Winton Capital – Shrinking Risk, Shrinking AUM

We’ve pointed out from time to time that when a CTA grows bigger, its monthly gains and losses often grow smaller. CTAs don’t really come any bigger than Winton, and they’ve definitely been a prime example of this trend:

Disclaimer: past performance is not necessarily indicative of future results.

Well as it turns out, not everyone is excited about the lower volatility, lower risk/return version of the Winton they once knew. Finalternatives reports:

Clients yanked $1 billion from Winton Capital Management last year, which was also the quantitative hedge fund’s second down year in 15. The London-based firm’s assets under management fell from US$29 billion to US$26 billion during the last eight months of 2012; about one-third of the decline was due to redemptions, Reuters reports.

Winton’s flagship lost 3.5% last year. But that decline is not what’s behind the withdrawals; instead, according toReuters, some investors are not happy with firm founder David Harding’s decision to cut risk during the financial crisis.

“That decision not to target high levels of risk appears to still resonate well with institutional and pension fund investors,” a Winton spokesman said.

We have a Winton spokesman (re)confirming what we’ve known for a while – that Winton’s risk/return levels are lower. But it doesn’t quite answer the question that lies behind it: Was Winton’s decision not to target high levels of risk one that they made in order to appeal to those institutional and pension fund managers, or was it an unavoidable consequence of growing so large? The cause and effect here may unclear, but we’re pretty sure this article has identified a surefire sign that you’ve really made it: when you can react to news of $1 billion in withdrawals with little more than a shrug.

One comment

  1. I guess their clients can still go with a nominal funding.

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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.

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.

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.

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.

See the full terms of use and risk disclaimer here.

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