Business Day – INVESTMENTS in hedge funds betting on metals, grains and other raw materials would grow faster than money tracking commodity indexes, partly because of the lower risk involved, NewFinance Capital LLP said.
Hedge funds that trade commodities would manage about $30bn next year, 50% more than the $20bn this year, said David Mooney, who manages the Opus Commodities Fund for NewFinance in London, yesterday.
Funds tracking indexes would grow 27% to $140bn next year, he said. Betting on “commodities and praying to God that they will go up in value is to me a much more doubtful investment proposition than investing with the most talented people in the world,†said Mooney.
If funds “lose an amount of money they close their positions or they have options to protect themselves,†he said. More institutional investors are looking into actively managed funds. Hermes Pensions Management, manager of the UK’s biggest retirement fund, said yesterday it might set up two funds betting on commodity prices after this year, to create a fund following indexes that track a basket of futures.
