| Fields of gold This week we bring you an interview with Andrew Beer of DBi whose range of ETFs mirrors the managed futures industry and other alternative asset classes. His latest launch is a non-commodities managed futures fund using proxies, designed to suit the requirements of a Nordic pension fund, but his true love is managed futures, a sector that is seeing enormous growth at the moment.
“We are trying to convince the broader allocator community that managed futures should be a 3 per cent allocator across their portfolios,” Beer says, quoting the numbers that reveal that six years ago, the managed futures ETF space was USD300 million and now it’s GBP3 billion.
A number of firms has recently launched managed futures ETFs, including BlackRock, Invesco and Fidelity. “Which is wonderful,” Beer says. “The space needs to grow and within the space we are the beta with index-like exposure so we are a solution for model portfolio allocators.
“I would argue that managed futures is the single most valuable diversifier you can put into a portfolio of stocks and bonds however that USD3 billion is 0.03 per cent of ETF assets, so the most valuable diversifier is essentially still a zero allocation. It should be 3 per cent so you should see 100x growth or 50 x growth.
Managed futures as a strategy is largely based on commodities, and of course the entire futures industry was founded on a need to hedge the wheat price in the American mid-West.
Watch out for our summer series of Off the Record podcasts entitled Old Money, where we will be taking the chance to talk to academics about the origins of investment. Think a pooled approach to raising funding for infrastructure projects is a new thing? Think again…
And this week we have a new podcast from Seward & Kissel lawyers, Peter Shea and Paul Miller, who discuss the potential arrival of ETFs as a share class in the US, explaining the likely impact the regulatory change will have on the US ETF industry. Listen here.
The nominations stage for our inaugural Japanese ETF awards service providers is now open – nominate your favourite service providers in the Japanese ETF industry using this link.
I will be chairing some of the ETF panels at IMPower Fund Forum in June. For a 10 per cent discount to attend, use this link and code: FKN3972ETFX. I hope to see you there.
Beverly Chandler, Managing Editor
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