By Don Steinbrugge, Agecroft Partners – Commodity Trading Advisers (CTAs) are one of only a few hedge fund strategies that performed well throughout the market selloffs of 2000-2002, 2008 and 1st Q of 2020. Yet, investor’s perception of the strategy is more divergent than any other major hedge fund strategy.
Commodities & Resources
Tether Gold (XAU₮), a digital asset providing ownership of physical gold (XAU) custodied in Switzerland, is being used as a means of obtaining around-the-clock exposure to the precious metal in an emerging alternative market.
Oil prices plummeted on Monday morning as the impact from the coronavirus outbreak – coupled with a Saudi Arabian price cut – dragged global stock markets lower, with a number of major hedge funds standing to gain from the commodities crash.
Trend-following hedge fund strategies’ strong start to 2020 was eroded during last month’s market volatility, leaving CTAs down for February and flat year-to-date.
CTAs are maintaining their strong start to 2020, with trend-following portfolios well-balanced between cyclical and defensive assets, boosting profits in the first six weeks of the year.
Ex-AHL director Christopher Cruden's novel currency and gold-focused CTA strategy Insch Kintore has marked its fifth anniversary with a strong double-digit showing in the first six weeks of the year.
The European Energy Exchange (EEX) has launched the “InsightCommodity” platform giving users the possibility to establish a comprehensive overview of available data products, services and providers around the energy and commodity markets of EEX Group.
Prices of palladium have now reached more than USD2,500 per ounce, in a sustained rally potentially indicative of a late stage bull cycle, analysts at Man Group said on Tuesday.
– Uncertainty still looms for commodities-focused strategies as Middle East tensions resurface –
The deadly missile strike against Iranian general Qassem Suleimani at Baghdad Airport on 3 January elevated oil prices amid immediate concerns over renewed conflict in the region. Brent Crude surged to more than USD70 a barrel following the attack, and prices stayed above USD68 early last week, before falling back to just under USD65 on Monday.
The oil price surge following the deadly US airstrike against Iranian general Qassem Suleimani is unlikely to be sustained, commodities-focused hedge fund managers have told Hedgeweek.