{"id":51231,"date":"2015-12-10T00:07:00","date_gmt":"2015-12-09T23:07:00","guid":{"rendered":"http:\/\/beta.next-finance.net\/news\/cta-launches-fall-to-lowest-level-since-2006\/"},"modified":"2015-12-10T00:07:00","modified_gmt":"2015-12-09T23:07:00","slug":"cta-launches-fall-to-lowest-level-since-2006","status":"publish","type":"post","link":"http:\/\/beta.next-finance.net\/en\/news\/cta-launches-fall-to-lowest-level-since-2006\/","title":{"rendered":"CTA Launches Fall to Lowest Level Since 2006"},"content":{"rendered":"<p><em> <strong>Underwhelming performance in 2015 and high investor dissatisfaction reduce inflows and demand for CTA funds<\/strong> <\/em><\/p>\n<p>Having recorded returns of +10.85% in 2014, their strongest performance since returning +15.70% in 2010, CTAs saw<br \/>\nfurther good performance in Q1 2015 as they posted returns of +4.29%. However, negative returns in Q2 (-3.74%)<br \/>\nand Q3 (-0.16%) saw volatile swings in CTA performance, and as of the end of October Preqin\u2019s CTA benchmark has<br \/>\nrecorded YTD losses of -0.39%. In contrast, all other hedge funds have posted YTD returns of +2.45% as of the end<br \/>\nof October, despite posting -3.94% in Q3.<\/p>\n<p>Funds of CTAs have posted even more pronounced swings in performance, returning -5.78% in June 2015, and<br \/>\n+3.39% the following month. The Preqin benchmark for funds of CTAs is currently -6.18% as of 31st October, having<br \/>\nposted losses of 10.88% in Q2.<\/p>\n<p>More Key Hedge Fund Information and Stats:<\/p>\n<ul>\n<li> <strong>CTA Launches:<\/strong> Fifty CTAs launched in the first nine months of 2015, and <strong>the year looks set for the fewest<br \/>\nlaunches since 2006<\/strong>, when 66 CTA funds launched. As a proportion of all hedge funds launched each year, the<br \/>\nfraction represented by CTAs has fallen below 10% for the first time since 2006, and now stands at 9%.<\/li>\n<li> <strong>Investor Dissatisfaction:<\/strong> As of the start of 2015, only 14% of investors in CTAs planned to increase their exposure<br \/>\nto these funds, despite good performance in 2014. Following poor Q2 performance, a June survey of CTA<br \/>\ninvestors found that <strong>over 70% were dissatisfied with returns.<\/strong><\/li>\n<li> <strong>CTA Strategy:<\/strong> <strong>Sixty-four percent of CTAs use a trend-following strategy<\/strong>, the largest proportion. Two-thirds of<br \/>\nCTAs trade currency futures, while 60% trade stock indexes.<\/li>\n<li> <strong>Liquid CTAs:<\/strong> CTAs remain far more liquid than other hedge funds, with an average <strong>11 day redemption notice period<\/strong> compared to 42 days for other products. CTAs also have a redemption frequency of 15 days, allowing<br \/>\ninvestors to make commitments and withdrawals much more quickly than for other fund types.<\/li>\n<li> <strong>Investor Geography:<\/strong> <strong>Europe-based investors show the greatest appetite<\/strong> for investment in CTAs, with 27% of<br \/>\ninvestors in the region stating a preference for the strategy. Twenty-three percent of Asia-Pacific investors and<br \/>\n19% of American institutional investors are interested in the fund type.<\/li>\n<\/ul>\n<p><em>\u201cCTAs exist as a true alternative to traditional products, offering an effective hedge against difficult economic<br \/>\nenvironments and market downturns. The poor performance of the sector in the years of the bull market has hit<br \/>\ninvestor confidence in the asset class and it has become increasingly difficult for CTAs to raise capital.<br \/>\nEven though the number of investors interested in CTAs continues to grow, investors have expressed prolonged<br \/>\ndissatisfaction with the performance of the strategy. Managers of these strategies will have to adapt to meet growing<br \/>\ninvestor demands, as well as proving their worth longer term to gain capital inflow\u201d<\/em> says Amy Bensted, Head of Hedge Fund Products, Preqin.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Fifty CTAs launched in the first nine months of 2015, and the year looks set for the fewest launches since 2006, when 66 CTA funds launched. As a proportion of all hedge funds launched each year, the fraction represented by CTAs has fallen below 10% for the first time since 2006, and now stands at 9%.<\/p>\n","protected":false},"author":20,"featured_media":51229,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1470],"tags":[1687,1655,1658,1723,1690,1651,1437,2007,2243,1814],"_links":{"self":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts\/51231"}],"collection":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/users\/20"}],"replies":[{"embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/comments?post=51231"}],"version-history":[{"count":0,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts\/51231\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/media\/51229"}],"wp:attachment":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/media?parent=51231"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/categories?post=51231"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/tags?post=51231"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}