New York (HedgeCo.net) – In somewhat of a contrarian move, Jeffrey Gundlach and his firm DoubleLine Capital have launched a new commodities based mutual fund. Just one month ago Wells Fargo launched a commodities based hedge fund in what seemed like odd timing. Now with DoubleLine’s fund we are looking at two managers bucking the trend.

With commodity prices slumping and the basic materials sector being the second worst performing sector so far in 2015, the more prevailing trend in the news has been about commodities-based hedge funds closing.

According to a report from Reuters, the DoubleLine Strategic Commodity fund will use derivatives and leverage as it seeks a total return type strategy. Portfolio manager Jeffrey Sherman was quoted in the Reuters report, saying that “A broad mix of commodities historically has shown low correlations to stocks, bonds and cash. So commodities can diversify a portfolio invested in traditional asset classes. In addition, commodities can serve as a hedge against unexpected inflation.”

There will be two share classes for the mutual fund with the Class I shares having a minimum initial investment of $100,000 and a 1.11% expense ratio while Class N shares will have a minimum initial investment of $2,000 and an expense ratio of 1.36%.

Rick Pendergraft
Research Analyst
HedgeCoVest