Commodity exchange traded funds have experienced a rough first half of the year as traders anticipated an eventual end to Fed easing that has helped support commodity prices.
The PowerShares DB Commodity Index Tracking Fund (NYSEArca: DBC) lost 0.8% over the past month and fell 6.1% year-to-date.
Hedge fund investors posted significant losses in June, and now, many commodity funds are now in negative territory for the first half of the year, reports Stephen Taub for Institutional Investor’s Alpha.
Commodity funds with combined assets of about $10 billion run by high-profile commodity traders like, Andy Hall, Stephane Nicolas, Chris Levett, Neal Shear and Chris Brodie, announced negative returns through he first five months of the year, reports Barani Krishnan for Reuters.
The average commodity fund fell between 2% and 5% in June and have declined 2% to 4% over the first six months of the year.
“The commodity space has been challenge in terms of generating performance and gaining assets,” Peter Laurelli, vice president of eVestment, commodity funds, said in the IIA article. “But it’s possible the recent sell-off in precious metals, along with rising energy prices, sparked what may be seen as a turning point in the space, at least in the eyes of investors via flows.”
Commodities stumbled as investors mulled over Fed and global central bank policies.
“Markets continue to fixate on central bank policy rather than the real economy,” Astenbeck’s Andy Hall said in a letter to investors.