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Is there a derivatives fund?

Discussion in 'Managed Funds & Index Funds' started by Ol School Skata, 23rd Apr, 2006.

  1. Ol School Skata

    Ol School Skata Well-Known Member

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    I have been thinking about this for a while...

    Is there a fund out there that invests/speculates solely in derivatives? I am aware a number if funds use derivatives in addition to equities to enhance returns, however the main medium used is equities. Is this similar to a hedge fund?

    As a discussion point in the case there are none we are aware of consider the following

    Imagine if a fund was established that invested mainly in options/warrants/futures/cfd's. Sure the fund would be out of the comfort zone of many investors, however some are comfortable with this possible 0% return where returns of 50-100%+ are possible.

    Maybe it would require a minimum investment of $20,000 each year for 5 years. A fund could spread the 'investable sum' across a range of positions so as to 'diversify'. Investor is limited to the amount invested each year, for 5 years.

    I am sure this type of vehicle already exists for the 'big boys'.

    Please share your thoughts.

    OSS
     
  2. jscott

    jscott Well-Known Member

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    Macquarie have a couple of funds like this under the Newton brand name. There is one that invests/speculates solely in futures (Global Futures Fund). The others though look to use a combination of shares and derivatives. How hard is it to put one of these funds together?
     
  3. Dave

    Dave Well-Known Member

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    jscott, isnt that Peter Spann's new fund?
     
  4. Ol School Skata

    Ol School Skata Well-Known Member

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    There has also been another buy write fund launched - Aurora Buy-Write Income Trust - this one by Aurora funds Management/Merrill Lynch Investment managers. I have not looked into it but seems similar with own internal gearing of up to a max of 65%.

    http://www.aurorafunds.com.au/

    Still no word on a fund that invests/speculates solely in derivatives...Maybe there is an opportunity here to someone who has the expertise to do this.

    OSS
     
  5. jscott

    jscott Well-Known Member

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    Dave, no its not the p.spann one. I went to his seminar last night and the Macquarie representative explained the new one (Enhanced Income Fund) as a combination (50/50 split) between the already available buy-write fund and a new one that Macqaurie to-date have only been trading internally called the Income-timing fund. The latter one attempts to take advantage of dividend run-up on shares here, Singapore and Hong Kong.
    Have a look at the Macquarie website - there is allot of details about the Newton line of funds. Personally I reckon they are way to expensive for not the best returns and since they are so new are untested for retail investors in other types of markets. Macquarie have been using them internally for a while but they don't have to pay 3% plus performance fee plus income protection fee like the new income fund.