Long-only Commodity ETFs vs. Futures- October 2012
It’s time for our monthly look at how the long-only commodity ETFs are performing versus simply holding the December futures contract and rolling annually. Futures trading is complicated, presents a risk of loss, and isn’t for everyone but we’ve yet to receive a good answer to the question: why invest in an ETF when you can just roll December futures contracts annually?
CME’s Duffy: A year later, [futures market] customers are safer than before
While much of the coverage one year after MF Global will focus on what went wrong, there has been progress made on making things right; with new rules, proposals, and reviews all focusing on restoring the unconditional trust in the futures industry’s ability to protect customer funds.
MF Global Anniversary Linkfest
Anniversaries are often use as opportunities to look back, reflect on what happened, and how things have changed in the meantime. With the collapse of MF Global now a full year in the rearview mirror, there’s still plenty that needs to be said, and many questions that have yet to be answered.
Getting Back to Business as Usual
While we’ve all been glued to our TV screens watching the aftermath of Superstorm Sandy, a different kind of drama has been unfolding in the stock and futures exchanges in the US. Futures trading here in Chicago has been interrupted, but with the worst of the storm over (for New York, at least) it appears that it will be back to business as usual tomorrow.
Hurricane Sandy: A “By the Numbers” Collection
In the face of a disaster on the scale of Hurricane Sandy, it can be difficult to wrap one’s mind around the enormity of what we’re dealing with. There are, of course, the pictures and personal stories that can offer a glimpse into the experiences of individuals, but as numbers people, we find that the statistics really drive home the magnitude of what we’re looking at.
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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