View more on these topics

Harewood launches commodities strategy

Harewood Solutions, part of BNP Paribas, has launched the BNP Paribas Comac Long Short investment strategy and says a US Enhanced product is on the horizon.

The Comac strategy uses specialist active commodities manager Tiberius Group to provide technical and fundamental recommendations with a systematic overlay strategy designed to enhance returns.

The new product aims to achieve absolute performance through taking both long and short positions on 25 commodities, based on weekly recommendations by Tiberius. The recommendations are then checked for consistency and success on the individual commodities over the previous six weeks. Weightings are determined according to each ones score before being fitted into the allocation model.

Commodities arent really a single asset class, says Ryan Rogowski, the head of Harewood Solutions. Its not just that they are uncorrelated to other assets, theyre not even correlated to each other.

While Brent crude has risen 340% over the past 10 years, natural gas prices have fallen 93%. The trend is equally true of soft commodities, with corn losing 73% over 10 years while soya has risen 67%.

It is because of this degree of differentiation in performance that Harewood chose an active long/short strategy that is reactive to weekly changes in momentum drivers or shifts in the fundamentals. Since April 2008 the strategy has returned about 65%. It is up 4.3% year to date.

The concept has already received significant interest from investors: the product was launched with 25.5m shares at listing. Rogowski says that demand was even greater but he was constrained by the price of collateral as investors capital is fully collateralised with AAA rated G7 government bonds.

What is interesting about that is if you look at the investor split for this launch they include multi-managers and institutions, including two pension funds, he says. As soon as I see stocks getting low Ill instigate the process to issue a new share class.

In addition to the launch of the Comac strategy, Harewood has filed for regulatory approval on a US Enhanced product. Rogowski says he hopes to receive approval some time in the middle of this month


Society anxiety

Building society chiefs left last week’s BSA conference with their tails firmly between their legs after a severe dressing down by the regulator.

Caversham goes into liquidation

London IFA firm Caversham Buchanan entered voluntary liquidation on May 13 and liquidator Asher Miller of David Rubin & Partners was appointed.


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm