U.K.-based futures shop Global Advisors will launch a relative-value commodity product next month. The systematic commodity futures offering will accept capital in managed account formats.
The Global Commodity Relative Value product seeks to profit from identifying distortions or inefficiencies in the relationships between highly correlated commodity groups, according to firm documents. For example, within the liquid hydrocarbon sector (West Texas Intermediate and Brent crudes, plus distillate and gasoline) the product's models evaluate different maturity points and recommend a portfolio of positions, which are predominantly inter-commodity in nature.
"It's currently focused on hydrocarbons and is looking more at structured trades within the complex,” said Russ Newton, the firm’s co-founder. “Although there is a directional component to it as well, it's much less pronounced than in some of our other products.”
Newton added that the product fulfills prospective investors’ desire for "something that had less of a directional flavor, so a market neutral or relative value slant was potentially of interest."
The Global Commodity Relative Value product charges 2% for management and 20% for performance, with a $2 million minimum investment requirement.