{"id":48606,"date":"2016-02-02T07:50:57","date_gmt":"2016-02-02T06:50:57","guid":{"rendered":"http:\/\/beta.next-finance.net\/note\/ctas-rock-the-house-in-january\/"},"modified":"2019-12-31T00:27:36","modified_gmt":"2019-12-30T23:27:36","slug":"ctas-rock-the-house-in-january","status":"publish","type":"post","link":"http:\/\/beta.next-finance.net\/en\/note\/ctas-rock-the-house-in-january\/","title":{"rendered":"CTAs Rock the House in January"},"content":{"rendered":"

January ended on a brighter note than it started. Recently, there have been signs that the
\noil supply glut could be addressed by both OPEC and non-OPEC countries, which has
\ngenerated some positive support for risk assets. Meanwhile, the dovish stance of the ECB
\nand the BoJ reassured investors that central banks are still at the helm. <\/p>\n

Going forward, we believe that the market respite is nonetheless likely to be short-lived.
\nThe Fed will be meeting on 15th-16th March and a second rate hike is still in the cards.
\nCoupled with the earnings recession in the US and China\u2019s growth deceleration, markets
\nmay struggle to find reasons to engage in a sustainable rally in the months ahead. <\/p>\n

Such market environment has proved supportive for hedge funds and should continue to
\ndo so. The Lyxor hedge fund index is down 1.3% in January, while the S&P 500 has
\nsuffered a 8.4% drawdown (as of Jan. 26). With regards to hedge fund strategies, CTAs
\noutperformed in January (+3.2%) and Event Driven underperformed (-2.5%).<\/quote><\/p>\n

The performance of CTAs during the recent market meltdown is remarkable. It highlights
\nthe fact that the power of diversification of the strategy in a portfolio remains intact. Recent
\ndevelopments provide additional evidence that managed futures often outperform
\ntraditional long-only investments and hedge fund strategies during market dislocations and
\nmacro events.<\/strong> But despite such evidence over the long run, the strategy often gets a bad
\npress. The opposition between the man (discretionary managers) and the machine
\n(systematic funds) continues to be popular in the medias. However, we fear that they miss
\nthe point. CTAs and systematic strategies have never pretended to replace discretionary
\nstrategies.
\nCTAs are complementary with traditional long-only or long-short strategies in a
\nportfolio and provide great diversification benefits as demonstrated during recent weeks.<\/quote><\/p>\n

\"long_term_ctas_have_accurately_spotted_inflection_points_in_equity_markets.jpg\"<\/a>