Lazard Asset Management is set to launch a global commodities fund investing primarily in futures as well as stocks.
The Lazard Global Commodities fund will be managed by the firm’s commodities team led by portfolio manager Terence Brennan and supported by managers Michael Bernadiner, Eduardo Gonzalez and client portfolio manager Caroline Abramo.
Actively managed, the fund will be benchmarked against the Bloomberg Commodity Total Return index where the team will invest in futures to replicate the index.
However, if they feel the index does not offer attractive returns they have the ability to allocate a maximum of 50% to commodity stocks. The strategy currently holds around 77% in commodities, 21% in equities and 2% cash, according to documentation seen by Investment Week.
The index currently holds 22 commodities spread across five groups and does not allow a single commodity to be more than 15% or a single one of the five groups to be more than 33%. The five groups are agriculture, livestock, industrial metals, precious metals and energy.
The firm said the reason for launching a commodities vehicle now was it acts as an inflation hedge and offers protection against rising interest rates while historically having a low correlation to equities and bonds.
Tony Maddock, head of third party distribution at Lazard AM, said: “We are launching this fund in response to investor demand.”
“With increased concerns about duration risk and rising inflationary pressures, it is important for our clients to have the right commodities exposure within their portfolios.”
Earlier this month, Investment Week revealed Lazard AM promoted managing director and global co-director of research Jeremy Taylor to UK CEO following Bill Smith’s retirement after 16 years with the firm.