The Strategy takes a fundamental research-driven approach to commodities management, while seeking alpha through active trade implementation.
Our investment process
The Cohen & Steers Active Commodities investment universe consists of all commodities in the Bloomberg Commodity Index and the S&P GSCI Commodity Index, with the ability to invest in out-of-universe commodities that meet the team’s specific liquidity guidelines. The strength of our commodities expertise rests in the depth and rigor of our fundamental research. The team conducts bottom-up analysis focusing on supply and demand balances, inventory trends, valuation, market participant composition, technical data and structural curve analysis. Additional inputs that feed into our research process include an assessment of the macro environment, the potential influence of event risk on commodity prices, on-the-ground due diligence field trips, and commodity-related market intelligence from Cohen & Steers’ investment teams. We complement the strength of our internal research with insight provided by external sources to build a well-diversified commodities portfolio. Based upon this bottom-up research, the team seeks to actively implement the strategy by tactically setting commodity position weights, employing long/short spread trades, and actively analyzing each commodity term structure to maximize roll yield.
The asset class
Commodities have historically demonstrated low correlation to many other asset class, which provides the potential to improve portfolio diversification, and the ability to potentially hedge against unexpected inflation and event risk. We believe the active, fundamental approach of the Cohen & Steers' Active Commodities Strategy provides a compelling way to capitalize on these important investment characteristics and take advantage of fundamental supply/demand dynamics that we believe are the primary driver of commodities markets.
The investment objective of Cohen & Steers’ Active Commodities strategy is:
- to outperform its benchmark over a full market cycle
- to achieve equity-like returns while maintaining a low correlation to the equity market
- to provide portfolio diversification and protection against unexpected inflation.
Cohen & Steers’ Active Commodities strategy invests entirely in derivatives, primarily through the use of futures, although long-only listed options and commodity-backed exchange traded products may be used. Cash collateral is invested in U.S. Treasury Securities or in Money Market Funds that invest in U.S. Treasury Securities.
An experienced team
Portfolio Managers Ben Ross and Nick Koutsoftas have an average of 22 years of industry experience and have been managing a commodities strategy together for over 11 years. Cohen & Steers has long been a proponent of real assets strategies, including commodities and real estate securities. This team utilizes the global resources of Cohen & Steers to develop and express their investment thesis on global commodities.
|Ben Ross||Senior Vice President, Portfolio Manager||New York||Bio|
|Nick Koutsoftas||Senior Vice President, Portfolio Manager||New York||Bio|
|Brad Sanderson||Vice President, Research Analyst||New York|
|Bennett Meier||Research Analyst||New York|
This is not an inducement to buy or sell commodity interests. Strategies and funds that trade in commodity interests involve a risk of loss. Investors should consider whether such services or products are suitable investments.
The views and opinions in the preceding commentary are subject to change and represent an assessment of the market environment at a specific point in time, should not be relied upon as legal, investment or tax advice and are not intended to predict or depict performance of any investment. We consider the information to be accurate, but we do not represent that it is complete or should be relied upon as the sole source of suitability for investment. Investors should consult their own advisors with respect to their individual circumstances. There is no guarantee that any historical trend illustrated above will be repeated in the future, and there is no way to predict precisely when such a trend will begin. There is no guarantee that a market forecast made in this commentary will be realized.
Please consider the investment objectives, risks, charges and expenses of any U.S. Registered open-end fund carefully before investing. A summary prospectus and prospectus containing this and other information may be obtained by calling 1-800-330-7348 or clicking here. Please read the prospectus carefully before investing.
Risks of Investing in Commodities
An investment in commodity-linked derivative instruments may be subject to greater volatility than investments in traditional securities, particularly if the instruments involve leverage. The value of commodity-linked derivative instruments may be affected by changes in overall market movements, commodity index volatility, changes in interest rates, or factors affecting a particular industry or commodity, such as drought, floods, weather, livestock disease, embargoes, tariffs and international economic, political and regulatory developments. The use of derivatives presents risks different from, and possibly greater than, the risks associated with investing directly in traditional securities. Among the risks presented are market risk, credit risk, counterparty risk, leverage risk and liquidity risk. The use of derivatives can lead to losses because of adverse movements in the price or value of the underlying asset, index or rate, which may be magnified by certain features of the derivatives.
Futures Trading Is Volatile, Highly Leveraged and May Be Illiquid. Investments in commodity futures contracts and options on commodity futures contracts have a high degree of price variability and are subject to rapid and substantial price changes. Such investments could incur significant losses. There can be no assurance that the options strategy will be successful. The use of options on commodity futures contracts is to enhance risk-adjusted total returns. The use of options, however, may not provide any, or only partial, protection for market declines. The return performance of the commodity futures contracts may not parallel the performance of the commodities or indexes that serve as the basis for the options it buys or sells; this basis risk may reduce overall returns.
Cohen & Steers open-end funds are distributed by Cohen & Steers Securities, LLC.