6 Takeaways from the Performance of 8 Asset Classes YTD

Our takeaways:

  1. The Real Estate ETF (IYR) is not only the best performing asset class this year, but over the past 5 years.
  2. Managed Futures and the S&P 500 ETF (SPY) are virtually tied for 2nd place, with only a month to go.
  3. Managed Future can perform in all market environments, not just crisis periods.
  4. The Long Only Commodity ETFs are getting pummeled, down double digits this month, and -20% on the year {past performance is not necessarily indicative of future results}.
  5. There’s a 40% difference between the yearly performance of commodities and real estate.

While us Managed Futures folk are a little giddy over recent performance (the best performing asset class the past three months), even we need a reminder that Managed Futures strategies (and true alternative investments) aren’t trying to outperform stocks or real estate. Managed Futures is meant to be a diversifier in your portfolio, ideally representing anywhere between 10-30% of your portfolio. It’s there to make sure when the other highly correlated assets in your portfolio go down with the stock market, you have something that’s truly different. As we said ourselves not too long ago:

“So the next time there’s an article claiming Hedge Funds (or other Alternative Investments) as underperforming the S&P 500, realize they are telling you that the Filet tastes meatier than the Salmon. The Salmon is half the calories and half the fat content… if it doesn’t taste as meaty – that’s usually on purpose.”

Table-of-Asset-Class-Scoreboard Asset Classes

Chart-of-Asset-Class-Scoreboard

(Disclaimer: Past performance is not necessarily indicative of future results)
Source: All ETF performance data from Morningstar.com
Sources: Managed Futures = Newedge CTA Index, Cash = 13 week T-Bill rate
Bonds = Vanguard Total Bond Market ETF (BND),
Hedge Funds= IQ Hedge Multi-Strategy Tracker ETF (QAI)
Commodities = iShares GSCI ETF (GSG); Real Estate = iShares DJ Real Estate ETF (IYR);
World Stocks = iShares MSCI ACWI ex US Index Fund ETF (ACWX);
US Stocks = SPDR S&P 500 ETF (SPY)

“The Managed Futures Blog is a compilation of thoughts, research, attempts at humor, and more from the team at Attain Capital Management (“Attain”). Attain pairs high net worth individuals, RIA’s, and institutional investors with alternative investments in commodities, managed futures, and global macro strategies through privately offered funds and managed accounts. Click here to sign up for their insight and analysis.”