As with all industrial sectors, shipping is susceptible to economic downturns. It is, by its very nature, a cyclical industry as supply is quite inelastic relative to demand due to the long lead-time in building new ships.
We aim to take advantage of the all-time lows recently experienced by the current market through our Shipping Opportunity Fund, which places a strong focus on the dry bulk shipping sub-sector.
We place special emphasis on the dry bulk sector, which has entered a transitional phase. In recent years, there has been a significant reduction in charter rates, and asset values of bulkers. In 2016, they were trading at approximately 60% discount to their last ten year average. Bulkers have been the hardest hit by this industry downturn, but given the essential nature of the cargoes that they transport, they will also recover the most rapidly when markets turn.