Innovative and highly liquid commodity concepts are our passion.

In recent years the commodity markets have evolved to a highly respected asset class. Investors have the opportunity of participating in the development of commodity markets via commodity futures. The correlation properties of commodity futures provide a decent inflation hedge and thus stabilise the investment return. Unfortuantely commodity prices do not increase steadily in the short- to medium-term. However, it is possible to earn a risk premium over short- to medium-term by means of an actively managed portfolio and an active index of positions in selected commodity futures.

Contrary and distinct to common passive long-only strategies in commodity futures, which are mainly aligned with the major commodity indices, our investment concepts offer an active and differentiated access to the commodity markets.

CYD Research is an innovation driver in the field of quantitative commodity strategies. We consider the active management of risk premiums in commodity markets as the most sustainable source for continual and consistent investment success. This philosophy strongly influences our products, defines our daily actions, and determines our directions in the exploration of innovative investment strategies and segments.

The conception of our investment strategies begins with extensive academic research of financial markets. We implement the latest academic insights into the dynamics of risk premiums in the commodity futures markets. Ideas and insights for our investment concepts are sourced from our intensive and continuous dialogue with various leading academic institutions. Based on this close dialogue economically motivated, model-based commodity strategies are developped, which offer a high degree of transparency and liquidity. All these strategies are unified by the pursuit of long-term sustainable investment success with daily liquidity.

 

Investment solutions are available in two segments:

1. Active rule-based commodity indices

In 2006 CYD Research launched CYD LongOnly, CYD LongShort and CYD MarketNeutral, an index family of three active, rule-based commodity indices.

With their broadly diversified index concept, CYD LongOnly and CYD LongShort represent, worldwide, the first application of the academic insight on the fact that commodity market risk premiums can be accessed by conditioning on the maturity structure of the futures curve. Based on this insight CYD LongShort index was the first long/short commodity index worldwide.

In addition, CYD MarketNeutral, the world's first market neutral commodity index, accesses the risk premium which can be achieved by means of "short convenience yield" positions in short-term contracts. This index is issued both with and without leverage.

These indices are investable through our product partners as structured products or as index tracker funds.

2. Active commodity management

In active management CYD concentrates on the research and developement of proprietary economic forecasting models for the price behaviour of commodity futures and conservative, state-of-the-art risk management systems for monitoring commodity portfolios.

Since the end of 2006 we have been managing active commodity portfolios based on our own research and on economic (risk-) models. We provide both benchmark-free, market neutral and benchmark-oriented investment solutions (with a given tracking error target as compared to a classic commodity index such as the DJ UBS Commodity Index).