December proved to be the only month in all of 2016 in which all of the asset classes we track ended the month in the black. Long-Only Commodities and Real Estate both recorded a 4% return in the last month of 2016, ending in the top bracket of the scoreboard.
But this 12-month view can show just how quickly things can change from year to year (something seen in our updated Callan chart). 2016 saw the previous year’s top performer, U.S Real Estate, up only 1.60% on the year, compared to U.S. Stock’s impressive performance of +11.81% in what seemed like a year prime for volatile moves and potential losses (Disclaimer: Past performance is not necessarily indicative of future results).
Meanwhile, the dog of the past few years, long-only commodities, had one of its best years in recent history (after back to back -30% performances). If you’re reading into the hype on the bounce in commodities and are thinking about investing, check how you access that sector, as you’ll probably lose money going the ETF route unless doing so on a short term basis.
And then there’s our corner of the world, where 2016 put forward the reminder that non-correlation can mean zigging (slightly down) while other assets zagged (up). While they can (and do – see 2014) perform well alongside other asset classes, they can also perform poorly. That’s what non-correlation is. To model out that behavior means modeling in higher correlation to equity markets and the potential losing periods there.
For more on why Managed Futures performed the way they did, be on the lookout for our 2016 Strategy Review coming soon.
Source: All ETF performance data from Morningstar.com
Sources: Managed Futures = SocGen CTA Index, Cash = 13 week T-Bill rate,
Bonds = Vanguard Total Bond Market ETF (BND),
Hedge Funds= IQ Hedge Multi-Strategy (QAI)
Commodities = iShares GSCI ETF (GSG);
Real Estate = iShares DJ Real Estate ETF (IYR);
World Stocks = iShares MSCI ACWI ex US Index Fund ETF (ACWX);
US Stocks = SPDR S&P 500 ETF (SPY)
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.
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