London-based Man Group, the world’s largest listed hedge fund business, has launched the $50 million seeded Man Commodities Fund for both retail and institutional investors.

The fund - available to investors in several European countries with a minimum investment of $1,000 for retail investors and $100,000 for institutional investors - is aimed at investors seeking portfolio diversification from standard investments in stocks and bonds.

The actively-managed fund also aims to outperform passive indices and minimise downside risk by obtaining liquid, long-only exposure to the Man Systematic Commodity Index. The index is based on trading in 25 liquid futures contracts in precious metals, industrial metals, energy and agricultural products.

Man said the fund's underlying investment strategy was developed by Man Systematic Strategies, which is led by its new head of commodities Scott Kerson. Kerson has 17 years of experience in commodities and systematic trading.

"Passive investment products like exchange-traded funds and index-linked swaps are generally poor at dealing with severe drawdowns and heightened volatility in commodity bear markets, so we think that an actively-managed, systematic approach is a better solution," said Man Systematic Strategies' chief investment officer Sandy Rattray.