Will a Negative Roll Yield Shut Down Managed Futures Bond Tailwind?
Legendary Bond trader ponders if many of the greatest investors have the 30 years of falling interest rates to thank for their success. We see similarities to this in the managed futures world, as it provided a boon to many managers. With bonds nearly 70% in the past 16 weeks (the highest change in 15 years), and managed futures didn’t so well in this dress rehearsal of rising interest rates, it’s left us wondering; Will a down trend in bonds treat managed futures as well as the 30 yr up trend has?
The $48 Million Platinum Payout
It’s not every day you see a Forbes 400 Member settle a class action suit surrounding market manipulation – but that was exactly what’s happened. Futures Industry ‘Hall of Famer’ Louis Moore Bacon’s firm Moore Capital has agreed to pay $48 Million to settle allegations of manipulating Platinum and Palladium prices. There’s no knowing what really happened, either way if you traded Platinum and Palladium why not submit your claim for part of it.
It’s getting Hot (and Dry) in here
So, about those record US Crop plantings and the big downtrend in grains in 2013…. Don’t look now but Corn and Soybeans (Oil + Meal) were all up more than 4% today, with Wheat up more than 3%. This has been a crazy summer for grains, as we’ve seen record number of bushels predicted. And now the forecast for hot, dry weather in the Midwest this week is pushing prices higher as people realize it’s not just how much is planted, but how much comes out of the ground in good shape that matters.
The “Bond King” coming to Managed Futures
Look out Managed Futures! Here comes the Bond King! Bill Gross is buying the drawdown in managed futures…well sort of. Pimco has filed papers with the SEC to open a Managed Futures Mutual Fund. While we are never too found of these mutual funds, it’s a little early to pass judgment. So what’s Bill Gross’s reason to invest in Managed Futures right now?
Weekend Reads
This week in finance will be one not many forget. For more than three hours the Nasdaq showed a flat-line as trading stopped due to a technical error. Investors, the twitter-sphere, and CNBC went bonkers. Nasdaq was trending on twitter, CNBC has 12 different analysts on the screen at the same time, and the Nasdaq itself keep delaying the reopening on the market. n the managed futures world, we can’t help but point out that Nasdaq futures kept going like nothing was happening during the craziness. As we think over this week’s events, here are some 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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