John W. Henry & Company started the year flat, but descended into negative territory last month. All of the firm’s programs suffered negative returns, with the Financial and Metals Portfolio (down 10.50%) and the Global Diversified Portfolio (down 10.40%) having the worst month out of eight programs.
Chief Operating Officer Kenneth Webster, in his monthly investor letter, attributed the programs’ increasingly-familiar poor performances to an “explosion in volatility” during the last week of February. “Trading through that point was mostly positive for the month, but the events of the week reverberated throughout the market and reversed what few trends that had been evident earlier in the month,” wrote Webster.
Last month’s short-term volatility spike drove down strong corn and wheat prices, according to Webster, and hurt rallies in precious and base metals. Although he admitted that the firm’s programs were not “positioned for this sudden turn of events,” he remains cautiously upbeat for the months ahead: “An element of turmoil has been injected into the markets, which if it persists, has the potential to be a positive development for our style of trading,” he wrote.