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Hedge funds wrong-footed by wheat price surge

Posted on 30 June 2015 by VRS  |  Email |Print

Hedge funds look to have been wrong-footed by the surge in wheat futures late last week, and saw profits dry up in soybeans as a rising market encouraged them to cover short positions at the fastest rate on record.
Managed money, a proxy for speculators, cut by more than 58,000 contracts its net short position in futures and options in the main 13 US-traded agricultural commodities in the week to last Tuesday, according to data from the Commodity Futures Trading Commission (CFTC) regulator………………………………………..Full Article: Source

Increasing investor concentration in hedge funds?

Posted on 25 June 2015 by VRS  |  Email |Print

According to the latest survey from data provider Preqin, some 51 investors have increased their allocation to the hedge funds to over the $1bn benchmark, while 27 investors have seen their allocation fall below that level.
There are now a total of 227 investors around the globe that have $1bn or more in assets invested in hedge funds, and collectively these investors have $735bn invested in the asset class, representing almost a quarter of the total capital invested in the industry (up 13%) on a year ago. Most of these were in America. What’s going on?……………………………………….Full Article: Source

Hedge funds return to extending bearish ag bets

Posted on 23 June 2015 by VRS  |  Email |Print

Hedge funds returned to extending their bearish bets on agricultural commodities, led by corn, in which wet Midwest weather is supporting US yield prospects, and sugar, helping drive prices to a six-year low.
Managed money, a proxy for speculators, raised by more than 81,000 contracts its net short position in futures and options in the main 13 US-traded agricultural commodities in the week to last Tuesday, according to data from the Commodity Futures Trading Commission (CFTC) regulator………………………………………..Full Article: Source

Funds pinch their nose and buy euros

Posted on 23 June 2015 by VRS  |  Email |Print

The notion that funds have been buying euros every time the Greek crisis deteriorates sounds daft. But the latest run of data covering funds’ activity does seem to bear it out. This will make any reaction to a Greek deal if (big if) we get one tough to call. As we’ve noted recently, the euro has held remarkably firm even while the Greek crisis has run right to the wire with few signs of progress or even good will, writes Katie Martin.
Bets against the euro have clearly been shrinking. Take a look at the dollar positioning chart below from ANZ. It covers positioning data from the Commodity Futures Trading Commission. This represents a tiny slice of the currencies market as a whole, but it’s a pretty good proxy for funds’ activity………………………………………..Full Article: Source

Gold price: Hedge funds scramble to cover 233 tonnes

Posted on 19 June 2015 by VRS  |  Email |Print

Gold on Thursday was clawing its way back to the $1,200 an ounce level, buoyed by dovish comments from the US Federal Reserve about the pacing of interest rate cuts which took some shine of the strong dollar. In brisk afternoon trade in New York, gold for delivery in August, the most active contract, added $25.50 an ounce or 2.2% from Wednesday’s close to exchange hands for $1,202.40 an ounce, the best level since May 22.
Lower-for-longer interest rates add to the allure of gold which produces no income and relies on price appreciation to attract investors. Worries about the economic impact of the Greek debt crisis and a weaker dollar also boosted the yellow metal which usually moves in the opposite direction to the greenback………………………………………..Full Article: Source

Hedge funds slash bearish ag bets at quickest rate in 15 months

Posted on 16 June 2015 by VRS  |  Email |Print

Hedge funds cut their bearish bets on ag commodities at the fastest rate in 15 months as mounting weather fears prompted a revival in prices – although there are doubts of the more positive positioning holding.
Managed money, a proxy for speculators, slashed by nearly 130,000 contracts its net short position in futures and options in the main 13 US-traded agricultural commodities in the week to last Tuesday, according to data from the Commodity Futures Trading Commission (CFTC) regulator………………………………………..Full Article: Source

Hedge funds cut bearish ag bets at fastest pace in 3 months

Posted on 09 June 2015 by VRS  |  Email |Print

Hedge funds turned less bearish on ags at the fastest pace in three months, although it was driven by short-covering in just one commodity, soyoil, and left the net short at a historically high level.
Managed money, a proxy for speculators, cut by more than 60,000 contracts its net long position in futures and options in the main 13 US-traded agricultural commodities in the week to last Tuesday, according to data from the Commodity Futures Trading Commission (CFTC) regulator………………………………………..Full Article: Source

Fund Managers Cut Oil Bets Ahead of OPEC Meeting

Posted on 05 June 2015 by VRS  |  Email |Print

Money managers have been cutting back their bets on oil in the run up to the crucial meeting of the Organization of the Petroleum Exporting Countries in Vienna this week. The number of bets taken by hedge funds and other big investors on the global oil benchmark Brent—comprising bets on both rising and falling prices—has fallen to just over 320,000, the equivalent of 320 million barrels of oil, its lowest level in nine months.
The number of bets on West Texas Intermediate, the U.S. gauge, is at its lowest since the beginning of January. The $2.5 billion United States Oil Fund USO -2.53 % LP, the largest U.S. exchange-traded fund investing in U.S. oil futures, has also drawn back, registering outflows of close to $1 billion in the past two months, according to investment research company Morningstar. In April, the fund lost $550 million, the biggest withdrawal since 2011. It lost another $390 million in May, the data shows………………………………………..Full Article: Source

The currency hedging trade is starting to fade

Posted on 05 June 2015 by VRS  |  Email |Print

The trendiest trade of 2015 has lost some of its mojo lately. With global central banks in overdrive to devalue and the U.S. heading in the opposite direction, investors had been piling into exchange-traded funds that hedged against big currency moves.
Four of the top 10 ETFs this year in terms of fund inflows are related to currency hedging. That includes the most popular one, the WisdomTree Europe Hedged Equity, which has taken in $13.6 billion, according to ETF.com. The fund is up a gaudy 16.8 percent year to date but is down 2.5 percent over the past week and off 0.4 percent for the month. The funds often use a balance of dividend-paying and export-based companies to hedge currency exposure………………………………………..Full Article: Source

Investors Cut Gold-Fund Holdings to Four-Month Low on Fed Bets

Posted on 03 June 2015 by VRS  |  Email |Print

Investors sold gold through bullion-backed funds, cutting holdings to a four-month low, on speculation that the Federal Reserve is getting closer to raising interest rates. Futures advanced in New York.
Assets in exchange-traded products backed by the metal dropped 2.4 metric tons to 1,599.5 tons as of Monday, according to data compiled by Bloomberg. Holdings slipped 4.8 percent since late February and are at the lowest since Jan. 14………………………………………..Full Article: Source

Metal Funds Rule Commodities in May as Traders Bet on Gains

Posted on 01 June 2015 by VRS  |  Email |Print

Investors are buying into industrial-metal funds at a faster pace than any other commodity, underscoring optimism about the health of the global economy. U.S. exchange-traded products backed by the metals attracted $71.1 million in May, putting flows on track for the biggest monthly increase since 2012, according to data compiled by Bloomberg as of Wednesday.
The extra funds represent a 22 percent increase in market value, more than other commodity groups such as agriculture and energy. Money managers are betting that China’s efforts to kickstart its slowing economy, including three interest-rate cuts in six months, will succeed in increasing demand for raw materials………………………………….Full Article: Source

India: RBI asks banks to create awareness on hedging agri-commodities

Posted on 29 May 2015 by VRS  |  Email |Print

The Reserve Bank of India (RBI) on Thursday advised banks to create awareness among their borrowers for hedging agricultural commodity price risk. “Banks should encourage hedging by the agri-borrowers by creating awareness amongst them regarding the utility and benefits of hedging through agri-commodity derivatives,” RBI said in a notification to all banks. “This would help to develop strong risk management capabilities to manage agri-commodity price risk,” it added.
At the same time, said RBI, “banks must keep the sophistication, understanding, scale of operation and requirements of their agri-borrowers in mind while advising on the availability and use of these instruments.” To begin with, banks were asked to encourage large agricultural borrowers such as agricultural commodity processors, traders, millers and aggregators to hedge their commodity price risk…………………………………Full Article: Source

Hedge Funds Have Taken a Shine to Silver

Posted on 29 May 2015 by VRS  |  Email |Print

Silver prices have remained stuck at historical lows for the past three years, but hedge funds have decided now is the time to pile in. Last week, hedge funds snapped up silver at the fastest pace since 1997, increasing their net long position to a three-month high according to data from Bank of America Merrill Lynch.
Large speculators increased their net long position to $4.4 billion as of May 19, up from $2.4 billion in the previous week, according to the bank’s research. The data, gathered from the U.S. Commodity Futures Trading Commission, is released every Friday, but reflects positions as of Tuesday’s close. The regulator requires traders to hand over data on their significant positions in major markets. Bank of America Merrill Lynch looks at a section of this data, which includes trading by speculative investors………………………………..Full Article: Source

Chinese Hedge Funds Turn Bearish on Copper

Posted on 28 May 2015 by VRS  |  Email |Print

Gains of as much as 20 percent since January haven’t convinced Chinese hedge funds that demand for copper is improving in the world’s biggest-consuming country. “The outlook for China’s demand will be worse, not better,” said Shen Haihua, a senior portfolio manager at Hong Kong-based HFZ Capital Management, a joint venture of U.K. hedge fund Red Kite Management Ltd. and Maike Metals International, a Chinese metals trader. HFZ Capital says demand will weaken in the second half of the year.
Because China uses half of the world’s copper to build new power lines, cars and appliances, investors piled into the metal this year as the government took steps to revive the economy. Some of that cash is flowing into Chinese hedge funds that have expanded after regulatory changes in 2013, helping to fuel domestic trading of commodity derivatives that now outpaces the growth of legacy markets like the London Metal Exchange…………………………………….Full Article: Source

Currency hedging: Does it still work?

Posted on 28 May 2015 by VRS  |  Email |Print

Hedging the euro and the yen has amplified returns for Japan and Europe investors in recent years, but will the trend continue? Over most timeframes, UK investors in Japan and Europe who have hedged the yen and euro have reaped stronger returns.
In the last year, three years and five years, the picture has been the same: of the pound strengthening against those currencies, and chipping away at the returns of those with unhedged exposure. With central banks in both Japan and Europe printing more money to buy bonds to boost their economies - known as ‘quantitative easing’ - many investors are betting that trend will continue…………………………………….Full Article: Source

China’s new $16bn gold fund at centre of new ‘Silk Road’

Posted on 27 May 2015 by VRS  |  Email |Print

Gold prices could be boosted by China’s plan to establish a $16bn (£10bn) fund to stockpile the precious metal as part of a scheme known as the ‘Silk Road’ initiative aimed at boosting trade. State endorsed media in China has reported that the new fund Shandong Gold Group and Shaanxi Gold Group will each take stakes of 35pc and 25pc respectively in the new fund alongside other investors.
The new entity, which may include an exchange traded fund for gold and investments in miners of the precious metal, aims to raise the $16bn in three tranches, according to the report. News of the fund could restore some impetus to the gold market, which has been struggling to offset the growing strength of the US dollar, which usually weighs on prices…………………………………..Full Article: Source

Chinese Hedge Funds Bearish on Copper Ring Alarm Bells for Bulls

Posted on 26 May 2015 by VRS  |  Email |Print

Nobody may be more bearish on China copper than Chinese hedge funds. That should be a warning to investors who’ve ridden the metal’s rebound from a five-year low into a bull market. Gains of as much as 20 percent since late January haven’t convinced the money managers that demand is improving in the world’s biggest copper-consuming country, where the economy is growing at the slowest pace in a generation.
“The outlook for China’s demand will be worse, not better,” said Shen Haihua, a senior portfolio manager at Hong Kong-based HFZ Capital Management, a joint venture of U.K. hedge fund Red Kite Management Ltd. and Maike Metals International, a Chinese metals trader. HFZ Capital says demand will weaken in the second half of the year………………………………………..Full Article: Source

Hedge funds still gloomy on ags, despite deep cut to wheat shorts

Posted on 26 May 2015 by VRS  |  Email |Print

Hedge funds’ dramatic turn less gloomy view on wheat price prospects has not been reflected in their thinking on ags overall, with corn and soybeans bearing the brunt of fresh bearish positioning. Managed money, a proxy for speculators, lifted its net short position in futures and options in the top 13 US-traded agricultural commodities, from corn to sugar, by 32,354 contracts in the week to last Tuesday, analysis of data from the Commodity Futures Trading Commission regulator shows.
The increase took the net short – the extent to which short holdings, which profit when values fall, exceed long bets, which benefit when prices gain – to 98,548 lots, below the record 142,612 contracts hit last month but a historically large figure nonetheless………………………………………..Full Article: Source

China sets up “largest” gold fund for nations along Silk Road

Posted on 25 May 2015 by VRS  |  Email |Print

China, the world’s biggest gold producer, has set up a gold sector fund involving countries along the ancient Silk Road which is expected to raise USD 16.1 billion. The fund, led by Shanghai Gold Exchange (SGE), is expected to raise an estimated 100 billion yuan (USD 16.1 billion) in three phases, state-run Xinhua news agency reported. It is said to be the “largest fund” set up by China.
The fund has been set up in northwest Xi’an city during an ongoing forum on investment and trade. China is the world’s largest gold producer, and also a major importer and consumer of gold………………………………………..Full Article: Source

AfDB invests N14 billion in African agriculture

Posted on 25 May 2015 by VRS  |  Email |Print

The African Development Bank, AfDB, said it has invested N14.78 billion (N2.91 trillion) in the agriculture sector of its Regional Member Countries (RMC) in 46 years to grow their economy. Chiji Ojukwu, the Director of Agriculture and Agro-Industry Department of the bank, stated this in a statement published on the bank’s official website.
In the statement, retrieved by the News Agency of Nigeria on Sunday in Lagos, the director said that between 1968 and 2014, the bank group approved 876 operations. These operations had commitments valued at approximately $14.78 billion that provide support to agriculture and rural development………………………………………..Full Article: Source

Commodities, precious metals funds outflows biggest since 2013 -Lipper

Posted on 22 May 2015 by VRS  |  Email |Print

Investors in U.S.-based funds pulled $597 million out of funds that specialize in commodities and precious metals in the week ended May 20, data from Thomson Reuters’ Lipper service showed on Thursday. The outflows were the biggest since December 2013. Stock funds posted $1.7 billion in outflows over the latest week after attracting $3.7 billion in inflows the prior week.
U.S.-based non-domestic-focused stock funds attracted $3.3 billion of inflows, their 15th straight week of net new cash. “I’m speculating here but possibly stronger economic news caused investors to pull money out of commodities and into stocks,” said Patrick Keon, research analyst at Lipper………………………………………..Full Article: Source

Chinese commodity hedge funds cultivate ties with Western investors

Posted on 21 May 2015 by VRS  |  Email |Print

Chinese hedge funds, blamed for several routs in the metal markets in the past 18 months, are developing relations with Western investors as they stretch out beyond their home turf, an executive at London Metal Exchange broker Sucden said.
Chinese metals funds, including Shanghai Chaos Investment Co, were believed to be behind an 8 per cent plunge in the copper price over three days in March 2014 and were active as the metal crashed to a six-year low this year. They have become a dominant force in metals, especially during the Asian day, as Western hedge funds, asset managers and banks have scaled back or quit………………………………………..Full Article: Source

Chinese metals hedge funds aim to lure Western investors

Posted on 20 May 2015 by VRS  |  Email |Print

Chinese hedge funds, blamed for several routs in the metal markets in the past 18 months, are developing relations with Western investors as they stretch out beyond their home turf, an executive at London Metal Exchange broker Sucden said.
Chinese metals funds, including Shanghai Chaos Investment Co, were believed to be behind an 8 percent plunge in the copper price over three days in March 2014 and were active as the metal crashed to a six-year low this year………………………………………..Full Article: Source

Hedge funds dumping oil position as OPEC may raise supply level

Posted on 19 May 2015 by VRS  |  Email |Print

Hedge funds and oil speculators are losing faith in the oil rally on concerns the Organization of Petroleum Exporting Countries (OPEC) will increase supply to its highest level since 2012, according to Bloomberg. Data from the U.S. Commodity Futures Trading Commission (CFTC) shows that hedge funds’ net-long position in West Texas Intermediate (WTI) crude fell 2.1%.
Futures advanced 35 cents to $60.75 a barrel on the New York Mercantile Exchange in the period covered by the CFTC report, before retreating to close at $59.69 on May 15. The net-long position in WTI slipped from a nine-month high to 262,575 futures and options. Shorts dropped 17% to 52,973 and longs fell to 315,548………………………………………..Full Article: Source

Hedge funds ‘may cover more shorts in wheat, but not sugar’

Posted on 19 May 2015 by VRS  |  Email |Print

Investors noted scope for further short-covering in wheat derivatives, after hedge funds eased back from a record bearish position, but raised doubts over the appetite for extending a large positive shift in raw sugar.
Managed money, a proxy for speculators, cut by more than 37,000 contracts its net short position in futures and options in the main 13 US-traded agricultural commodities in the week to last Tuesday, according to data from the Commodity Futures Trading Commission (CFTC) regulator………………………………………..Full Article: Source

Hedge Funds Lose Faith in Oil Rally as OPEC Seen Boosting Supply

Posted on 18 May 2015 by VRS  |  Email |Print

Speculators are losing faith in the oil rally, judging that OPEC will keep increasing supply from the highest level since 2012. Their net-long position in West Texas Intermediate crude dropped 2.1 percent, as long wagers fell the most in two months and short bets declined to the lowest since August, U.S. Commodity Futures Trading Commission data show.
OPEC’s push to defend its share of the global oil market has just begun and its members may further increase production, the International Energy Agency said May 13. Saudi Arabia said it boosted output to the highest level in at least three decades………………………………………..Full Article: Source

ETFs poised to outstrip hedge funds

Posted on 08 May 2015 by VRS  |  Email |Print

The high-profile hedge fund world is about to be surpassed in terms of total assets by the unstoppable juggernaut that is the exchange-traded fund (ETF) industry, new research shows. Assets held globally in ETFs reached $2.93trn (£1.9trn) at the end of the first quarter of this year, according to research and consultancy firm ETFGI.
Meanwhile, a report from Hedge Fund Research has revealed there was $2.94trn in hedge funds at the same time. The difference in assets is the closest it has ever been (see top chart) and ETFGI predicts that given the much faster rate of inflows into ETFs seen in recent years, the tracker funds should overtake hedge funds within the second quarter of this year………………………………………..Full Article: Source

Hedge funds are in love with crude oil

Posted on 07 May 2015 by VRS  |  Email |Print

Hedge funds love crude oil. Oil prices are recovering from the crash, and hedge funds have made big bets that oil prices will keep rallying.
According to a report from Societe Generale, hedge funds are most bullish on crude oil among major commodities, or betting that the price of oil will rise. Overall, hedge funds are still negative on commodity prices………………………………………..Full Article: Source

Market U-Turn Rams Hedge Funds

Posted on 06 May 2015 by VRS  |  Email |Print

A broad market reversal is battering hedge funds, spoiling the industry’s strongest annual start since the financial crisis. Many funds that bet on global financial and economic trends run by firms such as Fortress Investment Group LLC and Discovery Capital Management LLC suffered losses in April as they tried to benefit from a constellation of market moves that gained momentum in mid-2014 and were widely expected to continue throughout 2015.
They included rising European bond prices, spurred by the European Central Bank’s bond-buying program, and falling commodity prices as global growth stalled. But several factors upended those bets, beginning in late March and intensifying recently. Several rounds of unexpectedly weak U.S. economic data forced many investors to push back their forecast for when the Federal Reserve may raise interest rates………………………………………..Full Article: Source

Global equity mutual funds, ETFs post $31.8 billion April inflows

Posted on 29 April 2015 by VRS  |  Email |Print

Global equity mutual funds and exchange-traded funds showed $31.8 billion of net inflows in April through Friday, TrimTabs Investment Research said on Tuesday, putting them on track to surpass the record inflow of $34.8 billion in March.
U.S. equity mutual funds and exchange-traded funds have posted net withdrawals of $15.4 billion this month through April 24. “Equity flows shifted into emerging markets recently as investors chased the monster rally in China,” said Winston Chua, analyst at TrimTabs. “Interest in Europe cooled off in recent days, and investors still want nothing to do with the U.S.”……………………………………….Full Article: Source

Can hedge funds turn the tide in 2015?

Posted on 29 April 2015 by VRS  |  Email |Print

According to Preqin, hedge funds have started this year with a bullet. The Preqin All-Strategies Hedge Fund benchmark posted a 2.49% return in February, the highest monthly return since January 2013. The performance is timely given that hedge fund performance was a concern in 2014. The challenge, and opportunity, still remains for hedge funds to continue the uptick in Q1 as equity markets look to be buoyant and commodity markets remain turbulent.
According to the latest HFR Market Microstructure Industry Report, new hedge fund launches were down last year (in numerical terms, down 20 on the 1,060 funds launched in 2013). While launches have trended in a narrow range in recent years, they remain well below the peak of 2,073 funds launched in 2005, though nearly double the local trough of 659 launches in 2008. This is now the third consecutive year of decline, while fund liquidations saw their first drop since 2010………………………………………..Full Article: Source

Hedge Funds Lead Shift In Dollar Sentiment

Posted on 29 April 2015 by VRS  |  Email |Print

Betting that the dollar will keep pushing higher against major currencies has lost its allure. Up until a few weeks ago positioning for a further climb of the dollar against the euro and the yen was the only game in town, but investors and traders’ are scaling back on the trade, according to the latest positioning data from the Commodities Futures Trading Commission, which measures a portion of the market that serves as a good proxy for the whole.
In fact, being long the dollar has been named as the most crowded trade for months in surveys of fund managers by Bank of America Merrill Lynch. But now the trade is losing steam………………………………………..Full Article: Source

Hedge funds betting on more losses for crops as supplies swell

Posted on 28 April 2015 by VRS  |  Email |Print

With planting conditions improving across the U.S. Midwest, hedge funds are betting that harvests this year will compound a global crop surplus and worsen losses for corn, soybean and wheat prices.
Corn seeding is already ahead of last year’s pace, and recent rains that hampered sowing in some areas will give way to drier conditions this week, according to MDA Weather Services. In the Great Plains, winter-wheat conditions are better than they were in 2014. Record crops in Argentina and Brazil are adding to soybean supplies as U.S. farmers are forecast to plant the most acres ever next month………………………………………..Full Article: Source

Hedge funds bet big on oil price rally

Posted on 24 April 2015 by VRS  |  Email |Print

Hedge funds have placed one of their largest ever bets on a rally in oil prices, just as evidence mounts that energy companies are hunkering down for a delayed recovery.
Exchange data show hedge funds and other large speculators have accumulated a record-breaking number of North Sea Brent futures and options contracts equal to almost 265m barrels of oil — the equivalent of almost three days of global oil demand…………………………………..Full Article: Source

Hedge funds record-bearish ag bets ‘may spur’ price support

Posted on 21 April 2015 by VRS  |  Email |Print

Hedge funds’ bearish betting on agricultural commodities soared to the highest on record, led by selling in grains – spurring ideas of price support for some contracts as speculators’ reassess such downbeat positioning. Managed money, a proxy for speculators, lifted its net short position in futures and options in the top 13 US-traded agricultural commodities, from corn to cattle, by more than 78,000 contracts in the week to last Tuesday, analysis of data from the Commodity Futures Trading Commission regulator shows.
The selling took the net short - the extent to which short holdings, which benefit when prices fall, exceed long bets, which profit when values rise – to more than 142,000 contracts, far exceeding the previous record of 102,126 lots set a month ago…………………………………..Full Article: Source

Global-focused funds falter amid slump in commodities

Posted on 20 April 2015 by VRS  |  Email |Print

The downturn in the international commodities markets has hit select global funds investing in themes such as mining, commodities, gold and Latin America.Most of these products, launched in the past five to six years, have performed poorly in terms of their NAV (net asset value) growth, which was in the range of 2-28 per cent in the past 12 months, data collated by ICICIdirect show.
While the themes may have commodities in their names, the funds actually invest in shares of companies linked with a dominant theme. For example, the gold funds actually invest their money in firms whose primary economic activity is gold mining……………………………………Full Article: Source

Oil Bulls Boost Wagers by Most Since 2010 as Output Seen Peaking

Posted on 14 April 2015 by VRS  |  Email |Print

Speculators increased bullish oil bets by the most in more than four years, wagering that the U.S. production boom is slowing. Hedge funds boosted net-long positions on West Texas Intermediate crude by 30 percent in the seven days ended April 7, the biggest jump since October 2010, U.S. Commodity Futures Trading Commission data show.
Long bets rose to a nine-month high, while shorts tumbled 21 percent. U.S. crude output and inventories may peak this month amid a record drop in rigs exploring for oil, Goldman Sachs Group said………………………………………..Full Article: Source

Gold Income Funds Can Have You Investing Like Warren Buffett

Posted on 14 April 2015 by VRS  |  Email |Print

Warren Buffett thinks every investor should own a little bit of gold. Yet, while on CNBC recently for an hour-long segment, the legendary investor also said that he prefers “investments” versus “speculative trades.” That is, he prefers to hold investments that earn money and generate income rather than ones that are hoped to go up in value.
Obviously that means Buffett prefers equities of companies that generate income for shareholders; commodities, like gold, of course do not generate income. Buying a commodity in the hopes that someone will pay you more for it later is purely speculative, and not as much within the Buffett playbook. ……………………………………….Full Article: Source

Funds and ETFs to Play the Chinese Market

Posted on 10 April 2015 by VRS  |  Email |Print

Investors looking to get into surging Chinese stocks can pick from a wide variety of mutual funds and exchange-traded funds that focus on varying stock exchanges and types of stocks in the region.
In years past, most China-focused mutual funds in the U.S. invested primarily in shares listed in Hong Kong and Taiwan—including Hong Kong-listed “H shares” of mainland-China companies—and also in stocks of other companies that do a lot of business in China. A newer development is exchange-traded funds that invest in mainland-listed “A shares” of Chinese companies (which may also have shares traded in Hong Kong)………………………………………..Full Article: Source

Hedge funds gain 2.4% in Q1 driven by currency and commodity markets

Posted on 10 April 2015 by VRS  |  Email |Print

Hedge funds posted positive results last March to conclude a strong first quarter, with performance driven by strong macro trends in currency and commodity markets, complemented by broad-based gains and positioning in event driven, equity hedge and fixed income-based relative value arbitrage strategies, data provider Hedge Fund Research said.
The HFRI Fund Weighted Composite Index gained 0.5% in March and 2.4% in Q1, completing the strongest quarter of outperformance relative to S&P 500 since the third quarter in 2011. “Hedge funds posted the highest quarterly performance since 2013 in Q1, navigating dislocations in currency and commodity markets, benefitting specifically from trend following macro exposures as financial markets discounted the end to U.S. quantitative easing, as well as the inception of ECB stimulus measures,” stated Kenneth J. Heinz, president of HFR………………………………………..Full Article: Source

Hedge funds end Q1 on a strong note, up 3.2%

Posted on 08 April 2015 by VRS  |  Email |Print

The first quarter’s market conditions have been supportive of hedge fund performance, posting solid gains while the S&P 500 index is down year-to-date. Looking back at the quarter, there are many positive points worth highlighting, following a lacklustre 2014. Once again monetary policies took the front seat, driving hedge fund returns:
Equity-focused strategies and CTA funds have benefited from the large impact of European and Japanese QEs, as well as the Fed’s patience. European L/S Equity funds, while cautious, managed to limit volatility and catch the rally. Systems, mainly trend-followers, are still gaining from the “central bank” play, and generating gains on long equity and bond positioning………………………………………..Full Article: Source

Commodity Funds Continue To Struggle

Posted on 02 April 2015 by VRS  |  Email |Print

The price of a bushel of corn for May delivery tumbled during the last day of the quarter by almost 5 percent to $3.756. The move was caused by the corn supply in the Unites States coming in much higher than expected, even after the government pegged its inventory in June at its highest level in 28 years.
The 7.75 billion bushels’ stockpile, as of March 1, is 11 percent higher than a year ago, according to the U.S. Department of Agriculture. The reading outpaced economists’ estimates of an 8.6 percent increase and is the highest on record at this date since 1987………………………………………..Full Article: Source

Hedge funds reduce bearish stance on ags - a little

Posted on 31 March 2015 by VRS  |  Email |Print

Hedge funds reduced, a little, their bearish bets on agricultural commodities, but remained unusually downbeat on price prospects, particularly for the likes of sugar and arabica coffee. Managed money, a proxy for speculators, cut its net short position in futures and options in the top 13 US-traded agricultural commodities, from cotton to cattle, by nearly 24,000 contracts in the week to last Tuesday, according to data from the Commodity Futures Trading Commission regulator.
It was only the second week of 2015 in which hedge funds’ bets on rising crop prices had exceeded those on price falls. Nonetheless, hedge funds remained, overall, net short - meaning that short bets, which benefit when prices fall, exceeded long positions, which profit when values rise………………………………………..Full Article: Source

Once-bullish fund managers start to capitulate on oil prices

Posted on 30 March 2015 by VRS  |  Email |Print

Last fall, when the price of oil started dropping, fund manager Craig Hodges figured crude would rebound in 2015 and began buying shares of companies he thought would be unfairly hit, including construction company Primoris Services Corp and Eagle Materials Inc, which produces sand used in fracked wells.
Hodges, who runs the $2.1 billion Hodges Small Cap fund, is now starting to concede that oil prices will stay low for as long as a year or more because of a global glut. Even the air strikes Thursday in Yemen by Saudi Arabia and its Gulf Arab allies, which prompted a one-day 5 percent boost to the price of oil, presented “a traders move” and doesn’t signal a sustained move up, Hodges said. Oil fell 6 percent today to about $48 a barrel………………………………………..Full Article: Source

Hedge funds bet gold gain to fizzle

Posted on 30 March 2015 by VRS  |  Email |Print

Hedge funds are betting that gold’s recent rally won’t last and are holding the biggest wager ever that prices will decline. The net-long position in gold dropped by 9.9 per cent to 31,653 futures and options in the week ended March 24, according to U.S. Commodity Futures Trading Commission data published three days later.
That was the lowest since Dec 2013. Short holdings rose for a seventh straight week to 84,022 contracts, the highest since the data begins in 2006. Even as futures climbed for two straight weeks, some investors have shied away from the metal. Global holdings in exchange-traded products backed by bullion declined every week in March………………………………………..Full Article: Source

The World Bank’s Carbon Fund: Undermining indigenous rights or saving the planet?

Posted on 30 March 2015 by VRS  |  Email |Print

The World Bank’s emerging Carbon Fund, which provides payments to participating countries that are taking measures to reduce deforestation and carbon emissions, is under scrutiny from civil society leaders and indigenous rights groups, citing its insufficient safeguards to uphold land rights of local and indigenous peoples.
But as industry insiders told Devex, in order to develop a market for carbon that incentivizes the maintenance of forests and achieves results in the face of looming climate change, the World Bank and Carbon Fund donors may need to look beyond a cookie-cutter approach to land rights and remain open to to the political contexts and policies of participating Carbon Fund countries………………………………………..Full Article: Source

New hedge funds net most cash since 2004

Posted on 26 March 2015 by VRS  |  Email |Print

Hungry for returns, investors are giving more new hedge funds a test drive. Funds based in the Americas that launched in 2014 pulled in $34.1 billion, the highest annual total since $39.5 billion was raised in 2004, according to new research from industry news and data provider Absolute Return. The money was spread out over 84 new funds running at least $50 million, the largest total since 86 of the same minimum size were formed in 2006.
The largest fresh fund offerings came from a mix of new and old firms. The largest was the Two Sigma Absolute Return Macro Master Fund from leading quantitative investor Two Sigma. The vehicle raised a whopping $3.3 billion as of Jan. 1………………………………………..Full Article: Source

Ag prices ‘may rebound’, after hedge funds turn most bearish ever

Posted on 24 March 2015 by VRS  |  Email |Print

Agricultural commodity futures may be poised for a wave of support from covering of short bets, after a selldown by hedge funds left them, by a distance, with their most bearish ever positioning. Managed money, a proxy for speculators, dropped long positions on agricultural commodities by more than 40,000 lots in the week to last Tuesday, while hiking short bets – which profit when prices fall - by some 110,000 contracts, regulatory data show.
The resulting swing net short in positioning by 151,826 contracts was the largest in nearly two years. And it drove the overall position into a net short – the extent to which short holdings exceed long ones - of 102,126 lots, by far the biggest on Commodity Futures Trading Commission data going back to 2006………………………………………..Full Article: Source

Hedge funds get short of US oil as storage fills

Posted on 24 March 2015 by VRS  |  Email |Print

Hedge funds have turned super-bearish about US oil prices as concerns about running out of storage trump the drop in the number of rigs drilling new wells. Money managers had amassed a record number of short positions in futures and options contracts linked to WTI (West Texas Intermediate) by the end of March 17, equivalent to 209 million barrels of oil, according to the US Commodity Futures Trading Commission’s (CFTC) latest commitments of traders report published on Friday.
Money managers still have long positions equivalent to 381 million barrels, so overall the sector is still running a net long position. Hedge fund managers have a natural bullish bias. Not once have hedge funds as a whole been net short of WTI futures and options in the last nine years………………………………………..Full Article: Source

Currency hedging takes on new importance for global stock funds

Posted on 23 March 2015 by VRS  |  Email |Print

As the dollar surged in the last 12 months, David Marcus, head of the Evermore Global Value fund, steadily increased his stake in Europe. He now has 60 percent of his portfolio invested in companies in the euro zone, the largest stake among any global fund tracked by Lipper.
The gains in those stocks wouldn’t matter if the fund wasn’t actively hedging against euro weakness, which it is, helping the fund rise 8.8 percent so far in 2015, putting it among the top-performing global stock funds this year. “We’re stockpickers, and by hedging currencies we can be pure stockpickers without the currency risk,” said Marcus………………………………………..Full Article: Source

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