WEST PALM BEACH, FL (HEDGECO.NET) – Investments coming from hedge funds and large financial institutions have helped to boost assets of commodity funds, as increasing number of global investors flockto commodity investments pushing its assets to new levels. There is also the fact that commodity prices have surged to greater levels recently. Commodity funds continue to provide its investors withabsolute returns; as such investments have very limited correlation with stock and bonds.
The commodity CRB index barometer has gained about 9% year-to-date in 2004; such index is comprised of 17 commodity futures instruments, and it is watched as a measurement barometer for inflation. One commodity fund strategy, the PIMCO�s Commodity Real Return strategy has seen significant growth during the first two months of 2004. According to published reports, the PIMCO�s Commodity strategy has gained significantly since the fund�s inception date of June 2002. Commodity Assets managed by the fund now stand at nearly US$3 billion.
One of the principals at PIMCO, Mr. Bob Grier, senior vice president, said, �We are able to accommodate significant flows into the fund without having any market impact.� According to him, PIMCO fund was established to follow the Dow Jones-AIG Commodity Index (DJ-AIG), buying asset backed securities in ways enabling the firm to avoid the dreaded margin calls.
Another Commodity manager, Oppenheimer Real Asset funds gained about 37% in overall management assets since 2003, according to Kevin Baum, fund manager for the fund. As opportunities for investment returns increase in Commodity investments, it is anticipated that more Commodity investment vehicles may be coming to the markets in the coming months.
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: [email protected]
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