When you start learning about an asset class for the first time, most of the information you receive is going to be general. The glossy brochures provided to investors give sweeping, 20,000 foot views of the opportunities in front of them. These generalizations may make for great marketing material, but rarely do they provide investors with the kinds of solid information they need in order to make an informed decision.
How do we mean? Particularly in managed futures, performance data gets derived from indices and put into charts like this:
We’re guilty of this approach as well. In some ways, it makes sense; you get a snapshot to help you decide whether or not you want to learn more about the options out there. In other ways, though, it doesn’t. After all, you don’t invest in a managed futures index; you invest in the CTAs that match your goals and risk tolerance. You shouldn’t make decisions based on what everyone else is doing; you should invest in a way that makes sense for your portfolio. And really, even if you’re looking for a broad stroke painting of the opportunities in managed futures, the skew in the data makes this big picture approach a little too big to be useful- it’s like relying on a blurry, pixelated shot from a camera phone circa 2002.
We won’t tell you to ignore information the asset class as a whole, but we do think that filtering the information further makes it much more useful. Because we’re the helpful people we are, we decided to compile said filtered information for your investigative purposes.