CattleNetwork.com – The relentless flow of money into commodity index funds is slowing as money managers chase higher returns in commodities hedge funds, Barclays PLC unit (BCS) Barclays Capital said Tuesday, citing a survey of clients.
Although fund managers are expected to continue piling money into commodities, they are shying away from the $110 billion index fund sector because of the current roll-over cost in crude oil futures, Barclays Capital said, based on the findings of a survey of more than 110 of its U.S. clients.
The proportion of Barclays Capital’s clients expecting to invest more than 10% of their portfolio in commodities over the next three years has more than tripled in the past year to 53%, according to the study, which polled pension funds, hedge funds and retail distributors, among others.
More than half the respondents expect to be invested in hedge funds in the next three years, up from 21% in a similar survey a year ago, while those looking to invest in index funds have slumped to just 3% from 47% a year ago.
