Although its numbers picked up during July, the £1bn vehicle has lost 20% of its value in the last 12 months as commodities have come under pressure.
However Gregson is optimistic the sector’s fortunes will reverse and resources prices will recover.
"We believe commodity prices could be bottoming out following two years of declines,” he said, adding that the sector showed signs of a recovery during the third quarter as Chinese growth data improved and companies with earnings linked to commodities saw their share prices move higher.
Supply/demand
Bolstering Gregson’s conviction, the manager expects improvements on the demand side that will lend an added boost.
China should be instrumental in this shift, he explained, while at a stock level valuations are still attractive.
Gregson said: "So far this year, Chinese copper and iron ore import volumes have been well above consensus forecasts and there are healthy signs of inventories being drawn down through strong end demand, particularly in the housing and industrial sectors.”
He added: "Valuations among small cap mining stocks are particularly compelling. Small and mid cap mining companies are often better positioned to materially grow production and replace depleting reserves. They [also] tend to benefit the most from any upward movement in commodity prices."
