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By Beverly Chandler, Opalesque London:
A recent white paper from Altegris entitled 'Patience is a virtue’, finds that investors in managed futures need to be very patient and not a little brave in order to achieve investment returns.
The great strength of the managed futures strategy, often lumped into Global Macro, is that historically the investment style has exhibited low correlation with traditional investments. This means that over the longer term, the sector has managed to generate strong absolute returns across market cycles.
Altegris believes this comes from managed futures’ ability to utilize
multiple trading disciplines to create opportunities for managers to potentially profit from both positive and negative developments across multiple markets.
"Above all" their white paper says, "the most important point to keep in mind when investing in managed futures is that these potential benefits are typically realized over a long-term time horizon."
As an example, the firm shows returns for the managed futures strategy over 11 years. While on a month by month basis, the strategy produced many losses, over the whole 11 years, the managed futures sector only had one down calendar year and average returns for the 11 years were 8%. The most interesting figure is the return for 2008, where managed futures’ non correlation stepped up and the strategy produced a return of 15.47% in what was a disastrous year for many investors.
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