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Commodity funds hemorrhage cash as investors bail at record pace

Posted on 29 December 2015 by VRS  |  Email |Print

Investors can’t seem to get away from non-energy commodities fast enough. A record US$857 million was pulled this year from U.S. exchange-traded funds backed by broad baskets of everything from grains to metals, according to data compiled by Bloomberg through Dec. 23.
The value of the funds plunged 26 per cent as raw materials tumbled to a 16-year low. Hedge funds are expecting more losses, betting on price declines for gold, copper, corn and natural gas. While energy-linked funds were the only commodity group to see net inflows this year, oil and gas didn’t escape an almost across-the-board decline in prices………………………………………..Full Article: Source

Chinese funds take cautious bets on short-term metals price rise

Posted on 28 December 2015 by VRS  |  Email |Print

Some big Chinese commodity funds are positioning for a short-term uptick in metals prices despite a poor longer-term outlook, expecting supplies to tighten over the next three to six months as Beijing acts to strengthen its economy.
Chinese commodity funds have been blamed for pulling down copper prices in particular the last two years, but at least two large funds have started backing away from bearish bets on metals………………………………………..Full Article: Source

Gold’s Wild Ride Leaves Best Forecasters Siding With Fund Bears

Posted on 21 December 2015 by VRS  |  Email |Print

Janet Yellen sent gold prices on a roller-coaster ride. Now, hedge funds and the metal’s best forecasters are predicting there’s only one way prices are heading next: down. The Federal Reserve Chair on Wednesday raised U.S. interest rates for the first time in almost a decade, sending bullion prices swinging and driving the metal’s 30-day volatility to a six-week high.
While traders couldn’t decide on a direction for gold, Robin Bhar and Barnabas Gan, the most accurate forecasters, are convinced futures will keep falling in 2016. Money managers agree, raising their net-short position to the highest ever………………………………………..Full Article: Source

Hedge Funds Burned by Commodities Lose $40 Billion Since ‘08

Posted on 15 December 2015 by VRS  |  Email |Print

The biggest commodities meltdown in a generation has cost hedge funds more than $40 billion in seven years. Losses due to poor performance and investor withdrawals have left assets at the top 10 commodities hedge funds at less than $10 billion, compared with more than $50 billion in 2008, according to estimates from Trafigura Pte Ltd.’s annual report.
The trader and asset manager said the perception of commodities as an investable asset has been replaced by a “generalized aversion.” “Commodities as an asset class are not as attractive as before and we are seeing the consequences on our asset management division,” ……………………………………….Full Article: Source

Private equity, pension funds eye more metal streaming deals

Posted on 15 December 2015 by VRS  |  Email |Print

Private equity and pension funds may provide the next wave of funding to the slumping mining sector through metal streaming deals as dedicated funding sources struggle to raise their own cash, industry sources said. With many miners unwilling to issue equity given their weakened shares amid falling commodity prices, streaming may help them avoid credit downgrades and fund new mines.
About $4.5 billion worth of these deals, an alternative form of financing where miners are paid cash upfront for future output, have been inked this year, making 2015 a record year for metals streaming as miners slash debt five years into a commodities downturn………………………………………..Full Article: Source

Here’s a hedge fund getting in commodities, rather than out

Posted on 08 December 2015 by VRS  |  Email |Print

Orion Mine Finance Group is starting a hedge fund at a time when most investors are fleeing commodities. The $2 billion(Dh7.34 billion) investment firm is opening a fund in January to trade industrial and precious metals, and may eventually add equities, according to Oskar Lewnowski, the founder and chief investment officer.
The business, headed by John Fallon, is called Orion Commodities Fund LP and may buy and sell derivatives, as well as physical raw materials. Orion’s expansion is unusual because this year has seen some of the biggest, most well-known traders shut down their flagship commodity funds during the worst year for raw material prices since the global financial crisis of 2008………………………………………..Full Article: Source

Hedge Funds Turning Record Bearish on Gold Miss Metal’s Rebound

Posted on 07 December 2015 by VRS  |  Email |Print

Record hedge-fund pessimism about gold prices came at exactly the wrong time, just prior to the precious metal’s biggest rally since September. Money managers boosted their gold net-short position to the highest ever three days before Friday’s U.S. jobs report, which showed growth for payrolls, but also a rising underemployment rate.
The data, coupled with Federal Reserve Chair Janet Yellen’s signals that interest rate increases will be slow as the economy grows, sent gold prices higher. It’s been a tough year for gold bulls, with prices already set for a third annual loss, the longest slump since 1998………………………………………..Full Article: Source

Schroders commodity fund fights for survival

Posted on 07 December 2015 by VRS  |  Email |Print

A Schroders commodity fund that was once the largest of its kind in Europe has suffered substantial outflows from US investors on the back of the poor performance, raising questions about the fund’s survival.
Large investors, including Ocers, the Californian pension scheme, have pulled money from the UK asset manager’s Schroder Alternative Solutions Commodity fund, which has suffered from the recent commodity market rout. The outflows have caused its assets to fall from $4.6bn at its peak in 2010, to $803m. The expectation is that further outflows are likely………………………………………..Full Article: Source

Hedge funds have never bet this much on a falling gold price

Posted on 02 December 2015 by VRS  |  Email |Print

On Tuesday on the Comex market in New York, gold futures with February delivery dates eked out a small gain in brisk post-holiday trade, but remains not far off near five-and-half year lows hit last week. Exchanging hands for $1,067.40 gold is down more than $100 an ounce or just under 10% from where it was trading just before the Federal Reserve’s interest rate announcement in October which opened the door for a rate rise – which would be the first in nine years – when the bank next meets in two weeks time.
Last week gold touched $1,053 an ounce, the lowest since February 2010 and November has been the worst month for gold since mid-2013, a year during which the metal fell 28% in value………………………………………..Full Article: Source

Metals fund Orion Resources sees more pain for copper, gold

Posted on 02 December 2015 by VRS  |  Email |Print

Copper and gold are set for more price weakness as bear markets across the commodities sector are likely to last three more years, metals and mining fund Orion Resources said. “We are going to see a pretty broad cross-commodity leg down, where $900 an ounce gold is more than just a possibility,” Orion’s CIO Oskar Lewnowski said.
“$1.80 a pound ($3,968 a tonne) for copper is likely … I don’t think we are going to see much relief until 2018,” said the mining financier, who co-founded metals merchant and hedge fund Red Kite more than a decade ago before starting Orion………………………………………..Full Article: Source

Sovereign Funds and New Trends in Commodities Markets

Posted on 01 December 2015 by VRS  |  Email |Print

Sovereign wealth funds have expanded dramatically in recent years. High commodity prices and large foreign exchange reserves have contributed to their significant growth in global markets. Yet, recent trends in equity and commodities markets could seriously impact this growth story.
Sovereign funds have gradually increased their exposure to foreign equity markets. However, a decline in global equity markets in 2015 in both developed and developing countries has negatively impacted returns. The funds, which are accountable to their governments and citizens, have already started to reassess their diversified assets strategy and change their global investments………………………………………..Full Article: Source

Hedge Funds Raise Bets on Dollar Gains for Fifth Straight Week

Posted on 01 December 2015 by VRS  |  Email |Print

Bets on further appreciation versus eight major peers outweighed those on a slump by a net 428,298 contracts in the week through Nov. 24, according to a release from the Commodity Futures Trading Commission. That’s up from 411,208 contracts a week earlier.
Speculators are seeking to capitalize on any dollar strength that stems from an increase in U.S. interest rates next month. The Fed will consider whether it’s appropriate to raise rates from near zero, where they’ve been since 2008, when it meets Dec. 15-16. That contrasts with a wave of easing elsewhere that will likely see the European Central Bank add stimulus on Dec. 3………………………………………..Full Article: Source

Undone by the commodity rout

Posted on 30 November 2015 by VRS  |  Email |Print

If you put money in India-based global commodity and energy funds, there’s reason to be glum. The three funds in this category — Birla Sun Life Global Commodities Fund, DSP BR World Energy Fund and Mirae Asset Global Commodity Stock Fund — suffered deep cuts last year, losing 16-26 per cent.
These funds essentially bet on global commodities, which have been routed since mid-2014. Crude oil and natural gas have more than halved, while the prices of copper, tin, lead and zinc are down 20-30 per cent. A combination of factors — weak demand from a slowing China, economic troubles in Europe, oversupply of many commodities, and a strong dollar, thanks to impending rate hike in the US — is to blame. No surprise then that the funds’ performances don’t paint a pretty picture………………………………………..Full Article: Source

Here’s Why You Shouldn’t Currency Hedge

Posted on 26 November 2015 by VRS  |  Email |Print

Currency-hedged ETFs are gathering assets hand over fist. With central banks engaged in a race to the bottom, hedging currency exposure is vital to protecting assets and capturing returns. This topic is so popular that it’s the title of a panel at the Inside ETFs conference coming in late January. Here’s why you shouldn’t take the bait …
It’s absolutely natural to want to hedge international stocks—especially now. U.S. stocks have trounced international stocks in large part due to the soaring U.S. dollar. Not only is money flowing into hedged international stock funds, even legendary passive investor Burton Malkiel has wandered off the random walk and is chair of a new hedged emerging markets stock fund………………………………………..Full Article: Source

Hedge funds’ defensive stance on commodities pays off

Posted on 25 November 2015 by VRS  |  Email |Print

The defensive positioning of hedge funds on the commodity complex has been rewarding as most hedge fund strategies are up in November and previous trends in FX and commodities continue unabated, according to Lyxor Asset Management’s Weekly Briefing. The renewed fall in commodity prices has triggered another leg down in energy stocks in November, Lyxor said.
Lyxor AM senior strategist Philippe Ferreira commented, “CTAs outperformed last week as a result of their aggressive short positioning on commodities. Their long fixed income positions also benefitted from the deflationary pressures arising from the fall in commodity prices. In that respect, it is interesting to note that CTAs are rapidly adjusting their long fixed income positions downwards……………………………………….Full Article: Source

Hedge funds have never been this bearish on commodities

Posted on 24 November 2015 by VRS  |  Email |Print

Large scale futures investors like hedge funds or so-called managed money have entered an unprecedented bearish position towards commodities markets. According to the Commodity Futures Trading Commission’s weekly Commitment of Traders data, five weeks of selling has seen 13 of the 24 commodities tracked pushed into net short positions.
Thos include the major commodities like crude oil, gasoline, gold, copper, soybeans, corn and wheat where speculators are betting that these commodities will be cheaper in future………………………………………..Full Article: Source

Hedge funds near-eliminate their net long in ags

Posted on 24 November 2015 by VRS  |  Email |Print

Hedge funds all but wiped out their net long position in derivatives in the main agricultural commodities, led by selldowns in coffee, and in wheat, in which unexpectedly bearish positioning could set the scene for a price bounce.
Managed money, a proxy for speculators, cut its net long position in futures and options in the top 13 US-traded agricultural commodities, from corn to cotton, by a little over 59,000 contracts in the week to last Tuesday, analysis of data from the Commodity Futures Trading Commission regulator shows………………………………………..Full Article: Source

Hedge funds turn very bearish on U.S. crude: Kemp

Posted on 24 November 2015 by VRS  |  Email |Print

Hedge funds and other money managers had amassed short positions in U.S. crude oil amounting to 154 million barrels by last Tuesday according to data from the U.S. Commodity Futures Trading Commission (CFTC).
Short positions have increased more than 70 percent since the middle of October and stand at the highest level since August, the CFTC showed in its latest commitments of traders report published on Friday. The number of hedge funds with reported short positions of at least 350,000 barrels in the main WTI contract on the New York Mercantile Exchange hit 69 last week, the largest number since April……………………………………….Full Article: Source

Gold price: Hedge funds can’t exit market fast enough

Posted on 24 November 2015 by VRS  |  Email |Print

Settling at $1,065.00 gold is down $110 an ounce or just under 10% from where it was trading just before the Federal Reserve’s interest rate announcement last month which opened the door for a rate rise – which would be the first in nine years – when the bank next meets in December.
The likelihood that Fed will raise rates from near zero where they have been since December 2008, before the end of the year prompted large futures speculators or “managed money” investors such as hedge funds to dramatically raise bearish bets on the metal………………………………………..Full Article: Source

Hedge Funds Are Back to Bearish on Gold as Price Slump Deepens

Posted on 23 November 2015 by VRS  |  Email |Print

Hedge funds are betting gold’s decline is far from over, as the metal’s month-long slide deepened on expectations for higher U.S. interest rates. Prices are trapped in their worst rout since July as Federal Reserve officials talk up improvements for the U.S. economy and reinforce signs that they’re ready to raise borrowing costs for the first time since 2006.
That prospect has sent investors fleeing. Assets in exchange-traded products backed by gold have fallen to the lowest since 2009. Money managers are holding a net-short position in the metal for first time since August as their long wagers shrunk to the smallest in seven years………………………………………..Full Article: Source

Hedge Funds Add to Bullish Dollar Wagers as Fed Decision Nears

Posted on 18 November 2015 by VRS  |  Email |Print

Currency traders are growing more bullish on the dollar as a consensus builds that the Federal Reserve is approaching liftoff. The greenback climbed to a seven-month high against the euro after data showed U.S. inflation and factory output increased in October, fueling speculation the U.S. central bank will raise interest rates from near zero as soon as next month.
The rally comes as hedge funds and other large speculators boosted wagers on dollar gains versus eight major currencies by a net 198,491 contracts over the past three weeks, the biggest jump since March 2013, according to data through Nov. 10 from the Commodity Futures Trading Commission………………………………………..Full Article: Source

What fund managers get wrong about commodities?

Posted on 12 November 2015 by VRS  |  Email |Print

Many investors misunderstand commodities. After this year’s torrid performance, it is time to question commodities’ perceived special status as a play on growth and a portfolio diversifier. What once looked like an asset class with unique attributes, now just looks like a way to lose money.
Yet it may be a human weakness to be impressed by the apparent solidity of commodities and their seeming permanence. In a world of abstract securities, physical resources seem to represent something tangible and understandable. Investors need to re-examine the case for commodities with less emotion………………………………………..Full Article: Source

What fund managers get wrong about commodities?

Posted on 12 November 2015 by VRS  |  Email |Print

Many investors misunderstand commodities. After this year’s torrid performance, it is time to question commodities’ perceived special status as a play on growth and a portfolio diversifier. What once looked like an asset class with unique attributes, now just looks like a way to lose money.
Yet it may be a human weakness to be impressed by the apparent solidity of commodities and their seeming permanence. In a world of abstract securities, physical resources seem to represent something tangible and understandable. Investors need to re-examine the case for commodities with less emotion………………………………………..Full Article: Source

Commodity Funds Planned

Posted on 12 November 2015 by VRS  |  Email |Print

Elkhorn Investmfoents, the firm founded by former Invesco PowerShares head Ben Fulton, has filed for two new funds covering the commodity futures space. The Elkhorn S&P GSCI Dynamic Roll Commodity ETF and the Elkhorn RAFI Commodity ETF will both offer actively managed exposure to commodities with a smart-beta twist.
The former, according to its prospectus, is actively managed. It invest in commodities included in the S&P GSCI Dynamic Roll Index to a certain extent but will also include an actively managed portfolio of very liquid and short-duration, high-quality bonds in an effort to achieve excess returns………………………………………..Full Article: Source

Gold price: Hedge funds ready to dump 430 tonnes

Posted on 04 November 2015 by VRS  |  Email |Print

Gold is looking vulnerable ahead of Friday’s US job numbers. On Tuesday on the Comex market in New York, gold futures with December delivery dates fell for a fifth session in a row giving up more than $20 an ounce to trade at a one month low.
Settling at $1,114.10, gold is down nearly $70 an ounce or 6% from where it trading just before the Federal Reserve’s interest rate announcement last week which opened the door for a rate rise when the bank next meets in December. Higher interest rates boost the value of the dollar and makes gold less attractive as an investment because the metal is not yield-producing and Friday’s employment figures in the US will give the clearest indication whether the Fed lift rates from near zero where they have been since December 2008………………………………………..Full Article: Source

Hedge Funds Burned by Silver Bets as Fed Signals Rates May Climb

Posted on 04 November 2015 by VRS  |  Email |Print

Hedge funds picked the wrong time to build their bullish silver bets to a record. Prices have dropped almost 4 percent since last Tuesday, when the funds’ wagers reached their peak. That’s the biggest such loss since July.
A day after the speculators boosted their net-long positions in silver futures and options to the highest since 2006, the oldest government data available, Federal Reserve officials signaled U.S. interest rates could climb in December. The threat of higher rates by year-end has sent ripples through precious metals, which lose out when monetary policy tightens because they don’t pay interest or dividends………………………………………..Full Article: Source

Hedge funds up short bets on oil again

Posted on 03 November 2015 by VRS  |  Email |Print

Oil prices came under renewed pressure Monday as data revealed that hedge funds had upped their short positions on U.S. crude last week, as the strength of China’s economy continues to weigh on commodity prices.
Data from the CFTC’s (U.S. Commodity Futures Trading Commission) commitment of traders report Friday showed that managed money traders, which largely refers to hedge fund activity, showed some 27,694 short contracts were added last week. These are essentially traders taking bets that the price of oil will fall and compared to 7,073 long contracts that were added in the week ending October 27………………………………………..Full Article: Source

Alternative funds are taking center stage

Posted on 28 October 2015 by VRS  |  Email |Print

With the stock market careening wildly of late, it’s no surprise that investors are looking for alternatives. Nearly $4 billion flowed into alternative investment funds — often called liquid alt funds — in July, August and September, according to data from research firm Morningstar, and they have had nearly $10 billion in net inflows since the beginning of the year.
The funds invest in a wide range of asset classes and use hedge fund–like trading strategies with the objective of producing returns not closely correlated with stocks or bonds………………………………………..Full Article: Source

Hedge funds get gold wagers wrong again

Posted on 27 October 2015 by VRS  |  Email |Print

Gold prices are befuddling hedge funds, which are posting a track record no better than a coin flip when it comes to betting on the metal. The funds and other money managers have placed wrong-way wagers on gold in five of the past nine weeks, US government data show. Last week, speculators increased their net-bullish position to the highest since February just before the biggest price drop since August.
The precious metal has fluctuated between year-to-date gains and losses more than a dozen times in 2015 as traders weigh a dimming global economic outlook against the prospect for higher US borrowing costs………………………………………..Full Article: Source

Gold price: Hedge funds push bullish bets to 8-month high

Posted on 27 October 2015 by VRS  |  Email |Print

On Monday, gold consolidated some of its recent gains ahead of a crucial US Federal Reserve decision on interest rates this week. On the Comex market in New York, gold futures with December delivery dates were largely unchanged at $1,164.10, up $1.40 compared to Friday’s close in quiet and cautious trade.
Gold remains up some 5% from where it was trading before the US Federal Reserve at its September meeting decided not to lift rates from near-zero, where it has been since the global financial crisis. October 15 gold hit its highest level since June 22, amid fresh indications that a limp US economy may push the first rate hike in nine years further into the future………………………………………..Full Article: Source

Hedge funds turn bearish on wheat at fastest pace on record

Posted on 27 October 2015 by VRS  |  Email |Print

Hedge funds sold wheat at the fastest rate on record as forecasts for rain eased concerns over autumn-sown crops in the former Soviet Union and US, but speculators maintained their faith in a sugar rally. Managed money, a proxy for speculators, cut its net long position in futures and options in the top 13 US-traded agricultural commodities, from corn to cattle, by nearly 77,000 contracts in the week to last Tuesday, analysis of data from the Commodity Futures Trading Commission regulator shows.
The cut in the net long - the extent to which long bets, which profit when values rise, exceed short holdings, which benefit when prices fall – was the first in a month………………………………………..Full Article: Source

Hedge Funds Are Getting Their Gold Bets Wrong

Posted on 26 October 2015 by VRS  |  Email |Print

Gold prices are befuddling hedge funds, which are posting a track record no better than a coin flip when it comes to betting on the metal. The funds and other money managers have placed wrong-way wagers on gold in five of the past nine weeks, U.S. government data show.
Last week, speculators increased their net-bullish position to the highest since February just before the biggest price drop since August. The precious metal has fluctuated between year-to-date gains and losses more than a dozen times in 2015 as traders weigh a dimming global economic outlook against the prospect for higher U.S. borrowing costs………………………………………..Full Article: Source

Hedge funds suffer biggest quarterly drop in assets since 2008: data

Posted on 21 October 2015 by VRS  |  Email |Print

Hedge funds suffered their biggest quarterly loss in assets since the financial crisis during the three months that ended in September, data released on Tuesday showed, putting the industry on track for its worst year since 2008.
The secretive industry that caters to wealthy investors, including pension funds and endowments, saw assets shrink by $95 billion, or 3.9 percent, to 2.87 trillion in the third quarter, research and tracking firm Hedge Fund Research reported. The declines were driven by heavy losses when markets were roiled by concerns about slowing growth in China, sliding commodities prices and a likely U.S. Federal Reserve interest rate hike………………………………………..Full Article: Source

Hedge funds, again, lift bets on ag commodity price rises

Posted on 20 October 2015 by VRS  |  Email |Print

Agricultural commodities grew further in affections of hedge funds, who extended upbeat bets on sugar to a 15-month top, with hogs firmly in favour too, although sentiment cooled towards the main Chicago grains.
Managed money, a proxy for speculators, raised by more than 57,000 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 say commodities rally not backed by fundamentals

Posted on 13 October 2015 by VRS  |  Email |Print

The stunning rally in commodity-related stocks on the Australian sharemarket may be a sign investors are becoming comfortable with the outlook for China, but the underlying challenges facing the sector remain, fund managers warn.
A rally that led the S&P/ASX 200 to post its best week in almost four years on Friday was fuelled by strong buying in energy and mining companies. Since September 29, when the market plummeted 4 per cent to close at its lowest point in two years, the materials sub-index has soared 14.2 per cent, while energy has risen 17.7 per cent………………………………………..Full Article: Source

Hedge funds playing ‘dangerous game’ with copper, Rio says

Posted on 13 October 2015 by VRS  |  Email |Print

Hedge funds betting that copper will drop further are playing a “dangerous game” with prices, according to the head of copper at Rio Tinto Group, the world’s second-biggest mining company. The metal is “not trading on fundamentals,” Rio Copper & Coal Chief Executive Officer Jean-Sébastien Jacques said in an interview in London.
“There is lots of short-selling in copper and we’ve seen the pick up in terms of short-selling in copper on the back of what happened in China a few months ago.” A glut of copper has exacerbated short-selling by hedge funds and China’s move in August to restrict such sales in equities has prompted funds to redirect bearish bets on the nation’s economy to copper, Jacques said………………………………………..Full Article: Source

Korea to allow pension funds to invest in ETFs

Posted on 05 October 2015 by VRS  |  Email |Print

The financial regulator said Sunday that it will allow public and private pension funds to invest in exchange traded funds in a bid to provide a safer and decent yield-generating investment tool in the low rate environment.
An ETF refers to an investment fund traded on stock exchanges and represents a basket of stocks that reflects an index, which provides retail investors and institutions with a more liquid and risk-hedging tool. The Financial Services Committee will revise related regulations to let the National Pension Service, the country’s largest institutional investor, and individual pensions include the ETFs in their investment portfolios………………………………………..Full Article: Source

Funds Who Speculated Against Danish Currency Told to Drop Hedges

Posted on 02 October 2015 by VRS  |  Email |Print

Denmark’s government is warning its pension funds never to bet against their own currency regime again. “There’s no need to speculate against the krone, not even for the purposes of risk management,” Business Minister Troels Lund Poulsen said Thursday in an e-mailed response to questions. The krone’s peg to the euro “is not up for discussion.”
Denmark’s fixed currency regime was attacked in January, after Switzerland’s decision to send its franc into a free float spurred conjecture the krone might be next. Unlike their Swiss counterparts, Danish policy makers prevailed and hedge funds and other speculators were beaten back………………………………………..Full Article: Source

Hedge Funds Primed for Oil Rebound With Increase in Bullish Bets

Posted on 28 September 2015 by VRS  |  Email |Print

The momentum behind wagers on rising oil prices picked up steam as U.S. drilling slows and producers face potential credit line cuts. Money managers’ long position in West Texas Intermediate crude climbed by 6.1 percent in the week ended Sept. 22, the most since January, according to data from the Commodity Futures Trading Commission. The jump in longs and a decline in shorts boosted their net-long position by 15 percent.
U.S. crude output is down 470,000 barrels a day from a four decade high of 9.61 million in June, data from the Energy Information Administration show. Explorers idled U.S. oil rigs for a fourth week, Baker Hughes Inc. said Sept. 25………………………………………..Full Article: Source

Commodity traders given breathing room

Posted on 23 September 2015 by VRS  |  Email |Print

Hedge funds and Wall Street banks face an easier time keeping large oil, grain and metal trades after persuading the US derivatives regulator to amend a controversial clampdown on commodity speculation.
The Commodity Futures Trading Commission proposed on Tuesday to change one aspect of long-debated rules on commodity position limits, or caps on speculative holdings that were mandated by the Dodd-Frank financial reform. The regulation has been contentious, even after the collapse in commodity prices………………………………………..Full Article: Source

Hedge funds no longer sure oil prices will fall further

Posted on 22 September 2015 by VRS  |  Email |Print

Hedge funds continued to pare short positions in U.S. crude oil last week even as the previous short-covering rally ran out of steam. The unusual concentration of hedge fund short positions built up between June and August has been partially unwound, reducing some of the persistent selling pressure evident in the market during the third quarter.
Speculators are not yet ready to bet heavily on a rebound in prices but the bearishness that dominated the market over the summer is dissipating. Hedge funds and other money managers reduced their gross short position in the main NYMEX U.S. crude futures and options contract by 14.5 million barrels in the week ended Sept. 15………………………………………..Full Article: Source

Oil Speculators Most Bullish in Two Months as OPEC Calls for $80

Posted on 21 September 2015 by VRS  |  Email |Print

Hedge funds slashed their bets on falling oil prices, leaving them the most bullish in two months as OPEC called for a return to $80 crude. Money managers’ net-long position in West Texas Intermediate rose by 14,821 contracts to 147,678 futures and options in the week ended Sept. 15, according to data from the Commodity Futures Trading Commission. That’s the highest level since July 7.
The Organization of Petroleum Exporting Countries expects crude prices to rise to $80 by 2020 as output falls elsewhere. U.S. production could sink by the most in 27 years in 2016 as the price rout extends a slump in drilling. Speculators closed out short positions two days before the Federal Reserve decided not to raise key U.S. interest rates………………………………………..Full Article: Source

Fund managers split over whether mining is at rock bottom

Posted on 21 September 2015 by VRS  |  Email |Print

Bar-room brawls in mining towns can be bloody affairs, but they are as nothing to the battering meted out on mining shares as commodity prices slide and China’s economy slows. The MSCI metals index is down almost 30 per cent this year. Yet some fund managers who have been underweight the sector see signs that things are almost “bad enough” — as one manager puts it — to invest again.
Mining company bosses, for their part, are adapting to the lower growth outlook as China makes the transition from a production-based to consumer-driven economy. With these companies’ cash flow under pressure, they have cut costs and capital expenditure to eke out returns………………………………………..Full Article: Source

Hedge funds soar on China slowdown

Posted on 21 September 2015 by VRS  |  Email |Print

As hedge fund managers take a beating from the slowdown in China, Ray Bakhramov is flying. The chief investment officer of Forum Asset Management said he had been betting on an emerging-market slump since 2012. His conviction led to three years of losses of 10 per cent to 20 per cent in his Global Opportunity Fund.
Bakhramov finally got his wish in the past two months, as did a handful of managers who made multi-year wagers that emerging-market stocks and currencies would begin to fall, starting with a downturn in China………………………………………..Full Article: Source

Hedge Funds Ramp Up Volatility Bets to Record Levels

Posted on 17 September 2015 by VRS  |  Email |Print

Bets on higher stock-market volatility are at a record high, signaling increasing concern about the outlook for U.S. shares. Wagers by hedge funds and other speculative investors that futures tied to the CBOE Volatility Index will rise outstripped the number of bets on a falling VIX by 37,925 contracts as of Sept. 8.
That’s the biggest net bullish position on record, according to Schaeffer’s Investment Research’s analysis of data from the U.S. Commodity Futures Trading Commission going back to 2005. A bullish bet on VIX futures signifies a belief that investors will be rushing for protection against market downdrafts. The VIX, the market’s “fear gauge,” is based on the prices of S&P 500 options, which tend to rise as stock prices decline………………………………………..Full Article: Source

Hedge funds extend selldown on ags - despite sugar buyback

Posted on 15 September 2015 by VRS  |  Email |Print

Hedge funds extended to an eighth successive week their bearish positioning in the top US-traded agricultural commodities, led by a selldown in grains, which more than offset a more upbeat stance on sugar.
Managed money, a proxy for speculators, cut by more than 27,000 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

Local Funds Key to Shielding India From China Swings

Posted on 14 September 2015 by VRS  |  Email |Print

Foreign investors’ sway over Indian stocks is set to wane as local mutual funds take a bigger slice of the $1.4 trillion market, providing a buffer against price swings sparked by events like China’s yuan devaluation last month, according to Tata Asset Management Co.
Even as the worst emerging-markets rout in four years rubbed off on India’s benchmark S&P BSE Sensex, domestic stock funds took in a net 92 billion rupees ($1.4 billion) in August, 50 percent more than July, data from the Association of Mutual Funds in India showed last week. Global investors, on the other hand, sold the most shares since October 2008………………………………………..Full Article: Source

Hedge-Fund Bets Against Emerging Currencies Get Crowded

Posted on 11 September 2015 by VRS  |  Email |Print

Hedge funds are piling into bets that the dollar will strengthen against emerging-market currencies, especially those vulnerable to falling commodity prices, according to a money manager who invests in the funds. The popularity of the trade will fuel volatility in those currencies should such funds adjust their positions, said Sam Diedrich, a director at Pacific Alternative Asset Management Co., which oversees about $9.5 billion in hedge-fund investments.
“It’s become a crowded trade,” Diedrich, who is based in Irvine, California, said in a telephone interview. “Long term, I still think the trade works, but you could see some large swings.”……………………………………….Full Article: Source

Oil Back in Favor as Commodity Funds See First Flows in 6 Months

Posted on 11 September 2015 by VRS  |  Email |Print

The beginning signs of a rebound in oil and gold were enough to lure investors back to commodity funds last month. Exchange-traded products tracking raw materials absorbed $2.3 billion in August, the first increase in six months, according to a report from Blackrock Inc. on Thursday. Oil funds took in $1.8 billion, while those for gold collected $400 million and volatility-linked alternative products picked up $600 million.
Oil and gold rose about 4 percent in August, one of the few months with gains for markets that have seen prices steadily decline for the past two years. Crude rallied in the last few days of August as comments from OPEC and signs that the U.S. shale boom is fading faster provided optimism that a global supply glut will shrink………………………………………..Full Article: Source

Hedge funds extend bearish ag spree to longest in a year

Posted on 08 September 2015 by VRS  |  Email |Print

Hedge funds took their selldown in ags to the longest this year as they turned more bearish in particular on cotton and wheat, more than offsetting the impact of a short-covering wave in sugar. Managed money, a proxy for speculators, cut its net long position in futures and options in the top 13 US-traded agricultural commodities, from cotton to cattle, by more than 31,000 contracts in the week to last Tuesday, according to data from the Commodity Futures Trading Commission regulator.
The decline in the net long - the extent to which long positions, which profit when values rise, exceed short bets, which benefit when prices fall – was the seventh weekly drop in succession, the longest negative streak on positioning in more than a year………………………………………..Full Article: Source

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