13 March 2012
The underlying investment strategy has been developed by Man Systematic Strategies, an investment manager within Man, for investors looking to diversify portfolios from standard investments in stocks and bonds. According to Barclays Capital Commodities Research, commodity investments are set to increase in 2012 and could rise to $30-40 billion due to strong investor interest and the potential for good returns in many sectors.
Launched with $50 million of seed assets, the fund is actively traded and aims to outperform passive indices and minimise downside risk. It will achieve this by obtaining liquid, long-only exposure to the Man Systematic Commodity Index – a proprietary index based on trading in 25 liquid futures contracts in precious metals, industrial metals, energy and agricultural products.
Man Systematic Strategies’ chief investment officer, Sandy Rattray, said, “More investors want to add commodities to their portfolios, but there are relatively few options for them in a UCITS format. Passive investment products like exchange-traded funds and index-linked swaps are generally poor at dealing with severe drawdowns and heightened volatility in commodity bear markets, so we think that an actively-managed, systematic approach is a better solution.”
Man’s history lies in commodities. The company started life as a barrel maker and sugar cooperage business in 1783 and then became a commodities brokerage, before lately becoming an alternative asset manager. While Man trades commodities and related securities in AHL, Man’s flagship managed futures fund, and in its Man Commodity Strategies fund of funds, the new offering is Man’s first single manager commodities-only fund.
The underlying investment strategy is led by Scott Kerson, Man Systematic Strategies’ new head of commodities, who has 17 years’ experience in commodities and systematic trading. It also benefits from the research and input of Campbell Harvey, the J. Paul Sticht Professor of International Business at Duke University’s Fuqua School of Business and the editor of the Journal of Finance.
It is Man’s intention to make the fund available to investors in several European countries with a minimum investment of $/€/£/CHF1,000 for retail investors and $/€/£/CHF100,000 for institutional investors.