Highbridge Capital has announced the launch of a fund which the group describes as the ‘first of its kind’, as it will offer investors access to commodities futures in a Ucits III format.
The firm is the alternative investment arm of JP Morgan and is widely followed among fund selectors, largely as a result of a period of eye-catching performance by its success of its JPM Highbridge Statistical Market Neutral fund a few years back.
Its latest product, the Highbridge Diversified Commodities Fund, will invest in 25 to 30 of the most liquid and major commodities. It will have the ability to short commodities as it will invest via the futures market, meeting the Ucits III rules through the use of a total return swap.
It will be managed Mark Nodelman, an economist with experience of running money and a previous head of quantitative strategy development for commodities at Goldman Sachs, and Sassan Alizade, an electronic engineer with a PhD in economics.
‘As the fund gives investors exposure to pure commodities through a total return swap, it means that investors will only be taking commodity risk rather than equity and commodity risk together,’ said Jasper Berens, head of UK retail sales at JP Morgan Asset Management.
‘While equity sectors overall are generally more correlated to each other and influenced by economic and market trends, the performance of individual commodities tend to be dominated by their own supply and demand dynamics. As a result, diversifying a portfolio of equities, bonds and other alternatives with commodities may offer further diversity within a balanced portfolio.’
The Highbridge Capital Management group was founded in 1992 as an alternative investment manager and was acquired by JP Morgan Asset Management in December 2004.