Our weekly newsletter is out, and this time around, we’re letting you in on a secret ingredient in managed futures success- bonds. When most people think of the bond market, they think of nerdy fixed income analysts and boring, low rates of return. After all, there isn’t a whole lot of excitement in an investment whose sole proposition is – you loan us this money, we pay you back the money plus annual interest of xx%. There isn’t a new product launch, burn rate, USDA crop report, or currency market intervention to contend with – it is just principal, coupon rate, and duration (oh, and credit worthiness, but most ignore that knowing there is a government backstop likely available). All in all – bonds are boring.

But when managed futures see bonds in the portfolio, they see anything but boring. There just happen to be futures markets on bonds, and managed futures programs are traditionally big players in these bond futures, trading everything from 30 year US Treasury Bond futures to New Zealand Bank Bills.

But why, exactly, has this love affair blossomed? It may have something to do with the results of several tests we ran while investigating the matter. Find out just how much bonds contribute to managed futures crisis performance by reading on.

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