And for its next trick – managed futures will try and make money without the help of commodities. That mantra was seemingly playing out in September and throughout the 3rd quarter as managed futures shrugged off reversals lower in commodity markets and continued to post positive gains thanks to an incredible up trend in the US Dollar and the continuing march higher in interest rates. What started the year as a commodity inflation story has definitely pivoted to a US Dollar and interest rate reaction story.

Elsewhere, no other asset classes besides cash want anything to do with this rising interest rate environment, with bonds, commodities, US and World stocks, and real estate all selling off in a big way in September. Will bounce in the last quarter of the year or try for new lows. It will be an exciting end to this year’s game, whichever way the scoreboard breaks.

Past performance is not indicative of future results.

Past performance is not indicative of future results.

Sources: Managed Futures = SocGen CTA Index,
Cash = US T-Bill 13 week coupon equivalent annual rate/12, with YTD the sum of each month’s value,
Bonds = Vanguard Total Bond Market ETF (NYSEARCA:BND),
Hedge Funds = IQ Hedge Multi-Strategy Tracker ETF (NYSEARCA:QAI)
Commodities = iShares S&P GSCI Commodity-Indexed Trust ETF (NYSEARCA:GSG);
Real Estate = iShares U.S. Real Estate ETF (NYSEARCA:IYR);
World Stocks = iShares MSCI ACWI ex-U.S. ETF (NASDAQ:ACWX);
US Stocks = SPDR S&P 500 ETF (NYSEARCA:SPY)

All ETF performance data from Y Charts