Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Commodity Hedge Funds Said by FAO Finding Profits Harder to Make

Don't Miss Out —
Follow us on:

June 13 (Bloomberg) -- Commodity hedge funds are finding it harder to make a profit partly because fees and other charges “soured customers,” the Food & Agriculture Organization said.

Customers who besides paying annual fees are now finding themselves “saddled with 100 percent of the losses,” the United Nations agency said today in a report called “Commodity hedge funds in retreat?” The FAO cited commodity index fund investment data showing a 20 percent drop since April 2011, mirroring a withdrawal from hedge funds.

“As with most mature businesses, commodity hedge funds are finding profitability harder to come by,” the FAO said. “The sobering truth about the nature of commodity futures may have re-emerged: they are not investments at all but risk-shifting instruments, always generating a loss for every gain.”

Commodity hedge funds have existed since 1979, and were slow to take off until 2000, according to the report. The 2007-08 food crisis was a money-maker for hedge funds, the FAO said.

To contact the reporter on this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.