Stocks… We Hope they Go to Zero!
One of the best things about being in an investment which can do well when markets are down is the fun you can have at cocktail parties, in the locker room at the golf club, and dinner with friends. A -334 point down day in the Dow and around -5% move off of all time highs starts to bring out the shrugs and exasperated expressions, as those well to do’s around you murmur their version of the timeless classic:
Shhh… Managed Futures up 4.93% in Q3
Being in the managed futures biz, you might expect us to be leading a parade complete with marching band and tumbling coppers a’ la the opening scene of Austin Powers following a month like September, where two of the family of Attain Funds posted double digit returns, and the managed futures index was up 1.94% to finish the 3rd quarter up +4.93% (past performance is not necessarily indicative of future results)
Long the US Dollar… And Loving it
We tend to have a knack for highlighting a certain market move or environment on the blog, and that market or environment quickly reversing course upon our piece hitting the airwaves. The latest example looks to be the Currency Markets. So it’s no coincidence that the ‘best quarter for the dollar in 4 years’ coincides with the best managed futures performance in 4 years. This is just the sort of move that managed futures programs are designed to capture.
A Golf Clap for Reporting on “Commodity Hedge Funds”
Managed Futures and alternatives have been getting a bad rap over the past couple of years, and we’ve spent far too much time “setting the record straight.” We thought it might be a good idea to highlight a major publication (The Wall Street Journal) for doing a decent job capturing the climate of “commodity hedge funds” this summer. What are we talking about?
CalPERS Hedge Fund Exit: Earthquake or Godzilla?
The big news in the alternatives world this week is of course that the largest pension in the world CalPERS is ditching it’s Absolute Return unit and unloading $4 Billion worth of hedge funds. Is this the end of hedge fund investing by institutional investors (an earthquake), typical performance chasing by an investor (albeit a very large one), or a result of their enormous size (Godzilla).
More than anything, what we’re may really be seeing here is the upper bound of the hedge fund/institutional investor asset allocation game. CalPERS seemed like the best client a hedge fund could have… with nearly $300 billion in assets which could be allocated to hedge funds, but some boring performance on what really amounted to a test run (1.5% of assets), likely made them see that even if hedge funds were great – they couldn’t play in that pool in any real meaningful way.
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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