WEST PALM BEACH, FL (www.HedgeCo.Net) – Hedge Fund Managers see increased prospects for prices of industrial commodities in 2005, a continuation of the trend seen in 2004. Fund manager Tony Frizelle, of Resource Management & Finance at the Minesite Mining told a Forum in London that “The long-term trend will be upwards, although there will be aberrations due to hedge fund activity and currencies. But commodity prices have not reached their all-time highs.”
Managers believe that Asia and particularly China will offer great opportunities in 2005. Kjeld Thygeson fund manager at Lion Resource Advisors said “It is the most positive resource environment that I can remember, looking at iron ore and coal. Copper is also strong.” Hedge Funds have been very active in commodities trading in 2004. Richard Lockwood fund manager at City Natural Resources said, “Hedge funds are hugely important — they buy and sell anything that moves. They are the biggest single influence on metal prices, and they never buy physical — they buy futures.” In November, CTA/Managed Futures funds were the month’s top performing strategy, with an average of 5.18%, the S&P 500 was up 3.86% during the month.
Industrial expansion in China and India is expected to continue to boost commodity prices particularly in the industrials metals market as well as energy. Hedge Funds Managers particularly the CTA Managers will continue to play an active role in the commodities in the coming year.