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If Consistency is Key…

Our weekly newsletter is out, and this time we’re addressing a concern we hear often, but have rarely seen answered. In an age of struggling pension funds, it’s common to hear commentators and spectators in the world finance joke, “Anyone who can find a way to guarantee 7% annual returns will raise a trillion dollars by the end of the year.” Realistic? Absolutely not – unless you’re buying into some sort of scam – which, to be clear, we don’t advise.

That being said, this goal isn’t unique to the world of pensions. Both individual investors and RIAs seem to be in constant search of that silver bullet investment – the one allocation that will guarantee them a life of luxury. In a world absent of such possibilities, the request we get most often is for consistency. If they can’t get a magical 7% return, can they at least get returns they can count on?

This is still a request without a perfect answer, especially in a world where past performance is not necessarily indicative of future results. After hearing the question for about the millionth time, though, we began to wonder – just how consistent has this past performance been in the managed futures space? How, exactly does it stack up to what we’ve seen out of finance’s favorite child – the stock market? We ran the numbers, and what we found may just surprise you.