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iM Global Partner to launch UCITS fund version of managed futures ETF

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iM Global Partner has announced it will launch a new UCITS fund, the iMGP DBi Managed Futures Fund with its Partner, Dynamic Beta investments, to enable European investors to access the increasingly popular managed futures market.

Dynamic Beta investments (DBi) is a pioneer in hedge fund index replication and is on a mission to bring the diversification benefits of managed futures to a broader investor base, having been appointed sub-Manager of the iMGP DBi Managed Futures Fund, a new sub-fund of the Luxembourg domiciled iMGP SICAV.

Andrew Beer, Dynamic Beta investments, Co-Portfolio Manager of the fund, says: “Managed futures, as a strategy, has the potential for great diversification, especially in an inflationary environment. In 2015, we set out to solve the twin hurdles of investing in the space: high fees and expenses as well as single manager risk. Our managed futures vehicle is the culmination of that effort.”

This strategy has already been available to US investors for more than three years and has become the largest Managed Futures ETF in the industry. The US-based DBi Managed Futures Strategy ETF (DBMF) has had extraordinary growth over the past 12 months, increasing its assets under management by more than 1000 per cent from around USD60 million a year ago to more than USD1 billion today and posting a one-year return of 24.5 per cent (as at November 25, 2022, source Bloomberg, price-based total return.

Jamie Hammond, iM Global Partner, Deputy CEO, Head of International Distribution, says: “The success of our US domiciled ETF strategy (DBMF) has led to European clients asking if we are planning to launch a UCITS version and this is it. Clients have seen the diversification benefits of including managed futures within their portfolios, and we have now made this available in a daily-priced UCITS structure.”

The new fund seeks to replicate the pre-fee/pre-trading cost returns of 20 leading managed futures hedge funds in a UCITS wrapper. By targeting the performance of a portfolio of hedge funds, split between different sub-strategies, it seeks to minimise single manager risk.

The fund seeks to match the core factor exposures of the targeted hedge funds with a dynamically adjusted portfolio of liquid futures contracts.

The iMGP DBi Managed Futures fund does not invest directly in hedge funds. Rather, the sub-manager, DBi, uses quantitative models to estimate the current factor weights of the targeted hedge funds and invests in index futures to seek to obtain similar exposures. The portfolio is rebalanced weekly.

Philippe Uzan, iM Global Partner Deputy CEO, CIO Global Asset Management, says: “With both equity and bond markets seeing significant volatility and simultaneous negative returns, many investors have been desperately looking for diversification and positive performance. In 2022, the DBi Managed Futures Strategy ETF has so far been able provide positive returns over each of the six months where global bonds and equity indices were both negative. It also posted positive performance in 2020 (1.8 per cent) and 2021 (11.2 per cent) when traditional assets were in bull markets.”

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