Managed Futures is in a Drawdown – Cue Wilson Phillips

May 6, 2016 The Alts Team 3 Comments  Like
Managed Futures

We’re not afraid to admit that one of our biggest traditions in the office had something to do with Wilson Phillips. Whenever Managed Futures was in a drawdown, we used to pull out our CD player (yes, we had a CD player… this was before the iPhone or Spotify people) and blast their hit “Hold On” that debuted in 1990 (which we just learned, is the year some people in the office were born). It’s not just the harmonized vocals that provide us comfort, but the lyrics, which we think was secretly written for an investor in a drawdown.

“I know that there is pain
But you hold on for one more day and
Break free, break from the chains

Don’t you know things can change
Things’ll go your way
If you hold on for one more day yeah
If you hold on..”

We won’t say we’re trend setters, but the song did make a major comeback in 2011, when they performed “Hold On” at the end of the comedy classic “Bridesmaids.” (see the video here)

Wilson Phillips Bridesmaids

With the SG CTA Index currently down -5.15% since its highs in February, and several high profile managed futures mutual funds down double digits from their highs, we wanted to send out this cult classic to all those invested in managed futures who right now just need to hold on… and have “things go your way.”

The instructions are simple, listen to the song, or watch the end of Bridesmaids until you feel better, while markets (typically) complete their trend reversals, volatility consolidations, and generally set themselves up for the next round of directional volatility.

Here are some stats from one of our favorite managers in the mutual fund space, Auctos Capital Management ($ACXIX), who just happens to know a thing or two about controlling the downside after seeing these charts:

Managed Futures Mutual Funds DrawdownPerformance as of 4/21/16

While we know it won’t work given investors’ penchant for chasing returns – we’ll say it anyway:  this can be a great time to get in! Not only are managed futures due for a bounce after this down streak, stocks and bonds are looking iffy (billionaire Druckenmiller basically told investors to run recently). So, in the words of Wilson Phillips, “go ahead and break free, break from the chains” of performance chasing and sell some of the over performer (stocks) to put into the current underperformer (managed futures).

 

3 comments

  1. 05/08/16 – Sunday’s Interest-ing Reads | Compound Interest-ing!
    May 8, 2016

    […] Managed futures are in the midst of a drawdown. (managed-futures-blog.attaincapital) […]

  2. Philip
    May 8, 2016

    This has to be one of the last places I ever expected to run across a Wilson Philips quote, but somehow it actually works. Nice post.

  3. How much of a Drawdown are You Willing to Endure? – Finance Grad
    June 13, 2016

    […] these findings are intriguing given our post last week showing some of the turmoil currently going on in the managed futures space. We are realizing that much of the billions that have flowed into managed futures mutual funds over […]

Write a Comment

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.

logo