You would need to ask him. He is probably reading this now with his new handle. Your guess seems reasonable.
Michael B.
Michael B.
Quadriga Superfund - Managed Futures
- Thread starter USAtrader
- Start date
I have to disagree about funds not having problems with redemptions when they go into drawdown.
Having invested in some high profile futures fundS and talking with some people who place and run money. (I do note that some people on this thread have more experience than I on in this subject) We know that the people who place money into funds -- run after drawdown exceeds certain parameters say 25 to 30 percent drawdown. Something to do with their awareness of the risk fund managers take when they are far from their high water mark and the big payday.
We know when the core money runs all sorts of things get out of whack. Transaction fees, expenses, taxes and yes positions get all screwed up. Many large funds spiral down.
I have read very good articles about how this happens in the managed futures industry. It is very common.
Having invested in some high profile futures fundS and talking with some people who place and run money. (I do note that some people on this thread have more experience than I on in this subject) We know that the people who place money into funds -- run after drawdown exceeds certain parameters say 25 to 30 percent drawdown. Something to do with their awareness of the risk fund managers take when they are far from their high water mark and the big payday.
We know when the core money runs all sorts of things get out of whack. Transaction fees, expenses, taxes and yes positions get all screwed up. Many large funds spiral down.
I have read very good articles about how this happens in the managed futures industry. It is very common.
If this isn't Maverick, I'll take MyTwoCents out for a night of wild drunken sex! 
It will be interesting to see what retail investors do now. A 20% decline is one thing, but 50% in 4 months is another.
It will also be interesting to see Quadriga's response. They now need a 100% return before they even begin to earn performance incentives again. Maybe they will just start a new fund so they can earn 25% per month again from their rather reduced level.
It will also be interesting to see Quadriga's response. They now need a 100% return before they even begin to earn performance incentives again. Maybe they will just start a new fund so they can earn 25% per month again from their rather reduced level.
There are a number of other funds managing over 100M that are going through the same thing. Funds that have been around for years and done well until this stretch. It will be interesting to see what happens, whether the markets "change", or if we stay in this lethargy of slow moves and the funds adapt to the current conditions.
The problem is that Quadriga is a retail fund, not an institutional one, and they do not mention this possibility in their marketing. You can't really expect mom & pop to know the exact history of the CTA business for the last 2 decades. And not only do they not mention it, they in fact market the idea that they can make money in all types of markets, and have less risk than the stockmarket (Christian Baha said this many times on CNBC, Bloomberg TV etc).
I don't recall the last time the S&P fell 50% in 4 months?
It is a question of misleading marketing to inexperienced retail investors. If they had said "we are very aggressive, a 50% drawdown is a definite possibility at some point", then fair enough, but they don't do this. So mom & pop are left holding the bag.
I don't see how you can say that this misleading marketing is "par for the course". Of course guys like us are aware that trend-followers have blowups, especially if they gun for big returns, but I doubt the average customer with his $5k investment is aware of this, especially not when the fund touts itself in this way.