Funds banking on commodity price moves have had a rough 2013 to-date- losing money monthly since January, according to Reuters. Now officially the longest losing streak on record, the slide raises further doubts about commodities ability to make money when observers speculate the commodity “super cycle” may be at the end.
According to the article, the average fund slid 3.58 percent in the first six months of the year- previously, funds have only suffered five consecutive losing months once before in 2002- 2003. Hedge funds, which market themselves as capable of making money in all markets, are lagging in funds trading commodities as varied as gold, grains and gas, have failed to turn an annual profit in the last three years.
The weak performance will put more pressure on the industry, the article speculates, to lower fees and introduce claw backs, which enable investors to reclaim some performance perks paid to hedge fund managers in boom times if the returns they hope to achieve fail to continue, the article states. Worries about cooling demand in key markets like China, and a huge shift in the supply-side from shortage to glut, has sent prices tumbling in recent years, and left many warning that the end of the commodity "supercycle" - the long period of rising commodity prices - is here.