Thursday, 24 July 2014
Last updated 2 hours ago
Sep 30 2013 | 12:53pm ET
While many hedge funds toast the Federal Reserve's refusal to begin cutting back on its bond-buying stimulus program, long-term commodity trading advisors are cursing the central bank.
Such funds are facing a third-straight losing year, Reuters reports, and the Fed's indecision is in large part to blame: Market volatility, fueled by uncertainty as to the start of the expected taper, has battered long-term CTAs this year, and it is unclear now whether the Fed will actually begin to slow its $85-billion-per-month in bond purchases this year.
The volatility has proven difficult for CTAs' quantitative systems to predict.
"The essence of succeeding as a CTA is having the opportunity to enter and stay in a market," Quantum Leap Capital's Juan Carlos Herrara told Reuters. "You really need continuous movements and in one direction. If only three of four of the markets you're in are doing that, then it's going to downsize your returns."
Herrera would know: Sugar Land, Texas-based Quantum Leap is down 14% this year.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…