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Alternative Market Briefing

Rallying commodities drove Morningstar Emerging Market Hedge Fund Index 13.5% gains in May, but some indecision has returned in the first half of June

Friday, June 19, 2009

From Kirsten Bischoff, Opalesque New York:

The surge in hedge fund performance for Morningstar's leading index in May - the Morningstar Emerging Market Hedge Fund Index (+13.5%, +25.2 YTD), was attributed to US inflation expectations and commodity supply concerns. "Commodity prices, especially oil and gold, climbed dramatically in May-the S&P GSCI Energy and Gold Indexes rose 25.4% and 9.8%, respectively. These increases along with upward price trends in currencies ... boosted profits for funds in the Morningstar Global Trend Hedge Fund Index, which rose 3.6% in May." The firm said in a statement.

Commodity prices driven by oil and gold also played a large part in the performance of funds listed in the Morningstar Global Trend Hedge Fund Index (+3.6%, -2.21% YTD).

June hesitation in the commodity rally "June started out as a continuation of the macro relation trends we have seen in April and May," Samuel Thompson, CIO of the commodity portal FMX Connect told Opalesque. "But this week has seen some indecision return to the market as prices for the August contract chopped between 69.00 and 72.50. Is this a pause or a top, we don't know. But a quick analysis of our data shows increasing open interest during the rally. This is indicative of fresh money entering the market, which correlates well with continued strength."

Switzerland-based commodity fund house Tiberius G......................

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