Managed Futures – The January 2016 Litmus Test
Hello 2016! Well that was a lot of fun, wasn’t it. The worst ever opening weeks for the US stock market, continued carnage in commodities, and some Bank of Japan action just to top things off. While most investors will be a little scared to open their January statements, Managed Futures performed just as we expect them to in a market crisis – finishing off January up +4.13% (down from its’ January highs of +7.14%) {Disclaimer: Past performance is not necessarily indicative of futures results}. The same can be said for U.S. Stocks, at one point down -8.94%, only to have a late rebound at the end of the month to finish down -4.97% on the month. Finally, world stocks rounded out the bottom down -6.71%.
Regardless if you think we’re in a correction, preparing for a bear market, or are heading for another “recession” Managed Futures doesn’t pay attention to the market sentiment. It identifies market moves, whatever the direction, and rides those as long as possible.
Now for the tricky part – what will the scoreboard look like next month, in six months, or at the end of the calendar year? Only time will tell.
(Disclaimer: past performance is not necessarily indicative of future results.)
Source: All ETF performance data from Morningstar.com
Sources: Managed Futures = SGA CTA Index, Cash = 13 week T-Bill rate,
Bonds = Vanguard Total Bond Market ETF (BND),
Hedge Funds= IQ Hedge Multi-Strategy (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)
