Data overload: Commodity hedge funds down shutters as computers dominate

It was in January 2016, after a slide in cocoa prices, that Anthony Ward decided the days of traditional commodity investors doing well from taking positions based on fundamentals may be numbered

“Chocfinger” made his name and his money by taking bold bets on cocoa markets. But after nearly four decades of trading, sometimes winning, sometimes losing, Anthony Ward threw in the towel.

Ward blames the rise of computer-driven funds and high-frequency trading for forcing him and some other well-known commodities investors to close their hedge funds and look for opportunities where machines can’t make a difference. While computerised trading is not new, Ward and others argue its steady rise has reached a tipping point that is distorting prices and creating uncertainty not only for investors, but for chocolate firms, carmakers and others