How Emerging Manager CTAs May Deploy UCITS and ETF Fund Structures to Access Foreign Capital

Commodity trading advisors (CTAs) reeling from heavy outflows in 2016 may be looking for ways to begin making inroads into foreign markets in 2017. A wide array of options for doing so are available to CTAs, particularly via Undertakings for Collective Investments in Transferable Securities (UCITS) structures and exchange-traded funds (ETFs). For all their advantages, however, these vehicles’ complexity and cost may render them infeasible for a given CTA. Moreover, it is a mistake to assume that foreign jurisdictions share the pro-business stance of the new U.S. administration. Consequently, CTAs need to be exceedingly careful when choosing these vehicles, and an informed approach to these options can help CTAs flourish in foreign markets. All these points came across in a panel discussion during the recent CTAExpo/Emerging Manager Forum. Moderated by Stephen Klein, a portfolio manager at Abingdon Capital Management LLC, the panel featured Alex Lenhart, senior vice president of Singapore Exchange Ltd.; Bob Swarup, principal of Camdor Global Advisors Ltd.; Lynette Lim, co-chief executive officer of Phillip Capital Inc.; and Scott Brusso, senior director for foreign exchange and metals sales for Intercontinental Exchange, Inc. This article presents the key takeaways from the panel discussion. For more on the UCITS market and prospects for fund managers looking for opportunities abroad, see our two-part series, “Dechert Partners Outline Post-Brexit Cross-Border Marketing Options and the Viability of Domiciling Funds in Luxembourg” (Nov. 10, 2016); and “Dechert Partners Discuss Domiciling Funds in Germany or Ireland to Access the E.U. Post-Brexit, the Possible Introduction of PRIIPs and the Rising Prominence of UCITS Structures” (Nov. 17, 2016).

To read the full article

Continue reading your article with a HFLR subscription.