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Money managers under the microscope
Yu-Dee Chang: Opportunities for managed futures funds
Guest blogger Yu-Dee Chang is the sole principal and chief trader of ACE Investment Strategists. He has continuously been registered in the commodity industry for the past 14 years. From August of 1997 to the present he has operated Chesapeake Investment Services Inc., a Virginia based Introducing Broker where he is the President and Chief Executive Officer.
The views expressed here are entirely the author’s own and do not constitute Reuters’ point of view.
Investors often make no differentiation between commodities and professionally managed futures. While commodities are an asset class, professionally managed futures are an investment vehicle, which use the commodity futures and options markets in an attempt to capitalize on a rise or fall in commodity prices. In professionally managed futures, performance results are more dependent on the skill of the manager, not the investment vehicle or economic environment.
2008 was one of the worst years on record for not only stocks, but also commodities, which fell 46 pct. However, professionally managed futures were up 14 pct to 18 pct according to the Credit Suisse/Tremont Managed Futures Index and the Barclay CTA Index. This is due to Commodity Trading Advisors’ (“CTAs”) ability to capitalize on significant declines in commodity prices.
It’s not what you Fink
Hedge fund industry ‘godfather’ Stanley Fink has been busy since relinquishing the top job at Man Group nearly three years ago.
At ISAM is building a strong team, having attracted former RAB Capital director Rod Barker last year and now CTA veteran Larry Hite, while the firm can also boast former Labour party chief fundraiser Lord Levy as chairman.
Back to the Futures
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.
Going global
Global macro and managed futures (CTAs) are still where it’s at, it seems, when it comes to funds of hedge funds.
Nigel Davies’ poll of portfolio managers shows these are the two strategies they are expecting above average returns from in the first half of 2009.
