June 13, 2012
Attain Capital
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If you’ve ever perused our CTA rankings database, you’ll notice that all the programs in there are given a flag ranking between 1 flag and 5 flags, with 5 being the highest ranking awarded. These rankings are based on a proprietary algorithm that analyzes risk and performance across multiple time frames alongside a variety of other factors to provide what we believe is a pretty good reflection of quality programs- particularly since our database has been thoroughly scrubbed to exclude unregistered programs that don’t offer managed accounts or provide huge operational risk (you can see our most recent rankings here). We even rely on these rankings in-house to guide our portfolio construction for clients – though they are, by no means, the final word in the allocation process.
That’s how we do it, at least.
We are definitely not the only ones who rank managed futures programs- there are a variety of rankings and awards that get distributed every year in the space. But that doesn’t mean that all rankings are created equally. Many use incomplete or inaccurate databases to create their lists, some base their recognition solely on returns, and others fail to conduct any form of due diligence on the managers they’re evaluating, leading to some very questionable choices, in our minds. But, to each their own- right?
Except… sometimes the problems associated with the rankings and awards can be pretty egregious. A client of ours was recently reviewing a set of rankings in the managed futures space, and upon reading one of the names on the list, couldn’t help but balk.
“I was excited to see the awards and winners…. Up until I saw [a program] I believe… are falsely reporting numbers. It didn’t bother me until I saw they were getting an award for it.”
It’s not the awards and rankings themselves we take issue with. In and of themselves, regardless of methodology differences we may have with those bestowing the honors, the recognition isn’t dangerous. In fact, we applaud efforts by the curators to provide recognition to programs in the managed futures space, and the industrious investors who are using these lists as a starting point for research.
Typically, there are two kinds of investors viewing these lists. One type of investor will consider the rankings, question the methodology of the rankings, and, depending on how they feel about the basis of the rankings, make calculated decisions to further investigate individual programs listed. The other type of investor will take one look at the rankings, and assume the programs in question are obviously high quality and worthy of consideration. Some of those in this group will make an allocation based on the recognition alone. Unfortunately, these investors wind up chasing a lot of hype around investment opportunities with far more risk than the conferred accolades would ever imply- like a program with a highly suspect track record.
The point? As is the case with any piece of investment news or educational resource (or really, any allocation consideration, too), we advise investors to question everything. Rankings and awards can be a great starting point for your research, but no matter what the source of that recognition might be, it’s important to dig deeper and get all the facts before making any decisions.
Disclaimer
The performance data displayed herein is compiled from various sources, including BarclayHedge, 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.
The programs listed here are a sub-set of the full list of programs able to be accessed by subscribing to the database and reflect programs we currently work with and/or are more familiar with.
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. Individuals cannot invest in the index itself, and actual rates of return may be significantly different and more volatile than those of the index.
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.
Limitations on RCM Quintile + Star Rankings
The Quintile Rankings and RCM Star Rankings shown here are provided for informational purposes only. RCM does not guarantee the accuracy, timeliness or completeness of this information. The ranking methodology is proprietary and the results have not been audited or verified by an independent third party. Some CTAs may employ trading programs or strategies that are riskier than others. CTAs may manage customer accounts differently than their model results shown or make different trades in actual customer accounts versus their own accounts. Different CTAs are subject to different market conditions and risks that can significantly impact actual results. RCM and its affiliates receive compensation from some of the rated CTAs. Investors should perform their own due diligence before investing with any CTA. This ranking information should not be the sole basis for any investment decision.
See the full terms of use and risk disclaimer here.
Disclaimer
The performance data displayed herein is compiled from various sources, including BarclayHedge, 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.
The programs listed here are a sub-set of the full list of programs able to be accessed by subscribing to the database and reflect programs we currently work with and/or are more familiar with.
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. Individuals cannot invest in the index itself, and actual rates of return may be significantly different and more volatile than those of the index.
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.
Limitations on RCM Quintile + Star Rankings
The Quintile Rankings and RCM Star Rankings shown here are provided for informational purposes only. RCM does not guarantee the accuracy, timeliness or completeness of this information. The ranking methodology is proprietary and the results have not been audited or verified by an independent third party. Some CTAs may employ trading programs or strategies that are riskier than others. CTAs may manage customer accounts differently than their model results shown or make different trades in actual customer accounts versus their own accounts. Different CTAs are subject to different market conditions and risks that can significantly impact actual results. RCM and its affiliates receive compensation from some of the rated CTAs. Investors should perform their own due diligence before investing with any CTA. This ranking information should not be the sole basis for any investment decision.
See the full terms of use and risk disclaimer here.