Selasa, 30 September 2014

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Recipes for Video Lovers is a new Collection on IFTTT, check it out!

Save videos for viewing later, share your favorites with friends, or watch the best content from YouTube, Vimeo, Dailymotion, and Digg.

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Kamis, 25 September 2014

Huge long-short fund suffering outflows as performance wanes

Huge long-short fund suffering outflows as performance wanes

Manager calls asset decline 'natural organic redemption' but others see investor focus on return



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Rabu, 24 September 2014

Exclusive: New research service redefines 'liquid alts' for advisers

Money manager says new definition will help determine wither funds are delivering on their promise.

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Selasa, 23 September 2014

SEC advisory panel recommends new approach to accredited investor label

Group suggests gauging sophistication of individuals based on knowledge, or limiting the portion of a portfolio that can be invested in private placements.

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Market risk is ignored by invincible investors

Investment Insights: The Blogblog

Jeff Benjamin breaks down the game for advisers and clients.

Market risk is ignored by invincible investors

Plus: El-Erian dishes a bit on Pimco, Schorsch adds more management muscle, second-guessing Calpers, Obama forces companies to stay home, seeing volatility as an asset class, and hedge funds test the limits of advertising rules

Sep 23, 2014 @ 7:54 am

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Sabtu, 20 September 2014

Nontransparent ETFs a step backward

Nontransparent ETFs a step backward

Less transparency for new products seems in conflict with the SEC's interest in increased disclosure of mutual fund holdings



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Jumat, 19 September 2014

This week's stories that financial advisers can't miss

This week's stories that financial advisers can't miss

A scandalous lawsuit, new data on the growth of independent firms, and the rest of this week's must-reads



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Rabu, 17 September 2014

Untangling Nicholas Schorsch's vast web of businesses

The REIT czar's empire is broken down in this "simple" visual covering all entities under his purview

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Senin, 15 September 2014

Markets wait on the Fed's next move

Plus: Buying Alibaba via ETFs, S&P and Nasdaq stocks start to separate, hedge funds ride the wave, annuity product sales hitting double digits

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Minggu, 14 September 2014

Why managed futures aren't getting the job done

Why managed futures aren't getting the job done

Most advisers got involved in managed futures after stocks' poor performance in 2008 but walked right into another poor market environment

Sep 14, 2014 @ 12:01 am

By Jeff Malec

Most advisers got involved in managed futures after stocks performed poorly in 2008. But they walked right into another poor market environment, this time for managed futures themselves.

While they don't make the headlines as much, managed futures as an asset class are in crisis now, reminding many investors of the “generational low” terminology used by the stock folks circa 2009. The main managed-futures benchmark indexes are all close to five-year lows and sitting just above their worst drawdown levels in the past 15 years, at 38 months and -12.58%, respectively, from their past all-time highs.

But even though this period is the worst on record for the managed futures, the comparison with other asset classes is hardly a comparison at all, with managed futures losing about 12% from its highs, compared with roughly 50% for stocks and 65% for gold.

Despite the names on several managed futures products, they are not trying to provide the classic managed futures performance profile. Take 361 Capital's “Managed Futures Strategy,” which deserves credit for doing well in this poor period. But the strategy doesn't do trend following and isn't in commodities. Instead, it uses a counter-trend approach focusing on U.S. stock indexes only. There's nothing wrong with a different approach but investors need to know it isn't necessarily going to act like 'managed futures' when the next 2008-type market comes along.

Similarly, a recent review of the popular AQR Managed Futures Strategy reveals that 95% of the exposure was in financials, currencies and stock indexes. That's all well and good, and many of the largest managed futures programs have skewed their portfolios that way because of success in those markets recently, but investors need to know that it isn't going to necessarily act like 'managed futures' during a big sell off in oil, corn, copper or any similar 'in the ground'-type commodity.

EASIER ISN'T ALWAYS BETTER

While the mutual fund wrapper has made managed futures cheaper and easier to access, several of the so-called managed-futures mutual funds and exchange-traded funds don't actually provide access to managed-futures managers. Instead of the very complicated path of screening, hiring and allocating to actual managed-futures programs and managers — and having to pay them fees — many funds choose to use a single indicator to replicate managed futures performance at a low cost.

Despite big cost savings, the results have been rather disastrous, in at least one case, for those investors hoping to track the benchmark managed-futures indexes with a “managed-futures fund.”

These replication products can offer a lot of cost savings, but does it matter that you're saving 150 basis points if underperforming the benchmark by nearly 30%?

It costs money to operate a fund, go on road shows pitching advisers on the product, and wine and dine the custodians to get a fund listed and available on their platforms. So it should be no big surprise that the managed-futures investments put in front of advisers are from the biggest names with the most money to spend on the adviser channel.

The old saying the rich get richer has never been truer than in managed futures, where over 65% of the assets are controlled by just 3% of the managers (just 35 of them).

But while more assets may beget more asset raising, it doesn't necessarily mean more success. We looked at the BarclayHedge database and measured the average monthly return for all programs going back 20 years, finding a distinct pattern of returns falling as assets got larger.

There are several reasons for this, including the deleveraging of a program to attract more institutional assets, the inability to access less liquid commodity markets such as cotton or cocoa or platinum without hitting position limits, and the inevitable mental shift to protecting assets under management rather than growing them.

ACCESSING 'RIGHT-SIZED' MANAGERS

There are managed-futures programs in the $50 million to $1 billion under management range that have bucked the status quo since 2009 by making money while stocks have been rallying. These managers are 'right-sized,' remaining small and thus being able to access commodity markets like cotton and corn and large enough to maintain sophisticated operations and risk controls.

But a lot of these programs haven't been available to investment advisers and their clients because they exist only as managed accounts (which advisers can't access unless they are registered as futures professionals) or privately offered funds (which the managers don't have the scale or workforce to wholesale to the adviser channel). They typically don't have an interest in spending a lot of money to create and sustain a “liquid alts” mutual fund or ETF-type product.

Managed-account platforms are sometimes touted as a solution to this problem, offering one-investment access to a menu of programs. But there remains a steep learning curve and need for due diligence on the managers available, and most platforms still don't have access to the 'right-sized' managers (as the smaller managers may not wish or yet be able to pay to get onto the platform).

A better way of matching up those advisers who believe in the powerful diversification of managed futures with these 'right-sized' managers is needed.

GET MANAGED FUTURES DOING A BETTER JOB

With the stock market at all-time highs and interest rates still at historic lows, you're likely to start getting more of what you want from managed futures just by keeping your exposure to the space and benefiting from their crisis period performance profile.

But for those not content to just wait, a review of your managed-futures holdings could be in store: Are you with the largest managers, who have trouble accessing commodities? Are you in a low-cost replication strategy that is underperforming the index? Do you have access to “right-sized” managers via privately offered funds? These are all questions that need to be answered before a fair assessment can be made on whether managed futures are doing the job you hired them to do.

Jeff Malec is founder and CEO of Attain Capital Management.

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Selasa, 09 September 2014

Are you prepared to make an exit from the stock market?

Are you prepared to make an exit from the stock market?

If the Fed ends, or hints at ending its ultra-low interest rate policy, investors need to prepare for market mayhem



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Jumat, 05 September 2014

Advisers take stock as ETF portfolio manager F-Squared faces legal action

Advisers take stock as ETF portfolio manager F-Squared faces legal action

On the eve of possible legal action, popular money manager works to retain clients



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Bond gurus say the rally is over

Bond gurus say the rally is over

Plus: Hackers find nothing to steal from Obamacare site, the Fed goes after Libor, another reminder to diversify into alternatives, and kick off the football season with an NFL index



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Kamis, 04 September 2014

The four flavors of multialternatives have widely differing tastes

The four flavors of multialternatives have widely differing tastes

As investors fork over assets, advisers need to learn to distinguish the sweet from the sour



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Rabu, 03 September 2014

Frustrated Fed calls out consumers for saving too much

Frustrated Fed calls out consumers for saving too much

Plus: SEC reforms add risk to money market funds, considering a worst-case-scenario for economic growth, what Eric Cantor brings to Wall Street, and another case for long-short equity investing



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Selasa, 02 September 2014

Morgan Stanley bets big on stocks

Investment Insights: The Blogblog

Jeff Benjamin breaks down the game for advisers and clients.

Morgan Stanley bets big on stocks

Plus: Young people are living for the moment and ignoring the future, Detroit's big bankruptcy trial finally starts, and how to tread lightly into the master limited partnership space

Sep 2, 2014 @ 7:51 am

By Jeff Benjamin

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