The average commodity hedge fund fell 1.7 per cent in 2011, according to a closely-watched index compiled by Newedge, the first loss since the index was created in 2000 and down from a rise of 10.7 per cent in 2010.
The hedge funds suffered as commodities prices were hit by external factors, particularly the eurozone debt crisis in September, industry executives said. Erik Serrano Berntsen, at Energy Alpha Strategies in London, said that most commodity funds had had “a tough year... with fundamentals not always in the driving seat”.
But he added: “There have, however, been a few outperforming funds that have benefited from a specialised focus”. Metals and natural gas specialists both posted strong returns.
Industry executives said that investors withdrew money from several large hedge funds as losses mounted. The commodities sector as a whole saw the weakest net inflow of funds since 2002 last year, according to estimates by Barclays Capital. Net flows into commodities totalled $15 billion in 2011, less than a quarter of the investment level in 2010, which saw inflows of $67 billion, the bank estimates.
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