Managed Futures keeps positive performance rolling; Up 1.05% in November
The strong 2nd half performance typically witnessed from managed futures investors is coming to fruition as 2013 comes to a close. For the 2nd month in a row, the Barclayhedge BTOP 50 Index not only finished with a positive performance, but October and November’s monthly performance finished above the 1% mark {Disclaimer: Past performance is not necessarily indicative of future results}. Now the question is can the asset class finish the year on a positive note?
Option Traders: Focus on the (dead) Turkey tomorrow
While you dig into the delicious cooked to perfection turkey tomorrow, we want you to think about the life of that turkey in hypothetical terms. The turkey has “the good life,” including round the clock care, all the food it can muster, developing a life of self-satisfaction, until the 1,001st day, day when there’s the surprise where instead of receiving food, it becomes it. Our angle is from the investment side, and how there is an important lesson to be derived from the untimely end of the well-fed bird. Whether the chart below looks to you like your stock portfolio since 2009 or your Bitcoin holdings – it serves as a reminder that the unthinkable can and will happen.
Question: Can CTA’s with $1 Billion AUM Trade Grains?
First, on an elementary level, you won’t find anything on the CME website detailing a restriction on managers exceeding an arbitrary assets under management, from entering into a position into any market, nevertheless any of the grain markets. That’s not to say the question is entirely off; the root of the question, and in our opinion, the far more intriguing factor is not that they can’t but that they mostly don’t. Here’s why.
5 “other” All Time Highs
Is it just us or does all this coverage of the stock market indices seem like a broken record? Which got us to thinking of all the other things that are all time highs currently (besides the number of Attain employee children, collective age and weight in our office, etc), some having to do with the stock market, some decidedly not so…5 other areas where products/usage/items are at all time highs.
Weekend Reads
As the financial media talking heads focused their efforts on the S&P 500 and the Dow Jones Industrial Average hitting milestone markers, news emerged that could potentially shake the foundation of the alternative investment industry (managed futures included). Investment News reports that SEC Chairwoman Mary Jo White is considering changes to the criteria of what makes an accredited investor. Plus some other weekend reads.
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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