The two years of persistent market gains in a low volatility environment may have fueled speculative excesses “the likes of which have not been seen since the last bull market”. In the first day of trading in 2013 the NASDAQ Composite moved above its 100 day moving average and steadfastly remained above this average until April 4th the following year. The time span above this moving average was more than 15 months, a feat for the record books, going all the way back to the inception of the NASDAQ Composite in 1971. This is 4 months longer than the previous record. The second longest streak lasted 11 months, ending July 1983 nearly one year after the bull market began in August 1982. Measures of speculation were rampant in both these tops. For instance in the most recent period, discount brokerage firms’ transactions in February was the highest in over 10 years and 400% higher than in February 2009, which was near the bear market lows. The NASDAQ Composite in the month lost 2% and is 5.5% off the early March closing highs.
We are a little over half way through May and have approximately two-thirds of our CTAs updated through the month of April. Overall the index is flat and carried by agriculture and equity index manager trading for the month. Trend Following is so far posting a negative month with 73% of managers reporting. So overall on the year we are off to a moderate start as we get deeper into the second quarter. Without any significant trends we expect to see much of the same as the equity markets continue on the bull run. Agriculture should be particularly interesting as we head into planting season and this pig virus continues to play itself out.
“Flyberry Capital was founded in 2011 to deliver attractive risk-adjust returns, uncorrelated to most traditional and alternative investments, and unconditional to any single market or economic environment. The company relies heavily on research, using mathematics, “big data” and sentiment analysis techniques to develop proprietary trading models and strategies. Flyberry employs a quantitative trading program that opportunistically […]
Demeter Capital Management is a registered CTA with a Livestock and Grain Trading Futures and Options Program. The Livestock and Grain Trading Program attempts to generate profits through the Advisor’s discretionary selection of futures and options trades in agricultural markets. Trades are selected on the basis of fundamental analysis, which is concerned with any factor that would affect the supply and demand, and therefore the price, of a given instrument. The Advisor’s market analysis tends to focus on seasonal trends and year-to-year comparisons. The Advisor absorbs and interprets a wide range of research on a daily basis, employing its principals’s combined 40+ years of experience in agricultural futures markets.
Futures trading is a fast-paced, exciting business that attracts confident and assertive men and women who are convinced they can make a fortune, or at least a good side income, in one of the many futures contracts on the market. Some make it; many don’t. The percentage of self-directed traders who fail is exceptionally high. […]
Martin Fund Management (“the Fund Advisor”) is a Registered Commodity Trading Advisor (CTA) with a core focus on exchange-listed derivatives of global soft commodities (i.e. futures and futures options on coffee, cocoa, sugar, and cotton), using a Separately Managed Account (SMA) structure. The Fund Advisor seeks to generate outsized annual returns of 15%-20%, in excess of the S&P Goldman Sachs Commodity Index (S&P GSCI), employing short- to medium-term trading programs with low macro correlation and disciplined risk management. The Fund Advisor was founded by David Stephen Martin, who has over 22 years of commodity derivatives investment experience.
Commodity Trading Advisors, or CTAs, as they are commonly referred to have long been pigeon holed in the Managed Futures industry as professional money managers that trade commodities. Most people liken them to what they see in the movies. The reputation is that these are free wielding traders that have unlimited risk appetite in search of making a fortune. It may be true that speculative commodity traders that are depicted in the movies seek out returns that perhaps a novice or capital preserving investor would never be able to stomach, but most professional money managers trading in Managed Futures are seeking a risk/reward profile that appeal to a broader investing community.
Many people want to get into commodity trading but look askance at the vagaries of the markets and worry that they will lose a lot of money. Some individuals with limited trading experience can jump into the fray without losing their pocketbook; others aren’t so fortunate. Even some investors without experience investing in commodities may be shy at moving into the sector. Fortunately, there is a way for those with means to invest in the commodities market and perhaps come out better than they started most of the time. But they have to know the right tracks to follow.
Overall the IASG CTA Index was down 90 BPS for March with 71% of managers posting their returns a/o this posting. This was a particularly difficult month with the Volatility VIX index reducing dramatically in early March only to recover and spike quickly which presented an opportunity for the stock index and options CTAs. Agriculture was also an area of focus with grains primarily staying flat and end of month spiking after USDA reports indicated larger supply than was predicted along with unstable conditions in Ukraine causing corn prices to rally end of month. Finally Livestock prices achieved all time high prices as a virus continues to take its toll in decimating hogs. There were some managers that were able to exploit these markets and others who struggled. Trend Following continues to struggle in these market conditions with the first quarter showing a -1.25% loss.
Manning & Napier, Inc. (NYSE:MN), (“Manning & Napier” or “the Company”) today announced that it will acquire the business and operations of 2100 Xenon Group, LLC, an alternative investment manager specializing in managed futures and global macro strategies for institutional and individual clients. The acquisition will enhance Manning & Napier’s alternative capabilities and provide increased product diversification to clients. The transaction is subject to certain regulatory approvals and is expected to close within the second quarter. Financial terms of the transaction were not disclosed.
… or maybe more than one. If you’ve decided to include Managed Futures in your investment portfolio, the next step is choosing the right mix of Commodity Trading Advisors to help achieve your investment objectives. Just as managed futures help diversify an investment portfolio, different CTA programs can provide another layer of diversity within the […]
The stock market just hit an all time high and real estate values continue rising rapidly. Investors could not be happier. The day I refer to, of course, is October 9, 2007 when the S&P closed at its new record of 1565.15. What followed was a bull run in commodities culminating on July 11, 2008 when oil hit its high of $147.27 on dollar weakness and insatiable raw material demand from China. By January of 2009, oil dropped to almost $30 a barrel, the dollar was much stronger as seemingly everyone flocked to its perceived safety, and the worldwide economy would begin digging out slowly from the depths of the credit crisis. The S&P would drop below 700 points.