commidty funds

irish_bob

i stuck a few thousand in a commidity fund with irish life last october , last time i checked which was a week ago , im down about 10% , i was astonished , food prices have never been higher , energy prices bar the past month have never been higher and precious metal are high all the time

my fund is made up of 35% energy , about the same in precious metals and the remainder is a combination of orange juice , cattle and mining stocks or something , i honestly believe that if a commidity fund could not make money in the past year , it never will , ive always heard that funds exist for one reason and one reason only , to make money for fund managers or maybe its just that this irish life commiditys fund is a stinker , either way im seriously thinking of cutting my losses which will mean a 5% get out fee

my question is , with funds , do the fund managers just fling money at somewhere that just falls under the ( in this case ) commidities label , do they research at all , do they just assume that its a greehorn who invests in funds ( rather than direct shares which more seasoned investors tend to invest in ) and they will believe any explanation for failure

OfflerCrocGod

If you had invested 2 years ago I'm sure you would be up. My personal feeling is sell. I'm shorting $ after the massive increase in debt the US is facing that ofc means long OIL. As for the rest of the fund mix....frankly I don't know enough to be sure but mining has been strong for a long time and I'm guessing some of that strength will slow. Actually as we are heading for bumper crops from countries like China.....you may want to cut your losses early. I'm not convinced the gains from oil/gas will offset the losses from the rest of the commodities.

OfflerCrocGod

Oil up.

dunkamania

If you are talking about the Irish Life Commodity Fund, then you seem to be confused about the nature of the product you invested in.
Its a passively managed index commodity tracking fund. The fund manager's job is to match the return on the index, irrespective of his view on where prices are going. If you bought at the end of October and had sold on the third of July you would have been up 50%. The funds value reflects prices of commodites, which are very volatile. There is no exposure in this fund to stocks. You are taking the view that commodity prices are going up when you buy this fund. It is you who should have done the research, your only gripe is if the fund hasnt matched the performance of the indexes its supposed to be tracking. As for investment managers lining their pockets, this is usually an arguement leveled at active managers, but then again, I dont know your fee structure.

There is a delay effect on commodity price falls feeding in to your daily purchases. Part of this is due to the nature of commodity markets, producers buy what they will need in 3 months and 6 months time. Also, after realising that you have gotten used to paying higher prices, producers may be a little slow in dropping the prices they charge.

irish_bob

dunkamania wrote: »

If you are talking about the Irish Life Commodity Fund, then you seem to be confused about the nature of the product you invested in.
Its a passively managed index commodity tracking fund. The fund manager's job is to match the return on the index, irrespective of his view on where prices are going. If you bought at the end of October and had sold on the third of July you would have been up 50%. The funds value reflects prices of commodites, which are very volatile. There is no exposure in this fund to stocks. You are taking the view that commodity prices are going up when you buy this fund. It is you who should have done the research, your only gripe is if the fund hasnt matched the performance of the indexes its supposed to be tracking. As for investment managers lining their pockets, this is usually an arguement leveled at active managers, but then again, I dont know your fee structure.

There is a delay effect on commodity price falls feeding in to your daily purchases. Part of this is due to the nature of commodity markets, producers buy what they will need in 3 months and 6 months time. Also, after realising that you have gotten used to paying higher prices, producers may be a little slow in dropping the prices they charge.

up 50% my hole , having logged into my account only a week ago , i can tell you for a fact that it was up 9% in 12 mths and dropped 12% in the last month or so , at no time did it go up by 50% or anywhere near it

Poncherello

sounds very strange even allowing for the correction in energy and Metal prices you should be seeing gains
What is name of fund and I will look into it

dunkamania

I had a quick look at the nav, Bob should have been up 15-20% at one point

irish_bob

Poncherello wrote: »

sounds very strange even allowing for the correction in energy and Metal prices you should be seeing gains
What is name of fund and I will look into it[/QUOTE

commidities index fund from irish life

according to the fund value report on my irish life personal online account , this funds performance for the past 12 mths is + 1.22% and its performance for the past month is - 7.8%