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By Christine Gaylican, Opalesque Asia:
The commodity hedge funds industry has proven itself resilient in the last 12 months-the height of the global financial downturn-with returns not going beyond double digit levels for top performers comprised of energy, precious and base metals, and agriculture (except for livestock).
Investor interest in commodities has soared in recent years as the asset class has outperformed traditional assets such as stocks and bonds. The performance of commodities as an asset class is usually measured by a commodity index. The S&P GSCI has the longest history-the greatest amount of assets tied to it and is generally the most widely observed index.
According to the latest study done by Europe's largest hedge fund group Man Investments released on Oct.27-09 ("Facts and Myths about Commodity Investing"), this trend will continue strongly even beyond the world financial crisis, widely beating margins promised by equity markets. However, investors were also advised by Man's analysts to watch out for the pitfalls of commodity investing.
Commodity hedge funds vis-a-vis equity funds: No or little correlation
To illustrate that there is no correlation between the performance of commodity hedge funds and the global stock markets, Man Investments studied the historical pattern undertaken by these two investment strategies based on a 20-year data.
Occasionally, it said, the correlation between the two funds was...................... To view our full article Click here
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