Funds betting on commodity price moves have lost money every month since January, their joint longest losing streak on record, raising more doubts about their ability to make money at a time when the commodity "supercycle" may be over.
The average fund slid 3.58 percent in the first half of 2013, according to a widely watched Newedge commodity index. Funds have suffered five straight losing months only once before, in 2002-03, the index shows.
Hedge funds market themselves are capable of making money in all markets, yet funds trading commodities as varied as gold, grains and gas have failed to turn an annual profit in the past three years.
The weak performance will put more pressure on the industry to lower fees and introduce clawbacks, which enable investors to reclaim some performance perks paid to hedge fund managers in boom times if the returns they hope to achieve fail to continue.
Worries about cooling demand in key markets like China and a supply-side shift to glut from shortage have sent prices tumbling in recent years and left many warning that the end of the commodity "supercycle"—the long period of rising commodity prices—has arrived.
"Historically, most of these funds have been a levered beta play on the commodity cycle, or in some cases arbitrageurs of commodity spreads," said Michele Gesualdi, portfolio manager at hedge fund investor Kairos.