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Hedge Funds Turning From Shares To Commodities, Report Reveals

by Philip Morton, Investors Offshore.com

27 January 2003

According to a Financial Times report published late last week, hedge fund managers have been switching from falling equity markets to commodities.

The FT reported that, in the current uncertain climate, gold, nickel, and platinum have reached highs not seen in many years, and other commodity groups, including cocoa, wool, soybeans, palm oil, wheat, and corn have also seen a surge in interest from hedge fund managers.

Speaking to the business daily on Thursday, precious metals analyst for UBS Warburg, John Reade suggested that currency fluctuations may have played a role in the recent increased interest in commodity as opposed to equity investment:

'The fall in the dollar has been a major attraction as many of these commodities are dollar denominated, therefore making them cheaper to European or Asian investors,' he explained.

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