GE Pension Trust’s active commodities strategy unlocked
GLOBAL - An actively managed commodities strategy run for the General Electric Pension Trust in the US has been made available to other institutional investors.
GE Asset Management (GEAM), which has run the GE pension fund's actively managed commodities allocation for approximately four years, is looking to replicate the strategy for other investors.
The GE Active Commodities strategy, aims to help investors improve their portfolio diversification and safeguard against unexpected inflation, while also enabling access to an asset class with a "bullish long-term outlook".
The fund is benchmarked against the Dow Jones UBS Total Return Commodity index, and incorporates fully collateralised long and short futures positions in the underlying commodities. It seeks to achieve outperformance through broad and diversified commodity exposure.
The asset manager said it would adopt a fundamental, bottom-up approach for the strategy, claiming its "original and on-the-ground global field research" would differentiate it from other products in the market.
"For many reasons, interest in commodities exposure continues to grow among institutional investors," said Maureen Mitchell, GEAM's president of institutional sales and marketing.
"We have actively managed commodities ourselves for the GE Pension since 2006, and we're excited to now bring these capabilities to the marketplace, where there is demand for managers with a consistent investment process and a focus on rigorous risk management."
Ralph Layman, president and chief investment officer of public equities at GEAM, said the approach potentially offered "a more compelling opportunity than passive portfolios have historically provided".
He added: "We believe that many passive strategies ignore the key factors of supply and demand, which drive commodity prices and which skilled active managers can exploit."
The management team for the GE Active Commodities strategy will comprise portfolio managers Nick Koutsoftas and Ben Ross, as well as analyst Geoff Fila.