New York (HedgeCo.net) – Most of the recent headlines regarding commodity based hedge funds have been about poor performance or funds closing down, but Wells Fargo & Co.’s wealth management division is launching a new fund in the midst of the commodities swoon.

The Apollo Natural Resources II ASP Fund has already attracted $7 million in AUM. The fund carries a minimum $100,000 initial investment and it will be managed by the Wells Fargo Investment Institute which was launched in December.
The institute wrote in their 2015 mid-year Investment Forecast that “the prospects for modest upside in industrial metals, most energy products, and some agricultural markets, create an opportunity for investors to gradually increase their exposures to commodities.”

The majority of commodities have seen their prices fall over the past year with the headline grabbing commodities of oil and gold both falling 53.89% and 16.43%, respectively.

With economic growth in Europe and most parts of Asia stalling presently, some investors fear the fall in commodity prices could continue. Wells Fargo may be taking a contrarian approach by launching the fund at this time. While many commodity based hedge funds have closed due to asset outflows, opening a new one and with the power of the Wells Fargo brand behind it could prove to be a well-timed launch.

Rick Pendergraft
Research Analyst
HedgeCoVest