2012 is officially in the books, and in terms of asset class performance, the rankings remain similar to what we’ve seen over the past several months. While we will get into the specifics about what generated the managed futures performance numbers in our newsletter this week, and will cover what to expect in 2013 next week (are you signed up to receive our newsletter yet?), here’s how things ended up (Disclaimer: past performance is not necessarily indicative of future results):
Managed Futures = Newedge CTA Index, Cash = 13 wk T-Bill rate,
Bonds = Vanguard Total Bond Market ETF (BND), Hedge Funds = DJCS Core Hedge Fund Index
Commodities – iShares GSCI ETF (GSG), Real Estate = iShares DJ Real Estate ETF (IYR)
World Stocks = MCSI World Index (ex USA), US Stocks = S&P 500
Here are some of the key takeaways from this final score:
- While the housing bubble’s pain is still fresh in our memories, it looks like we may be well past the time of “hoping” for a recovery. U.S. Real Estate topped the scoreboard this year, and if you ask Bill McBride of Calculated Risk, it’s set up for a stellar 2013.
- Despite what many assumed would be a rocky year, stocks surged ever higher on the backs of low volume and government intervention. How political hijinx play out this year, and how a variety of financial obstacles on the horizon are resolved, will determine their performance next year.
- Hedge funds, in this instance, outperformed managed futures… but still underperformed the stock indices. Managed futures doesn’t promote itself as a perpetual winner when paired against stocks, but for hedge funds, that’s frequently the way they’re sold, and their exposure tends to be skewed towards equities.
- When will the bond bull die? Probably when we stop intervening… or the intervention becomes too over the top to keep confidence afloat. Josh Brown had a good piece about the coming shift in assets away from fixed income and into equities, but the question remains: Will this shift be a gradual reallocation, and part of a longer bull period? Or will the shift be reflective of investors chasing returns to no avail? I guess we’ll have to wait and see.
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.
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