CHICAGO, March 7 Mellon Capital Management has
launched a commodities fund aimed at a growing number of
inflation-wary institutional investors, its manager said on
The Commodity Alpha Long-Bias Strategy initially was
conceived as a diversification vehicle -- an addition to
equities and fixed-income exposure, but increasingly clients
are asking about the potential for higher-than-normal inflation
and how to manage it, said Mellon Capital managing director
Goodbar, who has worked as alternative investment
strategist for 26 years, said the strategy is "a mainstream
product" aimed at institutional clients. It uses a custom
benchmark, a "volatilty-adjusted" version of the Dow Jones UBS
Commodity Index that offers trading opportunities as well as an
For example, "there's usually a pretty heavy proportion of
energy" in the Dow Jones index, but our assessment "might find
it opportunistic to be net short energy," Goodbar said. The
"beta" of the strategy hedges inflation, while its "alpha"
component offers active management, he said.
The fund trades futures contracts listed on U.S. exchanges,
with the exception of certain energy contracts traded outside
the United States. The fund does not trade options or
Goodbar declined to reveal its open positions.
As its name implies, the fund has a long bias, a strategy
sometimes viewed by researchers as more volatile than others.
But "we believe it (the fund's strategy) will be less volatile
than a public benchmark," Goodbar said.
He declined to give the fund's total assets under
management, stating "it's only been out there a short time."
The fund was opened in late January.
Founded in 1983, Mellon Capital Management had $208 billion
in assets under management as of Dec. 31, 2010, according to
the company. Assets include those managed by dual officers of
Mellon Capital Management Corp, The Bank of New York Mellon
(BK.N) and The Dreyfus Corp. Mellon Capital is part of BNY
Mellon Asset Management.
(Reporting by Suzanne Cosgrove; Editing by David Gregorio)