ANDURAND COMMODITIES FUND
May/June 2017
Market and Portfolio Commentary:
The Fund lost -2.2% net during the month of May. The loss was due to the portfolio’s long crude exposure.
The price action in the oil markets has been ferocious and unforgiving as of late.
Our long term supply and demand forecast points toward a growing oil deficit even when assuming large oil demand displacement due to technology and efficiency gains. We believe US shale will not be able to bridge the gap and certainly not at current forward prices. Our intention is to remain patient and focus on active management. This will include periods of risk reduction when the price action is confusing and choppy. History has taught us that such periods do not last forever. The short term objective is to be defensive against further losses and remain focused and engaged to participate once the storm has passed.