Investors still concerned about currency exposure

Demand from investors has prompted the launch of a Sterling hedged share class for a leading commodities fund as currency exposure remains a concern for many.

Highbridge Capital Management, LLC, the alternatives investment management organisation owned by J.P. Morgan Asset Management, has introduced a Sterling hedged share class for the recently launched Highbridge Diversified Commodities Fund following demand from investors.

The UCITS III fund, which was launched in March 2011 gives investors the opportunity to gain exposure to pure commodities and has been offered with a base currency of US Dollar.

It invests in the most liquid, major commodities, with a long bias, but also has the ability to short individual commodities should the fundamentals of that commodity appear unattractive. The fund gains access to commodities futures through the use of individual swaps on commodity indices, as well as swaps on sub-sectors and the broad market.

‘Currency risk remains a growing concern for investors and we have launched this as a direct response to the needs of our clients. The US Dollar has continued to weaken against Sterling for some time and although the last few months have seen the US Dollar strengthen somewhat, volatility between the currencies is likely to continue,’ said Jasper Berens, head of the UK Intermediary Business at J.P. Morgan Asset Management.

‘Given this uncertainty, it is right to give investors, who are not prepared to be exposed to both market and currency risk, a choice between share classes to best suit their requirements. Equally, as the Fund gives investors exposure to commodities through a series of swaps that represent futures exposure, rather than investing in companies whose primary businesses are related to commodity markets, investors will only be taking commodity risk rather than equity and commodity risk together,’ he explained.

‘Whether investors choose the hedged or unhedged share class, we believe the Fund is an innovative offering that will provide strong returns for investors over the longer term,’ he added.
The fund's management is entrusted to a team of six professionals who have experience investing in global financial markets and in the commodities area. Sassan Alizadeh and Mark Nodelman serve as the fund's co-portfolio managers.
 
Sassan has a PhD in economics and a well published academic background with nearly two decades of experience in research and systematic trading. Mark, who has an MBA from New York University, has many years' experience in managing investments and previously traded a commodity strategy at Goldman Sachs Asset Management, where he spent more than 10 years.