I’m a proud American but sometimes when watching Congress at work I wonder if our Founding Fathers were a bit daft. Case in point: The House Agriculture Committee hearings on the MF Global failure held Dec. 8. Between the redundant, silly, random and political ax grinding questions, it’s a wonder anything was learned. However: (more…)
BarclayHedge released its May flash report of commodity trading advisor (CTA) performance this week, which indicated May was a rough month for managers. The report includes managed futures trading programs managing at least $50 million. It was no surprise that May was a tough month for traders as the sharp reversal in the U.S. dollar led many commodity markets to change course abruptly.
When I started writing about managed futures and hedge funds about a decade ago I did a story about the different strategies involved and a veteran told me “Global Macro” was not so much a specific strategy but a marketing tool by Commodity Trading Advisors (CTAs) tired of being rejected by allocators afraid of the futures space. Some managed futures managers started calling themselves Global Macro hedge funds and apparently it opened some doors. While Global Macro encompasses more than CTAs, I still view it as a term that doesn’t tell you a whole lot about the manager defining himself with it. Which may be its purpose.
On the morning of the day the CME Group would present its Fred Arditti Innovation Award I read small item on the Financial Times back page on French economist Benoit Mandelbrot who had passed away the week before. The story pointed out how the recent financial crisis vindicated Mandelbrot’s work, which “disproved the precepts of the efficient market half a century ago” even though it is still be taught as gospel today. (more…)
BarclayHedge reported on Tuesday that the managed futures sector surpassed all other hedge fund strategies in assets under management at the end of the second quarter. According to the Iowa based data provider money under management in managed futures grew to $223.4 billion in the second quarter, surpassing all the other hedge fund sub sectors it lists.
The Managed Funds Association (MFA) conference in Key Biscayne Fl. (held Feb. 8-10) was a tale of two asset classes. Much of the discussion surrounded the financial crisis, poor performance and expected additional regulation.
But the strategy/asset class best represented at the conference in terms of actual managers in attendance was managed futures, and commodity trading advisors (CTAs) had a great year in 2008. There was some confusion when a sponsor from a CTA introducing a panel, talked about how outstanding a year it was for the industry. There were some quizzical looks around the room from those who worked at or serviced the larger universe of equity based hedge funds. See it wasn’t so good of a year for them.
While looking for information on a certain money manager I came across a Website that put together a list of all of the institutional and individual investors who had lost money with Bernard Madoff. The list is impressive in its size and scope.
I was looking at another list as well in my due diligence for Futures’ upcoming Top Traders of the year feature. You see, while 2008 was a terrible year for equities, hedge funds, housing and just about every other asset class, commodity trading advisors (CTAs) had one their best year’s ever. Those of you who are familiar with managed futures know that it tends to perform best when equity markets struggle and when there are large market dislocations causing increased volatility.
Back in 1980 Frank Pusateri, Bucky Isaacson and a small group of futures traders met in Chicago to form an organization to serve the interests of commodity trading advisors (CTAs). The organization was the forerunner to the Managed Futures Association, which morphed into the Managed Funds Association (MFA) at the turn of the century.
In recent years many CTAs have felt the efforts of the MFA have focused on the institutional hedge fund universe to the detriment of its original managed futures trading founders.
