A sector at the intersection of strategy
With over eight years analysing equities across global markets, how do you assess the role commodities and natural resources play in today’s investment landscape — and why are they so often underrepresented in portfolios?
For Saran Sankar, the importance of the sector follows from where it sits in the global picture.
“Natural resources sit at the intersection of several strategic objectives — energy security, infrastructure investment, and geopolitical fragmentation. Because the sector touches all of these, it carries real importance.”
SARAN SANKAR · EQUITY RESEARCH
On the question of underrepresentation he is more measured, noting that many portfolios are now adding exposure across the sub-sectors. Where investors have held back, he argues, it stems from a misconception — the belief that these companies simply react to commodity spot prices.
“There are many companies with genuine structural advantages that grow through the cycle, regardless of where commodity prices sit. That’s exactly what we look for.”
SARAN SANKAR · EQUITY RESEARCH
He traces the shift in perception to a specific moment. Through the prior decade, technology led global markets while leadership rotated around it; the turning point for resources came with the Russian invasion of Ukraine, when investors began to treat access to a resource as a strategic advantage in its own right — recognising that reserves are finite and that privileged access confers a durable edge.
What separates a business worth owning
Q — Drawing on your experience covering equities across the US, Europe, and the Gulf, what does rigorous, multi-geography research bring to a specialist commodity strategy?
No company, Saran notes, can be understood in isolation — every business sits within an ecosystem of suppliers and customers shaped by economies well beyond its own borders. With commodities, the long, interlinked supply chains make that lens essential.
“It isn’t easy for everyone to build genuine research coverage and form a differentiated view, which is precisely why we are developing this expertise. There’s a clear gap in the market.”
SARAN SANKAR · EQUITY RESEARCH
Q — When evaluating a company in the commodity value chain, what separates a business worth owning from one that simply tracks the underlying commodity price?
The answer lies in a framework that sorts companies into three buckets: high-quality compounders, re-rating candidates, and high-risk, high-upside businesses. The firm’s largest positions concentrate in the first.
“High-quality compounders move through the cycle while consistently generating returns above their cost of capital — companies that keep asking what the next growth area adjacent to their core strength is, and invest into it.”
SARAN SANKAR · EQUITY RESEARCH
Re-rating candidates are companies the firm judges to be mispriced — and here exposure to spot prices is acceptable, because each is tested against the team’s own commodity-price forecasts to determine whether the security is genuinely mispriced relative to that view. The largest holdings, however, remain the businesses with a durable competitive advantage that compound through the cycle.
Why the supercycle may lie ahead
Q — With a background spanning energy markets, commodities, and quantitative finance, how do you frame the opportunity in global commodity markets today?
Bas Gitinov begins by challenging a widely held assumption — that the great commodity supercycles are behind us.
“The previous supercycles were warm-ups before the main event.“
BAS GITINOV · COMMODITY EQUITY RESEARCH
His case rests on demand and supply moving in opposite directions. On demand, much of Africa and many emerging markets remain below USD 5,000 of GDP per capita with rapidly growing populations, while developed economies are unlocking new demand from AI and the rising need for computing capacity. On supply, reserves have been steadily depleted — copper has been mined for thousands of years — creating a structural crunch. Growing political polarisation, by reducing trade freedom, adds arbitrage opportunities on top.
“The opportunity lies in fundamentally strong businesses, in emerging markets, and in deep integration into the industry.“
BAS GITINOV · COMMODITY EQUITY RESEARCH
Following fundamentals, not narratives
Q — Major energy transitions, infrastructure build-outs, and supply-chain realignments are reshaping demand. How does the firm’s research approach position it to read these structural trends?
The starting point, Bas explains, is recognising how deeply intertwined commodity markets are: a higher gas price lifts demand for coal; an expensive copper price pushes manufacturers toward aluminium. The energy transition is real, but he frames its purpose as diversifying the energy mix rather than replacing it.
“There’s no single commodity, sector or sub-sector that we should simply follow as a one-way trend. The discipline is to stick to fundamentals and avoid chasing the transition narrative.“
BAS GITINOV · COMMODITY EQUITY RESEARCH
Rising political polarisation, he adds, pushes economies toward their own resources — India leaning on domestic generation rather than costly imported LNG — as trade flows tighten, logistics costs rise, and tariffs bite.
Q — How does combining fundamental analysis with quantitative tools give the firm a more rigorous read than a purely qualitative approach?
For most upstream businesses two variables dominate — the commodity price and production — and both are highly uncertain. That, Bas argues, is where quantitative methods become integral, though he is careful about what they can and cannot do.
“The winner here isn’t the one who can predict the price; no one can. It’s the one who can see and measure the risks.“
BAS GITINOV · COMMODITY EQUITY RESEARCH
In practice that means stress-testing every assumption — simulating prices across historical and forward-looking distributions and monitoring a range of risk metrics across the portfolios — all to support the fundamental view rather than replace it.
From a screen to a defensible position
Q — How does the firm build conviction in a holding? What does the path from initial research to a defensible portfolio position look like?
The process combines top-down and bottom-up work. It begins with a quantitative screen across the sub-sectors — financial ratios, sales growth, profitability — to produce a first list, followed by a deep dive into the business model, competitive landscape, segment mix and margins, and the market dynamics around them. Notably, the team leaves one step until last.
“We deliberately leave the consensus comparison until near the end of the process, so that we aren’t biased while forming our own view.“
SARAN SANKAR · EQUITY RESEARCH
Only once the valuation work and the risk assessment all point the same way does the firm conclude there is genuine alpha to capture, and proceed.
Q — What makes the firm credible to answer where to invest next — and what does the team do differently?
Because the strategy invests in equities within the sector rather than in the commodities themselves, Bas argues, a multi-angle view is essential — requiring expertise in equity research and modelling, in commodity-price behaviour and risk, and in portfolio construction.
“Sitting here in Dubai, between Western and Eastern centres of capital, I think we’re about as unbiased and as flexible as we can be — and that’s a real advantage.“
BAS GITINOV · COMMODITY EQUITY RESEARCH
Saran adds that the sector demands expertise commodity by commodity — each almost a separate discipline — combining quantitative technique with modelling skill, which is precisely the gap the team is built to fill.
Q — The fund is concentrated and high-conviction by design. How does operating without a benchmark constraint sharpen the way ideas are evaluated and sized?
“We aren’t compelled to out-position a benchmark. Every position is judged on the absolute return it generates for us, which keeps the bar to entry very high.“
SARAN SANKAR · EQUITY RESEARCH
For a concentrated strategy, he notes, even one poor investment is costly — so the bar is set deliberately high, and every position comes down to genuine conviction: identifying companies the team believes in, confirming they fit the strategy, and only then deploying.
Where a view diverges from consensus
Q — Having presented research to major institutional investors, what distinguishes genuinely differentiated analysis from consensus — and how does the firm aim for the former?
Because the team forms its own view before ever looking at consensus, the comparison becomes a source of insight rather than an anchor.
“Where you differ from consensus is precisely where you find mispricing, because the market will tend to price to consensus.“
SARAN SANKAR · EQUITY RESEARCH
It is not a straightforward sector, he adds — even on the buy-side, expectations can differ widely, and the firm deliberately seeks a view different from the market, believing that is where its edge lies.
Q — How do fundamental analysis, market intelligence, and quantitative tools work together when evaluating a commodity-linked equity?
Bas ranks them plainly. Fundamentals come first — the balance sheet, the business model and the company itself have to be genuinely strong, and that is non-negotiable. Quantitative analysis comes second, to quantify the risks in an industry dependent on commodity prices and geopolitics. Market intelligence comes last.
“We follow the markets to help navigate the strategy and minimise the short-term impact of fluctuations — but it’s the lowest of the three priorities.“
BAS GITINOV · COMMODITY EQUITY RESEARCH
Q — Commodity prices are inherently volatile. How does the firm treat that volatility — as a risk to manage, and as an input into valuation and portfolio construction?
There is both a fundamental and an analytical answer. Fundamentally, the team can move along the supply chain — from upstream producers to refiners, manufacturers and retailers — where a given price move affects each differently.
“A higher oil price is a positive catalyst for an oil producer, but for a refiner it works the other way. By balancing across the supply chain, we can offset much of the impact of price swings.“
BAS GITINOV · COMMODITY EQUITY RESEARCH
Analytically, the team simulates its financial models across scenarios, incorporating as many risks as possible according to their distributions.
Specialisation as the edge
Q — Fundament Capital has made commodities and natural resources one of three core specialties. What’s the rationale for specialising this deeply, and why is research depth central to it?
Each commodity, Saran explains, is effectively a sector in its own right — with its own resource grades, capital efficiency, decline rates, logistics costs and project timelines — and navigating that requires deep, dedicated expertise.
“Where we build genuine research expertise we can identify excellent investment opportunities. We don’t see many firms developing that expertise in this sector in this region right now.“
SARAN SANKAR · EQUITY RESEARCH
Q — How does being based in the Gulf give the research team a differentiated edge in sourcing and validating ideas?
Two advantages stand out for Saran: proximity to long-term sovereign capital, which provides a receptive audience for strong ideas, and the quality of the feedback loop that proximity creates — making it easier to understand what those investment teams want and to refine the firm’s own research process accordingly.
Q — The firm emphasises a data-driven approach to portfolio management. What does that look like in practice?
It begins, Bas says, from the principle that every percentage point of return carries a cost in risk — so the goal is the highest return per unit of risk, tailored to each client’s appetite, using portfolio-optimisation models, liquidity awareness, and attention to correlation.
“If your portfolio can generate stable returns without being too correlated to the global equity indices, it delivers alpha during drawdown periods. That’s another reason commodities are attractive.“
BAS GITINOV · COMMODITY EQUITY RESEARCH
A generalist who simply buys a broad commodity index, he adds, typically gets only the exposure — historically mean-reverting toward inflation — whereas dedicated research can earn a higher return while keeping the same low-correlation benefit.
Every commodity a distinct case
Q — Energy and metals have different drivers, cycles, and risks. How does the firm adjust its analytical framework across them?
The team treats every commodity as its own case, identifying the drivers that matter for each and gathering as much data as possible — harder for niche metals like cobalt or lithium, where data is scarce and production capacity cannot easily scale. Increasingly, the correlations between commodities matter too.
“Producing copper requires a great deal of electricity — roughly 70% of the final cost is electricity — so higher energy prices generally mean higher production costs. There’s a clear chain of correlation.“
BAS GITINOV · COMMODITY EQUITY RESEARCH
Q — Within resource-linked equities, where does the firm’s research suggest the market may be mispricing risk or opportunity?
“The short answer is: everywhere. Because we don’t restrict ourselves to particular sub-sectors, those opportunities can appear anywhere — and finding them is exactly what you should be aiming to do.“
BAS GITINOV · COMMODITY EQUITY RESEARCH
On weighing long-term demand against short-term cycles, Bas is unequivocal: the team almost never emphasises short-term price cycles, which often barely register in a company’s earnings, and stays anchored to the quality of the business and the long-term factors instead.
Separating narrative from cash flow
Q — How does the firm apply an emerging-themes lens while staying disciplined on fundamentals?
Themes such as electrification or uranium can be a useful starting point, Saran says, but the investment decision is always grounded in the economics.
“The discipline comes from separating the narrative from the cash flow. A good theme doesn’t automatically make a good investment.“
SARAN SANKAR · EQUITY RESEARCH
The test is whether a company can convert the theme into earnings, free cash flow and returns on capital — and sustain growth above its cost of capital. Geographically, the team looks globally for mispriced quality, mindful that capital markets can price the same asset very differently from one region to the next.
Q — Looking ahead, what’s the biggest opportunity — and the biggest risk — the firm sees in commodity markets right now?
For Bas, the principal risk is macroeconomic — a failure to meet the growth expectations embedded in markets, whether from trade restrictions, conflict or unchecked inflation — rather than anything specific to commodities, where he sees the structural set-up as favourable. The opportunity, he argues, is in dispersion.
“I expect the commodity sector to perform well broadly, but with a high degree of dispersion between countries, companies and sub-sectors. The goal is to stick to the fundamentally stronger companies.“
BAS GITINOV · COMMODITY EQUITY RESEARCH
Saran frames the risk in two parts: a sector-specific one, since a popular sector attracts new entrants and added volatility that rewards patience and genuine research advantage; and a broader one around inflation and growth. But within that, his conclusion returns to the firm’s central idea.
“The businesses worth owning are those that find ways to turn these pressures to their advantage and keep growing. Identifying them requires research expertise and patience.“
SARAN SANKAR · EQUITY RESEARCH
