Armajaro Commodities Fund, a pure commodities strategy that trades in base metals, precious metal, energy, soft commodities, grains and livestock reported negative performance year-to-date.
Armajaro Commodities Fund is one of the specialist hedge funds operated by Armajaro Asset Management, a UK-based investment adviser.
GrizzlyRock Value Partners was up 16.6% for the first quarter, compared to the S&P 500's 5.77% gain and the Russell 2000's 12.44% return. GrizzlyRock's long return was 22.3% gross, while its short return was -2.9% gross. Compared to the Russell 2000, the fund's long portfolio delivered alpha of 10.8%, while its short portfolio delivered alpha Read More
Armajaro Commodities Fund utilizes a discretionary approach combined with technical signals in investing. Its investment strategy includes trading long/short directional, spread and volatility trades using exchange-traded futures and options.
Portfolio Manager steps down
The fund’s portfolio manager, John Tilney will step down from his position in April this year. Tilney joined the investment adviser in 2004 to establish Armajaro Commodities Fund.
His co-manager Oliver Denny will take over.“The next phase of the commodity cycle will be very interesting, and I believe it will provide some excellent investment opportunities for ACF,” said Denny.
According to sources with direct knowledge of the matter, the decision by Tilney to step down was likely due to his desire to have more free time and not because of anything related to the fund or the job specifically.
Armajaro Commodities Fund performance
Armajaro Commodities Fund Class A and Class C (USD) declined 3.78% and 3.77% respectively on February. The fund’s Class C (EUR) dropped 3.70% last month.
Its Class C (GBP) and Class E (GBP) fell 3.74% and 3.71%, respectively while its Class E (AUD) dropped 3.60% last month.
In a note to investors, Armajaro Commodities Fund said the decline was due to losses from investments in coffee and nickel.
“Over the medium-long term, portfolio returns are expected to be uncorrelated with the main equity and bond markets,” according to Amajaro Commodities Fund.
Armajaro Commodities Fund commentary
Amajaro Commodities Fund noted that Arabica Coffee ended February down by 13.64%. The fund explained that better-than-expected weather conditions reduced concerns regarding a shortfall in Brazil’s capacity to meet strong export demands. It drove prices lower on thin volumes. The fund explained that many investors were not present due to a public holiday in the United States.
“The manager has weather data showing a strengthening third El Nino that may cause dryness in coffee areas in Vietnam and Indonesia,” according to the fund.
Armajaro Commodities Fund said palladium outperformed in the precious metals market last month driven by lower oil prices and robust petrol engine car sales in China and the United States. Palladium gained 6%.
Platinum declined 4.25% due to reports from South African mines regarding faster-than-expected post-strike production ramp up. The ongoing concern regarding the European economy also led to large ETF outflows and record-high gross shorts in platinum.
Armajaro Commodities Fund suggested that platinum’s premium over palladium appears to decline further due to the growing concerns over the impact of diesel fumes to the environment.
The fund noted that major European cities are phasing out diesel cars. South African miners also intend to continue to maximize their platinum output.