Sextant Capital’s Sextant Strategic Opportunities Hedge Fund is continuing its strong performance, with the portfolio manager crediting the fund’s returns to plays in the molybdenum market.
The exotic metals fund, which returned 117% last year, was up18.2% in March bringing its year-to-date returns to 20%. The fund managed some $10 million in assets as of the end of February.
Sextant founder Otto Spork, in his monthly investor letter, writes: “Going forward, we continue to see a positive environment for the Fund. We believe we have positioned ourselves in the sweet spot of this bull market for exotic metals.”
Spork adds that the firm continues to see a strong demand from the Chinese for metals, specifically molybdenum.
“Given the miniscule nature of the moly market and equities, the expected spike in demand is just starting to move both the metals and the equities to new highs, as it takes 4-5 years to bring a moly mine on stream, we expect inventory tightness to continue,” writes Spork. He adds that China has also recognized this trend, and has recently announced a quota system for molybdenum experts.
“Until now, many were skeptical about investing in moly, as they thought that the price of moly would drop from $25 to $12 by early 2007. We at Sextant never subscribed to this thesis.”
The fund charges fees of 2/20 with a minimum investment requirement of C$150,000.