BNY Mellon said that the new strategy was designed to provide institutional investors with diversification beyond equities and fixed income and to provide a hedge against inflation.
The strategy also has been tailored to add value by taking long and short positions in futures contracts for a range of liquid commodities including energy, precious metals, industrial metals, grains, livestock and other agricultural products.
The managers of the strategy managers seek positions in the commodities markets that appear attractive by evaluating various factors that can influence commodity futures prices, BNY Mellon said.
While maintaining a net long position, the strategy generally uses longer-dated futures contracts and takes long or short positions in contracts with positive roll returns with the goal of mitigating the costs associated with rolling futures.
Mellon Capital managing director and alternatives strategist Eric Goodbar said that the commodities markets offer distinct investment opportunities as many of its participants are in these markets for reasons other than maximizing investment profits.
