Commodity hedge funds

Commodity hedge funds

December 18, 2015
Metal traders and clerks in

blue algae, hong-kong, red wave, algal bloomsReuters/ Tyrone SiuCommodities exchanging business Trafigura says there's been a "sea-change" in investor attitudes within the commodities sector.

This means, people are feeling negative and several tend to be fleeing commodity-focused hedge resources.

Many hedge resources that concentrate on trading products have experienced in 2015 as asset rates have plunged. The S&P GSCI product list, which is contains the most fluid commodity futures, has actually fallen more than 46% within the last few one year.

Duncan Letchford, the CEO Galena Asset Management, a subsidiary of Trafigura, writes:

"total 2015 had been a challenging 12 months for commodity-related hedge funds. Commodities were in a bear marketplace, with prices of oil, precious metals and industrial metals and minerals showing architectural weakness almost across the board. And year observed the closure or withdrawal from the market of several notable hedge funds and much more usually regarding the banks' proprietary trading arms. As a consequence the market became significantly less liquid and more difficult to trade.

"essentially, we seen a sea-change in trader attitudes. From the mid-2000's onwards, commodities came to be seen increasingly commonly as an investable asset course. This perception has mainly unwound, to-be replaced by a [generalized] aversion for institutional investors towards the part overall. We estimate that the complete assets under administration (AUM) inside top product funds globally have actually dropped from significantly more than USD50 billion in 2008 to lower than USD10 billion these days."

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