Managed-Futures Giant Hurt By Currencies in ‘07

Feb 4 2008 | 2:00am ET

Managed-futures behemoth Campbell & Co. was hurt last year by trades in the currency market, as well as in fixed-income and equities. The firm’s $11 billion Financials, Metals & Energy Large Portfolio was down 13.38% and its 22-year-old $1.5 billion Global Diversified Large Portfolio lost 11.21%—its first losing year since 1986.

“Losses for the portfolio from currency trading continued into year-end as market participants sold high yielding currencies, particularly the British pound,” wrote Teri Becks, president, in an investor letter. “Fears that the U.K. housing market and general economic growth would slow caused the Pound to finish off 4% on the month. Smaller losses were experienced in fixed-income trading and trading in equity indices as U.S. and European stock markets were extremely volatile in December, while Asian stocks continued to move lower.”
 
However, the portfolios did manage to sweat out small gains in base and precious metals as gold rallied 6% to all time highs amid strong buying in the face of a bounce in the U.S. Dollar, but obviously not enough to offset the losses.

So how is the firm handling its losses? Becks said that Campbell “has responded to the performance difficulties of 2007 with intensified efforts in research, highlighting the need to diversify across investment horizons and to monitor and respond to sharp factor-risk contagion more nimbly."


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