Fund seeks less volatility

SEP 30, 2012
By  JKEPHART
State Street Global Advisors is preparing to launch a commodities-free managed-futures fund that will invest in equity, fixed-income and currency futures. Managed-futures funds typically come in two flavors, those that invest only in commodities and those that combine commodities futures with equities, fixed-income and currencies. Managed-futures funds that invest in commodities have only 12% to 18% volatility, while funds that blend the four asset classes together typically have 8% to 10% volatility, according to Morningstar Inc. By avoiding commodities altogether, the SSgA SSARIS Managed Futures Fund should have even lower volatility, according to SSgA.

LOW STANDARD DEVIATION

In a filing with the Securities and Exchange Commission, the firm also said it will be targeting futures contracts with low daily standard deviation. Marie McGehee, a spokeswoman for SSgA, declined to comment. The downside of leaving out commodities could be lower returns. While commodities tend to have the highest volatility, they're also a potential source of big returns for managed-futures funds, which basically are trend-following strategies. According to Morningstar, the category's average return is -4% so far this year, but despite the performance woes for the group, investors are still interested in them. Through the end of August, $700 million flowed into managed-futures funds, according to Morningstar. [email protected] Twitter: @jasonkephart

Latest News

'Bogged down' advisors just want to have fun (again)
'Bogged down' advisors just want to have fun (again)

Jim Cahn, of Wealth Enhancement Group, lifts the lid on his firm's partnership model, his views on RIA M&A, and the widely slept-on reason why advisors are merging into larger organizations.

Vestwell unveils new emergency savings account offering
Vestwell unveils new emergency savings account offering

The fintech firm is cementing its status in the workplace savings space with its latest ESA offering, which employers can integrate into their existing benefits package.

'Money Mimosas' and other ways to show your Valentine financial love
'Money Mimosas' and other ways to show your Valentine financial love

Wealth managers offer unique ideas for couples to grow closer emotionally and financially.

Limra research finds financial confidence on the rise among Black American workers
Limra research finds financial confidence on the rise among Black American workers

Survey findings suggest increased sense of financial security and more optimistic 2025 outlook, while highlighting employers' role in ensuring retirement readiness.

DOGE efforts sideswipe muni bonds backed by federal lease payments
DOGE efforts sideswipe muni bonds backed by federal lease payments

Falling prices for some securities within the $4 trillion state and local government debt market spotlight how the push to shrink spending is sending shockwaves across the US.

SPONSORED Record growth: Interval funds emerge as key players in alternative investments

Blue Vault Alts Summit highlights the role of liquidity-focused funds in reshaping advisor strategies

SPONSORED Taylor Matthews on what's behind Farther's rapid growth

From 'no clients' to reshaping wealth management, Farther blends tech and trust to deliver family-office experience at scale.