We’ve been focused lately on the struggles of systematic trend-following CTAs. They’ve had similar stretches in the past, but because the strategy makes up the majority of the managed futures world (and this down year is the 3rd in the past 4), this year’s disappointing performance has been a drag on the industry as a whole.
But, there is one bright spot: Ag traders (even though they have come down from their highs in many cases). Due in part to the big market moves driven by this summer’s drought, the Barclay Agricultural Traders Index is up 6.82% so far this year, compared to the broad CTA index down -1.56% (Disclaimer: past performance is not necessarily indicative of future results). And it’s not just us at Attain seeing the over-performance of Ag traders this year – the CME has released some nice infographics on the Ag space and what drives prices in these markets, such as cattle and corn.
And this highlights one of the big differences between Ag traders and the majority of the managed futures world: nearly all ag traders are discretionary/fundamental traders. Most have grown up in the industry, either working on farms or as a buyer for large Ag companies, and they use this expertise (and network of contacts) to get a “feel” for the Ag markets. They will look at crop reports, cattle reports, and import/export numbers to try and determine where the futures markets should be in relation to the cash market.
This isn’t to say Ag trading is purely discretionary: many still use technical indicators to determine buying and selling points, position sizes, as well as whether to execute via outright futures, spreads, or options once they determine which trades they want to put on. But this year has definitely shown that, when conditions are right, Ag traders can be an excellent diversification play.
PS: The CME’s graphic made us think of the old “cuts of meat” pictures you see hanging in a few Chicago steakhouses.
The performance data displayed herein is compiled from various sources, including BarclayHedge, and reports directly from the advisors. These performance figures should not be relied on independent of the individual advisor's disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes proprietary results, and other important footnotes on the advisor's track record.
Benchmark index performance is for the constituents of that index only, and does not represent the entire universe of possible investments within that asset class. And further, that there can be limitations and biases to indices such as survivorship, self reporting, and instant history.
Managed futures accounts can subject to substantial charges for management and advisory fees. The numbers within this website include all such fees, but it may be necessary for those accounts that are subject to these charges to make substantial trading profits in the future to avoid depletion or exhaustion of their assets.
Investors interested in investing with a managed futures program (excepting those programs which are offered exclusively to qualified eligible persons as that term is defined by CFTC regulation 4.7) will be required to receive and sign off on a disclosure document in compliance with certain CFT rules The disclosure documents contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA, as well as the composite performance of accounts under the CTA's management over at least the most recent five years. Investor interested in investing in any of the programs on this website are urged to carefully read these disclosure documents, including, but not limited to the performance information, before investing in any such programs.
Those investors who are qualified eligible persons as that term is defined by CFTC regulation 4.7 and interested in investing in a program exempt from having to provide a disclosure document and considered by the regulations to be sophisticated enough to understand the risks and be able to interpret the accuracy and completeness of any performance information on their own.
RCM receives a portion of the commodity brokerage commissions you pay in connection with your futures trading and/or a portion of the interest income (if any) earned on an account's assets. The listed manager may also pay RCM a portion of the fees they receive from accounts introduced to them by RCM.