Public Commodity Funds Acquire Bad Image That Won't Fade Soon
For small-time investors battered in the treacherous commodity futures markets, public commodity funds seemed a godsend.</br></br>For as little as $5,000, they could buy the services of top trading managers, diversify into several futures markets and limit their losses to their original investments, all of which isn't always possible for small traders going it alone.</br></br>But something went wrong. Last year, 56 of the 61 largest funds lost money, costing investors 14.5 cents of each dollar they put in. Three funds traded their way into extinction. One-third of the record $620 million in assets the funds claimed collectively as of January 1983 was pulled out or lost by year-end.</br></br>This year hasn't been much better: In the first quarter, average investors lost an additional 1% of their capital.</br></br>"People are engaging the best commodity trading managers that money can buy, and they're still losing," says Jay Klopfenstein, president of Norwood Securities, a Chicago firm that tracks the performance of public commodity funds. "A lot of people are reconsidering the whole thing."