Oil

Andurand Commodities Fund Up 22 Percent In 2016 As Bullish Oil Bet Pays Off

Like most oil-focused hedge funds, the Andurand Commodities Fund produced an impressive return for its investors during 2016. According to the fund’s fourth quarter and full-year letter to investors, a copy of which has been reviewed by ValueWalk, the $1.6 billion fund gained 22.1% net over the year thanks to the portfolio’s long crude exposure, which was comprised of long Brent and WTI futures and call options, after a 6.8% return in December. The hedge fund has now returned 110% since inception (February 2013) while the S7P GSCI Crude Total Return Index is down 66% over the same period.

Andurand still bullish
Heading into 2017 the commodities fund is expecting more gains from oil prices. In the letter, Andurand writes, “we expect oil prices to reach $70/bbl and the market to move into backwardation by mid-year with excess inventory is quickly evaporating.” The letter goes on, “a backwardated curve will disincentive overzealous US shale producers and will reduce selling pressure on flat price. Oil futures buying as a result of inventory hedges being unwound will also prop up oil prices.” And upward price pressure could ultimately drive prices to $80/bbl, “we believe the move to backwardation will attract large inflows from passive investors and consumers looking to capture the roll yield. Today’s record speculative length is not a concern to us as such inflows could be responsible for the next leg higher towards $80/bbl.”

SORRY!

This content is exclusively for paying members. Access all of our content on including years of timeless investment news and in depth analysis for only a few dollars a month by signing up here while also supporting quality content and journalism, or learn more about our premium content here

If you are subscribed and having an account error please clear cache and then cookies if that does not work email support@valuewalk.com and we will get back to you as quick as humanly possible


Saved Articles
X
TextTExtLInkTextTExtLInk

Are you a smart investor? Join tens of thousands of sophisticated investor reading our authoritative free newsletter

* indicates required

Opt out of occasional 3rd party offers


Congrats! Are you a smart person? We have a limited time offer for sophisticated and loyal readers like yourself.

Sign up today and get three months free

Use coupon code VIP19 or click on the button below

Limited time offer only expires 8/31/2019 or next 30 now just 2 subscribers whichever comes first – please do not share this discount with others

 

0