Frost Investment Advisors has launched the Frost Natural Resources Fund (FNRFX – Institutional shares and FNATX – Class A shares), adding another strategy to the firm’s mutual fund family.
Fund co-manager Ted Harper has 12 years of experience covering energy. He is co-manager for the Frost Dividend Value Equity Fund, which, according to Morningstar, is in the first decile over a five-year period, based on performance as of 8/31/11. John Lutz, CFA, the fund’s co-manager, has 11 years of experience in the energy and basic materials sectors and is co-manager for the Frost Core Growth Equity Fund, which, also according to Morningstar, is in the second decile over a five-year period, based on performance as of 8/31/11 for the Institutional Class.
"Given our location in Texas, our proximity to a broad and deep range of natural resources, and our significant in-house experience in the natural resources space, we believe we are well qualified to provide value to investors through the Frost Natural Resources Fund," says Tom Stringfellow, president of Frost Investment Advisors. "Ted and John bring years of experience managing portfolios and following the energy and commodities sectors from different perspectives, developing skills which can ultimately help shareholders looking for a portfolio that manages up and down markets in the natural resources space."
Adding to the solid expertise the managers bring, the fund will draw on Frost, the advisory’s parent company, with its decades of experience in oil and gas lending, as well as its strength in managing oil and gas properties and mineral interests.
The managers will seek for FNRFX/FNATX to outperform the S&P North American Natural Resources Index, the fund’s benchmark index. The fund will invest at least 80 percent of its net assets in securities of domestic and international companies in natural resources industries, subject to limits described in the prospectus.
Investable sectors for the fund include oil and gas; energy equipment and services; metals and mining; and paper and forest products, among others.
The managers note that industries in the natural resources space, as a class, are often less correlated to the market than other sectors and have outperformed the market in periods of higher inflation. Given increasing global energy consumption and greater energy demand by both developed and developing countries, the managers believe that this is an ideal time to launch the Frost Natural Resources Fund.
Frost Investment Advisors began offering mutual funds in April 2008, initially to serve the needs of institutional clients, and expanding to offer retail shares in June 2008. With the Frost Natural Resources Fund, the adviser now offers 15 strategies and 25 mutual funds that include institutional and retail shares.