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At a glance
Index
DJ UBS Commodities Index
Launch date
Jul 2010
Fund size
$292.4m
Fund currency
USD
SICAVs
Fund Managers
David Donora
Nicolas Robin
Download fund sheet >
Enhanced Commodities Fund
There are many reasons why investors should consider investing in commodities, here are just a few:
- Increased commodity demand: Global economic expansion is increasing commodity demand, global growth is driven by emerging markets and the recovery in advanced economies.
- Diversification: Because of the relatively low correlation with other asset classes commodities give investors the potential opportunity to smooth out stock market volatility and enhance overall potential return when used as part of a diversified portfolio.
- Inflation hedge: Commodities have historically provided a good inflation hedge when compared with traditional asset classes.
Investors are increasingly seeking out more sophisticated,
actively managed, long-only commodities products following the underperformance of passive products through
2009. The Threadneedle (Lux) Enhanced Commodities
Fund provides investors with an opportunity to invest in
an actively managed long-only UCITS III fund with exposure across
the commodity spectrum.
The Threadneedle (Lux) Enhanced Commodities Fund
is an actively managed portfolio utilising asset allocation between
individual commodities markets and the optimisation of commodity
term structures by investing in total return swaps that provide the
returns of single commodity indices.
The Fund aims to generate returns of 3-6%* in excess of the DJ UBS Commodities Index over the long-term through investment in commodities on a global basis.
* Target outperformance is stated net of fees. This is only a target outperformance. There is no guarantee that the Fund will achieve this target.
- Actively managed long-only UCITS III portfolio incorporating an index-aware approach, targeting 3-6% outperformance*
- Diversified exposure across the commodity spectrum
- Positive long-term fundamentals support commodities
- Highly experienced fund manager with 25 years' experience in commodities investing
- Leveraging Threadneedle's wider investment platform for macro economic insights, information and proprietary research
- Sophisticated risk management framework
Launch date: 29 June 2010
Fund Manager: David Donora / Nicolas Robin
Index: DJ UBS Commodities Index
Outperformance target: targeting 3-6% outperformance*
Legal structure: SICAV
ISIN Code: LU0515768454
* Target outperformance is stated net of fees. This is only a target outperformance. There is no guarantee that the Fund will achieve this target.
The Threadneedle Enhanced Commodities Fund is available via your bank or asset manager, or please contact us.
- David Donora
David Donora joined Threadneedle in 2008 as a fund manager specialising in commodities. His principal responsibilities are to establish Threadneedle's capabilities in this asset class and to develop a suitable product range to complement the company's equity, bond and property offerings.
David has more than 25 years' investing experience encompassing commodity and derivative-based roles. He began his career at Marine Midland Bank in New York in 1982 where he held positions of VP - Commodity Finance, focusing on base and precious metals, latterly trading FX options, and finally Head of FX Options for London and New York. David then moved to UBS NY in 1988 to head its FX and Precious Metals OTC derivatives desk, before transferring to London to take a lead role in developing UBS London's OTC derivative businesses in precious metals, subsequently moving to the dealing side, trading FX and European government bonds.
In 1994 David joined CIBC to establish the London leg of a global volatility proprietary trading business, and became Managing Director and Global Head of FX Derivatives in 1998. In 1999 he created a successful commodity-based proprietary trading and derivative structuring business while Head of OTC Derivatives at Refco Overseas. The business was innovative in that it created unique derivative OTCs in all major asset classes, incorporating 1st and 2nd generation exotics as the building blocks, and managed its risk as a global-macro proprietary trader. Since 2003 the primary focus was in the agriculture and soft commodity markets.
David graduated from the University of Notre Dame with a BA in Finance
- Nicolas Robin
Investor Profile:
This Fund may be suitable for investors who seek portfolio diversification within their investment through exposure to commodities, with a long term investment horizon seeking capital appreciation who are prepared to tolerate potentially high volatility in value of their investment and have a high risk tolerance.
Key Risks:
The Portfolio uses derivatives to gain exposure to commodity indices or sub-indices composed of futures contracts on physical commodities. The use of such derivatives for investment purposes may increase the risk profile of the Portfolio. The Portfolio invests in commodity indices comprised of futures contracts on physical commodities in certain sectors. As these futures contracts approach expiration, they are replaced by contracts that have a later expiration. Depending on the prevailing prices in the underlying market, this could positively or negatively impact the portfolio. Commodity prices may change unpredictably, affecting the index and the level of the index and the value of the Portfolio in unforeseeable ways. The Portfolio invests in single commodity indexes which may be particularly susceptible to fluctuation and may fluctuate rapidly based on numerous factors. The commodities underlying the Index components may be produced in a limited number of countries and may be controlled by a small number of producers, political, economic and supply related events in such countries could have a disproportionate impact on the prices of such commodities and the value of the index. Investors should note the "Risk Factors" section of the Prospectus in terms of the risk applicable to investing specifically in this Fund.
Investing in commodities
David Donora of Threadneedle explains the main features and characteristics of commodities as an investment, as well as issues to consider such as risks, pricing and how to get access to them - more >
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Commodity trends
David Donora of Threadneedle looks at some of the recent trends and developments in the commodities space, and considers where the market might go from here - more >