Man commodity algorithm fund allows human element
LONDON (Reuters) Asset manager Man Group aims to attract new institutional and wealthy retail clients with a commodity fund that uses hedge fund techniques and computer models, but in a traditional long only format.
A wave of investment has entered commodities over the past decade from pension funds and other investors seeking diversification from equities and fixed income, but much of it is in passive index Canada Goose Outlet funds which underperform in weak markets such as last year.
Commodity hedge funds that are able to take long and short positions are more flexible Canada Goose Online in bear markets, but do not provide an inflation hedge, said Scott Kerson, who is managing the recently launched canada goose coats on sale fund.
bringing a systematic canada goose clearance hedge fund mindset to the long only space Canada Goose Parka in commodities, Kerson, formerly with hedge funds Ospraie and Amaranth, told Reuters in an interview.
The Man Commodities Fund will use proprietary computer algorithms to trade 25 commodity futures contracts, but unlike some box operations will also allow human intervention.
have developed a series of models on computers, which are non discretionary, but derived from a research process Canada Goose Coats On Sale that is heavily dependent Canada Goose online on the humans behind canada goose uk outlet it, said Kerson, who joined Man last canada goose summer.
those models are applied and whether they continue to canada goose be appropriate for the current market uk canada goose environment will be subject to human oversight.
The fund canada goose coats is part of a push by the world biggest listed hedge fund cheap Canada Goose firm to develop a range of new quantitative products.
SEEK TO FILL GAP The new product is seeking to fill a gap in a market to give investors greater choice.
While the return hedge funds may provide strong performance, they do not provide the beta exposure to commodities as an asset class. Beta refers to return generated from a portfolio that can be attributed to canada goose black friday sale canadagooseparks overall market returns rather than from an individual stock or commodity.
a hedge fund format, you don have that beta and you don have that hedge against inflation shocks that we felt people wanted, Rattray said.
While uk canada goose outlet passive funds have scant ability to guard against market downturns, the new fund can canadian goose jacket withdraw cash cheap canada goose uk from markets instead of going short canada goose clearance sale like hedge funds.
fund can become fairly significantly underinvested to the extent that our momentum models in particular are detecting a canada goose uk black friday negative trend in the commodity markets, he added. natural gas and agricultural markets.
It has begun trading with a $50 million (32 million pound) seed investment from the group and hopes to attract single digit hundreds of millions of dollars in assets this year. In the long run, it will have canada goose factory sale capacity for about $5 billion.
The fund is under the Ucits format, a European regulatory framework that allows funds to be sold in any European Union country.
That will allow the fund to be marketed to high net worth retail investors in additional to a core audience of pension funds and other institutions.
The Man Group has a long history in commodities after being founded in 1783 as a barrel maker and sugar cooperage business and later Canada Goose sale becoming a commodity broker before its transformation into a hedge fund group.
Man already trades commodities canada goose uk shop in its canada goose store flagship AHL futures fund and buy canada goose jacket its Man Commodity Strategies fund of funds.
MSS, which was formed in January 2011, buy canada goose jacket cheap has $1 billion of assets under management in two existing funds. The Man GLG Europe Plus fund is a long only equities Canada Goose Jackets fund drawing on the best broker ideas, and TailProtect is a long only volatility fund to provide tail risk protection.