FYI; This week’s mid-week reading covers a lot of ground, from hedge fund and managed futures performance for November, to the increasing buildup of the private equity industry’s “dry powder.”
One particular article that resonates with me is the post by Kenneth Masse of Invesco on equity market neutral strategies. Just this morning I had a conversation with an advisor about how these strategies can be used as a fixed income substitute. There are a lot of reasons for investors to consider this, and Masse’s blog post hits on the key points. Finally, if you want to get a head start on stocking stuffers, David Merkel provides a solid list of book ideas on The Aleph Blog.
Regards,
Ted
http://dailyalts.com/mid-week-reading/
Comments
Posted on December 8, 2015 by David Ott Acropolis Investment Management
Some strategies, managed futures being the most obvious, are based exclusively on trend following and they really got hurt last Thursday.
Managed futures funds attempt to catch trends by buying what has gone up recently and selling short assets that have fallen recently. Going into the meeting, they were short euros and long German bonds (among other things) and were hit with a tough reversal.
The Newedge Trend Index, an equally weighted index of large managed futures managers, lost -3.66 percent on Thursday, wiping out all of the gains for that index for the year. http://www.newedge.com/en/newedge-indices/
Although we haven’t really invested in managed futures programs, we have been looking into them over the past several years.
We’re not opposed to managed futures and trend following, but we don’t feel like anyone understands them like traditional asset classes like stocks and bonds.
..there is good data on stocks and bonds that goes back to the 1800s for the US and many decades from countries all over the world.
As always, we’ll keep looking and learning, just like we did last Thursday.
http://acrinv.com/when-trends-reverse/