Aviva Investors boosts commodities offering with Swiss group

The Aviva Investors Investment Solutions Global Commodity Plus fund has been launched in cooperation with Tiberius Asset Management, a commodity specialist based in Zug, Switzerland.

The Aviva Investors Investment Solutions Global Commodity Plus fund is available in the UK, Luxembourg, France, Germany, Italy, Sweden and Finland and should be available in other European countries soon.

It will be managed by Aviva Investors’ structured products team and provide exposure to a long-only actively managed commodity strategy run by Tiberius Asset Management since 2006.

Aviva Investors has decision making and day-to-day management responsibilities for the fund which include cash and swap derivative management.

Tiberius has decision-making and day-to-day management responsibilities for the underlying Commodity Alpha investment strategy. It expects to benefit from Aviva Investors’ distribution network.

Commodities have been picking up attention from fund managers and investors looking for alternative strategies in the difficult investment climate.

Stephane Rougier (pictured), structured product solutions director at Aviva Investors, said the fund will now enable his clients to access commodities, “a major portfolio asset class, especially as investors look to diversify their portfolios against a backdrop of market uncertainty.”

“Adding commodities to a traditional equities and bond portfolio can enhance returns and decrease volatility. In addition they offer an attractive risk/return potential as well as inflation protection,” he added.

Last month Deutsche Bank added a commodities investment strategy from America’s JE Moody to its regulated hedge fund platform to seek protection from mainstream asset classes.

At a recent conference in Paris, Peter Tanous, president of Lynx Investment Advisory, argued commodities outperform during inflationary periods. He explained that real assets which are not man-made such as oil, gold, water and timber are subject to increasing demand and diminishing supply dynamics and have limited substitutes, which can only have a positive impact on the asset class.

Tiberius’ strategy uses fundamental and quantitative analysis to determine exposure to the main commodity sectors: energy, industrial metals, precious metals and agriculture. The returns generated by these sectors are passed through to the fund via collateralised swaps.

The strategy aims to generate investment returns above the Dow Jones-UBS Commodity Index with lower levels of volatility, through active management of commodity futures.

Tiberius has a track record of over 6 years generating an annual compound return of 3.19% compared to the Dow Jones UBS Commodity Index TR of -1.18%.

Tiberius Group is domiciled in Zug, Switzerland and has offices in Stuttgart and London. The company is focused on research to build long only active and long short absolute return strategies based on quantitative models. The company has total assets under management of $2.4bn as of December 2011.

Aviva Investors is the global asset management business of Aviva operating in 16 countries in Asia Pacific, Europe, North America and the UK with assets under management of £269bn.

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