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.
Chasing Performance, Fleeing Weakness
Managed futures garnered a huge burst of attention after producing outsized gains during the 2008 financial crisis. Assets and interest surged… after the big gains were achieved. Now, the flip side of performance chasing is starting to set in – fleeing weakness. A new report from Preqin Group has the details on how investors are reacting to the recent less-than-impressive performance of CTAs.
Mirror, Mirror – Who’s the Finest CTA of Them All?
One reason it’s important go maintain due diligence on CTAs is that the return profile can change over time. Scrappy upstarts who take big risks for big rewards will often evolve into more cautious, lower risk/return managers as they grow and age. But how can you tell if a manager isn’t performing in the same way that they once did? One way is to take a look in a mirror.
Managed Futures Reads
When we started writing about managed futures, there weren’t many others doing the same. But over the last few years, quite a few others have joined in. Here are some of the recent managed futures reads floating around the internet that have caught our eye.
Options Sellers, Meet Volatility
Three weeks ago we wrote this newsletter detailing the recent comeback seen by options sellers and short volatility strategies. The crux of the story was that while these strategies had made an impressive comeback after two years of disappointing performance, that investors should still be wary of the potential for losses during the next volatility spike. Well the volatility spike that we were all waiting for started gaining steam last week before hitting the max capitulation point yesterday in precious metals. The results, as you might expect, are not pretty.
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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