Deutsche Bank has added a commodities investment strategy from America's JE Moody to its regulated hedge fund platform, as investors hunger for products that are protective from mainstream asset classes.
Deutsche Bank has added a commodities investment strategy from America’s JE Moody to its regulated hedge fund platform, as investors hunger for products that are protective from mainstream asset classes.
J E Moody & Company’s five-year old Commodity Relative Value Program has joined dbselect, the German bank’s platform for liquid alternative strategies.
The program, part of $170m total assets the alternatives manager runs, seeks to have “no commodity beta or correlations to Commodity Trading Advisers (CTAs), major asset classes such as stocks and bonds, or hedge funds,” says material promulgated with the announcement today.
This may not be a bad thing, because most major asset classes have fallen in value this year.
Hedge funds fell 4.7% by 31 October, while computer-driven funds known as CTAs, which typically provide performance more regularly, fell 3.1% by yesterday, according to data providers BarclayHedge.
Major European equity markets are typically sharply lower, and yield spreads have generally blown out on anything but the safest of the Western world’s government debt.
J E Moody’s non-directional program invests across various commodities complexes including energies, metals, grains, meats, and soft commodities.
Traders active in some of these complexes have made money this year, according to BarclayHedge. Agriculture traders were up 2.2% by 31 October, metals traders made 0.5%.
J E Moody’s strategy uses a fundamental, relative-value spread trading strategy in commodity futures.
John Moody, founder of his eponymous firm, said: “Deutsche Bank’s selection of CRV is a great testament to the diversification benefits and risk management inherent in the strategy.”
The $5bn dbselect platform has about 150 hedge fund programs offering daily liquidity.