Accurately picking a trend is one way to help position your portfolio to outperform the broader share market.
For example, in the past decade, investors who jumped aboard the resource boom did very well – so long as they got out before the bust!
Currently, many investors are benefiting from a tailwind in the telecommunications sector which is enjoying gains as more consumers spend time and money online and demand more data at faster speeds.
Another theme which is set to provide long-term growth is increasing demand from Asia for high protein food. This theme is set to benefit numerous ASX-listed companies with exposure to the agricultural industry.
Here are four worth monitoring –
Bega Cheese Ltd (ASX: BGA) – the attraction of dairy companies has been highlighted recently thanks to the takeover earlier in the year of Bega's peer Warrnambool Cheese & Butter Factory Co. (ASX: WCB). China's rising middle class is demanding increased volumes of dairy product and Bega is positioned to benefit.
Just as dairy is in higher demand in Asia, so too is beef. Boasting one of the world's largest beef herds and as a major vertically integrated exporter thanks to a new abattoir based in Darwin, Australian Agricultural Company Ltd (ASX: AAC) is positioned to benefit from growing Asian consumption of beef.
There is another angle for investors to gain exposure to food consumption which doesn't actually require owning food producers or manufacturers.
Service providers such as Ruralco Holdings Ltd (ASX: RHL), which offer merchandise, sales and marketing also stand to benefit. One of the important inputs which Ruralco sells is fertiliser – which is obviously a key ingredient in the farming process. Furthermore, higher volumes are expected to be demanded as Australia's status as 'Asia's food bowl' rises.
One company, perhaps above all others that could stand to benefit the most from increased global demand for fertiliser is Rum Jungle Resources Ltd (ASX: RUM), which is developing the Ammaroo Phosphate Project.
While the company has a market capitalisation of just $29 million, it is sitting on what is described as a 'world-class' phosphate resource with an estimated size of over 1.1 billion tonnes. Notably, phosphate is a key ingredient from which fertiliser is derived.
