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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.

Everything but soyoil rallied in March with wheat the upside leader. Funds covered shorts and got long wheat on US production risks and added risk premium for Ukraine/Russia tensions. Corn was supported on strong export demand and extremely strong ethanol margins. The same themes continued to support beans and meal – we have oversold our supply and need to ration for the remainder of the crop year. Oil made new highs early in the month in sympathy with strength in beans and on dryness in Southeast Asian palm production areas but sold off as rains materialized.

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.

The Federal Reserve gave the markets a double dose of talk and economic data Wednesday, but the market was already bullish and didn’t react much. First, the Fed released at 2 p.m. EDT the Beige Book Business Survey, which was based on data collected before April 7 and since the previous report on March 5. […]

Simultaneous, intense logistical snarls in both ocean-going shipments and North American rail transportation made for divergence between cash grain values and underlying futures contracts during the month. Part of what we do is forecasting how futures will act to realign regional imbalances, but this proved largely impossible as “uneconomic” dislocations abounded as never before: Cancellation […]

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.

Market Overview: Gasoline Current demand has climbed to a robust 9 million bpd which is 3.2% higher than the three year average At 9.84 million barrels per day, soaring U.S. gasoline production is a whopping 10.6% higher than the three year average As of this report, the NYMEX spot gasoline price is at $2.99/gal which is 7.6% below […]

Prudent investors like to know where their money is and how it is being used. They don’t want surprise announcements that the investment vehicle holding their money has lost 75% because of poor choices or because of a lack of management integrity.

This paper addresses issues contributing to the underperformance of trend following programs during the investment environment of the past five years, a set of conditions that may continue for some time. As the “trend following” debate rages on, our ultimate concern pertaining to the current conundrum is whether trend following strategies are no longer profitable. While I review comments from a variety of leaders in the field, both data and comments focus more heavily on the CTA (Commodity Trading Advisor) space than on that of other fund managers. Nevertheless, details are applicable to a variety of strategies. It is my hope that a broader perspective will encourage investors to ask more pragmatic questions, ultimately improving their manager selection process.