You Thought That was Bad? Look at These Monthly Losses

Comparing Asset Classes monthly is a little bit like looking up at the scoreboard during halftime. It’s a great opportunity to look at the whole picture, comparing what’s going right, and what’s going wrong. But in the case of investing, the outcome isn’t just losing a game; it’s real money being made or lost.

The scoreboard watching was a little painful last month – with 4 out of the 7 asset classes we track ending May lower than in April. The biggest hit came from U.S. Real Estate, which dropped -7.37% in May, and the losses were enough for one of our favorite bloggers – Mebane Faber – to come out with a chart putting May in perspective by showing the biggest monthly declines of multiple asset classes dating back to 1972…

Chart Courtesy Mebane Faber.

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

Wait a second… Is it just us or did they leave out a certain asset class… Managed Futures? Referring back to the sports theory here, it’s little hard for the coach to judge how the game is going when you can’t see the ENTIRE scoreboard. To level the playing field, we recreated our own chart to include managed futures, and reorganized the assets from lowest to highest losses.

We had to go all the way back to June of 1984 to find the biggest single month loss for managed futures, at -9.81%. But more importantly, you’ll notice that Managed Futures comes in at the third lowest worst monthly decline, behind only Corp Bonds and the U.S. 10YR (we’re not sure why Mr. Faber lists Corp Bonds, 10yrs, and 30yrs all as asset classes).

Now, this is just the worst loss for the managed futures index, not any one program within the index (or the universe of managed futures for that matter). But the same applies to the EAFE, Large Cap, Small Cap, GSCI, EEM, and REITs – all of which are indices which smooth out the worst loss from any one piece of the index.  So, we know a specific investment could see a worse monthly decline than the entire index – but still, a -20% to -30% monthly decline is nothing to shake your head at for these other asset classes.

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Disclaimer
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.

See the full terms of use and risk disclaimer here.

Disclaimer
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.

See the full terms of use and risk disclaimer here.