Schroder Alternative Solutions Commodity Fund

Back in April 2008, I bought some units of Schroder Alternative Solutions Commodity Fund (Fund) on the recommendation of my Relationship Manager. Little did we know that the world was going to see a financial crisis emanating from US and the situation was made worse by Lehman Brothers Inc collapse in September 2008. So we had the Great Recession of 2008/2009 that engulfed most financial cities of the world. July 2008 was also when the oil prices spiked to a new record high of US$147 per barrel.

When I bought the Fund, it was priced at S$12.13. This was significantly higher than the launch price of S$10 in August 2007.

Because of the recession, oil prices started to plummet to below US$100. As the Fund was invested in Oil, Silver, Copper, Cotton Corn, etc, the recession brought the prices of these commodities down. Hence, the Fund lost value. In other words, my timing when entering into the commodity markets was ill-timed.

After three and half years holding onto this Fund, the Fund price went below S$10. When I finally sold it, the realised price was S$9.21. This was a loss of 24 per cent. When I factored in sales charge of 4.25 per cent which I paid to the Bank at the time of purchase, the loss was even greater at 27 per cent.

I decided to cut loss and pull back the money for other investment opportunities. I am not hopeful, that the Fund price can reach my level of S$12.13 since we are going to witness yet another slow global economic growth in the next one to two years.

Copyright © 2011, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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