News

February 08, 2010

US Major Funds Go For Commodities

By Sally White

Even as commodity markets turned bearish, following other markets into a state of jitters about Europe’s economies, the second-largest of the largest US public pension funds announced it was considering investing in them. The US$134 billion California State Teachers Retirement System (Calstrs), said last week that it had its eye on the double-digit returns commodities have historically delivered when equities slumped. If it does make the move it will be following the largest fund, the US$202 billion California Public Employees’ Retirement System.

Last year investors poured around US$600 billion into commodities, buying index-trackers, exchange-traded funds and medium-term notes. A Barclays Capital survey shows that at least that much could be added in 2010. However, the recent track-record at Calstrs does not exactly inspire confidence - it lost 25 per cent in the year to last June, though that was largely because of a 43 per cent decline in is property portfolio.

Last week, most markets were slipping, and the...