MFA continues, and so do our conversations with managers. Yesterday we had the opportunity to chat with Welton Investments and John Locke Investments about their recent struggles and successes.

At Welton, the tides began to turn in their favor during May; however they did not knock the ball out of the park like some other managers. Part of the reason was that the trends that emerged in May came about very quickly, requiring their models to adjust from a mixed position in markets like currency and stock index to a more one directional position.  One interesting development, Welton is now officially registered with the SEC as an RIA, meeting some of the demands of institutional investors worried about registration issues because of Dodd-Frank.  On the trading side, despite reaching near $1 billion in assets (congratulations guys) they have firmly committed to continuing to target 15% annualized volatility in their strategy. No dampening down volatility to protect assets here. We love to see this, as well as their commitment to remaining a fully diversified manager accessing many different sectors. No shifting to a purely financial portfolio here, either.

Over at John Locke, they are sticking to their guns even though the last couple years have been very difficult on shorter term trend following programs. The French-based CTA is a 100% systematic, short-to-medium term multi-strategy program that trades 75 markets worldwide. Even though some of their competitors have made changes to strategy, John Locke has remained consistent, using multiple trend detection strategies over multiple time frames to generate trading signals. In addition, they manage volatility in real time and attempt to keep risk exposure the same across all positions. Last year was a great year for the company in terms of raising assets (they added an estimated $250mm in new money) and they are now looking for similar results on the trading side.