BNP Paribas suspends agriculture fund over 'food speculation' concerns
EUROPE – Asset manager BNP Paribas has suspended its Parvest World Agriculture fund due to controversy over food speculation.
BNP Paribas said: "As part of our ongoing dialogue with NGOs, we have taken heed of the arguments expressed by Oxfam.
"Despite the absence of any clear-cut conclusions regarding the relationship between financial instruments and the volatility of food commodity prices, we decided to adopt the precautionary principle and suspend subscriptions to our Parvest World Agriculture fund, which is the most exposed to foodstuffs among our range of funds.
"We have also decided to close the EasyETF Ultra Light Energy fund for the same reasons."
BNP Paribas has followed the precautionary principle with regard to activities in agricultural commodities market since 2011 and has closed a number of investment funds that were exposed to agricultural commodities.
It also published a position paper to this effect on its website and has accordingly already closed down three exchange-traded funds (ETFs) that had a significant agricultural commodities component.
But the group stressed that it was not a major player in essential agricultural commodities, and did not engage in speculation in this or any other market.
It said: "Oxfam has drawn attention to a number of investment funds we manage on behalf of our clients.
"These are in fact diversified funds, mainly exposed to industrial or precious metals and energy, with only marginal investments in foodstuffs.
"We do not make any investments in physical commodities nor engage in own-account trading in this sector.
"The funds in question are managed on behalf of the group's savers and investors and form part of their investment portfolios on a long-term basis."
The total amount invested in the funds mentioned above amounts to €1.5bn, accounting for 0.3% of the funds under BNP Paribas management, while the total share of food commodities in those funds stands at €411mn, accounting for 0.08% of its total assets.