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Next Edge CIA Disciplined Growth Portfolio — Next Edge Strategic Metals and Commodities Fund — Investor Presentation (2021)
31 slides from Next Edge CIA Disciplined Growth Portfolio's investor presentation, Sep 29, 2021
Slide 1: Next Edge Strategic Metals and Commodities Fund
Next Edge Strategic Metals and Commodities Fund
Slide 2: Important Notes
Important Notes The “Next Edge Strategic Metals and Commodities Fund” or “Fund” means the “Next Edge Strategic Metals and Commodities Fund”. Capitalized terms not defined in this presentation are defined as set forth in the prospectus of the Fund (the “Prospectus”). This communication is not, and un
Slide 3: Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements The following presentation may contain forward-looking statements. All statements, other than statements of historical fact, that address activities, events or developments that Next Edge Capital Corp., the Portfolio Manager, or any affiliates the
Slide 4: Executive Summary
Executive Summary The Next Edge Strategic Metals and Commodities Fund (the “Fund”) is a diversified and opportunistically managed portfolio of primarily equity securities of commodity and resource companies. These investments may be made globally with a bias towards North American companies. The Man
Slide 5: About Next Edge Capital Corp.
About Next Edge Capital Corp. Next Edge Capital is an alternative investment fund manager providing leading-edge solutions for investors. For almost two decades our experienced team has launched numerous investment solutions in a variety of product structures. The people and approaches we discover m
Slide 6: About Delbrook Capital
About Delbrook Capital Delbrook Capital Advisors Inc. (“Delbrook”) is a Vancouver based investment manager focused on alternative strategies in the materials sector. The firm was founded by former Fidelity Management & Research Company (“FMR Co.”) Portfolio Manager, Matthew Zabloski in 2010. The fir
Slide 7: The Case for Commodities
The Case for Commodities Increasing and Multiple Drivers of Demand for various metals, minerals and resources (driving prices higher) 1 Supply Constraints (driving prices higher) 2 PRIMARY FACTORS driving a investment Inflation Hedge/Protection against inflation opportunity in 3 the metals and commo
Slide 8: The Case for Commodities: Multiple Drivers of Demand
The Case for Commodities Multiple Drivers of Demand The move towards clean energy initiatives, targets, Mass government and standards Post-pandemic global stimulus and (wind, solar, electric economy recovery infrastructure vehicles, batteries) will place (re-opening stimulus) spending initiatives a
Slide 9: The Case for Commodities: Demand from Clean Energy
The Case for Commodities: Demand Increased demand from Clean Energy Initiatives The strain on demand from clean energy initiatives for various metals and minerals is intense and rapidly increasing. MINERALS USED IN SELECTED ENERGY TECHNOLOGIES (KG/VEHICLE)* The shift to a more mineral-intensive ener
Slide 10: Technological Innovation Accelerating Demand
The Case for Commodities: Demand Technological Innovation Accelerating Demand GLOBAL METALS AND MATERIALS DEMAND FROM EV BATTERIES 600 400 Kt 200 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Graphite Nickel Aluminium Copper Lithium Cobalt Manganese Source: Bloomberg New Energy Finance /
Slide 11: EVs Require Significantly More Copper Than Traditional Cars
The Case for Commodities: Demand EV’s Require Significantly More Copper Than Traditional Cars 90 83 80 70 60 International Copper 60 Association (“ICA”) estimates current total copper demand 50 from EVs stand at 300Kt or 40 1.5% of total demand. 40 Delbrook estimates copper 30 23 consumption per veh
Slide 12: Mass Stimulus and Infrastructure Spending
The Case for Commodities: Demand Mass Stimulus and Infrastructure Spending “The $1 tn plan would fund investments in roads, bridges, ports, airports, water facilities and broadband networks”* “According to the Asian Development Bank, developing countries in Asia alone will need $26 trillion of infra
Slide 13: Mass Stimulus and Infrastructure Spending: USD $69 Trillion
The Case for Commodities: Demand Mass Stimulus and Infrastructure Spending USD $69 Trillion The projected cumulative infrastructure investment is needed before 2035 to keep up with the projected global demand. Cash- strapped governments have been reaching out to the private sector to help meet that
Slide 14: Supply Constraints
The Case for Commodities Supply Constraints 1 2 3 Vast underinvestment Most mines require In many cases, cheaper over the past decade + in timelines of 10+ and higher grade the exploration and mining years to be put into resources are decreasing of various metals and production requiring significant
Slide 15: Supply Decreasing Despite Increasing Demand
The Case for Commodities: Supply Supply Decreasing Despite Increasing Demand GLOBAL CAPEX IN THE MINING INDUSTRY ACROSS 15 COMMODITIES WILL DROP BY 6.4% YEAR OVER YEAR IN 2020, DRIVEN BY A DECLINE IN DEVELOPMENT CAPEX* Copper Gold Iron ore Metallurgical coal Nickel Zinc Other 160,000 140,000 120,000
Slide 16: The Copper Market is Expected to Be in Deficit
The Case for Commodities: Supply The Copper Market is Expected to Be in Deficit due to Years of Underinvestment GLOBAL COPPER MARKET SURPLUS/DEFICIT 300,000 S&P Global estimates the 204,190 global copper market is 200,000 expected to return to deficit in 2021. 100,000 4,000 ICA expects EV copper 0 d
Slide 17: Lack of Copper Discoveries
The Case for Commodities: Supply Lack of Copper COPPER DISCOVERY RATES PLUMMET COPPER DISCOVERIES Although the >US$28 billion allocated 120 5,000 to copper exploration over the past decade is more than double 4,500 the US$10.5 billion spent over the 100 4,000 preceding 17 years Copper exploration bu
Slide 18: Commodities remain one of the best inflation hedges
The Case for Commodities: Inflation Hedge Commodities remain one of the best inflation hedges Historically, commodities have provided for purchasing power protection and upside return potential during inflationary environments “Almost a fifth of all US dollars were created this year”* “40% of US dol
Slide 19: Inflation Hedge: Record Money-Printing in the US
The Case for Commodities: Inflation Hedge Commodities remain one of the best inflation hedges Historically, commodities have provided for purchasing power protection and upside return potential during inflationary environments. RECORD MONEY-PRINTING IN THE US M1 Money Stock, Percent Change from a Ye
Slide 20: Return Potential During Rising Inflationary Environments
The Case for Commodities: Inflation Hedge SIGNIFICANT RETURN POTENTIAL POSSIBLE DURING RISING INFLATIONARY ENVIRONMENTS Energy Copper Broad Commodities Industrial Metals Agriculture Precious Metals Gold S&P 500 CPI 0% 5% 10% 15% 20% 25% 30% Gains for every $1 annual rise in US CPI Sources: Bloomberg
Slide 21: Diversification Benefits
The Case for Commodities: Diversification Benefits The addition of metals and commodity exposure can add diversification benefits to investment portfolios. CORRELATION OF MONTHLY RETURNS FROM 31 JAN 1990 TO 30 JUNE 2021 TSX S&P 500 Barclays Global Goldman Sachs Aggregate Index Commodities Index TSX
Slide 22: Timing and Valuations
The Case for Commodities: Timing and Valuations BLOOMBERG WORLD MINING INDEX 500 >150% GAIN 450 400 >60% >300% DECLINE >100% 350 GAIN GAIN >70% 300 DECLINE Index Value 250 200 150 100 50 0 8-2003 8-2006 8-2009 8-2012 8-2015 8-2018 8-2021 Source: Bloomberg / Delbrook Capital Unprecedented government
Slide 23: Commodity Valuations at Historic Lows
The Case for Commodities: Valuations Commodity Valuations at Historic Lows S&P GSCI TOTAL RETURN CME / S&P 500 INDEX RATIO* 10.0 Oil Crisis Gulf Crisis 1990 Since 2008, the Bloomberg Commodities 1973/1974 GFC 2008 Index is down 60%; the S&P 500 is up more 8.0 than 150%. Price Ratio 6.0 S&P 500 Index
Slide 24: Next Edge Strategic Metals and Commodities Fund
Next Edge Manager Strategic Next Edge Capital Corp. Metals and Investment Sub-Advisor Commodities Delbrook Capital Advisors Inc. , Fund Investment Objective The Fund seeks to provide long term growth of capital by investing opportunistically and primarily in equity securities of companies involved i
Slide 25: Portfolio Management Team
Portfolio Matthew Zabloski, Portfolio Manager and Founder Management Managing Director of Delbrook, a firm he founded in 2010 Team Over 15 years of capital markets experience including asset management and investment banking Founding Board Member of the Shareholder Gold Council (“SGC”) Portfolio Man
Slide 26: Investment Process
Investment Process WELL DEFINED PROCESS FOR CAPITALIZING ON OPPORTUNITIES IN METALS AND COMMODITIES 1 2 3 4 Evaluate individual Fundamental equity Allocate capital within Monitor risk factors to commodity fundamentals and macro analysis to the Fund’s strategy minimize downside and based on supply/de
Slide 27: Investment Strategy and Portfolio Details
Investment Strategy and Portfolio Details • Materials Investment Universe • Energy • Clean Tech/Industrials • Long Duration Thematic Investment Strategy • Opportunistic • Hedging • No position greater than 10% of NAV at inception • 90% listed equites Risk Management/Composition • 10% other – this ca
Slide 28: Summary of Terms
Summary of Terms • Class A – NEC 220 FundSERV Codes • Class F – NEC 219 • Class I – NEC 218 • $5,000 for Class A & F Investment • $1,000,000 for Class I Subsequent Investment $1,000 for all Classes • Class A – 2% (includes 1% • servicing fee payable out of the management fee) Management Fee • Class
Slide 29: Appendix
Appendix
Slide 30: Reference Track Record for Delbrook Capital
REFERENCE TRACK RECORD FOR DELBROOK CAPITAL Delbrook Resource Opportunities Fund1 3 Year 5 Year Fund XME ETF2 1 Month 1 Year Annualized Annualized PERFORMANCE -3.70% 84.86% 40.88% 24.77% Annualized 21.7% 1.40% RISK METRICS Std. Dev. 9.60% 10.00% JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC YTD2 2
Slide 31: Contact
nextedgecapital.com linkedin.com/company/next-edge-capital twitter.com/NextEdgeCapital 1 Toronto Street, Suite 200, Toronto, ON M5C 2V6 416.775.3600 Toll Free: 1.877.860.1080 info@nextedgecapital.com 31
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