Commodities

Uncorrelated Alpha and Beta strategies

Our expertise

Since 1994, we’ve been focused on offering cost-effective and efficient exposure to a diverse range of commodities. As part of O’Connor, an established alternatives platform, our strategy seeks to hedge against unexpected inflation and diversifies portfolios independently from stocks and bonds. Positioned as a strategic asset class, our solutions aim to enhance portfolio diversification, reduce risk, and increase returns.

What sets us apart

Diversification potential

Commodities generally offer a pattern of correlation and return that can be distinct from other asset classes, in particular stocks or bonds. As such, they have the potential to diversify and enhance the risk-adjusted returns of a traditional portfolio.

Inflation protection

Exposure to commodities can also help portfolios manage inflation risk. One of the most compelling advantages that commodities may offer is differentiated return characteristics during periods of unexpected inflation risk.

Business cycle diversification

Commodities have historically helped to diversify business cycle risk as the asset class tends to behave differently compared to equities during the various phases, such as during late-stage expansion or early-stage contraction.

Risk-managed approach

Our risk-managed approach aims to maintain diversification while managing collateral conservatively, avoiding significant duration or credit risk. Our expertise seeks to provide consistent, transparent, and efficient access to commodities.

Potential risks of investing in commodities

Market-driven risk could negatively affect the value of a particular investment
Credit risk may occur if a counterparty defaults or is unable to honor a financial obligation
Commodity-linked derivatives may be subject to greater volatility than traditional securities. These derivatives may be affected by:
- Changes in overall market movements
- Commodity index volatility
- Changes in interest rates, and
- Factors affecting a particular industry or commodity, such as drought, floods, weather, livestock disease, embargoes, tariffs and international economic, political and regulatory developments
Speculative Nature of Commodities Investments. Investing in commodities is speculative and involves a high degree of risk. There is no assurance that technical and risk management techniques, as well as the investment decisions made by the investment manager, will not expose investors to risk of significant losses.

Our approach

Experienced leadership

The Commodities Team is led by industry veterans with over 45 years of combined experience. Since 1994, the team has been committed to providing efficient and cost-effective exposure to a variety of commodity benchmarks.

Value-driven approach

The team focuses on adding value in the commodities markets by seeking to identify market inefficiencies and price dislocations. Their philosophy includes a conservative approach to managing the underlying cash-collateral portfolio, looking to ensure the preservation of the asset class’s diversification and inflation-protection qualities.

Diverse investment solutions

We offer a broad range of managed commodity solutions designed to meet each investor’s unique risk appetite and investment goals.

Our strategies

Enhanced Index (Beta)

The Total Commodity Return Strategy seeks to outperform the return of a commodities index, such as the Bloomberg Commodity Index Total Return or the S&P GSCI Total Return Index, using both a quantitative and qualitative commodity research process.