value chain of essential materials.
“Energy supply, data centers and defense all face the same structural bottleneck: dependence on critical materials poses significant risks to supply chains. Expansion in these sectors is driven less by demand than by the availability of these materials – and it is precisely along this bottleneck that key value drivers can emerge,” says Taylor Smith, portfolio manager of DWS Invest Essential Materials Producers, and Co-Head of Commodities and Natural Resources Equities at DWS.
Essential or so-called critical materials, such as lithium, copper, nickel, aluminium, cobalt and rare earths, form the basis of numerous modern technologies and industrial applications. They are at the heart of several long-term structural trends.
These include energy transition and electrification, the rising demand for raw materials driven by electromobility, data centers, AI and defense. At the same time, the geopolitical dimension of supply security is gaining in importance, as the extraction and processing of many of these materials are largely concentrated in a few countries and manufacturers. G
Against this backdrop, the fund offers investors a targeted addition to the thematic diversification of an equity portfolio. It is aimed at investors with a medium- to long-term investment horizon who are prepared to accept higher volatility and theme-specific fluctuations and who value active stock selection.
