Managed Futures’ Dominant January Performance

Here we are one month into January, and all the sudden Managed Futures is getting name dropped in a “I know a guy” sort of way. Today, Business Insider called Managed Futures the dominating Hedge Fund strategy in 2016, all while the Morningstar Managed Futures Mutual Fund Category has received 20 straight months of inflows (receiving $1.5 Bil in Jan alone).

What’s not to like – with Managed Futures offering up an average gain of 2.25% in a month where stocks lost -5.21% and global stocks lost -6.71%. Obviously, it’s because at some level, we’re all performance chasers, while we don’t like to admit it (unless we apply strict discipline in our portfolio), and the financial biz is following suit.

Managed Futures Index performance

(BarclayHedge reporting 74% of funds, numbers subject to change)

Those numbers sure look good from the outside, but as experts who perform due diligence on the hundreds on managers in the Managed Futures space, this performance is, well… average. Take a look at the net (estimate) performance of some of the managers we follow.

Attain Funds Table Jan 2016

Managed Future Programs Jan 2016

Mutual Fund Managed Futures Jan 2016

Of course we don’t know if this market uncertainty will continue or subside. We could be staring another 2008 in the face, or markets could pull a reversal and erase these gains.  We do know that every day it continues is better and better for managed futures, both in terms of upside, and in reducing future downside (as systematic models typically move their exit points down over time to lock in more and more of the gain to that point).

Wherever we’re headed the rest of February and beyond, what we’re excited about is seeing the diversification in real time. We’re seeing non correlation in real time. Just consider managed futures made money while stocks made money in 2014, were flat to down slightly while stocks were about the same in 2015, and now are making money while stocks are losing lots of it. That’s a year of positive correlation, a year of no correlation, and now a year of negative correlation.  Non correlation is a bit of an abstract concept, but there it is in black and white. It means sometimes you’ll do the same, sometimes you’ll do differently – resulting in differences, on average.

If you’re wondering just what things could look like the rest of the year, check out our Managed Futures 2016 Outlook, which you can download here.

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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.