Global Advisors, the commodity hedge fund manager, this week launched two new funds based on systematic quantitative models developed in-house.
These two new funds widen Global Advisors' product offering allowing commodities investors to choose or combine a systematic and/or discretionary approach to commodities markets.
Rus Newton, co-principal, Global Advisors, said: 'For most of the last twenty years of trading commodities markets, my partner Danny Masters and I have used a discretionary approach, blending analysis of the supply-demand fundamentals and geopolitical factors, relative value and systematic trading. Since the cyclical lows in commodity markets that were reached after 9/11 we have seen massive interest develop amongst institutional investors, mainly in passive long-only index-tracking products.'
'As a result, for the first time in over twenty years, commodities are now being recognized as a mainstream asset class. We have developed quantitative, systematic approaches to trading, which we use alongside our discretionary approaches. Over the past year or so, these systematic models have performed extremely well and so we decided it was time to offer the systematic program as a standalone product.'
The two new funds went live on 1 June 2006:
- The new Global Commodity Systematic fund offers full long/short exposure to the systems - this is known as pure 'alpha'- as well as diversification within the commodity niche by trading inter-and intra-commodity spreads and outright commodities.
- The new Global Commodity Index Plus Fund, a long-only fund uses GlobalAdvisors' systematic quantitative models as overlay onto long-only portfolio ofGSCI commodities. Global Advisors describes this as 'alpha on beta'.
Both funds are based on the systematic, quantitative models developed in-house for the commodity futures markets. Both funds trade only commodities (i.e. no stock indices, currencies or financial markets).
Market sectors traded include energy, base and precious metals, grains, tropicals, meats, commodity indices. Global Advisors offers investors the ability to switch between the two products. Minimum investment is USD 250,000.
Background Note: Global Advisors LP is a specialist commodities hedge fund, which provides investment management services to hedge funds, fund of funds, commodities companies and individual and institutional investors. It was founded in1999 by Daniel Masters and Russell Newton who between them honed their skills at Royal Dutch/Shell, developed innovative strategies for the commodities speculator, Phibro and built a trading business at risk management innovator JP Morgan. Global Advisors currently has over USD 380 million assets under management, has offices in London and New York and is a member of the NY Mercantile Exchange. An independently audited company, owned by the principal partners who are also invested in the fund, Global Advisors became in 2005 a member of Ospraie Wingspan, a multi-manager commodities & basic materials platform.