Thursday, 24 July 2014
Last updated 1 hour ago
Jul 6 2011 | 2:06pm ET
Equinox Fund Management, a sponsor of alternative investment vehicles, has launched a mutual fund with an alternative twist.
The Equinox Commodity Strategy employs a long-short commodity trading strategy to exploit potential inefficiencies in the systematic selling and repurchasing of expiring futures contracts.
Portfolio manager Ajay Dravid aims to exploit contango roll without directional exposure to commodity prices.
The fund offers investors an opportunity to diversify their current holdings in long-only commodity funds and ETFs, avoiding what Equinox characterizes as three challenges common to both ETFs and long-only funds. That is, high volatility, increasing correlation to other asset classes and systematic negative roll yields in commodity markets with rising price curves (i.e. “contango”).
Said Robert Enck, president and CEO of Equinox: “At Equinox, we keenly appreciate both the opportunities and challenges of investing in commodities. We have created the Equinox Commodity Strategy Fund as a means to address critical issues of volatility, correlation, and index integrity, while providing investors with an investment that draws upon our knowledge and experience in the commodity markets.”
Rich Bornhoft, Equinox CIO, said the fund employs a market neutral strategy that is equally long and short each commodity. “It uses a targeting mechanism to dampen volatility, the goal of which is a standard deviation of 6% or less.”
Dravid has more than 25 years of experience in industry, academia, and financial services. Prior to joining Equinox, Dravid was an adjunct professor of finance at Temple University’s Fox School of Business. His career has included stints at Solon Capital, The Frontier Fund, Saranac Capital Management, Salomon Brothers and Citigroup.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…