Long-Only Commodity ETFs vs Futures- April 2013
We’ve made no secret that we think Commodity ETFs are a poor choice for investors, and the underperformance of those ETFs compared to futures contracts in 2011 and 2012 bore that out. But so far, 2013 has not matched our expectations, with commodity ETFs ahead of the Dec futures performance through the end of April. We still expect them to underperform in the long run, but in the meantime, here’s how they have fared in 2013.
Managed Futures Ends April Up 1.52%
With April marking the best month since July of 2012 and 5th consecutive winning month (albeit two of those very small) for managed futures, some might be saying – it’s about time. Quite a bit can change in the next 8 months, but we’re glad to see the index starting off 2013 on the right foot.
Wasendorf’s Next Gig
Russ Wasendorf has already put together his next project. We’re talking about Jr., of course. He’s trying to get back on his feet while the old man sits in jail, having launched an ecommerce site in his new home. We’re hoping for the sake of ex-PFG customers that he enjoys great success with his new venture.
Newsletter: So You Want to Be a CTA…
There are plenty of alluring stories to entice skilled traders to try their hand at becoming professional Commodity Trading Advisors (CTAs). Taking the leap from trading your own money to managing others’ is the first step toward building a legend of your own, but how realistic is it to turn that gleam in your eye into a successful enterprise and tens of millions in the bank?
That Damned… W?
If there’s one thing that bugs trend followers, it’s the “V-shaped” recovery, when a market experiences a sudden, sharp reversal. Several markets that seemed to be on nice downtrends lately have exhibited this pattern over the last few days, while others have sported more of a W-shape. It may not seem like much, but the distinction can make a big difference.
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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