Three things that got the team talking this week - Firetrail Investments

Weekly insights from the Trail

Three things that got the team talking this week

November 5, 2021January 5th, 2022

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1. Magnetic attraction…

The price of NdPr, or neodymium and praseodymium (two light rare earth elements), has gapped up >20% in the last month. Reports suggest China is holding back their supply due to increased environmental regulations. NdPr is a key component of high performance magnets, which are used in electric vehicles, as well as some speakers, industrial robotics and medical devices like MRIs.

Lynas, a key portfolio holding, is the only large scale rare earths producer outside of China. This week Lynas and Japan (Japan Oil, Gas and Metals National Corporation) signed a ‘letter of agreement reconfirming support for Lynas’. This showed how important the material is for Japan, as they further deferred interest repayments on their loan to Lynas with no penalty or additional interest.

2. Grocery bill$…

Global food costs jumped last month according to a UN index tracking staples. The basket was up 3% in October to a fresh decade high, adding inflationary pressure on consumers and governments **hint hint BoE!

3. Retail power…

Retail investors added +$5.6B worth of equity fund demand every day last week, totaling +$28 Billion of inflows into equities in the week. US households now own 38% of the $75 Trillion US corporate equity market. This is a 2% increase since the start of the year, and this increase is nearly the full size of the Hedge Fund industry, which is 3% of the market!

Source: UBS

Disclaimer

This article is prepared by Firetrail Investments Pty Limited (‘Firetrail’) (ABN 98 622 377 913, AFSL 516821) as the investment manager of the Firetrail Australian High Conviction Fund (ARSN 624 136 045), the Firetrail Absolute Return Fund (ARSN 624 135 879), the Firetrail Australian Small Companies Fund (ARSN 638 792 113) and the Firetrail S3 Global Opportunities Fund (ARSN 653 717 625) (‘the Funds’). Pinnacle Fund Services Limited ('PFSL') (ABN 29 082 494 362, AFSL 238371) is the product issuer of the Fund. PFSL is not licensed to provide financial product advice. PFSL is a wholly-owned subsidiary of the Pinnacle Investment Management Group Limited (‘Pinnacle’) (ABN 22 100 325 184). The Product Disclosure Statement (‘PDS’) and Target Market Determination (‘TMD’) of the relevant Fund are available via the links below. Any potential investor should consider the PDS and TMD before deciding whether to acquire, or continue to hold units in, the Fund.

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