Finding up and coming talent (investments) is a tough task in any asset class, and not unique to just emerging managed futures programs. But as we alluded to in our newsletter comparing large and emerging managed futures programs, there is a need to find such up and comers due to larger managers returns tending to flatten out as they get bigger.

The main problem in looking at emerging managers lies in a lack of data, making comparisons difficult and relegating most risk adjusted statistics to estimates based on the super small sample size. But for all the difficulties, there are real rewards to being able to identify and get involved with a managed futures program (or any investment) in its early stages.

For one, you can get in for a lot less than you will be able to IF they ever do move from emerging to emerged.  Think of it like buying an IPO (Microsoft before they were big, or Google not so long ago), where there is little more than an idea and some proof of concept. The danger, of course, is that you get into the next Krispy Kreme or any one of a few hundred internet stock IPOs circa the late 90s and your emerging investment never sees the big time.

Enter emerging CTA – Applied Capital Systems, whose manager we have known for many years and whose track record we have been tracking “live” on our books for the last 10 months.  We were able to do a spotlight on Applied Capital and share our thoughts despite the short track record , seeing as how we have been able to develop a level of familiarity and comfort with the actual trading that has occurred over the last year.

View the Emerging Managed Futures Program Spotlight on Applied Capital Systems.