CTAs Struggle in May Amid Trade Wars

The Barclay CTA Index was unable to maintain momentum in May, dropping 0.19% and reflecting a negative month for these funds.

In an issued release, BarclayHedge attributes general poor performance to global trade wars and tariffs, which have consequently led to damaged equity markets and oil prices.

The Currency Traders Index was one of the few BarclayHedge indices to register a positive performance in May, eking out a return of 0.39%. It is now up 0.69% for the year. The Cryptocurrency Traders Index also showed positive returns in May, it was up 32.66% for the month, meaning that it is now up 55.39% year-to-date.

Despite negative performance this month for the majority of BarclayHedge’s CTA sector indices, all remain in positive territory for the year.

Sol Waksman, president of BarclayHedge, comments: “While rallies in energy and equity markets propelled managed futures’ performance in recent months, those markets were rocked in May by trend reversals attributed to tariffs and trade wars. However, the ongoing rally in fixed income instruments accelerated and provided profitable opportunities to mitigate losses in other market sectors.”

Waksman continues: “Bitcoin staged a significant rally in May, while total market capitalisation for other major cryptocurrencies was also on the rise. In the agricultural markets, fear of an escalating US-China trade war reducing demand and driving crop prices down were offset by concerns that wet weather in the corn belt during peak planting season would result in lower yields and higher crop prices. It was an opportunity for traders who could read the tea leaves correctly.”

 

Lizzy Birmingham

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