Newsletter: Managed Futures Outlook – 2013
Sadly, we must add 2012 to the list of poor managed futures years. The question is – what’s next? What was wrong in the last year, and what does 2013 hold? Will the conditions of 2012 persist in the new year, reverse course, or yield to different conditions?
The Greener Grass of Ag Traders
We’ve talked a lot about the good performance of Agriculture Traders last year, and with the 2012 numbers nearly all in, we couldn’t help but compare the Ag numbers to the rest of the managed futures world. Ag traders have a performance profile all their own, as one look at the data makes clear.
It’s All About Context
One of the most common questions we hear is about the fees charged in the managed futures world. For many there can be a fixation on how much an investment “costs,” without contextualization of the investment’s performance and role in a portfolio. So when we see someone in the traditional space bemoaning this mindset, we breathe a sigh of relief, knowing that there are people out there who get it.
Managed Futures Mutual Funds 2012 Performance
It’s been almost a year since we expanded our look at managed futures mutual funds to consider the new entrants into the space, and now we have a year’s worth of data to test our hypothesis that these funds would, in aggregate, underperform the broader managed futures indices. So far, we’ve been right.
Mythbusting Fundbusters
It’s been interesting to sift through all the different theories being floated about why managed futures is where it is today, but none have made us laugh quite as hard as this one: that academic researchers and bloggers are killing the traders’ edge by publishing their methods.
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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