Commodities remain an attractive asset class for many hedge funds

Despite volatile markets commodities trading remains a popular strategy with hedge fund managers and investors while regulators are more concerned that speculation could disrupt prices.

It is a tough time to be an investor in commodities. Volatility in the markets has led to a difficult year for many commodity hedge funds.

 A stream of negative headlines has also battered managers. In February 2010 the Ebullio Commodity Hedge Fund lost the bulk of its assets after a bet in metals. The loss was reported worldwide when the media got hold of Ebullio’s letter to investors.

Later in the year commodity hedge fund company Armajaro Holdings hit the front pages when it emerged that its