Credit Crunch Risk… Hedge Funds = Yes, Managed Futures = No
The SEC is bolstering/demonizing the reputation of hedge funds, with the somewhat shocking headline that the top hedge funds hold more than $1 Trillion in debt… This is another instance where we like to brag a little. You Ready? Managed Futures total debt = $0 The difference between managed futures and hedge funds are that managed futures doesn’t need to barrow money… Ever.
Makin’ It Rain on the CFTC?
While our nation’s leaders battle out a bill that allocates funding for the IRS, we in the managed futures industry are playing close attention, as a provision in the bill would give the CFTC an additional $110 Million in its budget, $8 Million more than the CFTC’s original proposal . This is far from becoming law, but in the meantime, we must contemplate how they funds will be utilized.
Cool Crude Charts
We re-jogged our memories about the definitions of Contango and Backwardation when Crude Oil experienced the highest level of backwardation in 15 years. Now, Newedge is out with a great piece tackling everything from the CME fine tuning the nickel content allowed in deliverable crude, to Egypt’s foreign reserves to the Jones Act which requires any goods moving from a US port to another US port to be done on a US flagged vessel.
Semi-Annual Managed Futures Rankings
It’s that time of year again, time for Attain Capital’s Semi-Annual CTA Rankings. We have the data for all of the CTAs we track through the first half of 2013, allowing us to try and answer the question we get on a daily basis: What’s your BEST managed futures program? Without further ado, here’s our updated rankings.
The Big Dogs of Physical Commodity Trading
Those of us in managed futures live in a world with hardly a physical commodity in sight during trades. But there’s an underbelly to all of that activity called physical commodity trading that sometimes gets overlooked. the physical side of commodities are huge, with the combined 2012 annual revenue of their Top 10 comes out to be $1.3 Trillion (yes that’s trillion with a capital T). So who are these companies?
Disclaimers
Managed futures, commodity trading, forex trading, and other alternative investments are complex and carry a risk of substantial losses. As such, they are not suitable for all investors. You should not rely on any of the information as a substitute for the exercise of your own skill and judgment in making such a decision on the appropriateness of such investments.
The entries on this blog are intended to further subscribers understanding, education, and – at times – enjoyment of the world of alternative investments. Unless distinctly noted otherwise, the data and graphs included herein are intended to be mere examples and exhibits of the topic discussed, are for educational and illustrative purposes only, and do not represent trading in actual accounts. Opinions expressed are that of the author.
The mention of specific asset class performance (i.e. +3.2%, -4.6%) is based on the noted source index (i.e. Newedge CTA Index, S&P 500 Index, etc.), and investors should take care to understand that any 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.
The performance data for various Commodity Trading Advisor (“CTA”) and Commodity Pools are compiled from various sources, including Barclay Hedge, 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.
The mention of general asset class performance (i.e. managed futures did well, stocks were down, bonds were up) is based on RCM’s direct experience in those asset classes, estimates of performance of dozens of CTAs followed by RCM, and averaging of various indices designed to track said asset classes.
The mention of market based performance (i.e. Corn was up 5% today) reflects all available information as of the time and date of the publication.
The owner of this blog, RCM Alternatives, may receive various forms of compensation from certain investment managers highlighted and/or mentioned within the blog, including but not limited to retaining: a portion of trade commissions, a portion of the fees charged to investors by the investment managers, a portion of the fees for operating a fund for the investment managers via affiliate Attain Portfolio Advisors, or via direct payment for marketing services.
Managed Futures Disclaimer:
Past Performance is Not Necessarily Indicative of Future Results. The regulations of the CFTC require that prospective clients of a managed futures program (CTA) receive a disclosure document when they are solicited to enter into an agreement whereby the CTA will direct or guide the client’s commodity interest trading and that certain risk factors be highlighted. The disclosure document contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA.
See the full terms of use and risk disclaimer here.
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