When even Cargill Inc., the world’s largest grain trader, decides to liquidate its own hedge fund, that’s a sign that commodity speculators are in trouble.

Hedge funds focused on raw materials lost money on average in the first half, the Newedge Commodity Trading Index shows. Diminishing investor demand spurred Cargill's Black River Asset Management unit to shut its commodities fund last month. Others enduring redemptions include Armajaro Asset Management LLP, which closed one of its funds, Carlyle Group LP's Vermillion Asset Management and Krom River Trading AG.

While hedge funds are designed to make money in both bull and bear markets, managers have a bias toward wagering on rising prices and that’s left them vulnerable in this year’s slump, said Donald Steinbrugge, managing partner of Agecroft Partners LLC. The Bloomberg Commodity Index tumbled 29 percent in the past year and 18 of its 22 components are in a bear market.

“No one wants to catch a falling knife, and demand for commodity-oriented hedge funds is very low,” said Steinbrugge, whose company helps funds find investors.

The amount of money under management by hedge funds specializing in commodities stands at $24 billion, 15 percent below the peak three years ago, according to data from Hedge Fund Research Ltd.

The Newedge index, which tracks funds betting on natural resources, suggests managers have lost money for clients during much of the past four years. A dollar invested in the average commodity hedge fund in January 2011, when values reached a reached a record, had shrunk to 93 cents by the end of June. Investing in the S&P 500 index would have returned 80 percent, including dividends.

Commodity profits tumbled in 2012 and 2013, prompting the first wave of closures, including funds run by Clive Capital LLP and BlueGold Capital Management LLP.

The exodus marked a shift from the boom times before the financial crisis, when the Newedge index surged almost sixfold from 1999 to a peak in June 2008. Since 2010, the gauge fell in three of the next four years and is down 0.3 percent in 2015.

The Galena Fund fell 0.8 percent in the first six months of this year, according to data compiled by Bloomberg. The fund, which had $637 million at the end of June, is the asset management unit of Trafigura Beheer BV, the second-largest metals trader. Officials at the unit declined to comment.

The $230 million Singapore-based Merchant Commodity Fund lost 3.9 percent in the first half, after returning almost 60 percent last year, a record.