New Commodity Indexes Attract Money

Chidem Kurdas

Commodity index funds that have greater flexibility as to the futures contracts they buy have gained traction with buyers of exchange-traded funds, to judge from the growth of PowerShares DB Commodity Index ETF.

Steel Partners Liquidates Japan Fund

Chidem Kurdas

Activist shareholders have a tough time in Japan. This is confirmed by the experience of Warren Lichtenstein and his New York-based Steel Partners, who fought for more than five years to change the governance of beer maker Sapporo.

Road Less Traveled Financial Stocks

After the crisis of 2008, many financial companies were undervalued. You could make good money holding a bunch of well-known names. It is tougher now after a prolonged up market. Although you still see big companies like Goldman Sachs and asset manager Legg Mason in portfolios, there is a move to look elsewhere for the next financial trade.

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Madoff Registration: Regulator Reform

Chidem Kurdas

The Securities and Exchange Commission is working to improve its oversight process—-to prevent Madoff problems, as Michael Macchiaroli of the SEC’s Office of Risk Management described certain reform efforts at a conference of the New York State Society of CPAs.

The Dodd-Frank Act has created a rulemaking boom, including new rules for the implementation of mandatory SEC registration of hedge fund managers with more than $150 million in assets. It might help to look at what registration did in the past.  So let’s consider the last investment adviser registration filing with the SEC by Bernard Madoff. 

Bond Funds Face Competition

Chidem Kurdas

Fixed income was one of the two hedge fund categories investors favored in March, according to BarclayHedge’s asset inflow data. But bond hedge funds are not the only vehicles investors use to get debt exposure.  PIMCO, the giant asset manager led by Bill Gross, is among those offering a variety of fixed income strategies similar to those used by hedgies.  Competition also comes from emerging markets managers that invest in debt.

Commodity Boom Forecast from Fed Policy

Chidem Kurdas

Commodity market turbulence has led to proclamations that the bubble has burst. Commodity bulls respond that recent declines are a temporary pause. Many of the arguments are about the supply and demand of specific commodities, in particular oil, silver and gold.

But the outlook for the sector as a whole depends on economic growth—-and hence Federal Reserve policy, whether for good or for ill. Barclays Capital economist and managing director Dean Maki argues that the commodity boom, driven by policy, will continue because of the way the Fed looks at inflation and unemployment.

Regulatory Impact on Goldman Sachs Funds

The Dodd-Frank Act’s coming effect on Goldman Sachs hedge funds can’t be large because those assets have already shrunk.

BlueCrest Affiliate to Make IPO

A US arm of Guernsey-based BlueCrest is expected to make an initial public offering, following the trend among major alternative investment businesses to raise capital in public markets. BlueCrest, among the largest hedge fund managers worldwide with $25-billion in total assets, runs BlueTrend, a top commodity trading advisor managed by Leda Braga.

Commodity ETFs Used for Shorts

Chidem Kurdas

Exchange–traded fund shares are increasingly used for short selling, in particular in commodity trades. This is in part due to the wider array of commodity ETFs, as well as the availability of their shares for borrowing and short selling.