Finally some good news: per the Newedge CTA Index, managed futures has kicked off 2013 with a gain of 1.46% (Disclaimer: past performance is not necessarily indicative of future results). We (and many others) have spent quite a bit of time over the last couple of months trying to figure out what went wrong in 2012… so what’s changed so far this year?

In short, it was the return of the trend, with excellent trends holding in foreign currencies (short Japanese Yen, long Euro), grains (long soybean oil, short wheat), energies (long crude, long RBOB), and in US stock indices (long Dow, long S&P 500). Trend following is the bread and butter of most CTA strategies, so the more trends (and the longer they hold) the better managed futures performance will tend to be.

Of course, as we always say, one month doesn’t make a year, and 2012 had its share of good months in isolation: July and May both saw gains of nearly 3% each, only to watch those gains slip away in the months that followed. The longer these trends continue, the more that trend following CTAs will be able to lock in open trading profits. Here’s hoping this January is only the beginning.