Commodity Exposure math = Commodity ETFs < Long/Short Commodities via Ag Traders
What started as a year of overperformance for Commodity ETF’s is quickly fading. After easily showing better results than the futures commodity markets that they track, commodity futures has sustained a lead for three consecutive months. But we’re not trying to kid anyone, both have dreadful performance year to date when you compare it to the Barclay Ag Trader Index which offers both long and short strategies in commodity markets.
Managed Futures Linkfest
Bart Chilton is announcing he will step down as Commissioner of the CFTC by the end of 2014, while Gary Gensler will vacate his seat by the end of this year. Here’s what else is happening in the managed futures world.
Futures Trading is Risky: Myth or Fact
By now, we in the managed futures world are used to the unwarranted assumptions about who we are and what we do, but what can we do to dispel these notions? While we’ll be the first to tell you that individual futures trading is risky (in fact we’re require to say it), Mike Dever with his book “Jackass Investing” tackles a similar notion, “Is Managed Futures equally or less risky than the Stock Market?”
Managed Futures (finally) Up 1.28% in October
Managed futures has a history of strong 2nd half performance, and it returned to form a little with a positive October performance of +1.28% according to the BarclayHedge BTOP 50 Index. Now all we need is a couple more months like that in November and December to push the asset class positive for the year. Here’s the performance for the main managed futures indices YTD.
Weekends Reads
Lots going on in the finance world. Q3 earnings came out, SAC is pleading guilty to security fraud, and the CFTC may have to delay investigations due to budget constraints. Here are our 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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