Commodities investors are abandoning index funds en masse and turning to hedge funds to elevate the level of returns, according to a survey of Barclays Capital clients. The number of commodities investors seeking HFs has more than doubled in the last year, from 21% in a similar survey in 2005 to more than 50% today. This increase comes as the percentage of Barclays customers -- including pension funds, hedge fund, retail distributors and the like -- allocating more than 10% of their portfolios to commodities has more than tripled in the past 12 months to 53%. The news bodes poorly for commodities index funds, which in the current survey was the choice of just 3% asked, compared with 47% a year ago. The results of the study also reflects a change in the way investors view commodities. In last year’s survey, 63% said they allocated to the sector to limit risk and diversify their portfolios. This year, only 43% felt that way, while the percentage of those selecting commodities to produce absolute returns surged from 15% in 2005 to 32% this year. Another driving force behind the change, says MarketWatch, is the drop in prices in the crude-oil market and the rising carrying costs, now at 20%. "The study highlights the concern about listed index investments," Kamal Naqvi, Barclays Capital’s director of commodities sales.