Ascenta Special Situations Resource Fund Now Available in Canadian Dollars

This long only, unleveraged equity fund is focused on mining, oil, gas and renewable energy sectors with a high percentage of its holdings in companies listed on the Toronto Stock Exchange. As a result many fixed costs are incurred in Canada, although the companies themselves operate around the globe. This means that investors in Canadian Dollars will have less underlying currency exposure, will benefit from the CAD’s underlying strengths and of course Canadian investors will welcome the convenience of using their home currency. 

The Canadian Dollar has shown great resilience to recent economic turmoil, and gives an opportunity for investors to establish exposure to the “Great White North” and one of the most vigorous developed economies on the planet.

Many investors have fled to the perceived safety of US Treasuries amid rising concerns about the durability of the recovery. The recent decline in the Canadian Dollar (or “loonie”) to below USD parity can be seen as an aftershock of recent equity declines affecting a resource-based currency. However, the longer-term trend of demand from emerging economies, led by China and India, will most likely push prices for oil and other abundant industrial commodities in Canada higher, taking its currency with it.

Although it is perceived as a barometer of global growth, Canada was the last of the old-school G-7 to enter recession and the first to emerge. This implies a level of stability and underlying strength. One major difference between it and the traditional “safe havens” of Japan and the US is the strength of Canada’s balance sheet. It entered the global crisis after a decade’s worth of balanced budgets, boasts the lowest debt-to-GDP ratio among the G-7, and the World Economic Forum says its financial system is the world’s soundest.

Not only is it blessed with the second-largest estimated oil reserves on the planet, its leaders have steered the ship of state in a way that will allow Canadians to enjoy the benefits of that wealth without excessive borrowing. 

Signs that Canada will be a major player over the next decade abound and although Canada still ships more than 70 percent of its exports, primarily oil, to the US, this component of outbound trade is declining. Canada remains focused on reducing its dependence on the US even further as China has emerged as Canada’s second-largest trading partner.

For these reasons, the fund’s managers Ascenta Asset Management are delighted to announce the immediate launch of a Canadian Dollar denominated cell within its successful fund and expect to see many investors enjoy the benefits of using it.