In recent newsletters, we’ve talked a lot about what success means in managed futures. Our conclusion was that success includes drawdowns, with managed futures usually moving in a sort of ‘three steps forward/two steps back’ type of pattern. After all- what goes up must come down some (unless your name is Bernie Madoff). While most investors cringe at the idea of investing in a program that isn’t performing well at the moment, it’s during those times that we get excited.
The way we see it, if performance is relatively cyclical (with run-ups followed by drawdowns, followed by run ups, and so on), the drawdown period is where you can get the biggest potential upside (for a more technical explanation, see here). Many of our clients have us scan our expanded watch list of CTAs looking for an opportune time to enter into a solid program in a drawdown – and one such opportunity is upon us now with Clarke Capital’s Worldwide program.
Based on our estimates, the Clarke program is currently in the midst of an intramonth drawdown of -23.64% (down approximately -11% in May) from the November 3, 2010 high. Compared to their max end of month drawdown of -26.06%, this looks like an attractive entry point to us in anticipation of a reversion to the mean in their performance.
The program has history going back to 1993 (under the name Domestic Diversified), when the models were first developed for US markets, and in 1996, it began to include international markets, earning it its current name. Throughout its history, the program has had its fair share of ups and downs, but has continued to excel during the good times (past performance is not necessarily indicative of future results).
For those investors looking to break the costly ‘in at the top/out at the bottom’ cycle (or for those lucky few who already understand the power of looking to ‘get in at the bottom/out at the top’), the current entry point for Clarke Capital Worldwide looks to be a great opportunity.
The performance data displayed herein is compiled from various sources, including BarclayHedge, RCM's own estimates of performance based on account managed by advisors on its books, and reports directly from the advisors. These performance figures should not be relied on independent of the individual advisor's disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes proprietary results, and other important footnotes on the advisor's track record.
Benchmark index performance is for the constituents of that index only, and does not represent the entire universe of possible investments within that asset class. And further, that there can be limitations and biases to indices such as survivorship, self reporting, and instant history.
Managed futures accounts can subject to substantial charges for management and advisory fees. The numbers within this website include all such fees, but it may be necessary for those accounts that are subject to these charges to make substantial trading profits in the future to avoid depletion or exhaustion of their assets.
Investors interested in investing with a managed futures program (excepting those programs which are offered exclusively to qualified eligible persons as that term is defined by CFTC regulation 4.7) will be required to receive and sign off on a disclosure document in compliance with certain CFT rules The disclosure documents contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA, as well as the composite performance of accounts under the CTA's management over at least the most recent five years. Investor interested in investing in any of the programs on this website are urged to carefully read these disclosure documents, including, but not limited to the performance information, before investing in any such programs.
Those investors who are qualified eligible persons as that term is defined by CFTC regulation 4.7 and interested in investing in a program exempt from having to provide a disclosure document and considered by the regulations to be sophisticated enough to understand the risks and be able to interpret the accuracy and completeness of any performance information on their own.
RCM receives a portion of the commodity brokerage commissions you pay in connection with your futures trading and/or a portion of the interest income (if any) earned on an account's assets. The listed manager may also pay RCM a portion of the fees they receive from accounts introduced to them by RCM.