Gwyn Roberts

26/07/2011 Author: Gwyn Roberts

Editor's view: 28 July 2011

Recent HFR data shows that, despite a run of uncertain performance, inflows continue to run relatively freely. In fact, it’s been a year of contrasts, with record allocations making up for strategy-wide losses over an uncertain and unpredictable seven months.

This good news/bad news equation suggests that the diversification benefits of the industry are well understood. Alpha – before it became a tarnished word – was once the key attraction. Now, more realistic investors see managers as protective cover – a move which explains the rise of interest in managed futures funds.

Long held in suspicion – because of some odd fee structures and a bias towards commodities – the modern managed futures fund is a much more appealing proposition, thanks to a proven ability to perform while the rest of the investable world heads south.

This lack of correlation is the key to the current attraction. A trend seen in 2008, when managed futures returned double digits while equities, real estate and commodities floundered; and also observed in the bear markets of 2000-2003, 1990 and 1987.

The fact that the strategy is down so far in 2011 hasn’t halted interest. Institutional investors have taken a while to thaw, but now seem to be embracing the sector as a much-needed diversifier. BarclayHedge already places managed futures assets at close to $300bn, meaning the strategy is well on its way to becoming an industry giant. 

Post a comment

Post a comment…

Be the first to comment on this article!

07/06/2012

UK: Impact of the AIFMD - the real story

Join us and our panel of experts for HFMWeek's Subscribers' Club June's UK breakfast briefing, 'Impact…

Read More

31/05/2012

US: Family Offices

The next US HFMWeek Subscribers' Club breakfast, will take place on Thursday May 31. Join us and…

Read More

02/02/2011

European Hedge Fund Services Awards 2012

HFMWeek's European Hedge Fund Services Awards are designed to recognise companies that have outperformed...

Read More

Search HFMWeek