Consulting firm Mercer says pension funds could lose money by investing in commodities due to current market conditions.  “Pension funds that currently invest in commodities, or those that are looking to do so, should be aware that they could lose money by following the traditional passive futures approach to investment, even if prices remain stable,” Mercer Investment Consulting said.  It said the current “contango” – where futures prices are higher than spot prices – means returns will be lower than the change in commodity prices.  “While commodity prices rose significantly in the year to 31 March 2006, the return on commodity futures was flat.”  In March this year rival firm Watson Wyatt was reported as recommending commodities, particularly energy, to its clients
Investment & Pensions Europe –