Ospraie and Other Hedge Funds Tumble

Volatility in commodities is taking some funds to task. For example, see Ospraie:

Wrong-way bets on energy and resources stocks have helped pare roughly $1 billion from the fund since it peaked near $3.8 billion in assets late last year, according to a person familiar with the fund. The Ospraie Fund, Mr. Anderson's biggest, has declined more than 20% this year as of this week, continuing a slide that amounted to a negative 13% return in July alone.

For many of Mr. Anderson's investors, the turmoil rings familiar. In early 2006, Ospraie lost almost 20% in its flagship fund as its managers wrongly guessed the direction in which copper prices were headed. But the fund bounced back enough to finish 2006 down about 6%, then swung back in 2007 to gain about 12% for the year.