Gresham launches Dynamic Commodities strategy to capitalise on new global commodity opportunities

Gresham, a pioneer in the management of diversified commodity investment portfolios and an affiliate of Nuveen, a leading global investment manager with over $1 trillion of assets under management, today announces it has raised $30 million for the launch of the Gresham Dynamic Commodities (GDC) strategy.

The strategy has been designed to meet demand for actively managed exposure to commodities while also seeking to provide its investors with a measure of capital preservation. While GDC is benchmarked to the Bloomberg Commodity Total Return Index, it will not target any level of tracking error making it far less constrained than the more traditional beta-plus offering. The strategy may also raise substantial levels of cash during periods of market turbulence. This approach may accommodate investors who seek to combine the potential diversification benefits of an allocation to commodities with the ability to mitigate periodic drawdowns.

An allocation to commodities has historically provided portfolio diversification, positive correlation to changes in the rate of inflation and expected changes in inflation, and a hedge against geopolitical event risk.

Jonathan S. Spencer, Chief Investment Officer at Gresham Investment Management, said: “In our view, the fundamentals are in place for the next bull market, presenting new opportunities in commodities. Yet investors are sometimes reluctant from investing in commodities during bear markets, as short-term dips in commodity performance can negatively impact overall performance. We’ve seen firsthand investors either being forced to reduce or terminate allocations to commodities for this reason, potentially missing out on the early stages of each bull market.”

“We believe this strategy could enable investors to participate in the bull market and potential upside returns, without risking short-term overall portfolio performance.”

“GDC complements existing beta and beta-plus allocations, providing investors with a strategy that could suit inflation, real assets or opportunistic allocations.”

The strategy will focus on a range of commodities, including precious metals, energy, agriculture, livestock and food and fibres. The strategy will be managed by Robert Howell.

Rob was previously the former Head of Commodities at Schroders, the lead manager on the Schroder LP and SAS Commodity Fund (2006-2014), and more recently, the Senior Manager at the Pennsylvania Public School Employees’ Retirement System (‘PSERS’).

Gresham has an established history pioneering the management of diversified commodity investment portfolios using commodity futures, with nearly $6 billion in assets under management. The senior management team averages over 30 years of investment experience in trading commodities.