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The Dublin-listed Aliquot Active Commodity Index fund went live last week. It will closely mirror the exposures of the firm’s existing British Virgin Islands fund, using instruments such as ETFs and ETCs.

The BVI long-only portfolio invests in 100 per cent hard and soft commodities and has no exposure to equities or cash.

From launch in 2002 to August 2005, the portfolio was passively managed, loosely following the S&P GSCI Commodity (TR) and the Dow Jones AIG Commodities indices.

A change in strategy came when managers Angus Murray, Leon Diamond and Matthew Sena predicted a looming commodities bull-market, producing an opportunity to add value and reduce risk through active management.

Mr Sena said: "Our fund opens up the commodity market to more investors by offering real exposure within a Ucits framework."

The co-manager said gaining the flexibility to change exposure to individual commodities would allow the team to manage risk and opportunity for investors effectively.

"There are very few actively managed commodity funds in existence and the vast majority of those that are Ucits compliant don’t have this flexibility," he said.

Castlestone said the fund would be attractive to investors seeking an inflation hedge. Commodities had also proven to act as an insurance policy during times of political or economic uncertainty and the resulting instability in financial markets, the firm said.

The Aliquot Commodity fund returned 56.3 per cent over three years until 31 April 2008, outperforming the Dow Jones AIG Commodities index's return of 36.9 per cent and the S&P GSCI Commodity (TR) index's return of 33.8 per cent, according to Bloomberg.