Commodity “Supercycle” Not So Super
There’s a reason why we prefer managed futures – which can go long or short various commodity markets – to long-only commodity positions. In addition to our misgivings about the vehicles many investors use to gain commodity exposure, there’s another big problem: there’s no guarantee that commodity prices are going to rise.
Limit Down: Coming Soon to a Stock Near You
Low volatility, new highs… you would think everything is hunky dory, that fear of another massive drop would be the furthest thing from people’s minds. Well, someone rather important is thinking about it – namely the SEC, CME, and NYSE. New market-wide circuit breakers and limits for individual shares will soon take effect.
Newsletter: Why am I Diversifying, Again?
Our weekly newsletter is out, and this time we’re taking a look at the long-term risks and benefits of diversification. In the long run, the responsible choice is most likely to provide the best outcome and protect you from potentially catastrophic losses, but it can be painful in the short run. But how much longer will you have to wait before those benefits become worth it?
Long-Only Commodity ETFs vs Futures- March 2013
We’ve made no secret that we think Commodity ETFs are a poor choice for investors, but with commodity ETFs ahead of the Dec futures performance through the end of March, we may need to revisit our premise. But will this change the long-term over/under performance between ETFs and futures contracts? Stay tuned.
Managed Futures Ends March Up 1.24%
The upward trend continued for managed futures in March, posting a third straight positive month. Several market trends emerged or strengthened during the month, but the big story was in the huge drop in grain prices following the USDA grain report – something that several programs we track had not been hoping to see.
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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