Investment Approach and Universe

Ryal Macro Commodities Fund invests in liquid futures contracts in commodities markets in order to achieve low correlation of its portfolio with traditional equity and bond markets.

Commodity futures contracts, as compared to stocks and bonds, may react differently to changing economic conditions. In our opinion, the movements of commodities prices are generally defined by fundamental factors – supply and demand, inventory and manufactured volumes, seasonals and weather etc. Commodities prices tend to increase with inflation, but are not only a hedge against inflation. Commodities are also a hedge against destabilizing events or catastrophes. Commodity prices may rise during times of crisis such as wars and stock market crashes. Therefore in our opinion commodities are a more predictable assets than stocks of closely managed company or politicized currencies.

Fund's portfolio includes futures and options on futures contracts on agricultural commodities, mostly GRAINS (corn, wheat, soybeans), SOFTS (coffee, cocoa, sugar, cotton, and orange juice), and other exchange-traded derivative instruments.

Use of option strategies and fundamental research to differentiate from traditional futures trend following approach in commodities space.

 

Opportunities

     attractive risk/reward ratio

     good addition to classic equity and bond portfolios

     low volatility due to the specifics of commodities markets

     trading strategies for return-optimized trades

     more income - in both rising and falling markets

     instruments non-correlated with traditional risky assets