Metals and Energy

Hedge Funds Succeed Investing in Precious Metals and Energy

Hedge fund strategies focusing on precious metals and energy have fared the best so far in 2011. Investors have primarily favored commodity and corporate bond strategies.

” The on-going conflicts in the Middle East and the debt crisis in Europe have resulted in precious metals and energy price rebounds past prior peaks while U.S. equities have surpassed beginning month’s highs as well,” reports HedgeFund.net in its Monthly Performance Report for February, 2011.

Investors poured money into commodity strategies, corporate bond strategies, and Asia focused funds. While this shows confidence of big money in these areas, it is quite late in the game to be betting on commodities, high yield bonds or the emerging markets of Asia, especially when leverage is being used.

While gold and silver are close to their peaks, it is true that crude oil is still selling at a 30-40% discount from its peak in 2008. Energy sector hedge fund strategies rose by 2.64% in February, which annualized is an impressive figure of over 30%. Source

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