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GLG shuts ‘sub-scale’ Rattray-designed commodities fund

by Robert St George on Feb 14, 2014 at 14:28

GLG shuts ‘sub-scale’ Rattray-designed commodities fund

GLG has closed a commodities fund whose strategy had been designed by Man Systematic Strategies chief investment officer Sandy Rattray and head of commodities Scott Kerson.

The GLG Man Commodities fund launched in March 2012 with a target of outperforming the Dow Jones UBS Commodity index by between 5% and 10% annually. Since inception it has lost 16%, compared with a decline of 12% from the index.

Initially seeded with $50 million (£30 million), it had dwindled to around $20 million (£12 million) by the end of January.

A spokesperson for GLG told Wealth Manager that as part of the firm’s ‘continued assessment of its product range and investor demand’, the fund had been deemed ‘sub-scale’ and so closed.

The fund employed liquid, long-only exposure to the Man Systematic Commodity index, which is based on trading in 25 liquid futures contracts in precious metals, industrial metals, energy and agricultural products.

To weather the slump in commodity prices the fund had run a high cash allocation, which accounted for 17% of the portfolio in the summer of last year.

Launching the fund, Rattray (pictured) said: ‘Passive investment products like exchange-traded funds and index-linked swaps are generally poor at dealing with severe drawdowns and heightened volatility in commodity bear markets, so we think that an actively managed, systematic approach is a better solution.’

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