Investors spooked by their hedge fund portfolios may do well to diversify into managed futures. Commodity trading advisors posted a modest gain of 0.68% last month, bringing their average year-to-date return to 7.86%, according to the Barclay CTA Index.
“As the financial crisis continued to wreak havoc across global equity markets, trend-following CTAs were able to profit from short positions in stock index futures,” says BarclayHedge founder and president Sol Waksman.
The Barclay Systematic Traders Index gained 1.94% in September, while Diversified Traders were up 1.56% and the Financial/Metals rose by 1.07%.
“Most commodity prices have been in decline since mid-August,” says Waksman. “CTAs, on balance, are currently short these markets, and the price declines were another source of profits for the month. Global fixed income was a difficult area for many traders in September. The U.S. rescue plan resulted in large counter-trend moves in the interest rate markets.”
All eight of the managed futures indices monitored by BarclayHedge are showing positive performance for the year. The Diversified Traders Index is up 14.15%, Agricultural Traders have gained 10.73%, Systematic Traders 9.21% and Discretionary Traders 9.05%.
The Barclay BTOP50 Index, which monitors performance of the largest traders, rose by 0.28% in September and is now up 6.45% over the first nine months of the year.