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Managed Futures Index down almost 10 % -- horrible April again
- Thread starter trillenium
- Start date
15 yrs ago ... I was a working for an FCM
one of my neighbors in my apartment complex
was a slightly "geeky" but sharp trader type name
Rob Rotella ... he traded stuff like coffee options
on the exchane floor then
next thing I knew ... he wrote a book about trading and was managing money in ASIA
now I see he is running OPM in the 7-8 figure
size.
it does look however like he has not done so great
in the last 1-2 yrs ... but those who were with him
in the 90;s are way ahead of the benchmark's
one of my neighbors in my apartment complex
was a slightly "geeky" but sharp trader type name
Rob Rotella ... he traded stuff like coffee options
on the exchane floor then
next thing I knew ... he wrote a book about trading and was managing money in ASIA
now I see he is running OPM in the 7-8 figure
size.
it does look however like he has not done so great
in the last 1-2 yrs ... but those who were with him
in the 90;s are way ahead of the benchmark's
when you look at the amount of money they manage now - its no wonder most of them are loosing now.
Look at www.iasg.com and rank for "money under management" then click on each and see how money under management exploded. These charts look like the stock charts in the dot.com years.
Will managed futures performance now crash as did the stocks ?
Look at www.iasg.com and rank for "money under management" then click on each and see how money under management exploded. These charts look like the stock charts in the dot.com years.
Will managed futures performance now crash as did the stocks ?
Quote from trillenium:
Will managed futures performance now crash as did the stocks ?
Crashes in managed futures returns are highly unlikely. Individual funds and even strategies can do horribly, but as an industry overall, it's got to be pretty stable.
For futures, for every contract that is held long, someone else holds a short contract position. If the underlying price shoots up or down, someone makes money and someone loses money. To the extent that managed futures mirrors futures trading as a whole, the net result is zero sum (less transaction costs).
Contrast the equity markets...On average the mutual fund industry is net long and a big drop in equity prices causes a crash in equity fund manager returns. To the extent managed futures is a zero sum game, it can't have these kind of crashes. Look at this graph of managed futures vs. the much more volatile S&P 500: http://www.iasg.com/SnapshotPT.asp?ID=333. For futures markets there is a lot of shuffling about of money, but never a big drop in wealth as happens when equity markets or real estate markets crash.
To the extent more money comes into managed futures, managed futures becomes an even larger part of the futures trading universe (vis a vis hedgers and individual speculators) and gets even closer to zero sum, and ends up <i>more</i> stable and crash resistant, rather than less so.
Aaron Schindler
Schindler Trading
Doesn't sound like much potential, up OR down, when you have so many sharks trying to take other sharks' money. Probably a slow grind to death, would be my opinion for some.
Quote from Aaron:
Crashes in managed futures returns are highly unlikely. Individual funds and even strategies can do horribly, but as an industry overall, it's got to be pretty stable.
For futures, for every contract that is held long, someone else holds a short contract position. If the underlying price shoots up or down, someone makes money and someone loses money. To the extent that managed futures mirrors futures trading as a whole, the net result is zero sum (less transaction costs).
Contrast the equity markets...On average the mutual fund industry is net long and a big drop in equity prices causes a crash in equity fund manager returns. To the extent managed futures is a zero sum game, it can't have these kind of crashes. Look at this graph of managed futures vs. the much more volatile S&P 500: http://www.iasg.com/SnapshotPT.asp?ID=333. For futures markets there is a lot of shuffling about of money, but never a big drop in wealth as happens when equity markets or real estate markets crash.
To the extent more money comes into managed futures, managed futures becomes an even larger part of the futures trading universe (vis a vis hedgers and individual speculators) and gets even closer to zero sum, and ends up <i>more</i> stable and crash resistant, rather than less so.
Aaron Schindler
Schindler Trading
http://www2.standardandpoors.com/se...e/IndicesIndexPg&r=1&l=EN&b=4&s=132&xcd=HEDGE
down 12.5 % -- you can watch it loose every day now
down 12.5 % -- you can watch it loose every day now
I read an article in Futures recently about managed futures programs. Some of the fees they charge should be criminal. The FCM's promote them and in return charge outlandish brokerage fees. Not all of the MM's do it, but before putting any money with one, make sure you understand what you are being charged and by whom.
First of all its lose not loose. Managed futures is a highly volatile strategy, but in the end they provide the best returns. My guess is that the index will be positive at the end of the month, it had a big day today, and be near the top of the indexes at the end of the year. If you don't like the fees they don't invest with one.
@5yrtrader
Yes today was a good day for managed futures -- I am pretty sure because i trade managed futures myself and my performance is very similar to the managed futures index. (sorry about my english by the way )
I came up with this thread to see what other people think about the bad performance of managed futures.... And because I am super scared that managed futures will steadily loose from here. I am almost convinced it will, because Futures Funds have collected too much money. When you look at www.iasg.com and rank for assets under management then you see how the capital under management just exploded. So when managed futures make money again this year then even more money will come in. That is like dot.com stocks in 2000. Everybody wanted in and then it all fell apart. That is what i fear for managed futures this year. Then next year people will withdraw money and then it might work again.
I am down 6 % this year and I am trading for more than 10 years already. Last April I had my worst drawdown of 12 % (at month end it was down 8 %). So I was sure this april would be better - but it is as bad as last year. The big question now for me is this: Will managed futures recover from here (hopefully) or will it keep on loosing because just too much money is in there and needs to be burned.
I cant really decrease discretionary because my clients expect the money to be invested with my systems. Even though I really would like to decrease a lot and wait til all this crazy "money under management" has come down.
I pass on my super low fees to the clients (i dont charge more to get some kickback from FCM) and i only get incentive fee and no money managemnt fee of 2 % or so. I undersatnd all big futures funds that they dont really care that much. When you have 1bln under management then you get 20 mio from 2% MMfee. I live purely off my performance and therefore I am very interested in what other people here think where managed futures will head.
Yes today was a good day for managed futures -- I am pretty sure because i trade managed futures myself and my performance is very similar to the managed futures index. (sorry about my english by the way )
I came up with this thread to see what other people think about the bad performance of managed futures.... And because I am super scared that managed futures will steadily loose from here. I am almost convinced it will, because Futures Funds have collected too much money. When you look at www.iasg.com and rank for assets under management then you see how the capital under management just exploded. So when managed futures make money again this year then even more money will come in. That is like dot.com stocks in 2000. Everybody wanted in and then it all fell apart. That is what i fear for managed futures this year. Then next year people will withdraw money and then it might work again.
I am down 6 % this year and I am trading for more than 10 years already. Last April I had my worst drawdown of 12 % (at month end it was down 8 %). So I was sure this april would be better - but it is as bad as last year. The big question now for me is this: Will managed futures recover from here (hopefully) or will it keep on loosing because just too much money is in there and needs to be burned.
I cant really decrease discretionary because my clients expect the money to be invested with my systems. Even though I really would like to decrease a lot and wait til all this crazy "money under management" has come down.
I pass on my super low fees to the clients (i dont charge more to get some kickback from FCM) and i only get incentive fee and no money managemnt fee of 2 % or so. I undersatnd all big futures funds that they dont really care that much. When you have 1bln under management then you get 20 mio from 2% MMfee. I live purely off my performance and therefore I am very interested in what other people here think where managed futures will head.
Down 13.12 %
I bet today was a big downday again for managed futures !!
I bet today was a big downday again for managed futures !!