The article below explains that trend following performed well in 2014. In fact, the strength in trend following has continued into 2015.
See our ETF Trend Following presentation, and our Tactical 2x (T2) portfolio.
ISAM, Managed Futures Dominate HSBC Rankings for 2014
Mark Melin, 1/6/15
ISAM Systematic has sprinted into the finish of the HSBC Holdings plc (ADR) (NYSE:HSBC) (LON:HSBA) Hedge Fund Weekly performance rankings and will claim the top stop in 2014, while activist investor William Ackman’s Pershing Square stumbled slightly as 2014 came to a close and will finish down -0.6 percent on the month in December.
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Seven of the top ten performers in the HSBC performance report were managed futures Hedge Funds who have had an interesting year, rising when the stock market rose in value. Managed futures investments typically carry a low correlation to stocks, zigging as stocks zagged. In 2008, for instance, managed futures indices delivered performance near 18 percent when the S&P 500 stock index was down nearly 40 percent. Certain managed futures algorithmic players have noted odd price and volatility patterns in the markets during the use of stimulus, and as stimulus was discussed to be extracted more normalized market patterns emerged.
Newedge CTA index rose 15.5%
In 2014 the Newedge CTA index, a measure of large managed futures funds, rose 15.5 percent, leading CNBC reporter Lawrence Delevingne to observe that “hedge fund robots crushed their human rivals in 2014.”
While many managed futures funds in fact rely on computers for their execution of trades, they are designed and monitored by human strategists who understand market environments and the core components that drive performance.
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