Eaton Vance Tackles Absolute Return Via Commodities
Reported by Neil Anderson, Managing Editor
Absolute return funds continue to be one of the hottest parts of the mutual fund business. An Eaton Vance subsidiary just launched a new commodities-based absolute return fund. Today Seattle-based Parametric Portfolio Associates unveiled the Parametric Structured Commodity Strategy Fund (EIPCX) [see prospectus], co-PMed by chief investment officer David Stein and managing director Thomas Seto.
"Parametric has developed robust capabilities in structured, volatility-capture strategies and has successfully applied these across a range of asset categories," stated Scott Rudick, head of institutional at Eaton Vance. "We are excited to offer this strategy to institutional investors at a time when many are actively researching thoughtful commodity exposure."
Parametric Portfolio Associates and its sibling, Parametric Risk Advisors, together managed $42.6 billion as of April 30.
The new fund is specifically aimed at the family office, institutional and RIA channels. Eaton Vance advises the fund, with Parametric sub-advising. The I shares charge 75 basis points. Eaton Vance serves as distributor and transfer agent.
Company Press Release
SEATTLE, June 6, 2011 -- Parametric Portfolio Associates LLC (Parametric), a leader in structured portfolio management, today announced the launch of Parametric Structured Commodity Strategy Fund (EIPCX), a non-diversified open-end mutual fund targeted at the institutional, family office and registered investment advisor markets. The Fund seeks total return primarily through exposure to commodities-linked derivative instruments backed by a portfolio of fixed-income securities. The Fund is co-managed by Parametric investment professionals David Stein, Ph.D., chief investment officer, and Thomas Seto, managing director, portfolio management of Parametric, which is a subsidiary of Boston-based investment manager Eaton Vance Corp.
The Fund intends to employ a top-down, disciplined and structured investment process that emphasizes broad exposure among individual commodities and commodity sectors. By following a rules-based strategy that incorporates targeted allocations and systematic rebalancing, the Fund seeks to exploit certain quantitative and behavioral characteristics of the commodity asset class to generate incremental returns over its benchmark. Commodity exposures are selected based on factors such as volatility, liquidity, diversification, and perceived risk and potential benefit. The frequency of rebalancing will vary with changes in the correlation between, and volatility of, individual commodities.
"Major commodities benchmarks and many active strategies within the category are heavily concentrated in particular commodity groups," said Timothy Atwill, Ph.D., director, research and strategy for Parametric. "Relative to other commodity investment strategies, we seek to enhance risk-adjusted returns through reweighting and rebalancing to take advantage of diversification, correlation and volatility."
Parametric has garnered significant institutional support of its suite of structured investment strategies, with nearly $12 billion in existing institutional assignments. "Parametric has developed robust capabilities in structured, volatility-capture strategies and has successfully applied these across a range of asset categories," commented Scott Ruddick, Eaton Vance's head of institutional. "We are excited to offer this strategy to institutional investors at a time when many are actively researching thoughtful commodity exposure."
Parametric, headquartered in Seattle, Washington, is an industry-leading provider of structured portfolio management solutions. As of April 30, 2011, Parametric and its affiliate, Parametric Risk Advisors, managed $42.6 billion in client assets. Parametric and Parametric Risk Advisors offer a variety of structured portfolio solutions, including customized core equity portfolios (U.S., non-U.S. and global equities), option strategies, commodities and emerging-market equities. For more information about Parametric, visit www.parametricportfolio.com.
Eaton Vance Corp. is one of the oldest investment management firms in the United States, with a history dating to 1924. Eaton Vance and its affiliates managed $203.0 billion in assets as of April 30, 2011, offering individuals and institutions a broad array of investment strategies and wealth management solutions. The Company's long record of providing exemplary service and attractive returns through a variety of market conditions has made Eaton Vance the investment manager of choice for many of today's most discerning investors. For more information about Eaton Vance, visit www.eatonvance.com.
The value of commodities investments will generally be affected by overall market movements and factors specific to a particular industry or commodity including weather, embargoes, tariffs, or health, political, international and regulatory developments. Derivatives instruments can be used to take both long and short positions, be highly volatile, result in economic leverage (which can magnify losses), and involve risks in addition to the risks of the underlying instrument on which the derivative is based, such as counterparty, correlation and liquidity risk. If a counterparty is unable to honor its commitments, the value of Fund shares may decline and/or the Fund could experience delays in the return of collateral or other assets held by the counterparty. As interest rates rise, the value of certain income investments is likely to decline. Because the Fund investments may be concentrated in a particular sector, the Fund share value may fluctuate more than that of a less concentrated fund. A non-diversified fund may be subject to greater risk by investing in a smaller number of investments than a diversified fund. No Fund is a complete investment program and you may lose money investing in a Fund. The Fund may engage in other investment practices that may involve additional risks and you should review the Fund prospectus for a complete description.
Before investing, prospective investors should consider carefully the Fund's investment objective(s), risks, charges and expenses. The Fund's current summary prospectus and prospectus contain this and other information about the Fund and is available through your financial advisor. Read the prospectus carefully before you invest or send money. For further information please call 1-800-262-1122.
Mutual fund shares are not insured by the FDIC and are not deposits or other obligations of, or guaranteed by, any depository institution. Shares are subject to investment risks, including possible loss of principal invested.
The Fund is distributed by Eaton Vance Distributors, Inc., Two International Place, Boston, MA 02110.