Copying and distributing are prohibited without permission of the publisher
Back to basics
18 December 2007
As commodities continue to soar, Marek Sanders looks at how long hedge funds and emerging markets will carry the markets, and speaks to one hedge fund manager playing the old school physical trading game to gain an edge.
Read more:
commodities
hedge funds
emerging markets
The oldest investment asset group – commodities – has been rising through the asset ranks since the turn of the century. And the last few years in particular have seen this increasingly influential sector offer both a speed of growth and high volatility that hedge funds find irresistible.
Global assets with hedge funds focusing strategies on the natural resources sector increased from $40 billion in May 2004 to $170 billion in September 2007, according to HedgeFund.Net (HFN), a hedge fund research firm. And whether their positions are taken through derivatives, spot markets, equities, exchange traded funds, structured vehicles tracking commodity baskets or a combination of the lot, these hedge funds have decidedly outperformed the broader hedge fund industry. From early 2002 through to Q3 2007, natural resource-focused hedge funds produced an annualized compound return of 16.6%, against the average hedge fund's 11.6%.
No wonder so many managers have eagerly...
Access to this content is denied because you are not logged in. Please login to view this content
Already have an account?
Subscribe
Subscribers have unlimited access to all current and archive content. Start your
subscription today - click on the button below.
Free trial
Taking a free trial will give you access to the current issue for two weeks (excluding
some surveys and articles). Start your free trial today.
