Funds Hub

Money managers under the microscope

Back to the Futures

June 25, 2009

At the turn of the year managed futures funds/CTAs were the talk of the town after a stonking 2008 in which they gained 18.33 percent while the average fund lost 19.07 percent.

Six months on and they have become one of 2009′s laggards, losing 5.23 percent while the average fund is up 6.72 percent.

The problem has been a lack of clear trends in futures markets, which CTAs follow to make their money.

The worst case scenario, which has happened in some markets this year, is an apparently long-term trend suddenly reverting, catching out those who’d been betting on something a bit longer-lasting.

To make matters worse, some CTAs had increased their leverage, according to Finaltis CEO Denis Beaudoin.

However, Beaudoin reckons this could be the time to buy back into managed futures again as trends are likely to re-emerge at some point, according to the laws of probability.

“If CTAs experience a drawdown it’s not time to get out, it’s the time to get in,” he says.

“You don’t know when trends will appear, but you know there will be trends somewhere down the road.”

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