VAM Funds has launched its Commodities Equity fund, a Ucits III sub-fund of VAM Funds (Lux) Sicav.
The announcement came just days after VAM launched its new Global Government Bond fund.
The VAM Commodities Equity fund seeks capital appreciation through exposure to global commodities markets by investing in equities related to commodities.
Around 30-70% of the portfolio will be composed of a basket of large cap stocks, which VAM expects to provide an effective way to participate in rising markets.
In declining markets, on the other hand, the basket wil be sold to preserve the fund’s assets. (article continues below)
The fund also features a satellite layer of stocks that VAM expects to produce outsized risk-adjusted returns. These stocks will be typically less liquid but sized appropriately to control risk.
The defensive layer comprises inverse exchange traded funds (ETFs) to profit from market declines. The extent of their use will vary depending on conviction, with larger position sizes reserved for long-term downwards trends.
The fund has launched in partnership with FF&P Asset Management (FF&PAM), which will be placing an initial seed investment into the fund on behalf of its clients. Jason Webster, an FF&PAM investment manager, is running the fund.