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Milton aims to cover commodity exposure for global portfolio

Miton Investments is protecting the CF Miton global portfolio from volatility in its commodity exposure by buying a Barclays structured product linked to the prices of oil, copper and aluminium.

The product, which was originally designed for institutional investors, invests in a zero-coupon bond and options on the commodities market.

It will return 180 per cent of the growth in the commodity basket plus the original capital at the end of an 18-month term.

The Miton fund’s weightings in both the Investec global energy and JPMF global resources funds have been halved to 4 per cent from 8 per cent, while the Barclays product carries a 5 per cent weighting.

Miton is a firm believer in a bull market for commodities over the long-term and the Barclays product will be used for a short-term play on the market.

Fund manager Sam Liddle says: “The Barclays contract is a bit of a departure for us but, generally speaking, structured products have become more acceptable. They have appeal in volatile areas like commodities and in cash when the returns are currently unexciting.”

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