We’re probably at risk of not getting that David Harding interview next time he’s in town… but we just can’t help but wonder aloud what happened with Winton in September. The estimate we’re seeing for their September performance is a negative -0.72% (and that would be their program performance, not the performance of the super high fee product you’re accessing them through).
While that’s hardly reason to sound the alarm, and Winton remains up +1.83% on the year; we’re talking the biggest player in the managed futures space being down in one of the biggest up months for managed futures in a few years (Q3 was the best quarter for managed futures since the hey days in 2008). What happened?
Well, we’re not privy to the investor letters or sector breakdown of performance just yet… (we’re not investors), but we believe it highlights an important issue for investors to consider when considering Winton. And that is the little issue with trying to access finite commodity markets with a very, very large amount of assets. Winton and Mr. Harding had $24.5 Billion under their control. And the math on that just simply makes it hard to have any meaningful exposure in markets like Lean Hogs or Corn or Palladium, where there are position limits. We covered it in this post “Can CTA’s with $1 Billion AUM Trade Grains?” and again in this newsletter “Second Guessing the Winton’s of the World.”
Harding was quoted as saying ‘don’t call us a F***ing ‘managed futures’ firm’, and he may be getting his wish if he doesn’t keep pace with those who are wanting to be known as managed futures. I’m sure he’s smarter than us and will likely get exactly what he is after in adding stock investments and other asset classes as they move away from a managed futures firm to a full on hedge fund behemoth in the Renaissance or Bridgewater mold. But for those wanting managed futures exposure – it will pay to watch just how correlated Winton will be moving forward to something like Newedge’s Trend Indicator. (it wont’ help to compare to the managed futures indices, as Winton is IN all of them… making them auto-correlate quite nicely).
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