Tag: trend following

trend following

CTA Performance: Decline or Dip?

Galen Stops looks at why CTA strategies struggled in 2016, examines why there is enthusiasm from these managers bubbling up for 2017 and looks at the trends that are shaping the managed futures industry.

2016 wasn’t exactly a vintage year for CTAs. The SocGen Prime Services SG CTA Index ended the year in negative territory for the first time since 2012, showing returns of -2.89%. Likewise, the BarclayHedge CTA Index was -1.14% for the year. One explanation for why these firms struggled was the continued low interest rate environment, which has kept bond prices low and helped drive up the stock market.

Alpha Quest: Navigating the Storm

In many ways alpha seeking firms trading FX have endured something of a perfect storm of return reducing conditions over the past few years.
Interest rate differentials are still largely non-existent as central banks persist with low interest rate policies. Many banks have pulled back from both principal risk taking and credit provision in FX, making life harder for their buy side counterparts.
Regulations continue to take their toll on both buy and sell side firms, introducing new cost pressures and causing budgets to be increasingly diverted towards compliance functions.