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BAML launches basket of commodity-focused UCITS funds

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Bank of America Merrill Lynch this week announced the launch of a basket of commodity-focused UCITS funds, the latest additions to BAML’s INVEST platform, widely regarded as one of the

Bank of America Merrill Lynch this week announced the launch of a basket of commodity-focused UCITS funds, the latest additions to BAML’s INVEST platform, widely regarded as one of the industry’s leading fully integrated UCITS-supported platforms. The three Commodity Alpha and Beta funds are: The MLCX Commodity Enhanced Beta Fund; the MLCX Agriculture Optimal Crop Fund and the MLCX Commodity Alpha Fund. Only the latter will use a L/S market neutral strategy to generate alpha, with the other two using a long only exposure to the commodities markets. All will track underlying indices developed by BAML Global Research. Investors will therefore be able to choose between the funds depending on the risk/return and degree of beta or alpha they’re looking to generate in their portfolios. The funds are Lux-domiciled and currently available to institutional and retail investors in Luxembourg, the UK, Ireland, Spain, Italy, Germany, Austria and Sweden.

Commodities-focused UCITS were the best performers last month, locking in +2.20 per cent returns. Commenting on the commodity family of funds’ launch, Eric Personne, Co-Head of EMEA cross asset retail sales and Head of Equity and Fund Structuring at BAML, said in the bank’s official press release: “Commodities play an important role in efficient portfolio allocation and we are excited about making these alpha and beta strategies available in a regulated, liquid and transparent fund format.” The bank’s Global Research team has been leading the way over the last five years in developing alpha and beta commodities strategies. Since being launched in 2006, the Merrill Lynch Commodity Index Extra (MLCX) family of indices has, through various strategies, attracted more than USD20 billion in investments. MLIS recently had to liquidate BlueCrest’s BlueTrend UCITS due to an unexpected widening in the fund’s tracking error.

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