The flash estimate for the Barclay CTA Index, compiled by BarclayHedge, shows a 1.75% gain in October. Year to date, the index is up 0.15%.
Diversified traders led for the month with a gain of 2.50%, followed by systematic traders at 2.46% and financial/metals traders up 2.02%. Currency traders notched a modest gain of 0.25% while discretionary traders fell 0.06% and agricultural slid by 0.31%.
“Global equity markets provided the biggest boost to returns as the S&P 500 rally moved into its 12th consecutive month and the Nikkei 225 rose to 20-year highs,” says Sol Waksman, founder and president of BarclayHedge.
Hedge Funds extended their winning streak to 12 months with a 0.96% gain in October, according to the Barclay Hedge Fund Index compiled by BarclayHedge.
The index is up 8.31% for the year and has gained 10.40% since the current winning streak began in November 2016. Overall, 14 of Barclay’s 17 hedge fund indices registered positive returns for the month, with Technology leading the way as the big gainer year to date with a rise of 21.09% and 2.83% for October.
Flow Traders, a Netherlands-based liquidity provider that specialises in exchange traded products (ETPs), is making a concerted push into the FX market, the firm has revealed today.
Flow Traders is partnering with MarketFactory to trade FX directly with investors across a number of different trading venues. In a release issued today the firms says that MarketFactory's API product, Whisperer, its “strategic ambitions” to become a leading liquidity provider in FX.
Flow Traders has long been active in the FX as part of its hedging strategies, but the firm claims that the current state of the FX industry provides an opportunity for it to further expand its role in this market.
In a new survey conducted by BarclayHedge, two thirds of the hedge fund respondents said that are not planning to invest in cryptocurrencies, despite the current hype around these digital assets.
The survey of 119 hedge fund managers and CTAs was conducted between September 11 and September 29, 2017.
Managers were asked if they currently invest in or plan to invest in cryptocurrencies. In total, 68% answered “No,” while 24% responded that they either currently invest or plan to invest within the next six months. A further 8% replied, “We’re studying the situation.”
Managed futures traders slipped after two months of gains, losing 0.72% in September, according to the flash estimate for the Barclay CTA Index, which is compiled by BarclayHedge.
“The Fed’s mid-month confirmation that it was unwinding QE precipitated trend reversals in bond yields, the US Dollar Index, and gold,” says Sol Waksman, founder and president of BarclayHedge. “In spite of the ongoing rally in global equities, there were several treacherous crosscurrents in motion during September and successful navigation was difficult.”
Portfolios that include managed futures funds perform better and reduce more risk than those without them, according to research jointly published by the Alternative Investment Management Association (AIMA) and Societe Generale.
The paper, titled ‘Riding the Wave’, analysed the risk and return profiles of investment portfolios including and excluding managed futures funds from 2000-2016.
For example, it showed the performance of a traditional asset mix of 60% bonds and 40% equities is enhanced with the addition of CTA strategies, which may increase the return and risk-adjusted returns (by lowering the volatility), as well as considerably lowering and shortening drawdowns.
Managed futures traders gained 0.54% in August, according to the Barclay CTA Index compiled by BarclayHedge.
For the year, the index is still down 0.51%. “Geopolitical uncertainty had investors scurrying for the safety of sovereign bonds,” says Sol Waksman, founder and president of BarclayHedge.
“As Harvey advanced, Gulf Coast refineries sought safety. Refiners shut down and spot gasoline shortages propelled gasoline futures 28% higher in the closing days of the month.”
Five of the six sub-indices calculated by BarclayHedge recorded gains in August. Diversified (0.94%), systematic (+0.74%), discretionary (+0.28%), financial/metals (+0.17%) and currency (+0.02%) traders all gained. Agricultural traders were the only losing sector (-0.56%) of the month.
Managed futures traders showed gains of 1.87% in August, according to a flash estimate of the BarclayHedge BTOP50. For the year-to-date period, the index is down 2.39%.
“Managed futures had its best month of the year and the best returns since June 2016 in August,” according to Sol Waksman, founder and president of BarclayHedge. “It’s too early to say that the industry has turned a corner, but the signs are positive.”
Systematic traders led the way with a gain of 2.63%; 13 of the 14 systematic traders in the BTOP50 were profitable in August. Discretionary traders were essentially flat for the month, losing 0.04%. Two of the three discretionary traders had small losses.
Nippon Life Securities has become the first Japanese non-bank financial institution (NBFI) to join the CLS system via third-party access.
Nippon Life Insurance Company, Japan’s leading life insurance company in terms of net profit, is now settling FX transactions in CLS via its settlement bank.
CLS says the addition of Nippon Life marks another milestone in the continued growth of CLS participation across Asia. Last year South Korea’s Samsung Securities became the first NBFI to become a third-party participant in South Korea, and was joined by three more of the largest securities brokers and one fund in 2017.
A BarclayHedge survey of 134 hedge fund managers in July has revealed that 36.6% of survey respondents currently offer reduced or no fee alternatives to their investors and a further 20% plan to offer lower or no fee products in the next three-to-six months.
“The hedge fund industry has been under pressure to offer lower fee alternatives for some time,” says Sol Waksman, founder and president at BarclayHedge. “We expect that these pressures will continue and that low or no fee products will continue to grow."